Landlord and Tenant Act 1954 as amended, section 24A–Application by landlords for determination of interim rent decided by county court judge without hearing landlords’ representative, a non-practising barrister who was the landlords’ chairman and managing director–Refusal by judge to hear on the ground that the landlords must be represented by solicitors and counsel–County court’s discretion to allow an agent other than a solicitor or counsel, including an officer of the company, to address the court–Order set aside and application to be determined by another county court judge
This was an
appeal by Homeville Estates Ltd, business tenants, against an order by Judge
Clapham at Slough County Court which inter alia fixed the amount of
interim rent to be paid by the tenants during the continuance of the existing
tenancy of the property known as 12 Craufurd Rise, Maidenhead, Berkshire. The
appellants complained that the judge made this decision without hearing their
case, the judge having refused audience to their chairman and managing
director.
P Ground
(instructed by Peachey & Co) appeared on behalf of the appellants; G
Platford (instructed by Willmett & Co, of Slough) represented the
respondent.
Giving the first
judgment at the invitation of Cairns LJ, STEPHENSON LJ said: This appeal is
brought by Homeville Estates Ltd, tenants of a business property of which Mr
Sams is the landlord, and their appeal is against an order dated June 4 1976,
made by Judge Clapham in the Slough County Court, which is in these terms:
Upon hearing
counsel for the respondents, the applicants not attending [that is, counsel
for the landlord, the tenants not appearing]. It is ordered that the
applicants’ application be adjourned until Wednesday June 23 1976 at 10.30
o’clock. Respondent’s costs of today in any event. And it is further ordered
under section 24A of the Landlord and Tenant Act 1954 that the interim rent on
the property known as 12 Craufurd Rise, Maidenhead, Berkshire, be fixed at
£7,668 per annum from October 22 1975, to be paid quarterly in advance. And it
is further ordered that the respondent do recover his costs of this application
for interim rent from the applicants to be taxed on Scale 3.
The two
applications which were before Judge Clapham on that day were, first, the
tenants’ application for a new tenancy under section 24 of the Landlord and
Tenant Act, and secondly, the landlord’s application to determine an interim
rent under section 24A. The tenants’ application was adjourned, and the
landlord’s application was finally decided by the fixing of the rent at the
figure which I have mentioned, and it was decided, according to the order, in
the absence or non-attendance of the applicants. That conceals a rather unusual
position, because what happened was that the applicants, who are a limited
company, did attend in the person of their chairman and managing director, a Mr
Broad, but were not heard.
Mr Broad had
been called to the Bar, though he never practised as a barrister, and he has
sworn an affidavit in which he has said, among other things, that he "made
an extensive study of office property that had been available for letting in
Maidenhead and made fairly elaborate preparations to ensure that the applicant
company . . . was able to present its case." He was also advised that he would be allowed
to present the applicant company’s case at the hearing, but when the case was
called on, he swears, and it is common ground, that the learned judge refused
to hear him and stated that the company must be represented by solicitors and
counsel as the respondent landlord was. He swears in his affidavit that he
believes "that had the applicants been given the opportunity of drawing
the court’s attention to the condition of the premises, the existence of a
number of comparable properties and properties available for letting in
Maidenhead it might well have persuaded the court that the right level for an
interim rent would have been several thousand pounds lower than the figure
fixed by the court, possibly as much as £3,000 per annum lower."
It stands out
on the face of the documents, without going into any details of the existing
lease, that the interim rent which the judge has fixed is over 11 times as high
as the existing rent. Mr Ground has submitted on behalf of the tenant company
that the learned judge here has finally determined the interim rent to be paid
for a period of something like a year without having heard the tenants’ case:
he has decided it simply on evidence put before him by Mr Padfield, a surveyor
on behalf of the landlord, and that, Mr Ground submits, is unjust. He submits,
first of all, that the tenants ought to have been allowed to present their
case, and to present it through their chairman and managing director, or, if
not, they ought to have been allowed an adjournment to present their case with
the assistance of a solicitor or a barrister. Secondly, he says that not only
has there been that denial of justice to the applicants, but that the course
which the learned judge took in refusing to hear either then or later the
tenants’ case has jeopardised the hearing of the tenants’ application for a new
tenancy because the rent of the new tenancy will be fixed with regard to the
interim rent which the learned judge has already fixed and which they will be
estopped from challenging; and although there is no statutory requirement,
nevertheless, it is recognised that there is a margin of difference between the
interim rent and the rent for a new tenancy in the landlord’s favour of
something between a one-third and one-tenth increase. Bearing in mind that the
interim rent is fixed on the basis of a tenancy from year to year, that
obviously is a forceful consideration. So the position will be, if the judge’s
order stands, that when the tenants come to argue about the terms of their new
tenancy they will be prevented from arguing for any lesser figure of rent than
one-tenth in excess of the handsome rent of £7,668 which the judge fixed by
order under appeal. Unfortunately, we have not the advantage of having before
us the counsel
now appears for the landlord, has put before us a draft affidavit sworn by a
representative of his instructing solicitors setting out the landlord’s reasons
why we should not allow this appeal and giving a very short account in
paragraph 16 of what took place before the learned judge. However, it does not
appear either from his draft affidavit or from the affidavit of Mr Broad whether
the judge had in mind the provisions of section 89 of the County Court Act or
the decision of this court in Charles P Kinnell & Co v Harding,
Wace & Co [1918] 1 KB 405.
The statute
provides by section 89(1): "In any proceedings in a county court any of
the following persons may address the court, namely"–and then there are
listed "(a) any party to the proceedings; (b) a barrister retained by or
on behalf of any party; (c) a solicitor . . . (d) any other person allowed by
leave of the court to appear instead of any party." It was argued in the Divisional Court and in
this court in 1918 on a corresponding provision of the County Courts Act that
that did not entitle a corporation to appear otherwise than by a solicitor or
by counsel. This court said that that was wrong: that in the county court the
position was that the judge there, unlike the High Court and this court, had
complete discretion to allow a corporation to appear by any other agent than a
solicitor or counsel, including an officer of the company. It may be that the
learned judge had that statutory provision and that authority in mind and did
exercise his discretion; but it may equally well be from all the information
which we have that he thought the practice in the county court was the same as
in other courts and that he was not entitled to hear Mr Broad on behalf of the
company. We do not know. At any rate, he did not hear him, and, therefore, he
did determine the interim rent without hearing any evidence on the part of the
tenants, and in one sense, with the position exactly the same as recorded in
the order of the court, namely, as if the applicants had not attended at all.
For my part, I
would regard that as something which required to be corrected by this court,
even if it were not, as I think it is, impossible to separate the application
for a new tenancy from the application for interim rent, tied as they are by
the considerations which Mr Ground has put before us, and which I did not
understand Mr Platford to challenge. It is quite true, as was recently said in
this court, that a landlord’s application for an interim rent is a wholly
distinct claim from a tenant’s application for a new tenancy and claims a
wholly independent relief from that relief claimed by the tenant. Nevertheless,
it is, to some extent, prejudicial to a tenant if the interim rent is fixed
before the terms of the application for a new tenancy are fixed, and it is
obviously a convenient and desirable practice that where there are those two
applications, in whatever particular form the landlord’s application may be
made, they should be heard together. In this case the learned judge took a
different view. He heard and finally decided the interim rent, and then
adjourned the tenants’ application to be heard, as we are told, on June 23,
tomorrow, if room can be found for it in the list. Whenever that application is
heard, as the judge’s order stands, whether it is heard by him or by another
judge, it will be the tenants’ application only, and an application made on the
basis that the interim rent has already been decided. In my judgment, that is a
state of affairs which this court ought to remedy by allowing the appeal.
Mr Platford
has, however, strenuously submitted two things. First of all, he says that
there has been a great deal of delay by the tenants in this matter, with
negotiations lasting for some 15 to 18 months; in the course of them the
tenants have entirely failed to produce any evidence of comparables which would
form a basis for determining the interim rent; they have been unhelpful, and it
ought to be concluded that, in spite of what Mr Broad has sworn in his
affidavit, there really is no evidence of comparables which the tenants can put
forward to challenge the figure which the learned judge has fixed on the evidence
of the landlord’s surveyor on comparables; there was no surveyor called on
behalf of the tenants before the learned judge on June 4 and in effect there is
no reason to suppose that if the tenants had been given the opportunity of
putting their case before the learned judge the result would have been any
different. In that connection Mr Platford relies on the case in this court of Grimshaw
v Dunbar [1953] 1 QB 408, of which I think I need only read from the
headnote. That was a landlord and tenant case in which a party had applied
under Order 37, rule 2, of the County Court Rules to the county court judge for
a new trial. There was an appeal to this court from the county court judge’s
refusal to grant a new trial. The decision of this court was that:
When
determining whether to exercise his jurisdiction under Order 37, rule 2, of the
County Court Rules to order a new trial the county court judge should be
influenced by the following considerations: First, the reason why the party
failed to appear when the case was heard. Secondly, whether there has been any
undue delay by the absent party in launching his proceedings for a new trial;
delay in itself would not be important, but delay prejudicing the other party
or delay enabling rights of third parties to intervene, would be material.
Thirdly, whether the other party would be prejudiced by a new trial in any
respect which could not be adequately compensated by a suitable award of costs.
A new trial should seldom, if ever, be refused on the ground that the applicant’s
case was a weak one.
It is quite
clear that if the applicant, who has not been heard, has really no case at all,
then that would be a ground for refusing a new trial.
On this aspect
of the case, and on this point which Mr Platford makes, I would have no
hesitation in saying that the applicants’ case is not necessarily a weak one. I
have referred to the steep rise in the rent which the judge’s figure brings
about, and I have also referred to the relevant paragraphs in Mr Broad’s
affidavit. They speak for themselves as indicating, in spite of the submissions
made by Mr Platford that no comparables have been produced, that the tenants
have a case which is worth hearing and considering. One suspects that in
practice there is hardly a case in which there is not a genuine bona fide
dispute between the parties on the evidence of rival experts as to what is the
proper figure for the rent of a new tenancy and for the interim rent.
Grimshaw v Dunbar has a bearing on Mr Platford’s second submission
also; and that is that the tenant has here applied to the county court judge
for a new trial of his application under Order 37, rule 2, still numbered the
same in the existing rules, and that provides by sub-rule (1): "Where a
defendant to an action or matter . . . does not appear at the hearing and a
judgment or order is given or made against him in his absence the judgment or
order and any execution thereof may on application be set aside and a new trial
may be granted." There is a wider
power to grant a new trial under rule 1 of the same order. Mr Platford submits
that if the tenants had not made such an application this court ought not to
allow this appeal until such application had been made and refused; but that
as, in fact, an application is pending, we ought to allow it to be heard and
not to take it upon ourselves to allow this appeal and set aside the judge’s
order now. That in most cases of non-appearance or non-attendance at the
hearing by one party would be so. But this is not the ordinary case. It is true
that the form of the order shows that this was an order made in the absence of
one party who did not attend. But this is not a case in which it could be said,
in my judgment, that the judge was right to make the order which he did,
considering the kind of absence which we have here of the tenants who did in
fact attend. This is a case in which the tenants do justly complain of the
judge making the order. It is not like the case of Grimshaw v Dunbar,
but like the case there cited of Dick v Piller [1943] QB 497,
where a judge refused to adjourn the trial although there was a reasonable
excuse for the absence of one party. If there is a reasonable excuse for
the absence of one party, or another reason why a judge has gone wrong in
refusing to grant an adjournment so that the absent party can be heard, it
seems to me that an appeal does lie to this court and should be dealt with by
this court as it was in the case of Dick v Piller.
It would be
difficult for the tenants to present their application to set aside the judge’s
order to the county court judge, and it would be difficult for Judge Clapham to
set aside the order which he had already made, even if matters such as the
section of the County Courts Act and the decision in 1918 to which I have
referred had not been brought to his notice on a previous occasion and were
brought to his notice for the first time on the rehearing. The position is not
the same as it was in Grimshaw v Dunbar. This is not a case in
which the tenants should be required first to try out their application under
Order 37, rule 2. That, I think, would be more likely than not to lead to
further dissatisfaction and a further appeal to this court.
For those
reasons, I have come to the conclusion that this appeal ought to be allowed.
The learned judge ought either to have heard the tenants’ side of the story put
forward by Mr Broad, who was there available to give evidence if required, or
he should have adjourned the application in order that the tenants’ case could
be put before him by a solicitor or counsel. I would set aside his order and
order that the landlord’s application for an interim rent should be determined
by another county court judge at the same time as the application for a new
tenancy, and leave for further consideration when we have heard counsel on the
matter what the right order as to costs, both here and below, should be.
BRIDGE LJ: I
agree. With all respect to the learned judge in the situation with which he was
confronted it seems to me that he was wrong to proceed to determine an interim
rent having heard one party only. If a party to proceedings in court, having
had notice of the time and place of trial, does not attend and is not present
or represented when the case is called on, then, of course, the court is
entitled to assume that that party is content that his case should go by
default and that the court should determine the matter in issue on the basis of
the material put before it by the other party. But that was not this case at
all. The county court judge knew from the presence of Mr Broad, the chairman
and managing director of the tenant company, that the tenant company desired to
present its case to the court both in relation to the tenant’s own application
for a new tenancy and in relation to the landlord’s application for
determination of an interim rent.
The
circumstance that the tenant company was guilty of a default, if one could call
it a default, in failing to instruct solicitors or counsel to represent it at
the hearing, could not conceivably justify a conclusion that it should
therefore, so to speak, as a punitive measure directed at that default, be
denied the right to be heard. That, I think, would be so in any event. But it
is certainly so if one bears in mind the fact that the court, as my Lord has
pointed out, has a discretion to allow a company to appear by one of its
officers under section 89 of the County Courts Act. Finally, as the adjournment
of the tenants’ application by the learned county court judge showed, this was
a case where an adjournment could be granted, it may be on terms, without
prejudice to the landlord. It is not as if the delay in the date when the
interim rent is determined affects the date from which the interim rent is
payable.
Moreover, for
the reasons which have been explained in the judgment of Stephenson LJ, it was
eminently desirable in this case, as it would be, I imagine, in any case where
there is a tenant’s application for a new lease and a landlord’s application
for an interim rent, that they should be heard together, because they are to a
large extent interdependent. I agree that the appeal should be allowed, and I
agree in the order proposed by my Lord.
CAIRNS LJ: I
also agree that the appeal should be allowed and a new trial directed for the
reasons which have already been given, to which I have nothing to add. But I
should just like to make this observation. Whatever delay there may have been
in this litigation in the past, this appeal has been brought before the court
and dealt with with most satisfactory expedition. The order appealed from was
made on June 4. Notice of appeal was given on June 18, and here on June 22 it
has been possible for the court to give its decision after full and helpful
arguments on both sides.
I should
particularly like to say with regard to the respondent to the appeal that Mr
Platford, though unsuccessful, presented an argument to the court which lacked
nothing in force and cogency, and he was able to put before the court an
affidavit which must have taken considerable preparation, on which his
instructing solicitors are to be congratulated in having got it in such a short
time.
(After discussion)
STEPHENSON LJ:
I omitted to say in my judgment that the question who should represent the
tenants at the new trial should be in the discretion of the judge who hears the
application, and it will be for him to say whether or not he should hear Mr
Broad for the applicants should they still wish to be represented by Mr Broad.
CAIRNS LJ and
BRIDGE LJ expressed agreement with this addition. The appeal was allowed with
costs. The costs of the abortive hearing in the county court were reserved to
the judge at the new hearing.
