The Court of Appeal has granted permission to appeal in a case which will consider whether a landlord who has successfully brought possession proceedings against its former tenant is prevented from starting a new claim on the same grounds to recover mesne profits from that former tenant. Lord Justice Irwin's reasoning for granting the appeal has now been published.

The landlord wanted to recover damages

Originally Leongreen Limited, the landlord, brought successful possession proceedings against its former tenant, Mr Farrar. Although no claim for money was made in those possession proceedings, Leongreen’s solicitors expressly put Mr Farrar on notice that a further claim for recovery of damages might follow. Leongreen Limited then started a second claim for mesne profits (damages for use and occupation). Both claims were based on the same cause of action, namely trespass by Mr Farrar. Mr Farrar appealed against the second decision, relying on the doctrine of merger. Other grounds of appeal were dismissed by the Court of Appeal judge.

The doctrine of merger

The doctrine of merger treats a cause of action as extinguished once judgment is given on it. The claimant’s rights under the cause of action become those rights which are granted by the judgment. Any subsequent claims under the same cause of action are merged with the first and will be struck out.

Outlook

If it is found that a landlord cannot follow possession proceedings with proceedings to recover money, this could create even greater delays in possession proceedings. Landlords would have to consider all remedies which they wish to seek, and justify these in a claim form, before they could “get the ball rolling” on possession. While Lord Justice Irwin did not comment on the appeal’s likelihood of success, he stated that this is at least arguably a strict principle of law which should be decided by the Court of Appeal.

The Court of Appeal hearing is scheduled for December 2017.

Co-authored by Ishbel Mackenzie.