Landlord and Tenant Act 1954, Part II, section 24A — Landlords’ claim for interim rent — Tenants’ answer to landlords’ application pursuant to section 24A struck out by county court judge as an abuse of the process of the court — Tenants’ appeal — Whether judge was justified in striking out answer
number of procedural steps following tenants’ application for a new tenancy of
business premises, and repeated applications by landlords for interim rent, the
county court judge ordered the interim rent application to be consolidated with
the other applications — There followed a lengthy delay which ended with a
letter from the tenants stating that they were not in occupation — Some two
months later the tenants’ application for a new tenancy was dismissed — Later
the court ordered the tenants to file an answer to the landlords’ claim for an
interim rent and the landlords to file a reply — This order brought forth the
answer from the tenants which the judge struck out — The answer asserted that
the court had no jurisdiction to determine an interim rent, that the tenants
had no tenancy after the expiry of their original lease, and that they were not
in occupation of the whole or any part of the premises — In their reply the
landlords gave a large number of reasons why in their opinion the court had
jurisdiction
landlords submitted that the parties’ course of conduct gave rise to an
estoppel by convention which precluded the tenants from asserting matters
inconsistent with the proposition that at all material times they were in
occupation of business premises to which Part II of the 1954 Act applied — The
landlords also submitted that the tenants could not be allowed to approbate and
reprobate by applying for a new tenancy and then denying its existence — The
tenants’ argument appeared to be that, as their answer had denied that any
tenancy within Part II of the Act had existed at any relevant time after the
expiry of their original lease, the court had no jurisdiction to consider
tenants’ own application for a new tenancy and accordingly there was no
material on which the court could have concluded that their answer was an abuse
of process and deserved to be struck out — There was no support on the
pleadings for any estoppel by convention — The tenants relied on Amalgamated
Investment & Property Co Ltd v Texas Commerce International Bank Ltd
issue on the appeal was whether the judge was correct in deciding that the
tenants’ answer was an abuse of process and ought to be struck out — The court considered
a number of cases and concluded that the judge’s action was justified — As to
the estoppel by convention point, the court was inclined to think that,
although it was strongly supported by the pleadings, the judge should probably
have ordered an issue to be tried and evidence heard on the matter — However,
on the broader general principle that the law does not allow a party to
approbate and reprobate, the judge’s ruling was clearly right — The position
was that the tenants invoked the assistance of the court and persisted for more
than four years in an application for a new lease pursuant to the 1954 Act,
asserting thereby that they had a tenancy for the purpose of Part II — It was
an abuse of the process of the court then to declare that they never had a
tenancy to which Part II applied, hoping by that means to defeat the landlords’
claim to an interim rent — Appeal dismissed
The following
cases are referred to in this report.
Amalgamated
Investment & Property Co Ltd (in liquidation) v
Texas Commerce International Bank Ltd [1982] QB 84; [1981] 3 WLR 565;
[1981] 3 All ER 577, CA
Artoc
Bank & Trust Ltd v Prudential Assurance Co
plc [1984] 1 WLR 1181; [1984] 3 All ER 538; (1984) 50 P & CR 65; [1984]
EGD 184; 271 EG 454, [1984] 2 EGLR 98
Dutton v Sneyd Bycars Co Ltd [1920] 1 KB 414; (1920) 89 LJKB 85;
122 LT 333, 36 TLR 54; 34 Digest (Repl) 681
Keen v Holland [1984] 1 WLR 251; [1984] 1 All ER 75; (1984) 47 P
& CR 639; [1984] EGD 9; 269 EG 1043, [1984] 1 EGLR 9, CA
Langford
Property Co Ltd v Goldrich [1948] 2 KB 423;
[1948] 2 All ER 439
Watkins v Emslie (1982) 261 EG 1192, [1982] 1 EGLR 81
This was an
appeal by Jalaram Ltd, who had been tenants of business premises at 270 Upper
Tooting Road, London SW17, from the order of Judge Hunter, at Wandsworth County
Court, that the appellants’ answer to the respondent landlords’ originating
application for interim rent under section 24A of the Landlord and Tenant Act
1954 be struck out as an abuse of the process of the court. The respondent
landlords were Henry Jules Benedictus, Joseph Elias Spencer Ricardo (deceased)
and George Emille Coopman.
Mrs Reziya
Harrison (instructed by Robert Thompson & Partners) appeared on behalf of
the appellants; Charles Douthwaite (instructed by Denton Hall Burgin &
Warrens) represented the respondents.
Giving
judgment, STOCKER LJ said: This is an appeal from the order of His Honour Judge
Hunter given in the Wandsworth County Court and dated February 3 1988 ordering
that the answer of the appellant tenants, Jalaram Ltd, to respondent landlords’
originating application for interim rent pursuant to section 24A of the
Landlord and Tenant Act 1954 be struck out as an abuse of the process of the
court. I will in this judgment refer to the appellants and the respondents
respectively as ‘the tenants’ and ‘the landlords’. The tenants now seek an
order that the matter be restored to the Wandsworth County Court for
determination on evidence of the issues raised in their answer. There is a
respondents’ notice relating to one aspect of the tenants’ grounds of appeal.
The
application to strike out formed part of the landlords’ application for interim
rent and was dealt with as a preliminary point. This appeal is concerned with
that preliminary point.
The dispute
concerns business premises at 270 Upper Tooting Road, London SW17. These
premises were let initially to H R Gompers Ltd by a lease dated May 17 1961. At
some unascertainable date prior to 1979 the lease was assigned to the tenants.
The lease expired on March 25 1982. The landlords are trustees. It seems that
they have now sold their freehold interest to purchasers on November 3 1987 and
it is this aspect of the matter upon which the respondents’ notice relates.
It will be
convenient at this stage to set out a procedural history of the proceedings between
these parties. The proceedings commenced
on February 1 1984. The proposals as to rent payable under the new tenancy were
that a new lease should be granted for a term of 14 years at a rental of £3,500
exclusive for the first seven years of the term. On March 1 1983, again upon
the statutory form, the landlords gave notice that they would oppose the
tenants’ application to the court under Part II of the Act on the following
grounds:
(a) failure to comply with obligations with
regard to keeping the tenancy in good repair;
(b) persistent delays in paying rent;
(c) failure to comply with the notice under
section 40 of the Act. Furthermore, it was said that the terms proposed for a
new lease were not acceptable.
On April 25
1983 the landlords, by originating application, applied to the court for the
court to determine the rent which would be reasonable for the tenants to pay
from the date thereof until the respondents’ application for a new lease was
finally disposed of pursuant to section 24A of the Act. It is that application
which came before the court when the answer of the tenants was struck out as an
abuse of process. On June 15 1983, again upon the appropriate form, the tenants
applied to the court for the grant of a new tenancy pursuant to Part II of the
Act. They stated the following as particulars of their current tenancy of the
premises; they state the address of the premises, the details of the original
lease and the dates of its expiration by effluxion of time: by para 2(g) of the
particulars they were asked to state ‘Nature of the business carried on by the
tenant in the premises’ and gave the answer ‘General Store’, and by para (2)h
to the question ‘Whether any and, if so, what part of the property comprised in
the tenancy is occupied neither by the tenant nor by a person employed by the
tenant for the purposes of the business carried on by the tenant in the
premises’, they answered ‘No’. Under para 4, asked to state ‘Where the current
tenancy has been terminated by a tenants’ request for a new tenancy, . . . the
date of the making of the request’ they answered ‘February 11 1983’, that being
a reference back to their earlier request.
On September 9
1983, again upon the appropriate form, the landlords opposed the grant of the
new tenancy on the grounds of persistent delay in paying rent and breach of
repairing covenants. In the alternative they contended that if a new tenancy
were granted they objected to its being granted on the terms proposed by the
applicant and said that their counter-proposals were that the period should be
three years and the rent £8,000 pa with other terms to be decided later. They
answered a question on the form about the persons who were to their knowledge
likely to be affected by the grant of a new tenancy with ‘this information is
only known to the applicants’. They repeat a claim for interim rent pursuant to
section 24A of the Act which they had earlier made by originating application
on April 25 1983. On September 12 1983 the court ordered that the landlords’
application for interim rent should be consolidated with the other applications.
Nothing then
transpired for a long time, but it seems that on April 23 1987 the tenants
wrote a letter to the landlords saying that they, the tenants, were not in
occupation. The relevant part of this letter reads:
Jaralam Ltd
are not in occupation of the property, there are other subtenants and
consequently Jaralam are not entitled to a new tenancy under the Landlord and
Tenant Act and are not a tenant of the property. Your clients must therefore
look to the subtenants for the rent.
On June 30 1987
the tenants’ application for a new lease was dismissed. It was ordered that the
landlords’ application for interim rent be adjourned to a date to be fixed and
that experts’ reports should be exchanged. The tenants did not appear on that
occasion. On September 18 1987 the court ordered that the tenants file an
answer to the landlords’ claim for interim rent and that thereafter a reply by
the landlords be filed. In pursuance of that order the tenants duly filed an
answer, dated September 25 1987, which raised the following contentions:
1 This court has no jurisdiction to determine
an interim rent in respect of the above premises, by reason of the fact that we
have at no material time after the expiry of the lease dated May 17 1961 of the
said premises on March 25 1982 had a tenancy thereof to which Part II of the
above Act has applied.
2 In particular and without prejudice to the
generality of the foregoing, we were not in occupation of the whole or any part
of the said premises either for the purposes of a business carried on by us or
for the purposes of such a business and other purposes:
(a) as at March 25 1982;
(b) at the date of the commencement of the
applicants’ action herein for interim rent;
(c) at the date of the first hearing of the
applicants’ first application for interim rent on September 18 1987 or
(d) at the date hereof.
This was the
answer which the learned judged ordered to be struck out. It is to be noted
that the tenants did not there specifically aver that they were not in
occupation at the date of their application for a new tenancy.
In pursuance
of the order the landlords duly filed a reply. They contended that the court
had jurisdiction to determine an interim rent:
. . . by
reason, inter alia, of the following facts and matters:
(i) the provisions of section 26 of the said
Act;
(ii) the provisions of section 64 of the said Act;
(iii) the [tenant’s] request by its solicitors and
agents for a new tenancy of the premises pursuant to section 26 of the said Act
and dated February 11 1983;
(iv) the [tenant’s] application by its directors
and solicitors for a new tenancy to this Court dated June 15 1983;
(v) the [tenant’s] representations therein that
no part of the property comprised in the tenancy was occupied neither by the
[tenant] nor by any person employed by it for the purposes of a business
carried on by the tenant in the premises;
Pausing there,
those five assertions are matters to be derived from the applications and
documents in the proceedings and were on the court file. The landlords further
particularised the basis upon which the court had jurisdiction in the following
way:
(vi) by the [tenant’s] failure to reply to a
request for information made pursuant to section 40 of the said Act;
(vii) by the [tenant’s] solicitors’ written enquiry
dated September 13 1985 as to whom future rent should be paid;
(viii) by the [tenant’s] purported willingness
to discharge arrears of rent and to agree a new rent for the premises contained
in their solicitors’ letter dated September 23 1985; and
(ix) by their failure between April 25 1983 and
September 18 1987 to take any point on the jurisdiction of the court.
It is further
pleaded that by reason of those matters it was the landlords’ contention that
the court had jurisdiction to determine interim rent:
(a) as a matter of law;
(b) as a matter of fact; and
(c) by consent of the parties express or implied.
By para 3 of
the reply they plead an estoppel, the particulars of which, so far as is
relevant to this appeal, were stated to be that they repeated subparas (iii) to
(ix), which have already been recited, and contended that those matters:
constituted
and/or form part of a course of dealing between the parties in which they have
both acted upon an agreed assumption that a particular state of facts is true,
namely, that the respondent was in occupation of the premises or part thereof
for the purposes of a business carried on by the respondent.
By para 4 they
pleaded:
For the
avoidance of doubt it is denied that the [tenant] was not in occupation of the
premises as alleged at all material times between March 25 1982 and June 15
1983. No admissions are made as to any subsequent date.
By para 5 the
landlords stated that they would apply at trial to strike out the tenants’
answer as being embarrassing to the landlords and an abuse of the process of
the court. It was upon para 5 that the learned judge made his preliminary
ruling and struck out the tenants’ answer. There was no independent application
to strike out, but the learned judge dealt with it on the basis of that
pleading.
It is now
convenient to refer to the relevant statutory provisions under the Landlord and
Tenant Act 1954. They are sections 23, 24, 24A, 26, 30 and 64 contained in Part
II of the Act, the heading of which is ‘Security of Tenure for Business,
Professional and Other Tenants’:
23. — Tenancies to which Part II applies
(1) Subject to the provisions of this Act, this
Part of this Act applies to any tenancy where the property comprised in the
tenancy is or includes premises which are occupied by the tenant and are so
occupied for the purposes of a business carried on by him or for those and
other purposes.
. . .
24. — Continuation of tenancies to which Part II applies and grant of
new tenancies
(1) A tenancy to which this Part of this Act
applies shall not come to an end unless terminated in accordance with the
provisions of this Part of this Act; and, subject to the provisions of section
twenty-nine of this Act, the tenant under such a tenancy may apply to the court
for a new tenancy —
(a) if the landlord has given notice under
section twenty-five of this Act to terminate the tenancy, or
(b) if the tenant has made a request for a new
tenancy in accordance with section twenty-six of this Act.
. . .
24A. — Rent while tenancy continues by virtue of section 24
(1) The landlord of a tenancy to which this Part
of this Act applies may, —
(a) . . .
(b) if the tenant has made a request for a new
tenancy in accordance with section twenty-six of this Act;
apply to the
court to determine a rent which it would be reasonable for the tenant to pay
while the tenancy continues by virtue of section twenty-four of this Act, and
the court may determine a rent accordingly.
. . .
26. — Tenant’s request for a new tenancy
(1) A tenant’s request for a new tenancy may be
made where the tenancy under which he holds for the time being (hereinafter
referred to as ‘the current tenancy’) is a tenancy granted for a term of years
certain exceeding one year, whether or not continued by section twenty-four of
this Act, or granted for a term of years certain and thereafter from year to
year.
(2) A tenant’s request for a new tenancy shall be
for a tenancy beginning with such date, not more than twelve nor less than six
months after the making of the request, as may be specified therein . . .
(3) A tenant’s request for a new tenancy shall
not have effect unless it is made by notice in the prescribed form given to the
landlord and sets out the tenant’s proposals as to the property to be comprised
in the new tenancy (being either the whole or part of the property comprised in
the current tenancy), as to the rent to be payable under the new tenancy and as
to the other terms of the new tenancy.
. . .
30. — Opposition by landlord to application for new tenancy
(1) The grounds on which a landlord may oppose an
application under subsection (1) of section twenty-four of this Act are such of
the following grounds as may be stated in the landlord’s notice under section
twenty-five of this Act or, as the case may be, under subsection (6) of section
twenty-six thereof . . .
and there are
set out a number of grounds upon which the landlord may oppose an application
for a new tenancy by the tenant.
64. — Interim continuation of tenancies pending determination by
court
(1) In any case where —
(a) a notice to terminate a tenancy has been
given under Part I or Part II of this Act or a request for a new tenancy has
been made under Part II thereof, and
(b) an application to the court has been made
under the said Part I or the said Part II, as the case may be, and
(c) apart from this section the effect of the
notice or request would be to terminate the tenancy before the expiration of
the period of three months beginning with the date on which the application is
finally disposed of,
the effect of
the notice or request shall be to terminate the tenancy at the expiration of
the said period of three months and not at any other time.
Subsection (2)
deals with the effect upon the timings of appeal procedures.
I now turn to
consider the issues raised on this appeal.
The landlords
contend that although the procedures were commenced by originating application
the application and the notices served in opposition constitute pleadings in
the proceedings and that upon the face of the pleadings the parties adopted a
course of conduct which gave rise to an estoppel by convention which precluded
the tenants from asserting matters inconsistent with the proposition that at
all material times the tenants were in occupation of business premises to which
the provisions of Part II of the Act applied and that the landlords acted
throughout in accordance with this course of conduct. Further, alternatively,
that the tenants by their application for a new lease, in the knowledge that an
application for interim rent would be or had been made, elected to pursue that
course and cannot now pursue an alternative and inconsistent course seeking to
defeat a landlord’s claim for interim rent by the assertion that no tenancy
existed at any material time and that they cannot approbate the proceedings by
applying for and pursuing a claim for a new tenancy and thereafter reprobate by
denying the very existence of a tenancy upon which that claim must depend.
The tenants
contend that various applications and documents in the proceedings do not
constitute pleadings or that if they did they ceased to have that effect by
reason of the order of June 30 1987 dismissing the tenants’ claim for a new
lease and that in any event an estoppel can only be founded upon evidence, and
that none was tendered by the landlords or permitted to be tendered by the
tenants, and that as a general proposition the parties cannot by agreement,
waiver or estoppel confer upon the court a jurisdiction which it did not
possess, since there was no tenancy in existence within the terms of section 23
of the Act.
Grounds of
appeal
The grounds
particularised in support of the contention that the judge was wrong in law
under paras 1 and 2 of the notice of appeal raise in different forms points of
pleading. On behalf of the tenants, if I have correctly understood their
argument, it is said that since by their answer they have denied that any tenancy
within the meaning of Part II of the Act existed at any relevant time after the
termination by effluxion of time of the original lease the court has no
jurisdiction to consider the tenants’ application for a new lease and that
accordingly in the absence of any evidence there was no material before the
court upon which the court could have come to the conclusion that the answer
was an abuse of the process of the court and should be struck out, and that in
particular this contention could not be supported by any pleadings or the
conclusion to be drawn from any pleadings and that therefore there was no
support at all upon the pleadings for any estoppel by convention. They rely
upon the case of Amalgamated Investment & Property Co Ltd v Texas
Commerce International Bank Ltd [1982] QB 84.
The first
argument put forward in support of the tenants’ contention was that there were
no ‘pleadings’ and that even if the documents in the proceedings could be so
regarded the only pleading consequent upon the dismissal of the tenants’
application for a new lease from June 30 1987 was the landlords’ application
for interim rent. It is contended that the effect of this order dismissing the
tenants’ application was to ‘strike out’ the tenants’ applications so that the
sole issue which stood on its own (vide the decision of Falconer J in Artoc
Bank & Trust Ltd v Prudential Assurance Co Ltd [1984] 1 WLR
1181) was the landlords’ application for interim rent and that there was
nothing at all in this which could support a contention of convention estoppel.
They contend that the application for a new lease was struck out in the light
of part of the letter dated April 23 1987 which has already been recited in
this judgment. I can find no substance in this contention. The application was
dismissed, not struck out. The pleadings remain and thus on this point, in my
view, the argument necessarily fails. In any event the letter of April 23 1987
states that the tenants ‘are’ not in occupation; it is silent as to the
position at any other relevant date such as the date upon which the section 26
application was made. It is contended that the request for a new tenancy made
on February 11 1983 did not in any event form part of the pleadings but was
solely a matter of evidence concerning events which occurred before the
application for a new lease was made on June 15 1983. In so far as this
contention adds to the primary submission already referred to I would reject
it, since the request of February 11 was specifically recited in the
application of June 15 and is incorporated into its contents.
A different
but related point arises upon ground 3 in the notice of appeal, that the judge
was wrong in law in holding that the application under section 26 ‘created or
perpetuated the tenancy’. In so far as this submission relates to the tenants’
basic assertion that there never was a tenancy after March 1982 it begs the
question. Clearly if there never was a tenancy no proceedings can themselves
have created or perpetuated one. In so far as this submission might be said to
involve the construction and scheme of the Act itself, it is not disputed that
an application for a new tenancy perpetuates an existing tenancy by virtue of
sections 24(1) and 64 of the Act. It seems to me clear that the scheme of this
part of the Act is to keep in existence any tenancy within section 23 until
three months after the determination or abandonment of an application for a new
lease. I do not therefore propose to analyse further the provisions of the Act
to this effect.
I now turn to
the main issue argued upon this appeal — whether the learned judge was correct
in his conclusion that the tenants’ answer was an abuse of the process of the
court and should be struck out. That as a matter of law he was wrong in this
conclusion is raised by ground 4 of the tenants’ notice of appeal. The basis
upon which the landlords contend that the answer did constitute an abuse of
process is contained in the matters pleaded in their reply and specifically
raised as an estoppel by para 3. These have already been recited in this
judgment. The learned judge proceeded first by reference to the case of Amalgamated
Investment & Property Co Ltd v Texas Commerce International Bank Ltd
[1982] QB 84 and cited from the judgment of Lord Denning MR at p 122:
When the
parties to a transaction proceed on the basis of an underlying assumption . . .
on which they have conducted the dealings between them — neither of them will
be allowed to go back on that assumption when it would be unfair or unjust to
allow him to do so.
He further
cited from the judgment of Eveleigh LJ at p 126F:
Estoppel
operates so as to prevent a party from denying (as the tenant seeks to here) a
representation or an assumed state of facts in relation to the transaction
supported by that representation or assumed state of facts.
The judge then
cited a passage from Spencer Bower and Turner: Estoppel by Representation,
3rd ed (1977), at p 157:
When the
parties have acted in their transaction upon the agreed assumption that a given
state of facts is to be accepted between them as true, then as regards that
transaction each will be estopped against the other from questioning the truth
of the statement of facts so assumed.
The learned
judge found:
That
— that is to
say the facts in the Amalgamated Property case —
may give rise
to an estoppel by convention as it was described in that case but I can find
nothing in that case to suggest the Court must hear evidence if there are
sufficient matters before the Court to bring the case within the principles set
out in Amalgamated Property. I do not find the label ‘by convention’
particularly helpful in this case: it seems to me that what the tenant seeks to
do offends against the principle that a person may not approbate and reprobate
and I note the passage in Halsbury’s Laws, 4th ed, vol 16, para 1507
‘Thus, a plaintiff having two inconsistent claims, who elects to abandon one
and pursue the other may not, in general, afterwards choose to return to the
former claim and sue on it’.
He continued:
The tenant’s
alternative claims are incompatible. He has abandoned one by failing to appear
on June 30 1987 and subsequently making no application to resuscitate it. It
would offend the principle I have just mentioned to allow him now to do so.
It is not clear
to me whether or not the judge was considering election upon inconsistent
claims or the fact that a person may not approbate and reprobate as falling
within the principle of convention estoppel or whether he considered them as
separate matters justifying his conclusion. In my view they are separate and
distinct matters, though leading in this instance to the same conclusion. The
arguments put forward on behalf of the tenants on the issue of convention
estoppel are: (1) the parties cannot by agreement, waiver or estoppel grant the
court jurisdiction which it does not in fact possess; (2) in any event, such an
estoppel must be based upon evidence and cannot be derived from pleadings even
if, contrary to the earlier submission on the pleading points which I have
already considered, such pleadings existed. It is submitted that there was no
evidence whatever to support the estoppel claimed and indeed the tenants were
precluded by the judge from calling such evidence as they desired to do.
As to the
first point, reliance is placed upon passages in Spencer Bower and Turner,
3rd ed, at pp 144-145, which read:
Not even the
plainest and most express contract or consent of a party to litigation can
confer jurisdiction on any person not already vested with it by the law of the
land, or add to the jurisdiction lawfully exercised by any judicial tribunal;
it is equally plain that the same results cannot be achieved by conduct or
acquiescence by the parties. Any such attempt to create or enlarge jurisdiction
is in fact the appointment of a judicial officer by a subject, and as such
constitutes a manifest usurpation of the Royal prerogative. On the other hand
where nothing more is involved than a mere irregularity of procedure or (eg)
non-compliance with statutory conditions precedent to the validity of a step in
the litigation, of such a character that, if one of the parties be allowed to
waive the defect, or to be estopped by conduct from setting it up, no new
jurisdiction is thereby impliedly created and no existing jurisdiction
impliedly extended beyond its existing boundaries, the estoppel will be
maintained, and the affirmative answer of illegality will fail.
Accordingly,
in all cases of the first class, that is, where it is sought by estoppel to
enlarge the jurisdiction of any tribunal of limited jurisdiction, or to confer
jurisdiction on any tribunal or person to whom it is not given by law, it has
been held that it is impossible by contract to achieve these ends contrary to
the provisions of a statute; and similarly no estoppel can be invoked to
produce a similar result. In the second class, in which the representation is
set up merely as a remedy for an irregularity in procedure, it has been held
that this end may be achieved by estoppel or waiver.
Mrs Harrison
on behalf of the tenants has cited to the court, and relies upon the decision
and judgments in, the case of Dutton v Sneyd Bycars Co Ltd [1920]
1 KB 414. The headnote to that case reads:
The statutory
jurisdiction conferred on a county court judge sitting as an arbitrator by the
Workmen’s Compensation Act, 1906, cannot be enlarged by agreement between the
parties nor by estoppel by conduct of either of them.
At p 418
Warrington LJ said:
He is,
therefore, clearly not under the Act entitled to claim compensation. But he
says that the respondents are by their conduct estopped from denying that he is
so entitled, or, alternatively, have agreed that as between him and themselves
he shall be treated in all respects, including the right conferred by the Act
of proceeding by arbitration before the county court judge, as if he had been
so entitled. The county court judge has accepted the contention that the
respondents are estopped from denying the title of the applicant and has made
an award in his favour. The respondents appeal.
At p 419 he
said:
The operation
of the Act is confined to a certain class of cases, and it seems to me that the
parties cannot by any form of estoppel or by agreement so enlarge the operation
of the Act as to bring within it other cases, or to extend the limited
statutory jurisdiction to those cases.
And in a later
passage, at p 420, he said:
Of course, if
some particular fact alleged by either party is in issue and either in
accordance with the practice of the Court, as in the case of admissions in the
pleadings or by the application of some rule of law, it has to be taken to be
as alleged, it will be so taken although the result may be not in accordance
with the true state of the facts.
At p 421 Atkin
LJ (as he then was) said:
In this case
the applicant suffered from an illness contracted in the course of his
employment. He was not injured by an accident; and the illness was not one of
the diseases brought within the Act by s 8, and the Third Schedule. Under these
circumstances, in my opinion, it was not competent for the employer and workman
by conduct or agreement to give jurisdiction to the county court judge to award
compensation under the Act. It is entirely different where the parties determine
by agreement questions that arise within the Act, eg whether a person injured
is a workman to whom the Act applies, whether he was injured by accident,
whether the accident arose out of, or in the course of, his employment, what
the amount of the compensation should be. In such cases the agreement of the
parties operates within the ambit of the Act.
We were
further referred in support of this proposition to a passage in Woodfall on
Law of Landlord and Tenant at p 2392:
Neither the
landlord nor the tenant is estopped, it would seem, by the mere service of the
appropriate notice, from subsequently denying that the tenancy is one to which
the Act applies. Thus, where there is doubt as to whether a tenancy qualifies
under the Act the landlord does not irrevocably commit himself by taking the
precaution of serving a section 25 notice on the tenant.
Reliance was
also placed on the decision and judgments in the case of Keen v Holland
[1984] 1 WLR 251, in which it was held that a tenant who could not lose the
protection of the relevant statute by agreement could not lose it by estoppel
either.
Having regard
to the view which I formed upon this aspect of the case, I do not consider it
necessary to refer to the other cases cited on behalf of the tenants such as Langford
Property Co Ltd v Goldrich [1948] 2 All ER 439 or Watkins v Emslie
(1982) 261 EG 1192, [1982] 1 EGLR 81, nor the cases cited to demonstrate the
distinction between agreements or estoppel which purport to enlarge the
jurisdiction of the court and those which relate to an admitted state of facts
essential to prove the cause of action arising within the ambit of the court’s
jurisdiction. In my view, it is clear law that the parties cannot by any route
enlarge the jurisdiction of the tribunal before whom a matter falls to be
decided. The question arising upon this appeal is whether or not the effect of
the estoppel pleaded is to enlarge the jurisdiction of the court or whether it
concerns solely an estoppel which precluded the tenants from denying an
essential fact necessary to establish their right to a new lease — namely, that
at the time of the application the premises were occupied by the tenants for
the purposes of a business carried on by them. Thus in this case the question
in issue is whether the assertion that the tenants were not in occupation for
the purposes of their business impugns the jurisdiction of the court, or
whether it is one which arises within the ambit of the court’s jurisdiction as
exemplified by the examples given by Atkin LJ in the Dutton case at p
421. In my view the tenants’ contention does not give rise to any question of
jurisdiction but arises as an issue relevant to their claim for a new tenancy.
For my part,
therefore, I am satisfied that the matters relied upon as reflected in the
pleadings are capable of establishing an estoppel by convention subject only to
one matter which the tenants might have been able to establish by evidence if
they had been permitted to call such evidence. The pleadings themselves
establish that the tenants applied for a new lease pursuant to section 26. Such
an application can be made only if they were at that time in occupation of the
premises for the purpose of their business. Indeed, this assertion is specific
in their application of June 15 1983 under para (h) already
rent in the light of such an application for a new tenancy but none the less
persisted in such application. They knew that their request for a new tenancy
on February 11 1983, if not followed within time by an application to the
court, would have the effect of determining such tenancy as they then had. They
knew that the landlord could not apply for interim rent unless and until a
request was made for a new tenancy pursuant to section 26. I therefore consider
that the estoppel pleaded was established and the judge’s conclusion correct
subject perhaps to one matter — whether or not he should have allowed the
tenants to adduce evidence that the landlords not only knew that the tenants
were not in occupation but agreed to the proceedings for some ulterior purpose,
that is to say that the common assumption relied upon as founding an estoppel
by convention did not exist. This may sound an unlikely supposition but it might
have been more appropriate had the judge allowed evidence on this point.
I do not find
it necessary to hold that the matter should be referred back to the county
court judge for this evidence to be tendered, having regard to the view I have
formed upon the other formulation by the learned judge. The position here was
that the tenants invoked the assistance of the court and persisted for a period
of more than four years in an application for a new lease founded upon the
essential averment that they held a tenancy for the purposes of Part II of the
Act. They knew that by so doing they would be confronted with an application
for interim rent. They then elected to adopt this course of action and put in
motion court proceedings to achieve it. They could have elected not to pursue
their application for a new tenancy, but did not do so. In my view, it would be
an abuse of the process of the court to abandon their previous assertion and
course of conduct and to elect to aver that they have never had a tenancy to
which Part II of the Act applied and by these means to defeat the landlords’
claim for interim rent, the existence of which they had been aware throughout
the whole course of the proceedings. No further evidence is needed on that
proposition. They were, as the judge said, approbating and reprobating and the
assistance of the court should not be available in support of such a course of
action.
If it be
necessary to do so, I do not doubt that the present freeholders can be added as
landlords in the present proceedings when the court considers the application
for interim rent, as it seems that the freehold had been sold shortly before
the matter came before the learned judge.
For the
reasons I have given I would dismiss this appeal.
Agreeing,
BINGHAM LJ said: The first question for decision by the judge was whether
Jalaram could in law be estopped from contending that they had not been in
occupation of the premises at the relevant time. Basing herself on para 143 of Spencer
Bower and Turner: Estoppel by Representation, 3rd ed at pp 144-145, Mrs
Harrison on behalf of Jalaram argues that they cannot be so estopped. The
argument in brief is this. The jurisdiction to determine an interim rent is
statutory and contained in section 24A of the 1954 Act. Under that section
application may be made by a landlord of a tenancy to which Part II of the Act
applies. Tenancies to which Part II of the Act applies are defined in section
23 to be ‘any tenancy where the property comprised in the tenancy is or
includes premises which are occupied by the tenant . . .’. Part II of the Act
therefore applies only where premises are occupied by the tenant. If, whether
by agreement, representation, waiver or otherwise, the parties purport to
confer jurisdiction on the court to determine an interim rent of premises which
are not occupied by the tenant then they are extending the jurisdiction
conferred on the court by the statute and that cannot lawfully be done.
Therefore Jalaram cannot be shut out from raising the issue of occupation and
so challenging the jurisdiction of the court to determine the rent.
I was
initially inclined to accept this argument as sound, being generally supported
both by the passage in Spencer Bower and Turner referred to and by Dutton
v Sneyd Bycars Co Ltd [1920] 1 KB 414. Closer examination of that
authority, however, reveals a distinction which, in my view, contains the
answer to this part of this appeal. Dutton suffered from gas poisoning caused
by his employment. He claimed compensation under the Workmen’s Compensation Act
1906. Gas poisoning was not specified as a disease giving a right to
compensation in the Schedule to the Act, but the employers were (it was said)
content to treat it as if it were. The matter came before a county court judge
sitting as a statutory arbitrator who held the employers to be estopped from
contesting Dutton’s right to compensation. He accordingly made an award. The
Court of Appeal held that this conclusion was wrong, since the effect of the
decision was to enlarge by estoppel the limited jurisdiction conferred upon a
county court judge by the Act, which could not be done. In the course of his
judgment, however, Warrington LJ said, at p 420:
Of course, if
some particular fact alleged by either party is in issue and either in
accordance with the practice of the Court, as in the case of admissions in the
pleadings or by the application of some rule of law, it has to be taken to be
as alleged, it will be so taken although the result may be not in accordance
with the true state of the facts.
Atkin LJ was
more explicit at p 421:
It is
entirely different where the parties determine by agreement questions that
arise within the Act, eg whether a person injured is a workman to whom the Act
applies, whether he was injured by accident, whether the accident arose out of,
or in the course of, his employment, what the amount of the compensation should
be. In such cases the agreement of the parties operates within the ambit of the
Act. In the present case the suggested agreement or estoppel seeks to operate
outside the Act, and to entitle the applicant to the exercise of statutory
jurisdiction and give him statutory relief in circumstances where the statute
has not given relief or jurisdiction.
The question
is therefore whether the agreement or estoppel contended for is one that
operates within or outside the ambit of the Act. In the present case I conclude
that this alleged estoppel operates within the ambit of the Act. In any case
where the landlord has given notice under section 25 or the tenant has made a
request under section 26 an issue may arise whether a tenant occupies the
premises for business purposes. This is an issue within the purview of the Act.
It is accordingly an issue which may be the subject of agreement or concession.
In contrast, the issue which was said to be the subject of agreement in Dutton
was one which could never arise under the Act because the disease in question
admittedly fell right outside the Act. I conclude that in the present case
there could be a binding agreement or estoppel because the issue in question
fell squarely within the county court judge’s field of decision defined by the
Act.
I do not think
this conclusion conflicts in any way with Keen v Holland [1984] 1
WLR 251 on which Jalaram rely. That case established that a tenant who could
not lose the protection of the relevant statute by agreement could not lose it
by estoppel either. In the present case, however, the protection afforded by
Part II of the Act can, subject to conditions, be excluded (see section 38) and
the estoppel alleged does not have the effect of permitting the parties to
contract out of the protection the statute is intended to give.
The second
question for decision by the learned judge was whether he was entitled on the material
before him to hold Jalaram to be estopped by convention or otherwise from
contesting the occupation of the premises at the material time. He held that he
was so entitled and held Jalaram to be estopped by convention. Jalaram
challenge the correctness of the course which the judge followed. Since any
estoppel involves proof of reliance, and an estoppel by convention involves
conduct premised on a common assumption, Jalaram contend that the party seeking
to set up the estoppel must adduce evidence to show that he did rely or that he
did entertain the assumption in question and the judge was wrong to resolve
these issues in favour of the landlords without affording the parties an
opportunity to call oral evidence and cross-examine. I do not find it surprising
that the judge found the conduct of Jalaram in the proceedings initiated by
them, and the assertions made by them in the course of those proceedings, to be
conclusive in the landlords’ favour. There were indeed strong inferences to be
drawn in their favour, and I cannot accept Jalaram’s argument that the judge
was wrong to pay attention to assertions by Jalaram in their originating
application simply because it had been dismissed. But one cannot, I think, rule
out the possibility, remote though it may be, that oral evidence would put a
different complexion on the matter. It could be that the eyes of both parties
were at all times fully open and that the litigation was to the knowledge of
both parties little more than a charade while the real action took place
elsewhere. Evidence of what passed between them, apart from notices and
pleadings, would in my view be relevant and admissible. I would feel inclined
to conclude on this point that the judge should have ordered an issue to be
tried on the estoppel question and permitted each side to call any evidence it
chose. He was, I am inclined to think, wrong to find for the landlords on the
estoppel issue in reliance simply on the documents before him.
The case was,
however, also put — to some extent before the judge and more fully before us —
on a somewhat different basis. It was pointed out that when the landlords in
April 1983 issued their application for an interim rent, Jalaram had a choice:
either they
in which event the landlords could have sought possession and mesne profits
forthwith, or they could accept that they were in occupation and found on that
fact to apply for a new tenancy, thus expressly or impliedly accepting their
liability to pay an interim rent as and when determined; in this case the
landlords would (at least to some extent: section 24A(3)) be protected
financially, however the application for a new tenancy were finally decided.
Jalaram chose to accept that they were in occupation, asserting in their own
originating application for a new tenancy that they carried on the business of
a general store and that no part of the premises was occupied by any other
person. Having adopted that litigious position, which was not retracted for
four years, Jalaram could not (the landlords submit) alter their position so as
to deprive the landlords of their claim to interim rent. The judge accepted
this submission. He said that what Jalaram sought to do seemed to him to offend
against the principle that a person may not approbate and reprobate. He also
said that what Jalaram sought to do was to change the fundamental basis on
which the parties had conducted the proceedings over a period of four years and
so deprive the landlords of relief which Jalaram, by their conduct of the
proceedings, had led the landlords to rely on.
In support of
the judge’s approach we were referred to various textbook passages on election
of remedies, waiver and approbation and reprobation. I do not think the present
case falls within the letter of any of these doctrines or maxims but each of
the doctrines and maxims reflects the unwillingness of the courts to
countenance inconsistent conduct by one party where this is prejudicial to the
other. It is further to be remembered that in the present case we are concerned
not with statements made in the course of commercial dealing or negotiation but
formal statements made in the course of invoking the court’s jurisdiction,
statements which Jalaram now wish to say were false. It seems to me, as to the
judge, that whether the rule is founded on public policy or justice as between
the parties this cannot be permitted. If in the course of litigation a party
(A) accepts the truth of an assertion of fact expressly or impliedly made by
his opposing party (B) and founds on that fact formally to claim relief to
which he would not be entitled if that fact were not true (A knowing if the
fact is true or not, whether or not B knows), and if the litigation is
thereafter conducted on the basis of the truth of that fact, A may not
thereafter assert the falsity of that fact and retract his acceptance of its
truth where the effect would be both to deny B a remedy which would have been
available to B had A asserted the falsity of that fact from the beginning and
to deny B a remedy to which A’s acceptance of that fact entitled him. I
accordingly agree that the judge was right to strike out Jalaram’s answer.
Jalaram lastly
contend that the landlords are not the correct plaintiffs, since they parted
with title to the property. It appears, however, that they owned the freehold
interest in the premises throughout the period for which they claim interim
rent. This being so, I am not persuaded that any order of substitution is
called for, but, if it is, the judge will no doubt make the appropriate order
when he hears the substantive application.
I agree that
the appeal should be dismissed, for these reasons as well as those given by
Stocker LJ.
The appeal
was dismissed with costs; application for leave to appeal to the House of Lords
was refused.
