A mortgagee of a leasehold interest claimed that he should have been given notice of a section 146 notice served on the lessee.
Held: A mortgagee by subdemise is always at the risk of a lessor obtaining re-entry for breach of covenant without the mortgagee knowing anything about it. He is completely shut out. Every mortgagee, therefore, knows that this is the risk he runs. If, after taking a covenant from his mortgagor to observe the covenants in the lease, he takes no steps whatsoever to satisfy himself from time to time that no breach of covenant is taking place, he is always exposed to the risk that, behind his back and without his knowledge, the lessor will succeed in re-entering, and so determining the lease, with the result that all possibility of relief from forfeiture is lost to the mortgagee. That is one of the risks of the game.
Sir Wilfred Greene MR required the mortgagees had to pay the landlord’s costs on the solicitor and client basis, rather than the party and party basis, on the principle that the landlord should be indemnified against proper expenses reasonably incurred, which party and party costs would not give them.
Judges:
Sir Wilfred Greene MR, Mackinnon and Finlay LJJ
Citations:
[1939] 2 KB 702
Statutes:
Jurisdiction:
England and Wales
Cited by:
Cited – Patel and Another v K and J Restaurants Ltd and Another CA 28-Oct-2010
The landlord appealed against refusal of forfeiture for breaches of the lease. A covenant provided against use for immoral purposes, and the sub-tenant had been found to be running a brothel. The tenant said that he had been concerned of an action . .
Cited – Daejan Investments Ltd v Benson and Others SC 6-Mar-2013
Daejan owned the freehold of a block of apartments, managing it through an agency. The tenants were members of a resident’s association. The landlord wished to carry out works, but failed to complete the consultation requirements. The court was . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Costs
Updated: 21 July 2022; Ref: scu.179899