Expert Clothing Service & Sales Ltd v Hillgate House Ltd

Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1985] WL 1167522

Property law – Landlord and tenant – Possession

Facts

The plaintiffs granted a lease of twenty-five years to the defendants under an agreement that the defendant would convert the property into a gym and health club. The defendants failed to pay rent and the plaintiffs gained re-entry to the property. The defendants recovered possession of the property sometime later on the basis, with a view to completing the reconstruction of the property. They did not do this and the plaintiffs issued a notice informing the defendants that they were breaching the covenant in respect of the Law of Property Act 1925, section 146 and that the breach was incapable of remedy. The plaintiffs brought proceedings to regain the property. The defendants argued that the plaintiffs had waived their right to forfeiture and this was rejected by the judge. The defendants appealed this decision.

Issue

The court was required to establish whether the breach of the covenant for not constructing the property could be remedied. Following this decision, it would be important to understand whether this remedy triggered the forfeiture notice under the Law of Property Act 1925, section 146.

Held

The court allowed the appeal of the defendants. They found that the breach of the covenant was a positive breach and that it was capable of remedy. Moreover, the plaintiffs had suffered no loss that could not be remedied by having the work carried out in a reasonable time. On this basis, the notice served under the Law of Property Act 1925 was flawed as it did not provide for a remedy.