Claim for enfranchisement under Leasehold Reform Act 1967–Question whether property had been tenant’s sole or main residence for five years–Order for discovery–‘Palpable’ failure by applicant to disclose relevant documents–Order under Banker’s Books Evidence Act 1879–Banker’s books revealed dealings by applicant in properties ‘on a surprisingly large scale’–Application by landlords to strike out applicant’s claim for want of prosecution–Application refused by county court judge, but allowed by Court of Appeal–‘Unusual order’ with ‘drastic result’ justifiable in the circumstances
This was an
appeal by Northumberland Court (Streatham) Ltd against a decision of Judge
Willis at Shoreditch County Court on May 9 1978, by which he refused to accede
to an application by Northumberland Court (Streatham) Ltd (the landlords) for
the striking out, for want of prosecution, under Order 14, rule 9 of the County
Court Rules, of an application by Mr Mathias Styles Nwokeji (the tenant) for
enfranchisement of the leasehold property occupied by him at 29 Rectory Road,
London N16.
Lawrence Cohen
(instructed by Clifford Watts Crompton & Co) appeared for the landlords; M
U Egole (instructed by Aka & Co) for the tenant.
Giving the
first judgment at the invitation of Megaw LJ, ORMROD LJ said that the tenant
had held the residue of a lease of 29 Rectory Road, the lease running for 99
years from December 1877. Thus it expired in December 1976. He was minded to
exercise his rights under the Leasehold Reform Act 1967 which, provided that he
complied with the statutory requirements, entitled him to the transfer, at a
very modest price, of the freehold in the property. He applied in the
appropriate way. The landlords put in an answer conceding his entitlement
except for one vital matter: they said that the property had not been his sole
or main residence for a period of five years immediately preceding the
application.
Quite soon
afterwards, in view of the nature of the defence, the county court registrar
made an order for discovery dated June 18 1976. Anyone familiar with legal
proceedings in the county courts and the High Court knew perfectly well that
when such an order was made all relevant documents had to be disclosed, and it
was unnecessary to quote once again the words of Brett LJ in Compagnie
Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11
QBD 55 which made it perfectly clear that documents were relevant not only if
they favoured the case of the person making the discovery, but also if they
tended to weaken or destroy it, and, moreover, they were relevant if they
contained such matters as might lead the other side to a line of inquiry which
would provide them with evidence directly relevant to the issue in the proceedings.
That order was not complied with and the landlords sought an order for specific
discovery. An order was made that the tenant produce within seven days the
following items: his student’s registration and union card; his family
allowance benefit card; all bank statements, pass books, building society books
and documents relating to investments. The action was adjourned until March 10
for compliance with the order. The tenant purported to comply, and submitted a
list of documents which was palpably incomplete.
Shortly before
the hearing on March 10 the landlords discovered in their possession an old
cheque made out by the tenant which had been dishonoured at some time. The
cheque revealed that he had had, at any rate, another bank account which he had
not referred to in his list of documents. That led to an application by the
landlords to the registrar for an adjournment in view of the obviously
defective nature of the discovery. The registrar refused an adjournment and the
matter came before the county court judge. The learned judge thought it right
to adjourn the proceedings again, but this time made an order for an affidavit
of documents and, so their Lordships had been told, gave the tenant the
clearest possible warning of the necessity of complying properly with the
order. The object of this discovery was to discover addresses also used by the
appellant during the five-year period, and any other property interests he
might have. Again, the affidavit of documents was produced, and was on the face
of it hopelessly defective.
Having written
innumerable letters trying to get better discovery from the tenant, the
landlords then decided to use the Banker’s Books Evidence Act 1879. They
applied for, and got, an order under that Act on October 28 1977. As a result
of their inquiries at the bank a good deal of information emerged. It became
immediately clear that the tenant had been dealing in property on a
surprisingly large scale and was using, to put it neutrally, other addresses
than that at 29 Rectory Road for the purpose of his correspondence with the
bank. It was quite plain now that there must be a very considerable case for
saying on the documents that at some period during the five relevant years the
tenant was certainly living part of the time, at any rate, at another address,
39 Hale Drive, London NW7. In those circumstances every document which could be
relevant to the occupation, residential or otherwise, of that address, and
every document relevant for the same reasons to 29 Rectory Road, should have been
produced. Yet there was not here a single reference to a rate demand, receipt
for rates, electricity or telephone bill, or any other of the obvious things
which people living at an address would have, and which would go some way, at
any rate, to establish a case that the individual was living at the address
shown.
In the early
stages the tenant might have been able to argue that he had not understood the
extent of the order or its full implication; but time had passed, and every
conceivable effort had been made by Judge Lipfriend and the landlords’
solicitors to make it plain to the applicant and his legal advisers what they
were required to do. All those efforts had been entirely in vain, though the
documents were of crucial importance to the proper, fair and just disposal of
the tenant’s application.
The evidence
from the bank strongly suggested that the tenant and his wife obtained a
mortgage from a building society in respect of 39 Hale Drive. If they did, they
would have had to state whether or not it was intended for their own occupation
as a home. That would obviously go a very long way to resolving the case one
way or the other.
Mr Cohen
recognised that a party appealing from the exercise of a discretion in the
court below was never in an easy position; but here there had been the most
flagrant failure to comply with successive orders for discovery and successive
requests for further information and discovery of documents. This discovery was
crucial to the just disposal of the case. It was very unusual for a court to
make an order under Order 14, rule 9 which had the drastic result of dismissing
the applicant’s claim for want of prosecution. But if ever there was a case in
which that power should be exercised, this seemed to be it.
BRIDGE and
MEGAW LJJ gave concurring judgments.
The tenant’s
application was dismissed for want of prosecution. The landlords were awarded
their costs in the Court of Appeal and below.
