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Huseyin Akici v L R Butlin Ltd

Language: English Publication details: 2005Subject(s): Online resources: Summary: [2005] EWCA Civ 1296, 2 November 2005. H appealed against a decision that his landlord, B, had validly forfeited the lease of H's business premises. The lease contained provisions prohibiting assignment, underletting, sharing or parting with possession. D had gone into occupation of the premises, and traded from there. H claimed that he was the owner and sole director of D, but the shares were not in fact transferred to him until a later date. B served notice under the Law of Property Act 1925 s146, alleging that H had assigned, sublet or parted with possession to D, and later re-entered the premises and changed the locks. The judge held that H had been sharing possession with D in breach of covenant as sharing possession meant sharing occupation, and B could rely on this breach, although it had not been mentioned in the s146 notice. "Held": on appeal, (1) the covenant against sharing with possession should be given its normal and technically legally correct meaning. The judge had been entitled to hold that H was sharing possession with D in breach of covenant. (2) The s146 notice did not specify the particular breach complained of, as required by that section. Therefore, the notice was ineffective to support re-entry. (3) A breach of covenant against parting with or sharing possession, which fell short of creating or transferring a legal interest, was capable of remedy within s146, and the judge had been entitled to conclude that the breach had been remedied by becoming sole director of D. (4) If re-entry had been valid, the judge's decision to refuse relief from forfeiture would have been justified.
Holdings
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Law report Virtual Online ONLINE PUBLICATION (Browse shelf(Opens below)) 1 Available 132172-1001

[2005] EWCA Civ 1296, 2 November 2005. H appealed against a decision that his landlord, B, had validly forfeited the lease of H's business premises. The lease contained provisions prohibiting assignment, underletting, sharing or parting with possession. D had gone into occupation of the premises, and traded from there. H claimed that he was the owner and sole director of D, but the shares were not in fact transferred to him until a later date. B served notice under the Law of Property Act 1925 s146, alleging that H had assigned, sublet or parted with possession to D, and later re-entered the premises and changed the locks. The judge held that H had been sharing possession with D in breach of covenant as sharing possession meant sharing occupation, and B could rely on this breach, although it had not been mentioned in the s146 notice. "Held": on appeal, (1) the covenant against sharing with possession should be given its normal and technically legally correct meaning. The judge had been entitled to hold that H was sharing possession with D in breach of covenant. (2) The s146 notice did not specify the particular breach complained of, as required by that section. Therefore, the notice was ineffective to support re-entry. (3) A breach of covenant against parting with or sharing possession, which fell short of creating or transferring a legal interest, was capable of remedy within s146, and the judge had been entitled to conclude that the breach had been remedied by becoming sole director of D. (4) If re-entry had been valid, the judge's decision to refuse relief from forfeiture would have been justified.