A right of re-entry had been reserved in the lease on the assignment (and not on the initial grant) of a term of years in order to reinforce covenants (to support, fence and repair) which were taken for the benefit of other retained land of the assignor. The House considered the availability of an order for specific performance of a positive covenant in a lease.
Held: Lord Wilberforce said: ‘There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copyholds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self-limitation to be imposed or accepted on this power.’
and ‘. . it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result.’
and ‘[W]hat the court has to do is to satisfy itself, ex post facto, that the covenanted work has been done, and it has ample machinery, through certificates, or by inquiry, to do precisely this.’
Lord Wilberforce, Viscount Dilhorne, Lord Pearson, Lord Simon of Glaisdale and Lord Kilbrandon
[1973] 2 WLR 28, [1973] AC 691
lip
England and Wales
Cited by:
Cited – Co-Operative Insurance Society Ltd v Argyll Stores HL 21-May-1997
The tenants of a unit on a large shopping centre found the business losing money, and closed it in contravention of a ‘keep open’ clause in the lease. They now appealed from a mandatory injunction requiring them to keep the store open.
Held: . .
Cited – Sommer and Another v Sweet and Another CA 10-Mar-2005
The claimants had sought entry into theirs and their neighbour’s registered land titles of entries to acknowledge their rights of way. The neighbours appealed the finding of a right of way of necessity and by proprietary estoppel, and an order for . .
Cited – Allied London Industrial Properties Limited v Castleguard Properties Limited CA 24-Jul-1997
The parties disputed the effect of a conveyance of land from 1985 and an associated deed of variation. The variation added an easement which was argued by the purchaser to have attached to the land, and was said by the vendor to have been personal . .
Cited – Total Network Sl v Revenue and Customs HL 12-Mar-2008
The House was asked whether an action for unlawful means conspiracy was available against a participant in a missing trader intra-community, or carousel, fraud. The company appealed a finding of liability saying that the VAT Act and Regulations . .
Cited – Celestial Aviation Trading 71 Ltd v Paramount Airways Private Ltd ComC 4-Dec-2009
The claimant sought summary judgment for recovery of three aircraft (valued at US$36m each) leased to the defendant after non-payment of instalments. The defendant said that the default was based on a demand for supplementary rents which had not . .
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Equity
Leading Case
Updated: 10 November 2021; Ref: scu.183780