Akici v LR Butlin Ltd [2006]

Akici v LR Butlin Ltd [2006] 1 W.L.R. 201

Property law – Landlord and tenant – Possession

Facts

The claimant was the tenant of a commercial lease of premises which contained a covenant preventing the sub-lease or underlet of the premises. The lease contained a clause requiring forfeiture for breaking the lease. The claimant ran a pizza business which was owned by G who paid the cheques to the defendant. Following a dispute between the parties, the defendant served notice under the Law of Property Act 1925 and two weeks later re-entered the property. The basis of the landlord’s claim was that the tenant had claimed that he was the owner of the company when he was not; the shares in the company were later transferred to him and therefore he had been sharing the premises with the company and was in breach of the covenant. The appellant appealed this.

Issue

The appellant submitted that the judge was wrong to hold that the wording of the lease meant that occupation was being shared, which was the basis of the landlord’s claim and could not therefore be relied upon. The tenant also argued that the breach could be remedied if it did exist.

Decision/Outcome

The court allowed the appeal of the tenant on the basis that the covenant in the lease should be given its technical meaning and if so, the actions of the tenant did not allow possession to another. Moreover, the notice provided under the Law of Property Act 1925, section 146, did not state a particular reason, and was not effective to support re-entry. The court also agreed that if such a breach did exist, it would have been capable of remedy.