Procedure — Possession application — Non-attendance of appellants — Claim served at property where appellants no longer resided — Whether good reason for non-attendance — Whether appropriate to set aside order — Appeal allowed
The appellant tenants held a leasehold property under a 99-year lease that had been granted to their predecessor in title in 1969. An annual ground rent of £20 was payable to the respondent landlord under the terms of the lease, together with service charges and insurance premiums as additional rent. The appellants moved out of the property. They redeemed the mortgage on the property and purchased another house. They made no further payments to the respondent.
The respondent sent demands for the arrears of ground rent, service charges and insurance premiums to the property, since it had no other address for the appellants. Having received no response, the respondent commenced proceedings to forfeit the lease for non-payment of rent. The claim form and notice of the hearing date were properly served at the property, in accordance with CPR 6.5(6), as being the appellants’ usual or last-known address. The appellants did not receive them, and were unaware of the proceedings. On the hearing date, the judge made an order in their absence granting possession to the respondent and ordering payment of the arrears, plus costs.
When the appellants became aware of what had happened, they applied to set aside the possession order under CPR 39.3(3). Allowing the application, the judge held that the appellants had satisfied the requirements of CPR 39.9(3) because they had: (i) acted promptly upon discovering that the order had been made; (ii) a “good reason” for not attending the trial, having been unaware of the proceedings; and (iii) reasonable prospects of success at trial. The respondent’s appeal against that decision was allowed on the basis that the judge should have considered not only the fact that the appellants had been unaware of the proceedings but also the reason why that was so, and that the appellants had put forward no cogent reason for why they had made it impossible for the respondent to contact them. The appellants appealed.
Held: The appeal was allowed.
The mere existence of a continuing legal relationship of landlord and tenant did not, of itself, oblige the parties to ensure that they had in place a system for receiving communications relating to litigation in the event that litigation occurred. There were many reasons why parties might need to contact each other for the purposes of their legal relationship; whether one party was obliged to give its address would depend upon the terms of that relationship. However, litigation stood on a different footing. The obligations of parties in relation to litigation were to be derived from legislation, particularly the CPR, and orders of the court.
If the reason for a party’s non-attendance at a hearing was that it was unaware of the hearing, it would usually be necessary to ask why that was so. If it had known that proceedings had been issued, or were imminent, and it did not have a system in place for ensuring that communications could be received, it would be difficult for it to establish a good reason for non-attendance. It would be hard to argue such a case if the court concluded that the party had deliberately avoided receiving such communications in order to frustrate the litigation process. However, the situation was different where a party was unaware of the existence or imminence of proceedings. A party was under no obligation to make itself amenable to potential claims of which it had had no notice. The phrase “good reason” should not be interpreted too strictly against an applicant in the light of the overriding objective and the right to a fair hearing under Article 6 of the European Convention on Human Rights. In the instant case, the appellants had had a good reason for not attending the hearing: Brazil v Brazil [2002] EWCA Civ 1135 considered.
Patrick McMorrow (instructed by Hanney Dawkins & Jones, of Pinner) appeared for the appellants; Gary Blaker (instructed by Peter Mercadante & Co, of Northolt) appeared for the respondent.
Sally Dobson, barrister
