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Azam v (1) Violet Developments LLP; (2) Secure Trust Bank plc; (3) East End Homes Limited (Central London County Court, HHJ Evans-Gordon, 14 November 2025)
Her Honour Judge Evans-Gordon handed down judgment in a possession and relief from forfeiture dispute concerning a development in East London.
Background
Mr Azam, the landlord, claimed possession following forfeiture of a headlease granted to Violet Developments LLP for breaches including failure to complete the residential and commercial development within a reasonable period. He also sought damages for loss of rent that would have accrued had the development completed on time, including ground rents that became irrecoverable from residential under-lessees following the Leasehold Reform (Ground Rents) Act 2022.
After proceedings began, Violet entered insolvent administration. The leased premises were the only asset in the administration, and the Second Defendant’s secured debt exceeded the potential sale value of the completed units.
Violet and the Second Defendant accepted that the lease had been forfeit but contended that any breach relating to delay in completion had been waived. They argued that section 146(1) of the Law of Property Act 1925 confined the court to granting relief only in respect of the forfeitable breach identified in the section 146 notice and, therefore, precluded the court from requiring payment of damages as a condition of relief. They further submitted that no damages were recoverable for loss of the residential ground rent stream because Violet had no obligation to sell the flats prior to the Ground Rents Act coming into force.
Court’s Findings
The judge rejected those submissions. Accepting Mr Azam’s case on both jurisdiction and remedy, the court granted relief from forfeiture on terms that: (1) approximately £1.4 million be paid to the landlord as damages compensating for all relevant breaches; and (2) security for costs of £1.1 million be provided. In reaching that outcome, the judgment contains a detailed analysis of expert evidence on delay and valuation and makes two points of wider interest:
First, although there was no direct authority on point, the court held that the statutory jurisdiction to grant relief from forfeiture is both wide and purposive. It permits the court to impose conditions that extend beyond the specific breaches cited in the section 146 notice where required to do justice between the parties. On the facts, that jurisdiction enabled conditions designed to avoid a windfall to the tenant and its secured lender, and to restore the landlord to the position he would have occupied absent the breaches, without compelling a futile pursuit of an insolvent tenant for damages.
Second, the court held that, when fixing the compensation upon which relief is conditioned, it is not constrained to approach the matter exactly as a conventional assessment of contractual damages. In that context, principles such as the doctrine of minimum performance were not determinative of whether the landlord could recover for the lost ground rent income stream. The court’s objective was to ensure the landlord was not disadvantaged by the tenant’s breaches or by the grant of relief, rather than to apply the strictures of ordinary damages analysis.
David Holland KC and Evie Barden appeared for the claimant landlord, Mr Azam, instructed by Ben Barrison and Will Leney at Forsters LLP.
