We have recently seen yet another example of forfeiture being a viable and successful remedy available to Landlords when necessary, so it is right to say that Landlords need not be fearful of this course of action where a leaseholder is in breach of the terms of their lease. Whilst action should be taken and attempts made in any given case to avoid forfeiture proceedings as much as possible, sometimes this is simply not possible. This was ultimately the case in Timbo v London Borough of Lambeth (2019) which shows that the Courts are willing, not only to forfeit a lease, but also to reject applications for relief from forfeiture in appropriate cases.

Background

Mr and Ms Timbo (Mr Timbo later passed away) purchased the lease to a flat in 2009. In 2010 they moved back to Sierra Leone and left the property rented out and in the hands of someone known as “Geoffrey” to manage. No service charges (which were reserved as rent under the lease) were paid and money judgments were obtained against them by Lambeth in default in 2012 and 2015 in the combined sum of over £4,000. In March 2017 a further money judgment was obtained in the sum of over £3,500 and no payments had been made towards the previous judgments.

A Section 146 notice was therefore served in April 2017 as a precursor to forfeiture of the lease and possession proceedings (forfeiture) commenced in May 2017. The Court made a possession order in August 2017 and the warrant for possession was executed by the bailiffs in October 2017. Lambeth then used the flat as temporary accommodation for those to whom it owed a homelessness duty.

Ms Timbo’s application for relief from forfeiture

Ms Timbo later sought relief from forfeiture to reinstate the lease (see here August 2019 Legal Update giving an overview on the process for relief). She claimed that she had applied for relief from forfeiture on 31 January 2018, however her application was apparently returned by the Court as the fee sent with the application was incorrect. Then in February 2018, Ms Timbo applied for the possession order to be set aside as well, claiming that she had no knowledge of the proceedings. A hearing was listed for April 2018 but Ms Timbo did not attend as she was not served with the notice of hearing. This was re-listed for a hearing in June 2018 but, in the meantime, Ms Timbo attempted to discontinue proceedings. The June hearing went ahead as scheduled, Ms Timbo did not attend and the application was dismissed. The reasons for Ms Timbo’s actions and lack of attendance are not clear but it appears that Lambeth and Ms Timbo were in discussions, but the amount that Ms Timbo would have to pay to settle the matter remained in dispute.

In July 2018, 9 months after Lambeth had taken possession of the flat, Ms Timbo again applied for relief from forfeiture in the High Court and the matter proceeded to another hearing.

The Hearing and Ruling

It is relevant that Ms Timbo’s application was in the High Court, as the rules and procedure for relief differ to those when an application is made in the County Court. In particular, the application must be made within 6 months of the forfeiture - that being service of the possession claim - as opposed to 6 months from the Landlord recovering possession of the property, as is the case in the County Court (where service charges are reserved as rent).

At the hearing, there were a few issues that confronted Ms Timbo’s application. First  was the 6 month time restriction. Ms Timbo’s Counsel tried to argue that the 6 month period started from the date Ms Timbo’s application to set aside the possession order was dismissed. The Court did not agree and confirmed that the 6 months started to run from the date of service of the possession claim, which was at some point in May 2017. This therefore meant that the 6 month timescale to apply for relief from forfeiture expired at the end of November 2017 at the latest. Although the Court can, at their discretion, overrule the 6 month time period, there must be a clear and justifiable reason for the application being made beyond this date.

This brings about the second issue that faced Ms Timbo. There had been two attempts to challenge the forfeiture - the first application for relief had been abandoned and the second attempt to challenge the possession order had been dismissed. The Court was not satisfied that the delay was justified simply because Ms Timbo had hoped that the matter may be resolved with Lambeth during that time. This was also due to the fact that, despite the discussions and hope for resolution, the fundamental issue, how much Ms Timbo was going to pay, was still very much in dispute between the two parties.

Finally, Ms Timbo argued that the windfall Lambeth would receive was disproportionate to the sum outstanding; by then over £34,000. The Court again rejected this, stating that this argument would not be enough when Ms Timbo was the party at fault for the matter proceeding as far as it had, and the lateness of application for relief. Ms Timbo was also not able to evidence sufficient financial means to pay the sum due and therefore, the Court found it would be inevitable that Lambeth would receive a windfall.

The application for relief was therefore refused.

Conclusion

It is difficult to see what more Lambeth could have done to avoid what seems to have been an evitable possession claim, and the Court clearly considered their actions to be reasonable such that they dismissed the application for relief.  This case further illustrates that despite there being several hoops to jump through before getting to forfeiture proceedings, forfeiture is a live, available and viable remedy in appropriate cases (also see here our Legal Update from December 2018 with some of our own recent experiences of such claims).

For more information, please contact Kevin Lever, Principal Solicitor, on 01435 897297 or Kevin.Lever@kdllaw.com.

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