Landlord and Tenant Act 1954, Part II — Application for leave to appeal out of time from decision of county court judge dismissing tenant’s application for new tenancy — Landlords had opposed a new tenancy on the ground of the tenant’s persistent delay in paying rent — The time for appealing against the judge’s decision expired on November 30 1987 — Application for leave to appeal out of time was not made until January 12 1988 — Leave to appeal was granted by the Registrar of Civil Appeals on February 16 1988 and the landlords now appealed against the registrar’s decision
that the delay was partly due to the tenant’s misunderstanding of a statement
made to him by counsel at the conclusion of the trial as to the time for
appealing, partly to delay of a further five weeks in his solicitors’ offices
during which the Christmas holiday intervened — The registrar, notwithstanding
‘the weakness of the appeal,’ decided to give leave
Appeal recalled the relevant factors which, as stated in C M Van Stillevoldt BV
v E L
Carriers Inc, should be taken into account when considering an application of
the present kind — ‘Those factors include the length of the delay, the reasons
for the delay, whether there is an arguable case on the appeal, and the degree
of prejudice to the defendant if time is extended’ — It was agreed that the
court should consider the present matter afresh and exercise their own
discretion — Taking all the relevant matters into account, including the
minimal chance of success which an appeal would have, the court decided that
the registrar should not have extended the time for appealing — Appeal from
registrar’s order allowed
The following
cases are referred to in this report.
Hopcutt v Carver (1969) 209 EG 1069
Palata
Investments Ltd v Burt & Sinfield Ltd
[1985] 1 WLR 942; [1985] 2 All ER 517, CA
Van
Stillevoldt (CM) BV v Carriers (EL) Inc
[1983] 1 WLR 207; [1983] 1 All ER 699, CA
This was an
appeal by the landlords, Major-General Barry Michael Lane OBE and Lady Elizabeth
Ann Koelle, against a decision of the Registrar of Civil Appeals granting the
tenant, Ahmad Ali Rawashdeh, leave to appeal out of time from a decision of
Judge Phelan, at West London County Court, dismissing the tenant’s application
for a new tenancy of premises at 366 King’s Road, Chelsea, London SW3, which
had been occupied as a launderette.
Edward Cole
(instructed by Wilkinson Kimbers) appeared on behalf of the appellant
landlords; P Castle (instructed by Owen Thomas & Webster) represented the respondent
tenant.
Giving the
first judgment at the invitation of Fox LJ, GLIDEWELL LJ said: This is an
appeal against a decision of the Registrar of Civil Appeals on February 16
1988, granting to the tenant, Mr Rawashdeh, leave to appeal out of time, against
a decision of His Honour Judge Phelan of November 2 1987.
The tenant,
who is the respondent to the present appeal, was the tenant of premises situate
at 366 King’s Road, Chelsea, which had been occupied as a launderette. The
lease was for a term of 21 years from March 25 1966, and thus it expired on
March 25 1987. The present appellants were the landlords.
The rent from
1980 was £9,000 per annum payable quarterly in advance — that is to say at the
rate of £2,250 per quarter.
The tenant
took an assignment of that lease in 1981. On July 8 1986 the landlords’
solicitors gave notice in accordance with section 25 of the Landlord and Tenant
Act 1954, terminating the tenancy on March 25 1987. The notice stated that the
landlords would oppose an application to the court for a new tenancy under the
Act on the grounds that the tenant ought not to be granted a new tenancy in
view of his persistent delay in paying rent which had become due. That is the
ground set out in section 30(1)(b) of the 1954 Act.
On September 19
1986, by originating application, the tenant applied to the court for a new
tenancy, and by a notice of October 22 of that year, the landlords indicated
their opposition to that grant for the reasons to which they had already
referred.
On November 2
1987, at the West London County Court, Judge Phelan found that the landlords’
grounds of opposition were made out and dismissed the tenant’s application for
a new tenancy.
The time for
appealing against that decision was the standard time of four weeks, and thus
it expired on November 30 1987. On November 4 the landlords’ solicitors wrote
to the tenant’s solicitors a letter in which, among other things, they said:
With regard to
Judge Phelan’s decision not to grant your client a new tenancy, the following
matters arise:
1. Would you
kindly confirm that, subject to your client deciding to appeal Judge Phelan’s
decision, your client’s tenancy shall, in accordance with section 64 of the
Act, be terminated on Monday, February 29 1988 (ie the time limited for appeal
(4 weeks) plus 3 months).
That paragraph
accurately set out the substance of section 64 (1) of the Act, which provides,
in effect, that if an application to the court has been made for a new tenancy,
and the tenancy would, apart from that application, expire at some earlier
date, it shall nevertheless not expire until three months beginning with the
date on which the application is finally disposed of.
By subsection
(2), that date is the earliest date
by which the
proceedings on the application (including any proceedings on or in consequence
of an appeal) have been determined and any time for appealing or further
appealing has expired . . .
Therefore, if
the tenant did not appeal, his tenancy would nevertheless continue for four
weeks plus three months after the date of judgment in the county court.
On November 18
the tenant’s solicitors acknowledged the landlords’ solicitors’ letter of
November 4 but said nothing more. No appeal was entered by November 30. On
December 1 the landlords’ solicitors wrote to the tenant’s solicitors once
more, saying in the second paragraph:
The time
limited for appealing the decision of Judge Phelan made on November 2 1987 has
now expired and therefore, in accordance with section 64 of the Act, your
client’s tenancy shall be terminated on Monday, February 29 1988, ie three
months from November 30 1987.
That letter
produced a substantive reply, when the tenant’s solicitors wrote on December 8
saying:
In fact we obtained
our client’s instructions on December 4 that he wishes us to lodge a notice of
appeal. Accordingly counsel is settling the same and the same will be lodged
before the expiry of this week.
Despite that
letter, it was not until January 12 1988 that the tenant’s solicitors made the
present application for leave to appeal out of time, which led to the
registrar’s grant of that leave, and filed a draft notice of appeal. The
reasons why there was such delay in applying for leave to appeal out of time are
two-fold:
First, in an
affidavit sworn on January 12 1988, the tenant explains that he misunderstood
what counsel had said to him after the conclusion of the hearing in the county
court as to the time for appeal. He had it in mind that the three months’ period,
to which reference was made, was the time for appeal.
Mr Rawashdeh
said in that affidavit:
I fully
accept that the delay in instructing my solicitors to launch an appeal was
attributable to my lack of understanding and it was the merest fortune on my
part that I contacted my solicitors and gave them instructions to appeal at
Christmas rather than waiting to March or later before communicating my
instructions to them.
But in fact it
was not Christmas; it was three weeks before Christmas — it was December 4. The
time between December 4 and January 12 is nothing to do with the tenant himself
but is the responsibility of his solicitors. That is explained in a letter
dated January 19 from them to the landlords’ solicitors, in which in the third
paragraph they said:
The reason
for the further five week delay is that it was necessary to instruct counsel to
settle the notice of appeal and other documentation and this was returned to us
during the week before Christmas. The documentation then had to be typed, submitted
for the client’s approval. Our own offices were closed from the 24th until the
4th January and our client was not seen until the second week of January. The
affidavit was sworn on the 12th, being the first opportunity we had to see our
client and the documentation forwarded to you soon thereafter
The registrar
granted leave to appeal out of time on February 16. His reasoning is to be
found in a note which we have of his short judgment, in which he said:
This is not an
easy case. The applicant’s initial delay in instructing his solicitors to
appeal was only short and was due to the applicant’s misunderstanding of his
conversation with counsel. Thereafter, this application was not pursued as it
might have been. This was due to the intervening Christmas period and the fact
that the applicant’s former firm of solicitors had de-merged.
In these
circumstances, the merits fall to be considered. The learned judge does not
state explicitly why he regarded the applicant’s offer of security to be
inadequate. Notwithstanding that, this is a weak appeal. But it is not so weak
that the door should be closed on the applicant.
In view of
the weakness of the appeal, I am prepared to grant an extension of the time in
which to lodge the notice of appeal on stringent terms.
The matters
which the registrar was required to take into consideration in deciding whether
or not to grant leave to appeal out of time are to be found conveniently set
out in the judgment of Griffiths LJ (as he then was) in C M Van Stillevoldt
BV v EL Carriers Inc [1983] 1 WLR 207 at p 212, where he said:
The registrar,
in my judgment, took into account all the relevant matters when approaching the
determination of the application before him. He stated them in the following
words:
‘In my
judgment, all the relevant factors must be taken into account in deciding how
to exercise the discretion to extend time. Those factors include the length of
the delay, the reasons for the delay, whether there is an arguable case on the
appeal, and the degree of prejudice to the defendant if time is extended.’
It is agreed
by both counsel before us that we, hearing as we are an appeal directly from
the registrar, are in the position in which a single lord justice would have
been if he had been hearing this appeal — that is to say, we must consider the
matter afresh and exercise our own discretion.
I turn to
consider the first and second of the factors referred to by Griffiths LJ,
namely the extent of the delay and the reasons for the delay. In my judgment,
the delay is quite excessive. The application was not made, nor was the draft
notice of appeal filed, until ten and a half weeks after the judgment of the
county court, as opposed to the time limited by the rules of four weeks.
As to the
reasons for the delay, the reason given for the delay up to December 4 may well
be a valid one. The tenant is not English-speaking by birth and he may well
have misunderstood what his counsel said to him. That is an excuse which the
court might well have accepted had the matter stopped there. Indeed, it seems
from the tenant’s solicitors’ letter of December 8 that what they had in mind
to
a few days. If that had been done, and if the court had received this application
within, say, a week of the four-week expiry date, it might well have been
proper to grant the application to extend time.
The serious
delay was occasioned not before but after December 4. For that delay I can find
no valid explanation whatsoever. It is all very well to say that counsel had to
be instructed and then the Christmas period intervened; also that there was
difficulty in getting in touch with the client; but the tenant’s solicitors
must have been aware when they were instructed that they were already out of
time. It was their responsibility to ensure, thereafter, that the application
was made and the draft notice of appeal filed at the earliest possible
opportunity — by which I mean within a matter of a few days thereafter.
In my view, no
valid reason for the greater part of the delay has been advanced.
The last of
the matters referred to by Griffiths LJ is ‘prejudice to the landlords’. I do
not consider it necessary to say much about that matter. By section 24A of the
1954 Act, which was added by amendment by the Law of Property Act 1969, a
landlord can now make an application for an interim rent to be assessed if, as
has happened in this case, the former lease or contractual tenancy expires
before the date when the extended tenancy, under the 1954 Act, would expire.
Under the pre-1969 provisions, the tenant was obliged only to pay rent at the
rate applicable before his lease expired. Thus if the market rent had increased
substantially in the meantime, the landlord inevitably suffered a disadvantage.
There was some
discussion as to whether or not the landlord suffered a disadvantage even with
the benefit of interim rent on the basis that such interim rent is to be
assessed as if the tenant were being granted a new tenancy from year to year.
What to my mind is even more to the point is the fact that, although an
application has been made for the interim rent, it has not as yet been
assessed, so that such payment as the landlord has received up to date has been
at the old rent. No doubt when an interim rent is assessed (whatever the result
of the present appeal) for the period after March 25 1987 the landlord will
recover the balance due between the difference of the old rent and the interim
rent. But the fact is that the increased rent is not being received at the
moment and in my judgment there must be some detriment or prejudice to the
landlords in that respect.
That is
reinforced by the fact that the tenant has indicated that he would regard a
rent of £16,000 per annum as an appropriate rent if a new tenancy were to be
granted. That must be the minimum of what the tenant would regard as the
appropriate new rent, being a proper rent to be taken into account in assessing
the interim rent.
If it is right
to pause there and consider only the delay, the reasons for it, and the
question of prejudice to the landlords, everything points in favour of allowing
this appeal. The question next arises: should the court also take into account
the merits of the substantive appeal? Mr
Castle for the tenant accepted that the court need not consider that question.
He bases that submission upon a decision of this court in Palata Investments
Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942, which was a case in
which the tenants sought to apply for leave to appeal out of time very shortly
after a four-week period had expired — indeed, the period of delay was only
three days. There was a valid explanation for that delay.
On appeal from
the registrar, Neill LJ, sitting as a single lord justice, granted an extension
of time. On application to the full court for leave to appeal against that
order, Ackner LJ (as he then was) gave a judgment with which Robert Goff and
Browne-Wilkinson LJJ agreed.
At p 947D
Ackner LJ said this:
Before us the
matter was estimated to last two hours, as indeed it would have done but for
the fact that at the outset, having drawn attention to the procedure which used
to exist, we expressed the opinion that, in cases where the delay was very
short and there was an acceptable excuse for the delay, as a general rule the
appellant should not be deprived of his right of appeal and so no question of
the merits of the appeal will arise. We wish to emphasise that the discretion
which fell to be exercised is unfettered, and should be exercised flexibly with
regard to the facts of the particular case. No doubt in some cases it may be
material to have regard to the merits of the appeal; because it may be wrong,
and indeed an unkindness to the appellant himself, to extend his time for
appealing, after he has allowed the time to elapse, to enable him to pursue a
hopeless appeal.
There Ackner
LJ was considering a case in which the time which had elapsed was very short;
but suppose (as here) the reverse is the case. The time which has elapsed is
lengthy and there is little valid explanation for it. Suppose, also, that the
prospective appellant (the tenant) wishes to argue that he has a good chance of
success in his appeal. Should the court then go on to consider how great it
thinks that chance is; or, should it simply say: ‘You are very much out of
time. You have given so little explanation for the delay that we are not
prepared to consider the chances of a successful appeal’?
In my view in
such circumstances it is a relevant matter for the court to consider the merits
of the appeal. We are not bound to do otherwise by the decision in Palata
Investments Ltd. We therefore went on to hear argument on the merits, as to
which I now turn.
In his
judgment, Judge Phelan summarised the delay regarding payment of rent by
reference to a schedule which was placed before him, and which this court has
in the papers before it, indicating from the time when the present tenant took
an assignment in 1981 the dates on which the various quarterly payments had
been made.
The judge
summarised that matter in this way:
8. . . . In
summary, apart from the first and last payments,
that is to say
1981 to 1987
the applicant
has never paid on the due date and has been late in paying not only for five,
six or seven days, but twice that length, and on several occasions the delays
have been much longer — 65, 74, 41, 30 and 46 days. Not only is it the
situation that he has a woeful history, as I think it has been rightly
described when I consider the 27 payments in the schedule, but also the landlords
have been obliged to take action on two occasions when proceedings for
possession were instituted in June 1985 and December 1985. There have been two
section 146 notices, the first in September 1984 and the second in February
1987, and on no less than four occasions cheques received from the applicant in
payment of rent have been returned by the bank. A cheque was returned twice in
December 1981, once in December 1984, once in September 1985 and three times in
March 1986.
Clearly there
was persistent delay in paying the rent. To return to the wording of section
30(1)(b) of the Act, the ground upon which the landlords oppose an
application for a new tenancy is:
that the
tenant ought not to be granted a new tenancy in view of his persistent delay in
paying rent which has become due;
The question
for the judge was: ought the tenant not to be granted a new tenancy? Clearly that question involved the exercise
of the judge’s discretion; equally clearly Mr Castle accepted that this court
can differ from the exercise of that discretion only on well-known principles:
if it is apparent that the judge made an error on principle; if he exercised
his discretion in a way which was patently perverse or if he took into account
an irrelevant factor or failed to take into account a relevant factor.
It is upon the
last of those that Mr Castle bases his argument. At the hearing before the
judge, through his counsel the tenant offered what is described as ‘security’;
that is to say, if there were to be a grant of a new tenancy, the tenant said
he was willing to have that tenancy subject to a provision to the effect that
he would initially pay a quarter’s rent in advance; thereafter he would pay the
rent by monthly standing orders, so that the intention was the rent would be at
least two months in advance. Moreover, the tenant offered to be subject to a
term entitling the landlords to foreclose if he fell into arrear with his rent.
The first
ground of the draft notice of appeal is:
. . . the
learned judge erred in law in the exercise of his discretion in that he failed
to give any or any proper weight:
(a) to the applicant’s offer of amends making it
a condition of any new tenancy, breach of which would entitle the respondents
to re-enter, that the rent would be payable by banker’s order monthly in
advance and that the respondents would be entitled to hold a further quarter’s
rent in advance as security for payment thereof;
Mr Castle
argues before us that either the judge did not give this matter any weight or
he did not give it proper weight.
In his
judgment, when Judge Phelan came to deal with this matter, he said:
12 It is said I must (and of course I must) look
at a wide range of circumstances. The tenant has offered to pay the rent by
standing order monthly and make a quarter’s payment in advance. There is force
in the suggestion that monthly payments are likely to lead to more
administration for the landlords. On any view even if the court accepts the
tenant’s contention that the rent should be fixed at £16,000 per annum then
there will be a substantial increase. Also I am told that one of the
respondents, and this is not denied, relies on the income being paid regularly
for her day-to-day expenses.
Then in para
14 of his judgment, the judge referred to Hopcutt v Carver* (an
authority to which he had no doubt been referred during the course of the
hearing) and said:
In Hopcutt
v Carver the tenant had occupied the premises for 20 years, but there
was evidence that over a period of two years he had been constantly in arrear with
rent. No offer admittedly was made for security; that was a case in which the
tenant had been in occupation for 20 years.
*Editor’s
note: Reported at (1969) 209 EG 1069; [1969] EGD 164.
In my
judgment, despite Mr Castle’s argument, it is quite clear from those two
passages that the judge did take into account the offer made by the tenant of
what was called ‘security’. It is a wide use of the word ‘security’, but it is
a convenient form of shorthand. That the judge did take it into account is, in
my view, established. The weight he gave to the matter, as against the other
factors which he had to put in the scales, was very much a matter for his
discretion. I can see no reason to say he did not take that relevant
consideration into account; and there is nothing to suggest that he erred in
principle in any way.
Accordingly in
my view, if we were to uphold the decision of the registrar giving the tenant
leave to appeal out of time, his appeal would have only the most minimal chance
of success. It follows therefore that, taking all the relevant factors into
account, with respect to the registrar, he should not have extended time.
I would
therefore allow this appeal and set aside the registrar’s order.
FOX LJ agreed
and did not add anything.
The appeal
was allowed with costs in Court of Appeal and below.
