Court Proceedings

If the tenant falls into arrears of rent, service charge or other monies, the landlord can sue the tenant on the covenant to pay, merely for the amount due. This is often combined with a claim for possession in order to put pressure on the tenant, but it is not necessary to include such a claim. There may be reasons why the landlord does not wish to rely on the right of forfeiture, thereby terminating the lease; for example, if there is a surety who can be relied upon to make payment, or if it would be difficult to re-let the premises.

Having decided what amount is to be claimed and that it is due from the tenant, consideration should be given to the parties to be sued. The current tenant will obviously be a party, and it will usually be appropriate to join any surety and/or previous tenant(s) or their sureties. In cases to which the Landlord and Tenant (Covenants) Act 1995 applies notice will have to have been served on a former tenant or his guarantor in accordance with section 17 of the Act.

Limitation

No rent claim may be brought six years after the date the arrears fell due: Limitation Act 1980, section 19. Rent is defined in section 38(1) and includes a rent charge and a rent service. This limitation period also applies to a claim against a surety: Romain v Scuba TV Ltd [1999] EG 126.

The six years only begins to run from the time the cause of action arises. If the surety's liability only arises on service of a demand on him which is expressly required by the lease, the commencement of the six year period will be delayed until that demand is served.

The Landlord and Tenant (Covenants) Act 1995 (s. 17) prevents a landlord from recovering any fixed charge from a former tenant or his guarantor unless, within six months of the charge becoming due, he serves on that person a notice informing him that the charge is now due and that the landlord intends to recover that amount with interest.

Pre-action Protocols

Although there is a pre-action protocol for possession claims based on arrears of rent, there is no protocol specifically for rent arrears cases but the Practice Direction relating to protocols makes it clear that the courts will generally expect parties to all types of litigation to have entered into the spirit of the existing protocols by exchanging information before litigation and generally trying to settle matters before proceedings have begun (see CPR 7.0.3).

The key elements of the existing protocols give an indication of the approach the court is likely to require parties to take in the pre-action period:

A letter of claim should be sent, setting out the facts, the main allegations, the financial losses claimed, the evidence in support and attaching relevant documents.

The defendant should be given a reasonable opportunity to consider and respond fully, dealing with the detailed nature of any defence and any dispute as to the facts.

Any relevant documents should be disclosed. Although there is no reference to this in the CPR, clearly where the claim does not comprise any complex issues and is little more than debt collection the need to wait three months is not appropriate. If the tenant refuses to pay, delay will not improve this and the landlord may proceed with court action if payment is not forth-coming after a detailed demand.

Any party wishing to instruct an expert (for example in a dilapidations claim) should give the other party an opportunity to agree the instruction of that expert.

Non-compliance with the spirit of the pre-action protocols may have the consequence that the party at fault will be penalised in costs.

It will therefore be essential for a landlord to write a formal and clearly phrased letter before action before commencing proceedings. Any documentation to support the claim requested by the tenant should also be provided.

In the context of landlord and tenant law and in particular tenant default, a careful regard should however be had to the rules relating to waiver of a breach of covenant. Clearly the landlord should ensure that the steps taken in the pre-action period cannot be construed as amounting to waiver. In such circumstances, it is likely that the protocol will require less pre-action delay (for example, a three month period of consideration after a rent arrears or breach of alienation covenant claim is made is unlikely to be needed) although again the landlord is likely to be required to give the tenant the opportunity to respond to his allegations.

Commencement of Proceedings

Proceedings should be started using a Claim form: CPR Part 7. The landlord must complete and file at court a Part 7 Claim form, service copies and the issue-fee.

The court will issue the Claim form and either send notice of issue to the Claimant giving the claim number and the date of service if the form is to be served by the court, or hand the form back to the Claimant for personal service.

The Claim form must be served within four months of issue (six months if served out of the jurisdiction). A Claimant may issue and serve a Claim form without full Particulars of Claim in the first instance but if served separately, the Particulars of Claim (see below) must be served within 14 days of service of the Claim form.

Response forms must be served with the Particulars of Claim where they are not served with the Claim form. The Defendant's time for responding to the claim runs from the date of service of the Particulars of Claim.

Particulars of Claim

The Particulars of Claim set out the facts giving rise to the cause of action and will set out details of the lease, the rent covenant and the arrears. They may either be served with the Claim form or within 14 days of service thereof.

CPR Part 16 specifics what must be contained in the Claim form (Rule 16.2):

A concise statement of the nature of the claim.

The remedy which the Claimant seeks.

A statement of value in accordance with Rule 16.3.

If the Particulars of Claim are not served with the Claim form or contained in it the Claimant must state that Particulars of Claim will follow.

Any representative capacity in which the Claimant is suing.

The contents of the Particulars of Claim are prescribed by Rule 16.4 and must:

include a concise statement of the facts.

set out details of the claim for interest. be verified by a Statement of Truth: Part 22.

where the claim is based on a written agreement (as will usually be the case for a claim for arrears under a lease) a copy of the lease should be attached or served with the Particulars of Claim.

The CPR require details of any claim for interest.

If this is on a contractual basis under the lease this must be set out in the Particulars of Claim.

Alternatively the claim may be under the County Courts Act 1984, section 69 or the Supreme Court Act 1981, section 35A.

If the tenant is not the original tenant, it is not necessary to plead the history of assignment. It is sufficient to plead the original demise and that the estate and interest of the lessee is now vested in the tenant by assignment.

If the reversion has been assigned, the landlord must show how he acquired title and from whom: Philips v Philips [1878] 4 QM 127; Davis v James [1884] 26 CHD 778.

All Statements of Case (i.e. Particulars of Claim, Defence and Reply) must be verified by a Statement of Truth: “I believe that the facts stated in these Particulars of Claim are true.”

Service

Where the court is to serve any documents this will generally be by first class post. The deemed date of service is two days after the date of posting for all defendants, including limited companies. Bailiff service is not available.

Where a Claim form originally served by post is returned by the post office, the court will send a notice of non-service to the Claimant. It will then be a matter for the Claimant to seek to effect service. The Claimant will receive from the Court the Claim form and response pack etc for the Claimant to serve.

Claimants may effect service of Claim forms themselves (having notified the court that they propose to do so) either by personal service, by post, by fax, by document exchange, or by e-mail. Where the Claimant serves a document, the Claimant must file a Certificate of Service (see Form N215) within seven days of effecting service together with a copy of the document so served attached.

The Rules of Service are set out at CPR Part 6. This specifies the different methods of service:

Personal service: this is effected by leaving it with the individual. If the Defendant refuses to accept the summons it is sufficient service to inform him of the nature of the document and leave it in his presence, even on the floor: Thomson v Pheney (1832) 1 DOWI. 441. In such circumstances it is better if the document is not in an envelope. A document is served personally on a company or corporation by leaving it with a person holding a senior position within the company. The Practice Direction to Part 6 sets out the meaning of "senior position". A document is served personally on a partnership where partners are being sued in the name of the firm by leaving it with a partner or a person who at the time of service has control or management of the partnership business at its principal place of business. Service on a receptionist or security guard is insufficient: Amerada Hess v Rome QBD 19 January 2000.

Service on solicitors. Where a solicitor is authorized to accept service, any document must be served on him and not by personal service (unless personal service is required by another rule: CPR Rule 6.4 (2)).

On occasion it may be necessary to serve on the defendant outside the jurisdiction. In which case an application for permission must be made.

Deemed Dates of Service

Method of Service

Deemed Date of Service

First Class Post

Second day after posting

Document Exchange

Second day after left at Document Exchange

Delivering or leaving at Defendant's address

The day after delivery

Fax

Where sent before 4.00 pm, on that day; otherwise the day after the fax was transmitted

Other electronic method (e.g. e-mail)

Second day after day of transmission

 

Service can be effected by an “Alternative Method”. This replaces the previous provisions for "substituted service". Rule 6.8 permits the court to make an order for service by an alternative method not otherwise specified. An application for service by an alternative method requires a formal application supported by written evidence (i.e. a Witness Statement) specifying the method of service proposed (e.g. service on a third party, advertisement in the press, affixing to premises).

Responding to the Claim

When the Particulars of Claim are served they must be served with a Response Pack, which contains an acknowledgement of service, a form of admission and a form of Defence and Counterclaim.

The Defendant must respond within 14 days of service of the Particulars of Claim (whether served with the Claim form or subsequently) by one of the following methods:

paying the sums claimed;

filing the Form of Admission at court;

admitting all or part of the claim and, as appropriate, seeking time to pay;

filing the Acknowledgement of Service form; or

serving a Defence.

If the claim is to be defended, the Defence is due within 14 days of service of the Particulars of Claim unless an Acknowledgement of Service is filed within 14 days of service of the of Particulars of Claim in which case the Defence is due 14 days after that, i.e. 28 days after service of the Particulars of Claim. The time for service of the Defence may be extended by the parties by up to 28 days only but where this occurs the Defendant must notify the Court in writing (Rule 15.5). Any further extension will require an application to the court for permission under Rule 3.1.

The Defence

The Defence must be filed at court and served on all other parties.

Where the Defence states that the amount claimed has been paid, a copy of the Defence is sent to the Claimant by the Court who must notify the court within 28 days of service that payment has been made or that the proceedings should continue as defended.

If the Claimant does not reply within the 28 day period the claim will be stayed automatically by the court. Where any party thereafter wishes to take further action they will first have to apply to the court to lift the stay (by making an application under Part 23).

The contents required of a Defence are set out in Rule 16.5. The Defence must expressly state which of the allegations in the Particulars of the Claim are denied, which allegations the Defendant is unable to admit or deny but which the Defendant requires the Claimant to prove, and which allegations are admitted. Where an allegation is denied, the Defendant must state his reasons for doing so and if he intends to put forward a different version of events, he must state his own version. Failure to deal with an allegation where the Defendant does nevertheless set out the nature of his case shall be taken to require the allegation to be proved. However, in a money claim, the Defendant shall be taken to require any allegation relating to the amount of money to be proved unless he expressly admits this. If the Defendant disputes the Statement of Value he must state why and provide his own valuation.

The Defence must be verified by a Statement of Truth. If the Defenant has not served an Acknowledgement of Service he must provide all Address for service in the jurisdiction.

Where a Defendant advances a defence of set-off this may or may not also be a counterclaim. A counterclaim is a Part 20 claim and will require the issue of a Part 20 claim form which may be made at any time without the court's permission if this is issued before or at the same time as the Defence is filed. Thereafter a counterclaim will require the court's permission.

Reply to the Defence

A Claimant who does not file a Reply to the Defence shall not be taken to admit the matters raised in the Defence. A Reply is therefore optional. It is only likely to be necessary where the Claimant wishes to allege facts in answer to the Defence which were not included in his claim. A Reply must be verified by a Statement of Truth pursuant to Part 22.

Judgment in Default

If the Defendant does not reply to the claim, the Claimant can apply for Default judgment.

Where the claim is for a specified amount, there may be judgment for that sum.

If the amount claimed is unspecified, then there will he a judgment for liability only.

Application for Default Judgment can be made after the 14 -day period has elapsed without any Acknowledgement of Service or Defence having being filed, or, where an Acknowledgement of Service is filed, where no Defence is filed within 14 days thereafter, or an extension agreed: Rules 12.1 and 12.3.

Default Judgment is obtained by the Claimant filing at Court a request in the prescribed form: Rule 12.4.

The Default Judgment may include interest where this is claimed in the Particulars of Claim: Rule 12.6.

Where there is more than one Defendant the Claimant may obtain Default Judgment against one and proceed with the claim against the other: Rule 12.8.

Default Judgment may also be obtained for costs only where the debt (but not costs) is paid: Rule 12.9.

Proceedings will generally run the following course:

1. Allocation

When a Defence is filed the court will send out a copy to the other parties together with an allocation questionnaire specifying a date when that questionnaire is to be returned.

Where there is more than one Defendant, the allocation questionnaire will not be sent out until the last Defence is received (or the time for the last Defendant to reply has expired).

When the allocation questionnaires have been returned (or the 14-day period has expired) the court file will be passed to a Judge for directions and track allocation.

The Directions ordered by the court will vary depending upon the issues and size of the case but are likely to include the following steps:-

Disclosure of documents

Inspection of documents

Expert evidence if necessary

Service of any further witness statements

If the claim has been allocated to the Small Claims Track, the court will give standard directions and will fix a trial date.

If the claim has been allocated to the Fast Track, the court will give directions for the management of the case and again fix a timetable and a trial date. The trial date may be a trial window within which the trial is to take place.

If the claim has been allocated to the Multi Track, the court will give directions for the conduct of the case and will fix a timetable including a case management conference or a pre-trial review (see CPR Part 29).

2. Listing Questionnaires

Listing questionnaire are sent out (in form N170) in both Fast Track and Multi Track cases. The form asks questions about the conduct of the case to enable the court to fix the trial date and give any necessary directions. If the questionnaire is not completed or the court believes a hearing is necessary, it may fix a listing hearing (see CPR, Parts 28 Practice Direction 28.5 and 29 Practice Direction 29.8.3).

If either party fails to file a listing questionnaire the court may order the claim or defence to be struck out unless they are filed within a set period (and “unless” order).

3. Pre-trial Review

In Multi Track claims the court may fix a pre-trial review after the listing questionnaire has been received. At the pre-trial review the court will consider what additional directions, if any, are required and which the parties request.

Attendance at the pre-trial review by the parties' legal representative is mandatory (Part 29.3), and the client (or a representative of the client with sufficient authority to deal with any issues that arise) may be required to attend: Part 3.1 (2)(c) attend.

4. Disclosure

Where disclosure is ordered this will be "standard disclosure" which will require a party to disclose documents:

on which he relies;

which adversely affect his case, or

adversely affect another party's case, or

support another party's case.

The obligation on a party is to make a reasonable search for the above documents, meaning that the party should take into consideration the number of documents involved, the nature and complexity of the proceedings, the ease and expense of retrieval of each document and the likely significance of any document that might be found during the search (CPR, Part 31.7). The overriding principle of proportionality will apply.

Each party will then disclose a “List of Documents” (now in the standard form N265) which will include a statement by the party giving disclosure setting out the extent of his search. The other party can then request disclosure or inspection of any document on that list.

If a party is dissatisfied with another party's disclosure he may still apply for an order for specific disclosure, specifying the order that he requires the court to make. Such an application must be supported by evidence.

Summary Judgment

Either party may make an application for Summary Judgment under CPR Part 24 on the basis that the other party has no real prospect of successfully defending the claim or counterclaim and there is no other reason why the claim or counterclaim should be disposed of at trial: Rule 24.2.

Summary judgment may be sought once the Acknowledgement of Service has been filed or after the Defence. An application for summary judgment must be served at least 14 days before the hearing of the application.

If written evidence (in addition to the statement of case) is required by the applicant, this must he served with or form part of the application. If the Defendant wishes to use written evidence this must be served at least seven days before the hearing and filed at court.

Evidence in reply to this by the applicant is required three days before the hearing: Rule 24.5.

On hearing the application the court may:

give judgment on the claim or an issue;

strike out or dismiss the claim or an issue;

dismiss the application;

give directions;

make a conditional order requiring payment into court or a specified step.

Even if the tenant raises a counterclaim and set-off, it would usually be appropriate, tactically, for the landlord to seek summary judgment in respect of the claim (even if enforcement is suspended), leaving the tenant to pursue his counterclaim.

Interim Payment Orders

If the tenant has raised a substantial defence and/or counterclaim, an application can be made by the landlord for an interim payment order under Part 25, given that the proceedings may take some time to resolve. However, an interim payment order is not usually sought if the landlord has commenced proceedings seeking only payment of arrears, as the matter is usually clear-cut and likely to proceed direct to summary judgment.

Enforcement of Judgment

Once judgment has been obtained the landlord's solicitor may proceed immediately to take enforcement proceedings, or alternatively may first apply for an order to obtain information from the judgment debtor under CPR Part 71. This is a special court hearing when the tenant is cross-examined in detail on oath as to his income, assets and liabilities.

If the tenant is an individual he will be the person examined, but in the case of a company, a director of the tenant company may be examined. Non-attendance may be enforced by committal, which is normally suspended initially to allow the debtor to attend on a subsequent occasion.

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