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