#7580 - Remedies And Enforcement Of Proprietary Rights - Property and Equity 2

• The landlord’s primary remedy lies in his/her capacity to bring the lease to an end prior to expiry – forfeiture of the lease

  • Because of the drastic nature of this remedy (especially in long term leases) – strict procedural requirements must be met before this right can be exercised:

1. An express right to forfeit in the lease or implied by statute must be present

2. The tenant must have breached the lease

3. The landlord must serve notice unless the lease/breach comes within an exception to this

4. The breach must be current at the expiry of the notice period

5. The landlord must effectively forfeit the lease

6. The tenant must not have been granted RAF

• At common law a landlord had no implied right to bring the lease to an end and had to wait for effluxion of time – but leases would generally confer an express power on the landlord to terminate in the event of a breach. Due to this remedies extreme nature, equity and now statute regulated it tightly:

  • Unless a formal demand was made for rent, failure to pay would not entitle forfeiture – unless the landlord was entitled to by express stipulation by the lease (which was then often done)

    • S 8 of the Landlord and Tenant Act provides that where one-half year’s rent is in arrears, re-entry may be effected without formal demand

    • S 85(1)(d) provides re-entry for breach of a covenant for a month, after two months if it has not been remedied

  • Where a tenant breaches a covenant other than rent, legislation provides some protection for the tenant by requiring notice. S 129 (1) of the CA provides:

1. A right of re-entry for breach of a covenant, condition or agreement in the lease is not enforceable unless and until the lessor serves on the lessee a notice:

   1. Specifying the particular breach complained of; and

   2. IF the breach is capable of remedy, requiring the lessee remedy it; and

   3. If the lessor claims compensation, requiring the lessee to pay it

and the lessee fails within a reasonable time to remedy the breach, if it is capable of being remedied, and compensation is required to pay reasonable compensation to the lessor for it

Exceptions are provided for in the Act (for example in the case of leases of one year or less (s 129(6)(a))but the section has effect notwithstanding any stipulation to the contrary (s129(10)). Furthermore the act doesn’t affect the law relating to re-entry in the case of non-payment of rent (s129(8))

• The purpose of this is to allow tenants to remedy breaches before the matter reaches court

• This procedure has to be followed even if the breach is irremediable (in which case the notice needn’t require the breach to be remedies – Horsey Estate v Steiger)

• The requirement of demanding compensation isn’t mandatory – the landlord does not have to if he does not want to (Rugby School v Tannahill)

• The breach must be specified – mere identification of breach of a particular covenant without detailing the particular damage will be ineffective (Gerraty v McGavin)

• In the cases of breaches incapable of remedy:

  • Notice operates to give the tenant an opportunity to consider his or her position

  • In the case of assignment without consent the notice must be directed to the assignee since the assignment is effective notwithstanding the breach (Chelfield v Goldsea)

  • A test was posited by Slade LJ in Expert Clothing Service v Hillgate House for cases of positive ‘once and for all ‘ covenants

    • The only instance in which failure of the s 146 notice to require a remedy of a breach would be justifiable is IF “compliance with the notice, coupled with the payment of any appropriate monetary compensation” would not have effectively remedied the breach

  • This test was applied for a negative covenant (Savva v Houssein – tenant breached covenant not to display and not to make alterations without consent)

  • Scala House and Distrct v Forbes asid that breach of a covenant to sublet is never capable of remedy; this is questionable in light of the above tests

• Tenants must be given a ‘reasonable time to remedy the breach’ (s 129(1)) which will usually be three months (Penton v Barnett) but it depends on the circumstances:

  • Billson v Residential Apartments – 14 days enough since the tenants disregarded all prior warnings and indicated no intention to remedy it

  • For irremediable breaches a shorter time is allowed

    • Civil Service Co-op Society v McGrigor’s Trustee – 14 days reasonable between service and re-entry

• Courts generally resist attempts to circumvent legislation for notice a prelude to forfeiture:

  • Plymouth Corp v Harvey

    • Facts: Tenant required by landlord to execute deed of surrender of the lease in escrow – this was to become effective if the tenant breached a covenant in the lease

    • Held: The deed of surrender provided for forfeiture under the guise of surrender and since the landlord didn’t comply with statutory requirements the purported surrender was void

  • Holden v Blaiklock

    • Facts: Residential lease in standard form provided that on breach, the tenancy should, at the landlord’s option, become a tenancy from week to week terminable on a week’s notice

    • Held: This comes within s 129 and hence the notice provisions must be complied with

• If the landlord elects to treat the lease as still in force the landlord is said to waive the breach – this can be express or implied

  • It is implied if the landlord is aware of the tenant’s breach and performs some act clearly recognizing its continuance (e.g. accepting rent).

  • But once the landlord has finally and unequivocally elected to treat the lease as forfeited, no subsequent act can amount to waiver

    • NGL Properties v Harlington – the issue and service of a writ by the landlord claiming possession on the ground of the tenant’s breach was effective to terminate the lease regardless of subsequent discontinuation of the action

  • Lidsdale Nominees v Elkhardly – landlord’s solicitors wrote that they have been instructed to terminate the lease and that a tender of money was to be treated as mesne profits

    • Held: Acceptance of money tendered for rent after the breach of covenant amounts to waiver by the landlord notwithstanding the fact that it was purported to be accepted as mesne profits

  • Waiver of a covenant or condition does not operate as a general waiver of all breaches but only extends to the particular breach in question

  • Cornille v Saha

    • Facts: Lessor, after learning that the lessee sublet in breach of a covenant, took proceedings for access and damages for failure to grant access. She then later purported to forfeit the lease for breach of the covenant

    • Held: The act of the lessor in seeking access was an unequivocal act of recognition of the subsisting lease and was made with knowledge of the fact that the lessee had sublet in breach of covenant – this is waiver in law

  • If a lessee assigns the lease, taking covenants from the assignee, the lessee can reserve a right of re-entry for breach even against subsequent lessees or subtenants against whom the covenants are not directly enforceable by the original lessee (Shiloh Spinners v Harding)