Respondent issuing possession proceedings on ground of rent arrears — Tenant sending cheque for full amount before hearing — Judge overturning earlier decision to adjourn to give cheque time to clear — Whether arrears still unpaid at date of hearing — Whether conditional payment by cheque sufficient — Whether jurisdiction to adjourn — Appeal allowed
The appellant assured tenant fell into arrears with the rent on his flat, which he habitually paid by cheque. When 11 weeks’ rent were outstanding, the respondent landlord served a valid notice, under section 8 of the Housing Act 1988, of her intention to start proceedings to recover possession of the flat. She relied upon ground 8 in Schedule 2 to the Act, namely that, both at the date of service of the notice and at the date of the hearing, at least eight weeks’ rent was outstanding. A problem with the tenant’s housing benefit was later resolved, and, a few days before the hearing, he sent a cheque to the landlord, which the landlord accepted, for the full amount of the arrears. On the date of the possession hearing, the district judge adjourned the matter to give the cheque time to clear. It was subsequently paid by the tenant’s bank on first presentation.
The landlord appealed, contending that: (i) the district judge had had no power to adjourn if he was satisfied that ground 8 was fulfilled on the hearing date; and (ii) ground 8 had been satisfied because the rent remained unpaid on that date, conditional payment by an uncleared cheque being insufficient for that purpose. The judge allowed the appeal and made a possession order. The tenant appealed.
Held: The appeal was allowed.
Although a landlord was, in principle, entitled to have his rent in cash on the due date, the parties could agree to payment by some other means, such as by cheque, as had happened in the present case. There could be no doubt about the general principles applicable to payment by cheque. Acceptance of a cheque in payment of a debt suspends the right to sue upon the debt while the cheque is being cleared, and, if it does clear, the debt would then be paid as from the date upon which the cheque was delivered: Homes v Smith [2000[ Lloyd’s Rep Bank 139, Marreco v Richardson [1908] 2 KB 584, Beevers v Mason [1978] 2 EGLR 3 and Official Solicitor v Thomas [1986] 2 EGLR 1 considered. There was no reason why that general principle of law should not apply to ground 8. A tenant could save his position by making payment right up until the date of the possession hearing; an uncleared cheque accepted by the landlord was sufficient for that purpose, and was to be treated as payment at the date of delivery provided that the cheque was subsequently paid on first presentation. At the date of the hearing, therefore, the judge had had jurisdiction to adjourn the claim to see whether the cheque would be paid, on the ground that he could not, at that time, be satisfied that the landlord was entitled to possession (although he might not be bound to adjourn if he had reason to conclude that the cheque would not be paid). If the cheque had not been cleared at first presentation, the order for possession would have to have been made, the “date of the hearing” for the purpose of ground 8 being treated as the earlier date, and not that of the adjourned hearing. The order for possession against the appellant was set aside.
Mark Wonnacott (instructed by Mary Ward Legal Centre) appeared for the appellant; Simon Braun (solicitor-advocate) of Sherrards, of St Albans, appeared for the respondent.
Sally Dobson, barrister
