Rojer Taylor White v 29 Buckland Crescent Management Company Limited

The Court of Appeal held that a settlement agreement which released and barred further proceedings "arising out of or connected with" the earlier proceedings precluded the landlord from instituting forfeiture proceedings based on the same underlying disputes. The court applied ordinary rules of contractual interpretation, read the Settlement Agreement in its legal context (including the Leasehold Property (Repairs) Act 1938 and section 168 of the Commonhold and Leasehold Reform Act 2002), and concluded that the release in clause 6 together with clause 7.1 operated to bar claims concerning the earlier applications to the First-tier Tribunal. The carve out in clause 7.2 was limited to claims for breach of the Settlement Agreement itself and did not permit forfeiture for breaches of the lease. The court therefore allowed the appeal.

Background and parties. 29 Buckland Crescent is a house divided into flats. The respondent company is the registered freehold proprietor; the appellant, Mr White, is the lessee of the top floor flat. The company issued FTT applications alleging breach of the tenant's repairing covenant (clause 3(1) of the lease) and claims for unpaid charges. Those applications were compromised by a Settlement Agreement dated 5 December 2021.

Nature of the claim and procedural posture. The company later served a draft section 146 notice and issued county court proceedings seeking forfeiture of the lease on the basis that Mr White remained in breach of the repairing covenant. Richards J in the High Court granted relief against forfeiture on payment of costs on an indemnity basis; the company appealed to the Court of Appeal and permission to appeal had been given by Nugee LJ. The appeal before the Court of Appeal concerned whether the Settlement Agreement precluded forfeiture proceedings and, in consequence, the costs order.

Issues framed by the court.

• Whether the Settlement Agreement operated as a release and bar to subsequent forfeiture proceedings concerning the subject matter of the earlier FTT applications;
• How the carve out in clause 7.2 (claims in respect of any breach of this agreement) should be construed and whether it allowed the company to pursue forfeiture either for breach of the Settlement Agreement or for breach of the lease;
• The relevance of the legal context, notably section 168 of the Commonhold and Leasehold Reform Act 2002 and the Leasehold Property (Repairs) Act 1938, to the interpretation of the Settlement Agreement;
• Consequences for the availability of forfeiture as a remedy and for costs.

Court’s reasoning. The court applied ordinary contractual interpretation principles and read the Settlement Agreement against its legal background. Clause 6 was a wide release of "all and/or any actions, claims, rights, demands and set-offs ... arising out of or connected with the Proceedings" and clause 7.1 precluded commencing proceedings "concerning the Proceedings". That language, read objectively and in context, precluded the company from bringing forfeiture proceedings based on the same factual matrix. The carve out in clause 7.2 was confined to claims for breach of the Settlement Agreement itself and did not extend to claims based on breaches of the lease. The court also emphasised that an admission in the Settlement Agreement did not ipso facto entitle the landlord to forfeit because (i) an application under section 168 is distinct from forfeiture and may serve other remedial purposes and (ii) the 1938 Act might have restricted forfeiture if a counter-notice had been served. Given the ordinary meaning of the Settlement Agreement and the legal background, the company was precluded from pursuing forfeiture for the matters compromised by the Settlement Agreement.

Result. The Court of Appeal allowed the appeal and held that the Settlement Agreement barred the forfeiture claim; the three members of the court agreed.

The appeal was allowed. The Court of Appeal held that the Settlement Agreement's release (clause 6) and agreement not to sue (clause 7.1) barred proceedings "arising out of or connected with" the earlier FTT applications and therefore precluded forfeiture proceedings concerning those matters. The carve out in clause 7.2 was limited to breaches of the Settlement Agreement itself and did not permit forfeiture for breach of the lease. The court interpreted the settlement in its legal context, including section 168 of the Commonhold and Leasehold Reform Act 2002 and the Leasehold Property (Repairs) Act 1938, and concluded the company could not rely on the admission in the settlement to forfeit the lease.

Appeal from Mr Justice Richards in the High Court, Chancery Division: Richards J [2024] EWHC 1480 (Ch). Permission to appeal granted by Nugee LJ. First-instance decision by HHJ Dight CBE (First-tier Tribunal / earlier hearing) held the company was precluded from seeking forfeiture; Richards J reached a different view on entitlement to pursue forfeiture but granted relief against forfeiture on payment of costs.