Toms v Ruberry

A notice under section 146 of the Law of Property Act 1925 may be served only after the contractual right of re-entry or forfeiture has become enforceable. The relevant breach is the breach which triggers that right under the lease. Where the lease requires a default notice and gives the tenant time to remedy an antecedent breach, the landlord must wait until that period expires without remedy. The antecedent breach is not itself the relevant breach for section 146 purposes. A different result may follow where the lease makes re-entry arise immediately on the antecedent breach. A notice served prematurely is invalid.

The appellant landlord leased a public house to the respondent tenant under a lease containing repairing and decorating covenants. Clause 4.1.7 made re-entry conditional on the tenant’s failure to remedy a remediable breach within 14 days after written notice. The landlord served a Default Notice and a notice under section 146 on the same day, alleging breaches of the antecedent covenants.

The trial judge found the breaches established but dismissed the possession claim. Dingemans J dismissed the landlord’s appeal. The Court of Appeal considered whether the section 146 notice could precede the accrual of the contractual right of re-entry and whether it specified the relevant breaches.

The Court of Appeal unanimously dismissed the appeal.

1. Accrual of the right. Section 146(1) of the Law of Property Act 1925 regulates the exercise of rights of re-entry or forfeiture conferred by the lease. A section 146 notice can be served only after the contractual right has become enforceable. Under clause 4.1.7, the relevant breach was the failure to remedy the antecedent breaches within 14 days after the Default Notice, not the antecedent repairing and decorating breaches themselves. The notice served on the same day as the Default Notice was therefore premature.
2. Statutory scheme. The requirements to specify the particular breach and, where capable of remedy, require its remedy make sense only if the relevant breach has occurred. Section 146(2) supports the same conclusion. Service of the notice is part of proceeding to enforce the right, rather than merely a preliminary step, as explained in Pakwood Transport Ltd v 15 Beauchamp Place Ltd (1977) 36 P&CR 112.
3. Scope of the conclusion. If the antecedent breach were incapable of remedy, or if the lease made re-entry arise immediately upon that breach, the right could arise immediately. The landlord’s submission would have been correct in that situation, as illustrated by Fox v Jolley [1916] 2 AC 1. The ordinary meaning of breach for these purposes does not require a voluntary act, consistently with Halliard Property Co Ltd v Jack Segal Ltd [1978] 1 WLR 377.
4. Waiver authorities. Penton v Barnett [1898] 1 QB 276, Farimani v Gates [1984] EGLR 66 and Greenwich LBC v Discreet Selling Estates Ltd (1990) 61 P&CR 405 concerned waiver after a section 146 notice had already been given. They did not determine the different question of a notice served before the right of re-entry had arisen.
5. Respondent’s notice. Although unnecessary to the disposition, the court considered the tenant’s alternative ground well-founded. The section 146 notice should have specified the failure to comply with clause 4.1.7, rather than only the antecedent covenant breaches.

• Court of Appeal (Civil Division) dismissed the landlord’s second appeal.
• High Court, Queen’s Bench Division Dingemans J dismissed the landlord’s appeal and held that the contractual right of re-entry had to arise before service of a section 146 notice.
• Trial court Recorder Mawhinney found the specified repairing and decorating breaches established, but the landlord’s possession claim was dismissed.