Fort Regent Development Committee v Regency Suite Discotheque and Restaurant Ltd

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Hamon, Commr. and Jurats Vint and Herbert:
• Judgment Date: 23 October 1990
• Date: 23 October 1990

ROYAL COURT

Hamon, Commr. and Jurats Vint and Herbert:

S.C.K. Pallot for the plaintiff;

R.G. Fielding for the defendant.

Cases cited:

(1) Blackstone (David) Ltd. v. Burnetts (West End) Ltd., [1973] 1 W.L.R. 1487; [1973] 3 All E.R. 782; (1973), 117 Sol. Jo. 894; 27 P. & C.R. 70, distinguished.

(2) Expert Clothing Serv. & Sales Ltd. v. Hillgate House Ltd., [1986] Ch. 340; [1985] 2 All E.R. 998; [1985] 2 E.G.L.R. 85; (1985), 129 Sol. Jo. 484; 50 P. & C.R. 317; 82 L.S. Gaz. 2010, distinguished.

(3) Faulkner v. Public Works Cttee., 1983 J.J. 71, distinguished.

(4) New Guar. Trust Fin. Ltd. v. Birbeck, 1977 J.J. 71; further proceedings, sub nom. In re Birbeck, 1979 J.J. 111; further proceedings, 1980 J.J. 117; further proceedings, 1980 J.J. 183; affirmed, sub nom. Birbeck v. Midland Bank Ltd., 1981 J.J. 121, considered.

(5) Warner (ne Rimeur) v. Hendrick, 1985-86 JLR 366.

Additional case cited by counsel:

Pirouet v. Pirouet, 1985-86 JLR 151.

Texts cited:

Cheshire and Fifoot's Law of Contract, 11th ed., at 549 (1986).

Dalloz, Code des Loyers et de la Coproprit, 8th ed., at 678 (1989).

Dalloz, Nouveau Rpertoire, vol. 3, Louage, para. 430, at 83 (1966 ed.).

Nicholas, French Law of Contract, at 236-237 (1982).

Woodfall's Landlord & Tenant, para. 1-1907, at 852-855 (1990).

Contractwaiver (renonciation)subjective testwaiver of breach of covenant depends on subjective intention of party allegedly making waiver, not objective factdemand for future rent only waiver of breach of covenant under lease if actually intended to be so

Landlord and Tenantdetermination of leasecontract leaselessor not entitled to treat lessee's breach of covenant as justifying forfeiturecourt alone has power to terminate contract lease

The plaintiff applied to have its contract lease with the defendant lessee set aside for breaches of covenant.

The plaintiff lessor leased certain rooms under a contract lease to the defendant for a period of 21 years. After becoming aware of what it considered to be major breaches of covenant by the defendant, the plaintiff made an unequivocal demand for future rent for a specified period and subsequently applied to the court, inter alia, to have the lease set aside. Following the defendant's answer and the filing of the plaintiff's reply, the defendant obtained leave to amend its answer. The amendment raised the question whether the plaintiff's actions had not in fact waived the alleged breaches of covenant and the court proceeded to consider this matter as a preliminary issue.

It submitted that the plaintiff's demand for rent had waived the breaches, since (a) the test for waiver or for renonciation was objective, rather than one of intention; and (b) since the plaintiff had made an unambiguous demand for future rent even though it was allegedly aware of breaches of covenant entitling it to forfeiture, that demand was, objectively, an election to continue the lease and was in consequence a waiver of the breaches.

The plaintiff submitted in reply that (a) the test for waiver was one of its own actual intention rather than one of objective fact and it followed that since it had not intended to waive the breaches it had not automatically done so simply by demanding future rent in full knowledge of the breaches; and (b) in any case, a lessor was not entitled to treat a lessee's breaches as entitling it to forfeiture but was obliged to apply to the court for an order to terminate the lease, and since the lessor's acceptance of rent pending the court's decision would not therefore change the parties' positions, their prior demand for rent was irrelevant.

Held, ruling in favour of the plaintiff on the preliminary issue:

(1) The test for waiver was a matter of the intention of the party allegedly making the waiver rather than one of objective fact and even though the plaintiff had instituted the action after issuing the demand for rent, it followed that since it had not intended to waive its right to relief it had not in fact done so merely by its actions, objectively regarded (page 235, lines 20-26).

(2) In any case, a lessor could not treat a lessee's breaches as entitling it to forfeiture since it was obliged to apply to the court for an order to terminate the lease, the court alone having the power to set aside a contract lease once it was satisfied that there was sufficient evidence of breach of covenant. Since the plaintiff's acceptance of rent pending the court's decision would not therefore change the parties' positions, it followed that its prior demand for rent was also irrelevant unless the court subsequently found that it had been seeking to take advantage of a temporary difficulty in order to avoid what it now considered to be a bad bargain. The amendment to the defendant's answer did not therefore raise an issue which...