Landlord and Tenant Act 1954, Part II — Application by landlord to fix interim rent under section 24A — Question as to the date from which the interim rent was to run — Section 24A(2) provides that such rent shall be payable as from the date on which the proceedings were commenced or the date specified in the landlord’s notice or the tenant’s request, whichever is the later — The proceedings referred to are the proceedings by the landlord to fix the interim rent — In the present case the landlord, in her answer to the tenant’s originating application for a new tenancy, after setting out various matters such as her grounds of opposition added a paragraph in which she applied under section 24A for the determination of an interim rent — In doing so the landlord was following a paragraph in Practice Form N400 in the County Court Practice — This was in May 1983 — After nearly two years, during which negotiations and discussions continued, in April 1985 the landlord issued a notice that she intended to apply to the county court to fix an interim rent — The judge decided that the date on which proceedings were commenced, for the purpose of the interim rent, was the notice in April 1985, not the date of the answer in May 1983 — He held that the para in the landlord’s answer could not
constitute an application, which took place only when some notice of appointment was taken, as in the present case, under Order 13, rule 1 — On appeal by the landlord the Court of Appeal held that the judge was wrong on this point — Order 13, rule 1 was a convenient practical rule dealing with interlocutory applications but it did not cover the whole ground — Where there is a dispute as to rent and terms of the new tenancy as well as the interim rent, and the tenant’s application is before the court on a single substantive appointment at the trial of the action, the court can determine the terms of the new tenancy, and the interim rent, because the application for the latter has been made in the answer — If the application for the interim rent is granted it will date back to the date of the answer — Here the interim rent would run from May 1983 — Appeal allowed
This was an
appeal by the landlord, Mrs Joan Hammond-Lawrence, from a decision of Judge
Motta Singh at Clerkenwell County Court as to the date from which an interim
rent under section 24A of the Landlord and Tenant Act 1954 was payable in
respect of business premises at 288 Camden Road, London N7. The respondent to
the appeal, the applicant for the grant of a new tenancy, was Mrs Dorothy
Gwinfell Thomas.
R J Moshi
(instructed by Hurd & Haigh) appeared on behalf of the appellant; Sir
Ashley Bramall (instructed by Davidsons) represented the respondent.
Giving
judgment, DILLON LJ said: This is an appeal by a landlord against a decision of
Judge Motta Singh QC given in the Clerkenwell County Court on July 25 1985. The
appeal raises a short point of practice in relation to proceedings in the
county court under Part II of the Landlord and Tenant Act 1954 and, in
particular, in relation to an application by a landlord for the fixing of an
interim rent for premises in respect of which there is an application for a new
tenancy under Part II of that Act.
Section 24A of
the Landlord and Tenant Act 1954 was introduced into the Act by the Law of
Property Act 1969. Subsection (1) of section 24A provides:
The landlord
of a tenancy to which [Part II] of this Act applies may
in certain
events
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 24 of this Act, and the court
may determine a rent accordingly
Subsection (2)
provides:
A rent
determined in proceedings under this section shall be deemed to be the rent
payable under the tenancy from the date on which the proceedings were commenced
or the date specified in the landlord’s notice or the tenant’s request,
whichever is the later.
In the case of
Stream Properties Ltd v Davis [1972] 1 WLR 645, it was held that
the ‘proceedings under this section’, referred to in subsection (2), were the
proceedings by the landlord to fix an interim rent and not the proceedings by
the tenant to obtain a new tenancy. Therefore, the reference in subsection (2)
to ‘the date on which the proceedings were commenced’ is a reference to the
date on which the landlord’s proceedings for fixing an interim rent were
commenced. That is the date which has to be ascertained to find out what the
date is from which the interim rent, when granted, will run. Stream
Properties Ltd v Davis was a High Court case, and in the High Court
there is express provision in Order 97, rule 9A of the Rules of the Supreme
Court that
An
application under section 24A of the Act of 1954 to determine an interim rent
shall (a) if the tenant has begun proceedings for a new tenancy under section
24 of the Act, be made by summons in those proceedings, and (b) in any other
case, be made by originating summons.
It was
accordingly held in Stream Properties Ltd v Davis in the context
of High Court proceedings that the date from which the interim rent was to run
was the date of the issue of the summons in the tenant’s proceedings which was
issued by the landlord by way of application to determine the interim rent
under section 24A. There is no parallel in the County Court Rules to Order 97,
rule 9A of the Rules of the Supreme Court.
The facts of
the present case are as follows. The appellant is the present landlord, and the
tenant, who is respondent to this appeal, is the tenant of business premises
known as 288 Camden Road, London N7. The tenant was granted in 1975 a tenancy
of those premises for a term of seven years from March 26 1976 at a rent of
£1,000 per annum. It is common ground that that tenancy was within the
protection of Part II of the 1954 Act.
On November 23
1982 the landlord served notice on the tenant determining the tenancy under
section 25 of the 1954 Act. The notice gave May 25 1983 as the date for the
termination of the tenancy; it also indicated that the landlord would oppose
the grant of a new tenancy. Accordingly, on January 18 1983 the tenant made
application in the county court for the grant of a new tenancy. The application
is in the normal form, Form N397, for an originating application for a new
tenancy under Part II of the 1954 Act, and it sets out the various matters
which such an application is required by the rules to set out. It accordingly
became the landlord’s duty to serve an answer to that application. The answer
was served on May 27 1983 by the landlord’s solicitors, and it is addressed to
the registrar of the county court and to the applicant and her solicitors. This
set out that the landlord opposed the grant of a new tenancy on certain grounds
which are indicated, and it also objected to the new tenancy, if granted, being
granted on the terms proposed by the applicant. It set out various other
matters which an answer has to contain, and then in para 5 it said this:
The
Respondent hereby applies under Section 24A of the Landlord and Tenant Act 1954
that the Court should determine the rent which it would be reasonable for the
Applicant to pay while the tenancy continues by virtue of Section 24 of the
said Act.
As is often
the case with applications for a new tenancy, there were negotiations and
discussions and delays for various reasons. There was an abortive appointment
to decide certain preliminary issues in November 1984, the preliminary issues
concerned being whether the landlord made out the grounds for objecting to the
grant of a new tenancy at all. Ultimately, on April 11 1985, the landlord
issued a notice, which was served on the tenant a few days later with a
covering letter, giving notice that the landlord intended to apply to the judge
of the court on July 10 1985 for an interim rent to be fixed for the premises
and for costs. The notice intimated that a day had been allowed for the
hearing. The hearing commenced on July 10 1985, but for various reasons the
hearing was not then concluded; it was adjourned to the 25th and then
concluded, the order under appeal then being made.
The judge
decided that the date on which the proceedings were commenced for the purposes
of subsection (2) of section 24A was not the date of the answer which contained
the para which I have read but the date of the issue of the notice in April
1985 of the hearing to fix the interim rent.
The question
is: Was he right in so concluding, or was the date when the proceedings were
commenced the date of the answer?
In the Green
Book it is set out in the notes, at p 1506 of the 1985 County Court
Practice, under section 24A against the word ‘Procedure’:
If the tenant
has already applied to a county court for a new tenancy, an application under
this section may be made in the course of those proceedings in accordance with
Ord 13, r 1 . . . or in the landlord’s answer. If the tenant has not already
applied for a new tenancy, an application to a county court under this section
should be made by originating application in accordance with Ord 3, r 4.
A similar note
has appeared in the corresponding part of the Green Book for many years
past, even before the introduction of the County Court Rules 1981.
The practice
forms issued in respect of county court proceedings include, as Form N400, a
form of answer to originating application for new tenancy under Part II of the
Landlord and Tenant Act 1954. This practice form includes, as something to be
added if required, a para 6 in these words:
I hereby
apply to the court under section 24A of the Act to determine a rent which it
would be reasonable for the applicant to pay while the tenancy continues by
virtue of section 24 of the Act.
It will be seen
that the form of the para in this landlord’s answer in this case was closely
parallel to that in the practice form N400. Before the 1981 County Court Rules
came in, the form of answer in the county court forms was a mandatory form, but
it did not include any reference to application to determine an interim rent.
The present form is not mandatory; it is a practice form issued with the
approval of the Lord Chancellor but not prescribed by rule. Such forms are
issued with the two-fold object of assisting litigants to take steps in the
proceedings and promoting uniformity of practice among the courts.
Notwithstanding that, the learned county court judge held that the para in the
landlord’s answer in the present case and the para in the practice form are in
truth of no effect at all, because they do not constitute an application to the
court to determine a rent; they do not
only when some notice of appointment is taken, as in the present case, by a
notice or application under Order 13, rule 1.
The learned
judge held that there was nothing to make it mandatory or to give official
support to the inclusion of the application for a new tenancy in the answer,
and, seeing no official support in the way of a mandatory provision, he felt
that he should not hold it effective.
It has been
submitted by Sir Ashley Bramall for the respondent in this court that, in
truth, Order 13, rule 1 of the County Court Rules makes it mandatory to make
the application for an interim rent by summons under Order 13, rule 1 if
proceedings have been commenced by the tenant, and therefore makes the issue of
the summons (in this case in April 1985) the date of the commencement of the
proceedings for the interim rent.
Order 13, rule
1 provides:
(1) Except as otherwise provided, the following
paragraphs of this rule shall have effect in relation to any application
authorised by or under any Act or rule to be made in the course of an action or
matter before or after judgment.
(2) Unless allowed or authorised to be made ex
parte, the application shall be made on notice, which shall be filed and served
on the opposite party not less than two days before the hearing of the
application.
That is
dealing with interloctory applications and is an obviously convenient practical
rule. Sir Ashley says that the application by a landlord is an application
authorised by statute, and so under Order 13, rule 1 it must be made by notice
and is effectively so made only when the notice is issued. But I do not see
that that covers the whole ground. One might have a case in which there was no
dispute that the tenant was entitled to a new tenancy and therefore no
preliminary issue to be tried. But there was dispute between the parties over
what the rent under a new tenancy should be, or what some other terms should
be, and over a claim by the landlord to an interim rent. In such a case, as it
seems to me, if the landlord has in his answer, in accordance with the practice
form, put forth a claim for an interim rent, then the tenant’s application
could come before the court on a single substantive appointment at the trial of
the action and the court would then be able to determine the terms of the new
tenancy and the interim rent because the application for the interim rent had
been made in the answer. I do not see that it makes any difference that there
is an issue as to whether the tenant should have a new tenancy at all; the answer
is the pleading in which the claim for an interim rent is made. It is then a
matter of sensible practice how the various issues raised in the tenant’s
application and the answer can best be dealt with, but, as the answer has
raised the application for an interim rent, if one is granted by the court,
that will date back to the date of the answer. Equally, whereas it may often
happen that the parties will wish to negotiate over the amount of an interim
rent as over the amount of the final rent under an order for a new tenancy,
they will be able to negotiate with the knowledge that the application had been
raised and is properly included in the proceedings so that time is not running
against the landlord in the sense that he would be precluded from claiming
interim rent over the period of the negotiations.
With every
respect, therefore, to the learned judge, I think he was wrong on this point
and I would accordingly allow this appeal.
SHELDON J
agreed, for the reasons given by Dillon LJ, that the appeal should be allowed
and he did not add anything further.
The appeal
was allowed with costs and it was declared that the landlord’s application was
validly made in her answer of May 27 1983, the interim rent to run from that
date.
