Tenants obtain relief against forfeiture upon numerous conditions, some to be performed only in the future–Landlords held to have the right to proceed in the meantime against squatters for possession–Uncertainty as to tenants’ status during interim period reflected in dissenting judgment of MacKenna J
This was an
appeal by City of Westminster Assurance Co Ltd from a decision of Cusack J in
chambers on January 21 1975 refusing to make an order for possession of 17
Upper Grosvenor Street and 19 Culross Street, London W1, against the
respondents, Mr Michael Ainis and 12 other named people and other persons
unknown.
Mr M Horowitz
(instructed by Titmuss, Sainer & Webb) appeared for the appellants, and Mr
C R Chope (instructed by P Kingshill) represented the respondents.
Giving
judgment, CAIRNS LJ said that the respondents were squatters, but none of the
types of issue which commonly arose under order 113 of the Rules of the Supreme
Court arose in this case at all. The sole question was whether the appellants
had a right to bring these proceedings, or whether the party who could have
brought them was a different company. The freeholders of the premises whose
possession was disputed were the Grosvenor Estate, and the appellants were
their lessees. In 1969 the appellants sublet the premises for a term of 66
years, and in November 1973 that sublease was assigned to a company called
International Colloids Ltd. The latter were not satisfactory tenants. They
failed to pay their rent; failed to pay for insurance, as the sublease imposed
a covenant upon them to do; and failed to keep the premises in repair in
compliance with another covenant in the sublease. Accordingly, on August 7 1974
the appellants issued a writ for possession against them for nonpayment of rent
and for breaches of covenant. There was no appearance to the writ, and the
appellants got judgment for possession against International Colloids in
default of appearance.
International
Colloids, as they were entitled to do, then applied for relief from forfeiture.
Their application came before Master Elton on December 18 1974, when he made an
order of some complexity. It was ordered that if International Colloids
complied with certain conditions they were to be relieved from forfeiture. The
first set of conditions was for payment of four different sums forthwith. Then
there were conditions as to reinstatement of a garage on or before March 1
1975; putting the premises in repair before September 1 1975; payment of various
items of costs, 14 days after taxation or agreement, the final item of costs
being costs in connection with the occupation of the premises by squatters, it
being common ground that at that time there were squatters on the premises; and
payment of certain surveyors’ fees. The order went on to provide that if the
conditions were complied with, the first and second defendants (the second
defendant was a guarantor of payment of rent and compliance with the covenants
in the sublease) should be relieved from forfeiture, and the lease reinstated
and all further proceedings stayed, ‘but if default is made the plaintiffs’
judgment herein as against the first defendant dated November 11 1974, and as
against the second defendant dated November 15 1974, do stand, and the
plaintiffs be at liberty to proceed to execution on the said judgments.’ It was further ordered that ‘on default of
the defendants complying with any of the above terms at the time specified the
defendants’ application for relief be dismissed with costs.’ The defendants did comply with the terms as
to payment forthwith of a number of substantial sums, but so far as appeared
the time for compliance with any of the other conditions had not arisen.
Certainly the time for compliance with the condition that was to be performed
by March 1 had not yet arrived, and the condition to be complied with by
September 1 would not arise for another seven months. After the making of the
order for relief, the appellants issued their originating summons against the
present respondents, the squatters, on December 24 1974. What was contended
before the judge when those proceedings came before him was that because of the
order for relief against forfeiture the party entitled to possession of the
premises was International Colloids and not the appellants. Cusack J accepted
that submission and declined to make an order for possession.
The position
as to how a lease stood when an order for relief against forfeiture had been
made but was conditional on a term to be complied with in the future was not
clearly dealt with in any of the authorities. Certain things were plain. The
issue of a writ for possession on the ground of forfeiture did not terminate
the lease: the lease was not terminated until judgment was given for
possession. When such judgment had been given, however, the termination related
back to the date of the writ. But what about the position when relief was
granted? It was stated in Woodfall on
Landlord and Tenant 27th edn vol 1 para 1959 that ‘when relief is granted
the effect is for all purposes and between all parties to do away with the
forfeiture just as if there had never been any.’ The authority for that proposition was Dendy
v Evans [1910] 1 KB 263. That was, however, a case where the order for
relief took effect immediately upon the order being made, there being no future
conditions to be complied with. The only case to which the court had been
referred in which he (his Lordship) had found some guidance on the matter was
that of Talbot v Blindell and Others [1908] 2 KB 114. The
headnote read:
‘Where an
order granting relief against the forfeiture of a lease was expressed to be
made upon the defendants performing certain conditions, and the defendants
having performed part of the conditions declined to perform the remainder and
desired to waive the relief: Held that there was no power to compel the
defendants to perform the conditions, and that the order for relief must
therefore be treated as abandoned.’
In the
judgment of Walton J appeared the sentence: ‘The result is, I think, that I
must agree with the construction put on the order by the defendants.’ In his (Cairns LJ’s) view, that was a proper
construction. If defendants who had obtained conditional relief declined to perform
the conditions, the order for relief fell to the ground. In the meanwhile,
until the time came for the performance of any future conditions, the
defendants, if they remained on the premises, were there not as tenants under
the lease but as tenants at will or on sufferance. That being so, his view
would be that, subject to any particular terms of the order covering the
interval between the making of the order and compliance with the conditions, it
was the plaintiffs who were entitled to possession, and if there was somebody
in possession other than the plaintiffs they were entitled to take proceedings
to have them ejected. He (his Lordship) confessed that his opinion on the
matter had at one stage fluctuated, when the court’s attention was drawn to the
words in the master’s order, ‘that if default be made the plaintiffs’ judgment
herein do stand and that the plaintiffs be at liberty to proceed to execution
on the said judgment.’ It was quite
possible to construe that as meaning that until default took place the
plaintiffs were not at liberty to proceed to execution and accordingly not
entitled to possession. But in the end it was the last phrase of that
proposition that he did not accept. He did not regard that provision of the
master’s order as being any more than a fetter upon the actual execution of the
judg-
certainly if the premises were vacant at any time between the making of the
order giving relief and compliance with the conditions, the plaintiffs would be
entitled to go in and occupy the property themselves. If there was in
occupation some person or some body of persons who had not been given leave by
anybody to go in there, then he thought that the plaintiffs had such a right to
possession as entitled them to bring an action for possession and to succeed
upon it. For these reasons he would allow the appeal and make the order for
possession claimed.
Agreeing,
LAWTON LJ said that he inferred from the facts of the case that at about the
time the plaintiffs got an order for ejectment against their tenants on
November 11 1974 the premises were in fact empty, because if they had not been
empty the squatters, who numbered 15 and more, could not have gone into
occupation. So long as the order for ejectment stood, the plaintiffs had the
right to possession. The best the tenants could hope for was some kind of
conditional order. Before the passing of the Common Law Procedure Act 1852, the
only relief they could have got was to apply to the Court of Chancery for a
stay of execution. Such an order would have taken the form of an injunction
merely restraining the plaintiffs from levying execution against the tenant, in
other words from putting the sheriff in or seeking by processes of law to
enforce their order. That, before 1852, would have been the only limitation
which the law imposed on them, and he (his Lordship) could see nothing in the
statutory provisions since 1852 relating to forfeiture which really altered the
position. The effect of Master Elton’s order had been to impose a fetter on the
plaintiffs’ right to possession against the tenant. But it was a fetter imposed
solely in favour of the tenant. It was not a fetter imposed in favour of the
world at large. The respondents in the present appeal, the squatters, were
third parties, and as against them he (Lawton LJ) could see no reason at all
why the appellants should not be entitled to enforce the right to possession
which was given them by the order for ejectment. But for the words in Master
Elton’s order, namely ‘that the plaintiffs be at liberty to proceed to
execution on the said judgment,’ he would have thought it clear beyond argument
that what the master was intending to do was to restore the plaintiffs to their
rights as lessees on the happening of certain events in the future, and that
until those events had happened the defendants were not to have the right of a
lessee. He could see nothing wrong in that kind of order. He agreed that the
appeal should be allowed.
Dissenting,
MACKENNA J said that the question was whether, at the date when proceedings
were commenced by the appellants against the squatters, that company had a
right to immediate possession of the premises. The answer to that question
depended on the effect of Master Elton’s order. The effect of the last words of
the order was that the appellants should not be permitted to proceed to
execution on the judgments of November 11 and November 15 until default had
been made in the performance of the conditions. He (his Lordship) did not doubt
that the master had the power to make the second part of his order, and he
thought that its effect was to give International Colloids the right to
immediate possession. If that were so, the appellants were not entitled to
bring proceedings against the squatters on December 24. It would be curious if
International Colloids were not entitled under the master’s order to have a
right to the immediate possession of the premises. If they performed the
conditions of the order, the forfeited lease would be reinstated as from the
beginning, and that would carry with it the appellants’ right to be paid rent
in respect of the whole period during which the conditions were being
performed. The provisions of the master’s order about payment of the
appellants’ cost in taking proceedings against the squatters were no doubt
inserted upon the assumption that proceedings would be taken by the appellants,
and upon the further assumption that they would be the right plaintiffs, but he
(MacKenna J) thought that this further assumption was a mistake. In his opinion
Cusack J’s order refusing leave to the appellants was right, and the appeal
should be dismissed.
The appeal
was allowed, and the court made an order for possession forthwith. The
respondents were directed to pay the costs.