Belgravia Property Investment and Development Company v Webb

A purported forfeiture or re-entry cannot terminate a lease where the premises are lawfully occupied as a residence unless the statutory requirements for recovery are satisfied. An unlawful re-entry therefore does not substitute a new leaseholder for the existing tenant or determine the tenant’s lease. Where a subtenant’s tenancy survives, the subtenant’s rights must be considered independently of those of the tenant. A person who becomes the immediate landlord only when a court order terminates the superior tenancy cannot recover earlier rent arrears as landlord. The statutory relationship created on termination operates prospectively.

The claimants sought possession of a flat and substantial rent arrears from Mr West. Mr West had occupied under a protected shorthold tenancy granted by Mr Webb, whose leasehold interest was later charged to a mortgagee. After Mr Webb disappeared, the freeholder purported to re-enter and granted a new lease of the flat to a related company. The county court refused the claim for arrears and made possession-related orders, but its reasoning treated the original lease as having ceased to exist. The claimants appealed. The central issues were whether the original lease had ended by forfeiture or surrender, when the claimant company became Mr West’s landlord, and whether earlier rent arrears were recoverable.

The appeal was from the order of His Honour Judge Dedman in the Southend County Court dated 7 June 2001, with a later possession order dated 13 June 2001.

1. Appeal dismissed. The court dismissed the appeal with costs and directed a public funding assessment.
2. The purported re-entry in July 1994 was unlawful under section 2 of the Prevention from Eviction Act 1977. Mr West was lawfully residing in the flat, and a lease could not be determined by re-entry without a court order. The re-entry therefore did not terminate either Mr West’s tenancy or Mr Webb’s 1973 lease.
3. There was no sufficient evidence of surrender. The continuing charge in favour of Maes and the freeholder’s contemporaneous demand for ground rent and maintenance charges were inconsistent with the suggested surrender.
4. The 1994 lease did not replace Mr Webb’s lease. It inserted a further link into the chain of interests. Quantumrange became Mr West’s immediate landlord only because, and from the date on which, the court ordered possession as against Mr Webb, namely 13 June 2001. Sections 137(2) and 137(5) of the Rent Act 1977 then operated to create the new landlord-and-tenant relationship.
5. Quantumrange could not recover rent arrears accruing before that date. Any earlier rent was owed to Mr Webb or his assigns, not to Quantumrange. The county court was therefore right to give no money judgment, although its reasons differed.
6. The court also upheld the refusal of possession under cases 1 and 6 in Schedule 15 to the Rent Act 1977. It applied the principle in Leith Properties v Byrne [1983] QB 433 that a subtenant’s rights do not necessarily stand or fall with those of the tenant and must be independently considered.

• Court of Appeal (Civil Division): Appeal from the Southend County Court dismissed with costs; public funding assessment ordered.
• Southend County Court: His Honour Judge Dedman made orders on 7 June 2001 and 13 June 2001, including refusing the claim for rent arrears and granting possession as against Mr Webb.