Insolvency: Whether a bankruptcy petition is valid where a landlord fails to notify tenant with address for service (Sunset Ltd v Al-Hindi – 2023)
The High Court considers the status of a bankruptcy petition in a case where a landlord failed to provide its tenant with a proper and valid address for service of notices.
The background
In Sunset Ltd v Al-Hindi [2023], the leaseholder failed to pay rent to the landlord and, following the leaseholder’s failure to comply with a statutory demand, the landlord issued a bankruptcy petition against the leaseholder on 23rd June 2022.
The leaseholder disputed the petition, arguing that the debt was not due or payable because the landlord had failed to serve a s.48 notice specifying a valid address for service.
The landlord’s address for service stated in the tenancy agreement was not in England or Wales, as per the requirements of s.48 of the Landlord and Tenant Act 1987:
“A landlord of premises…shall by notice furnish the tenant with an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant.”
Some months after service of the statutory demand and issue of the bankruptcy petition, the landlord served a valid s.48 notice retrospectively on 6th February 2023. The tenant sought dismissal of the petition.
The decision
The High Court found in favour with the tenant, dismissing the bankruptcy petition. The address stated in the tenancy agreement was not in England or Wales. The later s.48 notice was served too late to have effect.
Additional letters and documents had stated an address for service for the landlord which was in the correct jurisdiction. However, these were deemed by the Court to relate to specific purposes and were not general addresses for service for any or all purposes. Although solicitors may have been instructed to accept service of one notice or set of proceedings on behalf of the landlord, this does not extend to authorisation to accept other notices.
Having failed to serve a valid s.48 notice, and further on the grounds that the statutory demand was not served when the debt was immediately payable, the debt was not considered due when the bankruptcy petition was presented. The landlord did not remedy this defect with its service of the later s.48 notice, meaning that the court could only consider the facts at the date the petition was presented.
Advice and action for landlords
This decision is a word of warning for all parties to ensure that their addresses for service comply with statute, providing addresses in England and Wales regardless of where a registered office or head office may be located.
The landlord’s apparently simple error in this case, together with service of a defective statutory demand, resulted in the failure of its bankruptcy petition and the need to restart the process in its entirety. Landlords and agents, as well as tenants, are advised to review addresses for service stated in documentation should the need to serve notices arise.
The High Court found in favour with the tenant, dismissing the bankruptcy petition. The address stated in the tenancy agreement was not in England or Wales, and the later s.48 notice was served too late to have effect.
