29 Buckland Crescent Management Company Limited v Rojer Taylor White
[2024] EWHC 1480 (Ch)
The Tropical Zoo Limited v The Mayor and Burgesses of the London Borough of Hounslow
24 May 2024
[2024] EWHC 1240 (Ch)
High Court
A zoo failed to build a zoo as agreed in a lease. The council tried to end the lease. The zoo argued the council waived its right to do so. The court said the council didn't waive its right and refused to let the zoo keep the land because there was no real plan to build the zoo.
Key Facts
- •The Tropical Zoo Limited (TZL) leased land from Hounslow Borough Council (LBH) to build a zoo, but failed to do so within the stipulated timeframe.
- •LBH sought forfeiture of the lease due to TZL's non-compliance.
- •TZL argued waiver and sought relief from forfeiture; litigation was funded by Canmoor, a property development company.
- •Canmoor aimed to develop the site for an industrial park, a use not permitted under the lease.
- •LBH served notices under Schedule 2, paragraph 9.1 and section 146 of the Law of Property Act 1925.
- •TZL continued to pay rent even after LBH instructed its agent not to accept it.
- •Disputed issues included whether paragraph 9.1 was a freestanding covenant, whether LBH waived forfeiture, and whether relief should be granted.
Legal Principles
Waiver of forfeiture occurs when the landlord knows the facts and performs an unequivocal act affirming the lease.
Matthews v Smallwood [1910] 1 Ch 77, 786
Acceptance of rent after knowledge of a breach waives forfeiture, even if accidental.
Woolgar , p. 1054; Greenwich LBC v Discreet Selling Estates (1991) 61 P &CR 405, p. 409
For a “once and for all” breach, waiver is irrevocable.
First Penthouse v Channel Hotels [2003] EWHC 2713 (Ch), §30 and on appeal [2004] EWCA Civ 1072, §17
Contractual interpretation is objective, considering language, context, and commercial sense.
Wood v Capita Insurance Services [2017] UKSC 24, [2017] AC 1173, §§10–13; Rainy Sky v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900; Arnold v Britton [2015] UKSC 36, [2015] AC 1619; Sara & Hossein v Blacks [2023] UKSC 2, [2023] 1 WLR 575
Relief from forfeiture is discretionary, considering parties' conduct and circumstances. It aims to prevent disproportionate advantage to the landlord.
Section 146(2) of the Law of Property Act 1925; Eastaugh v Crisp [2007] EWCA Civ 638, §17; Hyman v Rose [1912] AC 623, p. 681; Freifeld v West Kensington Court [2015] EWCA Civ 806, §43; Croydon LBC v Kalonga [2022] UKSC 7, [2023] AC 1, §3; Shiloh Spinners v Harding [1973] AC 691, p. 723
A landlord's agent's authority to receive rent doesn't automatically imply authority to waive forfeiture.
Nash v Birch (1836) 150 ER 490; Mardorf Peach v Attica Sea Carriers Corporation of Liberia [1977] AC 850; John Lewis Properties v Viscount Chelsea [1993] 2 EGLR 77
Outcomes
Paragraph 9.1 of the lease is a freestanding covenant, breach of which allows forfeiture.
The court found the clause's wording and context clearly establish a separate obligation to remedy breaches, distinct from the landlord's step-in rights. TZL failed to comply with the paragraph 9.1 notice.
LBH did not waive its right to forfeit.
The court found clause 5.1.1 did not exclude the common law doctrine of waiver but only prevented waiver from affecting subsequent breaches. The delays in returning rent payments were not considered acceptance by LBH because Avison Young lacked the authority to waive forfeiture and LBH's instructions were clear. The rent payments were viewed as tactical by TZL.
Relief from forfeiture is refused.
TZL lacks the financial means to build the zoo, and evidence of Canmoor's willingness to fund it is insufficient. The court deemed the chance of the zoo being built too speculative to justify granting relief.