Court of Appeal provides succour to long-lessees faced with forfeiture for non-payment of rent

This morning the Court of Appeal (Sir Terence Etherton MR, Lewison and McCombe L.JJ.) handed down judgment in the case of Golding v Martin [2019] EWCA (Civ) 446.

Ms. Martin was the long-lessee of a flat in Sidcup. Mr. Golding was her landlord. In June 2016, Mr. Golding brought possession proceedings against Ms. Martin for unpaid service charges. The service charges were reserved as rent under her lease. Ms. Martin has lived in Majorca since 2003 and she was unaware that her landlord had brought proceedings against her.

In July 2016, the county court made a possession order. The order was not made in form N27 and so did not comply with s.138(3), County Courts Act 1984 – i.e. it did not allow her four weeks before she had to give up possession and did not provide that the order would be of no effect if she paid the arrears and costs before the date on which she was ordered to give up possession.

In January 2017, Ms. Martin applied to set-aside the order for possession pursuant to CPR 39.3(5) – applied by analogy to possession claims per Hackney LBC v Findlay [2011] EWCA Civ 8. Mr. Golding resisted her application.

At first instance DDJ Mohabir found that Ms. Martin had good reasons for not attending the hearing at which the possession order (CPR 39.3(5)(b)) was made, and that she had made her application promptly (CPR 39.3(5)(a)) but held that relief from forfeiture was not a defence to the possession claim and so she did not have a reasonable prospect of “success” at trial (CPR 39.3(5)(c)) and so he dismissed the application.

In March 2018, HHJ Luba QC allowed Ms. Martin’s appeal holding that as relief from forfeiture would prevent the order for possession from causing the loss of Ms. Martin’s lease it amounted to “success” for the purposes of CPR 39.3(5)(c).

Mr. Golding appealed.

In dismissing his appeal, the Court of Appeal held that:

  • Per s.138(3), County Courts Act 1984, the county court has no power to make a possession order forfeiting a long-lease for non-payment of rent that does not give the lessee at least four weeks to clear the rent arrears and pay the landlord’s costs before it takes effect. An order that fails to comply with s.138(3), 1984 Act, should be set-aside.
  • Notwithstanding the decision of the Court of Appeal in Forcelux Ltd v Binnie [2009] EWCA Civ 854, a “trial” for the purposes of s.138(3), 1984 Act, includes any hearing which disposes of a possession claim brought for non-payment of rent under a long-lease.
  • Relief from forfeiture constitutes “success” for the purposes of CPR 39.3(5)(c).

Faisel Sadiq appeared for Ms. Martin at first instance and before HHJ Luba QC. Faisel was led by Philip Rainey QC in the Court of Appeal. He was instructed by SA Law LLP.