Termination of Tenancies for Tenant Default - Law Commission

do so by delaying until the default period has expired. The possibility of extension
would, the CP argued, be consistent with the policy of encouraging parties to
negotiate and come to an out of court settlement wherever possible. Where no
agreement to extend the default period can be reached, the CP suggested that
either party should be able to apply to the court for an extension. 12
Consultation
4.18 The majority of responses to these provisional proposals were supportive. There
was, somewhat inevitably, disagreement among consultees over the six-month
period we proposed. Opinion was divided as to whether the period was too short
or too long.
4.19 A number of consultees felt that there were uncertainties inherent in the concept
of the landlord’s “knowledge” of tenant default. In particular, HH John Colyer QC
feared that defining the default period by reference to what the landlord knew
would lead to evidential disputes about who knew what and when.
4.20 The Judges of the Chancery Division agreed with the CP’s provisional proposal
that the parties should be able to extend the default period by agreement. They
did not, however, consider that the parties should be able to apply to the court for
an extension where they could not reach agreement themselves. Such a
provision could, according to the Judges, “lead to tactical games and undesirable
satellite litigation”.
Reform recommendations
4.21 We intend to proceed with our provisional proposal that a tenant default notice
must be given within a defined period of time after the landlord has knowledge of
the relevant tenant default. Although we accept that arguments can be made for
shorter or longer periods, we have not been persuaded to depart from the CP’s
provisional proposal that six months should be the period of time within which
notice must be given.
4.22 Disputes over the date of knowledge are perhaps inevitable. However, we have
come to the view that it may assist the resolution of such disputes if we set out in
some detail what will constitute knowledge for the purposes of the statutory
scheme.
Actual knowledge
4.23 Under the current law, knowledge is a key element of the doctrine of waiver:
“waiver of a right of re-entry can only occur where a lessor, with knowledge of the
facts upon which his right to re-enter arises, does some unequivocal act
recognising the continued existence of the tenancy”. 13 Knowledge for these
purposes is “knowledge of the basic facts which constitute a breach of covenant
entitling him to forfeit the lease” but not necessarily knowledge that the right to re-
12 CP, para 5.12. This was not formally expressed as a provisional proposal.
13 Matthews v Smallwood [1910] 1 Ch 777, quoted with approval by Aldous LJ in Cornillie v
Saha and Bradford & Bingley (1996) 72 P&CR 147, 155.
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