Assorted quick leasehold related notes, to be done before they go off in the fridge.

Kaye v Lees (2022) EWHC 3326 (KB)

The aftermath of the decision on a mental health moratorium that we noted here. In the previous judgment, it was held that a warrant of eviction (on the back of an order for sale and possession order) was in breach of the defendant’s mental health moratorium and that it and the subsequent sale of the lease were ‘null and void’. The claimant had paid off the defendant’s mortgage, and now found themselves with no property, while the defendant had the lease back with no mortgage. The claimant applied for a declaration that he held the mortgage debt by subrogation, was entitled to payments and this debt post dated the mental health moratorium and so was not caught by it, or that that there was right to request a review under the subsequent extension of the mental health moratorium as an additional debt

The High Court held

i) The claimant had acted under a mistake, the defendant had been unjustly enriched as a result, and the claimant was subrogated to the mortgage lender’s rights as creditor.

ii) As a subrogated debt, it was not an ‘additional’ or new debt.

iii) Any request for a review of the moratorium debt had to be made within the strict timetable in regulation 17 and regulation 19, with no power to extend time.

An application under regulation 7 for permission to take enforcement action was refused as eviction would be detrimental to the defendant.

As noted on the first decision, not handling a moratorium properly can result in very messy and expensive consequences.

Dunward Properties Ltd v Isaac (2022) EWHC 3276 (Ch)

This was an appeal from a first instance decision on Mr Isaac’s claim in breach of contract, nuisance and derogation from grant after his landlord had permitted a change of use to the commercial property below his flat from an estate agents to a bar restaurant. Mr Isaac won on breach of contract only and was awarded £105,000 as the difference in value for his flat between the price he sold it for – £470,000, and the value if there had been no breach.

The landlord appealed on the breach of contract finding, Mr Isaac cross appealed on the refusal of damages for consequential costs.

The High Court dismissed the landlord’s appeal, which turned on an analysis of wording of the lease which introduced “levels of abstraction which were almost metaphysical in their subtlety”. The cross appeal was also dismissed – the pleaded losses flowed from the nuisance, which had rightly been dismissed as an unsupportable claim against the landlord.

English Rose Estates Ltd v Menon & Ors (LANDLORD AND TENANT – SERVICE CHARGES) (2022) UKUT 347 (LC)

English Rose Estates appealed a First Tier Tribunal decision that the leases did not permit them to recover insurance premium charges from leaseholders. They argued that the failure to include a reference to the insuring obligation in the schedule dealing with service charges was a clear mistake and the lease should be rectified by construction, and that the lease point had only been raised at hearing.

The UT said the new point on lease construction was an issue capable of being decided on submissions, which the FTT had invited, so was not procedurally unfair. On ‘rectification’ of the lease, this was not in the equitable sense. It only applied where a document only hd one apparent meaning which obviously could not be what the original parties intended. In the leases, this was not a grammatical error, but the allocation of responsibility between the parties. This went beyond the scope of ‘rectification’. The outcome might be surprising, and outside the usual paradigm, but that did not make it an obvious error. Appeal dismissed.

Clifford v Grosvenor West End, Central London County Court 12 December 2022(?)

No judgment on this one, only an article in the Daily Mail – so caution needed. Mr Clifford had a lease of a mews house adjoining an apartment block in, we are assured, was a ‘high class’ part of Mayfair. He brought a claim in nuisance against Grosvenor WE – a company of the Duke of Westminster – the freeholder of the block of flats (and co-incidentally, Mr Clifford’s freeholder) for failure to take reasonable steps to abate a nuisance emanating from the block due to “noise from three-day-long parties, drug dealings and prostitution”, uncontrolled short letting, noise in the street associated with the block, and threats of violence. Mr Clifford claimed general damages for distress and a diminution in value of his lease of £1.5 million.

Grosvenor asserted it had taken reasonable steps to abate the nuisance, but the court held that reasonable steps had not been taken quickly enough, and there was a clearly evidenced three year period of nuisance.

Mr Clifford was awarded £13,200 for the interference with the enjoyment of his property. The claim for diminution in value of the property was, however, dismissed, as the nuisance was of a transitory nature with no enduring impact on the property’s value. Costs to be decided at a later hearing.