Summary

A landlord in a long lease at a low rent granted at a premium is not entitled to mesne profits in addition to or in substitution for rent arrears when the tenant or sub-tenant is granted relief against forfeiture.

Facts

Four appeals in which mortgagees by subdemise sought relief from forfeiture of a long lease granted at a premium and at a low rent where although the landlords accepted that relief was available, the landlords contended that they were entitled to mesne profits from the date of forfeiture to the date of relief instead of merely arrears of rent. In all the cases the judges held that relief could be granted retrospectively and that it ought to be granted on terms that all arrears owing under the lease and costs, but not mesne profits, were paid.

Held

The landlords had sought to distinguish service charge arrears from rent arrears but their submission could not be accepted. The arrears of service charges were to be treated as arrears of rent. A distinction was to be drawn between proceedings in the High Court and the County Court but all relief against forfeiture stemmed from that granted by the old Court of Chancery in cases of non-payment of rent. The practice of the court and the effect of its decrees were described by Wigram VC in Bowser v Colby (1841) 1 Hare 109 and by Cozens-Hardy MR and Farwell LJ in Dendy v Evans (1910) 1 KB 266. In the case where the lessor had already taken possession at law, the court ordered him to grant a new lease to the lessee, the effect of which stopped the forfeiture in limine; so that there was no question of any destruction of an estate which had to be called into existence again. The only remedy which could be granted was the reinstatement of the lease. Equally, relief was granted to an under-lessee by the reinstatement of the lease, and with it the under-lease. As a general point in cases of this kind a judge might well think it inequitable that a landlord who had received a premium should receive in addition mesne profits vastly exceeding a rent whose minimal rate had been the very means of his acquiring the premium.

Appeals dismissed.