Remedies for breach of leasehold covenants Flashcards
‘Keep-open’ covenants, case:
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1996] - Argyll Stores had closed its Safeways stores in Hillsborough shopping center.
House of Lords held it was inappropriate to compel a defendant to carry on a business, for a number of reasons.
Repair covenants and specific performance, rules and cases:
Leasehold Property (Repairs) Act 1938 - act applies to lease 7+ years, may be brought only with the leave of the court to protect tenant.
Hill v Barclay - specific performance of covenant not available for T or L.
Jenne v Queen’s Cross Properties Ltd - order for S.P. of a covenant to repair against a landlord effective - now in Landlord and Tenancy Act.
Rainbow Estates v Tokenhold - judge considered it appropriate to grant an order against the tenants for specific performance.
Specific performance is not party to the Act, and so the landlord could seek this remedy without needing to pass the high threshold from the Act. Could be used to harass or oppress the tenant.
Remedy of distress:
Tenant fails to pay rent, landlord can enter the premises and seize goods, quick and effective.
Fuller v Happy Shopper Markets Ltd [2001] - Lightman J warned landlords of the dangers in levying distress: “the ancient self-help remedy of distress involves serious interference with the right of a tenant under Article 8.”
The Tribunals, Courts and Enforcement Act 2007 made provision for reform of distress. Abolished it, and prevents residential landlords seizing goods.
Remedy of forfeiture, rules for it to be present:
1) There is a provision in the lease permitting ‘re-entry’ in the event of a breach; and
2) the landlord has not waived the breach of covenant.
Waiver of a breach of forfeiture, rules and cases:
The landlord must know that the breach has occurred - Matthews v Smallwood (1910).
Implied waiver: Segal Securities v Thoseby, L claimed/accepted rent knowing that a breach has occurred.
Slade J in Expert Clothing Service and Sales Ltd v Hillgate House: “the court is free to look at all the circumstances of the case to consider whether the act could be regarded as having been done consistently with the continued operation of a tenancy.”
Thomas v Ken Thomas Ltd - where rent is paid directly into L’s bank, if the L rejects or repays it is not waived.
Forfeiture for breach of non-rent covenants:
Governed by LPA 1925, s. 146. Requires L to serve notice on T before right to forfeit can be exercised. Gives chance to remedy.
Form of s. 146 must:
a) specify the breach;
b) require that the breach be remedied, if remediable; and
c) require the tenant to pay financial compensation for the breach.
Non-rent covenants that if breached are not capable of remedy:
Hoffman v Fineberg, Harman J: “no breach can ever be remedied, because there must always be a point in time in which there has not been compliance with the covenant.”
S. 146 however states that some breaches are capable of being remedied, and the L must give a chance to T to do so.
Court of Appeal in Expert Clothing Service & Sales v Hillgate House Ltd held that the important question was whether harm to the landlord could be remedied.
Forfeiture for non-payment of rent:
The notice period under s. 146 does not apply in this case.
Unless lease says otherwise, a lease cannot be forfeited for this unless the landlord has made a formal demand to the demised premises between the hours of “sunrise and sunset” on the day on which payment is due - Duppa v Mayo (1669).
May be rendered unnecessary if lease says ‘whether formally demanded for or not’.
S. 210 of Common Law Procedure Act 1852 dispenses with need for notice if more than 6 months in arrears, and L cannot use CRAR to recover arrears.
Tenant’s relief from forfeiture:
S. 146(2) LPA 1925: “the court may grant relief on such terms as it ‘thinks fit.”
Relief can be applied for at any time, after receipt of notice, after proceedings issued, or even after re-entry (as held in Billson v Residential Apartment).
Forfeiture, method:
Not residential property (while used as such), s. 2 Protection of Eviction Act 1977.
Peaceable entry and without force.
Breach causing irremediable harm
Rugby School (Governors) v Tannahll - use of the premises for illegal or immoral purposes, cannot be remedied. The stigma could not be removed by ceasing use or paying compensation.
Relief of subtenant
Can apply for relief under s. 146(4). If head lease is forfeited, could become a direct tenant of landlord, subject to the terms of the sublease and any imposed by the court.
