Landlord and tenant — Forfeiture — Whether mortgagee barred from relief in forfeiture by section 138(7) of the County Courts Act 1984 and/or by section 210 of the Common Law Procedure Act 1852 — Whether proof of insufficient distress on the premises necessary
1983 the defendant’s predecessors in title, Newcom Ltd, granted a lease of a
flat, 22 West Kensington Court, London W14, for a term of 99 years (less 28
days) from June 24 1978 at a rent of £30 a year. In August 1987 the term of the
lease was assigned to Mr Karimi Nik for a premium of which £61,000 was advanced
by the plaintiff, United Dominions Trust Ltd, secured by a charge over the
lease — A claim for arrears of service charges and possession of the flat
against Mr Karimi Nik brought by Newcom Ltd came before the county court on
March 17 1988, when judgment was given in its favour against Mr Nik for arrears
of service charge in the sum of £2,146.92, together with costs and an order
that if the arrears were not paid by April 14 1988, and costs within 14 days of
taxation, Mr Nik should give up possession of the flat — Although the arrears
of £2,146.92 were duly paid, the costs of Newcom Ltd, taxed in the sum of
£362.15, were not paid — Newcom Ltd executed the judgment obtained on March
1988 by taking possession of the flat through the bailiff on February 28 1990 —
On February 25 1991 the plaintiff commenced the present proceedings in the High
Court against the defendant, Shellpoint Trustees, successors in title to Newcom
Ltd, for relief in forfeiture of the lease in its capacity as mortgagee — The
defendant’s summons to strike out the plaintiff’s application was dismissed by
Master Barrett on October 18 1991 — The defendant’s appeal against that
decision was, by agreement, treated as an application to determine a
preliminary issue, namely whether the court has jurisdiction to entertain the
plaintiff’s application for relief from forfeiture — On behalf of the
defendant, it was contended that the court did not have jurisdiction to grant
the plaintiff relief from forfeiture in view of section 138(7) of the County
Courts Act 1984 or, alternatively, in view of the provisions of section 210 of
the Common Law Procedure Act 1852
Despite the wide definition of ‘lessee’ in section 140 of the 1984 Act, the
reference to ‘the lessee’ in section 138(5) is a reference to the tenant who
holds the lease — Accordingly, the same restrictive construction of ‘lessee’
must apply to section 138(7) and, as the plaintiff was not a ‘lessee’, it was
not barred from all relief by reason of its failure to apply for relief from
forfeiture timeously under section 138(9C) of the 1984 Act
defendant’s predecessor obtained judgment on March 1988 in respect of more than
a half-year’s rent, the plaintiff was not barred from obtaining relief from
forfeiture under section 210 of the Common Law Procedure Act 1852 — Because the
plaintiff was not a party to the claim for possession brought by the
defendant’s predecessor in the county court, the plaintiff was not a person who
is barred from seeking relief under section 210 of the 1852 Act — The
plaintiff’s application for relief was within section 210, notwithstanding
there being no evidence of the absence of any sufficient distress on the
premises at the time the order for possession was made; see Roe d West v
Davies
The following
cases are referred to in this report.
Di Palma v Victoria Square Property Co Ltd [1986] Ch 150; [1985] 3
WLR 207; [1985] 2 All ER 676, CA
Grand
Junction Co Ltd v Bates [1954] 2 QB 160;
[1954] 3 WLR 45; [1954] 2 All ER 385
Matthews v Dobbins [1963] 1 WLR 227; [1963] 1 All ER 417, CA
Roe d
West v Davies (1806) 7 East 363
Standard
Pattern Co Ltd v Ivey [1962] Ch 432; [1962]
2 WLR 656; [1962] 1 All ER 452
This was an
appeal by the defendant, Shellpoint Trustees, from a decision of Master
Barrett, who dismissed its application to strike out the application of the
plaintiff, United Dominions Trust Ltd, for relief from forfeiture as mortgagee
of a lease of 22 West Kensington Court, London W14. By agreement the appeal was
treated as a hearing of a preliminary issue.
Simon Berry QC
and Andrew Goodman (instructed by Hill Bailey, of Bromley) appeared for the
plaintiff; Wayne Clark (instructed by Binks Stern) represented the defendant.
Giving
judgment, MR DAVID NEUBERGER QC said: The question at issue is whether
the plaintiff, as the mortgagee of a long lease at a low rent, is entitled to
claim relief in forfeiture. This question requires consideration of two
statutory provisions: one comparatively recent, section 138 of the County
Courts Act 1984, and the other of more antiquity, section 210 of the Common Law
Procedure Act 1852.
The relevant
facts are as follows. On December 2 1983 the defendant’s predecessors in title,
Newcom Ltd, granted a lease of a flat, 22 West Kensington Court, London W14,
for a term of 99 years (less 28 days) from June 24 1978 at a low rent of £30 a
year. The lease contained a provision for payment of service charges and a
proviso for forfeiture for non-payment of the rent service charges. It was
assigned to a Mr Karimi Nik in August 1987 for a substantial premium of which
£61,000 was advanced by the plaintiff and to whom Mr Karimi Nik granted a
charge over the lease. Thereafter, Mr Karimi Nik was registered as proprietor
of the lease at the Land Registry and the plaintiff was registered as the first
chargee.
Newcom Ltd
issued proceedings in West London County Court for arrears of service charges
and possession of the flat against Mr Karimi Nik. There were alleged to be
arrears of service charge under the lease amounting to £2,146.92. Pursuant to
Ord 6, r3(1)(f) of the County Court Rules the plaintiff was specifically
identified in the particulars of claim as a person ‘who is entitled to claim
relief against forfeiture’ and was given notice of the proceedings.
The claim for
possession came before the county court on March 17 1988, when judgment was
given in favour of Newcom Ltd against
with costs on scale 2. It was further ordered that, unless the arrears of
£2,146.92 were paid by April 14 1988 and the costs paid within 14 days of
taxation, Mr Karimi Nik should give up possession of the flat. The arrears of
£2,146.92 were duly paid shortly thereafter.
The costs of
Newcom Ltd in relation to the county court proceedings were taxed in the sum of
£362.15. On June 28 1988 notice of that fact was given to Mr Karimi Nik in the
appropriate form, which specifically stated that the sum of £362.15 should be
paid into court within 14 days. No money was paid to Newcom Ltd or into court
in respect of these costs.
Pursuant to
the judgment obtained on March 17 1988 and the failure of Mr Karimi Nik to pay
the costs, Newcom Ltd executed the judgment by taking possession of the flat
through the bailiff on February 28 1990. Since that date Newcom Ltd and, since
the transfer of the reversion of the lease to it, the defendant have been in
possession of the flat.
On February 25
1991 the plaintiff issued the instant proceedings in the High Court against the
defendant for relief from forfeiture of the lease. It did so in its capacity as
mortgagee. On September 10 1991 the defendant took out a summons applying to
strike out the plaintiff’s application. That summons came on for hearing before
Master Barrett, who dismissed it on October 18 1991. The defendant appealed
against that decision.
When the
appeal came on before me, both parties very sensibly agreed that it would be
far more satisfactory from the point of view of the parties and of the court to
treat the defendant’s summons as an application to determine a preliminary
point, namely whether the court had jurisdiction to entertain the plaintiff’s
application for relief from forfeiture.
Mr Clark, on
behalf of the defendant, contends that the court does not have jurisdiction to
grant the plaintiff relief from forfeiture in view of section 138(7) of the
County Courts Act 1984 (‘the 1984 Act’). If that is not correct, he contends in
the alternative that the court does not have jurisdiction to grant relief from
forfeiture in view of the provisions of section 210 of the Common Law Procedure
Act 1852 (‘the 1852 Act’). Mr Berry QC, on behalf of the plaintiff, contends
that neither the 1984 Act nor the 1852 Act prevents the court from granting the
plaintiff relief from forfeiture.
I turn first
to the provisions of section 138 of the 1984 Act. In its current form it reads:
Provisions
as to forfeiture for non-payment of rent.
138.— (1) This section has effect
where a lessor is proceeding by action in a county court (being an action in
which the county court has jurisdiction) to enforce against a lessee a right of
re-entry or forfeiture in respect of any land for non-payment of rent.
(2) If the lessee pays into court not less than 5
clear days before the return day all the rent in arrear and the costs of the
action, the action shall cease, and the lessee shall hold the land according to
the lease without any new lease.
(3) If —
(a) the action does not cease under subsection (2);
and
(b) the court at the trial is satisfied that the
lessor is entitled to enforce the right of re-entry or forfeiture,
the court
shall order possession of the land to be given to the lessor at the expiration
of such period, not being less than 4 weeks from the date of the order, as the
court thinks fit, unless within that period the lessee pays into court all the
rent in arrear and the costs of the action.
(4) The court may extend the period specified
under subsection (3) at any time before possession of the land is recovered in
pursuance of the order under that subsection.
(5) Subject to subsection (6), if —
(a) within the period specified in the order; or
(b) within that period as extended under subsection
(4), the lessee pays into court [or to the lessor] —
(i) all the rent in arrear; and
(ii) the costs of the action,
he shall hold
the land according to the lease without any new lease.
(6) Subsection (2) shall not apply where the
lessor is proceeding in the same action to enforce a right of re-entry or
forfeiture on any other ground as well as for non-payment of rent, or to
enforce any other claim as well as the right of re-entry or forfeiture and the
claim for arrears of rent.
(7) If the lessee does not —
(a) within the period specified in the order; or
(b) within that period as extended under
subsection (4), pay into court —
(i) all the rent in arrear; and
(ii) the costs of the action,
the order
shall be enforced in the prescribed manner and so long as the order remains
unreversed the lessee shall, subject to subsections (8) and (9A), be barred
from all relief.
(8) The extension under subsection (4) of a period
fixed by a court shall not be treated as relief from which the lessee is barred
by subsection (7) if he fails to pay into court all the rent in arrear and the
costs of the action within that period.
(9) Where the court extends a period under
subsection (4) at a time when —
(a) that period has expired; and
(b) a warrant has been issued for the possession of
the land,
the court
shall suspend the warrant for the extended period; and, if, before the expiration
of the extended period, the lessee pays into court all the rent in arrear and
all the costs of the action, the court shall cancel the warrant.
(9A) Where the lessor recovers possession of the
land at any time after the making of the order under subsection (3) (whether as
a result of the enforcement of the order or otherwise) the lessee may, at any
time within six months from the date on which the lessor recovers possession,
apply to the court for relief; and on any such application the court may, if it
thinks fit, grant to the lessee such relief, subject to such terms and
conditions, as it thinks fit.
(9B) Where the lessee is granted relief on an
application under subsection (9A) he shall hold the land according to the lease
without any new lease.
(9C) An application under subsection (9A) may be
made by a person with an interest under a lease of the land derived (whether
immediately or otherwise) from the lessee’s interest therein in like manner as
if he were the lessee; and on any such application the court may make an order
which (subject to such terms and conditions as the court thinks fit) vests the
land in such a person, as lessee of the lessor, for the remainder of the term
of the lease under which he has any such interest as aforesaid, or for any
lesser term.
In this
subsection any reference to the land includes a reference to a part of the
land.
(10) Nothing in this section or section 139 shall
be taken to affect —
(a) the power of the court to make any order which
it would otherwise have power to make as respects a right of re-entry or
forfeiture on any ground other than non-payment of rent; or
(b) section 146(4) of the Law of Property Act 1925
(relief against forfeiture).
Subsections
(9A), (9B) and (9C) were added by section 55 of the Administration of Justice
Act 1985, following the decision of the Court of Appeal in Di Palma v Victoria
Square Property Co Ltd [1986] Ch 150 to which I shall refer, and certain
other small amendments were added by the Courts and Legal Services Act 1990,
which are not material to these proceedings.
It is right to
refer to section 140 of the 1984 Act, which contains certain definitions that
apply to section 138. It provides as follows:
140.–For the purposes of sections 138 and 139 — ‘lease’ includes —
(a) an original or derivative under-lease;
(b) an agreement for a lease where the lessee has
become entitled to have his lease granted; and
(c) a grant at a fee farm rent, or under a grant
securing a rent by condition;
‘lessee’
includes —
(a) an original or derivative under-lessee;
(b) the persons deriving title under a lessee;
(c) a grantee under a grant at a fee farm rent, or
under a grant securing a rent by condition; and
(d) the persons deriving title under such a
grantee;
‘lessor’
includes —
(a) an original or derivative under-lessor;
(b) the persons deriving title under a lessor;
(c) a person making a grant at a fee farm rent, or
a grant securing a rent by condition; and
(d) the persons deriving title under such a
grantor;
‘under-lease’
includes an agreement for an under-lease where the under-lessee has become
entitled to have his under-lease granted; and
‘under-lessee’
includes any person deriving title under an under-lessee.
It is clear
that it would have been open to the plaintiff to apply for relief from
forfeiture in the county court under section 138(9C) within six months of the
date on which the defendant recovered possession. However, by the time the
plaintiff made its application for relief from forfeiture, namely by the originating
summons in the current proceedings, the six-month time-limit had long since
expired and it was and is too late for the plaintiff to seek relief from
forfeiture in the county court. It is for this reason that the plaintiff seeks
relief from forfeiture in the High Court.
Mr Clark
fastens on the provisions of section 138(7) and, in particular, the provision
that, if the arrears of rent and service charge and costs are not paid into
court within the time specified by the order, then ‘the lessee shall, subject
to subsections (8) and (9A), be barred from all relief’.
Although it is
true that section 138(7) refers to ‘the lessee’ as being barred from all
relief, Mr Clark relies on the definition of ‘lessee’ in section 140 as
including ‘an original or derivative underlessee’ or ‘the persons deriving
title under a lessee’. In this connection it is common ground that the
plaintiff as mortgagee is within the concept
[1954] 2 QB 160. If that contention is correct, then Mr Clark’s submission that
the plaintiff would in those circumstances be barred from applying to the High
Court for relief from forfeiture, whether pursuant to section 210 of the 1852
Act or pursuant to the inherent jurisdiction of the court, is based on the Di
Palma case.
That case
involved an application for relief from forfeiture in the High Court by a
tenant whose lease had been forfeited for non-payment of service charges in the
county court. As in this case, the landlord had re-entered pursuant to the
court order and opposed the application for relief on the grounds that the High
Court had no jurisdiction because section 191 of the County Courts Act 1959,
the statutory predecessor of section 138, excluded not only the jurisdiction of
the county court to grant relief from forfeiture but also the jurisdiction of
the High Court. Section 191 of the 1959 Act provided that, once the landlord
had executed an order for possession for non-payment of rent made in the county
court, the tenant was ‘barred from all relief’. At p 161E of the report, Lawton
LJ, who gave the leading and only reasoned judgment in the case, referring to
the words ‘barred from all relief’, said:
. . . on the
plain meaning of the words used . . . Parliament intended that a tenant who did
not do the acts specified should not later be able to apply to the High Court
for relief from forfeiture.
Mr Berry
argued that the decision of the Court of Appeal on this point no longer applied
and that the words ‘barred from all relief’ applied only to relief in the
county court. I cannot accept that. In the first place, the jurisdiction of the
county court is statutory and not inherent and there would seem to be no power,
outside the provisions of section 138, to grant relief in the county court.
Accordingly, on Mr Berry’s argument, the words ‘barred from all relief’ would
be otiose. Second, I would be very reluctant to accede to the argument when,
subsequent to the decision in Di Palma, Parliament has amended the 1984
Act in such a way as to keep in unqualified form the words construed in that
case, namely ‘barred from all relief’ and has also sought to mitigate the
effect of the decision in Di Palma by adding subsections (9A) to (9C) in
section 138.
In these
circumstances, it seems to me that the plaintiff’s argument on the first point
essentially rests on whether the reference to the lessee’s being barred from
all relief in section 138(7) extends to the plaintiff as a mortgagee under the
lease subject of the forfeiture. There is undoubtedly a powerful argument in
favour of the plaintiff’s contention. Section 138 envisages the tenant under
the lease concerned as having six months following the landlord taking
possession within which to seek relief from forfeiture, whereupon the landlord
knows that his property is free of the tenant’s right to apply for relief from
forfeiture. Given that the county court rules require any mortgagee known to
the landlord to be notified of any forfeiture proceedings (see Ord 6, r3(1)(f)
of the County Court Rules 1981), that any sensible mortgagee would therefore
ensure that the landlord was informed of the mortgage as soon as it was
granted, that the mortgagee would therefore have the right to apply to be added
in the proceedings, and given also that the mortgagee’s right to apply for
relief from forfeiture effectively mirrors the tenant’s rights by virtue of
section 138(9C), one can see the practical force of the contention that the
mortgagee should be treated as being in the same position as the tenant so far
as section 138(7) is concerned.
Against that,
the consequences of construing section 138(7) in such a way as to debar the
mortgagee from any right whatever to seek relief from forfeiture could be said
to be somewhat draconian. First, it is not the default of the mortgagee which
has brought about the forfeiture but that of the tenant under the lease.
Second, it is not as if the mortgagee is normally a party to the proceedings.
As here, the mortgagee may even be unaware of the fact that possession has been
executed against the premises. Third, if it is open to the mortgagee to apply
for relief from forfeiture, that does not mean to say that he will
automatically obtain such relief. It would be a matter for the court’s
discretion.
In the end, of
course, one is thrown back on the language of the section. Despite the wide
definition of ‘lessee’ in section 140, it seems to me that the reference to
‘the lessee’ in section 138(5) must be a reference to the tenant who holds
under the lease. Thus it seems to me that if, for instance, an undertenant paid
the rent and the costs in accordance with section 138(5), it cannot have been
intended that he, the undertenant, would ‘hold the land according to the lease
without any new lease’. I think that view finds some support from observations,
albeit obiter, in Matthews v Dobbins [1963] 1 WLR 227,
where the Court of Appeal was considering the statutory predecessor of section
138, namely section 191 of the 1959 Act. In particular, at p 231, Pearson LJ
said:
If the
section operated on payment into court, the action would cease and the lessee
would hold the land according to the lease without any new lease. It is
difficult to see how that can operate except as between the owner of the land
and the original lessee, or somebody deriving title under him, that is to say, some
person holding the lease.
Emphasis
supplied.
It is right to
say that he did not appear to decide that point in terms. It is also right to
refer to the earlier judgment of Donovan LJ at p 230, where he said:
I think it is
impossible to hold that a payment into court by a stranger satisfies section
191(1)(a). When a lessee pays in the rent and costs, the subsection
provides that, ‘the lessee shall hold the land according to the lease without
any new lease . . .’ There is a similar
provision in paragraph (c) of section 191(1), and these provisions lead me to
the conclusion that there must be identity between the person sued, the lessee,
and the person who pays in the arrears of rent. Moreover, the actual words of
section 191(1) (a) are: ‘if the lessee pays into court . . .’ all the rent
in arrear . . .’ How can a person with
no privity of contract with the landlord and in no property relationship with
him pay in rent? He may pay
money, but the Act uses the expression ‘rent’.
Section 191(1)(a)
and (c) of the 1959 Act are substantially re-enacted as section 138(2)
and (5).
It is true
that there are observations in Matthews v Dobbins which could be
said inferentially to support the contention that a subtenant is within the
concept of ‘lessee’ in section 191 of the 1959 Act and, therefore, section 138
of the 1984 Act. In particular, at the end of his judgment, which is the
leading judgment, Ormerod LJ said:
There are a
number of other valid reasons why such a state of affairs cannot arise unless
the arrears of rent and costs are paid in by the lessee or by a person proved
to be deriving title under the lessee who has possession.
However,
immediately before that, he said:
[Counsel for
the plaintiff] submits that ‘lessee’ in paragraph (a) must refer to the
lessee who is sued by the lessor and is referred to in the earlier part of the
subsection. That, I think, must be right.
In my
judgment, the observations which I have quoted from the judgments of Pearson and
Donovan LJJ do touch directly on the point with which I am concerned and
support the way in which I would have read section 138(5) free of authority.
The observations of Ormerod LJ are more equivocal but, to put the point at its
highest in favour of the defendant in this case, I do not consider that the
conclusion I have reached is inconsistent with his reasoning. If ‘lessee’ in
section 138(5) is restricted to the tenant in whom the lease is or was vested
and who is the defendant in the relevant proceedings, then I think the same
restrictive construction of ‘lessee’ must apply to section 138(7) as a matter
of ordinary language and construction.
Accordingly, I
do not consider that the plaintiff is ‘barred from all relief’ owing to its
failure to apply for relief from forfeiture under section 138(9C).
In reaching
this conclusion I have not overlooked the definition of ‘lessee’ in section 140
of the 1984 Act. In my judgment, the extension of the expressions ‘lease’ and
‘lessee’ to include, for instance, original underlease and original
underlessee, is to emphasise that, if the lease that is the subject of the
forfeiture proceedings is an underlease, then section 138 applies as much to
the underlessee in whom the underlease is or was vested as it does to a headlease
vested in a headlessee. I draw support for this conclusion from consideration
of section 146(5) of the Law of Property Act 1925, which contains similar
definitions of ‘lease’ and ‘lessee’. I should add that my view appears to be
the same as that taken by the legislature when it added subsections (9A) to
(9C) to section 138. If the reference to ‘the lessee’ in section 138(9A)
extends to an underlessee and mortgagee, then section 138(9C) would seem to be
otiose.
In the absence
of section 138(7) applying to the plaintiff, it was not suggested by Mr Clark
that there was anything else in section 138 of the 1984 Act which bars the
present application. Accordingly, so far as the provisions of the 1984 Act are
concerned, I determine the preliminary point in favour of the plaintiff and
hold that there is nothing in that Act which removes the jurisdiction of the
High Court from granting relief from forfeiture for the plaintiff.
I turn, then,
to the second aspect, which involves consideration of section 210 of the 1852
Act. I must set out that difficult section in full. With a view to simplifying
matters I shall divide section 210 into eight parts, although in the statute it
is set out in a single, undivided paragraph. It provides as follows:
[1] In all cases between landlord and tenant, as
often as it shall happen that one half year’s rent shall be in arrear, and the
landlord or lessor, to whom the same is due hath right by law to re-enter for
the nonpayment thereof;
[2] such landlord or lessor shall and may,
without any formal demand, or re-entry, serve a writ in ejectment for the
recovery of the demised Premises; . . . which service . . . shall stand in the
place and stead of a demand and re-entry;
[3] and in case of judgment against the defendant
for nonappearance, if it shall be made appear to the court where the said
action is depending, by affidavit, or be proved upon the trial in case the
defendant appears, that half a year’s rent was due before the said writ was
served, and that no sufficient distress was to be found on the demised
premises, countervailing the arrears then due, and that the lessor had power to
re-enter;
[4] then and in every such case the lessor shall
recover judgment and execution, in the same manner as if the rent in arrear had
been legally demanded, and a re-entry made;
[5] and in case the lessee or his assignee, or
other person claiming or deriving under the said lease, shall permit and suffer
judgment to be had and recovered on such trial in ejectment, and execution to
be executed thereon, without paying the rent and arrears, together with full
costs, and without proceeding for relief in equity within six months after such
execution executed;
[6] then and in such case the said lessee, his
assignee, and all other persons claiming and deriving under the said lease,
shall be barred and foreclosed from all relief or remedy in law of equity,
other than by bringing error for reversal of such judgment, in case the same
shall be erroneous;
[7] and the said landlord or lessor shall from
thenceforth hold the said demised premises discharged from such lease; . . .
[8] provided that nothing herein contained shall
extend to bar the right of any mortgagee of such lease, or any part thereof,
who shall not be in possession, so as such mortgagee shall and do, within six
months after such judgment obtained and execution executed pay all rent in
arrear, and all costs and damages sustained by such lessor or person entitled
to the remainder or reversion as aforesaid, and perform all the covenants and
agreements which, on the part and behalf of the first lessee, are and ought to
be performed.
The omitted
words were repealed by the Statute Law Revision Act 1892.
On behalf of
the defendant it is contended that the judgment obtained by the defendant’s
predecessor on March 17 1988 was in respect of more than one half-year’s rent
and that, accordingly, after the expiry of six months following the execution
of the judgment which occurred on February 20 1990, the plaintiff became
‘barred and foreclosed from all relief or remedy in law or equity’ by virtue of
what I have called part [6] of section 210. In this connection it is common
ground that the arrears of service charge did amount to more than six months’
arrears of rent and, accordingly, the present claim for possession falls within
what I have called part [1] of section 210.
It is,
correctly in my view, common ground between the parties that, if the judgment
in the county court in the instant matter is a case falling within what I have
called part [6] of section 210, then the plaintiff’s claim for relief from
forfeiture cannot succeed. That is because of the words ‘shall be barred and
foreclosed from all relief or remedy in law or equity’, similarly wide words to
those found in section 138(7). Further, again rightly in my view, it is common
ground between the parties that, if the judgment in the county court in the
instant matter is not a case falling within part [6] of section 210, then the
plaintiff’s application for relief from forfeiture is not debarred from
succeeding in principle. That is because section 210 does not wholly replace
the general equitable jurisdiction to grant relief from forfeiture.
On behalf of
the plaintiff it is contended that the present application for relief from
forfeiture is not by a person barred by part [6] of section 210 and, if that is
not right, then, second, the possession order executed by the defendant was not
an order falling within part [5] of section 210.
So far as the
first point is concerned, the plaintiff contends that the application which is
barred by what I have called part [6] of section 210 is an application by the
person against whom the order for possession was made. In this case it applies
to an application by Mr Karimi Nik, the tenant, and not to an application by
the plaintiff, the mortgagee.
If one reads
part [6] in isolation, that would seem to be a bad point, because not only is
the lessee referred to as being barred but so is ‘his assignee, and all other
persons claiming and deriving under the said lease’. However, there are, in my
judgment, a number of pointers in the section to the effect that the
plaintiff’s contention is correct.
First, part
[6] comes into effect only ‘in case the lessee or his assignee, or other person
claiming or deriving [title] under the said lease, shall permit and suffer
judgment to be had and recovered on such trial in ejectment’ (part [5] of
section 210). At the time the section was enacted it was not necessary to join
the mortgagee as a party to a forfeiture action and that remains the case. Nor
was it then necessary to notify him that proceedings were brought. That has
been changed. It remains the position, however, at common law. There was,
therefore, at least a substantial probability that the mortgagee would not know
anything about proceedings for possession, the judgment for possession or the
execution of the order for possession. I find it difficult in these
circumstances to see how, as a matter of ordinary language, such a mortgagee
could be said to have permitted or suffered judgment to be had and execution to
be executed. This seems to me to be a strong indication that the words ‘the
lessee or his assignee, or other person claiming or deriving under the said
lease’ were not intended to apply to a mortgagee who has not been a party to
the proceedings.
I should add
that neither party has invited me to approach the construction of the section
on the footing that whether a mortgagee has permitted or suffered judgment and
execution is a question of fact depending on the circumstanes of each case and
I have not so approached it.
Second, it is
difficult on any view to make much sense of part [8]. If, however, the persons
who are barred by part [6] are not the same as those who are sued in part [5],
then part [8] has no ascertainable meaning. Any mortgagee will automatically be
within part [6]. If, on the other hand, the only person who is barred under
part [6] is the person against whom judgment is given under part [5], then part
[8] specifically provides for the position relating to mortgagees, or at least
those mortgagees who were not parties to the proceedings.
Third, it
seems to me that the sense of parts [5] and [6] is that the persons referred to
in part [6] were intended to be such of the persons referred to in part [5]
against whom judgment was given. It is fair to point out that, while the
persons in part [5] are linked by the word ‘or’, those in part [6] are linked
by the word ‘and’. This gives rise to an argument that a difference between the
two classes was intended, the latter class being intended to comprise all
possible applicants for relief. In my judgment, however, that is attributing
too great an importance to the difference in conjunctions. My view is
reinforced by the reflection that, once there has been an assignment, the
original tenant cannot any longer apply for relief. If, therefore, part [6] was
intended to refer to different persons, then three separate references to the
said lessee and his assignee are hard to understand. If, on the other hand,
part [6] is merely a reference back to part [5], then the separate references
are explicable on the basis that there may have been an assignment and the
person against whom the judgment has been obtained may be an assignee and not
the original tenant.
Fourth, the
bar does not operate to prevent the bringing of ‘error for reversal’ of the
judgment. While it may be that a mortgagee who is not a party to the
proceedings can apply to set aside the judgment, none the less this provision
is more consistent with the persons who are barred being those against whom the
judgment has been given.
Fifth, the
defendant’s construction would be penal in circumstances where the mortgagee
had, through no fault of his own, no notice of judgment until the expiry of the
six-month time-limit. I find it hard to attribute such an intention to
Parliament in the absence of clearer words than have been used in the section.
Accordingly, I
consider that the plaintiff is correct in the contention that, because it was
not a party to the claim for possession brought by the defendant’s predecessor
in the county court and therefore does not fall within part [5] of section 210,
the plaintiff is not a person who is barred from seeking relief under part [6]
of section 210.
In view of
that conclusion it is not strictly necessary to consider the second point which
was argued on behalf of the plaintiff, namely that the possession order
obtained in the county court was not within the expression ‘such case’ in part
[6] of section 210 because it had not been established that there was
insufficient distress on the premises within part [3] of section 210. As this
point has been fully argued, it would be wrong for me not to express a view on
it.
The plaintiff
contended that, in order to be a forfeiture within section 210 at all, it must
be established not only that there was at least half a year’s rent in arrear,
which in this case is conceded, but also that insufficient distress could be
found on the premises. In Standard Pattern Co Ltd v Ivey [1962]
Ch 432 Wilberforce J had to consider the effect of section 212 of the 1852 Act.
So far as relevant that section is in the following terms:
If the tenant
or his assignee do or shall, at any time before the trial in such ejectment,
pay or tender to the lessor . . . all the rent and arrears, together with the
costs, then and in such case all further proceedings on the said ejectment
shall cease and be discontinued . . .
Wilberforce J,
after considering sections 210 to 212 of the 1852 Act, said:
This is a
series of sections which brings into existence a right greater than those which
formerly existed in ejectment against a tenant in the case of arrears of rent,
and the tenant on the other hand is given the right, by satisfying the landlord
by payment, of having those ejectment proceedings stopped or discontinued.
It seems to
me perfectly clear that, whether one is considering the landlord’s rights or
the tenant’s rights, they only come into existence and the section only applies
in cases where the rent is six months in arrear and not in other cases.
He then
considered whether there was any authority to the contrary and decided there
was not.
Although Mr
Berry QC, on behalf of the plaintiff, relied on that decision, it does not deal
with the question of whether, in order for a judgment to be within parts [5]
and [6] of section 210, it must be established that there was insufficient
distress on the premises. With some force the plaintiff argues that the words
‘such trial in ejectment’ in part [5] refer back to ‘every such case’ in part
[4], which in turn refers back to part [3], which deals with the case of a
judgment where, inter alia, it is established that there was
insufficient distress on the premises. On the other hand, it was argued on
behalf of the defendant that, while accepting that one goes back from part [5]
to part [4], the reference to ‘every such case’ in part [4] is wide and refers
back to part [1], which requires there to be a half-year’s rent in arrear but
does not require there to be sufficient distress on the premises. On the
plaintiff’s construction, it is argued that no real meaning is given to the
words ‘and in every such case’.
Each argument
appears to me to be consistent with the decision of Wilberforce J in Standard
Pattern Co Ltd v Ivey. I consider that the plaintiff’s argument is
rather stronger as a matter of the language used in section 210. Against that
there is considerable force in the view that the defendant’s argument seems to
be more consistent with the purpose of the statute.
However, the
point is not free of authority. I was referred to a number of cases and books
of some antiquity. Of particular relevance is the decision in Roed West
v Davies (1806) 7 East 363. The main point in that case was whether a
court of law, as opposed to a court of Chancery, could grant relief from
forfeiture after trial notwithstanding the statutory power to grant relief from
forfeiture vested in a court of law under the statutory precedessor of section
212 of the 1852 Act, namely section 4 of the Landlord and Tenant Act 1730, was
restricted to granting relief from forfeiture before trial. However, it appears
clear from the report of counsel’s argument at p 365 that, perceiving the court
was against him on this point, counsel for the tenant sought to argue that
section 212 did not apply ‘where no sufficient distress was to be found upon
the premises’. In the first part of his judgment Lord Ellenborough CJ appears
clearly to reject that argument, fastening on the wide words ‘then and in every
such case’, found in part [4] of section 210, and holding that, in effect, they
refer back to what I have called part [1] of section 210 and not part [3].
I was also
referred to Adams on the Principles and Practice of the Action of Ejectment
1846, where, at p 124, he considers the point in relation to the 1730 Act and,
relying on the observations of Lord Ellenborough, comes to the same conclusion.
In those circumstances,
I would not accept the contention on behalf of the plaintiff that this case
would fall outside what I would call part [6] of section 210, because there was
no evidence of the absence of any sufficient distress on the premises at the
time the order for possession was made in the county court. However, for a
different reason, namely that the judgment in the county court was not obtained
against the plaintiff in these proceedings, I have reached the conclusion that
the provisions of section 210 do not bar the plaintiff from seeking relief from
forfeiture.
In these
circumstances, I find in favour of the plaintiff on the preliminary issue and
hold that it is open to the court to grant relief from forfeiture for the
plaintiff on the originating summons.
Judgment for
the plaintiff on the preliminary issue. Defendant to pay the plaintiff’s costs
of the preliminary issue. Leave to appeal.
