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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Telchadder v Wickland Holdings Ltd [2014] UKSC 57 (05 November 2014) URL: https://www.bailii.org/uk/cases/UKSC/2014/57.html Cite as: [2014] WLR 4004, [2014] 1 WLR 4004, [2014] WLR(D) 469, [2015] HLR 4, [2015] 1 All ER 855, [2014] UKSC 57 |
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Michaelmas Term
[2014] UKSC 57
On appeal from: [2012] EWCA Civ 635
v
Wickland Holdings Limited (Respondent)
Appellant Martin Westgate QC Lindsay Johnson (Instructed by Shelter Eastern Counties) |
Respondent Richard Wilson QC Stephen Goodfellow (Instructed by Asher Prior Bates) |
LORD WILSON:
Issues
"The owner shall be entitled to terminate the agreement forthwith if, on the application of the owner, the appropriate judicial body –
(a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and
(b) considers it reasonable for the agreement to be terminated."
(i) Can an occupier 'remedy' a breach of a covenant against anti-social behaviour?
(ii) If not, what is the effect of the para 4 term?
(iii) Alternatively, if so,
(a) how may he 'comply' with a notice to remedy and
(b) what is the effect of his obligation to do so 'within a reasonable time'?
Facts
"… there is the … extremely serious matter of your behaviour in that you are dressing in what appears to be military combat clothing and obscuring your face with a mask while outside your home in the Park area.
You are also making unwanted approaches to some Residents while dressed in this manner causing alarm and distress.
Your apparel in itself is not a great problem but not really desirable or in keeping with Meadowview Park, it is your actions which are not acceptable in that:
A. ON NO ACCOUNT MUST YOU MASK OR OBSCURE YOUR FACE WHEN YOU ARE IN ANY AREA OF THE PARK OUTSIDE YOUR HOME
B. ON NO ACCOUNT MUST YOU MAKE UNSOLICITED APPROACHES OR ADVANCES TO OTHER RESIDENTS ON MEADOWVIEW PARK
Should you ignore either A or B above you will leave us no alternative but to apply to Colchester Court to have your Agreement terminated and your home removed from Meadowview Park."
Judge Moloney held that the letter dated 15 August 2006 amounted to "a notice to remedy the breach" which had occurred on 31 July 2006 for the purposes of the para 4 term. The Court of Appeal agreed with him; and the current appeal proceeds on that basis.
(i) In October 2009 an anonymous note was delivered to Mr Carter's home. Mr Carter decorates his home with two Samurai swords. The note asked Mr Carter to leave one of the swords outside for the writer to collect. Later Mr Carter saw Mr Telchadder lurking outside his house. Mr Telchadder (so the judge found) had written the note.
(ii) In February 2010 Mr Telchadder harassed and intimidated two elderly residents, one of whom was also disabled, as a result of which, on his plea of guilty, the local magistrates made an order restraining him from contacting them again.
(iii) In July 2010 Mr Telchadder behaved in a threatening manner to a member of the family which owns and operates Wickland.
(iv) In March 2011 Mr Telchadder left empty shotgun cartridges outside Mr Carter's home.
(v) In April 2011 Mr Telchadder approached two elderly residents, who asked him to go away and threatened to call the police. At their request another resident joined them. Later Mr Telchadder returned, confronted the other resident, used foul language towards him and put his face up close to him. The other resident pushed him away.
Legislation
"(g) the right of the owner to determine the agreement for breach of an undertaking, subject to the requirement, in the case of a breach which is capable of being remedied, that he has served written notice of the breach upon the occupier and has given the occupier a reasonable opportunity of remedying it;"
"unless and until the lessor serves on the lessee a notice –
(i) specifying the particular breach complained of; and
(ii) if the breach is capable of remedy, requiring the lessee to remedy the breach; and
(iii) 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… for the breach."
In drafting section 3(g) of the 1975 Act the draftsman almost certainly had section 146(1) of the 1925 Act in mind. Both subsections require service of a notice of the breach which gives the lessee/occupier a reasonable opportunity to remedy it. More importantly for present purposes, both qualify their provisions by reference to the case of a breach which is "capable of remedy" or "capable of being remedied". But the qualification operates at different stages. Section 146(1) requires service of a notice in any event but, if the breach is capable of remedy, the notice must require the lessee to remedy it and he must be given a reasonable time in which to do so. Section 3(g), by contrast, did not require service of a notice at all unless the breach was capable of being remedied.
"… satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time;"
Breach Capable of Remedy
"To stop doing what is forbidden by a negative covenant may or may not remedy the breach even if accompanied by compensation in money. Thus to remove the window boxes and pay for the repair of any damage done will remedy the breach, but to stop using the house as a brothel will not, because the taint lingers on and will not dissipate within a reasonable time."
"In my judgment…the question is: whether the remedy referred to is the process of restoring the situation to what it would have been if the covenant had never been broken, or whether it is sufficient that the mischief resulting from a breach of the covenant can be removed. When something has been done without consent, it is not possible to restore the matter wholly to the situation which it was in before the breach. The moving finger writes and cannot be recalled. That is not to my mind what is meant by a remedy, it is a remedy if the mischief caused by the breach can be removed. In the case of a covenant not to make alterations without consent or not to display signs without consent, if there is a breach of that, the mischief can be removed by removing the signs or restoring the property to the state it was in before the alterations."
Aldous LJ, at p 157, cited the conclusion of Slade LJ in the Expert Clothing case that the test was whether the harm resulting from the breach could effectively be remedied and noted that the breach in that case was of a positive covenant. He observed:
"There is in my view nothing in the statute, nor in logic, which requires different considerations between a positive and negative covenant, although it may be right to differentiate between particular covenants. The test is one of effect."
A Reasonable Time
"[Counsel for Mr Telchadder] objected that the notice could not possibly have been intended by Parliament to have perpetual effect. As there had been compliance for a reasonable time following the 2006 notice, it was necessary, he asserted, to serve another notice before commencing proceedings. I do not agree. Paragraph 4 does not set any end-date for the expiration of a notice. There is no reason why the notice served in this case should not have continuing effect for the whole period of [Mr Telchadder's] occupation of the mobile home on Plot Number 160. All that the notice was seeking to achieve was future compliance with continuing obligations in circumstances where [a breach] had already occurred."
Conclusion
(i) An occupier can in principle 'remedy' a breach of a covenant against anti-social behaviour but some such breaches are so serious as to be irremediable.
(ii) Not applicable
(iii) (a) The occupier 'complies' with a notice to remedy a remediable breach of such a covenant by not committing any further breach of it within a reasonable time.
(b) The effect of his obligation not to do so within a reasonable time is that he must not do so for a reasonable time.
(a) I, Lady Hale and Lord Toulson conclude that, in the case of an irremediable breach, the para 4 term does not require service of a notice to remedy it. But our conclusion in this respect is not central to this decision because the breach dated 31 July 2006 was not irremediable and in any event a notice to remedy it was duly served.
(b) All members of the court conclude that Mr Telchadder's appeal should be allowed but the reasons given by Lord Carnwath and Lord Reed for their subscription to that conclusion represent a minority view. Their reasons are that, in the case of a remediable breach of a covenant against anti-social behaviour, compliance with the notice to remedy must continue indefinitely (Lord Carnwath, para 91 below) but that there needs to be a causal or temporal link between the notice to remedy and the subsequent breach (para 92 below), which was absent in the present case (para 96 below).
(c) By contrast, the reasons of the majority are, in essence, that a breach of such a covenant is remediable if the mischief resulting from it can be redressed; and that Mr Telchadder redressed the mischief resulting from the breach dated 31 July 2006, and thereby complied with the notice to remedy, by not committing a further breach prior to 15 July 2009.
LADY HALE
"The owner shall be entitled to terminate the agreement forthwith if, on the application of the owner, the appropriate judicial body [in this case the local county court] –
(a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and
(b) considers it reasonable for the agreement to be terminated."
(i) that the occupier has breached a term of the agreement;
(ii) that the owner has served a notice to remedy that breach; and
(iii) that the occupier has not complied with the notice within a
reasonable time.
LORD TOULSON
"(a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and
(b) considers it reasonable for the agreement to be terminated."
LORD CARNWATH (with whom Lord Reed agrees):
i) The structure and effect of the para 4 term;
ii) The particular problem of negative user conditions and repeated breaches;
iii) The resolution of this appeal.
The structure of paragraph 4
A long pedigree
i) Section 146(1) of the Law of Property Act 1925 (replacing section 14 of the Conveyancing and Law of Property Act 1881) provided that a right of forfeiture under a lease for breach of covenant -
"shall be unenforceable, 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."
Even where these requirements were satisfied, the landlord faced a further hurdle in the right of the tenant (under s 146(2)) to apply to the court for relief from forfeiture, in relation to which the court had a wide discretion to –
"grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit".
ii) The Mobile Homes Act 1975 section 3 (no longer in force) provided that the written agreement for stationing a mobile home to be occupied as a residence (required by s 1) was to contain specified "terms and conditions", including:
"(g) the right of the owner to determine the agreement for breach of an undertaking, subject to the requirement, in the case of a breach which is capable of being remedied, that he has served written notice of the breach upon the occupier and has given the occupier a reasonable opportunity of remedying it;"
iii) Finally, para 4 itself: the Mobile Homes Act 1983 Schedule 1, provided for certain terms or conditions to be "implied by [the] Act", including :
"4. The owner shall be entitled to terminate the agreement forthwith if, on the application of the owner, the appropriate judicial body –
(a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and
(b) considers it reasonable for the agreement to be terminated."
Reference was also made before the Court of Appeal (paras 34, 40) to analogous provisions under the Housing Acts 1985 and 1988, but it was noted that the contents of the notices are generally prescribed by regulations. They were not relied on by either party in this court.
The 1983 Act
"I think perhaps [the judge] went further than was really necessary for the decision of this case in holding that a breach of any negative covenant —the doing of that which is forbidden—can never be capable of remedy. It is unnecessary to decide the point on this appeal; but in some cases where the immediate ceasing of that which is complained of, together with an undertaking against any further breach, it might be said that the breach was capable of remedy." (p 90)
However, the court accepted the landlord's argument so far as directed to a case where the nature of the particular breach (use as a brothel in that case) would have an effect on value even after the use had ceased.
"has always been construed, having regard to the common sense of the matter, that the tenant is to be given reasonable information as to what he is required to do, and he is given the right to apply to the Court for relief".
He cited, as an example of this "common-sense interpretation", the early decision (Lock v Pearce [1893] 2 Ch 271) that "although its language pointed in the opposite direction" the section did not require the notice to claim compensation which the lessor did not want.
Post-1983 developments
"Until recently it was assumed that breach of a covenant against carrying out alterations without consent was also irremediable. However, the position appears to have changed. The test is now one of fact and degree as to whether in reality the mischief can be remedied. Similarly, it now appears that parting with or sharing possession, at least where it falls short of creating or transferring a legal interest, is a remediable breach.
In addition the following breaches have been held to be incapable of remedy:
1. running catering premises contrary to the licensing laws in breach of a covenant to conduct them according to those laws;
2. contravening the Food and Drugs Act resulting in 14 convictions;
3. assigning the lease without the landlord's consent;
4. sub-letting the premises or part thereof;
5. using the property for the sale of obscene material;
6. using the premises for espionage resulting in convictions under the Official Secrets Act."
(The references to all but the last of the six examples are from cases decided before 1983.)
Alternative interpretations
Negative user conditions and repeated breaches
"The spectre is that the occupier commits a breach and is served with a notice; that he commits no further breach for a reasonable time and thereby complies with the notice; that thereupon he commits a further breach; that the cycle begins again; and that his licence cannot be terminated."
He discounts this concern as "unreal".
"… supposing the case of a breach of covenant not to do something and, when the landlord complained, an immediate abstention from the user of the premises in breach of the covenant, the landlord would be deprived of any cause of action, or, if he had already begun one, he would have it dismissed with costs. And that might happen again and again; the landlord would have to give a fresh notice in each case, with the same result." ([1934] 1 KB 695, 701).
This passage was also cited with approval as part of Harman J's "grumble of discontent" in Hoffmann v Fineberg [1949] Ch 245, 254: Lord Wilson para 25.
The present case
"First of all, my interpretation of clause 4(a) is that what is required is that there be what I might call an initial breach, then a notice to remedy that breach, and a failure to comply with the notice within a reasonable time. In the context of this case, which concerns what I can roughly call antisocial behaviour, that would mean an instance of antisocial behaviour, a notice complaining of it and requiring him to desist from it and then a proven instance of further antisocial behaviour in disregard of the notice." (para 4)
"I do find, first of all, that he was warned against antisocial behaviour of that kind by the notice of 15 August 2006 'No unsolicited approaches or advances to other residents on Meadowview Park causing alarm and distress' and it appears to me that that is sufficient, though I think only just sufficient, to constitute a notice complaining of harassment of neighbours and warning him of the consequences of harassment to neighbours. As I have found, I take the view that on 15 July 2009 he did engage in a very serious incident of such antisocial behaviour when he made the threats to kill to Mr. Carter and made threatening gestures with a pole in the manner that I have found. So I do I consider that that is a pleaded and actionable and proven breach after notice, satisfying the requirements of clause 4(a) and opening the way to the court to remove him if it considers it reasonable to do so."
He then went on to express his conclusions on the issue of reasonableness under (b), in relation to which no there is no challenge.