Article by Katie Wilkinson
In May 2024 the High Court handed down Judgment in The Tropical Zoo Limited v The Mayor and Burgesses of the London Borough of Hounslow [2024] EWHC 1240 (Ch) following a five day trial before Mrs Justice Bacon.
The trial considered three primary issues:
- Whether breach of a ‘Jervis v Harris’ clause triggered a right of re-entry and forfeiture;
- Whether there had been a waiver of forfeiture by the Defendant;
- Whether the Claimant required, or was able to obtain relief from forfeiture.
The Facts
The case involved a parcel of land covering an approximate area of 25 acres located close to Heathrow Airport. The Claimant is an operator of Zoos and the Defendant was the Local Authority.
The Defendant had granted a 125-year Lease to the Claimant in 2012. The Lease was in relatively standard form in containing covenants for which the tenant was to perform, and a right of re-entry for the landlord.
The Lease also contained a ‘Jervis v. Harris’ clause. Such a clause grants the landlord a right to serve notice on a tenant specifying breaches of covenants relating to the condition of the property. If the tenant then fails to remedy the breaches identified in the notice within a specified period (as set out in the Jervis v. Harris clause), the clause grants a right for the landlord to enter the property to carry out the works themselves and to then recover the costs of doing so from the tenant as a debt.
It was a term of the Lease that the Claimant would construct a Zoo on a part of the land within 2 years. Planning permission for the construction of the Zoo had been granted.
In 2020, being some 8 years since the grant of the Lease, the Claimant had failed to build the Zoo. As a result, the Defendant served two notices under s.146 of the Law of Property Act 1925 requiring the tenant to remedy its breach of the Lease.
The Claimant brought a claim seeking declarations that the Lease was not liable to be forfeit because inter alia the Defendant was said to have waived any right of forfeiture by its acceptance of ongoing rent payments. In the alternative, the Claimant sought relief from forfeiture.
The Jervis v Harris Clause
There was no dispute that the Claimant was in breach of the obligation to construct a Zoo within two years of the grant of the Lease and that rent was subsequently accepted by the Defendant thereby waiving the breach (being the period between circa 2014 and service of the notices). However, the Court accepted the Defendant’s argument that the failure to comply with the s.146 notice requiring the Claimant to remedy the breach was freestanding. It was held that the defendant had been entitled to serve the s.146 notice and take steps to forfeit the Lease even though the breach had occurred many years earlier.
Waiver of Forfeiture
The law applicable to the doctrine of waiver is complex and the Judgment helpfully included a summary of the status of the law.
The Defendant relied upon the express wording of the re-entry clause which was to the effect that the landlord retained the right to re-enter the premises even if it had waived any previous right of re-entry.
It was argued by the Claimant that the clause was inconsistent with the doctrine of ‘waiver’ at common law and thus had no effect. The effect of the clause was also in issue as a matter of construction.
The Court held that the clause did not oust the common law doctrine of waiver as a matter of construction and, on consideration of the facts, the Defendant was not found to have acted inconsistently with forfeiture even though the return of rental payments made by the Claimant were delayed in some instances.
Relief From Forfeiture
As a result of the Court’s findings, the Claimant required relief from forfeiture. The application was made on the basis that a Zoo would be constructed in remedy of the breach. In principle, the Defendant did not oppose the Claimant’s position, but the Defendant doubted that the Claimant had sufficient funds to construct the Zoo. The granting of relief from forfeiture is discretionary for the Court.
The Court confirmed that it should consider whether there was a real likelihood that the conditions required to remedy the breach would be met. The Court was not satisfied that the Claimant had any real prospects of erecting the Zoo and thus remedying the breach, and for those reasons the Court refused the application for relief from forfeiture.
The Claimant was granted permission to appeal to the Court of Appeal.
