Landlord and tenant — Leasehold Property (Repairs) Act 1938 and section 146(1) of Law of Property Act 1925 — Appeal from decision of county court judge holding that a notice under section 146(1) was invalid because of non-compliance with the 1938 Act — County court judge held that the notice related to a breach of covenant to repair and that it failed to contain the statement required by section 1(4) of the 1938 Act to the lessee’s entitlement to serve a counternotice claiming the benefit of that Act — The lessors’ notice recited a number of covenants, which included a repairing covenant, and alleged 13 breaches, one of which was the unhygienic condition of a toilet contrary to the requirements of the public health authority — The complaint was substantially that the premises, instead of being used as a restaurant in accordance with the user covenant, were used for the operation of amusement machines, causing a nuisance to adjoining occupiers — Held that the breaches alleged in the lessors’ notice were not breaches of a ‘covenant or agreement to keep or put in repair’ within the meaning of section 1(1) of the 1938 Act and that the notice was not invalid under section 1(4) of that Act — Question raised but not answered by May LJ as to whether a notice specifying both breaches of covenant to repair and of other covenants could be severed and held good in part and bad in part — Practice mentioned of serving two separate notices in such cases — Appeal allowed
This was an
appeal by lessors from a decision of Judge Macdonald, sitting at Poole County
Court, holding, on a preliminary point, that a notice under section 146(1) of
the Law of Property Act 1915 was invalid for non-compliance with the Leasehold
Property (Repairs) Act 1938. At the date of service of the notice in question
more than three years of the term of the lease remained unexpired. The
appellant lessors were Starrokate Ltd and the lessees were Olive Grace Burry
and Richard Trevor Burry. The premises concerned were business premises at
Wimborne, Dorset.
Sir Ashley
Bramall (instructed by Turner, Peacock, agents for Lester & Russell, of
Bournemouth) appeared on behalf of the appellant company; K Wylie (instructed
by Cyril Clark & Son, of Bournemouth) represented the respondents.
Giving
judgment, DUNN LJ said: This appeal raises a short point under the Leasehold
Property (Repairs) Act 1938.
The
respondents to the appeal (whom I shall call the tenants) were granted a lease
of business premises at Wimborne in Dorset by a supplemental lease dated
December 10 1979 for a term of seven years. The supplemental lease contained a
number of tenant’s covenants and, in view of the course that the appeal has
taken, it becomes necessary to read one of them, which has been loosely
referred to as the ‘repairing covenant’, in full. The covenant obliges the
tenant:
At all times
during the said term well and substantially to repair decorate cleanse maintain
amend and keep the interior of the demised premises and the windows thereof and
all additions made thereto and the fixtures and fittings therein and the
interior walls and appurtenances thereof and the sewers drains and services
serving only the demised premises with all necessary reparations cleansings and
amendments whatsoever (damage by fire only excepted).
There were also
covenants not to obstruct the passages and staircases. There was a covenant not
to deposit waste. There was a covenant to comply with Acts of Parliament and
by-laws and the enactments of, inter alios, local authorities. There was
a covenant not to cause or allow a nuisance, and there was a proviso for
re-entry in case of any breach or non-observance of any of the covenants.
On October 6
1981 the landlords served on the tenants a notice under section 146 of the Law
of Property Act 1925 requiring them to remedy certain breaches of covenant.
That notice was complied with and this court is not concerned with it. But on
February 10 1982 a further notice under section 146 was served on the tenants,
and that notice has not been complied with, and it is the terms of that notice
which forms the subject in dispute in these proceedings.
As a result of
the non-compliance the landlords took proceedings for forfeiture in the Poole
County Court, and His Honour Judge Macdonald ruled on a preliminary point,
which we were told had been raised informally by counsel for the tenants, that
the notice of February 10 1982 was invalid, because it did not comply with the
provisions of the Leasehold Property (Repairs) Act 1938. The landlords now
appeal against that ruling of the learned judge, maintaining that the notice
was a valid notice.
It is as well
to remind ourselves of the precise wording of section 146 of the Law of
Property Act. First of all it provides in subsection (1) that:
A right of
re-entry or forfeiture under any proviso or stipulation in a lease for a breach
of any covenant or condition in the lease shall not be enforceable, by action
or otherwise, unless and until the lessor serves on the lessee a notice — (a)
specifying the particular breach complained of; or . . .
Subsection (1)
of section 1 of the Leasehold Property (Repairs) Act 1938 provides:
Where a
lessor serves on a lessee under subsection (1) of section 146 of the Law of
Property Act 1925, a notice that relates to a breach of a covenant or agreement
to keep or put in repair during the currency of the lease all or any of the
property comprised in the lease, and at the date of the service of the notice
three years or more of the term of the lease remain unexpired, the lessee may
within twenty eight days from that date serve on the lessor a counternotice to
the effect that he claims the benefit of this Act.
Subsection (2)
provides that a right to damages for a breach of such a covenant shall not be
enforceable by action commenced at any time at which three years or more of the
lease remain unexpired unless the lessor has served the appropriate notice
under section 146 of the Law of Property Act 1925, and where a notice is
served, the lessee may serve a counternotice.
Subsection (4)
is in these terms:
A notice
served under subsection (1) of section one hundred and forty-six of the Law of
Property Act 1925, in the circumstances specified in subsection (1) of this
section, and a notice served under subsection (2) of this section shall not be
valid unless it contains a statement, in characters not less conspicuous than
those used in any other part of the notice, to the effect that the lessee is
entitled under this Act to serve on the lessor a counter-notice claiming the
benefit of this Act. . . .
Those
provisions originally related only to small houses as defined, but the Act was
amended by the Landlord and Tenant Act 1954 to make them applicable to leases
of all premises, both residential and business.
The notice in
this case first of all recited a number of covenants in the supplementary
lease, including, firstly, the repairing covenant and also the other covenants
to which I have referred. In paragraph 3 the notice set out the breaches of the
covenants alleged. They relate to a variety of breaches, including at the end
three breaches of the covenant not to cause or commit a nuisance. It is plain
from the correspondence that is before this court that the principal complaint
of the landlords was that these premises instead of being used as a restaurant
and coffee lounge, which was the effect of the user covenant, were in fact
being used for other purposes by the installation of amusement machines and
fruit machines, and the consequence of that was to cause a nuisance to
adjoining occupiers.
There were 13
alleged breaches, and one of them is in these terms:
(10) The remaining toilet in the premises is in a
dirty and unhygienic condition and without a wash-basin and does not comply
with the requirements of the local public health authority.
Mr Wylie, for
the tenants, seeking to uphold the ruling of the learned judge, has submitted
that those breaches relate to a breach of the covenant to keep or put the
premises in repair. He concedes that all the breaches alleged could have been
alleged as breaches of other covenants: for example, the express covenant to
comply with the requirements of local authorities. But he submits that in as
much as the repairing covenant is recited in the notice, and in as much as the
repairing covenant puts an obligation on the tenant inter alia to
cleanse the interior of the premises, then the breach alleged at paragraph (10)
of the notice relates to a breach of the repairing covenant.
He accepts
that this is a technicality, but he submits that the object of the Act is to
protect tenants from oppressive notices. He submits
breaches, some of them trivial. He accepts that the landlord could have relied
for his forfeiture possibly just on the breach of a covenant not to commit a
nuisance. As he says, the landlord having chosen not to do that, and having, in
colloquial language, thrown the book at the tenants, the landlord must take the
consequences. He relies in particular on the words in subsection (4) of section
1 of the Leasehold Property (Repairs) Act 1938 and submits that in as much as
this notice relates to a breach of a covenant or agreement to put or keep in
repair, then the notice is not valid.
The short
answer to those submissions which has been given by Sir Ashley Bramall is that
the breach alleged in paragraph (10) of the notice is not a breach of a
covenant or agreement to keep or put the premises in repair. The breaches
alleged in the paragraph are that the lavatory is in a dirty and unhygienic
condition and does not comply with the requirements of the local authority. He
submits that the second of those breaches is plainly a breach of the covenant
to comply with the requirements of the local authority. And so far as the
breach of the agreement or covenant to cleanse the property is concerned, he
submits that, although it appears in what is loosely called the repairing
covenant, it is in fact not an obligation to repair or keep in repair; it is an
obligation to cleanse, and he points to the terms of that covenant which
contain obligations other than a strict obligation to repair and keep in
repair. Accordingly Sir Ashley submits that this notice is not caught by the
provisions of the Leasehold Property (Repairs) Act.
He referred us
to two decisions of this Court, Sidnell v Wilson [1966] 2 QB 67
and Middlegate Properties Ltd v Messimeris [1973] 1 WLR 168,
where it was said that the mischief which the 1938 Act was designed to overcome
was where an unscrupulous landlord bought premises in a dilapidated condition
knowing that it was dilapidated, and then endeavoured to obtain possession of
the premises from the tenant even though sufficient time remained under the
lease for the tenant to be able to comply with the requirement.
Sir Ashley
submitted that, bearing in mind that that is the mischief which this Act was
designed to prevent, then notices of this kind should not be construed
strictly, but that a liberal and commonsense construction should be put upon
them.
Speaking for
myself I do not find it necessary to approach the case in that way, because in
my judgment Sir Ashley Bramall is right when he says that the breaches set out
in the notice, and in particular in paragraph 3(10) of the notice, are not
breaches of a covenant or agreement to keep or put in repair. The fact that a
particular obligation is contained in the same clause of a lease as an
obligation to repair, and that that clause may be compendiously described as
‘the repairing covenant’ does not mean that every obligation contained in the
clause constitutes an agreement ‘to keep or put in repair’ within the meaning
of section 1(1) of the Leasehold Property (Repairs) Act. Each obligation in the
clause must be given its natural and ordinary meaning. An obligation to cleanse
is not an obligation to repair. On that short ground I would allow the appeal.
The case must be remitted to the county court for a fresh trial.
Agreeing, MAY
LJ said: I agree that this appeal should be allowed for the reason stated by my
Lord. I wish, however, to add a few comments because the argument seemed to
show that there may be unnecessary technicalities in the working out of this
particular branch of the law.
Dunn LJ has
already quoted section 146(1) of the Law of Property Act 1925, which requires a
notice thereunder to specify ‘the particular breach complained of’. Thus where
a landlord seeks to rely on a number of breaches of covenants, both repairing
covenants and other covenants, the notice under section 146 must specify each
and every particular breach he relies on. Notice of the particular breaches can
of course be given each on a separate piece of paper. But for convenience the
allegations of the various breaches are always on one piece of paper, one
notice, setting out the many breaches alleged.
I understand
from the argument in this case that it is the practice, where it is alleged
that there are breaches of a covenant or agreement to keep or put in repair
within section 1(1) of the 1938 Act, as well as alleged breaches of other
covenants under the same lease or tenancy agreement, to serve two notices: the
first specifying the breaches of the repairing covenants with the additional
appropriate notice under the 1938 Act, the other specifying the remaining
breaches without any such notice.
Now I think
that the mischief against which section 1 in particular of the 1938 Act was
directed was not, as Mr Wylie submitted, oppressive landlords, but that of
tenants having to face claims based upon alleged breaches of repairing
covenants when there remained in existence a sufficient residue of the term of
the demise during which appropriate repairs could be carried out.
In these
circumstances, notwithstanding the provisions of section 1(4) of the 1938 Act,
and although counsel for the appellant in this particular appeal was not prepared
to argue that a notice specifying breaches of a covenant or agreement to keep
or put in repair together with breaches of other covenants could be held to be
good in part and bad in part, I am not satisfied that in an appropriate case a
court could not sever such a notice and allow proceedings on the alleged
breaches of covenants other than those to keep premises in repair. However, it
is not necessary for the decision of this appeal for me to express any final
view upon this point.
I agree that
this appeal should be allowed for the reason given by my Lord.
The appeal
was allowed, the case being remitted for retrial on the merits, with a
declaration that the notice of February 10 1982 was valid. The appellant was
awarded costs in the Court of Appeal and costs below on Scale 2, limited to
costs of one hearing, all other costs to be costs in the cause.
