In Bijlani v Medical Express (London) Ltd [2024], the High Court considered whether a dentist carrying out Botox procedures was in breach 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 when to allow the tenant relief from forfeiture.
The Facts
- The tenant, Dr Bijlani, held a 20 year lease of a room in a building on Harley Street and was registered as a dentist with the General Dental Council (the GDC). The landlord also used other parts of the building for healthcare practices.
- The permitted user clause of the lease provided that the room could be used for: 'consultations and legitimate surgical dental procedures by a dental practitioner who was qualified and registered in the UK with the GDC'.
- In June 2021, the tenant’s registration with the GDC was suspended for various reasons, including issuing “fit to fly” certificates during COVID lockdown. She ceased offering dental treatment but continued to use the room for the provision of Botox treatments, an activity that does not require any formal qualifications.
- The landlord continued to accept rent after it knew that the Dr Bijlani had been suspended but stopped accepting rent from January 2022. It served notices requiring the tenant to remedy the breach of the user covenant by carrying out the Botox treatments. The notices were served as a precursor to forfeiting the lease.
- In response, Dr Bijlani brought the following claims before the High Court:
- For a declaration that her provision of Botox treatments was not in breach of the permitted user clause;
- If there was a breach, that the landlord had waived the right to forfeit by initially continuing to accept rent;
- In the alternative, for relief from forfeiture.
The Judgment
Permitted User clause
It was held that the use of the premises by the tenant performing Botox treatments (or any dental treatments whilst her GDC registration was suspended) was in breach of the permitted user clause.
The fact that cosmetic Botox treatments can be carried out by unregistered people, as well as by a registered dentist was not relevant in this case; the wording of the permitted user clause was such that the premises could not be used at all by a person who was not a registered dental practitioner.
Waiver of forfeiture?
Dr Bijlani argued that the landlord had continued to accept rent until January 2022, after it had become aware of her suspension and that she was continuing to provide Botox from the premises, therefore waiving its right to forfeit the lease.
The Judge pointed out that, where a breach of covenant is waived, the waiver extends only to that breach and does not operate as a general waiver of the breach of covenant. The notices served on the tenant requiring a remedy of the breach of covenant were issued in February and May 2022, and there was no further acceptance of rent.
The Judge ruled that the landlord had not waived his right to forfeit in respect of these continuing breaches of the terms of the lease.
Relief from forfeiture
The Judge held that, as it had genuinely not been clear to the Dr Bijlani that the user clause prevented her from carrying out Botox treatments, there was no wilful breach of the terms of the lease. Further, there was no clear evidence of reputational damage to the landlord, nor damage to the goodwill of the building, which had both been argued by the landlord.
In the circumstances, the Judge granted relief from forfeiture, whilst imposing conditions to prevent the Dr Bijlani’s future breach of the user clause; she was unable to use the premises at all until her suspension was lifted.
Conclusions
This case shows that covenants in a lease will be interpreted by considering the purpose of the contract and the circumstances in which it was made. It was clearly intended by the parties that the premises in Harley Street should be used in accordance with maintaining the highest standards for the benefit of the landlord’s own business within the building and that of the other tenants.
A right to forfeit in a commercial lease is security for the performance of a covenant and, if the landlord can be put in the same position as before the breach occurred, relief should be granted.