ABSTRACT
The next two cases demonstrate that the assimilation process may involve the courts according
primacy to the contractual, and not the proprietary, nature of the claimant’s rights, so as to justify
a ‘contractual’ remedy. In National Carriers Ltd v Panalpina (Northern) Ltd199 the doctrine of
frustration200 was held, in principle, to be applicable to a lease. In this case, the plaintiffs had let a
warehouse to the defendants for a period of 10 years. The only vehicular access to the premises
was by a street which the local authority closed half-way through the leasehold term. The period
of the closure was expected to be about 20 months. During that time, the premises were rendered
useless for the defendant’s purposes. In an action by the landlord for unpaid rent, the defendant
argued that the lease had been frustrated. The judge held himself bound by the authority of
Leighton’s Investment Trust201 to the effect that a lease could not be the subject of frustration. By a
four to one majority the House of Lords held that the doctrine of frustration was in principle
Agreeing with the majority view, Lord Wilberforce found the experience of the North
American jurisdictions to be ‘instructive’203 and rejected the decision of the Court of Appeal in the
Leighton’s Investment case. First, that decision was ‘summary, unargued, and based upon previous
cases which will not bear the weight of a generalisation’.204 Second, and more generally, Lord
Wilberforce believed that ‘the movement of the law of contract is away from a rigid theory of
autonomy towards the discovery-I do not hesitate to say imposition-by the courts of just
solutions, which can be ascribed to reasonable men in the position of the parties’.205 Lord Simon
also followed the majority view that ‘a lease is not inherently unsusceptible to the application of the
doctrine of frustration’.206 Lord Simon quoted the words of Lord Wright in the Leighton’s Investment
case, ‘the doctrine of frustration is modern and flexible and is not subject to being constricted by
an arbitrary formula’.207 Further, Lord Simon said that ‘the law should if possible be founded on
comprehensive principles: compartmentalism, particularly if producing anomaly, leads to the
In Hussein v Mehlman209 Stephen Sedley QC held that a tenant could treat a consistent failure by
his landlord to comply with his repairing obligations as a repudiatory breach, enabling the tenant
to treat the lease as at an end and to claim damages. Acknowledging the growing contractualisation
of leases, in particular that brought about by the decision in Panalpina, Sedley felt able to disregard
the dictum of Lord Denning MR in Total Oil v Thompson Garages210 to the effect that a lease could
not be repudiated. Bright concludes her consideration of the case with the prediction that ‘the tide
has turned: leases will be assimilated with contracts unless the particular proprietary features of the
facts and the issue demand a different result’.211 It might be thought that Hussein demonstrates the
demise of the property concept as described by Cotterrell. However, it is suggested that a more
accurate assessment rests on recognition that the key issue related not to the nature of the primary
right but to the fact that specific enforcement of that right would not have provided the claimant
with an adequate remedy. By recognising that breach of the primary right might give rise to a
secondary right and an election to treat the lease as terminated, an adequate remedy was possible.
