Summary

Rent was not "unpaid" for the purposes of Ground 8 Sch.2 Part I Housing Act 1988 if a cheque for the arrears due at the date of the hearing had been delivered to the landlord, accepted by him and met on presentation.

Facts

Tenant's ('C') appeal from a possession order made against him by HH Judge Cox in the Mayor's and City of London County Court. In February 2001 the respondent landlord had granted C a new assured tenancy of a flat in London N5 for 12 months at a rent of £135 per week. C had habitually paid his rent by a cheque posted the day before it was due to the landlord in Daventry. C had failed to pay his rent from May 2002 and when 11 weeks' rent had become outstanding the landlord had served a valid notice under s.8 Housing Act 1988 notifying C of his intention to start proceedings to recover possession of the flat on Ground 8 Sch.2 Part I to the Act. Proceedings were issued and the hearing was fixed for 9 September 2002. On that day the landlord had been handed C's cheque for the full amount of the rent arrears. The landlord had accepted C's cheque and it had been paid on first presentation. The landlord said that since the cheque had not been paid the district judge had no power to adjourn the proceedings (s.9(1) and (6) of the Act). The district judge had adjourned to give the cheque time to clear but had given the landlord permission to appeal. The judge had held that the rent had been unpaid on 9 September and had made an order for possession. C appealed.

Held

The general position in law was that delivery of a cheque was a conditional payment and if the cheque had been met was an actual payment from the date of delivery (Homes & Anor v Smith & Anor (2000) Lloyd's Rep Banking 139). That principle applied to Ground 8. If the cheque had been cleared, the debt had been paid when the cheque had been delivered. An uncleared cheque that had been delivered to the landlord at or before the hearing and which had been accepted by him, or which he had been bound by an earlier agreement to accept, had to be treated as payment at the date of delivery provided it had subsequently been paid on first presentation. At the date of the hearing therefore the district judge had had jurisdiction to have adjourned the claim to see whether the cheque would have been paid. The judge had been wrong to have made a possession order. It was accordingly set aside.

Appeal allowed.