Factual and Procedural Background
The appeal arises from a decision made by Judge Cotran in the Central London County Court in November 1994 following a four-day trial. The case concerns a lease granted on 11 July 1991 by the landlords (referred to as "Landlord") to the tenant ("Tenant") for a 12-year term. The lease permitted use as a café, snack bar, and mini-cab operation, and contained covenants regulating signage, alterations, repair obligations, and rights related to future building works.
The Landlord served a notice under section 146 of the Law of Property Act 1925 to forfeit the lease due to alleged breaches of covenant by the Tenant. The breaches complained of included unauthorized changes to signage, alterations to the premises' frontage, and installation of a flue penetrating the roof and air-space above. Additionally, the Landlord claimed trespass to the roof and air-space and sought damages and an injunction. The Tenant counterclaimed alleging that the Landlord failed to keep the roof and walls in good repair, causing leaks and dampness.
Legal Issues Presented
- Whether the alleged breaches of covenant by the Tenant were capable of remedy under section 146 of the Law of Property Act 1925.
- Whether the section 146 notice served by the Landlord was valid.
- Whether the Tenant committed trespass by penetrating the roof and air-space above the premises.
- Whether the Landlord was liable for failure to repair the roof and walls, and the appropriate remedies for such failure.
Arguments of the Parties
Appellant's Arguments (Landlord)
- The Tenant breached covenants by altering signs and the frontage without consent.
- The Tenant unlawfully installed a flue penetrating the roof and air-space, constituting trespass.
- The Landlord sought forfeiture of the lease based on these breaches and damages or injunction for trespass.
Appellee's Arguments (Tenant)
- The breaches, if any, were capable of remedy and the section 146 notice was therefore invalid for not requiring remedy.
- The Tenant argued that the alleged leaks and dampness were not caused by the Tenant’s works but by the Landlord’s failure to repair.
- The Tenant contested the extent of damages claimed, attributing business losses to ill-health rather than property defects.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Billson v. Residential Apartments Limited (60 P & CR 392) |
Whether breaches involving alterations without consent are capable of remedy. |
The court considered the reasoning but preferred a broader interpretation allowing remedy by removing mischief caused. |
| Scala House & District Property Co. Ltd v. Forbes [1974] QB 575 |
Established that breach of covenant not to assign without consent is irremediable. |
Confirmed that except for such cases, breaches may be capable of remedy, supporting relief from forfeiture. |
| Expert Clothing Service & Sales Ltd v. Hillgate House Ltd [1986] 1 Ch 340 |
Test for whether a breach is capable of remedy under section 146 of the Law of Property Act 1925. |
Applied the test to negative covenants, emphasizing the effect of remedying the harm caused. |
| Clerk and Lindsell on Torts (17th edition) |
Definition and principles of trespass to land, including air-space invasion. |
The court held that the Tenant’s penetration of the roof and air-space constituted trespass, though no damages were awarded. |
Court's Reasoning and Analysis
The court began by examining the nature of the breaches of covenant, particularly unauthorized signage and alterations. It noted that some breaches had been condoned by acceptance of rent, but the later breaches were contested. The court considered the statutory requirements of section 146 of the Law of Property Act 1925, which mandates a notice requiring remedy of breaches if they are capable of remedy.
Relying on case law, the court rejected the view that breaches involving unauthorized alterations are inherently irremediable. Instead, it distinguished between restoring the exact original condition (which may be impossible) and removing the harm or mischief caused by the breach, such as removing unauthorized signs or restoring altered premises. The court held that the breaches in this case were capable of remedy and thus the section 146 notice was invalid for failing to require remedy.
Regarding trespass, the court referred to established tort principles defining trespass as unjustifiable intrusion on land or air-space in possession of another. It found that the Tenant’s installation of a flue penetrating the roof and air-space constituted technical trespass, although no damages were awarded due to lack of present loss. The court granted liberty to apply for injunction or other remedies if circumstances change.
On the counterclaim, the court accepted that the Landlord had a duty under the lease to keep the roof and walls in repair and found a failure to do so. It upheld the judge's award of damages equivalent to two months’ rent based on reasonable inference of loss and ordered the Landlord to repair the premises within a specified timeframe. The court noted the order’s general terms but indicated that further clarification could be sought if necessary.
Holding and Implications
The court DISMISSED THE APPEAL, upholding the decision of the Central London County Court with modifications.
The court held that the breaches of covenant relied upon were capable of remedy, rendering the section 146 notice invalid for not requiring remedy. Consequently, forfeiture of the lease was not permissible on these grounds. The court recognized the Tenant’s trespass to the roof and air-space but declined to award damages at this stage, allowing for future injunctive relief if warranted by changed circumstances.
Regarding the Landlord’s repair obligations, the court confirmed the Landlord’s liability for failure to maintain the roof and walls, awarded damages to the Tenant, and ordered repairs. No new legal precedent was established; the decision clarifies the application of section 146 notices and remedies for breaches involving unauthorized alterations and trespass.