EQUITY’S JURISDICTION TO RELIEVE AGAINST FORFEITURE OF LEASES – AN HISTORICAL PERSPECTIVE
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This article seeks to trace the evolution of equity’s jurisdiction to relieve against the forfeiture of leases from the early 17th century cases through to the present day. Although the celebrated case of Sanders v Pope, decided in 1806, marked a trend towards a more flexible (discretionary) approach to equitable relief, this was to be short lived following Lord Eldon’s judgment in Hill v Barclay in 1811 declining to grant relief against forfeiture of a lease for a wilful breach of covenant not involving the failure to pay rent even where the same was capable of adequate compensation. This remained the position until 1973, when the House of Lords in Shiloh Spinners Ltd v Harding took the opportunity to review the whole question of the scope of equity’s jurisdiction to relieve against forfeiture. What emerged was a principled approach to the grant of equitable relief which was not limited to the two orthodox heads of relief: (a) where the right to forfeit was inserted by way of security for the payment of rent nd (b) where the breach had been occasioned by fraud, accident, mistake or surprise. The Shiloh ruling paved the way for the granting of relief for breaches of other covenants in the same way as that in the case of rent, namely, to prevent a forfeiture where the landlord may be adequately compensated and receive proper undertakings as to future performance, so that the forfeiture clause is merely security to achieve these results.
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