Savva & Anor v Houssein

Under the Law of Property Act 1925, a lease covenant breach is capable of remedy where compliance after notice, within a reasonable time and with any appropriate compensation, could effectively remove the harm caused or threatened by the breach. Exact restoration of the pre-breach position is unnecessary. The approach applies to negative as well as positive covenants, subject to the established exception for a covenant not to assign without consent. A forfeiture notice is invalid if it omits a required demand to remedy a remediable breach. The judgment also confirms that an intrusion through a landlord’s roof may constitute technical trespass without present loss, while a landlord’s repairing obligation remains unless causation by the tenant is established.

Landlords granted the tenant a 12-year lease for cafe, snack-bar and mini-cab use. They later sought forfeiture under section 146 of the Law of Property Act 1925 for unauthorised signs, alterations and a flue passing through the roof. The landlords also claimed trespass, while the tenant counterclaimed for failure to repair the roof and walls.

Judge Cotran in the Central London County Court found no trespass, upheld the landlords’ repairing liability, awarded damages and ordered repairs. The landlords appealed. The central issues were whether the alleged covenant breaches were capable of remedy, whether the roof penetration was trespass, and whether the counterclaim remedies were justified.

The appeal was dismissed with costs. The judgment below was varied by granting liberty to apply for an injunction or other remedy if circumstances concerning the trespass changed.

1. Remediable breaches. The Court of Appeal unanimously held that the alleged breaches concerning signs, alterations and the flue were capable of remedy. The relevant question under section 146 of the Law of Property Act 1925 is not whether the exact pre-breach state can be recreated. It is whether the mischief caused by the breach can be removed. Removing unauthorised signs or restoring alterations could achieve that result.
2. Applicable test. Aldous LJ stated that the court should ask whether, had the notice required remedy and allowed a reasonable time for full compliance, compliance with the covenant together with any appropriate compensation would have effectively remedied the harm suffered or likely to be suffered. The same approach may apply to negative and positive covenants. The exception for a covenant not to assign without consent remained established.
3. Forfeiture. Since the notice did not require the tenant to remedy breaches which were capable of remedy, it was invalid and no forfeiture could follow. No damages for the covenant breaches were presently established.
4. Trespass. The flue’s penetration through the landlords’ roof was technically trespass, and the invasion of air space might also be trespass. There was no present loss, so damages were not awarded. Liberty to apply was appropriate if future building plans created loss or required an injunction.
5. Repairing counterclaim. The landlords’ repairing obligation under clause 5(d) remained. The tenant’s attempted repairs did not discharge it, and there was no finding that the leaks were caused by the flue. The judge was entitled to infer loss equivalent to two months’ rent and to order repairs to the roof and walls.

• Court of Appeal (Civil Division): In [1996] EWCA Civ 1302, Staughton and Aldous LJJ and Sir John May unanimously dismissed the landlords’ appeal with costs, varying the judgment to add liberty to apply in respect of trespass.
• Central London County Court: Judge Cotran decided the forfeiture, trespass and repairing issues after trial, finding no trespass, awarding the tenant damages and ordering the landlords to repair the roof and walls.