Landlord and tenant — Liability of original lessee after assignment of lease — Two assignments — Covenant to repair — Default of second assignee — Forfeiture of lease — Consent order — Whether forfeiture waived — Appeal from decision of Garland J upholding master’s summary judgment for damages under Ord 14 in favour of landlord against original lessee — Defendant, original lessee, had assigned the lease to the present third party, who later assigned it to the present fourth parties — Fourth parties were unable to pay the rent and the landlord in previous proceedings obtained a default judgment against them which operated as a forfeiture of the lease — Subsequently a consent order was made whereby it was agreed that a writ of possession should not be executed for three months — Consent order recognised that the lease had come to an end and stated that nothing in the order should be construed as implying the existence of a relationship of landlord and tenant between the parties — Some correspondence passing at the time, however, which the court in the present proceedings looked at de bene esse, contained a suggestion that the lease might be ‘reinstated’ (the court said ‘resurrected’) if the fourth parties could find another assignee, but nothing came of this suggestion
fourth parties vacated the premises the place was in a state of disrepair — In
the present proceedings the landlord sued the original lessee on the basis of
privity of contract for breach of the repairing covenant — The master gave
summary judgment under Ord 14 in favour of the landlord and Garland J upheld
the decision — Original lessee now appealed — It was submitted on his behalf
that, although the lease had clearly been forfeited, the forfeiture had been
waived when the consent order was made; that there was a surrender of the
lease; and that the surrender absolved the original lessee from any liability
under the covenants in the lease — Held that there was no foundation for the
suggested waiver and that there was no arguable case on the question of the
repairing liability — Appeal dismissed
No cases are
referred to in this report.
This was an
appeal by the defendant, Kenneth Alfred Mogford, the original lessee under a
lease for 21 years of the Highweek Inn, Newton Abbot, Devon, from a decision of
Garland J, who had upheld the decision of Master Grant giving summary judgment
under Ord 14 in favour of the landlord, Leonard Arthur Weaver. The third party
was Robert Chambers, the assignee of the lease from the defendant, and the
fourth parties were John Simm and Beverley Simm, assignees from Robert
Chambers.
J Hodgson
(instructed by Robbins Olivey & Blake Lapthorn, agents for Phillip
Skerrett, of Tavistock, Devon) appeared on behalf of the appellant; Gordon
Bennett (instructed by Kingsley Napley) represented the respondent.
Giving the
first judgment at the invitation of Woolf LJ, MANN LJ said: There is before the
court an appeal from a decision of Garland J dated October 12 1987. By that
decision he dismissed an appeal against a decision of Master Grant dated May 14
1987. In his decision Master Grant gave summary judgment under Ord 14 in favour
of the plaintiff, with damages to be assessed.
The background
to the matter is that the plaintiff in the action is the owner of the Highweek
Inn, Newton Abbot, Devon. On January 16 1973 the plaintiff granted a lease for
a term of 21 years to the defendant. That lease contained the ordinary
repairing obligations; that is to say, an obligation to repair on delivery up
and an obligation to repair periodically during the currency of the tenancy.
On June 26
1981 the defendant assigned the lease to the third party in the current action.
The assignment contained, as was to be expected, an indemnity from the third
party to the defendant in respect of breaches of covenant.
The third
party was not in occupancy for long because, on March 10 1983, he in turn
assigned the lease to the fourth parties, Mr and Mrs Simm. That assignment, in
its turn, contained an indemnity by the fourth parties to the third party in
respect of breach of covenant. It may be said at once that Mr and Mrs Simm have
fallen upon misfortune and the value of their indemnity is questionable.
In their
misfortune, Mr and Mrs Simm were unable to pay the rent of the premises, and on
January 22 1986 the plaintiff in the action issued a writ against the fourth
parties claiming possession and forfeiture of the lease on the ground of rent
arrears. There was a default judgment on March 11 1986; that operated as a forfeiture
of the lease.
The premises
were in disrepair when Mr and Mrs Simm vacated. On March 5 1987 the plaintiff
issued the writ in the present action against the defendant for breach of the
repairing covenant. It was on that writ that Master Grant, and subsequently
Garland J, gave judgment for the plaintiff with damages to be assessed.
There were
proceedings in relation to the default judgment. On May 13 1986 there was, by
consent, an order made by Master Waldman. That was in these terms: I quote so
far as is material:
In
consideration of the defendants and the National Westminster Bank PLC
(hereinafter referred to as ‘the Bank’ and being Mortgagees of the Leasehold
interest referred to in the Writ of Summons herein) consenting to a Writ of
Possession in this matter being issued forthwith the Plaintiff hereby
undertakes not to seek to execute the said Writ of Possession within 3 months
of the date hereof subject to the following terms and conditions:
(1) It is hereby agreed and accepted that neither
the Bank nor the Defendants have any further interest in the premises referred
to in the Writ of Summons herein as Highweek Inn, Highweek, Newton Abbot, Devon
and both the Bank and the Defendants hereby undertake that they will at no time
apply to the Court for Relief from Forfeiture. The Lease having
nothing in this agreement nor any prior or subsequent acts or deeds shall be
construed so as to imply the existence of the relationship of Landlord and
Tenant between the Plaintiff and the Defendant.
(2) The Bank will within 7 days of the date
hereof pay to the Plaintiff the sum of £3,864.66 made up as follows
I need not
recite the breakdown.
In addition,
the bank undertook to pay the plaintiff’s costs and a sum in respect of future
mesne profits. It was also agreed that work detailed in the schedule of
dilapidations should be executed.
Immediately
after that order was made there was correspondence between the plaintiff’s
solicitors, the mortgagees’ solicitors and the solicitors acting for Mr and Mrs
Simm. We have been shown that correspondence and we have looked at it on a de
bene esse basis; it is of interest. The plaintiff’s solicitors wrote in
these terms, both to the bank and to the Simms:
Provided all
payments due under the terms of the order dated May 13 1986 and the schedule of
dilapidations have first been complied with, we confirm that in the event of
the defendants submitting to our client within three months of the date of the
order a prospective tenant of the property satisfactory to our client, then our
client will reinstate the lease for the purpose only of considering an
assignment of the lease to that prospective tenant.
Mr Hodgson, on
behalf of the defendant (behind whom stands the third party), submitted that
although a forfeiture undeniably occurred on March 11 1986, that forfeiture was
waived; that there was a surrender and that a surrender absolved the original
tenant from any liability under his covenants in the lease.
I find it
quite impossible to accept that submission. The order of May 13 is plain in its
terms. It states that the lease has come to an end and that nothing in the
order should be construed as implying the existence of a relationship of
landlord and tenant between the plaintiff and the defendants. True it is that
there seems to have been some discussion as to the resurrection of the lease
should a suitable further assignee be found, but I would emphasise ‘resurrection’
or, in the phrase of the parties, ‘reinstatement’.
It seems to me
quite plain that the forfeiture which occurred on March 11 1986 was neither
waived nor avoided.
That being so,
I can see no reason to disturb the judgment of Garland J. There appears to me
to be no arguable case on the question of liability, whatever be the position
on quantum, and upon quantum I advisedly say nothing. I sympathise with the
defendant and with the third party who stands behind him, but as the law now
stands I see no avoiding the decision, which for my part I would also have
reached and I would dismiss this appeal.
WOOLF LJ
agreed and did not add anything.
The appeal
was dismissed with costs, such costs to be taxed and paid forthwith.
