Defendants leasing premises to claimant — Claimant licensing premises to third party — Third party breaching terms of licence and lease — Defendants serving claimant with notice under section 146 of Law of Property Act 1925 — Claimant obliged to give third party specified period for compliance — Whether section 146 notice should take account of claimant’s obligations to third party — Claim dismissed
The claimant leased premises from the defendant. The lease contained a covenant that the premises should be used only as shops, showrooms or offices. A third party occupied part of the premises by way of a licence granted by the claimant. Although the licence had been granted for office use only, the third party used the premises to run computer-study courses. The defendants maintained that such educational use was in breach of the covenant, and served a notice on the claimant, under section 146 of the Law of Property Act 1925, requiring the breach to be remedied within a reasonable time.
Under the terms of the licence agreement, the claimant was obliged to give the licensee two months within which to remedy any breach. It therefore claimed that the reasonable period, as required under the section 146 notice, should correspond with its obligations under the licence agreement, that is, it should be two months.
Held: The claim was dismissed.
1. The section 146 notice was validly served because the third-party use was clearly in breach of both the lease and the licence agreement.
2. The reasonableness of the time for compliance with the section 146 notice related to the contractual obligations between landlord and tenant. Thus, it was necessary to consider only what was reasonable between those parties to enable the claimant to comply with the covenant in order to stop the forfeiture proceedings. The claimant could not better its position by referring to terms it had negotiated with a third party, since that would mean that the right of the landlords to serve the section 146 notice would have been affected by arrangements to which they were not a party.
3. A reasonable time within which the claimant could secure compliance with the covenant would have been the time necessaryto take the third party to court in order to force its compliance with its obligations under the licence agreement.
Alaric Watson (instructed by Layard Horsfall, of Godalming) appeared for the claimant; Edwin Johnson (instructed by Radcliffes le Brasseur) appeared for the defendants.
Vivienne Lane, barrister
