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 the first place.
Held: The new landlord was not liable for the failings of the old, and the tenant could not set off any claim in damages from the original lessee against arrears of rent: ‘the weight of principle, authority and textbooks all point firmly in the same direction. Where the reversion to a lease is transferred, a tenant cannot set off, against rent falling due after the transfer, a claim for damages he has arising out of a breach by his original landlord of the lease, let alone of the agreement pursuant to which the lease was granted, unless of course the lease specifically provides that he should have that right.’
Lord Justice Pill Lord Justice Neuberger Lord Justice Scott Baker
Times 12-May-2006, [2006] EWCA Civ 403, [2006] 1 WLR 1583
Bailii
Law of Property Act 1925 141, Landlord and Tenant Covenants Act 1995 3
England and Wales
Citing:
Appeal from – 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 – British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd ChD 19-Dec-1978
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 . .
Cited – Spencer’s Case 1583
An assignee of a lease will take both the benefit and burden of the covenants in the lease provided that there is privity of estate as between the person enforcing the covenant and the person against whom enforcement is sought, and the covenant . .
Cited – Corporation of City of London v Fell and Others HL 3-Dec-1993
The original tenant under a lease was not liable for arrears of rent on a tenancy continued after an assignment and after the original contract term has ended. The right of a transferee of the reversion to recover rent is, both in common law and . .
Cited – Duncliffe v Caefelin Properties Ltd ChD 1989
The defendants had taken an assignment of the reversion of a flat held on a long lease. The assignors had gone into liquidation when in prolonged breach of the lessor’s repairing covenant. The lessee asserted that the effect of s.142 on an . .
Cited – Reeves v Pope CA 1914
The potential landlord agreed with the proposed tenant to build a hotel by a date, and the tenant agreed to take a lease when it was ready. The building was late in completion. The tenant took the lease but without prejudice to his claim for . .
Cited – Pfeiffer GmbH v Arbuthnot Factors Limited 1988
Section 136 by its terms preserves the equitable rule that the debtor can rely on any rights of set-off which arose before he had notice of assignment . . .
Cited – National Provincial Bank Limited v Ainsworth HL 1965
The significance of the distinction between occupation and rights was that although the deserted wife was in actual occupation of the former matrimonial home, the quality of her rights was not such as to be capable of amounting to an overriding . .
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 – Re Arrows Ltd (No 3) ChD 1992
Hoffmann explained the case of Reeves v Pope: ‘The reasoning of the Court of Appeal was that a mortgagee or transferee of a property subject to a lease does not become entitled to the rents . . as an assignee [of] a chose in action by the original . .
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 – Green v Rheinberg CA 1911
. .
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 – Government of Newfoundland v Newfoundland Railway PC 7-Feb-1888
A railway company and its assignees brought action the Government. Under the contract the company was to build a railway subsidised by the government. The railway was not completed. The parties disputed whether the contract was ‘entire’ and no part . .
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 – Lotteryking Ltd v AMEC Properties Ltd ChD 1995
The tenant sought to prevent the sale of the landlord’s reversion until the lessor’s repairing obligations had been met. One of the grounds was that on a sale the tenant’s right of set-off would not pass.
Held: An order was refused. Lightman . .
Cited – Famous Army Stores v Meehan 1993
. .
Cited – BOC Group Plc v Centeon Llc and Centeon Bio-Services Inc CA 29-Apr-1999
The court was asked whether a clause in a share sale agreement setting out the payment obligation worked to preclude the purchaser from exercising a right of set-off when the time comes to pay a later instalment of the price.
Held: The appeal . .
Cited – Mellowes Archital Limited v Bell Projects Limited CA 15-Oct-1997
The court referred to ‘the distinction between the common law defence of abatement and the defence of equitable set-off’. . .
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 – Marubeni Corporation v Sea Containers Ltd ComC 17-May-1995
Procedure – set-off – contract for supply of containers – construction of contract – clear words to exclude right of set-off – equitable set-off – abatement – defective containers. The words ‘without deduction’ have been held in the context of a . .
Lists of cited by and citing cases may be incomplete.
Construction, Landlord and Tenant
Updated: 05 December 2021; Ref: scu.241388