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 if the amount of that entitlement is reduced or extinguished at common law by money which the tenant has expended in remedying the assignor’s breaches of covenant (in other words, the abatement of rent passes too), it is not easy to see what principle of law or justice denies similar relief to a lessee who may not have had enough money to do the repairs but was entitled to be compensated from day to day for the conditions he has consequently had to live in. The decision in Lotteryking was to be followed, and the tenant’s right of set-off was exercisable against the assignee landlord.
Lord Justice Buxton Lord Justice Sedley Lord Justice Ward
[2003] EWCA Civ 962, Times 12-Aug-2003, Gazette 18-Sep-2003, [2003] 1 WLR 853
Law of Property Act 1925 77 141 142
England and Wales
CitedTaylor vBeale 1591
Where a tenant is required to spend money on remedying the breach of the landlord’s covenant to repair, the money so spent could be invoked to abate the rent even if it thereafter falls due to a successor landlord. Discharge by the tenant of the . .
CitedLee-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 . .
CitedDuncliffe 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 . .
CitedLotteryking 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 . .
CitedRoxburghe v Cox 1881
K owed the plaintiff andpound;5,000 plus interest. He also owed the defendants, who were his bankers, andpound;647. When he retired from the army the proceeds of sale of his commission, namely andpound;3000, were sent to the defendants as his . .
CitedGovernment 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 . .
CitedHanak 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 . .
CitedBritish 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 by:
CitedSonia Burkett, Regina (on the Application of) v London Borough of Hammersmith and Fulham CA 15-Oct-2004
The appellant challenged an order for costs after dismissal of her application for judicial review of the respondent’s planning decision. The claimant had been granted legal aid at about the time of the bringing in of the new legal aid scheme. The . .
CitedEdlington 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. . .

These lists may be incomplete.
Updated: 09 January 2021; Ref: scu.184774