Godfrey v A2 Dominion - possession order not 'a remedy in respect of the debt'

fatbelly

This is an important case for DRO law, and we have been awaiting the result from the Court of Appeal for some time.

I missed it initially when it was published, but the full judgement is here:

http://www.bailii.org/ew/cases/EWCA/Civ/2011/813.html

listed as SHARPLES v PLACES FOR PEOPLE which was a similar case involving bankruptcy.

I'll avoid comment for now but will post again when/if I get any analysis from Shelter or CAB.

debtinfo

so basically, a possession order can still be made because arrears existed, but the order cannot be suspended on condition of payment of those arrears, only on the payment of post bankruptcy arrears or current rent.

so either out straight away or can stay as long as you keep up current rent (at the judges order)

sounds about right

fatbelly

The DRo Unit have now issued guidance:


1. Rent arrears accrued at the date of the application for the DRO are a qualifying debt and should be included in the DRO regardless of whether there is a possession order already in place.
2. When completing the income and expenditure section of the DRO, no allowance should be made for payment of the rent arrears. Where there is a suspended possession order for payment of those arrears, the client should be advised to apply to the court to vary the terms of the order to exclude payment of the rent arrears.
3. Although the landlord no longer has the right to recover any rent arrears included in the DRO, where the client is at risk of repossession if those arrears are not paid, the client can pay the rent arrears out of their surplus income in order to retain their home.

CAB comment is as follows:

There is no guarantee that county courts will (i) suspend any warrant of possession or possession order on payment of current rent only or (ii) vary any existing order to remove the requirement to pay the rent arrears (particularly if landlords object to such orders being made).

Clients who are not eligible for a DRO because they are unable to meet the £50 a month surplus income condition without including rent arrears as an essential expense may chose to use a different option to resolve their financial situation or wait until we see exactly what county courts do in practice. If they do not make the sort of orders envisaged by the Court of Appeal where the discretionary possession grounds apply but, instead, make outright possession orders, then the DRO Unit will have to be urged to change their guidance to allow payment of rent arrears as an essential expense in appropriate cases.