Frequently Asked Questions

Whether or not the lessor, Sella House Ltd, can enforce the covenants upon restricting his activities or conduct concerning the property without his previous permission.

The dispute in the case of Sella House Ltd v Mears (1989) was founded on the enforceability of a covenant in the lease. This produces the substantive question in point: whether or not the lessor, Sella House Ltd, can enforce the covenants upon restricting his activities or conduct concerning the property without his previous permission. This case represents the judicial approach to the interpretation of the lease covenants and the circumstances under which such covenants may be enforced.

Facts

Sella House Ltd was the landlord of a property let to Mears who was the tenant. There was a covenant in the lease not to alter the property without the landlord's previous written consent. Mears had done some alterations to the property without getting such prior consent from Sella House Ltd. Upon learning of these variations, Sella House Ltd commenced litigation against Mears to enforce the covenant and have the variations undone. What was Mears' defence, then? It was to the effect that the variations were trifling, and therefore no prior land lord's consent was required—a further case was advanced that the covenant did not apply, or alternatively that the land lord's refusal to give the consent was unreasonable.

Issues

The following is the main issues arising during the present case:

1. Whether the covenant, restraining alteration without seeking prior consent, was valid and enforceable .

2. Whether his works of alteration, in fact required consent within the lease terms.

3. If the answer to the above question is in the affirmative, then the landlord's insistence not to give his consent was reasonable .

First Instance

It had to first consider whether the covenant in question was applicable within the lease agreement and further whether it could be enforced. The court has thus taken into consideration the terms of the lease in issue, the nature of the alternations carried out by Mears, as well as the parties' conduct. It was based on the first instance decision where Sella House Ltd had managed to succeed in its application and confirmed the covenant was clear and would be enforceable. The court held that in the process Mears had effectively breached the covenant merely because he had made alterations without originally seeking and obtaining consent for such alterations from the landlord. It also held that the type of changes made were not small enough to make it be exempt for lack of necessity to seek consent of the landlord.

Decision on Appeal

Mears appealed on the grounds that the judge at first instance had misconstrued both the meaning and effect of the covenant and the unreasonableness of the landlord's refusal to give consent. On appeal, the facts were reviewed in light of the law as it pertains to reasonableness with respect to both the covenant itself and the landlord's actions. It was held that the appeal be rejected, and the appellate court further held that the covenant was indeed valid and enforceable. Lease covenants were to be constructed in reference to the plain words and what the parties meant when the lease was being made. The criteria used in the case at bar is also held to have been of such a nature in that it was so serious that it fell within the provisions requiring prior consent. In regard to reasonableness, therefore, it is essential that the decision of the appellate court be done and, thus, any consent by the landlord should be reasonable and not arbitrary or capricious. In the present case, refusal by Sella House Ltd was reasonable, and that the alterations had a potential impact on the property's structure and property value.

Comments

The case Sella House Ltd v Mears teaches much for lessors and lessees with respect to lease covenants and its implication in the performance of remedial works.

1. Clarity and Enforceability of Covenants: The decision points out that the covenants under the lease should be express, clear, and unambiguous. The landlords and tenants are required to ensure that the terms are well-defined so as not to breach any question of interpretation.

2. Tenant's Liabilities: The tenants are liable to ensure that covenants contained in their respective lease agreements, especially those with an obligation to get consent prior to implementing alterations, are complied with. This again is a case of when legal action might be taken against a tenant for failure to secure such approvals.

3. Reasonableness Test: What is more, the insistance of the Court on the reasonableness of the landlords' refusal to give consent very much brings out that the landlord shall have justifiable reasons for refusing to give his consent, arbitrary refusals are open to successful challenge or being set aside.

4. Effect on Value and Integrity of Property: The court below did give an indication that it took into account a likely effect of the alterations on property value and structural integrity. They ought to have a legitimate interest in the condition of the property and that the alteration did not reduce the value of the property.

5. Judicial Interpretation: It is the case where courts interpret lease agreements in the light of the intentions of parties and all various facts of a particular case. Precedent from such cases then informs future disputes and further elaborates the application of legal principles.

In summary, in the case of Sella House Ltd v Mears, it is pointed out clearly that the lease covenants are binding and a tenant is to observe them. It further reinstates reasonableness into the relationship between landlord and tenant, and it provides the courts with a guideline on how to apply such principles that can extend even to bigger disputes. That is a case of immense relativity to both landlords and tenants in understanding what their rights and responsibilities are within the ambit of any lease agreement.

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