Landlord alleging failure to pay rent and repossessing property – Whether tenant in arrears of rent – Whether repossession lawful – Whether landlord unlawfully and wrongfully interfered with goods
In August 1993 the claimant landlord granted a lease of arches at 190 and 191 Morning Lane, Hackney, London, to the defendant tenant. The lease provided that the tenancy would commence in June 1993 at a rent of £10,000 pa, to be paid in advance on the usual quarter days, with a rent-free period of 12 months until June 1994. The rent-free period was granted in return for the tenant undertaking to carry out works specified in the lease. By clause 29, the tenancy could be determined by either party giving six months’ notice. The lease contained the standard provision for re-entry if rent was 21 days in arrears, even if not formally demanded.
Shortly afterwards, the tenant entered into a lease of the arch at no 192, which provided for a tenancy commencing in September 1993, at a rent of £5,000 pa payable quarterly in advance on the usual quarter days. There was to be a rent-free period of 18 months until February 1995. The tenant covenanted to carry out works similar to those relating to arches 190 and 191.
In June 1994 the tenant wrote to the landlord informing it of his intention to surrender possession of arches 190-192 within the next six months. Later that month, the landlord replied, stating that it was prepared to accept notice from November 1994 without prejudice to the tenant completing the works he had covenanted to undertake. Subsequently, a building inspector instructed by the landlord reported that there was no possibility of the tenant carrying out the works and recommended repossession for arrears of rent. In March 1995 bailiffs instructed by the landlord took possession of the arches, and the locks were changed. The three arches were subsequently let to L, who was authorised by the landlord to dispose of the goods left by the tenant.
The landlord demanded payment of £8,781 arrears of rent. The tenant counterclaimed for unlawful re-entry and wrongful interference with goods. The judge held that the two letters of June 1994 had not constituted notice of surrender and that, accordingly, the leases were determined in March 1995. He held that the rent due on that date in respect of arches 190 and 191 had been £7,779, but that no rent was due in relation to arch 192. On that basis, he concluded that the re-entry of arch 192 had been unlawful and that the tenant was entitled to £31,442 as the value of the goods interfered with. The tenant appealed. The landlord cross-appealed.
Held: The appeal was dismissed. The cross-appeal was allowed.
1. The tenant had paid no rent in relation to arches 190 and 191, and, whether or not he had received an invoice, he was required to pay pursuant to the lease. Accordingly, the landlord had acted lawfully when it re-entered arches 190 and 191 in March 1995. The rent for arch 192 for February 1995 and March 1995 had been payable in advance on the relevant quarter day, namely 25 December 1994. It had not been paid within 21 days of that date, and, even though the landlord had not demanded it, the landlord was entitled to forfeit the tenancy under the terms of the lease. Accordingly, both leases had been terminated by forfeiture pursuant to contract in March 1995.
2. The tenant was not entitled to reimbursement for the works to arch 192, because he was required to do them under the lease and had enjoyed a rent-free period as a result. He had no right to damages for interference with his peaceful enjoyment, as the interference had been lawful. Furthermore, he was not entitled to damages for wrongful interference with his goods.
Andrew Gore (instructed by Greenwoods, of Peterborough) appeared for the claimant; the defendant appeared in person.
Thomas Elliott, barrister
