Commercial Tenancies – Serving Notice Correctly

It is important that any notice required by a lease is served correctly. In particular, it is essential that any time limits are adhered to and the correct recipient of the notice is identified.

Many cases end up in the courts involving the incorrect service of notice. One way to ensure that mistakes are not made, is to engage a lawyer.

The following case highlights the importance for tenants to take extra care when serving the notice.

Batt Cables PLC v Spencer Business Parks Ltd [2010] CSOH 81

The facts

The claimant, Batt Cables Plc (“Batt”), was a tenant of industrial premises owned by the defendant, Spencer Business Parks Ltd (“SBP”).

The lease contained a break clause whereby Batt was entitled to terminate the lease on the fifth anniversary of the lease, by serving a written notice. Batt attempted to exercise the break option and served the notice on Joe Dempsey of Spencer Holdings Plc (“SH”), an associated company of SBP.

Batt subsequently received a letter from SBP stating that the notice had been served incorrectly as it had not been served on the landlord and as a result, the lease therefore continued.

Batt argued that as it had served a written notice, it has fulfilled the requirements, albeit that it was not addressed to the correct landlord. It argued that it did not stipulate in the lease that the notice be served on the landlord.

The key issue to be decided by the court was whether the service of the notice on SH was sufficient as serving it on SBP.

The Court’s decision

The Court held that as Mr Dempsey and SH both had ostensible authority to manage the subjects of the lease as agents of SBP, it included authority to receive notices. Mr Dempsey was authorised to handle all correspondence relating to SBP. The court therefore found that the break notice was validly served on an agent of SBP and the lease had therefore been validly and effectively terminated by the break notice.

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