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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Akici v LR Butlin Ltd [2005] EWCA Civ 1296 (02 November 2005) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2005/1296.html Cite as: [2005] EWCA Civ 1296, [2006] 1 WLR 201, [2006] WLR 201 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON
CIVIL JUSTICE CENTRE
His Honour Judge Dean QC
CHY04339
Strand, London, WC2A 2LL |
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B e f o r e :
and
LORD JUSTICE NEUBERGER
____________________
HUSEYIN AKICI |
Appellant |
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- and - |
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L R BUTLIN LIMITED |
Respondent |
____________________
Mr Stephen Lloyd (instructed by Messrs Clifford Watts Compton) for the Respondent
Hearing date : 10th October 2005
____________________
Crown Copyright ©
Lord Justice Neuberger :
The basic facts
"4.18.1 Not to charge assign equitably assign underlet or part with possession of a part of the demised premises nor to hold the whole or any part of the demised premises on trust for another nor to share possession of the whole or any part of the demised premises nor to part with possession of the whole of the demised premises (except as hereinafter permitted) all of which are expressly prohibited.
4.18.7 Not in any event to assign or underlet the whole or any part of the demised premises without the written license of the lessors first had and obtained which consent shall not be unreasonably withheld or delayed "
"This covenant has been broken and the particular breach complained of is the assignment or alternatively subletting or alternatively parting with possession of the premises without the landlord's consent. You have assigned, sublet or parted with possession to Deka Ltd."
"Insofar as the aforesaid breach is not remedied the Landlord shall exercise right of re-entry contained in the lease and will forfeit the lease 14 days after service of this notice or after such other period as shall be held to represent a reasonable period for remedying the breach of covenant."
i) There had been no assignment, subletting or parting with possession of the premises by Mr. Akici to the company;
ii) Mr. Akici had shared occupation of the premises with the company, and that represented a breach of the covenant against the sharing of possession;
iii) Although the section 146 notice did not specify sharing of possession as a breach of covenant, it was nonetheless open to Butlins to rely on that notice to justify its re-entry;
iv) If the breach had been capable of remedy, the Judge would have held that it had been remedied when Mr. Akici acquired ownership and control of the company;
v) However, the breach was incapable of remedy, and therefore the landlord's re-entry was effective to forfeit the lease;
vi) Primarily as a result of the inaccuracies perpetrated by Mr. Akici through his solicitors in correspondence, relief from forfeiture should be refused.
i) The meaning of clause 4.18.1 insofar as it precludes parting with possession or sharing possession;
ii) Whether Mr Akici was in breach of contract;
iii) Whether the section 146 notice was valid;
iv) Whether the breach was capable of remedy;
v) Whether the breach was remedied;
vi) Whether the Judge was right to refuse relief from forfeiture.
The covenants against parting with, and sharing, possession
"A covenant which forbids a parting with possession is not broken by a lessee who in law retains the possession even though he allows another to use and occupy the premises."
"In a strict legal sense the word "possession" has a highly technical meaning, and the sharing of possession is an unknown concept. It has been said that a possession is single and indivisible. So when you get what might be termed a sharing of possession, the two sharers become one, as, say, joint tenants and one is back to the original concept. But "possession" also has a broader popular meaning, and it means the sharing of the use or occupation."
Was there a breach of clause 4.18 of the lease?
"A covenant which forbids a parting with possession is not broken by a lessee who in law retains the possession even though he allows another to use and occupy the premises."
Was the section 146 Notice valid?
"(1) 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; and
(b) If the breach is capable of remedy, requiring the lessee to remedy the breach; and
(c) In any case, requiring the lessee to make compensation in money for the breach;
and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach."
"I think that the notice should be construed as a whole in a common-sense way, and that no lessee could have any reasonable doubt as to the particular breaches which are specified."
Was the breach capable of remedy?
"if the section 146 notice had required the lessee to remedy the breach and the lessors had then allowed a reasonable time to elapse to enable the lessee fully to comply with the relevant covenant, would such compliance, coupled with the payment of any appropriate monetary compensation, have effectively remedied the harm which the lessors had suffered or were likely to suffer from the breach?"
Was the breach in this case remedied?
Relief from forfeiture
Conclusion
i) Clause 4.18.1 of the lease precludes the lessee parting with, or sharing, possession, and is not infringed if he merely parts with, or shares, occupation;
ii) In this case, the Judge was entitled to conclude that the lessee had shared possession with, and had not parted with possession to, the company;
iii) The section 146 notice did not allege that the lessee was sharing, as opposed to parting with, possession, and therefore was ineffective to support the lessors' re-entry;
iv) The breach of the covenant against sharing possession was capable of remedy;
v) The Judge was entitled to conclude that the breach had been remedied by the lessee acquiring all the shares in, and becoming the sole director of, the company;
vi) If the re-entry had been valid, the Judge's decision to refuse the relief from forfeiture would have been one to which he could justifiably have come.
Mummery LJ: