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This week we settled a relatively straight-forward case on behalf of one of our clients.

Our client sells IT hardware and software from premises on a trading estate. A well known house-building company was building houses on the neighbouring estate. Unfortunately, a contractor working for the house-building company cut through cables on the neighbouring estate that supplied our client with telephone and email facilities.

Thankfully, the cables were restored after just two days but, during that period of time, our client lost profits quantified at £7,300.00. The case settled on terms that the house-building company shall pay our client the sum of £7,300.00 plus a contribution towards costs.

Happy Birthday!

Today is our third birthday! We would like to take this opportunity to extend a huge thank you to our clients, contacts and friends for all their support over the last three years.

Our landlord client instructed us to evict his residential tenant. However, the tenant had paid a tenancy deposit to the landlord which the landlord did not protect in an authorised tenancy deposit scheme within the 30-day period required by the Housing Act 2004. This immediately exposed the landlord to a counterclaim that he should pay compensation to the tenant for an amount which would be between a minimum of one-times the deposit and a maximum of three-times the deposit.

We commenced possession proceedings against the tenant and, unsurprisingly, the tenant made a counterclaim for compensation equivalent to three-times the amount of the deposit. The tenant relied on the Court of Appeal’s decision in the case of Ayannuga v Swindells [2012] EWCA Civ 1789 in which the tenant was awarded compensation equivalent to maximum amount of three-times the deposit.

At the trial of our landlord client’s claim in the Barnet County Court, we obtained an Order for Possession and went on to successfully persuade the Judge to award compensation to the tenant limited to the minimal amount of one-times the deposit.

The tenant was disappointed with the Judge’s award and so he appealed. At the appeal hearing in the High Court in London on 23 October 2014, we successfully persuaded the Appeal Judge to dismiss the tenant’s appeal and to confirm the tenant’s entitlement to compensation was limited to just one-times the amount of the deposit. (Our landlord client also recovered his costs of the appeal from the tenant).

For the sake of completeness, we should add that our landlord client did not actually have to pay any compensation to his (former) tenant because the compensation payable was set off against rent arrears the tenant owed to our landlord client!

The factual circumstances behind this news article are relatively straight-forward:

A company traded as a restaurant and had one director but the company was in financial difficulty. The director of the company found two individuals prepared to purchase the company (and its restaurant business) but the director required a £5,000 purchase deposit. Unfortunately, the two purchasers didn’t have the financial resources to pay the deposit and so they persuaded a third party investor to pay it. The third party investor duly paid the £5,000 deposit to the company but shortly after he made that payment, the company went into liquidation and a liquidator was appointed.

Unsurprisingly, the third party investor was upset by the fact that he was unlikely to recover his investment from the insolvent company (or the two individuals who persuaded him to invest in it) and so the investor took the unusual step of commencing legal proceedings against the liquidator for the recovery of his £5,000 investment.

Richard Moss Solicitors was instructed by the liquidator to defend the claim brought by the investor.

Although our liquidator client had excellent prospects of successfully defending the investor’s claim, that claim would inevitably be allocated to the Court’s ‘Small Claims Track’ in which the ‘no costs rule’ applies. In other words, our liquidator client would almost certainly need to pay more than £5,000 in legal costs in defending the investor’s claim but he would be unable to recover such costs from the investor even in the event of success due to the ‘no costs rule’ that applies in the ‘Small Claim Track’. 

In the circumstances, Richard Moss advised the liquidator to make a very quick application to the Court for an order striking out the investor’s claim before it was allocated to the Small Claims Track. The liquidator accepted Richard’s advice and, on 3 June 2014, Warrington County Court struck out the investor’s claim – the liquidator client was spared both the inconvenience of dealing with the investor’s claim and the need to pay £5,000 compensation to the investor.

Even further (and because the investor’s claim had not been allocated to the Small Claims Track at that time), our liquidator client also obtained a Court order that the investor pays the costs of making the application!

Our commercial landlord client was owed just under £7,000.00 in rent and service charge arrears by his tenant.

On 26 February 2014, we were instructed by the landlord to recover the arrears.  On 4 March 2014, we completed a ‘Warrant to Distrain’ and filed it with the Sheriffs’ Office. On 6 March 2014, a Sheriff attended the tenant’s premises for the purpose of seizing the tenant’s goods and then selling them. On 14 March 2014, our client received payment in full (i.e. within less than 3 weeks of our instructions).

Unfortunately, that was the last time this firm will complete and file a Warrant to Distrain based on the ancient law of distress. That is because, on 6 April 2014, the law of distress was replaced by the Commercial Rent Arrears Recovery procedure (‘CRAR’) by virtue of Part 3 of the Tribunals, Courts and Enforcement Act 2007.

Nevertheless, we shall continue to successfully recover rent arrears on behalf of our commercial landlord clients (albeit by following the new statutory CRAR procedure).