Gibbs v Lakeside Developments Ltd [2018] EWCA Civ 2874 is a sorry tale about the forfeiture of a long lease of a studio flat in London. The tenant had moved out, leaving the flat unoccupied. She gave the managing agents a correspondence address – and the landlord sent invoices for ground rent and insurance premiums there. All was well for fifteen years but, for reasons that are unclear, the tenant stopped paying the landlord’s invoices in 2006.
In due course, the landlord issued a claim for arrears of rent and insurance premiums amounting to £1410, purporting to serve the claim by sending it to the property. This was not good service because it was not the tenant’s usual or last known residence. But the landlord secured judgment in default and subsequently issued possession proceedings, which were also served at the property. And although the landlord copied the paperwork to the tenant at her correspondence address, it was overlooked.
The landlord obtained an order for possession. And it also re-entered the flat. It then put the property on the market more than a year later. This did come to the attention of the tenant, but her attempts to contact the landlord came to nothing. So the tenant instructed solicitors, who applied to register a “caution” against the title of the property. Their cheque was cashed, but nothing was entered on the register. Meanwhile, the tenant’s solicitors applied for relief against forfeiture and to set aside the possession order. They also requested the landlord not to sell the property, but it went ahead and granted a new long lease to a third party who had no knowledge or notice of the tenant’s claim.
The Court of Appeal suggested that the sale would not necessarily have prevented the court from setting aside the possession order on terms that did not interfere with the new lease. The court could have restricted the consequences of setting aside the order to a financial remedy against the landlord (calculated by reference to the premium received for the new lease, less the sums properly due to it). But the case was eventually fought, nearly settled for £90,000, and then lost on the grounds of unjust enrichment. And, despite the tenant’s pleas in the Court of Appeal, the tenant’s claim was, once again, dismissed.
Landlord and tenant lawyers will be particularly interested in Lord Justice Lewison’s observations on the law relating to relief from forfeiture. Tenants seeking relief against forfeiture generally have to comply with strict time limits laid down by statute. And, although the High Court has power in equity, independently of statute, to grant relief from forfeiture by peaceable re-entry, the court will not normally grant relief if an application is overly delayed.
Lewison LJ indicated that the tenant’s application for relief, made nearly one and a half years after the landlord had recovered possession, was far too late. The court might not boggle at a few days. But His Lordship doubted the decision in Pineport Ltd v Grangeglen Ltd [2016] EWHC 1318 (Ch), [2016] L&TR 28, in which the High Court relieved the landlord of a windfall, and the tenant from forfeiture by peaceable re-entry of a long lease of an industrial unit, where the application for relief was made 14 months after the forfeiture.
Allyson Colby is a property law consultant
