Magnic v Ul-Hassan and Freifield v West Kensington Court – More on relief from forfeiture

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In both of these cases the tenants were in clear, serious, deliberate and repeated breach, yet the Court of Appeal allowed relief from forfeiture. Why? We explain the correct approach.

In Magnic the tenant deliberately committed breaches of its lease, a planning permission, a consent order and a conditional consent order, all to operate a takeaway business from the premises. In Freifeld the tenant sublet the premises to a restaurant without the landlord’s consent, breaching both the alienation and the user covenants in the lease. In both cases, however, the Court of Appeal granted relief from forfeiture when the landlords attempted to recover possession. Why?

These cases reiterate the court has a wide discretion whether to grant relief from forfeiture. Forfeiture is such a serious step that relief on fulfilling certain conditions will generally be granted where possible, even in some circumstances where there has been deliberate or repeated breaches. The cases explain the correct approach as to whether relief should be allowed and provide a reminder of the factors that the court will consider. In summary:

  • The court’s discretion whether to grant relief is wide and the courts have refused to lay down rigid guidelines as to the exercise of that discretion.
  • The starting point for the exercise of the court’s discretion should be that the purpose of the right of forfeiture is to provide the landlord with some security for the performance of the tenant’s covenants – it is not intended to operate as an additional penalty for breach.
  • In most cases relief will be granted on the breach being remedied and on terms as to costs.
  • The court can take into account:
    • the tenant’s conduct (including whether the breach was wilful or deliberate)
    • the nature and gravity of the breach and its relationship to the value of the property
    • the respective advantage to the landlord and disadvantage to the tenant if the lease remains forfeit.

See our earlier briefings: Forfeiture and Relief: Clarification of court’s discretion and Relief from Forfeiture: Another recent case.