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Commercial Property - Case Shows Value of Making Arguments Early

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A recent case involving a landlord and a tenant highlights the importance of making sure that possibly contentious points are not agreed by default in negotiations concerning other matters.

Background

The landlord had sought possession of the property occupied by the tenant because of arrears of rent. That action was settled on the basis of a compromise agreement in which an order was made that the tenant was a statutory tenant and would resume its tenancy when the landlord had made certain repairs to the property. The issue of the nature of the tenancy (statutory or non-statutory) was not raised in the original proceedings. However, in the wording of the compromise agreement it was stated that the tenancy was a statutory tenancy and this was not disputed at that time.

Possession Orders

A year later, the landlord again sought a possession order on the basis of rent arrears. The judge in the second possession proceedings agreed that had the issue of the nature of the tenancy been raised at the original hearing, he would have denied the tenant the protection that a statutory tenancy gives. However, the issue was not raised then and it would be an abuse of process for it to be raised in subsequent proceedings. The Court of Appeal agreed.

Reserving Rights and Positions in Litigation

The key issue here is that the point about the nature of the tenancy should have been dealt with at the first hearing. Since it was accepted by the landlord at that time that the tenancy was a statutory tenancy, that point could not be reopened. This case makes it clear that it is important to make one's arguments early in proceedings, or the right to make them later may be lost. In any event before legal proceedings are commenced, an astute party will reserve their rights and their position.


About the Author

Gillhams Solicitors conduct commercial litigation and dispute resolution in the UK and advise on commercial tenancies.


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Article Published/Sorted/Amended on Scopulus 2006-07-10 21:10:07 in Legal Articles

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