Telchadder v Wickland Holdings Ltd [2014] UKSC 57

Mr Telchadder, an occupier of a mobile home with autistic traits, breached his agreement through anti-social behaviour. The site owner served a notice to remedy in 2006, but relied on it to seek eviction after a serious 2009 incident. The Supreme Court allowed his appeal, holding the notice had lapsed.

Facts

Mr Telchadder occupied a mobile home at Meadowview Park under a written agreement dated 1 June 2006 with Wickland Holdings Ltd, the site owner, governed by the Mobile Homes Act 1983. The agreement, and the Park Rules incorporated into it, included an undertaking not to act so as to annoy or disturb other occupiers. Mr Telchadder was middle-aged, somewhat eccentric, had a mild learning disability and exhibited autistic traits.

On 31 July 2006, wearing camouflage clothing and netting, he jumped out from behind a tree and startled a female resident, Miss Puncher. Wickland responded by letter dated 15 August 2006 warning him not to mask his face or make unsolicited approaches to residents, failing which it would apply to court to terminate his agreement.

No further material breach occurred for almost three years. On 15 July 2009, Mr Telchadder made threats to kill two women and Mr Carter, another resident, though the judge found he never intended to carry them out. Wickland issued possession proceedings on 8 September 2009. Between then and the hearing in August 2011, Mr Telchadder engaged in further incidents including harassment of elderly residents, threatening behaviour, and leaving shotgun cartridges outside Mr Carter’s home.

HHJ Moloney QC ordered termination of the licence under paragraph 4 of Chapter 2 of Part 1 of Schedule 1 to the 1983 Act, treating the August 2006 letter as a notice to remedy and the July 2009 incident as a subsequent breach in disregard of that notice. The Court of Appeal upheld this, holding the notice had continuing effect throughout the term of occupation.

Issues

The appeal raised issues of construction of the paragraph 4 term, which entitles an owner to terminate an agreement where the court is satisfied the occupier has breached a term and, after service of a notice to remedy, has not complied within a reasonable time, and it is reasonable for the agreement to be terminated. Specifically:

• Can an occupier ‘remedy’ a breach of a covenant against anti-social behaviour?
• If not, what is the effect of the paragraph 4 term?
• If so, how may he ‘comply’ with a notice, and what is the effect of the obligation to do so ‘within a reasonable time’?

Arguments

Mr Telchadder argued that the notice served in 2006 could not have been intended to have perpetual effect; as he had complied for a reasonable time, a further notice was required before proceedings could be commenced based on later conduct.

Wickland argued that rejecting the Court of Appeal’s conclusion would allow anti-social occupiers to play “cat and mouse” with site owners, committing a breach, being served with notice, complying for a reasonable time, then re-offending in a repeating cycle, with the licence never terminable.

Judgment

The Supreme Court unanimously allowed the appeal, though with differing reasoning between the majority (Lord Wilson, Lady Hale and Lord Toulson) and the minority (Lord Carnwath and Lord Reed).

Remediability of breach

Lord Wilson, giving the leading judgment, reviewed the statutory pedigree from section 146 of the Law of Property Act 1925 through section 3(g) of the Mobile Homes Act 1975 to paragraph 4 of the 1983 Act. He noted the omission from paragraph 4 of any express reference to a breach “capable of remedy”, but concluded it would be nonsensical to require service of a notice to remedy a breach incapable of remedy. Drawing on L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, he held that the twin requirements in sub-paragraph (a) apply only to a breach capable of remedy.

Reviewing authorities including Rugby School (Governors) v Tannahill, Expert Clothing Service and Sales Ltd v Hillgate House Ltd, Savva v Hussein, and Akici v LR Butlin Ltd, Lord Wilson held that remediability requires a practical inquiry: whether the mischief resulting from the breach can be redressed. A covenant against anti-social behaviour can in principle be remedied by the occupier committing no further breach for a reasonable time, though some breaches may be so serious as to be irremediable.

Compliance and reasonable time

Lord Wilson rejected the Court of Appeal’s view that a notice has continuing effect throughout occupation. To equate “within a reasonable time” with “throughout the subsistence of the agreement” would deprive the phrase of significance and permit termination based on breaches decades old. The word “within” must be read as “for” where the remedy is not to do something. Compliance means not committing a further breach for a reasonable time; on the facts, the period of almost three years clearly amounted to a reasonable time, so the 2006 notice had been complied with and could not support the 2011 order.

Minority reasoning

Lord Carnwath (with whom Lord Reed agreed) preferred an interpretation closer to the natural wording: a notice to remedy is required in all cases, and in the case of a negative user condition, compliance requires ceasing the offending conduct indefinitely. However, there must be some causal or temporal link between the notice and the later breach. The three-year gap here was too great for the 2006 notice to serve as a platform for the 2009 proceedings.

Lord Toulson

Lord Toulson agreed with Lord Wilson that a practical approach was required and that a notice to remedy should not be regarded as a gateway for termination throughout the remainder of the contract. Repeated misconduct may cumulatively pass the point of remediability. The 2009 incident might have justified immediate termination as an irremediable breach, but the case had not been argued on that basis.

Implications

The decision clarifies the operation of paragraph 4 of Schedule 1 to the Mobile Homes Act 1983 in cases of anti-social behaviour. The majority ratio is that a breach of a covenant against anti-social behaviour is remediable where the mischief can be redressed, and the occupier complies with the notice by refraining from further breach for a reasonable time. Once that reasonable time has elapsed, the notice is spent and cannot found later proceedings based on subsequent, unrelated breaches.

The judgment is significant for the estimated 85,000 households living in mobile homes, many of whom are elderly or vulnerable, and for site owners managing communities where good-neighbourliness is at a premium. It balances protection of occupiers from over-hasty eviction against the need to protect neighbours from anti-social conduct.

Practically, site owners faced with serious anti-social behaviour should consider serving a fresh notice for each breach, or, where the breach is arguably irremediable, notify the occupier of the intended application and reasons for treating the breach as irremediable. The court left open whether particularly egregious breaches may be treated as irremediable, permitting immediate application to court. The differing approaches within the court on whether a notice is required for irremediable breaches remain unresolved as strictly obiter, though the majority preferred the view that no notice is required in such cases.

The decision also confirms that the practical, rather than technical, approach to remediability developed under section 146 of the Law of Property Act 1925 is applicable to the mobile homes regime, and that most breaches, including breaches of negative covenants, will be capable of remedy.

Verdict: Appeal allowed. The Supreme Court unanimously held that the notice to remedy served on 15 August 2006 had been complied with by Mr Telchadder’s abstention from further breach for almost three years, and could not support the termination order made in reliance on the July 2009 incident.

Source: Telchadder v Wickland Holdings Ltd [2014] UKSC 57