Ruby Triangle Properties Ltd v Jesus Sanctuary Ministries Ltd

A company occupying premises for business purposes may hold a tenancy protected by Part II of the Landlord and Tenant Act 1954. Re-entry without a court order is unlawful where the tenancy has not been determined under that Part. Serious allegations remain subject to the ordinary balance of probabilities, but inherent probability is relevant when assessing the evidence. A company cannot recover aggravated damages for distress or injury to feelings, but exemplary damages may be available where the defendant calculated that its conduct would produce a profit exceeding the compensation payable. The court may also consider equitable set-off and the effect of an assignment of rent arrears according to the terms of the assignment.

Jesus Sanctuary Ministries Ltd occupied part of premises under a written church hire agreement which had expired in 2012. Ruby Triangle Properties Ltd acquired the freehold and, without obtaining a court order, took possession in October 2019. Possession was restored by an interim order.

JSM claimed a protected tenancy, damages for unlawful eviction and conversion of cash allegedly removed from its offices. RTP counterclaimed for rent arrears and disputed the tenancy position. The issues concerning termination of any protected tenancy were excluded from this trial and listed for a later hearing.

1. Tenancy and unlawful eviction. The written agreement created a tenancy, not a licence. JSM occupied the premises for business purposes within section 23(2) of the Landlord and Tenant Act 1954. After expiry of the contractual term, the tenancy continued under section 24(1), subject to Part II. JSM was therefore entitled to a declaration that it held a protected tenancy and to remain in possession until determination in accordance with Part II. Taking possession without a court order was unlawful.
2. Conversion claim. The court applied the balance of probabilities approach stated in Re H [1996] AC 536. The CCTV did not establish that any defendant’s agent removed the alleged money. The delayed reporting, lack of supporting witnesses and absence of reliable contemporaneous documentation reinforced the conclusion that conversion was not proved. The conversion claim was dismissed.
3. Damages. JSM recovered £850 for replacing locks and keys and £1,500 for loss of amenity, nuisance and inconvenience. Applying Eaton Mansions (Westminster) Limited v Stinger Compania De Inversion SA [2013] EWCA Civ 1308, aggravated damages were unavailable to a limited company. Exemplary damages were available under the second category identified in Rookes v Barnard [1964] A.C. 1129, because RTP had at least partly acted to avoid expense and obtain the benefit of possession. The award was £6,250, taking account of both aggravating and mitigating factors.
4. Rent and set-off. On construction of the deed of assignment, no rent arrears relating to Property 11 were assigned because the schedule recorded the arrears as “NA”. If that construction were wrong, the rent and alleged equitable set-offs would have required an account and inquiry. The court also followed the principle identified in Edlington Properties v JH Fenner & Co [2006] EWCA Civ 403 that set-off did not operate against rent falling due after assignment of the reversion unless the lease provided for it.
5. JSM was liable for rent arrears from 25 March 2019 to 6 November 2019 without interest, subject to setting off the damages awarded. It was required to continue paying £68.50 per day while remaining in occupation.