Pat (Pensions) Limited v Kamal & Anor

In forfeiture proceedings for non-payment of rent, a tenant cannot resist possession by claiming expenditure on repairs unless the landlord was under a legal liability in respect of that expenditure. A court need not decide whether the tenant was itself bound to perform the repairs if the landlord’s lack of liability resolves the issue. An assertion that the tenant bears legal responsibility under a lease is an opinion on legal liability, not an actionable misrepresentation; reliance also fails where the tenant rejected the assertion. In this context, restitution for unjust enrichment requires the claimant to have taken advantage of a mistake for which it was responsible. Because forfeiture is draconian, reasonable opportunities to obtain relief should be afforded, subject to appropriate conditions.

The landlord brought possession proceedings against the tenants of shop and residential premises. The tenants were in substantial rent arrears and sought to set off expenditure incurred in repairing a defective structural beam. The trial judge found that the landlord was under no obligation to carry out the work and had made no promise to pay for it. He ordered possession unless the arrears were paid, entered judgment for rent, interest and mesne profits, and ordered costs.

Permission to appeal was refused by the trial judge and by Chadwick LJ on the papers. On renewal, Chadwick LJ directed that the applications be heard on notice, with a substantive appeal to follow if permission were granted. The central issues were whether the tenants had a viable set-off, misrepresentation or restitutionary claim, and whether the forfeiture should be relieved.

The Court of Appeal dismissed the applications and refused permission to appeal. The order for possession remained subject to a conditional further stay.

1. Repairing obligations and set-off. The trial judge was entitled to decide the case without determining whether the tenants were contractually obliged to carry out the structural work. It was sufficient that the landlord had no liability to the tenants in respect of the expenditure. An implied term requiring the landlord to bear the cost could not be sustained because it would contradict the express tenant’s repairing covenant.
2. Misrepresentation. The managing agent’s statement that the works were the tenants’ responsibility was an opinion on legal liability under the lease. It could not amount to an actionable misrepresentation. In any event, the tenants had expressly disputed the assertion and therefore could not establish reliance on it.
3. Unjust enrichment. A restitutionary claim in this context could succeed only if the landlord was taking advantage of a mistake for which it was in some way responsible. The evidence did not support those conclusions. The landlord’s forfeiture for non-payment of rent therefore did not unjustly enrich it in circumstances where it owed no liability for the repair expenditure.
4. Relief from forfeiture. Forfeiture is a draconian remedy, and the court must afford a tenant all reasonable opportunities to obtain relief. The court therefore suspended execution of the possession order for eight weeks, conditional on the June quarter’s rent being paid within seven days and the arrears then being paid. Further applications were directed to the county court. Costs were awarded, subject to detailed assessment if not agreed.

• Court of Appeal (Civil Division): Chadwick LJ refused permission on the papers on 19 April 2002, then directed an on-notice hearing on 1 May 2002. On 5 July 2002 the applications were dismissed and permission to appeal was refused.
• West London County Court: His Honour Judge Cowell ordered possession on 10 December 2001 unless the rent arrears were paid, entered judgment for arrears, interest and mesne profits, and ordered costs. Permission to appeal was refused on 17 January 2002, with subsequent applications concerning stays and payment of the judgment debt.