Consent order – Time extension – Relief from forfeiture – Appellant bringing claim to forfeit long lease of flat for non-payment of rent and service charge and other breaches of covenant – Consent order agreed between parties providing for relief from forfeiture on satisfaction of certain conditions within specified time limit – Respondent applying for extension of time – All matters specified in consent order addressed by time that application heard – Whether court having discretion to grant time extension under CPR 1 and 3 – Whether extension properly granted on facts of case – Appeal dismissed
The deceased was the registered proprietor of a long lease of a flat in London W1. He died in 2002 but his landlord, the appellant, did not become aware of that fact until much later. In 2012, the appellant issued a claim for possession of the flat on the grounds that the lease had validly been forfeited for non-payment of rent and service charge and for breaches of covenants against assigning, underletting and parting with possession of the flat or carrying out alterations. The claimed arrears amounted to £22,770.29. The respondent, who was the deceased’s son, was appointed under CPR 18.8(2) to represent the deceased’s estate.
The county court made an order for possession and for payment of the arrears with interest but that order was stayed pending a hearing of the respondent’s application for relief from forfeiture. The hearing was postponed due to the respondent’s ill health and, in the meantime, the parties reached a settlement on the terms of a consent order, which provided for relief from forfeiture to be granted on the satisfaction of certain conditions. These included the payment of arrears and the carrying out of certain works to the flat by given deadlines, plus the ongoing payment of sums equal to the rent and serve charge for the continued occupation of the flat.
The respondent did not comply with the deadlines imposed by the consent order but instead applied for an extension of time. By the time that application was heard, he had addressed all the matters set out in the consent order, albeit not within the specified timetable. The judge held that there was jurisdiction under the CPR to extend time and that, while that jurisdiction should be exercised sparingly, it was appropriate to grant a time extension on the facts of the case.
The appellant appealed. It contended that the consent order represented a binding contract between the parties and that, where it imposed time limits, the respondent should be held to those limits, at least in the absence of exceptional circumstances arising after the date of the consent order and not anticipated in its provisions.
Held: The appeal was dismissed.
In granting an extension of time to the respondent, the judge had made no error of principle and had not taken into account irrelevant matters or left relevant ones out of account. The power under CPR 3.2(a) to extend compliance with any order, combined with the obligation under CPR 1 to comply with the overriding objective of dealing with cases justly, conferred a real discretion on the court whether or not to extend the time specified in a consent order. The existence of the discretion no longer depended on the distinction, made in the settled practice of the courts prior to the CPR, between consent orders giving effect to a real contract between the parties, which were variable only on grounds such as mistake or misrepresentation that applied to any other contract, and, on the other hand, consent orders which were no more than an order to which the parties did not object, and which could be altered or varied by the court in the same circumstances as any other court order made without the consent of the parties.
Nonetheless, the distinction between those two types of consent order remained important when the court was considering the exercise of its discretionary power. Appropriate weight should be given to the parties’ agreement, with the weight varying according to the nature of the order and therefore the agreement. A case management decision made at the instance of one party, and to which the other party made no objection, was different from a genuine settlement of a substantive dispute as to the parties’ rights. Where the agreement represented the compromise of a substantive dispute or the settlement of proceedings, that factor would have very great, and perhaps ordinarily decisive, weight. Where, on the other hand, the agreement was no more than a procedural accommodation in relation to case management, the weight to be accorded to the fact of the parties’ agreement as to the consequences of non-compliance, while still real and substantial, would ordinarily be correspondingly less: Ropac Ltd v Inntrepreneur Pub Co (CPC) Ltd [2001] L&TR 10; [2000] PLSCS 136 and Pannone LLP v Aardvark Digital Ltd [2011] EWCA Civ 803; [2011] 1 WLR 2275 applied; Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 considered.
The judge had properly held that the power to extend time should be exercised sparingly in a case such as the present, but he had also been right to take into particular account the context of the case, in which a tenant was seeking relief from forfeiture. It was well established that the court regarded a condition of re-entry under a lease as being merely security for the rent and that, where the court had granted relief from forfeiture on condition of payment of arrears of rent or other action by the tenant by a specified date, the court would grant further time if it was just and equitable to do. Critical factors in the instant case, in the contest of relief from forfeiture, were that the application for the time extension had been made before expiry of the time limits, all the conditions in the consent order had been satisfied by the time the application was heard and the forfeiture was in respect of a long lease of residential premises, the value of which was almost £1m more than the sums due to the appellant. In light of those factors, the judge was entitled to exercise his discretion in favour of extending the time limit: Chandless-Chandless v Nicholson [1942] 2 KB 321 and Starside Properties Ltd v Mustapha [1974] 1 WLR 816; (1974) 232 EG 79 applied.
Nathaniel Duckworth (instructed by Howard Kennedy) appeared for the appellants; Jonathan Gaunt QC (instructed by Freemans Solicitors) appeared for the respondents.
Sally Dobson, barrister
