CA-2024-001924 - [2025] EWCA Civ 1206

We were referred in this context to F L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 (“Schuler v Wickman”), Savva v Hussein (1996) 73 P&CR 150, Crane Co v Wittenborg A/S (21 December 1999, unreported) (“Crane”), Woodchester Lease Management Services Ltd v Swain & Co [1999] 1 WLR 263 (“Woodchester”), Stocznia Gdanska SA v Latvian Shipping Co (No 3) [2002] EWCA Civ 889, [2002] 2 All ER (Comm) 768 (“Stocznia”), Akici v LR Butlin Ltd [2005] EWCA Civ 1296, [2006] 1 WLR 201 (“Akici”), Force India, Bournemouth University Higher Education Corpn v Buckland [2010] EWCA Civ 121, [2011] QB 323 (“Buckland”) and Wickland (Holdings) Ltd v Telchadder [2014] UKSC 57, [2014] 1 WLR 4004 (“Telchadder”).

In Schuler v Wickman, clause 11(a)(i) of an agency contract entitled a party to terminate if “the other shall have committed a material breach of its obligations hereunder and shall have failed to remedy the same within 60 days of being required in writing so to do”. Lord Reid said at 249-250:

“It appears to me that clause 11 (a) (i) is intended to apply to all material breaches of the agreement which are capable of being remedied. The question then is what is meant in this context by the word ‘remedy.’ It could mean obviate or nullify the effect of a breach so that any damage already done is in some way made good. Or it could mean cure so that matters are put right for the future. I think that the latter is the more natural meaning. The word is commonly used in connection with diseases or ailments and they would normally be said to be remedied if they were cured although no cure can remove the past effect or result of the disease before the cure took place. And in general it can only be in a rare case that any remedy of something that has gone wrong in the performance of a continuing positive obligation will, in addition to putting it right for the future, remove or nullify damage already incurred before the remedy was applied. To restrict the meaning of remedy to cases where all damage past and future can be put right would leave hardly any scope at all for this clause. On the other hand, there are cases where it would seem a misuse of language to say that a breach can be remedied. For example, a breach of clause 14 by disclosure of confidential information could not be said to be remedied by a promise not to do it again.”

As I have already mentioned, Force India related to a sponsorship agreement which could be terminated in the event of a material breach which, though capable of remedy, had not been remedied within 10 business days of a notice. The Court of Appeal concluded that changes to the team’s livery and name and the adoption of the logo of Kingfisher Airlines gave rise to “a series of repeated, or continuing, breaches which were sooner or later but ultimately repudiatory”: see paragraph 87 of the judgment of Rix LJ, with whom Patten LJ and Sir Mark Waller agreed. The Court further held that the breaches were irremediable.

Rix LJ referred to Schuler v Wickman as the “leading case” on the remediability of contractual breaches: see paragraphs 103 and 104. Having quoted from Schuler v Wickman, Rix LJ said in paragraph 108:

“The judge, without citing this authority, recorded the sponsors’ counsel as accepting that the authorities ‘favour a practical rather than an unduly technical test’. I think that is right. The judge concluded that any breaches of cll.4.6 or 4.7 were remediable, in the sense that Force India ‘could have put matters right’, either by changing the team name back to Etihad Aldar Spyker F1 Team and/or by reverting to the previous livery and removing the Kingfisher logo. However, in my judgment, these were not remediable breaches. The closest analogies are with the publication of confidential information or the publishing of advertising matter not containing a party’s name: one releases information which should be kept confidential, the other broadcasts a product in an inappropriate way. Looking at the matter pragmatically and not technically, I think that a proper marketing campaign is, generally speaking, all of a piece. Where Dr Mallya and Force India had persistently marketed the team as ‘Force India’ to the Indian market and had publicised the car’s new livery with deployment of the Kingfisher logo, and where Kingfisher was so much associated with Dr Mallya himself and he with Force India, and where, as Dr Mallya himself said in his interview which appeared on Force India’s website on October 11, 2007, ‘The name is an integral part of the team identity’, which I regard as truly said, the marketing genie cannot be put back into the bottle. The breach is irremediable. This conclusion is to my mind re-emphasised where the breach or breaches are repeated, cumulative, continuing and repudiatory.”

A similar approach has been adopted in relation to section 146 of the Law of Property Act 1925. Subsection (1) of that provides:

“A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice—

(a)

specifying the particular breach complained of; and

(b)

if the breach is capable of remedy, requiring the lessee to remedy the breach; and

(c)

in any case, requiring the lessee to make compensation in money for the breach;

and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.”

It is thus relevant whether a breach is “capable of remedy”.

In Savva v Hussein, where a landlord had sought to forfeit a lease, Staughton LJ said at 154:

“In my judgment, except in a case of breach of a covenant not to assign without consent, the question is: whether the remedy referred to is the process of restoring the situation to what it would have been if the covenant had never been broken, or whether it is sufficient that the mischief resulting from a breach of the covenant can be removed. When something has been done without consent, it is not possible to restore the matter wholly to the situation which it was in before the breach. The moving finger writes and cannot be recalled. That is not to my mind what is meant by a remedy, it is a remedy if the mischief caused by the breach can be removed. In the case of a covenant not to make alterations without consent or not to display signs without consent, if there is a breach of that, the mischief can be removed by removing the signs or restoring the property to the state it was in before the alterations.”

In Akici, where again a landlord claimed to forfeit a lease, Neuberger LJ, with whom Mummery LJ agreed, noted in paragraphs 67 and 68 that the authorities indicated that there were “two types of breach of covenant which are as a matter of principle incapable of remedy”: subletting and illegal or immoral user. In general, though, Neuberger LJ considered that a “practical rather than technical” approach should be adopted. He said:

“64.

In those circumstances it seems to me that the proper approach to the question of whether or not a breach is capable of remedy should be practical rather than technical. In a sense it could be said that any breach of covenant is, strictly speaking, incapable of remedy. Thus, where a lessee has covenanted to paint the exterior of demised premises every five years, his failure to paint during the fifth year is incapable of remedy, because painting in the sixth year is not the same as painting in the fifth year, an argument rejected in Hoffmann v Fineberg [1949] Ch 245, 253, cited with approval by this court in Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340, 351c-d. Equally it might be said that where a covenant to use premises only for residential purpose is breached by use as a doctor’s consulting room, there is an irremediable breach because even stopping the use will not, as it were, result in the premises having been unused as a doctor’s consulting room during the period of breach. Such arguments, as I see it, are unrealistically technical.

65.

In principle I would have thought that the great majority of breaches of covenant should be capable of remedy, in the same way as repairing or most user covenant breaches. Even where stopping, or putting right, the breach may leave the lessors out of pocket for some reason, it does not seem to me that there is any problem in concluding that the breach is remediable. That is because section 146(1) entitles the lessors to ‘compensation in money... for the breach’ and, indeed, appears to distinguish between remedying the breach and paying such compensation.”

The Supreme Court borrowed from the case law relating to section 146 of the Law of Property Act 1925 when considering in Telchadder paragraph 4 of chapter 2 of part 1 of schedule 1 to the Mobile Homes Act 1983. That paragraph implied the following term in an agreement between the owner of a mobile home park and the occupier of a mobile home at the site:

“The owner shall be entitled to terminate the agreement forthwith if, on the application of the owner, the appropriate judicial body— (a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and (b) considers it reasonable for the agreement to be terminated.”

When considering whether a breach involving anti-social behaviour by Mr Telchadder, an occupier of a mobile home at a site owned by Wickland, had been remediable, Lord Wilson said:

“31.

In my view the answer is to be found by a practical inquiry whether and if so how (to adapt the words of Staughton LJ in the Savva case) the mischief resulting from Mr Telchadder’s breach could be redressed. In relation to a breach of a covenant against anti-social behaviour, there is no escape from the conclusion that the inquiry requires a value judgment on the part, first, of the covenantee and, then, of the court in determining whether the requirements of section 146(1) of the 1925 Act, or, as the case may be, of the paragraph 4 term have been satisfied. Had Mr Telchadder not only jumped out at Miss Puncher [i.e. another occupier at the site] but, for example, deliberately perpetrated a significant injury on her, Wickland might well have been entitled to conclude that the breach was irremediable; that there was therefore no need for it to serve a notice to remedy; that it should apply directly to the court under the paragraph 4 term; but that, as a prelude to doing so, it should notify Mr Telchadder of its proposed application and of its reasons for having concluded that the breach was irremediable and that therefore there was no need for it to serve a notice to remedy. Obviously there would have been a risk that the circuit judge would either have disagreed with Wickland about the irremediability of the breach or have declined to consider it reasonable for the agreement to be terminated. Nevertheless, by reference only to the simple facts postulated, Wickland might have contemplated that risk with equanimity.

32.

But Mr Telchadder’s breach was in no way of that gravity. To an inquiry whether, and if so how, the mischief resulting from it could be redressed, the practical response is to say: yes, of course it can be redressed by his committing no further breach of his covenant against anti-social behaviour for a reasonable time.”

In the same vein, Lord Toulson said:

“51.

The interpretation of paragraph 4(a) of the Mobile Homes Act 1983 raises the question what is required to remedy a breach. A linked question is, ‘what is the correct procedure if a breach cannot be remedied within a reasonable time?’

52.

I agree with Lord Wilson JSC that the answer to the first question calls for a practical approach, that is, whether and how the mischief caused by the breach can be redressed. The context is a relationship between an occupier of land and the owner of the land, who also has responsibilities towards others living in close proximity including the elderly and vulnerable. In a case of anti-social behaviour by an occupier towards a neighbour, much must depend on the nature of the conduct in determining whether and how the mischievous effect of a particular breach may be remediable.

53.

A minor incident may not be expected to cause lasting harm to the peace of mind of other residents. In some cases an apology may be an appropriate means of redress. But human nature being what it is, there may be cases (for example, involving serious violence or threats of violence) where the conduct is such as to cause physical harm or feelings of fear and anxiety which the injured person could not be expected to get over within a reasonable time period, regardless of the other person’s subsequent behaviour. There is no reason why neighbours, especially if elderly and vulnerable, should be expected to live for months (let alone years) in a state of fear and anxiety.”

The authority on which Mr Butler principally relied was Buckland. In that case, a university had committed a repudiatory breach of a professor’s employment contract by re-marking examination papers originally marked by the professor without consulting him. The professor resigned in response, but by the time he did so an inquiry set up by the university had acknowledged that the re-marking should have been undertaken in consultation with the professor.

As Sedley LJ noted in paragraph 1, one of the issues in the Court of Appeal was “whether an employer who has committed a fundamental breach of contract can cure the breach while the employee is considering whether to treat it as a dismissal”. The Court answered the question in the negative.

Having quoted from Rix LJ’s judgment in Stocznia, Sedley LJ in paragraph 40:

“This account of the alternative courses which may be taken in response to a repudiatory breach leaves no space for repentance by a party which has not simply threatened a fundamental breach or forewarned the other party of it but has crossed the Rubicon by committing it. From that point all the cards are in the hand of the wronged party: the defaulting party cannot choose to retreat. What it can do is invite affirmation by making amends.”

With “some reluctance”, Sedley LJ accepted that the Court would not be justified in introducing into contract law “the doctrine that a fundamental breach, if curable and if cured, takes away the innocent party’s option of acceptance”: paragraph 44.

Jacob LJ expressed the principles crisply. He said:

“52.

… I do not share Sedley LJ’s regret in holding that a repudiatory breach of contract, once it has happened, cannot be ‘cured’ by the contract breaker. Once he has committed a breach of contract which is so serious that it entitles the innocent party to walk away from it, I see no reason for the law to take away the innocent party’s right to go. He should have a clear choice: affirm or go. Of course the wrongdoer can try to make amends—to persuade the wronged party to affirm the contract. But the option ought to be entirely at the wronged party’s choice.

53.

That has been the common law rule for all kinds of contract for centuries. It works. It spells out clearly to parties to contracts that if they actually commit a repudiatory breach, then whether the contract continues is completely out of their hands. The rule itself discourages repudiatory breach. In the context of employment law it means that employers know that if they treat an employee so badly as to commit a repudiatory breach, then they cannot hang on to the employee unless they can persuade him or her to decide to stay.”

For his part, Mr Crow relied on Crane, Woodchester and Force India as cases in which, he said, Courts had proceeded on the basis that a repudiatory breach could be “capable of remedy”. In Crane, clause 15B of an agreement between Polyvend and Wittenborg entitled a party to terminate if the other party “commits any substantial breach of any of the provisions of this Agreement and in the case of breach capable of remedy fails to remedy the same within 90 days of receipt of a written notice giving full particulars of the breach and requiring it to be remedied”. Mance LJ, with whom Stuart-Smith and Aldous LJJ agreed, rejected Wittenborg’s case that Polyvend had committed a repudiatory breach of the agreement. He nonetheless went on to consider what the position would have been had there been such a breach. As to that, he said in paragraph 21:

“any termination on the grounds of actual breach would have to take place in accordance with clause 15B. This is so in my view, even if the breach was of a condition or repudiatory. I for my part doubt whether there is any distinction to be drawn between the ‘substantial’ breach required by that clause and a breach of condition or repudiatory breach …. The requirement, in the case of a remediable breach, that a notice to remedy should have been given and a 90 day period should have elapsed before any termination does not persuade me that the parties must have had in mind breaches which were less than repudiatory. I therefore consider that substantial should be read as equivalent to repudiatory.”

Woodchester concerned a photocopier which was the subject of a regulated consumer hire agreement. The Consumer Credit Act 1974 prevented the owner from terminating the agreement without first serving a “default notice” which, in the case of a breach “capable of remedy”, had to specify “what action is required to remedy it and the date before which that action is to be taken”. The hirer having ceased to pay the sums due from it, the owner served a default notice but that was held to be invalid because it misstated the amount owing and, hence, what action needed to be taken to remedy the breach. It was thus assumed that the hirer’s failure to pay was “capable of remedy” even though the agreement between the parties provided for any failure to pay on time to be a “repudiatory breach”.

In Force India, Rix LJ concluded in paragraph 87 that Force India had committed “a series of repeated, or continuing, breaches which were sooner or later but ultimately repudiatory”. He nevertheless went on to consider whether they were remediable. Having noted a submission that “a ‘material’ remediable breach is not a repudiatory breach”, Rix LJ said that he would “assume for the sake of argument that, whether or not a ‘material’ breach need be repudiatory or not, the clause is intended to and does cover repudiatory but remediable breaches”: see paragraphs 101 and 102.