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In Mannai [1997] the HL ruled that it was possible to cure minor defects
in notices. The end result is that minor defects will not necessarily
invalidate a notice, provided a reasonable recipient, with a knowledge of
the factual and contextual background, would not be perplexed by the
error. Thus, mere procedural errors will no longer be allowed to invalidate
a notice (unless the requirement is statutory, or unless there is a failure
to observe pre-conditions). Generally, the ‘reasonable recipient’ test
means that most obvious errors will no longer be fatal.
Mannai came to the rescue in a recent case involving a notice to extend
an option period. The original option agreement said that ‘at any time
during the last year of the Option Period… the developer may by notice
in writing served upon… require such period to be extended by five
years’. Shortly before the five-year period expired, the developer’s
solicitors wrote to the claimant’s solicitors saying ‘we shall very shortly
be placed in funds for the extension of the option for a further five years upon payment of £20,000 (clause 9.1 refers)’. Was that a sufficient
notice – was it properly worded, and did the fact that the necessary
money was not tendered, also mean that it was defective? Somewhat
surprisingly, the notice was saved by Mannai. A reasonable recipient
would have understood from the letter that the developer did intend to
exercise his right to extend the option. Thus, the notice was valid.
Interestingly, at the time of the letter from the solicitors the developers did
not have the necessary Board authority to proceed and it was therefore
argued by the defendants that the claimants themselves did not intend it
to be a valid notice. In other words, it was argued that the subjective
intention of the developers (and their solicitors) was that it should not be
a valid notice! But, that argument also failed – because Mannai uses
objective (not subjective) tests. As such, the subjective intentions of the
developer were irrelevant; what mattered was the understanding of the
‘reasonable recipient’ (and that is an objective test). Since the wording of
the option clause merely provided that written notice be given (with there
being no specific requirement that the money be paid at the time) it
followed that the letter written by the solicitors was sufficient.
Many will praise this as a common sense approach. After all, it is
probably the correct outcome. But, there are dangers in such a relatively
lax attitude. What it means is that if you, as solicitor, write to the other
side in anticipation of your client serving a notice, then there is a danger
that your letter will be interpreted as actually amounting to the notice.
The point, of course, is that you may not subjectively intend your initial
correspondence to amount to a formal notice, but with Mannai there
must be a danger that the objective ‘reasonable recipient’ will interpret
your letter as being a formal notice. If the logic of this decision is correct
(and it surely must be) then this is a real danger to guard against. The
simple answer, of course, is to specifically state in your initial
correspondence that your letter does not constitute a formal notice. At
a more fundamental level, the real answer lies at the drafting stage, by
setting out the clear wording that has to be used when serving the
necessary notice (so there is then no ambiguity as to whether or not a
notice has been served). But, as a general point, do remember that
Mannai provides an objective test, and you must therefore ensure that
any preliminary correspondence cannot be interpreted by a ‘reasonable
recipient’ as amounting to a formal notice. Rennie v Westbury Homes
[2007] EWHC 164, noted in Property Week 23 February 2007, and also
discussed in www.practicallaw.com (subscription service).
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