In the case of Pineport Ltd v. Grangeglen Ltd, [2016] EWHC 1318 (Ch). the court considered
whether a lessee of a long lease of commercial premises was entitled to relief from forfeiture
for non-payment of service charge.
One of the issues was whether the 14-month delay in seeking relief prevented the court from
exercising its discretion in favour of the lessee.
Although the delay was significantly longer than the six-month period generally adopted by
the courts as a guide, the court accepted the tenant’s explanation for the late application.
In addition, the lease had a capital value that was significantly higher than the amount of the
arrears.
If the lease was forfeited, the lessor would enjoy a disproportionate windfall.
T
he lessor would not suffer any prejudice from the grant of relief because the lessee had shown
that it was able to discharge the arrears and the lessor had not taken any steps to market or relet the property.
The case confirms that the primary purpose of forfeiture is to secure performance of the
lessee’s covenants and not to provide the lessor with a windfall.
However, lessors will be concerned about the inherent uncertainty in allowing a lessee a
significant amount of time in which to make an application for relief.
Critically discuss this case.
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