Landlord and tenant – Forfeiture – Section 1(3) of Leasehold Property (Repairs) Act 1938 – Claimant landlords bringing proceedings to forfeit defendant’s lease for arrears of rent – Defendant applying for relief from forfeiture – Claimants thereafter applying to court for permission to bring further forfeiture proceedings on ground of breaches of repairing covenants – Whether existence of first forfeiture proceedings precluding second forfeiture claim – Whether claimants electing to treat lease as at an end pending outcome of first proceedings – Application dismissed
The claimants were the landlords and the defendant was the tenant under a lease of premises for a term of 30 years and nine months from September 1980. In 2002, the claimant served a notice on the defendant, under section 146 of the Law of Property Act 1925, specifying certain breaches by the defendant, including breaches relating to the repairing covenants. The defendant served a counternotice.
In January 2004, the claimants issued proceedings to forfeit the lease for arrears of rent. A witness statement referred to the breaches of the repairing covenants but stated that the claimants were not at that time applying for permission to forfeit on that ground. In its defence, the defendant admitted the arrears but claimed relief from forfeiture under section 138 of the County Courts Act 1984.
The claimants then applied for permission, under section 1(3) of the Leasehold Property (Repairs) Act 1938, for permission to issue forfeiture proceedings on the ground of breaches of the repairing covenants, with those proceedings to be consolidated with their existing forfeiture claim. The defendant applied to strike out that application. It contended that the claimants could not commence new proceedings to forfeit the lease on that ground because there was no lease to forfeit; the lease had already been forfeited on the issue and service of the first proceedings, subject to possible reinstatement should the defendant succeed in obtaining relief from forfeiture. The defendant’s application was refused and a full hearing was conducted to determine the claimants’ permission application.
Held: The application was dismissed.
The issue and service of a writ claiming forfeiture was best analysed as an unequivocal election to forfeit rather than an act terminating the lease: Billson v Residential Apartments Ltd [1992] 1 EGLR 43; [1992] 02 EG 91 considered. Where a landlord issued proceedings and made that election, it was not immediately certain whether forfeiture would prove effective; this would depend on whether the landlord’s claim succeeded, although, if it did, the lease would be forfeited as from the date of service of the proceedings. By issuing and serving the first forfeiture proceedings, the claimants had unequivocally elected to forfeit the lease. They could not now resile from that election unless they were to discontinue the first proceedings and/or waive the forfeiture: Wheeler v Keeble [1920] 1 Ch 57 applied. In applying for permission under section 1(3) of the 1984 Act, the claimants were not simply seeking to rely on a breach of covenant that had existed prior to forfeiture in the first proceedings to justify for such forfeiture. A section 1(3) application required a landlord to assert that the lease continued and that it could be forfeited for breaches of covenant. Therefore, for the purposes of their application, the claimants had positively to assert that the lease remained in existence, otherwise they had no rights to exercise and no entitlement to forfeit. Such an assertion would be inconsistent with the claimants’ unequivocal election to treat the lease as at an end: Baglarbasi v Deedmethod Ltd [1991] 2 EGLR 71; [1991] 29 EG 137 distinguished.
Accordingly, the claimants’ application failed. If they wanted to rely on the breaches of the repairing covenants as a ground for forfeiture, they had to await the determination of the defendant’s application for relief from forfeiture in the first proceedings or to withdraw those proceedings. Although that outcome might appear unattractive and overly technical, it followed from an application of principle; moreover, the court was entitled to take into account the breaches of the repairing covenants in exercising its discretion to grant relief from forfeiture in the first proceedings.
Harriet Townsend (instructed by the legal department of Hammersmith and Fulham London Borough Council) appeared for the claimants; James Fieldsend (instructed by Davies Arnold Cooper LLP) appeared for the defendant.
Sally Dobson, barrister
