Landlord and tenant — Whether right of forfeiture waived — Whether tenant entitled to relief from forfeiture in relation to breach of a covenant not to use the premises for any illegal or immoral purposes
dated July 29 1985 the plaintiff was granted in consideration of a premium of
£36,695 a term of 99 years from June 24 1983 of 35 Silver Birch Close, London
N11 — The defendants are trustees of the Kasner Charitable Trust and the
assignees to the reversion to the flat — The lease contained provisions for
forfeiture and a covenant by the tenant that he would not use the premises for
any illegal or immoral purposes, but would use the same as a single private
dwelling-house — On April 2 1988 the plaintiff was arrested and charged with
offences under the Official Secrets Acts — On May 23 1988 the defendants
allowed a demand for ground rent from June 24 1988 to be sent to the plaintiff
and on June 17 the ground rent was paid on the plaintiff’s behalf by his
solicitor — On November 21 1988 the defendants made a further demand for rent,
which was eventually paid on February 13 1989 — On March 3 1989 the plaintiff
was convicted and sentenced to 10 years’ imprisonment — On December 8 1989 a
document was sent to the plaintiff at the flat alleging breach of covenant by
using the premises for illegal purposes, namely for acts preparatory to the
commission of offences under the Official Secrets Act 1911 and stating that the
breach of covenant was incapable of remedy — On December 21 1989 the defendants
re-entered the flat — Rent demands were prepared on May 22 and November 20 1989
but not sent to the plaintiff — The plaintiff asserted that the notice given on
December 8 1989 lacked proper particularity and did not satisfy section 146 of
the Law of Property Act 1925, that the non-service of the rent demand in
respect of the June quarter day 1989 was a wrongful act, that there was a
waiver of the defendants’ rights of forfeiture by reason of the delay from the
date of the conviction on March 3 1989 to the service of the notice on December
8 1989, that there had therefore been waiver of the right to forfeit the lease
— Alternatively, if the defendants were entitled to possession, the plaintiff
should have relief from forfeiture
1989 satisfied section 146 of the 1925 Act notwithstanding that it made no
reference to that provision — The notice was served within the terms of section
196(3) of the 1925 Act even though at the date of service it was known that the
plaintiff was in prison and unlikely to receive it — Because the paraphernalia
for spying was found in the flat there had been illegal acts in breach of
covenant — However, the demand and receipt of rent in respect of the June and
Christmas quarter days 1988, with the knowledge that the plaintiff had been
arrested for offences which founded the breach of covenant, were sufficient
acts which amounted to an affirmation of the tenancy and waived the right of
forfeiture
forfeiture would have been granted
The following
cases are referred to in this report.
Chrisdell
Ltd v Johnson (1987) 54 P&CR 257
Expert
Clothing Service & Sales Ltd v Hillgate
House Ltd [1986] Ch 340; [1985] 3 WLR 359; [1985] 2 All ER 998; [1985] 2
EGLR 85; (1985) 275 EG 1011 & 1129, CA
Hoffman v Fineberg [1949] Ch 245; [1948] 1 All ER 592
Rugby
School (Governors) v Tannahill [1934] 1 KB
695; [1935] 1 KB 87, CA
Scala
House & District Property Co Ltd v Forbes
[1974] QB 575; [1973] 3 WLR 14; [1973] 3 All ER 308; [1973] EGD 342; (1973) 227
EG 1161, CA
This was an
action by the plaintiff, Erwin Van Haarlam, to recover possession of 35 Silver
Birch Close, London N11, from the defendant trustees, Josef Kasner and Elfreda
Erlich, who had effected peaceable re-entry pursuant to provisions for
forfeiture in a lease dated July 29 1985. The second plaintiff, the Leeds &
Holbeck Building Society, discontinued their action on agreed terms with the
defendants.
Michael
Gettleson (instructed by Ross Williams Neilson & Co) appeared for the first
plaintiff; Howard Smith (instructed by B Erlich, solicitor to the Kasner
Charitable Trust) represented the defendants; the second plaintiffs, Leeds
& Holbeck Building Society, did not appear and were not represented.
Giving
judgment, HARMAN J said: This is an action which began by writ on
January 17 1990. The plaintiffs were one Erwin Van Haarlam and the Leeds &
Holbeck Building Society. The building society came to a financial arrangement
with the defendants immediately before the start of this trial and with leave
discontinued the action on behalf of the second plaintiff building society
without any order as to costs. There thus remains only one plaintiff.
The defendants
were originally sued as the Kasner Charitable Trust. It appears that that is
not a corporate body and has no existence in law and could not properly be a
party to the action. Accordingly, the parties were amended by leave and the
defendants are now one Josef Kasner and Elfreda Erlich. Those two persons are
the present trustees of the Kasner Charitable Trust. I have not seen the trust
deed and I do not know anything about the powers of the trustees, but no point
has been taken upon that matter.
The statement
of claim alleges, and it is admitted, that by a lease dated July 29 1985 a
company called Smardene Properties Ltd, as lessor, demised to the plaintiff, Mr
Erwin Van Haarlam, a flat now known as 35 Silver Birch Close, sometimes
described as being in Finchley and sometimes described as being in Colney
Hatch.
The lease was
for a term of 99 years from June 24 1983, the premium paid was £36,695, the
ground rent reserved was £65 pa for the first 33 years rising to £130 for the
second 33 years of the term and £195 for the last 33 years of the term.
The defendants
are the assignees of the reversion to that flat, which is part of a block of
flats built at that time by Smardene Properties Ltd. The lease contains very
ordinary covenants including a proviso for re-entry. I cannot say which actual
page of the lease that is because the lease is divided into schedules, but in
clause 5, subclause 2, of the relevant schedule the proviso for re-entry, in
very ordinary form, runs:
If the rent
hereby reserved, or any part thereof, shall be in arrear and unpaid for 21 days
after becoming due and payable, whether formally demanded or not, or if there
shall be any breach of any covenants or agreements on the part of the lessee
herein contained, then the lessor may lawfully re-enter upon the demised
premises and thereupon the demise shall cease and determine.
One of the
covenants by the tenant was that he would not use the premises for any illegal
or immoral purposes, but would use the same as a single private dwelling-house
for one family only.
Mr Van Haarlam
appears to have at once moved into the flat, although I have no direct evidence
of it. Mr Van Haarlam himself has given no evidence in this case and has kept
clear of the witness box. He seems to have occupied the flat in a quiet and
normal manner, living, as far as I can make out, by himself and causing neither
trouble nor difficulty to anyone.
The defendants
produced the rent ledger for the charitable trust of which they are trustees
and that shows payments of the ground rent half-yearly in sums of £32.50 due in
advance on Midsummer Day and Christmas Day, demanded very sensibly rather in
advance of that, although, as I have read, there is no obligation whatever upon
the landlord for the time being to make any demand for rent.
The ground
rent was demanded in May 1986 and paid in May 1986 for the quarter starting on
Midsummer Day 1986, that is a month later. It was paid again on December 3
1986, June 5 1987 and December 10 1987. All those appear to be impeccable
payments of ground rent in an entirely desirable and regular manner.
Thereafter, an event occurred which has led to this litigation.
On April 2
1988, Mr Van Haarlam was arrested. He was arrested and charged with offences
under the Official Secrets Acts. He eventually came to trial at the Old Bailey,
I think in late February 1989 or early March. The indictment which is before me
states the offence as:
Doing acts
preparatory
— notice that
—
to the
committal of an offence under Section 11C of the Official Secrets Act 1911 as
amended by the Official Secrets Act 1920, contrary to Section 7 of the Official
Secrets Act 1920.
— and the
particulars are —
Erwin Van
Haarlam on divers days between 1 May 1975
— long before
the grant of this lease —
and 2 April
1988
— the date of
his arrest —
for a purpose
prejudicial to the safety or interests of the State did acts preparatory to
communicating to another person, information which was calculated to be, or
might have been, or was intended to be, directly or indirectly useful to an
enemy, (i) by residing in the United Kingdom, (ii) by having in his possession
equipment for the receipt of secret information, (iii) by receiving secret
radio transmissions from a person or persons in Czechoslovakia, (iv) by having
in his possession materials for the communication of secret information to
others, and (v) by having in his possession a list of places in the United
Kingdom where secret information could be left or collected.
That indictment
was drawn on September 30 1988.
Mr Van Haarlam
was, as I say, arrested and there has been an application before me, which I
have ruled was a proper one, to admit in evidence under the Civil Evidence Act
1968 statements made by Mr Van Haarlam, evidence given about him and, most
importantly, the summing up by Simon Brown J to the jury which appears in the
volume and is a substantial document.
The summing up
started on Thursday March 2 and was completed by a further direction on the
afternoon of Friday March 3 1989, and the jury returned their verdict at 3.30
pm on that day. The jury found Mr Van Haarlam guilty. Simon Brown J sentenced
him to 10 years’ imprisonment.
I think I can
properly take judicial notice of the fact that 10 years is a fairly severe
sentence, perhaps particularly so bearing in mind that Mr Van Haarlam was not
charged with doing, nor was there any evidence given that he had done, any
actual act prejudicial to the interest of the state. He was charged with acts
preparatory to so doing. There is no doubt that those acts fall within the
Official Secrets Acts, the sections which I have referred to, and there is no
doubt that they are, as Simon Brown J’s sentence marked, serious criminal
offences.
The evidence
given at trial and referred to by the judge in his summing up shows that Mr Van
Haarlam had acted as an employee of Hilton Hotels, England, down to, I think,
about 1985. He acquired the lease of this flat and, roughly simultaneously, it
is not necessary to be precise, gave up his employment subsequently to be engaged
as an art dealer. That occupation appears to have been, undoubtedly on the
evidence recited by the judge, a cloak or sham.
His
art-dealing was of minimal quantity and contained a good many false entries in
his books purporting to record transactions that had not happened. Further, he
practised in some small degree as an artist himself — he was said to have some
little talent, but again in that capacity he persuaded people to ‘buy’ pictures
made by him by giving them the money which they then paid to him in order to
‘buy the picture’. Thus, again, the transactions had a fairly bogus air.
In addition,
Mr Van Haarlam appears to have taken a very great interest in jewish matters.
He got to know many persons in the jewish community and, in particular, was
concerned with organisations and activities which were then concerned with
obtaining or giving help to jewish persons, notably in the former Soviet Union
but also, I think, in other Eastern block countries. That activity does not
appear on the evidence to have done anything harmful to any individual; Simon
Brown J, at p 75B of his summing up, said:
There is no
evidence that Mr Van Haarlam personally did anything whatever to try to damage
the interests of individual Jews or, indeed, of the Refusenik
damaged Jewish, in the broadest sense, interests.
The evidence
was that he was associating with and, if I may speak colloquially, getting
close to persons involved with organisations, several of which were mentioned
by Simon Brown J. He mentions a number of organisations: ‘Conscience’, ‘Women’s
Commission for Soviet Jewry’, ‘Liberal Jewish Synagogues’ Soviet Jewry Group’,
‘The Conservative Friends of Israel’ and ‘The Labour Friends of Israel’. All
these are, of course, organisations connected with jews desiring, perhaps, to
escape from countries where relations with judaism are unhappy, jews who are
oppressed and people of that faith or race who wish to escape.
I break off to
observe that all this has a curiously old-fashioned air. I observed during this
trial that the Soviet Union can properly be referred to only as the former
Soviet Union, as it no longer exists. Czechoslovakia, with which Mr Van Haarlam
was said to have communicated, was then of course — I think I can properly take
judicial notice of this — a communist country forming a part of the Eastern
block wedded, I think it was called, by the Warsaw Pact. Czechoslovakia had
very close relationships and, upon the evidence given at Mr Van Haarlam’s
trial, was used very much by the former Soviet intelligence organisations to
assist in anti-jewish activities.
Czechoslovakia
is now more or less a free country, the communist party has ceased to control
it, indeed the communist doctrine has been abandoned and totally discredited as
an economic system and has in many cases been given up as the sort of faith
which it formerly was. All those extraordinary events have happened in just
under three years since Mr Van Haarlam’s original trial took place and it
merely shows how astonishingly the world changes.
It may well be
that were Mr Van Haarlam to be arrested and charged now it would not be thought
necessary to lock him up for very long on the ground that the persons with whom
he formally communicated have now ceased to have any power to damage Israel or
jews at all. However, he was convicted before the fall of the Berlin Wall and
before the destruction of the former Soviet empire or association, however it
may be called.
The defendants
here are the two individuals who are trustees of the Kasner Charitable Trust.
That charitable trust I am told, (I have not seen the trustee deed), exists for
the purposes of benefiting jews and jewry both within and without the United
Kingdom. Mr Kasner in his statement of evidence, which was exchanged, observes
that he, on hearing of this arrest and charge and upon reading information
about the alleged offences, was, as a devout jew, deeply and bitterly offended.
Indeed, that would be very natural. He could not then have known, what Simon
Brown J later said, that there was no evidence of any actual harm to any jewish
person or interest.
Mr Kasner was
minded, he said, to forfeit the lease of the flat, 35 Silver Birch Close, held
by Mr Van Haarlam. He went to the legal adviser, Mr B Erlich, the solicitor who
regularly advises the trust, who happens to be his nephew and who advises the
trust in an unpaid and honorary capacity, as I understood him. The solicitor
gave evidence before me and all questions of legal professional privilege upon
that matter were waived. Mr Kasner sought advice as to whether he could forfeit
the lease held by Mr Van Haarlam. He was advised, according to his statement,
that:
Until Mr Van
Haarlam was convicted and the facts relating to his arrest were proved to a
court of law, no action should be taken against him for breach of his covenant
against illegal use, and if such action was taken it would be unlawful.
In my
judgment, that was not accurate advice. Plainly, if there was knowledge of
illegal activities in the flat, that knowledge has to be proved only to a civil
court in forfeiture proceedings on the balance of probabilities. There is no
question of any presumption of innocence having anything to do with the matter,
contrary to the impressions which Mr Erlich, the nephew and solicitor, observed
to me that it had. And there is no difficulty whatever in proceeding in the
civil court to a decision different from that in the criminal court where
matters have to be proved in the old-fashioned phrase ‘beyond reasonable doubt’
and in the modern phrase ‘so that the jury is sure’. Consequently that advice
must have been erroneous. However, it was given and bona fide acted upon by Mr
Kasner.
Mr Kasner, in
consequence, went on and allowed to be sent out on May 23 1988, something like
six weeks after the arrest, the demand for the ground rent for June 24 1988 to
Christmas Day. On June 17 that ground rent was paid by a cheque drawn by a
solicitor, a Mr Dennis Lynch. Mr Lynch was the duty solicitor who had been got
in to advise Mr Van Haarlam when he was first arrested and who gave evidence
before me.
On June 16 Mr
Lynch wrote a letter on the writing paper of his firm, Neilson & Co,
addressed to the Kasner Charitable Trust, referring to the flat, 35 Silver
Birch Close, enclosing the cheque for £32.50 for the ground rent and saying
that any problems should be referred to him. I also had shown to me the demand
addressed to Mr Van Haarlam at the flat and the cheque.
There is no
doubt from the evidence before me from Mr Kasner, Mr Erlich and his sister,
Miss Erlich, who acts as the typist to type the charitable trust rent demands
in the intervals of her work from Mr Kasner’s private property companies, that
that demand was sent deliberately and the rent was accepted with full knowledge
that Mr Van Haarlam had been arrested and charged with the offences with which
he was later convicted. That is to say the offences, put in broad and
colloquial terms, of spying by the use of the flat for that purpose. It is also
clear that Mr Kasner also knew of the allegations that Mr Van Haarlam had been
getting close to persons in the organisations concerned with jewry, which was
the reason why Mr Kasner was so anxious to forfeit Mr Van Haarlam’s lease and
cease to have any further contact with him.
That was
followed on November 21 1988 by a further demand for rent. That demanded the
rent in respect of Mr Van Haarlam in the sum of £32.50 from Christmas Day 1988
to Midsummer Day 1989 and was addressed specifically to Mr Lynch at Neilson
& Co, Seymour Place, W1.
Perhaps, not
surprisingly, Mr Lynch was somewhat busy at that time with the trial coming on;
the indictment, as I have said, had been drawn in September and the trial date
must have been coming up. He overlooked the matter and eventually on February
13 1989 wrote a letter apologising for the delay in sending the ground rent,
sent his own client account cheque for the £32.50, asked for a receipt, and
said he was available. That rent was accepted and was, on February 15, paid
into the Lloyds Bank account of the charitable trust.
I have had
produced to me, as I have said, the housing ledger of the charitable trust with
a page for Mr Van Haarlam and this particular flat. That records the payments
to which I have already referred. The page has attached to it in the top
left-hand corner a typewritten slip which is stuck on to the corner of the
ledger sheet. It says:
As Mr Van
Haarlam will not be available at his flat for some time (years perhaps),
contact Mr D Lynch, Neilson & Co, Solicitors, 98 Seymour Place [telephone
number given] for any ground rent problems.
I was told by
Miss Erlich that she typed that. I was told by her that she probably was
instructed by either her brother or her uncle to type it, and that it was a
result of knowing about the charges for spying, loosely so-called, (although
they are only acts preparatory and no actual spying is alleged in the
indictment or found in the summing up) and that the typing was done towards the
end of 1988, although the date could not be given. I accept that evidence.
There is also
attached to the ledger sheet a manuscript document, a piece of paper with the
date December 1989 at the top right-hand corner and in capital letters, ‘DO
NOT’ heavily underlined ‘send any further demand notes even to the solicitor of
this flat’. The English is perhaps slightly surprising but Miss Erlich and,
indeed, all the witnesses for the defendants, did not seem very fluent in
English. There is also written in pencil at the bottom of the ledger sheet, ‘Do
not send any further demand notes to this flat’. Those entries are both, I was
told, and it is not doubted, in Miss Erlich’s hand.
That was
followed by the handing on December 8 1989 by Mr Kasner personally, as he told
me and I believe, of a document in an envelope addressed to Mr Van Haarlam at
35 Silver Birch Close. The document is on writing paper with a printed heading,
Kasner Charitable Trust and number, address and telephone numbers. The actual
writing is very short and says:
Re 35 Silver
Birch Close. To ERWIN VAN DER HAARLAM. TAKE NOTICE that you did in breach of
the covenant on the tenants part contained in your lease of the above premises,
use the premises for illegal purposes, namely for acts preparatory to the
commission of offences under the Official Secrets Act of 1911 contrary to
Section 7 of the Official Secrets Act 1920.
The said
breach of covenant is incapable of remedy.
8 December
1989.
Josef Kasner
for & on
behalf of
The Kasner Charitable
Trust.
That document
was served by Mr Kasner going to 35 Silver Birch Close and pushing it in its
envelope through the letter box, so as it would fall probably, according to the
evidence of Mr Erlich, on the
inside, to the best of his recollection. That was said to be good service
pursuant to section 196 of the Law of Property Act 1925 of such a notice. The
provisions relied upon are of course extremely well known. Section 196(3):
Any notice
required or authorised by this Act to be served shall
— notice that
word —
be
sufficiently served if . . . in case of a notice required or authorised to be
served on a lessee or mortgagor, [it] is affixed or left for him on the land or
any house or building comprised in the lease or mortgage.
I have omitted
irrelevant words.
Mr Kasner’s
service seems to me quite undoubtedly good service within the terms of section
196(3). It fulfils the requirements exactly.
It was
attacked on the grounds that it was not a proper or reasonable thing to do when
it was well known, at that date in 1989, that Mr Van Haarlam was locked up in
prison, when it was well known that solicitors were acting for him and were
asking to receive all documents, to serve it by delivering it in accordance
with section 196. In my judgment, that is unarguably not correct. It is
perfectly lawful, it may not be very attractive, but it is perfectly lawful
according to the letter of the law, which is sufficiently complied with to
serve this notice by serving it through the doorway. It did in fact come to
nobody’s notice.
On December 21
1989 an entry was effected to the flat; one could call it a forcible entry, but
the force needed was very slight because Mr Erlich told me, and I believe, that
the doorway to the flat had already been substantially damaged by the police
forcing an entry when they arrested Mr Van Haarlam on April 2 1988.
Accordingly, it required only, Mr Erlich said, a very slight push to get the
nib of the lock out of the place into which it goes.
That was, it
is said, a peaceful re-entry. It was an entry upon the premises and it took
possession of it by a trustee — Mr Kasner was personally present, and Mr
Erlich, also the solicitor to the trustees — of the flat, and thereby
determined the demise.
None of the
facts I have so far recited can really be doubted. I should add two further
facts, that a rent demand was prepared on May 22 1989 after the conviction of
Mr Van Haarlam, but I accept the evidence of Mr Erlich and Miss Erlich that it
was never sent. Mr Erlich said: ‘It got very close to it’, and he thought ‘It
had been a close squeak’, or words I think to that effect. Further, a rent
demand was prepared on November 20 1989, which was intercepted at an early
stage and again, I accept, was never sent. I find it astonishing, I must add,
that in the face of all the notes which the typist, Miss Erlich, had made for
herself about not sending further demands, that she went through the farce of
typing them out in order to throw them away, but that appears to be the sort of
young woman she is.
That being so,
there is no question that any demand for rent was made after the demand made on
November 21 1988 for the half-year to Midsummer Day 1989 and the payment of
that gale of rent unequivocally accepted on February 15 1989.
In those
circumstances the question arises: Has there been a valid forfeiture? I have been most helpfully supplied with a
skeleton argument by Mr Smith for the trustees and I will go through it.
He asserts,
first, that the rent due in June 1989, on June 24 I think, for the half-year to
Christmas Day 1989, had never been paid and was in arrears although it had not
been demanded. There was no requirement that it be demanded. The rent was thus
unpaid at the date of service of the notice on December 8 1989 and on the date
of re-entry on December 21 1989. In my judgment, those facts are undoubtedly
proved and there was a failure to pay the ground rent owing to an oversight by
Mr Lynch, but none the less that was what the result was. Second, Mr Smith
asserts that there is a right to forfeit for breach of covenant by use of the
flat for illegal purposes.
Mr Smith deals
with a number of points which I think I have already dealt with. He asserts the
notice was properly served; I hold that it was properly served by Mr Kasner on
December 8. That it was thus served prior to the entry, which I hold was on
December 21. The section 146 notice which I have read was attacked upon the
ground that it was ‘lacking in proper particularity’ and that arises from
section 146 of the Law Property Act itself, subsection (1):
A right of
re-entry or forfeiture under . . . a lease for a breach of any covenant or
condition in the lease shall not be enforceable, . . . unless and until the
lessor serves on the lessee a notice —
(a) specifying the particular breach complained
of; and
(b) if the breach is capable of remedy, requiring
the lessee to remedy the breach; and
(c) in any case, requiring the lessee to make
compensation in money for the breach; . . .
This notice
declares that the breach is capable of remedy, it also does not demand any
compensation in money. It is well-settled law that the notice does not have to
make any demand for compensation in money and no attack upon it can be made
upon that ground. It was attacked upon the ground that the particular breach
was really exiguously mentioned.
The notice is,
in my judgment, one of the most exiguous I have had to deal with and I regret
that it failed to refer to section 146 of the Law Property Act at all, that it
failed to refer to the covenant on the tenant’s part by number or other
indication and that it contained the most general words that the user of the
premises for illegal purposes was for acts preparatory to commission of
offences. I am, however, satisfied that by a very short head it gets within the
necessary requirements to be a valid section 146 notice.
In my view,
the words ‘Use the premises for illegal purposes, namely for acts preparatory
to commission of offences under the Official Secrets Act’, which are almost the
same as the words in the indictment, are sufficiently specific for Mr Van
Haarlam to know that of which he was charged. If they were sufficiently
specific for the purposes of the crime with which he was charged and for the
jury to convict him of the crime upon that charge, they are, in my judgment,
also sufficiently specific to amount to a valid section 146 notice.
It is clear
that the time allowed, from December 8 to 21 1989, was very short, but it is
asserted that this breach was, as the notice said, ‘incapable of remedy’. Had
it been a breach capable of remedy the notice would be bad because the notice
concerning a breach capable of remedy must call upon the tenant to remedy the
breach.
I was referred
as to what breaches are and are not capable of remedy to a series of well-known
cases such as: Hoffman v Fineberg [1949] Ch 245; Rugby School
(Governors) v Tannahill [1935] 1 KB 87; Scala House &
District Property Co Ltd v Forbes [1974] QB 575 and Expert
Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch
340*.
*Editor’s
note: Also reported at [1985] 2 EGLR 85.
From those, Mr
Smith distilled the proposition that ‘negative covenants are generally not
capable of remedy’. He further went on to argue that ‘a breach of covenant
involving an illegal user is usually not capable of remedy’, and for that he
specifically referred to Hoffman v Fineberg and Rugby School
(Governors) v Tannahill. He asserted that the breach of a covenant
against using the flat for illegal purposes cannot be remedied merely by
ceasing those illegal acts. Those acts have been committed, they exist and they
were, as this case demonstrates, of a serious nature.
In my
judgment, the proposition exemplified in Hoffman v Fineberg is,
as the learned judge said at p 257:
. . . that on
the facts of this case
— which
concerned the use of premises as a gaming club —
this is a
breach where mere cesser is no remedy. The lessor is entitled to be protected
against the slur which is involved in being said to be the landlord of a gaming
house, even though no monetary damage ensued from it. The fact that gambling
has ceased cannot alter the fact that the property has been used for this
illegal purpose. By ceasing, the lessee merely complies with the law and
prevents a further conviction; he cannot make his record clean, as he could by
complying, though out of time, with a failure to lay on the prescribed number
of coats of paint. I doubt whether the process of white washing in the moral as
opposed to the physical sense can be a remedy. The breach was the condonation
of a crime, and ceasing to commit it is no remedy.
The judge held
in that case that on the facts there was no remedy available within the
intendment of the statute. In my judgment, I should follow that and hold that
in this case on these facts there would be no remedy upon the intendment of the
statute without going so far as to hold (as no judge has yet held, save in the
first instance decision of Rugby School (Governors) v Tannahill,
which was later disapproved in the Court of Appeal) that negative covenants are
always incapable of remedy, nor even that a negative covenant and a breach
involving illegal user is always incapable of remedy. There are trivial
breaches of what many people would call regulations rather than law where there
is technically a criminal offence committed and possibly a breach of some
negative covenant, but the court would not pay a great deal of heed to it and
would hold that it was remediable.
This case
involved the putting in place of Mr Van Haarlam, as Simon Brown J put it at his
trial, as a sleeper, not an active spy but somebody there ready to perform the
acts desirable by his foreign
J’s sentence of 10 years and must be taken to be a breach by illegal acts. In
my judgment, the illegal acts, all of which I hold are in breach of covenant,
must include: first, living in the flat which was itself article 1 of the
particulars of the crime which I have read out; and second, by having within
the flat, as I am satisfied on the balance of the evidence here, Mr Van Haarlam
having chosen to give no evidence, what was loosely described as the paraphernalia
for spying, being such unusual items of daily life as one-time code pads for
the comprehension of messages in code and other materials. It is clear that all
these were actually found in the flat and must have involved the commission of
the illegal act of preparing to spy to the detriment of this country within the
flat itself and thus constituted, as the section 146 notice charged, the use of
the premises for illegal purposes.
I therefore
hold that the section 146 notice was good and that there is an ample making out
of the acts requiring forfeiture.
Counsel then
argued that the non-service of the rent demand in the summer of 1989 was in
some way a wrongful act. In my judgment, a lease which provides that the rent
was due whether demanded or not is perfectly sound, well known and indeed, I
think, a normal form of draft. It beholds tenants to put in place arrangements
to pay their rent and if a landlord, even though he normally, and perhaps wisely
and sensibly and regularly, sends out rent demands, he is not thereby placing
himself under a legal obligation to do so. It is good practice, but it is not a
requirement of the law, and there should be no charge against a landlord of
‘trap’ by reason of his having failed so to do.
It was then
said that the trustees sat by for a very long time after the conviction, which
was on March 3 1989, before service of the section 146 notice of December 8
1989 and re-entry on December 21. It is quite true that it was a long time, but
it is well settled in law that a landlord standing by and doing nothing does
not thereby in any sense waive his rights to forfeiture. I therefore do not
think anything turns upon that point.
Then there was
an allegation that there was a demand for rent in June 1989; I have already
held that that is wrong, there was no demand at that time. Preparation of a
demand without its being sent out cannot be in any sense a communication to the
tenant which is the essential point of any waiver.
There was also
some point about some alleged demand for rent after forfeiture. There were
demands for a service charge from a service company, which is an entirely
separate entity as I here find upon the evidence I have heard from the trustees
and has no connection with them. That cannot possibly be a demand on their
behalf for rent under the lease. There was no evidence of any demand for rent
after the re-entry and, if there were, there would be grave difficulties in
understanding that as a waiver of the already completed forfeiture then
completed on December 21 1989 by re-entry.
There is,
however, one point of real difficulty. That is the rent demands, to which I
have referred, sent out in May and November 1988 and paid on June 17 1988 and
February 15 1989. The question is, were those unequivocal demands met with
undoubted receipt of the moneys as rent which undoubtedly would be affirmations
of the tenancy by the landlord made at a time when the landlord, to quote Woodfall’s
Law of Landlord and Tenant para 1-1913, had ‘notice or knowledge of’ the
alleged forfeiture.
That
requirement has long been recognised in law. The onus is upon the tenant to
give some evidence of the lessor’s knowledge. Mr Kasner himself — and indeed Mr
Erlich and Miss Erlich — all said that from April 1988 they knew of the charges
against Mr Van Haarlam, knew that he was alleged to have been a Czech spy, knew
that he was alleged to have been in breach of the Official Secrets Acts and was
in custody. They took, so far as the evidence before me goes, absolutely no
step whatever to investigate the facts. They did not visit the neighbours and
inquire whether any of them knew anything about Mr Van Haarlam’s activities,
they did not apply to the police. They spoke briefly to Mr Lynch, who was acting
as Mr Van Haarlam’s solicitor in his defence, and he refused very naturally and
properly to give any information. He had a duty of confidence to his client and
would have been quite wrong to volunteer information about his client’s
activities.
No letter was
written to Mr Lynch which may well have produced the same answer, nor was any
letter written to Mr Van Haarlam as could easily have been done through the
medium of sending it care of Mr Lynch to be forwarded if Mr Kasner or his
cohorts did not know in which prison Mr Van Haarlam was at any particular time
while he was in custody awaiting trial.
There must
have been some form of process of committal by magistrates or other process
leading to Mr Van Haarlam appearing on the indictment. Nothing appears to have
been done to investigate those matters.
Mr Kasner had
had the advice of his nephew, Mr Erlich, that nothing could be done in the
terms which I have read out from Mr Kasner’s written statement, and his
evidence to me merely reaffirmed that he knew a great deal about the
suspicions, the accusations, the alleged acts, but that he had no personal
knowledge which would amount to proof of those acts.
In the
circumstances, Mr Smith cited to me and heavily relied upon a decision of the
Court of Appeal called Chrisdell Ltd v Johnson (1987) 54 P&CR
257. That decision was of a two-judge Court of Appeal, on appeal from a county
court. Glidewell LJ, who has a considerable knowledge of the subject of
landlord and tenant, delivered the leading judgment. He accepted the trial
judge’s view that, and I quote at p 264:
. . . though
the landlords undoubtedly had material which caused them to suspect that there
had been a breach . . . nevertheless when they got the letter from Johnson
[that was the tenant], and I would add when they got the second letter from his
solicitors, they must have been in a state of mind where they concluded that
they could not prove a breach. I put it in that way because they had been
threatening to take proceedings for possession up until February 4 1978. To my
mind the only explanation for their failure to take those proceedings is that
they took the view that in those proceedings they might well fail because
Johnson’s explanation might well be accepted by a judge. If that is correct, I
do not myself see how it can be said that the landlords had waived the right
they had. If a landlord receives a representation from his tenant which, if
true, means that there has been no breach and if the landlord, not being
sufficiently confident of the untruth of what the tenant says, decides not to
take proceedings but proceeds on the basis that what the tenant says is true,
then, . . . it cannot later be said that he knew all the necessary facts to
establish a breach.
The decision
does not seem to have been reached upon any very detailed consideration of the
authorities, which are lengthy. They appear in Woodfall (28th ed) as
note 44 to para 1-1913 and Woodfall summarises the decision itself at
the end of that paragraph as follows:
Where a
landlord suspected that a tenant might be in breach of the tenancy agreement,
but was not sufficiently confident that a judge would disbelieve the tenant’s
denial of that allegation, a failure to take any action against the tenant and
a continued acceptance of rent did not amount to a waiver of the breach.
Thus, Woodfall
explains it as mere suspicion faced with a clear explanation and denial upon
the other side.
Here I have
the different case. I have the very public arrest of Mr Van Haarlam on April 2
1988. I have a great deal of newspaper publicity. I have the availability of
sources of inquiry, none of which were pursued. I have the contact with Mr
Lynch, which was never followed up by any letters. I have the typed notice in
the rent ledger itself that ‘Mr Van Haarlam will not be available . . . for
some time (years perhaps)’, which was based undoubtedly upon a belief that he
was going to be convicted and would receive a long sentence, which must mean
that there was a belief that he had committed acts in the flat which amounted to
the illegal use of the flat. Above all, far more to my mind than mere
suspicion, Mr Van Haarlam had been arrested and was kept in custody throughout
the time between April 2 1988 and his trial in late February 1989. That could
only have been in the face of the presumption in favour of bail, because it was
a serious and grave case with a great deal of evidence to support conviction
and that was known to the defendants.
To my mind it
was a perfectly possible view for the trustees to take that it would be better
to wait following his arrest until his trial and see what happened then. But
that view must have been accompanied by a duty, if that was the view, that the
trustees must suspend action, not to demand and accept rent. To demand and
accept rent with that knowledge, and then to do it again with more knowledge at
the end of November 1988 and receive and accept the rent as late as February 15
1989, very shortly before the conviction, at a time when a great deal of
material must have been available to the landlords, seems to me to be acts
which do amount to an affirmation of the tenancy. In my judgment, there was a
waiver of the undoubted right to forfeit by this double issue of demand for and
acceptance of rent by the landlords and thus this action must fail.
However, I
have been asked to consider also the further point: what would happen if there
had been a good forfeiture, would Mr Van Haarlam be entitled to relief?
In case this
matter goes further I think I ought to express my own view, which is that the
damage caused to the landlords by these acts was not such as to warrant a
court, in balancing up, as Morritt J said one should and as I agreed one
should:
The damage
sustained by the landlord and whether that is proportionate to the advantage it
will obtain if no relief is granted.
The advantage
to the landlords of obtaining vacant possession of this flat where there is
well over 80 years to run at a very low ground rent, is so disproportionate to
the damage done to it by the acts, illegal as they were and damaging to the
state as they were, by Mr Van Haarlam, that had it been my business I would
have granted him relief from forfeiture.
However, I
should add that it seems to me that to do otherwise would be to punish him
twice for his illegal offences.
Nothing he did
in the flat was qua tenant offences; Mr Van Haarlam did not disturb any
neighbour, he did not fail to pay his landlords’ rent, he did not fail in any
of his obligations as a tenant. His activities against the state had been
punished by a very severe sentence by Simon Brown J, which he is now serving.
It seems to me that it would be to punish him twice to take away from him the
flat for which he paid £36,000 only four or five years ago as well as having
been sent to prison. It is quite true that he has no need of the flat as a
residence because he is in prison and then will be deported, but it is an asset
which he may well be desirous of exploiting by assignment.
Thus, were it
relevant, I would have granted relief of forfeiture, but the question does not
arise because I hold that, although there were undoubtedly breaches of
covenant, serious and irremediable breaches of covenant, proper service and
proper re-entry, yet, before service of the section 146 notice on December 8,
there had been steps which amounted to a waiver of the forfeiture.
