In the appeal hearing Kirsty Valentine of the Alma in Islington, London, also accused Enterprise of misleading her into signing a rent review.
In addition she put in a counterclaim saying the pubco subsequently breached its code of practice. The case took place between 9 and 10 April.
Clerkenwell & Shoreditch County Court heard that when a rent review took place in 2007, Valentine was led, she claims, to believe that the rent calculations had taken into account a disregard of £9,000 per annum, equating to a net annual difference of £4,500 per annum.
A disregard means that physical developments of the property should be taken off the rent — Valentine had spent £90,000 making improvements to the pub.
Her barrister Tony Verduyn told the court: “Our case is that we would not have agreed to that level of rent had the disregard been properly taken into account. Therefore, it was a misleading statement.”
Valentine called for her damages resulting from the alleged failure to properly take account of the disregard to be ‘set off’ against the rent claimed by Enterprise, who said that Valentine had been underpaying rent for a “significant amount of time”.
Adam Rosenthal, the barrister for Enterprise, argued that Valentine is not entitled to a set-off because of an anti-set-off clause written into the lease.
This latest hearing followed an initial district court hearing where possession of the Alma was awarded to Enterprise after the pubco claimed forfeiture of the lease on grounds of rent arrears.
Valentine’s defence to being in rent arrears was struck out by a district judge in May 2012.
The PICA-Service judgement on Valentine’s case found Enterprise not to have breached its code of practice, nor to have acted contrary to the spirit of the code.
A judgement on the appeal case is due on 2 May.
Code of practice: Will it become binding in statute?
In relation to Enterprise’s code of practice, both parties agreed that it was binding in the context of the case.
However, Enterprise Inns barrister Adam Rosenthal later said: “The code of practice doesn’t have any binding force [in statute]. It is accepted voluntarily by the landlord pending legislation to what otherwise is a voluntary code. This is a voluntary concession that the landlord has agreed to offer to the tenant.
“At the moment, the binding nature of the code of practice is in relation to its enforcement by the PICAS body and the rules of that body give the tenant a remedy.
“It is in that body that the tenant has the ability to seek redress.
“That might change if legislation creates a statutory duty on the part of the landlord.”