The tenant appealed against forfeiture of his lease for breach of a qualified covenant against assignment. It was said that the tenant had attempted to hide from the landlord the assignment of the premises to his company or its shared occupation. The judge had found a sharing of occupation.
Held: The tenant’s appeal succeeded. The lessor’s notice failed to comply with section 146(1) of the 1925 Act in that it specified only other alleged breaches which it had failed to establish. But the court went on to observe that the breach was remediable and indeed had been remedied by a discontinuance of the sharing of possession.
Neuberger LJ said: ‘The difference between possession and occupation is rather technical, and, even to those experienced in property law, often rather elusive and hard to grasp.’ and ‘I do not accept that possession cannot be shared.’ and ‘the covenant against parting with possession of the whole or part of the premises . . should be given its normal, and technically legally correct, meaning, unless there is any good reason to construe it in some other way.’
Where the person prima facie entitled to possession is alleged to have parted with possession to an entity which is admittedly in occupation, the ultimate question is whether he has effectively ceded possession to that other entity. As to whether the section 146 notice has properly identified the breach, it was recognised that an alienation covenant is a combination of covenants. Mannai will apply to s146 notices. In this case however a reasonable tenant would interpret the notice as only objecting to a parting with possession not a sharing of possession.
Judges:
Mummery, Neuberger LJJ
Citations:
[2005] EWCA Civ 1296, [2006] 1 WLR 201
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Cited – Lam Kee Ying Sdn. Bhd v Lam Shes Tong PC 1975
The Board considered an alleged breach of a covenant against assignment in a lease.
Held: The transfer to a newly formed company of the partnership business being conducted on the premises was a parting with possession. ‘A covenant which . .
Wrongly decided – Tulapam Properties Limited v De Almeida 1981
The lessee had given a covenant not to share occupation of the premises. He was claimed to be in breach of the covenant: ‘In a strict legal sense the word ‘possession’ has a highly technical meaning, and the sharing of possession is an unknown . .
Cited – Jackson v Simons 1923
The lease contained a covenant by the lessee not to ‘part with or share the possession or occupation [of the demised premises] or of any part thereof’.
Held: The lessee had ‘retained the legal possession of the whole of the premises’ and . .
Cited – Chaplin v Smith 1926
It is possible for a lessee to permit a company, in which he has an interest, to occupy the demised premises for the purpose of its business, without parting with possession of those premises to that company. . .
Cited – Fox v Jolly HL 1916
The House referred to a schedule of repair served on the tenant: ‘Now the schedule is attacked on several grounds. It is said that it does not tell the tenant what it is he ought to do in order to remedy the breach of which complaint is made. I am . .
Cited – Mannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
Cited – Marks v Warren 1979
An alienation provision such as the clause ‘Not to charge assign equitably assign underlet or part with possession of a part of the demised premises nor to hold the whole or any part of the demised premises on trust for another nor to share . .
Cited – Hoffman v Fineberg 1949
The court rejected an argument in the context of an application for the forfeiture of a lease, that a painting in the sixth year of a lease could not remedy a failure to repaint in the fifth year. . .
Cited – Expert Clothing Service and Sales Ltd v Hillgate House Ltd CA 1985
Landlords took possession after a successful, at first instance, forfeiture claim. The tenant succeeded on appeal and then brought a claim for the wrong of breach of the covenant for quiet enjoyment.
Held: The lease had been in existence all . .
Cited – Scala House and District Property Co Ltd v Forbes CA 1974
A breach of the covenant either against subletting or against assignment are uniquely not a breach capable of remedy, and the lease was subject to forfeiture. . .
Cited – Rugby School (Governors) v Tannahill CA 1935
The tenant had been convicted of permitting the premises in Great Ormond Street to be used for habitual prostitution. The landlord served a notice under section 146 which did not provide for the possibility of the breach being remedied. The evidence . .
Cited – British Petroleum Pension Trust v Behrendt CA 1985
The tenant had been held by the judge to have known of the use by his sub-tenant of the premises as a brothel, or at best to have shut his eyes deliberately to it.
Held: Although the subtenant had been removed, the breach was not remediable . .
Cited – Glass v Kencakes 1966
The court considered the ability of a tenant to obtain relief from forfeiture for illegal or immoral use where the tenant was not aware of the breach by his sub-tenant until he received the section 146 notice. Where the tenant took prompt action to . .
Cited – Savva and Another v Houssein CA 24-Apr-1996
The tenant had broken a negative covenant against making alterations, namely not to change the exterior sign and not to alter the premises without consent. The landlord sought to forfeit the lease.
Held: The breach of the covenant was . .
Cited by:
Cited – Clarence House Ltd v National Westminster Bank Plc ChD 23-Jan-2009
The claimant landlord alleged that the defendant tenant had transferred the lease under a ‘virtual assignment’ and that this was in breach of its lease.
Held: The Abbey National case was not helpful. However, the arrangement was not a breach . .
Cited – Clarence House Ltd v National Westminster Bank Plc CA 8-Dec-2009
The defendant tenants, anticipating that the landlord might delay or refuse consent to a subletting entered into a ‘virtual assignment’ of the lease, an assignment in everything but the deed and with no registration. The lease contained a standard . .
Cited – Telchadder v Wickland Holdings Ltd SC 5-Nov-2014
Old breaches did not support possession order
The mobile home tenant was said to have paraded on the caravan park in combat style clothing, and disguising his face, causing fear among the other tenants. He now appealed against confirmation of the order for possession. He said that there had . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 04 July 2022; Ref: scu.231660