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Relief from forfeiture: Consent Order conditions not set in stone

Key on tenancy document Print publication

23/11/2015

The Court of Appeal has confirmed that deadlines for complying with conditions for relief from forfeiture are not necessarily set in stone. Housing Litigation specialist Karl Anders explains.

Safin v Badrig

In this recent case [1], the Court of Appeal considered the situation where a consent order records the settlement of a substantive dispute on certain terms, but those terms are not complied with on time.

The landlord had sought forfeiture of a long lease and possession of residential premises, following non-payment of rent and service charge by the estate of the deceased tenant. The proceedings were settled by a consent order which provided for relief from forfeiture on condition that the arrears were paid by a certain date. The consent order specified that time for payment was of the essence and that the application for relief from forfeiture was dismissed upon failure to comply. The tenant’s estate did not make payment on time; but it did make an application to the County Court, prior to the consent order deadline, for an extension of time for compliance. It also made payment a little less than two months after the deadline. The County Court granted the requested extension of time to obtain relief from forfeiture. The landlord appealed.

Court of Appeal clarification

The Court of Appeal dismissed the landlord’s appeal, thereby allowing the relief from forfeiture to stand. It clarified the following principles:

  • The court has a discretion to vary consent orders and to extend time in accordance with Civil Procedure Rule (CPR) 3.2, the Overriding Objective (CPR 1.1) and the decision of the Court of Appeal in Pannone v Aardvark Digital [2].
  • In exercising its discretion the court will take all of the circumstances of the case into account.
  • Exercise of the discretion is not limited to unusual or exceptional circumstances.
  • Where a consent order deals with resolution of a substantive dispute between parties and not just a case management decision, that will be highly important and often decisive to the exercise of the court’s discretion.
  • In the case of a financial breach, the landlord’s remedy of re-entry, or forfeiture of a lease, is merely security for the payment of the lease arrears. Where payment is ultimately made (even if it is late and in breach of strictly worded ‘time of the essence provisions’ as was the case here), the court will grant relief in the form of an extension of time if it is just and equitable to do so.
  • In this particular case, the fact that the application to extend time was made in a timely manner, the arrears were paid shortly thereafter and the lease was a long residential lease (the value of which was significantly more than the lease arrears), meant that the court had properly exercised its discretion to extend the time for payment.

WM Comment

One of the driving factors behind the Jackson Reforms, and a significant theme arising out of recent procedural case law, has been compliance with court rules, directions and orders. This case is an important reminder, for landlords and tenants alike, that court deadlines – certainly in the context of relief from forfeiture cases – are not necessarily set in stone.

Forfeiture of a long residential lease is such a draconian step that consent order conditions – even those as strict and clear as the terms of the order in this case – may be varied and extended where that is just in all the circumstances.

If you have any queries arising from the Safin v Badrig decision or would like any advice or assistance in connection with any residential property issue, please do not hesitate to contact Karl Anders or any member of Walker Morris’ Housing Litigation team.

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[1] Safin (Fursecroft) Limited v Estate of Dr Said Ahmed Said Badrig (Deceased) [2015] EWCA Civ 739
[2] Pannone v Aardvark Digital Limited [2011] EWCA Civ 803

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