Shirayama Shokusan Co Ltd & Ors v Danovo Ltd (2005)


The claimants were entitled to forfeit a sub-underlease granted to the defendant company, which traded as the Saatchi Gallery. Given the conduct of certain individuals behind the defendant, it was not appropriate to grant relief from forfeiture.


The claimant freeholder (S) brought a claim against the defendant sub-underlessee (D) for damages for trespass. The sixth claimant underlessee in the trespass action was also the sole claimant (C) in forfeiture proceedings brought against D for breach of covenant. S was the freeholder owner and long lessee of a building, which formed the main part of the former County Hall complex. C was the underlessee of certain parts of the building. D held a sub-underlease to part of the first floor of the building, which D used as an art gallery trading as the Saatchi Gallery. Disputes arose between the parties as to D's use of the common parts and exterior of the building to display signs, its use of a corridor and of a particular room. The claimants in the trespass action contended that they were entitled to revoke a limited licence granted to D to display signs outside the premises and works of art in the common parts. D argued that the claimants were estopped from enforcing any rights in trespass. C in the forfeiture action argued that D's "two for one" entrance fee offer was in breach of clause 4.13 of the sub-underlease, which it was entitled to forfeit. D argued that the "two for one" offer did not breach the clause and when construed in the context of all the surrounding circumstances it was clear that such promotions were used by those running exhibitions as a means of obtaining substantial publicity and applied for relief from forfeiture in the event that it was determined that C was entitled to forfeit.


(1) Any licence to display signs and works of art in areas outside those demised to D in the sub-underlease had been revoked. There was no evidence upon which D could base a defence of proprietary estoppel. C was awarded damages for trespass involving the display of works of art and signage in the common parts and exterior of the building, the use of the corridor and the use of room 157. (2) The words of clause 4.13 were clear and specific: every member of the public admitted, except for those in certain groups, had to pay a minimum entrance fee. D's promotion constituted a clear breach. D had been given the opportunity to explain to C how the breach was to be remedied but had not responded. C was entitled to take the view that D had no intention of remedying the breach and was entitled to forfeit the sub-underlease for breach of covenant. (3) The court's discretion to grant relief from forfeiture under the Law of Property Act 1925 s.146(2) was unfettered but had to be exercised equitably, and it was appropriate for the conduct of the applicant seeking relief to be taken into account. The conduct of certain of those behind D had been such that D was disentitled to any relief despite the effect on the staff employed at the gallery and members of the public.

Judgment for claimants.