Archive for March 2006
Fitzroy House Epworth Street (No. 1) Ltd. & Anor v The Financial Times Ltd.  EWCA Civ 329 (31 March 2006)
The Appellant landlords were unsuccessful in appealing a decision that the Respondent tenant had successfully terminated its lease pursuant to a notice given by the tenant under a break clause. The landlord alleged that the tenant had failed to “materially comply with” its repairing obligations. The judge found that the tenant may have taken reasonable steps to comply however this was irrelevant to the objective question of material compliance. The relevant question was whether, in light of the findings by the judge, the tenant had materially complied with its obligations and the answer was in the affirmative.
The Housing Act 1985 contained a lacuna in that an assignee of a secure tenancy, who had taken part in the fraudulent misrepresentation that induced the landlord to grant the tenancy to the original tenant, was able to resist an order for possession and thereby take advantage of his own fraud as the common law remedy of rescission of the tenancy was not available to the landlord, but rather they had to follow the code set out in Schedule 2 of the Act.
The landlord served notice under section 21(4) Housing Act 1988 stating possession is required “at the end of your period of your tenancy”. The court conisdered the phrase meant after the end of the tenancy rather than the split second in time the tenancy came to an end. It was therefore a valid notice.
In resolving rival claims for possession of a property and the right to buy, the court should carry out a balancing exercise and it was an essential ingredient of any judgment that it contain some reasoning explaining how the balancing exercise was carried out and why it comes down in favour of one party.
A court should consider a property and whether it was designed or adapted for living in at the time notice was served when deciding if it satisfied the definition of a house for the purpose of s.2(1) of the Leasehold Reform Act 1967.
The head lessee had altered the basement of two premises tunring vaults into a kitchen and dining area. The freeholder served a section 146 notice claiming breach of covenant and in particular a change of layout. The court held that this alteration did amount to a breach and was a change in layout. The section 146 notice that had been served was sufficient to bring the breach to the attention of the lessee.
A court would not imply words of qualification into a lease unless it was obvious or necessary. In this particular case there was no need to qualify the lease as the term “main structures” must have included the floor joists as they kept the structure of the building sound.
The first part of the rule in Wheeldon v Burrows (1879) LR 12 Ch D 31 has no application on a conveyance made on enfranchisement under s.8(1) of the Leasehold Reform Act 1967. The application of the second rule in Wheeldon was limited by the need to construe the conveyance executed so as to give effect to the common intention of the parties and by s.10(2)(ii).