[2024] UKUT 51 (LC)

Fecha: 23-Feb-2024

Issue 3: is the paragraph 31 notice valid?

Issue 3: is the paragraph 31 notice valid?

Preliminary

59.

Paragraphs 30 of the Code was set out above. Paragraph 31 says this:

31 How may a person bring a code agreement to an end?

(1)

A site provider who is a party to a code agreement may bring the agreement to an end by giving a notice in accordance with this paragraph to the operator who is a party to the agreement.

(2)

The notice must—

(a)

comply with paragraph 89 (notices given by persons other than operators) [which is about forms prescribed by OFCOM, and does not give rise to any issue in this reference],

(b)

specify the date on which the site provider proposes the code agreement should come to an end, and

(c)

state the ground on which the site provider proposes to bring the code agreement to an end.

(3)

The date specified under sub-paragraph (2)(b) must fall—

(a)

after the end of the period of 18 months beginning with the day on which the notice is given, and

(b)

after the time at which, apart from paragraph 30, the code right to which the agreement relates would have ceased to be exercisable or to bind the site provider or at a time when, apart from that paragraph, the code agreement could have been brought to an end by the site provider.

(4)

The ground stated under sub-paragraph (2)(c) must be one of the following—

(a)

that the code agreement ought to come to an end as a result of substantial breaches by the operator of its obligations under the agreement;

(b)

that the code agreement ought to come to an end because of persistent delays by the operator in making payments to the site provider under the agreement;

(c)

that the site provider intends to redevelop all or part of the land to which the code agreement relates, or any neighbouring land, and could not reasonably do so unless the code agreement comes to an end;

(d)

that the operator is not entitled to the code agreement because the test under paragraph 21 for the imposition of the agreement on the site provider is not met.

60.

The parties’ arguments about issue 3 are tightly linked to the validity or otherwise of the notice purportedly given under clause 5.8 of the lease. What the claimant says is that a paragraph 31 notice is not valid unless a valid break notice has been served; that the break notice was invalid; and that therefore the paragraph 31 notice was invalid. The respondent says that the break notice was valid, but that even if it was not the paragraph 31 notice was valid because there is no need for a break notice to be served in addition to the paragraph 31 notice.

61.

Both parties rely, in support of those arguments, upon the law and practice relating to leases protected by the Landlord and Tenant Act 1954.

62.

Because the parties agree that if a valid break notice was served then the paragraph 31 notice was valid they invited us first to decide, as a necessary step towards deciding issue 3, the question that had been issue 2, namely whether the break notice was valid.

63.

However, for the reasons we shall explain, we take the view that the respondent is right and that it is not necessary for a valid break notice to have been served in order for a valid paragraph 31 notice to be served. That is a point that has broad implications for these and other parties. Accordingly we approach issue 3 by asking first the question of principle and then the question specific to this reference, as follows:

What is meant by paragraph 31(3)(b) (and in particular must a valid break notice have been served)?

Was the paragraph 31 notice valid? (i.e. did it meet the requirement set out in paragraph 31(3)(b))?

64.

In considering those questions, we bear in mind that the recipient of the paragraph 31 notice must be able to know at the point when the notice is served whether or not it is valid.

65.

By way of reminder, the paragraph 31 notice in the present reference was served on 3 October 2022, and proposed a termination date of 8 April 2024.