Facts
Mr Akici held a commercial lease that prohibited sharing or parting with possession. Deka Ltd, then owned and controlled by Mr Gultekin, operated a takeaway pizza business from the premises. The landlord served a notice under section 146 of the Law of Property Act 1925 alleging that Mr Akici had parted with possession. Mr Akici acquired the company’s shares and became its sole director before the landlord re-entered and changed the locks. The county court upheld the forfeiture.
Issue
Had Mr Akici shared or parted with possession, and did the notice identify the breach relied on by the landlord? Could the breach be remedied?
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Decision
The Court of Appeal allowed Mr Akici’s appeal. The covenant prohibited sharing or parting with possession. Mere sharing of occupation was insufficient. The judge was entitled to find that Mr Akici had shared possession with the company, but that he had retained enough control to avoid parting with possession. The notice alleged parting with possession only, so it did not support the landlord’s re-entry.
The breach was capable of remedy, and the judge was entitled to find that Mr Akici remedied it by acquiring the shares and taking sole control of the company. Whether this was done within a reasonable time was left open. Had the forfeiture been valid, the trial judge would have been entitled to refuse relief.
Reported citations: [2006] 1 WLR 201, [2006] WLR 201
Source: Full judgment
