Subsequent rent-adjustment agreement and the bar under section 8(2) of Law 23/1983

Adalena Court Ltd v. Antonis Savva and Adalena Court Ltd v. Kyprianos Katsouris, Consolidated Applications Nos. K1/2022 and K2/2022, Rent Control Court of Larnaca–Famagusta (Famagusta Division), judgment dated 8 May 2025

Leave to file a Further Reply under Order 23, rule 2 — Subsequent rent-adjustment agreement and the bar under section 8(2) of Law 23/1983 — Further evidence and equality of arms — The narrow limits of cross-examination in fast-track cases

The facts

In 2022 the landlord company filed two applications for the determination of fair rent against two statutory tenants, which were subsequently consolidated. The tenants, persons of advanced age, handled their cases in person, without a lawyer, for reasons which were essentially financial, and filed their Replies themselves. They appointed counsel only in February 2025, by which time the hearing had already commenced and the cross-examination of the Land Registry valuations officer was pending completion.

Upon counsel taking over the cases, a critical fact emerged which had not been pleaded: after the filing of the Replies, and specifically in June 2023, the parties had agreed an adjustment (an increase of 6%) of the rents in dispute, a fact evidenced by payment receipts and not disputed by the landlord. The tenants filed an interim application seeking leave to file Further Replies so as to plead the agreement and the bar arising from it, leave to adduce further written evidence, and leave to cross-examine the landlord's private valuer. The landlord objected, relying principally on the excessive delay, the advanced stage of the proceedings and the fast-track character of the cases.

The legal issues

1. A Further Reply for a defence arising after the pleadings. The Court applied Order 23, rule 2 of the Civil Procedure Rules, applicable by analogy in the Rent Control Court by virtue of regulations 2(b) and 12(a) of the Rent Control Procedural Regulations of 1983, which permits the filing of a further defence in respect of a ground of defence arising after the delivery of the defence, within fifteen days or, thereafter, with the leave of the Court (Famiro Shipping Company Ltd v. Ami Knitting and Clothing Industries Ltd (1989) 1 C.L.R. 741, Cyber Group Ltd v. Charalambides (2004) 1 C.L.R. 1852). The rent-increase agreement, concluded while the applications were pending, constituted precisely such a subsequently arising ground of defence.
2. The substantive weight of the issue to be pleaded — section 8(2) of Law 23/1983. Decisive for the exercise of the Court's discretion was the importance of the issue which the tenants sought to plead: under the proviso to section 8(2) of the Rent Control Law, no application for the determination of fair rent may be filed before the lapse of two years from the date of the last increase or reduction of the rent. Pleading the intervening agreement was therefore a necessary precondition for the examination of the tenants' contention that the landlord was, by its own conduct, barred from pursuing the applications.
3. Delay, justification and the balancing of prejudice. The Court accepted that, for applications made after the commencement of the hearing, the discretion is exercised sparingly, only where the delay is justified and the prejudice to the other side is weighed. In the present case the delay was sufficiently justified: the self-represented litigants were unaware of the procedural need to plead the agreement, a need identified only upon the appointment of counsel. It was also critical that the landlord faced no new factual issue, the conclusion of the agreements was not disputed, and their legal consequences were a purely legal question. Finally, given that the judicial determination of rent operates retrospectively from the date of filing of the application (section 8(3)), no irreparable prejudice was established which could not be remedied by an award of costs.
4. Further evidence and equality of arms. Consequent upon the grant of leave for the Further Replies, leave was also granted for further written evidence, strictly confined to the issue of the rent-adjustment agreements. On the basis of the principle of equality of arms, parallel directions were issued for supplementary evidence by the landlord as well, within tight deadlines securing the prompt completion of the proceedings.
5. Cross-examination as the exception in fast-track cases. The outcome was different as regards the request to cross-examine the private valuer. The Court recalled that Order 30 requires the presentation of evidence in writing and the speedy administration of justice, oral cross-examination being available only exceptionally, sparingly, and solely for the clarification of the written evidence (Ironfx Global Ltd v. Chr. Alexandrou & Sons Ltd, Civil Appeal No. 338/16, judgment dated 23.3.2017). The general and vague reference to the "comparable lettings", without specification of the particular points of the valuation report requiring clarification, did not meet the required standard and the request was refused.

The outcome

The application was granted in part: leave was given for the filing of Further Replies and for the adduction of further written evidence on both sides, within strict deadlines, while the request for cross-examination of the valuer was refused. Costs were ordered to follow the outcome of the main applications, with the express proviso that in no event would they burden the tenants. The tenants, following their instruction of counsel, were represented by our firm.

Significance of the judgment

The judgment is of practical interest for three (3) main reasons.

First, it highlights an often-overlooked trap in rent control disputes: an agreement adjusting the rent concluded while an application for the determination of fair rent is pending is not a neutral event. In view of the two-year bar under section 8(2) of Law 23/1983, it may operate as an impediment to the pursuit of the application, provided it is pleaded in time and in the proper manner. Landlords and tenants alike must weigh the procedural consequences of any interim agreement.

Secondly, it confirms that the commencement of the hearing is not an insurmountable obstacle to supplementing the pleadings where the new issue arose after the pleadings closed, is material to the fair disposal of the case, is not disputed as a fact, and any prejudice to the other side can be remedied in costs. The judgment also serves as a reminder of the understanding shown by the courts towards self-represented litigants: ignorance of procedural requirements, where explained in good faith, may justify delay, though this in no way diminishes the importance of obtaining legal advice in good time.

Thirdly, it clearly delineates the right of cross-examination in fast-track cases: it is the exception and not the rule, and its invocation requires specific identification of the points requiring clarification. Generalised requests, however well-intentioned, do not suffice.

This text is intended for general information purposes only and does not constitute legal advice. For any information regarding the judgment or for tailored guidance, please contact our firm.