Wickland (Holdings) Ltd v Telchadder

Mobile Homes Act 1983 – Protected residential site – Termination of licence – Respondent site owner serving notice on appellant occupier to remedy breach of licence agreement by antisocial behaviour – Such behaviour ceasing for three years before further incident occurring – Respondent obtaining order of court for termination of licence agreement in reliance on earlier notice pursuant to para 4 of Part 1 of Schedule 1 to 1983 Act – Whether breach capable of remedy – Whether remedied within reasonable time – Appeal allowed The appellant owned and occupied a mobile home on a protected residential site under a licence governed by the Mobile Homes Act 1983, for which he paid an annual pitch fee. The licence agreement set out the provisions of para 4 of Part 1 of Schedule 1 to the Act, under which the respondent, as owner of the site, could terminate the agreement only on application to the court, which would have to be satisfied that the appellant was in breach of the agreement, that he had failed to comply within a reasonable time with a notice to remedy the breach and that it was reasonable for the agreement to be terminated. The agreement contained an express covenant against antisocial behaviour, by which the appellant undertook to comply with the site rules and not to be a nuisance or cause annoyance, inconvenience or disturbance to the respondent or other occupiers. In late July 2006, the appellant, who had a mild learning difficulty and other mental health issues, startled another resident by jumping out at her from behind a tree in camouflage clothing. In response to that incident, the respondent served a notice on the appellant in August 2006, requiring him to remedy that breach of covenant. There were no further incidents of antisocial behaviour until July 2009, when the appellant made threats to other occupiers. In September 2009, the respondent issued proceedings seeking possession of the appellant’s plot, relying on non-compliance with the notice served in August 2006. The claim was allowed in the courts below; the Court of Appeal held that the 2006 notice had continuing effect for the whole period of the appellant’s occupation of the plot and that the new incidents of antisocial behaviour amounted to a failure to comply with that notice: see [2012] EWCA Civ 635; [2012] PLSCS 109. The appellant appealed to the Supreme Court. He contended that he had remedied his earlier breach, by refraining from further antisocial behaviour for a considerable time, and that the respondent now needed to serve a fresh notice. Held: The appeal was allowed. Although para 4 of Part 1 of Schedule 1 to the 1983 Act referred only to a “breach”, and not to a breach that was capable of being remedied, the twin requirements of serving notice and affording the occupier a reasonable time within which to comply with it could apply only to a breach that was capable of remedy: L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 applied. A breach of a positive obligation would ordinarily be capable of remedy by belatedly doing the thing required by the obligation. Some breaches of a negative obligation, requiring an occupier to refrain from certain actions, could also be remedied: Rugby School (Governors) v Tannahill [1935] 1 KB 87, Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340; [1985] 2 EGLR 85, Savva v Houssein [1996] 73 P&CR 150; [1996] 2 EGLR 65 and Akici v LR Butlin Ltd [2005] EWCA Civ 1296; [2006] 1 WLR 201; [2006] 1 EGLR 34 considered. A breach of a covenant against antisocial behaviour could in principle be remedied, although some breaches might be so serious as to be irremediable. In deciding whether a breach was capable of remedy, a practical inquiry was required as to how the mischief resulting from the breach could be redressed, which would involve a value judgment first by the covenantee and then by the court in determining whether the requirements of para 4 had been satisfied. The appellant’s breach represented by the July 2006 incident was not so serious that the resulting mischief could not be redressed. It could be remedied by the appellant committing no further breaches of his covenant against antisocial behaviour for a reasonable time. In that regard, the reference in para 4 to a failure to comply “within” a reasonable time should be read as meaning “for” a reasonable time where the necessary remedy was to refrain from further breaches rather than to do some positive act. A notice to remedy would lapse once a reasonable time had passed without further incident. A “reasonable time” could not be equated with the entire period of subsistence of the licence agreement. In all the circumstances, the period of almost three years during which the appellant complied with the August 2006 notice and refrained from further antisocial behaviour amounted to a reasonable time for him to comply with it, sufficient to redress the mischief caused by the July 2006 incident. It followed that the respondent should have served a further notice to remedy the July 2009 breach or, in the light of its seriousness, raised an allegation that it was irremediable. Per curiam: The better view was that a site owner did not have to serve a notice in respect of an irremediable breach before applying to the court for possession. The statutory scheme of serving a notice to remedy and allowing the occupier a reasonable time in which to do so would serve no comprehensible purpose if the breach was irremediable. Per Lord Carnwath and Lord Reed (minority view): Para 4 required a formal notice to remedy in every case, even where the site owner intended to assert that the breach was irremediable. In the case of a negative covenant, compliance with a notice did not simply mean a temporary pause in the offending behaviour but required that it cease it altogether and indefinitely. Compliance within a reasonable time meant immediate and continuing compliance. If, when the matter came to court, the occupier was found to have resumed the offending behaviour after a period of abstinence, the court would be able to hold both that a reasonable time had elapsed and that the occupier had failed to comply with the notice. The determining issue would therefore be that in para 4(b), namely whether it was reasonable for the agreement to be terminated. However, there had to be a causal or temporal link between the notice and any subsequent breach on which the site owner relied in support of its claim to terminate the agreement. A notice to remedy was not a gateway for termination for any breach throughout the remainder of the contract. The required link did not exist in the instant case owing to the lapse of time between the notice to remedy and the conduct on which the courts had ultimately based their order. Martin Westgate QC and Lindsay Johnson (instructed by Shelter Eastern Counties) appeared for the appellant; Richard Wilson QC and Stephen Goodfellow (instructed by Asher Prior Bates) appeared for the respondent.   Sally Dobson, barrister   Click here to read transcript: Wickland (Holdings) Ltd v Telchadder