Landlord and tenant — Breach of covenant — Proceedings to forfeit lease — Landlord transferring reversionary interest in lease — Defect in service of proceedings — Whether substitution of claimant curing defect — Applications dismissed
Business premises were let under a lease made between the predecessors in title of the claimant landlord and the first defendant tenant for a term of 999 years from 1913. In December 2005, the claimant started proceedings for forfeiture of the premises for breach of covenant. The claimant alleged that the defendants had failed to comply with a reinstatement obligation that was contained in a licence for alterations, under which the first defendant had been given permission to connect the premises with adjacent premises that were held by a sister company. The obligation to reinstate arose on the termination of the lease of the adjacent premises.
In July 2005, the first defendant assigned its interest in the premises the second and third defendants. In October 2005, the claimant transferred its reversionary interest in the property to its associated company (ME) and an application was lodged at the Land Registry to register the transfer. The transfer was not registered immediately and registration had not been completed when the claimant issued the forfeiture proceedings. However, unknown to the claimant or ME, the transfer had been registered by the time the forfeiture proceedings were served on the defendants.
When the second and third defendants became aware of the registration position, they objected that the lease had not been forfeited since, at the time of the purported forfeiture by service of proceedings, the claimant had no interest in the premises because of the transfer to ME.
The claimant and ME applied for an order that ME be substituted as claimant. The second and third defendants applied for summary judgment against the claimant on the entirety of the claim, pursuant to CPR 24, or, alternatively, an order that the particulars of claim be struck out under CPR 3.4, on the ground that the claim had no prospect of success or alternatively disclosed no reasonable cause of action.
The issue for the court was whether, if the identity of a landlord changed between the date of issue and the date of service of forfeiture proceedings, the subsequent substitution of the new landlord as claimant cured the fundamental flaw in the proceedings.
Held: The applications were dismissed.
The present proceedings could not stand. Service “by the landlord” was a precondition to a landlord being entitled to a subsequent order for possession and the claimant could not prove an actual and effective exercise of the right of entry that was sufficient to terminate the lease.
At the time of the service of the forfeiture proceedings, the claimant was not the landlord of the premises, either legally or beneficially. The claimant did not therefore have any right to make lawful entry on the premises. Although it committed no trespass by serving the proceedings, the effects of service, as a notional entry and termination of the lease by the actual landlord, did not occur.
Accordingly, the substitution of ME as claimant would not cure the defect in the original forfeiture proceedings by standing as though they had been issued and served by ME. However, the addition of ME as a claimant, and subsequent reservice of the proceedings, would undoubtedly remedy the defects as from the time of any reservice. This was a matter for the court’s discretion and there was no good reason to cause the landlord to waste money issuing fresh proceedings, when the addition of a party, with consequential amendments, could be made on the usual terms as to costs and produce a good cause of action capable of being established.
Timothy Morshead (instructed by Speechly Bircham) appeared for the claimant; Katharine Holland (instructed by Denton Wilde Sapte) appeared for the defendants.
Eileen O’Grady, barrister
