Cadogan Estates Limited v McMahon: HL 26 Oct 2000

When a tenancy was terminated and was followed by a statutory tenancy, a term in the contractual tenancy that the tenancy should be forfeit on the tenant’s bankruptcy was continued in and inherited by the statutory tenancy. Though perhaps in conveyancing terms there was no positive obligation not to become bankrupt, the Acts should be interpreted in the context of the legislation as a whole. There was no reason in principle to distinguish between forfeiture for non-payment of rent, and a proviso for re-entry on insolvency.
‘The Rent Acts were enacted in haste and in places badly drafted, and have greatly perplexed judges of the greatest distinction over many decades . . But unless the words used are inconsistent with the policy of the Acts they must be given their natural meaning. Since the proviso for re-entry has no possible application to a statutory tenancy, there is no policy reason to distinguish between a statutory tenancy which follows the determination of a contractual tenancy which contains such a proviso and a statutory tenancy which follows the determination of one which does not. ‘


Lord Bingham of Cornhill Lord Steyn Lord Hoffmann Lord Hutton Lord Millett


Times 01-Nov-2000, Gazette 09-Nov-2000, Gazette 16-Nov-2000, [2000] 3 WLR 1555, [2000] UKHL 52, [2001] 1 EGLR 47, [2001] BPIR 17, [2001] 1 AC 378, (2001) 81 P and CR DG11, (2001) 33 HLR 42, [2000] 4 All ER 897, [2001] L and TR 2, [2000] NPC 110, [2000] EG 119, [2001] 06 EG 164


House of Lords, House of Lords, House of Lords, House of Lords, Bailii


Rent Act 1977


England and Wales


Appeal fromCadogan Estates Ltd v McMahon CA 9-Jun-1999
A provision in a tenancy agreement that the tenancy would cease upon the bankruptcy of the tenant, continued and became part of the terms of a statutory tenancy following the contractual one. The provision was not inconsistent with the idea of the . .
CitedIn re Drew (A Bankrupt) 1929
(Ireland) A tenant subject to a re-entry clause in his tenancy agreement in the case of his being made bankrupt, and who had gone bankrupt had broken an obligation of his tenancy. He was not protected from an order for possession. ‘The tenant here . .
CitedRMR Housing Society Ltd v Combs 1951
The court considered it unnecessary to distinguish between terms and conditions of a tenancy forfeiting the tenancy on the insolvency of the tenant as to the result or effect for their breach. . .
CitedPaterson v Aggio CA 1987
The Court considered whether a tenancy was a ‘protected shorthold tenancy’ within the meaning of section 52 of the Housing Act 1980 and therefore excluded from the protection of the Rent Act 1977.
Held: A power to forfeit within the minimum . .
CitedHalliard Property Co Ltd v Jack Segal Ltd 1978
The court considered a proviso for re-entry that: ‘forfeiture on the bankruptcy of the lessee is considered as a case of breach of condition.’
Held: It was clearly a condition rather than a mere covenant of the original protected tenancy that . .
CitedRead v Goater 1921
As to the Rent Acts, it was essential ‘that, wherever possible, [they] should be construed in a broad, practical, common-sense manner so as to effect the intention of the Legislature’ . .
CitedRemon v City of London Real Property Co Ltd CA 1921
The court was asked whether the plaintiff, a tenant of rooms to which (once enacted) the Act of 1920 applied and who had been excluded from possession by the landlord’s re-entry on the day that the Act came into force following service of a notice . .
CitedBrewer v Jacobs 1923
A proviso for re-entry in a tenancy is inapplicable to a statutory tenancy. It is concerned with the forfeiture of an existing term and can have no application after the contractual term has expired. Once the statutory tenancy has come into being, . .
CitedRoe v Russell CA 1928
Sargant LJ said that the Rent Acts had ‘not been framed with any scientific accuracy of language.’ . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Housing, Insolvency

Updated: 31 May 2022; Ref: scu.159086