Development lease — Covenant to carry out works as expeditiously as possible — Whether once-and-for-all breach waived by appellant landlord — Whether unreasonable refusal of consent to assignment — Appeal dismissed
A roof-space lease included a covenant to carry out and complete the development of the property as expeditiously as possible. A preliminary agreement, pursuant to which the lease had been granted, provided for the lessee to start development by 1996, and to use all reasonable endeavours to complete the works by September 2000. The second respondent had a charge over the lease, granted by the lessee. In exercise of its power as chargee, it sold the lease to the first respondent. The appellant held an overriding lease in reversion, granted by the freeholder.
The first respondent brought an action against the appellant, claiming that it had unreasonably refused its consent to the assignment of the lease to the second respondent. The appellant, in turn, brought proceedings claiming that, at the date of assignment, the lease had been liable to forfeiture for breaches of, inter alia, the covenant to complete the development. Determining preliminary issues, the judge held that the appellant had waived the breach of covenant by the lessee. He took the view that the breach was of a once-and-for-all nature, and was not a continuing breach, so that the appellant’s waiver was irrevocable. He went on to find that the appellant had unreasonably refused consent to the assignment. The appellant appealed.
Held: The appeal was dismissed.
A covenant to do something by a particular date was a covenant that could only be broken once, and the same applied to a covenant to do something within a reasonable time: Farimani v Gates [1984] 2 EGLR 66 applied. On a correct construction of the lease, it was possible to point to a time by which the works, if carried out and completed as expeditiously as possible, should have been completed. The covenant therefore provided for a once-and-for-all breach. Moreover, the judge had correctly concluded that the appellant had unreasonably refused consent to the assignment.
Paul Morgan QC (instructed by Goldkorn Mathias Gentle) appeared for the appellant; Michael Pryor (instructed by Bircham Dyson Bell) appeared for the first respondent; Timothy Dutton (instructed by Berwin Leighton Paisner) appeared for the second respondent.
Sally Dobson, barrister
