Law Report: 1 May 1998; Tenant must pay rent due at date of order

Maryland Estates Ltd v Bar-Joseph and another; Court of Appeal (Lord Justice Beldam and Mrs Justice Bracewell) 23 April 1998

THE COUNTY court had power under section 138(3) of the County Courts Act 1984 to order a tenant against whom possession was claimed for non- payment of rent to pay not only rent due at the date of service of the writ, but also rent payable up to the date of the order.

The Court of Appeal allowed the appellant's appeal against an order made in the county court in possession proceedings against the respondents.

The appellant was the freehold owner of premises let to the respondents, who fell into arrears in payment of the rent and service charges. The appellant issued proceedings in the High Court claiming possession of the premises, and arrears of rent and service charges up to and including 25 December 1994.

The proceedings were remitted to the county court, and in October 1996 the appellant applied for a declaration that it was entitled to possession, and for an order that the respondents should give up possession unless, within 28 days of judgment, they paid the rent and service charges claimed, and also sums falling due since the issue of the summons in respect of rent and service charges.

The deputy district judge made a declaration in the appellant's favour, but considered that he had no power under section 138(3) of the County Courts Act 1984 to order the respondents to pay more than the arrears of rent due at the date of service of the writ. His order was confirmed by the county court judge. The appellant appealed.

Nicholas Dowding QC (Malthouse Chevalier) for the appellant; Arthur J. Moore (Jim McKenzie & Co) for the second respondent; the first respondent did not appear and was not represented.

Lord Justice Beldam said that the issue turned on the interpretation of the phrase "all the rent in arrears" in section 138(3) of the 1984 Act. The wording of section 52 of the County Courts Act Amendment Act 1856, which itself largely followed the language used in section 212 of the Common Law Procedure Act 1852, was undoubtedly the statutory forerunnner of section 138 of the 1984 Act. Section 52 made it clear that at each stage of the proceedings for possession all the rent in arrears had to be paid without limiting or qualifying the arrears to those due when the summons was issued.

In construing the words of section 138 of the 1984 Act it was important not to lose sight of the purpose of the Act, which was to grant relief against forfeiture. The court should not resort to a literal construction of words which had been given a purposive interpretation in Acts granting similar relief unless driven to do so.

Moreover, the county court judge's construction depended upon the theory that the lease was in a state of suspended animation and was only revived when the order of the court granting relief from forfeiture was complied with. However, section 138(5) provided that the tenant granted relief continued to hold the land "according to the lease without any new lease".

The implication of the judge's approach was that if the tenant continued to hold under the terms of the lease, and did not pay rent during the period between the service of the summons and the making of the judge's order, he would at once be in breach of covenant, for further rent would be in arrears and the lease would be liable to be forfeited immediately. The landlord could commence proceedings and the whole procedure would start again.

Such an inconvenient result was easily avoided if it was assumed that the lease continued to exist after service of the summons on the tenant, that he remained under an obligation to pay the sum reserved in the lease as rent, and that all the rent in arrears meant the rent payable up to the date stated in the order.

Kate O'Hanlon, Barrister