Ramsbury Properties Ltd. v Oceanview Construction Ltd. [2024] UKPC 40 and the Termination of Leases for Repudiatory Breach

The recent decision of His Majesty’s Privy Council in Ramsbury Properties Ltd. v Oceanview Construction Ltd. [2024] UKPC 40 issued on the 17th day of December 2024 arose out of unremarkable factual circumstances which many may argue ought not to have troubled the Court in the first place far less to reach to the final appellate Court in London. 

The appeal before the Privy Council arose from St. Kitts and Nevis and related to a dispute between Ramsbury Properties Ltd. (Ramsbury) and Ocean View Construction Ltd. (Ocean View) as to the proper interpretation of a lease agreement. 

Ramsbury leased its property to Ocean View to house some 250 workers. The lease contained a provision that the leased premises were to be used for “sleeping accommodation only” and in purported reliance on that provision, Ramsbury forbade the occupants of the premises from eating or doing laundry on the premises. Ocean View took the view that Ramsbury’s position was a breach of the lease and was sufficient to repudiate the lease agreement. Relying on that breach, Ocean View terminated the lease and vacated the premises. 

Ramsbury sued unsuccessfully in the High Court and appealed unsuccessfully to the Eastern Caribbean Court of Appeal. The Privy Council has now dismissed Ramsbury’s appeal in a unanimous judgment delivered by Lord Burrows. 

The first point of law raised in the appeal to the Privy Council was the short and trite point of the meaning of “sleeping accommodation only”. The second and more substantive point raised was whether there was a repudiatory breach by the landlord (Ramsbury) which entitled the tenant (Ocean View) to terminate the lease. 

The second and more substantive of the points of law raised on the appeal is the subject of this note because it caused the Privy Council to examine whether the general principles applicable to termination of contracts for breach also applied to leases. 

There was at one point a view that because leases were a special type of contract which granted a proprietary interest in land (the right of exclusive possession) such contracts were sui generis and outside the general provisions of contract law as they related to repudiatory breaches. This view flowed from the decision in Total Oil Great Britain Limited v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318. It appears that the reasoning in Total Oil came in part from the decision of the English Court of Appeal in Cricklewood Property and Investment Trust Ltd. v Leighton’s Investment Trust Ltd [1943] KB 493 that the contractual notion of frustration was inapplicable to a lease. On appeal in Cricklewood to the House of Lords, that issue remained unsettled (See decision at [1945] AC 221). 

In Hussein v Mehlman [1992] 2 EGLR 87, Sedley QC sitting as a County Court Judge departed from the decision in Total Oil and ruled that there could be a repudiatory breach of a lease. The learned Judge was persuaded to that view in part because the House of Lords had 10 years earlier in in National Carriers Ltd. v Panalpina (Northern) Ltd. [1981] AC 675 held that in exceptional circumstances a lease could be frustrated thereby departing from the position hitherto established in Crickelwood. Sedley, QC accepted in Hussein that the fact that a lease created a proprietary interest in land did not exclude the normal contractual principles on repudiatory breach. 

This position seems to have been accepted by Ellis J in Emperor International Holdings Ltd. v James Young Harbour View Marine Centre Ltd. (BVIHCV 2015/023) and therefore accepted as good law in the Eastern Caribbean. 

Having reviewed an extensive list of authorities, the position in other common law Commonwealth jurisdictions like Australia and Canada, and academic writings on the issue, Lord Burrows in Ramsbury concluded on behalf of the Privy Council at paragraph 42 of the Judgment that:

“… the Board accepts that there can be a repudiatory breach entitling the innocent party … to terminate a lease. In principle, there is no good reason why that should not be possible”. 

The Board however heavily caveated its position at paragraph 43 of the Judgement thus:

“Nevertheless, in determining whether there has been a repudiatory breach of a lease, it is of importance that one is concerned with a lease that confers a proprietary interest in the land. The right to exclusive possession under a lease, especially where the lease is long-term, means that it may be rare for there to be a repudiatory breach of a lease entitling the tenant to terminate. In any event, a tenant is likely to have a right to give notice under the lease so that it will often be unnecessary to terminate for breach.”

Conclusion

It must now therefore be accepted that under the law of St. Kitts and Nevis, leases, notwithstanding their special character, can be terminated for repudiatory breaches. However, given the special character of leases, such repudiatory breaches entitling termination would be rare and it would perhaps be more common for parties to rely on notice provisions under the terms of the lease. 

The law then is now settled. 

Brianna Brantley, Associate, Daniel Brantley 

Gabriella Brantley, Associate, Daniel Brantley 

The decision can be read in its entirety through the below link: https://www.jcpc.uk/cases/jcpc-2022-0109