McCabe v Roberts, Sheffield County Court, 08 & 09 March 2012

Proceedings in the County Court for forfeiture of long residential leases are now mercifully uncommon, since the passage of ss.166 to 169 of the Commonhold and Leasehold Reform Act 2002.  These sections required landlords, who were owed rent or service charges, to wait until the sum owed exceeded £500 before bringing a possession claim.  Or, if forfeiture was claimed for breach of another covenant, to first obtain a determination by the Leasehold Valuation Tribunal of the alleged breaches before being able to serve the s.146 LPA 1925 Notice, which itself is a pre-requisite of bringing proceedings.  The aim was to prevent the windfall to the landlord of gaining what is often a very valuable long lease, unencumbered by any mortgage, for what might be either relatively trivial or easily remediable breaches.  But what if the erring leaseholder simply does not recognise serious defaults as being breaches?

In this case, M (a retired schoolteacher) sought forfeiture of R’s (a young-ish motor trader’s) 999 year lease, and damages for nuisance.   R sought relief from forfeiture on whatever terms the Court saw fit.  M also lived upstairs from R, the attractively situated large semi-detached house in which they both lived having been divided into their two flats.  M was also R’s freeholder (and R was M’s freeholder, under identical “criss-cross” leases).  The leases contained typical covenants which prohibited causing nuisance, structural alterations, obstruction of access, leaving rubbish in common parts; and required upkeep of the garden by R.

After moving in in early 2008, R carried out some internal structural alterations, which had the effect of causing considerable noise while the work went on, although it stopped and started over 2.5 years.  As a result of this work, and the replacement of carpeting with laminate floors, more noise was created by R’s ordinary user, and it was tansmitted more readily to M’s flat.  R also caused a noise nuisance by his and his visitors’ activities; all the nuisance was sporadic, but highly intrusive, occurring at all hours.  R covered the lawn with tarpaulin (since removed, and the lawn restored), and his contractors often left debris in the common parts until the work ended in late 2010, with a reduction in rubbish thereafter.  They blocked M’s basement access with scaffolding for 3 months; and there were some plumbing leaks and staining to M’s ceilings.  3 Noise Abatement Notices were served between 2008 and 2011, which only had fleetingly beneficial effects; proceedings before the Leasehold Valuation Tribunal (“LVT”) began in early 2009; and despite being defended by R, a determination of breach was made by the LVT and served on R.  A s.146 Notice was then served. 

Forfeiture proceedings were commenced in late 2010, and a single joint expert report filed just before trial, backing M’s allegations and the LVT’s findings.  R still showed no sign of properly complying with the covenants, retaining the uncovered floors, although he had latterly spent less time at his flat.  At trial, he admitted that alterations were carried out – but said that the noise and disruption created at the time and caused by the change in layout were reasonable and proportionate.  He denied any other nuisance, essentially claiming that M was oversensitive and exaggerating:  but said that he would do whatever the Court required in order to save his lease.  Despite being entitled to do so, and facing the total loss of their security, his mortgagees (a large High Street bank) had not intervened in the proceedings, despite being fully notified.

At trial, Recorder Edwards acknowledged the clash between the parties’ lifestyles, but found M’s allegations proved, and awarded £6,875 in general damages, covering both common law nuisance and compensation for the breaches of covenant.  This was awarded at the rate of £2,000 per annum for the 2.5 years that the building works went on, and £1250 p.a. for the 18 months thereafter.  R’s credible intention to put things right came late in the day, and the breaches were remediable in nature - this led to the judge ordering relief from forfeiture but on strict terms, including requiring re-instatement of the internal wall, sound-deadening flooring, and payment of compensation and indemnity costs within a short timescale.

It remains to be seen whether R can bear the practical requirements and financial burden of compliance with the terms of relief.  If not, the expected consequences would be a restored claim for possession, and Charging Orders in respect of the damages and costs – which would not seem like any kind of “relief” to R at all.

© Simon Read