Archive for the ‘Equitable lease’ Category

There is no equitable lease unless specific performance of the agreement would be ordered

September 15, 2014

In Warmington v Miller ([1973] QB 877, CA (Eng)) M’s lease contained a covenant prohibiting him from assigning, underletting or parting with possession of part only of the demised premises. He entered into an agreement with W to grant W a tenancy of part of the demised premises but refused to execute the underlease. W sought specific performance.

This failed since specific performance would not be awarded ‘where the result would be a breach by the defendant of a contract with a third party or would compel the defendant to do that which he is not lawfully competent to do.’ (at 886 per Stamp LJ).

There was no equitable lease, the rule in Walsh v Lonsdale did not apply, unless the lessee was entitled to specific performance. (at 887 per Stamp LJ).

Michael Lower

An agreement for lease is as good as a lease? The inability to enforce the agreement as between the landlord and an assignee of the lease.

November 22, 2010

Purchase v Lichfield Brewery ([1915] 1 KB 184) concerned an agreement for lease that had been assigned to Lichfield Brewery. The brewery had never paid rent or gone into possession. It was held that the covenant to pay rent could not be enforced against the brewery. There was no privity of contract or privity of estate between the landlord and the brewery. Lush J put it like this:

‘A tenant under an agreement, whose only title to call himself a lessee depends on his right to specific performance of the agreement, assigns his right to assignees. The assignees never had a term vested in them because no term was ever created; therefore there was never privity of estate. They never went into possession or were recognized by the landlord; therefore there was never privity of contract. It is impossible that specific performance of a contract can be decreed against a person with whom there is neither privity of contract nor privity of estate. Therefore these assignees are not liable to perform the terms of the agreement and this appeal must be allowed.’ (at 188 – 189)