Toms v Ruberry

A notice under section 146 of the Law of Property Act 1925 cannot validly be served before the landlord’s right of re-entry or forfeiture has accrued. The notice must identify an actual, particular breach giving rise to that right. Although section 146 should be construed sensibly so that the tenant understands what must be done, that purpose cannot displace the statutory requirement that the relevant right already exists. Lease provisions conferring rights of re-entry are construed consistently with the language used elsewhere in the lease and, in cases of doubt, against the landlord.

The freeholder appealed against the dismissal of his possession claim concerning a public house occupied by the tenant under a lease described as a Business Development Agreement. The landlord relied on breaches concerning the condition of the premises and served a default notice under the lease and a notice under section 146 of the Law of Property Act 1925.

The County Court held that the section 146 notice was invalid because it preceded the accrual of the contractual right of re-entry. On appeal, the issues were whether the notice could precede that right, whether another lease clause created an immediate right of re-entry, and whether the notice sufficiently particularised the breaches.

1. Appeal dismissed. The section 146 notice was invalid because it was served before the contractual right of re-entry had accrued.
2. Section 146 must be given a common-sense interpretation. Its purpose is to ensure that the tenant has full notice of what is required. That purpose does not permit service before the relevant right of re-entry exists.
3. The reference in section 146(1) to “a right of re-entry or forfeiture” and to “the particular breach complained of” indicates that the right must already exist and that the breach must already have occurred. Where the contractual right arises only after failure to comply with a prior 14-day default notice, that period must expire before the section 146 notice can be served.
4. The authorities concerning the purpose and contents of section 146 notices did not establish a contrary timing rule. Penton v Barnett was concerned with waiver and continuing breach; Fuller v Judy Properties did not decide the timing issue; and Akici v LR Butlin Ltd concerned the adequacy of the notice’s contents.
5. The alternative contractual right of re-entry did not arise. “The standards” in the relevant clause referred to the standards of performance identified in clause 3.13 and the associated manual, rather than the repair and decoration obligations in clauses 3.6 and 3.7. The re-entry provision was also construed against the landlord in the event of doubt.
6. The pleading issue and the respondent’s separate challenge to the notice did not require determination.

1. High Court (Queen's Bench Division): [2017] EWHC 2970 (QB) dismissed the appeal from the County Court.
2. County Court at Truro: dismissed the landlord’s claim for possession and damages. The judgment is described in the appeal judgment as dated 27 July 2017.