Pease v Carter: ‘reasonable recipient’ test applies to statutory notices
By Ruchi Parekh
The Court of Appeal has provided much-needed clarity on whether the ‘reasonable recipient’ test applies to statutory notices. In Pease v Carter, the Court confirmed that a statutory notice is to be interpreted in accordance with the test laid down in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, i.e. as the notice would be understood by a reasonable recipient reading it in context.
Mannai v Eagle
Mannai v Eagle was a case concerning break clauses in leases for a term. The tenant had served the contractual notices determining the leases but had specified the wrong date, by one day, on the notices. The House of Lords held that the notices remained effective notwithstanding the wrong date because bearing in mind their context and the purpose of the notices, a reasonable recipient with knowledge of the terms of the leases would have been left in no doubt that the tenant wished to determine the leases on the correct date.
Mannai and statutory notices
A number of authorities have since considered and applied Mannai in a range of cases involving unilateral statutory notices. By and large, the courts have held that the Mannai approach is applicable to statutory notices, although it would remain necessary to consider whether the notice satisfies the relevant statutory requirements.
However, the decision in Fernandez v McDonald [2003] EWCA Civ 1219 cast serious doubt on that approach. Fernandez concerned a notice under s.21(4) of the Housing Act 1988 stating that possession was required on “4 January” when the last day of the period of the tenancy was in fact 3 January. The Court of Appeal held that the notice was invalid because it did not comply with the statutory requirement i.e. to specify a date which was the last day of a period of the tenancy after which the tenancy was required (not to specify the date on which the landlord required possession). The Court considered, but did not focus on the reasonable recipient test in reaching its conclusion.
Fernandez can be contrasted with the approach of the Court of Appeal in Spencer v Taylor [2013] EWCA Civ 1600. Spencer concerned a s.21(1) notice which gave the wrong date but also contained, in the alternative, formula wording to calculate the end of the period of the tenancy. The Court held that the notice was valid as the reasonable recipient would have looked at the notes on the notice and concluded that the stated date was wrong, and that the last day had to be calculated by using the formula.
The apparent disparity in approach between Fernandez and Spencer had understandably caused some confusion amongst landlords (and judges!), and it remained unclear when a court was likely to step in and use the reasonable recipient test to remedy any errors or typographical mistakes in statutory notices.
Pease v Carter
That uncertainty has now helpfully been resolved. The Court in Pease analysed the long line of authorities on this subject and concluded that Fernandez and Spencer are not contradictory, but can be distinguished on their respective facts.
Most usefully, the Court set out the following principles of general application to all statutory notices (at §39):
(1) A statutory notice is to be interpreted in accordance with Mannai.
(2) If a reasonable recipient would appreciate that the notice contained an error and would appreciate what meaning the notice was intended to convey, then that is how the notice is to be interpreted.
(3) It remains necessary to consider whether, so interpreted, the notice complies with the relevant statutory requirements. This involves considering the purpose of those requirements.
(4) Even if a notice, properly interpreted, does not precisely comply with the statutory requirements, it may be possible to conclude that it is “substantially to the same effect” if it fulfils the statutory purpose.
Applying these principles to the facts of this case, a notice served on 7 November 2018 pursuant to s.8 of the Housing Act 1988 and stating that proceedings would not begin until after “26 November 2017” (instead of “2018”) was accordingly deemed valid. The Court held that a reasonable recipient would have understood the notice as giving at least two weeks’ warning of commencement of proceedings, thereby satisfying the statutory purpose of the provision.
What next?
With that debate resolved, what will be the next battleground as far as notices are concerned? One issue that social housing landlords may want to consider is how notices are construed by their vulnerable tenants or those with relevant disabilities. For certain tenants, a typographical error may be far from obvious and they may simply be unable to work out the correct date for themselves. While the reasonable recipient test is clearly focused on an objective standard, an argument may still be raised about the particular vulnerabilities of the tenant and the impact of the error on that tenant.
That being said, most landlords will send out a covering letter with the relevant notice and such letters may be taken into account in determining how the reasonable recipient would interpret the notice. Provided the covering letter sets out the information in a clear manner, landlords should be able to rely on the content of such letters to override any error in the actual notice.
