Repeat possession claims and cause of action estoppel

April 29, 2019

In Salix Homes v Mantato [2019] EWCA Civ 445 the Court of Appeal considered whether cause of action estoppel prevents a landlord obtaining a possession order on rent arrears grounds where there is an existing undischarged order for possession on the basis of earlier arrears, and for payment of those arrears.

The facts: In 2008 the local authority landlord had obtained a postponed possession order on the grounds of non-payment of rent together with a money judgment for the arrears. The order provided that the landlord shall not be entitled to apply for a date for possession to be fixed so long as the Defendant tenant pays the landlord the current rent plus £3.05 per week towards the judgment debt. A date for possession was subsequently fixed, but a series of warrants for possession were stayed on terms. The landlord’s interest was subsequently transferred to the Claimant and the tenancy became an assured tenancy within the meaning of the Housing Act 1988. The Defendant never paid off the arrears in full, although at one point they were reduced to £82-odd, and the 2008 possession order was never discharged. In 2017 the Claimant served a notice seeking possession under s.8 Housing Act 1988 and commenced fresh possession proceedings relying on grounds 10 and 11 Sch 2 Housing Act 1988.

The Defendant did not attend the possession hearing and a suspended possession order was made, together with a money judgment for the arrears, not to be enforced for so long as the possession order remained suspended. Permission to issue a warrant of possession was subsequently given and the Defendant was evicted. He then paid off the arrears and costs and applied to set aside the possession order on the basis that it was an abuse of process and barred by the principle of res judicata. At first instance the court set aside the possession order and struck out the claim.

The decision: On appeal, the Court of Appeal held that no cause of action estoppel arose. Under the 2008 order, there was no judgment for the current rent as it fell due, and the requirement that the Defendant pay current rent plus £3.05 per week was not a money judgment but a condition for postponing the date for possession which was spent when the Defendant failed to comply with it. The claim for rent arrears in the second set of proceedings was a different cause of action than the claim for rent arrears which led to the 2008  order. Further, the cause of action under the Housing Act 1988 was different to that in the earlier proceedings where the entitlement to possession arose under the Housing Act 1985.

Note:  The Court of Appeal’s reasoning appears to leave open the possibility of a cause of action estoppel argument being made in a case where the first possession order was an outright order which  included an order that the Defendant pay a daily rate for use and occupation until possession is given up.

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