Non-resident or absentee leaseholders who do not provide a correspondence address other than the property itself should (a) make proper arrangements for forwarding or diverting the mail addressed to the premises or (b) entrust the task of “keeping an eye” on their property to persons who are actually committed to that task. This was the clear lesson from HHJ Luba QC’s decision in Golding v Martin [2022] EW Misc 2 (CC).
Ms Martin (the defendant) was the long leaseholder of a flat (the flat) in a modest block in Mottingham Court, Sidcup, south-east London. Her lease contained a covenant to pay service charge which was reserved as rent and which if unpaid for 21 days allowed the lease to be forfeit. In 2003 she moved to Majorca to work as a housekeeper. Her brother and niece were to keep an eye on the flat in her absence.
In 2012 the claimant became the freeholder. Following significant works there was a dispute about the amount of service charge payable, and this was dealt with by the defendant’s brother, a surveyor who the claimant’s agents were told was authorised to act, and solicitors instructed by the brother. The claimant attempted to ascertain the defendant’s correspondence address to no avail. Demands for unpaid service charge were therefore sent to the defendant at the flat and to her surveyor. In accordance with s81 of the Commonhold and Leasehold Reform Act 1981, the claimant made an application to the First-tier tribunal (FTT) and obtained a determination that £11,794 of service charge was payable, which determination formed the basis of a money judgment given by Bromley County Court on 20 April 2016.
The flat appeared to have been completely uninhabited since 2009. Accordingly, s2 of the Protection from Eviction Act 1977 did not apply. The claimant would have been entitled to forfeit the lease by either peaceable re-entry or issue of proceedings. The claimant did not want there to be any suggestion that any re-entry into the flat might be unlawful and, in what Judge Luba described as “an excess of caution”, on 15 June 2016 commenced possession proceedings. The proceedings were served by postal delivery to the flat. The defendant did not attend the hearing and was not represented and on 8 July 2016 a possession order was made. On 23 August 2016 the claimant took possession of the flat, which was empty. He subsequently gifted it to his daughter, who sold it for £290,000.
In early December 2016 the defendant was told about the possession order by her niece. She applied to have the possession order set aside. After various delays, appeals and cross-appeals, on 15 March 2019 the Court of Appeal set aside the possession order and remitted the claim back to the county court for determination.
At the trial the defendant admitted that, as a result of her unpaid service charges and the determination of the FTT, the claimant was entitled to forfeit the lease. She also abandoned her claim that the right to forfeit had been waived. Her defence relied squarely on the wording of s138 of the County Courts Act 1984. This states:
(1) This section has effect where a lessor is proceeding by action in the county court… to enforce against a lessee a right of re-entry or forfeiture in respect of any land for non-payment of rent.
(2) If the lessee pays into court or to the lessor not less than 5 clear days before the return day all the rent in arrear and the costs of the action, the action shall cease, and the lessee shall hold the land according to the lease without any new lease.
(3) If – (a) the action does not cease under subsection (2); and (b) the court at the trial is satisfied that the lessor is entitled to enforce the right of re-entry or forfeiture, the court shall order possession of the land to be given to the lessor at the expiration of such period, not being less than 4 weeks from the date of the order, as the court thinks fit, unless within that period the lessee pays into court or to the lessor all the rent in arrear and the cost of the action.
The defendant argued that the court was compelled by s138 to make an order for possession (which would then give the defendant opportunity for relief). This was rejected by the court. The claimant did not have to seek a possession order he did not require and it had not been necessary for him to discontinue that part of the claim. In this case the forfeiture may have occurred when the possession proceedings were served, but even if that were wrong then it definitely occurred where-entry was effected. Section 138(3)(b) has no application to a case in which – by the time the claim gets to trial – a landlord has long since lawfully forfeited. Further, the counterclaim for unjust enrichment on the possession order in the sum of the resale value of the flat failed. The claimant had behaved lawfully.
Elizabeth Haggerty is a barrister
