Cases - Billson v Residential Apartments Ltd
Record details
- Name
- Billson v Residential Apartments Ltd
- Date
- [1992]
- Citation
- 1 AII ER 141
- Legislation
- Keywords
- Breach of covenant - alterations
- Summary
-
The House of Lords considered the procedure for forfeiture of a lease following breach of covenant by a tenant.
The lease under which Billson held the property provided that the tenant would not make alterations to the property without the landlord's consent. When the appellant embarked on a major reconstruction project without the landlord's consent, the landlord served a forfeiture notice under section 146(1) of the Law of Property Act 1925, and subsequently re-entered the property and forfeited the lease. The case before the House of Lords raised several issues concerning the landlord's right to end the lease in this way, and the circumstances in which tenants can seek relief from such acts.
The decision in this case is authority for the proposition that section 146 of the Law of Property Act 1925 confers discretion on the court to grant to a tenant relief against forfeiture regardless of whether the landlord proceeds to forfeit the lease by applying to the court for an order for possession, or by re-taking possession on a peaceable re-entry.
It was evident in both the Court of Appeal and the House of Lords that this outcome was viewed as being the most desirable and just interpretation of the legal position.
However, the majority of the Court of Appeal took the position that, regardless of how appropriate or desirable that outcome might be, both the statutory provisions and previous judicial interpretations of the relevant provisions excluded such a decision. The dissenting judgment of Nicholls LJ in the Court of Appeal demonstrated one alternative route by which the desired outcome could be reached, although the House of Lords ultimately followed another more direct pathway to the desired outcome.
The House of Lords focused on the language of section 146(2), applying a pragmatic and common-sense approach to the meaning of the phrase 'proceeding, by action or otherwise' in section 146(2), which the House of Lords interpreted as meaning proceeding by action or proceeding otherwise than by action.
It is also interesting to recognise the notice taken in both the Court of Appeal and the House of Lords of the possible knock-on effects of their decision on dealings between landlords and tenants. Note, however, that the House of Lords' analysis was, nevertheless, clearly focused on the wording of the legislation.