Relief from forfeiture

Applications for relief

An application for relief from forfeiture can be made:

  1. as a free-standing claim for relief, in which case Form N5A with attached particulars of claim will be required—see Precedent: Particulars of claim for relief against forfeiture

  2. as a counterclaim in the landlord’s action for forfeiture—see: Defence to claim for possession: right to forfeit denied; with counterclaim for relief against forfeiture: Atkin's Court Forms [134]

  3. as a CPR Part 23 application in the landlord’s action—see: Application notice in possession action for relief from forfeiture: Atkin's Court Forms [135]

Relief is not limited to termination of leases, and is equally available for the ending of rights granted by licence provided they are sufficiently ‘possessory’ in nature.

Claiming relief from forfeiture when breach is rent arrears

The process for claiming relief from forfeiture varies depending on the nature of the breach. If a landlord forfeits due to rent arrears, where the application for relief is dealt with in the:

  1. County Court, if the forfeiture is by:

    1. court proceedings, the application must be made within six months of the date on which

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Insolvency, declarations of trust, loan agreements, artificial asset protection, sham transactions, transactions defrauding creditors, interspousal asset transfers, change of position defence and wife’s entitlement to share of husband’s assets (Sayers v Dixon)

Restructuring & Insolvency analysis: The court held that six declarations of trust (DoTs) executed by the transferor (Mr Dixon) in favour of his wife (Mrs Dixon) constituted transactions defrauding his creditors within the meaning of section 423 of the Insolvency Act 1986 (IA 1986) and that two of them, purporting to transfer all his future assets and income to Mrs Dixon, along with an accompanying loan agreement, were shams which were void and ineffective. It set aside the DoTs and ordered Mrs Dixon to restore the value of three transferred properties (which had been converted into £551,589 cash) to Mr Dixon’s trustees in bankruptcy (trustees) together with interest of £101,726. It also ordered an account to be taken of the funds that had been transferred to Mrs Dixon or on her behalf by Mr Dixon over the seven years between the date of the DoTs and his bankruptcy. The court dismissed Mrs Dixon’s defence of change of position to the trustees’ claim for restoration, finding that even if such a defence were generally available (which is unclear), she had not acted in good faith and could not rely on it. It also dismissed her defence that, having been married to Mr Dixon for many years, she was entitled to half his assets and/or an entitlement to a share of them by virtue of a right to be maintained. Written by Jonathan Lopian, barrister at New Square Chambers, who acted for the successful claimants.

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