As the uncertainty around Brexit continues, we can expect to see an increase in disputes about the validity of notices, particularly those intended to terminate leases early.

In Tyco Fire & Integrated Solutions (UK) Ltd v Regent Quay Development Company Ltd [2016] CSOH 97, the tenant (Tyco) entered into a lease of commercial premises with Regent over two units (Units 3 & 4). A minute of variation added an additional unit (Unit 1), extended the term until 30 August 2021, and gave Tyco an option to terminate the lease on 31 August 2016 upon giving six months' notice.

Tyco's agents served a break notice on 11 January 2016. The notice erroneously referred to only Units 3 and 4 and the letter defined "Lease" by reference to the original lease only, which only covered Units 3 & 4. There was therefore no explicit reference in the break notice to Unit 1. After the six month window had passed, Regent informed Tyco that they considered the notice to be ineffective. Tyco raised court proceedings.

Both parties accepted that a valid notice must be sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when it is intended to operate.

Regent argued that (1) by defining the premises in the break notices as Units 3 & 4; and (2) by referring to the original lease only, the break notice made the reasonable recipient think that Tyco intended to only break its lease over Units 3 & 4 and to leave the part of the lease relating to Unit 1 in place. As that was legally impossible, the notice was invalid.

Tyco argued that the letter was sufficiently clear. Technical precision should not be favoured over the evident intention of the notice. When the notice was read as a whole and regard was had to the break clause being relied upon (which was in the minute of variation) then it was clear the whole of the lease _ Units 1, 3 and 4 _ was being terminated.

Perhaps unsurprisingly, Lord Tyre found for Tyco.

The suggestion by Regent that the notice conveyed an intention by Tyco to terminate the lease only insofar as Units 3 & 4 were concerned, even although that was technically impossible, was, in His Lordship's Opinion, sufficiently far-fetched to be disregarded as a reasonable interpretation, or even as one capable of creating confusion in the mind of the reasonable recipient.

Tyco shows that minor errors will not undermine an otherwise valid notice. Whilst accuracy should always be desired when sending any correspondence, the courts will not normally allow technical inaccuracies to impinge an otherwise valid notice. The challenge is knowing when an error is a minor technical one, or one sufficient to cause confusion in the mind of the reasonable recipient.

For more information please get in touch with your usual Brodies contact, or one of the individuals listed below.


Stephen Goldie

Managing Partner

Matt Farrell