Savva v Houssein (Hussein)

Under the Law of Property Act 1925, s 146, a breach of a lease covenant is capable of remedy when the harm or mischief caused by it can be removed. Complete restoration of the pre-breach position is unnecessary. Unauthorised signs or alterations can generally be remedied by removal or reinstatement, so a forfeiture notice must require that remedy. A notice omitting that requirement is invalid. A covenant against assignment without consent remains a distinct exception. Technical trespass into a landlord’s roof, and potentially the airspace above it, may exist without present loss. Damages may nevertheless be withheld while future relief is preserved. A landlord’s repair duty and a reasonable inference of loss supported the tenant’s counterclaim.

The landlords appealed from a decision of Judge Cotran in the Central London County Court following a four-day trial. They had served a notice under section 146 alleging breaches of covenants concerning signs, alterations and a flue installed through the roof, and sought forfeiture and relief for trespass. The tenant counterclaimed for damp and roof defects, alleging breach of the landlords’ repair obligations.

The county court rejected the trespass claim, upheld the repair claim, awarded damages equivalent to two months’ rent and ordered repairs. The central appellate issue was whether the alleged covenant breaches were capable of remedy for the purposes of section 146.

The Court of Appeal, in a unanimous judgment delivered by Staughton LJ and agreed by Aldous LJ and Sir John May, dismissed the appeal with costs. The county court judgment was varied by adding liberty to apply for an injunction or other remedy if circumstances changed in relation to the trespass.

1. Capability of remedy. The question under s 146 of the Law of Property Act 1925 is one of effect. A breach is capable of remedy where compliance after notice, within a reasonable time and with appropriate compensation, would effectively remove the harm suffered or likely to be suffered. It is unnecessary to recreate the precise position existing before the breach.
2. Application to the covenants. Breaches involving unauthorised signs or alterations could be remedied by removing the signs or reinstating the premises. The reasoning of Mummery J in Billson v Residential Apartments Limited 60 P & CR 392 could not be supported. Aldous LJ adopted the effect-based approach stated by Slade LJ in Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] 1 Ch 340. The distinct rule concerning a covenant not to assign without consent, recognised in Scala House & District Property Co. Ltd v Forbes [1974] QB 575, did not govern these breaches.
3. Notice and forfeiture. Because the breaches were capable of remedy, the notice had to require the tenant to remedy them. Its failure to do so made the notice invalid and prevented forfeiture. Any claim for damages for the covenant breaches disclosed no present loss.
4. Trespass. Penetration through the landlords’ roof was technically trespass. Invasion of the airspace above the roof might also constitute trespass. No damages were awarded because no present loss was shown, but future relief was preserved.
5. Counterclaim. The landlords remained responsible for repairing the roof and walls. The tenant’s engagement of workmen did not relieve them of that duty, absent a finding that the tenant’s flue caused the leaks. The judge was entitled to infer loss equivalent to two months’ rent and to leave the repair order in force, with any necessary clarification available from the county court.

• Court of Appeal (Civil Division): On 24 April 1996, the appeal was dismissed with costs, subject to adding liberty to apply in relation to trespass.
• Central London County Court: Judge Cotran determined the dispute after a four-day trial in November 1994, ordering repairs, awarding damages for the tenant’s counterclaim and rejecting the trespass claim.