Payment of rent by cheque

If payment by cheque is made by direct delivery to the landlord or his agent, then it is treated as having been paid on the date of delivery to the landlord or his agent: Coltrane v Day [2003] 17 EG 146.

Wall J held in that case:

“On the facts of this case, the long established principle, succinctly set out by Byrne J in Felix Hadley & Co v Hadley [1898] 2 Ch 680 and recently reiterated by Lord Woolf in Homes v Smith (2000) Lloyds Law Rep. (Banking) 139, that a cheque for a sum due which (a) is delivered to a creditor (b) is not returned by the creditor and (c) is met on first presentation discharges the debt as at the date the cheque is delivered, provides the tenant, in my judgment, with a cast iron defence to the landlord's claim for possession ...”

If it has been agreed expressly or impliedly that payment can be made by cheque sent by post, the deemed date of payment is taken to be when the cheque is posted: Commercial Union Life Assurance Co Ltd. V Label Ink Ltd Unreported 24th July 2000. In cases of payment of a cheque by post, the deemed date of delivery as being that when the cheque was posted as opposed to delivered is justified by regarding the post office as the landlord's agent, as per Tuckey LJ in Coltrane above:

“The cheque was not received by the landlord until after the notice had expired. Nevertheless, as a result of the previous course of dealing, the court held that the tenant was entitled to pay by cheque and treated the post office as the landlord's agent for the purpose of deciding when the cheque was delivered. This court accepted that approach in Official Solicitor v Thomas (1986) 2 EGLR 1 although it did not apply to the facts of that case. It would also have applied in Luttenberger v North Thoresby Farms Ltd. (1993) 1 EGLR 3 but for the fact that the tenant's cheque lacked a necessary signature.”

It should be noted that payment by cheque is conditional on the cheque being honoured: Beevor v Mason (1978) 37 P & CR 452 i.e. if a cheque is posted or delivered by the due date but bounces, it is taken not to have been paid. If the landlord re-presents a dishonoured cheque to his bank he is not waiving the fact that the payment was not made by the due date: Hannaford v Smallacombe [1994] 15 EG 155.

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