Remedies

Insolvency

Taking action under the Insolvency Acts may be an appropriate method of enforcing the terms of the tenancy. (See Insolvency.) It is not within the remit of this section to consider insolvency proceedings in any depth. If it appears that such action is warranted, specialist legal advice should be sought.

However, some key points to note are:

• There must be a clear debt owed by the landlord or tenant in excess of £750.
• The debt should be undisputed. If it is disputed, then insolvency action - whether by winding up a company (putting it into liquidation) or making an individual bankrupt - will not be appropriate and the proceedings will probably not be allowed to continue.
• There must be a quantifiable debt. As a result, insolvency action is most likely to be relevant in the context of a dilapidations claim where a Jervis v Harris clause (after Jervis v Harris [1996] Ch. 195) has been operated and the landlord’s costs quantified, or where a claim for damages has been made and is to be enforced. In the context of a tenant’s claim against a landlord, the remedy might arise where the tenant has undertaken work on behalf of the landlord and the tenant has not been reimbursed.

Putting a landlord or tenant into liquidation or making it bankrupt may have the result that, owing to the restrictions contained in the Insolvency Acts, the tenant or landlord finds that by its own actions it cannot enforce the terms of the tenancy.

Frustration

As in the case of repudiation, frustration is a concept that applies to contracts. In National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 it was held that the principle applies to leases.

Frustration arises in instances where, when neither party to the contract or, in this case, the lease, is at fault, an event occurs that the contract had not provided for that so changes the position of the parties that the contract is to be regarded as being at an end. The lease might be frustrated, for example, where there is some catastrophic event that destroys the building. Otherwise, it is difficult to envisage other circumstances where the principle might apply in the context of the condition of the building.

If there is a dramatic, unenvisaged change to the building, and it is thought that the contract or lease has been frustrated, specialist legal advice should be sought.