Three Leases of the Peter Jones site to T’s predecessor in 1934 contained covenants by T to redevelop the site in two phases, the second of which related to the MackMurdo and Simon’s Street buildings and was to be completed by December 25 1987. In 1969 the MackMurdo building was given grade 2 listing as being all special interest. In April 1988 the notices under section 146 of the law Property Act 1925, requiring T to remedy alleged breaches of the covenants to rebuild. Mummery J heard preliminary issues.
Held: There can exist lawful excuses for non-performance of a building covenant in a long lease, and such excuses may provide a defence to an action for forfeiture for breach of covenant, even though they would not provide a defence to a claim for rent.
(1) there was a valid obligation upon T to demolish and build on the whole site in conformity with plans, drawings and elevations which were in existence and had been approved before the execution of the lease;
(2) T was in prima facie breach of the Covenant, in that the date for execution had passed, the existing buildings were still standing and the completion of Phase 2 of the redevelopment have not occurred;
(3) the section 146 notices had satisfied the statutory requirements;
(4) there may however exist lawful excuses for non-performance of a building covenant in a long lease, and such excuses would provide a defence to an action for forfeiture for breach of covenant, even though they would not provide a defence to a claim for rent;
(5) the listing of the MackMurdo building had resulted in there being no significant prospect during the 1980s of T being able to perform phase two of the development, involving as it did, the demolition of the MackMurdo building, by December 25th 1987. It was not simply a question of the covenant becoming more onerous; the performance of the obligation regarding Phase 2 of the development had become impossible and different in nature from what had been agreed in 1934;
(6) accordingly he was not in fact in breach of its obligations under the redevelopment covenant, although it was not thereby discharged from its obligations, and there might come a time when the lawful excuse for non-performance of the obligation to demolish and rebuild no longer obtained; and
(7) had there been a breach, the receipt to rent by L’s bankers during 1988 would not have amounted to a waiver, since L had made it clear by letter that it would not accept or demand rent because of the alleged breach of covenant and had later returned the rent paid, since the Bankers had not had authority to make business decisions on behalf of L and since L’s conduct, objectively considered, had not given T grounds for supposing that the rent had in fact been accepted.
Mummery J
(1994) 67 P and CR 120, [1993] 34 EG 116
Law of Property Act 1925 146
England and Wales
Citing:
Cited – Matthews v Smallwood 1910
A landlord cannot prevent accepting a payment of rent from operating as a waiver of breach merely by stating at the time of payment that he accepts it without prejudice to his right to forfeit.
Parker J said: ‘It is also, I think, reasonably . .
Cited – Central Estates (Belgravia) Ltd v Woolgar (No 2) CA 20-Jun-1972
Right to forfeit waived by rent demand
The landlords’ managing agents learned that the tenant had been convicted of keeping a brothel at the premises and served a section 146 notice intending to forfeit the tenancy. He told his staff and instructed them not to demand or accept rent. But . .
Cited – Amalgamated Investment and Property Co v Walker (John) and Sons CA 1975
The defendants sold a commercial property to the plaintiffs knowing that the plaintiffs intended to redevelop it and would need planning permission for it. Unknown to both parties the building had been identified by the Department of the Environment . .
Cited – National Carriers Ltd v Panalpina (Northern) Ltd HL 11-Dec-1980
No Frustration of Lease through loss of access
The tenant’s access to the premises was closed by the local authority because it passed by a derelict and dangerous building. The tenant argued that its tenancy was frustrated.
Held: The lease was not frustrated. The lease had a term of ten . .
Cited – Fletcher v Nokes 1897
A notice was issued under s 14 of the Conveyancing and Law of Property Act 1881 in which the lessor alleged generally that the lessee had ‘broken the covenants for repairing the inside and outside’ of the demised premises, and required the lessee to . .
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 – Re Anglo-Russian Merchant Traders and John Batt and Company (London) 1917
The parties had agreed to export certain goods. The seller failed to deliver, and the only reason given for breaking the contract was the impossibility or illegality of performance attached to it by the Jute (Export) Order 1917. The only reason . .
Cited – Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd HL 1945
Wartime regulations were implemented which prohibited the building on land which was already subject to a building lease which required the lessees to erect several shops.
Held: Even if the doctrine of frustration could apply to a lease, the . .
Cited – Mardorf Peach and Co Ltd v Attica Sea Carriers Corporation of Liberia (The Laconia) 1977
A right of withdrawal had been granted to a shipowner under a time charterparty if the charterer failed to make a punctual monthly payment of hire.
Held: If the monthly hire had not been punctually paid, the right of withdrawal remained even . .
Cited – Antaios Compania Naviera SA v Salen Rederierna AB (‘the Antaios’) HL 1984
A ship charterer discovered that the bills of lading were incorrect, but delayed withdrawal from the charter for 13 days. They now sought leave to appeal the arbitration award against them.
Held: Though he deprecated extending the use of the . .
Cited – Expert Clothing Service and Sales Ltd v Hillgate House Ltd and Another CA 2-Apr-1985
The defendant tenant appealed from refusal of relief from forfeiture. At the trial it was conceded that there had been breaches of covenant by the defendant company consisting of the failure to reconstruct the premises by a stated date, and to give . .
Cited by:
Cited – Osibanjo and Another v Seahive Investments Ltd CA 21-Nov-2008
Appeal against refusal of relief from forfeiture of lease – appeal based on assertion of waiver by acceptance of rent knowing of the breach.
Held: The appeal was refused. The acceptance of rent was through payment in of a cheque for a sum of . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.652983
