Thursday, 30 September 2021

COVID-19: High Court Grants Landlord Summary Judgment for Rent Arrears


The High Court* has granted a landlord summary judgment to recover rent and service charge arrears on premises that were closed during the pandemic.

The premises are a cinema in London’s Trocadero Centre.

The cinema had to close in March 2020 due to the pandemic and no rent has been paid since June 2020. The landlord brought proceedings for summary judgment for rent and service charge arrears of £2.9m.

The court rejected the tenant’s defences that there should be implied terms that they were not liable to pay for periods when the premises could not be used, and that there was a failure of basis.

The court found that the risk lay with the tenant, who could have taken out business interruption insurance (it was agreed that the pandemic was not an insured risk).

Judge Robin Vos stated there was “a long-standing principle that an inability of a tenant to use premises for the purpose intended at the time the lease was granted will not provide a defence to a claim for the payment of rent.”

The court had dismissed an application by the tenant to adjourn the summary judgment pending the introduction of the bindingarbitration scheme for pandemic rent arrears, which was a proposal announced by the government in June, but which has still not been enacted.

Until that arbitration scheme is up and running (which requires legislation), then regardless of the ongoing moratorium on forfeiture action, this case demonstrates that landlords are still able to sue tenants for non-payment even if the tenant was unable to trade during the pandemic.

*London Trocadero(2015) LLP v Picturehouse Cinemas Ltd and others [2021] EWHC 2591 (Ch) (28September 2021) (Robin Vos sitting as Deputy Judge of the High Court)

UPDATEPermission to appeal to the Court of Appeal has been granted in London Trocadero, together with a stay of execution of the judgment pending the appeal. It is also understood that the High Court has granted Cine-UK Ltd permission to appeal in Bank of New York Mellon, and granted its application that the appeal should be transferred from the High Court to the Court of Appeal. 

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