Or, to be precise, when does a Suspended Possession Order for rent arrears cease to be enforceable? In broad terms, the answer is clear – when all sums due under the order have been paid off. But when is that?
After Marshall v Bradford MC, it is vital for a .s85 application to revive tenancy by varying the possession order that the original possession order remain enforceable, particularly since the failure of the Payne approach in Porter v Shepherds Bush.
I’ve posted on this before, but I was reminded by the coda to James Stark’s article on Porter in the latest Legal Action (May 2008). Incidentally, that is well worth reading. I think it is safe to say Mr Stark is not happy with the Court of Appeal judgment, and is not happy in considerable detail. I remain a fanboy, but he has an uphill battle with this one. I’m going to have to have a think about the detailed argument.
At the end of the article James Stark suggests that it may still be possible to make a revival application if the rent arrears have been paid off if the Court costs remain unpaid. He further suggests that an HB payment which takes the account into credit is impliedly appropriated to rent only.
To which I can only say, it utterly depends on your Court and your DJ. I have seen a number of successful s.85 revival applications on the back of unpaid court costs, but some DJs are taking the L&Q v Ansell Court of Appeal judgment as authority for the proposition that the rent account going into credit by more than the courts costs means that the SPO has been satisfied in total, and refusing revival applications on the basis that the Court has no power under s.85 to vary an unenforceable order, leaving an entrenched tolerated trespasser.
In my view, it is not correct to find support for this view in Ansell. In that case, the County Court judge found that the debt and costs were satisfied by the rent account going into credit, but the specific issue wasn’t appealed, so the Court of Appeal couldn’t find on it (although they sounded very doubtful that this was correct).
More worryingly, there has also been a line of reasoning that the SPO in form N28 rolls costs and arrears into one judgment debt, and one cannot expect the landlord to collect arrears and costs separately. Hence a sufficient credit will satisfy the debt.
I’m not sure about this, particularly when the landlord has maintained separate court costs accounts/not rolled the full judgment debt into the arrears/not collected or debited the court costs. It ought, at least, to be possible for the tenant to specifically appropriate payments to the rent. The suggestion that HB is impliedly appropriated to the rent may also help here.
But, with some DJs, this just isn’t working.
Until there is a decent appeal on the issue, we are left at the mercy of the individual view of District Judges. In my area, I know of a couple of appeals to Circuit Judges that were settled prior to hearing with an offer of grant of new tenancy – clearly the local authorities concerned were keen to maintain the alleged Ansell position.
Does anybody know of a Circuit Judge, or higher case, on this issue? Because I’m getting very tired of the mess.
Of course, the proposed ‘replacement’ tenancies in the Housing & Regeneration bill will sort this out, at least as it stands at present, but that is a long time to wait.
One difficulty is that when a tenant pays “rent” to their council landlord they do not think about, let alone indicate, the intended appropriation. One argument that meets with some success is that where a council maintains a separate costs and rental account, payments of “rent” do not become appropriated to the costs owed because, absent an indication of appropriation by the tenant, the council may chose to appropriate and the rule in Clayton’s Case does not have effect.
Tragically, Ealing have — I am told — made an effort in recent years to “tidy up” their tolerated trespasser accounts, recording the costs owed in the main rental account, and appropriating payments against them.
One a second point: I have been getting on to the Bill team and they promise to let me know when they are going to bring the new provisions into effect, which will save us all a lot of bother. Though royal assent should be fairly soon (before the summer recess is the current hope), ominously the provisions we care about require consultation with the Welsh Ministers, introducing further delay.
Certainly one can’t expect the tenant to have made specific appropriation. I have seen it used by the solicitor when the rent account is perilously close to no arrears and one unexpected HB payment would tip the balance, but that was in circumstances where the costs had definitely not been added to the rent account or otherwise retrieved.
If the Court chose to see both arrears and costs as a singular judgment debt, wouldn’t the rule in Clayton’s Case not be applicable anyway?
The sooner the better on bringing the provisions into effect, and thanks for the update.