Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence at law to a claim for unpaid rent; and where the tenant has suffered damage by the breach rather than paid money to remedy it, an equitable set-off is in appropriate circumstances available. Appropriate circumstances include a close reciprocity in the subject-matter of the cross-claims. Damages for breach of a repairing covenant and rent payable under the same agreement are an instance of such reciprocity. ‘there are at least two sets of circumstances in which at common law there can be a set-off against rent, one where the tenant expends money on repairs to the demised premises which the landlord has covenanted to carry out, but in breach has failed to do so (at any rate where the breach significantly affects the use of the premises) and the other where the tenant has paid money at the request of the landlord in respect of some obligation of the landlord connected with the land demised. To this proposition there must be added two riders. First, that as the landlord’s obligation to repair premises demised does not arise until the tenant has notified him of want of repair, such notification must have been given before the set-off can arise; and secondly that the set-off must be for a sum which is not to be regarded as unliquidated damages, that is, it is a sum certain which has actually been paid and in addition its quantum has either been acknowledged by the landlord or in some other way can no longer be disputed by him’ It is proper in principle to allow that a cross-claim could be effective as an equitable set-off against a claim for rent, but such a defence is not available in all circumstances. The equity must impeach the title to the legal demand, or in other words go to the very foundation of the landlord’s claim.
Forbes J
[1980] QB 137, [1978] EWHC QB 2
Bailii
England and Wales
Citing:
Cited – Beall v Smith CA 6-Dec-1873
Lord Justice James discussed the practice in the Court of Chancery on claims brought by people without mental capacity: ‘The law of the Court of Chancery undoubtedly is that in certain cases where there is a person of unsound mind, not so found by . .
Cited – Hanak v Green CA 1958
A builder was sued for his failure to complete the works he had contracted for. The buider sought a set-off against that claim of three of his one claims. One, under the contract, was for losses from the defendant’s refusal to allow his workmen . .
Cited – Modern Engineering (Bristol) Ltd v Gilbert Ash (Northern) Ltd HL 1974
The court considered how to construe a clause in a contract which excluded a remedy provided by law. Lord Diplock said: ‘It is, of course, open to parties to a contract . . to exclude by express agreement a remedy for its breach which would . .
Cited – Federal Commerce Ltd v Molena Alpha Inc; (The ‘Nanfri’) CA 1978
The court considered whether claim as against a shipowner could be set off against sums due under a time charter hire.
Held: Save for any contractual provision to the contrary a tenant is entitled to deduct from the rent payable, so as to . .
Cited – Mondel v Steel 1841
The court considered a claim for a set off. Parke B: ‘Such cases are confined to those concerned with goods sold and delivered with a warranty, goods agreed to be supplied according to a contract and actions for work and labour done.’ . .
Cited – Pigott v Williams 1821
The solicitor claimed fees for coduct of an action which, but for his own failings would not have been necessary.
Held: The client had a set-off in equity. . .
Cited – Rawson v Samuel 15-Apr-1841
Cottenham LC said: ‘We speak familiarly of equitable set-off as distinguished from set-off at law, but it will be found that this equitable set-off exists in cases where the party seeking the benefit of it can show some equitable ground for being . .
Cited – Weigall v Waters 1795
Where a party has fairly laid out money on repairing what he was not bound to repair, a court of equity might grant him relief. The tenant had paid andpound; 30 but Lord Kenyon still regarded the cross-claim as one for uncertain damages. The quantum . .
Cited – Lee-Parker v Izzett (1) ChD 1971
Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence of set-off at law to a claim for unpaid rent. Justice Goff discussed the . .
Cited – Bankes v Jarvis 1903
The plaintiff was his son’s agent. The son purchased a veterinary surgeon’s practice from the defendant, agreeing to pay the rent and indemnify the defendant against liability under a lease of premises from which the practice was carried on. The son . .
Cited – Brown v Holyoak 1734
The plaintiff began an action of debt for rents upon a parol lease. The defendant had by his plea set off a debt by simple contract. On demurrer it was held that a debt of an inferior nature cannot be set off against a superior demand. The reason . .
Cited – Gower and Wife v Hunt CCP 1734
The landlord brought an action of covenant in a lease under seal for non-payment of rent. The tenant wished inter alia to raise a set-off under the statutes of set-off for sums due under other covenants in the same deed relating to ‘spurring up land . .
Cited – Morgan and Son Ltd v S Martin Johnson and Co Ltd CA 1949
Cohen LJ considered the appropriateness of a claim for a set-off: ‘Before the Judicature Act, such claims were very often enforced by injunction, but it is plain from section 41 that an injunction would not be the appropriate way of giving effect to . .
Not followed – Hart v Rogers 1916
The landlord claimed for unpaid rent and the tenant counterclaimed for damages for breach by the landlord of the implied covenant to repair the roof of the premises demised.
Held: The cross-claim was no defence to an action for rent. . .
Cited – Surplice v Farnsworth 1844
. .
Cited – Townrow v Benson 1818
There can be no set-off by a tenant against a distress. . .
Cited – Beasley v D’Arcy HL 1800
The House upheld the decision of the Lord Chancellor of Ireland to grant the tenant relief from forfeiture. The landlord had cut timber on the land, and the tenant sought damages. The tenant came into Chancery to restrain the landlord’s proceeding . .
Cited – Absolon v Knight and Barber 1743
A landlord’s debt to a tenant could not be set off against distress, not because rent is something special, but because distress is something special–not an action, but a remedy without action. . .
Cited – O’Mahoney v Dickson 1800
. .
Cited – Henriksens Rederi A/S v Centrala Handlu Zagranicznego (CHZ) Rolimpex, The Brede CA 1974
The court considered when a set off is available to a party. Lord Denning said: ‘It is available whenever the cross-claim arises out of the same transaction as the claim or out of a transaction that is closely related to the claim.’ and ‘In point of . .
Cited by:
Cited – Smith v Muscat CA 10-Jul-2003
The tenant was sued by his landlord for arrears of rent, but sought an equitable set-off for damages for disrepair accruing under the previous landlord.
Held: If the entitlement to recover arrears of rent passes from assignor to assignee, and . .
Cited – North British Housing Association Ltd v Matthews, Same v Others CA 21-Dec-2004
In each case the tenants requested adjournment of the possession proceedings brought against them by the landlord for arrears of rent to allow them time to bring the arrears below the level at which a possession order could be made. In each case it . .
Cited – Altonwood Ltd v Crystal Palace FC (2000) Ltd ChD 7-Mar-2005
The landlord claimed arrears of rent and other payments due under the lease of the football ground occupied by the club. A licence had been granted for the accomodation to be shared with Wimbledon Football Club. The rent varied with the gate . .
Cited – Connaught Restaurants Ltd v Indoor Leisure Ltd CA 17-Sep-1993
The lease provided the tenant would pay the rent ‘without any deduction’.
Held: The words ‘without any deductions’ in a lease were ambiguous and were insufficient to exclude the tenant’s right to claim a set off. Clear words are needed before . .
Cited – The Mortgage Corporation Ltd v Ubah CA 21-Mar-1996
The respondent mortgagee had obtained an order for possession against the mortgagor freeholder, referred to in the judgment as ‘the Chief’, who had, prior to the mortgage, granted a tenancy to the appellant.
Held: The landlord’s retention of a . .
Cited – Edlington Properties Ltd v J H Fenner and Co Ltd QBD 20-Oct-2005
The landlord sought repayment of arrears of rent. The tenant sought to raise a set off which had arisen against the landlord’s predecessor arising from defects in the property they had constructed.
Held: The tenant had no right of set off. . .
Cited – Edlington Properties Limited v J H Fenner and Co Limited CA 22-Mar-2006
The landlord had assigned the reversion of the lease. There was an outstanding dispute with the tenant defendant who owed arrears of rent, but sought to set these off against a claim for damages for the landlord’s failure to construct the factory in . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 05 December 2021; Ref: scu.185863
