In Bijlani v Medical Express (London) Ltd [2024], the High Court considered the regulation of dental treatments in testing the limits of a permitted user clause in the lease for a Harley Street dental practice.
This case offers useful guidance on the court's approach to forfeiture for breaches other than for non-payment of rent and the treatment of costs in such proceedings.
Dr Bijlani rented a room from Medical Express (London) Ltd at an address on the prestigious Harley Street in London.
It was a requirement of both the permitted user clause and as a secondary covenant in the lease that the tenant remain fully registered with the General Dental Council (GDC).
Dr Bijlani sought (1) a declaration that she had not broken the terms of her lease, or (2) that if she had, such breach had been waived, or (3) alternatively, relief from forfeiture.
Breach
Dr Bijlani's registration for practicing as a dental practitioner with the GDC was suspended in April 2021 but she continued to use the room for Botox consultations and treatments.
The court found that this was a breach of the permitted use provisions in the lease which required Dr Bijlani to remain registered with the GDC and to conduct her practice in accordance with that registration.
However, the severity of the breach was relevant to the exercise of the court's discretion in deciding whether to grant relief from forfeiture and the judgment devotes much time to this subject.
Expert witnesses were called to assist the court in deciding whether the administration of Botox was a form of dental treatment (a regulated activity) or not. The Court found that it was not.
The Court also noted that it was not apparent to Dr Bijlani that she was in breach of the lease at the time the work was performed.
Waiver
The right to forfeit a lease can be waived by asserting the continuation of it, for example by accepting rent, after a breach occurs that gives rise to the right to forfeit.
In this case, the breach of a permitted user clause was a continuing breach, giving rise to a reoccurring right to forfeit each day the permitted user provision was breached. The suspension took effect from April 2021. The landlord continued to accept rent until January 2022 which the Judge found to be a waiver for that period. After that date, no further rent payments were accepted.
Two notices were served on Dr Bijlani pursuant to section 146 of the Law of Property Act 1925 after January 2022 (and whilst Dr Bijlani continued work) stating the nature of the breaches complained of. The judge was satisfied that there had been no waiver of the breaches which gave rise to the forfeiture remedy sought since those notices had been served.
Relief
The court granted relief from forfeiture, proposing that the order include either an undertaking or an injunction preventing the use of the room whilst the breach of the user clause continued together with provision for payment of the back rent since it was first refused in January 2022.
It was relevant for the purposes of the court exercising its discretion to grant relief that Dr Bijlani did not believe she was in breach of the lease whilst using the premises to administer Botox at a time when she was suspended from the GDC and it was not therefore a wilful breach.
Costs
If granted relief, it is usual for a tenant to pay the landlord's costs in proceedings, on the indemnity basis.
In this case, the judge awarded the landlord 95% of its costs on the indemnity basis, reduced as the landlord had been found to commit a minor breach of the lease itself. The tenant was also granted a declaration related to the landlord's use of CCTV footage in breach of the Data Protection Act 2018.
Whilst Dr Bijlani secured relief, she was prohibited from using the leased premises until the suspension from practicing as a dentist was lifted and it was an expensive endeavour.
Our national commercial property disputes team regularly act for both landlords and tenants in forfeiture matters.
