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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> White v 29 Buckland Crescent Management Company Ltd [2025] EWCA Civ 814 (30 June 2025) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2025/814.html Cite as: [2025] EWCA Civ 814 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES CHANCERY APPEALS (ChD)
Mr Justice Richards
EWHC
1480 (Ch)
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE NICOLA DAVIES
and
MR JUSTICE COBB
____________________
ROJER TAYLOR WHITE |
Appellant |
|
- and – |
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29 BUCKLAND CRESCENT MANAGEMENT COMPANY LIMITED |
Respondent |
____________________
Daniel Bromilow (instructed by Teacher Stern LLP) for the Respondent
Hearing date: 24/06/2025
____________________
Crown Copyright ©
Lord Justice Lewison:
Introduction
The facts
"At all times during the term granted to keep and maintain the demised premises and each and every part in good and substantial and tenantable repair and condition and in particular so as to support shelter and protect all parts of the Building other than the demised premises."
"… if there shall be any breach of any covenant or agreement on the part of the Lessee herein contained then in any such case it shall be lawful for the Lessor at any time thereafter to re-enter upon the demised premises or any part thereof in the name of the whole…"
Restrictions on forfeiture
"(1) A landlord under a long lease of a dwelling may not serve a notice under section 146(1) of the Law of Property Act 1925 (c 20) (restriction on forfeiture) in respect of a breach by a tenant of a covenant or condition in the lease unless subsection (2) is satisfied.
(2) This subsection is satisfied if— (a) it has been finally determined on an application under subsection (4) that the breach has occurred, (b) the tenant has admitted the breach, or (c) a court in any proceedings, or an arbitral tribunal in proceedings pursuant to a post-dispute arbitration agreement, has finally determined that the breach has occurred.
…
(4) A landlord under a long lease of a dwelling may make an application to the appropriate tribunal for a determination that a breach of a covenant or condition in the lease has occurred."
"(a) that the immediate remedying of the breach in question is requisite for preventing substantial diminution in the value of his reversion, or that the value thereof has been substantially diminished by the breach;
(b) …
(c) …
(d) that the breach can be immediately remedied at an expense that is relatively small in comparison with the much greater expense that would probably be occasioned by postponement of the necessary work; or
(e) special circumstances which in the opinion of the court, render it just and equitable that leave should be given."
The applications to the FTT
"The shower room in the respondent's flat is not in good, substantial and tenantable repair and has caused multiple water leaks into the flat below, and hence the respondent is in breach of Clause 3.1"
The Settlement Agreement
"Party A is the holder of an insurance policy with Allianz for the Building (The Insurance Policy). Party B has made a claim against the Insurance Policy in respect of the repairs required to the bathroom of the Property (The Works)."
"… there are indications that the expression "the works" encompassed the work necessary to put the bathroom into repair, as well as the refurbishment. At the very least, it seems to me that the use of the expression "the works" goes beyond what was necessary to fix the leak and potentially beyond what was necessary to put the bathroom into the state contemplated by the covenant in the lease."
"The parties have settled their differences and have agreed terms for the full and final settlement of the Proceedings and wish to record those terms of settlement, on a binding basis, in this agreement."
"[Mr White] admits the breach of Clause 3(1) of the Lease as set out in [the company's] Application under Section 168(4)Commonhold
and Leasehold Reform Act 2002 dated 24th May 2021."
"[Mr White] shall remedy the breach of Clause 3 (1) of the Lease by 28th January 2022 by carrying out the Works."
"6 Release
This agreement is in full and final settlement of, and each party hereby releases and forever discharges, all and/or any actions, claims, rights, demands and set-offs, whether in this jurisdiction or any other, whether or not presently known to the parties or to the law, and whether in law or equity, that it, its Related Parties or any of them ever had, may have or hereafter can, shall or may have against the other party or any of its Related Parties arising out of or connected with the Proceedings.
7 Agreement not to sue
7.1 Each party agrees on behalf of itself and on behalf of its Related Parties not to sue,commence,
voluntarily aid in any way, prosecute or cause to be
commenced
or prosecuted against the other party or its Related Parties any action, suit or other proceeding concerning the Proceedings, in this jurisdiction or any other.
7.2 Clause 6 and Clause 7.1 shall not apply to any claims in respect of any breach of this agreement."
The current dispute
"The Defendant has failed to keep the bathroom of his property in good substantial and tenantable repair as required by clause 3 (1) of his Lease." (Emphasis added)
"In clause 5.3 of the said agreement the Defendant agreed to remedy his breach of covenant by no later than 28th January 2022 by carrying out the necessary remedial works. The Defendant has failed to carry out the necessary remedial works and remains in breach of the terms of his lease." (Emphasis added)
Interpretation of the Settlement Agreement
"all and/or any actions, claims, rights, demands and set-offs, whether in this jurisdiction or any other, whether or not presently known to the parties or to the law, and whether in law or equity, that it, its Related Parties or any of them ever had, may have or hereafter can, shall or may have against the other party or any of its Related Parties arising out of or connected with the Proceedings."
"Given the normal meaning, purpose and effect of a compromise, the natural inference is that the parties'common
intention is that the compromise will henceforth govern their legal relationship in connection with the disputes in which they had been engaged. Accordingly, those disputes would still be regarded as "dead" even in the event of breach of the compromise. In these circumstances, recourse to the original claims will not be permitted unless, upon a true construction of the compromise, it is clear that this is what the parties intended. In this context, whilst the matter is primarily one of construction, the nature of the consideration furnished by the parties may operate as a pointer."
"It might be observed that contracts drafted by lawyers not infrequently include statements of the obvious. Indeed, Clause 7.2 might not, even on Mr White's interpretation, be as much of a statement of the obvious as the Landlord suggests. One can quite envisage a reasonable, but pedantic, reader of the Settlement Agreement asking whether the general exclusion in Clause 6 prevented any claim from being brought for breach of the Settlement Agreement itself and finding nothing unusual about that query being addressed expressly in Clause 7.2."
"… for the purpose of answering this third question, I assume the existence of a breach of both covenants in the first and second questions mentioned. I am of opinion, then, that there was such a right of re-entry. I think that the condition ought to be construed with this amount of strictness, that it ought clearly to appear that the condition was meant to include and did incorporate the covenant on the breach whereof the right to re-enter is claimed; but that the question whether the covenant itself is broken (having once ascertained that the condition for re-entry applies to and includes it) is to be determined by reference to the rules which prevail in construing ordinary contracts between party and party." (Emphasis added)
The application under section 168
"[55] First, Mr White has identified no legal consequence of an admission specifically tied to s168(4) other than that admission conferring entitlement on the Landlord to serve a s146 Notice in respect of the breach so admitted. That raises the obvious inference that, viewed objectively, the parties agreed that if Mr White did not comply with his obligations under the Settlement Agreement, and if the breach of Clause 3(1) therefore persisted, the Landlord could bring Forfeiture Proceedings.
[56] Second, that interpretation is supported by the relevant factual matrix. Mr White and the Landlord did not enjoy a harmonious relationship. Leaks from the Flat had caused Ms Yalgin considerable difficulties. At the time of the Settlement Agreement, the Landlord only had Mr White's word that he would perform the Works as he had agreed to. There is no suggestion that Mr White and the Landlord had reached a complete reconciliation of their difficult relationship. The Settlement Agreement had simply compromised particular disputes between them." (Original emphasis)
"[46] I do not accept that the availability of alternative remedies for the breach of covenant was an irrelevant consideration in the FTT's assessment of whether the application was an abuse of process. On the contrary, it was highly relevant. The most obvious alternative remedy that a landlord might seek in the face of a persistent breach of covenant by its tenant would be an injunction compelling the tenant to comply, either by requiring that he terminate the current sub-tenancy or by prohibiting any future sub-letting. Mr Gallivan also referred to the possibility of a claim for compensatory damages on a negotiating basis, as had been directed, for example, by Lightman J in Crestfort v Tesco [2005] L & TR 20 wherecommercial
premises had been sublet in breach of covenant.
[47] Either of these remedies, an injunction or damages, could be sought by Paragon in proceedings in the County Court in which the primary remedy sought was forfeiture. Damages could be sought in addition to forfeiture and an injunction as an alternative to forfeiture. A waiver of the right to forfeit for the breach would not provide a defence to either type of claim (although waiver might be relevant to the exercise of the Court's discretion to grant an injunction if no further breach has beencommitted since Paragon last demanded rent). Whichever remedies Paragon chose to pursue it would be essential for it first to be determined whether a breach of covenant had occurred; if it wished to forfeit it was essential that the determination of breach be made by the FTT."
"It is true that section 168(1) is concerned with paving the way to a forfeiture. But an application to the FTT under section 168(4) is not, itself, a proceeding for forfeiture. It may be a necessary precondition to the exercise of a right of forfeiture, but it is a discrete and separate step. The mere fact that the FTT has found the existence of a breach of covenant may itself persuade the tenant to cease the activities complained of or remedy the breach without the need for further action. Alternatively, it may, for example, be the prelude to obtaining a judgment from the County Court for an injunction or damages; or a charging order; or enabling the landlord to serve notice under section 146 of the Law of Property Act 1925 and forfeit the lease. A determination under section 168(4) is no more than a declaration that a breach has taken place and cannot without more be enforced in the County Court: compare Termhouse (Clarendon Court) Management Ltd v Al-Balhaa [2022] 1 WLR 1529 (dealing with determinations of the amount of service charge payable)."
"These cases demonstrate that, despite the fact that section 168 appears under the general heading "forfeiture of leases of dwellings", although a determination under section 168(4) may be a step on the path to forfeiture, that is not its sole function. In making an application under section 168(4) the applicant is doing no more than seeking to obtain a determination by a specialist tribunal that may be used for a number of purposes including (but not limited to) the service of a notice by the landlord under section 146. If such a determination may be sought and obtained in circumstances where forfeiture is no longer an option (eg where there has been a waiver of the right to forfeit, or the breach has been remedied), the applicant cannot be exercising a function of forfeiture in asking the FTT to make such a determination."
Conclusion
"In my view, the parties reshaped their bargain in respect of the subject matter of the original dispute with the effect that …(i) the causes of action which fall within clause 6 of the agreement were discharged by the settlement agreement; and (ii) new causes of action would arise from future breaches of the terms of the settlement agreement which the parties were entitled to access or enforce via clause 7.2. That means, in my judgment, that it might have been open to the landlord to sue for specific performance of Clause 5 or, alternatively, to seek damages for breach. It seems to me that the effect of confining the parties' rights to breaches of the agreement meant that the claimant gave up its right to forfeit for breach of covenants in the lease in this instance as is accepted to be the effect of clause 6. Clause 7.2 is not a sufficiently wide gateway to enable the landlord to revert to that remedy."
Result
Lady Justice Nicola Davies:
Mr Justice Cobb: