Scala House and District Property Co Ltd v Forbes

Scala House and District Property Co Ltd v Forbes [1974] Q.B. 575

Property law – Landlord and tenant – Forfeiture

Facts

The lessees of a property agreed not to underlet or provide possession of the premises to a third-party without the landlord’s consent. They had planned to use the property as a restaurant. The lessee then entered into a secondary agreement for third-party individuals to manage the restaurant for which he used the premises. However, this agreement had a clause which created a sub-tenancy which left him in breach of the covenant. The landlord served a notice under the Law of Property Act 1925, section 46 which required them to remedy the situation caused by the mistake of the contract. Fourteen days later, the landlord issued a writ for the possession of the premises under the Act. The trial judge held that the breach in this instance could be remedied and dismissed the action. The landlord appealed this decision.

Issue

Based on the trial judge’s decision, it was important to establish whether the breach in question was capable of being easily remedied. The court also had to decide if the fourteen day time limit given by the landlord was enough to allow for the remedy and begin proceedings.

Decision/Outcome

The court allowed the appeal from the landlord but provided the tenant with relief from forfeiture. It was held that a breach not to assign a sub-letting was not a breach that could be easily rectified within the meaning of the Act. It was also held by the court that allowing fourteen days to pass before starting such proceedings did not allow enough time for a remedy to be found.