Hughes v Metropolitan Railway and Central London Property Ltd v High Trees House Ltd - Assignment Example

LAW RESEARCH PART ONE There first place to start is to determine if there is a legally binding contract between Angelo and Christie. A leasehold agreement is by all means a contractual agreement (Treitel, 2007), and thus the ingredients of offer, acceptance and consideration are important when considering leasehold agreements. For the first year there is clear evidence that both parties had reached an amicable consensus on agreement and payment where Christie continues to pay $150 weekly. On the second year, there are two issues that come to the fore; the first is the renegotiated contract of $ 200 weekly and the effect of the verbal agreement by Angelo that she should pay $ 175 a week contrary to the new leasehold agreement. The first legal principle is the one of Promissory Estoppel, which means that if a person by his words or conduct make a unambiguous representation as to how he will conduct his future affair, while having an intention that the representation is to be relied upon by the representee and the representee relies on the statement, the representor will be unable to recover since such an act would be prejudicial to the representee (McKendrick, 2009). This is illustrated in the leading case of Hughes v Metropolitan Railway coin this case a landlord gave his tenants a notice of six months to make some building repairs. During the course of the tenancy agreement, he subsequently entered into a contractual negotiation with the tenants to sell the property at £3,000. The negotiation broke down at some point during the lease agreement and the landlord sought to forfeit it because the tenants hadn’t carried out the repairs. The House of Lords held that the tenants were entitled to rely on the doctrine of promissory estoppels against the lease forfeiture (Atiyah, 2006). This was on the ground that the six month repair notice was suspended when the negotiations started and didn’t recommence until the negotiations broke down. ` This position is firmly supported by the case of Central London Property Ltd v High Trees House Ltd. In 1937 the claimants had let a block of flats to the defendants though a lease agreements at an annual rent of £2500. In 1940 as a result of the war outbreak, the landlord agreed to reduce the rent to £1250. The promise to reduce the rent by the claimants was unsupported by any consideration by the defendants. When the war finally came to an end in 1945, the landlord sought to claim the arrears, the court held the claimants couldn’t recover the amount prior to 1945 due to the legal doctrine of promissory estoppels (Treitel, 2007). (Waddams, 2005) argues that promissory estoppel is used as a shield and not a sword, therefore Christie would rely on it successfully to convince the court that by the verbal agreement, Angelo had agreed not to charge her as per the new renegotiated lease agreement. Another legal principle that catches the attention is the parole evidence rule; this is so due to the verbal agreement between Christie and Angelo. The general rule is that once the contracting parties agree to enshrine all their terms in a written document, the courts have held that a party is not allowed to bring forth any extrinsic evidence to vary or contradict the written document (Treitel, 2007). This would be an important avenue for Angelo to recover the arrears and institute a cause of action. The parole evidence rule is not an absolute rule otherwise Angelo would encounter no hurdles in recovering arrears. The rule purpose was to ensure that there was certainty in contracts. These essentially worked to avoid impunity of some parties relying on terms that had not been incorporated in the written document. However the existence of many exceptions to the rule reduced its rigidity. This is justified from the perspective that in some instances reliance of the rule would cause considerable injustice, for example in the cases of fraud. A party would thus be allowed to use extrinsic evidence to prove the existence of fraud (McKendrick, 2009). This rule however has an exception which could be relied by Christie to enable her to continue living in the caravans. This position was upheld in the case of City and Westminster Properties Ltd v Mudda lease agreement provided that the tenant could only use the premises for business purposes only. Subsequently, the tenant entered into an oral assurance with the landlord agents that he would continue to reside in the premises and that the lessors would not at all raise any objection. Relying on this assurance the tenant continued to use the premises for residential purposes. The court held that the evidential oral assurance was admissible to prove the existence of another collateral agreement. The collateral agreement was admissible despite the fact that it was contradictory to the express written agreement (Atiyah, 2006). This rule would essentially help Christie from paying the extra arrears she had not paid. Another important consideration in the case is the effect of the rule established in Welsh v Lonsdale, the court held that in any lease agreement the court will find as done that which ought to be done (Birks, 2004). This is an equitable rule, and may be relied by Christie in avoiding the formality of the leasehold agreement by saying that since she continued to pay $175 she should not be penalized to pay $200 weekly arrears not paid by her. Another important consideration in Angelo scenario is considering the effect of the timing. The case law is quite clear that if a party is indolent to recover any costs, the court will not awake him from his slumber. Even if Angelo would be successful in her cause of action against Christie to recover the amount of the arrears, it is clear that she waited for months before instituting any suit or seeking any claim from her. This is illustrated by the case of Allcard v Skinner the plaintiff in this case relied on the defence of undue influence to vitiate the existence of any contract between her and the defendant. She had channeled all her property to the religious organization, when she was in the organization. The court held that even though her defence was good, she had been indolent before instituting her claim (Birks, 2004). The court will have to consider whether the period that Angelo has taken is reasonable, if not, she will not be entitled to her claim even if it is good. Drawing from the above legal principles, it will be a herculean task for Angelo to recover her arrears. The fact that she had allowed Christie to continue paying a lesser amount than she ought to have, will act as estoppels, thus deterring her from recovering any claim in a court of law. The facts illustrate that Christie have had loud music in her premises, this is however immaterial in the circumstances of forfeiting the lease agreement or even claiming the arrears. Therefore any attempt to claim the arrears would be futile. However, Angelo would successfully start receiving the amount of $200 after a reasonable notice to Christie. PART B In relation to the lease agreement between Ali and Angelo, it should be said from the start, that the law provides that a tenant should give a 21 day notice before terminating a periodic lease agreement. The facts show Ali has not given any notice to terminate the lease agreement. There is however prevailing circumstances which should be interrogated, to find out, whether he is justified in breaching the contractual agreement. Ali may rely on the tortuous defence of nuisance to justify the breach of the lease agreement. Ali contracted for a peaceful environment but this is evidently not honored by Angelo who has allowed implied such tenants as Christie to make loud noises near the premises (Clearly and Joseph, 2002). Nuisance can be divided into two categories, public or private. Public nuisance interferes with a particular class of the public. There is however no civil remedy for a private citizen who wishes to institute a suit, the remedy lies in the criminal prosecution. Under the category of private nuisance, this is where a person’s enjoyment is interfered with. If Ali decided to pursue this in the court of law, he should be successful because his right to enjoy is being breached. A private nuisance amounts to a civil wrong. In determining its existence the court looks the presence of three ingredients which are, whether the defendant is at fault, if the plaintiff interest has been substantially interfered with and if the conduct of the defendant is at all reasonable. If Ali can prove those three factors successfully he would be entitled to a remedy. The remedies available for nuisance are in most instances monetary damages and injunctions. Injunction orders may also be available to the claimants to restrict the continuance of nuisance (Dodson, 2002). Under the law of contract a contractual agreement can effectively be discharged by a breach of that contract. A breach of contract occurs when one of the parties without any lawful and reasonable excuse refuses to perform or performs defectively what they ought to have done under the contract. It is important to note Ali was an immigrant wishing to enjoy a peaceful environment, by Angelo failure to provide such an environment; he is prima facie justified to terminate the contract without payment of the balance. The clause was clear that Angelo was supposed to offer a quiet environment. The question as to whether Ali may sue Angelo for nuisance is a difficult one, since it is not clear whether Angelo herself is an agent of the nuisance. But as to the facts of the breach of the contractual agreement this is very possible. Breach of a contract can be through words or conduct. A breach of contract will not necessarily bring a contract to an end. This was held in the case of DecroWall International SA v Practitioners in Marketing Ltd the court held that if there is a breach of contract, the parties are given various options. The level and extent of the options will always depend on the seriousness of the breach itself. The court held that even in the most serious breach which is often referred as fundamental breach; this does not entitle the party to terminate the contract (Waddams, 2005). The legal principle of discharge does not support Ali’s effort to end the agreed annual lease agreement with Angelo. The breach of contract entitles the innocent party to three possible consequences; first the innocent party is entitled to terminate any further performance which he may have had with the party in breach, secondly it entitles the innocent party to recover any damages due to any loss which he has had and thirdly the party in breach will be denied the right to sue to enforce any obligations of the innocent party under the contract (Atiyah, 2006). (Treitel, 2007) says that a breach of contract always operates prospectively and not retrospectively. This means that the right of the innocent party will be to terminate the performance of the contract and not to in any way terminate the contract itself. Thus in the lease agreement, Ali cannot merely purport to terminate the contract, he can only terminate the performance of the contract. This was held in the case of Heymans v Darwin Ltd. Another important factor the court will take into consideration will be whether, the breach of the code of behaviour clause amount to a breach of condition or a breach of warranty. A condition is that essential term of the contract that goes to the heart or the root of the contract of the parties. A warranty on the other hand is a subsidiary term that is lesser in nature. A clear distinction of the terms will result in case of a breach of contract. A breach of condition entitles the innocent party to recover damages, terminate or affirm the contract with the party in breach. On the other hand a breach of condition entitles the innocent party to recover only damages. A case to illustrate this is Lombard North Central plc v Butterworth there was a contract existing for hire purchase of computers between the parties. The agreement stipulated that that the hirer ought to pay the installment very promptly. The hirer however failed to honour this agreement and the owners retook possession and also sued the hirer for breach. The court of appeal held that the breach was a condition, and they were therefore entitled to terminate the contract for even a single failure of installment of payment and they were also entitled loss of future installments, damages and the arrears as at the date of termination (McKendrick, 2009). Another important issue that Ali needs to take into consideration before asking for the balance of the lease is the level of delay. We are told that he got into the premises after Christie that essentially means that she had borne the nuisance of the premises for the last 10 months. By all means, a delay of such kind will be seen by the court as unreasonable. A good case to illustrate that such delay will result in Ali’s detriment is the case of Allcard v Skinner. Angelo on the other hand may successfully claim an equitable remedy of specific performance. They have covenanted with Ali for an annual lease agreement, thus he ought to complete the agreed time period. This remedy is illustrated by the case of Co-operative Insurance Society Ltd v Argyll Stores Holding Ltd the claimants in this case were the freehold owners of a premises. They entered into a covenanted agreement with the defendants to let them for purposes of starting a supermarket. The agreement was clear that it was to run for a period of 35 years starting from 1979. However, in 1995, the defendants’ purported to close the supermarket due to the recurring trade in losses. The court of appeal by a majority held that the owners were entitled to a claim of specific performance (Atiyah, 2006). From the above illustrations due to the effect of delay coupled with the lack to give constructive notice to Angelo, Ali may find it difficult to claim a balance of the lease. In effect, according to the legal principles, such a termination would let a suit against him ensue, which would be much detrimental to him. The best advice to Ali would be to continue with the tenancy for the remaining two months, during which he may institute a tortuous liability claim against Christie and any other tenant in the premises who is causing nuisance. Reference Atiyah. (2006). An Introduction to the Law of Contract, 6th ed. OUP. Birks. (2004). ‘Undue Influence as wrongful exploitation’, Law Quarterly Review. Cleary, Joseph W. (2002). "Municipalities Versus Gun Manufacturers: Why Public Nuisance Claims Just Do Not Work." University of Baltimore Law Review 31. Dodson, Robert D. (2002). "Rethinking Private Nuisance Law: Recognizing Esthetic Nuisances in the New Millennium." South Carolina Environmental Law Journal 10. Mc Kendrick. (2009). Contract Law 8th Edition. Palgrave: Macmillan. Treitel. (2007). The Law of Contract, 12th Edition. Sweet & Maxwell. Waddams. (2005). The Law of Contract, 5th Edition, Canada LawBook. Read More