Bloomfield & Anor v Williams & Anor

A former tenant remains liable for rent only if the landlord serves the notice required by section 17 of the Landlord and Tenant (Covenants) Act 1995 within the statutory six-month period. The time limit is strict. A claim for rent brought without the notice is unarguable and cannot be preserved by a later notice.

On an application to set aside a default judgment, the court must address the applicable procedural rule and exercise its discretion in accordance with justice. Relevant considerations include the merits of the proposed defence, delay, prejudice and the circumstances in which the judgment was entered. Those considerations may justify setting aside a default judgment even after damages have been assessed, particularly where the judgment includes sums for which the defendant was not liable in law.

The respondents let a private hotel to the appellants. The tenancy was assigned, and the original tenants remained contractually liable for rent. After the assignees surrendered the tenancy, the respondents claimed rent arrears and repairing costs.

The county court entered judgment in default, later assessing the respondents’ recovery at £7,226.99, including rent and interest, together with £390 for agreed dilapidations. The appellants subsequently discovered that no notice had been served under section 17 of the Landlord and Tenant (Covenants) Act 1995. Judge Proctor refused to set aside the default judgment or strike out the rent claim. The appeals concerned the statutory liability for rent and the court’s jurisdiction and discretion to set aside the default judgment.

1. Appeals allowed. The part of the judgment awarding £7,226.99 for rent arrears and interest was set aside. Judgment was substituted for £390, representing the agreed dilapidations.
2. Section 17 of the Landlord and Tenant (Covenants) Act 1995 applied to the appellants as former tenants. Rent was a fixed charge. The respondents were required to serve a compliant notice within six months of each charge becoming due. The Act provided no power to extend time. Since no notice had been served, the appellants were not liable for the rent, and the rent claim was bound to fail.
3. The default order should have been considered under County Court Rules Order 37 rule 4, or alternatively Order 37 rule 2. The judge erred by treating the application as falling only under Order 37 rule 1. The respondents could not rely on their own failure to comply with the formal requirements for entering judgment in default. If the order was irregular, the appellants were entitled to have it set aside ex debito justitiae.
4. The discretion to set aside had to be exercised by considering all the circumstances, including the merits of the defence, delay, prejudice and the circumstances of the defendants’ absence. The court’s ultimate task was to make the order required by justice. The principle identified in Shocked v Goldschmidt that a party absent from a trial will normally be bound by the result did not preclude relief where the claim included a sum for which the party was not legally liable.
5. The approach in Vann v Awford demonstrated that a default judgment could be set aside even after an assessment of damages, where there were substantial merits in the defence. Costs orders previously made in favour of the respondents were retained but placed on scale 1; there was no order as to costs of the 28 July hearing, and the appellants received the costs of the appeals.

• Court of Appeal (Civil Division): Allowed appeals from orders of His Honour Judge Proctor in the Lancaster County Court dated 27 May 1998 and 28 July 1998. The judgment was varied by substituting £390 for the rent and interest award.