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Relief

Costs where relief is granted

Indemnity basis

CB Patel & PC Patel v K&J Restaurants Ltd
[2010] EWCA Civ 1211

In this case the court was concerned with breaches of the immmoral user covenant and the alienation covenant. Relief was granted upon terms, which included the payment of costs. For a full note of the case see this page.

The Court of Appeal held that, in the absence of special circumstances, landlords should receive their costs on an indemnity basis where the tenant successfully applies for relief from forfeiture, notwithstanding comments to the contrary by Lord Templeman in Billson v Residential Apartments Ltd (No 1) [1992] 1 AC 494 at 541 (see paras 98 to 104 of this case). Lord Templeman had misunderstood the effect of an order for indemnity costs. At para 98 and 99:
    "In Billson v Residential Apartments Ltd (No 1) … Lord Templeman held that it was wrong to award costs on the indemnity basis against a tenant who failed in his application for relief against forfeiture. He also deprecated the imposition of a term for obtaining relief as to the payment of indemnity costs, as a general practice. He said:
      'But it seems to me that in principle a tenant should not be at the mercy of an order made by a judge who has no means of knowing the effect of the order and imposes no impartial criterion by which costs can be taxed down.'
    That suggests that Lord Templeman may have misunderstood the effect of an order for the payment of costs on the indemnity basis. Such an order does permit the taxation of costs and provides impartial criteria for the determination of the amount payable. Before 1999 the criterion was set out in RSC Order 62 rule 12(2). Now it is to be found in CPR Part 44 rule 44.4(1) and (3)."
And at para 104:
    "I have come to the conclusion that the indemnity basis should apply as a general principle, despite what Lord Templeman said, and that there is nothing in the circumstances of the present case to make it appropriate either to adopt the standard basis or to disallow some part of the Claimants' costs. As it seems to me, the factors which led the Court of Appeal in Egerton v Jones to decide in favour of a more generous basis of costs than party and party (which seems to me to be the equivalent of the modern standard basis) are still relevant as a general principle, and that normally this should require that the applicant for relief should pay the landlord's costs on the indemnity basis, rather than only on the standard basis. I therefore consider that K&J should be required K&J to pay the Claimants' costs of the proceedings at first instance on the indemnity basis as a condition of obtaining relief against forfeiture."

Property relet

Benefit to landlord to be taken into account

Bland v Ingrams Estates Ltd (No.2)
[2001] EWCA Civ 1088

Where a landlord has re-entered and obtained a benefit the benefit must be taken into account when determining the sum to be paid by the tenant as the price of obtaining the relief.


Publicly funded tenant

Payment of costs as a condition of relief

Crisp v Eastaugh
[2007] EWCA Civ 638

Arden LJ at para 27:
    "At the time when the judge gave his judgment Mr Eastaugh was publicly funded. He is no longer publicly funded. However, it is clear from the judge's findings that Mr Eastaugh is entitled to not insubstantial assets. In my judgment, nothing in Section 11 of the Access to Justice Act 1999, which protects publicly funded litigants, prevents this court from providing that as a condition of obtaining relief from forfeiture Mr Eastaugh should pay not merely the costs which could be ordered against him under Section 11, but the difference between those costs and the percentage of the costs which the Landlord has incurred. In my judgment it would be fair, in these circumstances, to make an order to that effect for the reasons that I have given. In concluding that relief from forfeiture should be given, I take into account that the sums due to Mr Crisp are relatively minor and in addition that the lease has a considerable period yet to run."

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