Breach of Lease & Relief from Forfeiture: Whether a Tenant Breached the Permitted Use of a Property Following Suspension from their Regulatory Body (Bijlani v Medical Express (London) Ltd – 2024)

Where a tenant is suspended from practice by their regulatory body and they continue to practice in related areas from their business premises, is there a resulting breach of the lease’s permitted use clause?

The background

In Bijlani v Medical Express (London) Ltd [2024], a tenant occupied commercial premises on Harley Street in London under a lease granted by the defendant landlord. The tenant was a dentist registered with the General Dental Council. She practised from the premises, carrying out dental treatments and unregulated aesthetic treatments such as anti-wrinkle injections. Under the terms of the lease, the tenant was not to use the premises for any use other than the permitted use. The tenant also covenanted to be duly qualified and registered with the GDC.

The tenant was subsequently suspended by the GDC following a professional conduct issue, but the tenant continued to deliver aesthetic treatments from the premises. The landlord issued s.146 notices to commence forfeiture proceedings on the grounds that the tenant was in breach of the lease as a result of carrying out aesthetic treatments, not using the premises for the permitted use, and because she was not duly qualified and registered with the GDC.

The tenant argued that she had not breached the terms of the lease and that, if she had, the landlord had waived its right to forfeit as a result of accepting rent. Further, the tenant sought grant of relief from forfeiture.

The decision

The High Court considered whether the permitted use covenant in the lease had been breached, particularly as a result of the tenant’s suspension from registration with the GDC.

Ultimately, the court concluded that there had been a breach but allowed the tenant to remain in occupation.

The permitted use clause had been breached by the tenant’s continued use of the premises for the carrying out of aesthetic treatments. The lease intended for the property to be used by an occupier who was qualified, registered and authorised to practice as a dentist. The tenant did not meet these stipulations; she was not a fully-registered dentist as a result of her suspension.

The landlord had accepted rent while the tenant’s breach subsisted, but had not accepted any further payments following service of s.146 notices. Accordingly, the landlord had not waived its right to forfeit.

In considering whether the tenant should be granted relief from forfeiture, the High Court determined that she had not used the premises in such a way that she knowingly breached the permitted use clause, and that the landlord did not face any reputational damage as a result of the tenant’s actions. The High Court, using its discretion, granted relief from forfeiture subject to conditions to prevent any further breach.