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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Pat (Pensions) Ltd v Kamal & Anor [2002] EWCA Civ 1056 (5 July 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1056.html Cite as: [2002] EWCA Civ 1056

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IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
WEST LONDON COUNTY COURT
(His Honour Judge Cowell)

		The Royal Courts of Justice The Strand London Friday 5 July 2002

Friday 5 July 2002

1. LORD JUSTICE JONATHAN PARKER: Before the court are applications for permission to appeal and for permission to rely on additional evidence and to inspect the documents. The applications are made by Mr Peter Kempster and Miss Soheir Kamal, the defendants in the action. The applicants appear in person and Miss Kamal has spoken for both of them this morning.
2. The applicants seek permission to appeal against an order dated 10 December 2001, made by His Honour Judge Cowell in the West London County Court, in possession proceedings brought against the applicants as tenants of a shop and residential premises at 24 Gloucester Road SW7 by the current landlord, Pat Pensions Ltd, as claimant.
3. Pursuant to an order made by Chadwick LJ on 1 May 2002 (to which I will make further reference later in this judgment) the applications are on notice to the claimant (for whom Mr Dutton appears, as he did before the judge) and if permission is granted the substantive appeal is to follow.
4. The background to the applications is briefly as follows. The applicants hold the premises under a Lease dated 15 December 1989, granted by the claimant's predecessor in title, General Accident, for a term of 20 years from 29 September 1986. The passing rent, when the possession proceedings were commenced on 9 June 2000, was £26,000 per year. The lease contains a repairing covenant by the tenant and a proviso for forfeiture and re-entry for, among other things, non-payment of rent. The proviso for forfeiture and re-entry, which is contained in clause 5.2 of the lease, is in the following terms:

" .... if the rents due to the Lessor shall be unpaid for seven days or if the Lessee shall fail to perform or observe any of the covenants or terms herein then the Lessor may forfeit this Lease but without prejudice to any remedy of the Lessor in respect of any antecedent breach of any of the covenants herein".

5. The proceedings were originally brought in the High Court, but were subsequently transferred to the West London County Court.
6. It was accepted by the claimant before the judge that since the proviso for forfeiture and re-entry does not contain the words "whether formally demanded or not", in order to forfeit the lease for non-payment of rent, the claimant had to establish (1) that not less than six months' rent was owing and unpaid as at the date of the commencement of the proceedings and (2) that distress was not available.
7. The claimant alleged and the judge found that the arrears of rent amounted to £36,584: that is to say, well over six months' arrears. The judge further found that distress was not available. However, by paragraph 3 of the defence the applicants allege as follows:

"(1) On 23rd September 1996, in the course [of] carrying out works of refurbishment at the Premises, the First Defendant discovered that the main timber beam at the ground floor level spanning between the party walls was cracked as a result of overstressing. The cracking and/or general settlement of the beam had caused sloping of the floors at the first and second- floor level and was potentially hazardous. The cracking and/or general settlement of the beam was caused by an inherent defect in the Premises, in that the beam was overloaded by a factor of 2.5, and its repair was not therefore the responsibility of the Defendants under their repairing covenant. The First Defendant informed the then freehold owner of the premises General Accident of these matters through their managing agents Hartnell Taylor Cook but, notwithstanding these matters, General Accident instructed the Defendants to carry out the necessary remedial works which the First Defendant did at a cost of £32,200. Particulars of the works have been supplied to the Claimant by the First Defendant in a letter dated 24th January 2000. In the circumstances, the First Defendant is entitled to set off these costs against the rent claimed in the Particulars of Claim, alternatively against that part of the rent claimed in the Particulars of Claim which fell due before the date on which the Claimant acquired the freehold reversion of the premises."

8. I record that the claimant acquired the freehold reversion in 1999.
9. The Reply, if any, has not been included in the bundle, but it is accepted by the claimant that the applicants have spent £32,200 or thereabouts in making good defects in a main beam spanning the premises and supporting the cross-beams, which in turn support the upper floors of the building.
10. The issue as to whether the applicants are, as they allege, entitled to set off the sum of £32,200 against the rent arrears, the effect of which would be to prevent the claimant obtaining an order for possession of the premises pursuant to the proviso for forfeiture and re-entry, formed the main issue at the trial.
11. In the result, the judge found (1) that the landlord was under no obligation to carry out the work in question (page 12C-D of the judgment) and (2) that, contrary to the applicants' allegations, the former landlord of the premises, General Accident, had made no promise or statement that it would pay for such work.
12. In the circumstances, the judge did not find it necessary to address the question whether the applicants were obliged to carry out the work in question under the terms of the covenant for repair contained in the lease. He regarded it as sufficient for the purpose of deciding the case that the claimant was under no liability to the applicants in respect of the expenditure in question.
13. Accordingly, by his order dated 10 December 2001 the judge ordered delivery of possession of the premises by 1 January 2002 unless the arrears of rent were paid in the meantime. He also entered judgment for the claimant for £48,406 arrears of rent plus interest and mesne profits, and he ordered the applicants to pay the claimant's costs. That is the order in respect of which the applicants seek permission to appeal.
14. On 17 January 2002 there was a further hearing before the judge, when he refused permission to appeal. On that occasion, however, the judge suspended execution of the order for possession, which was due to be executed on 29 January 2002, on terms that the applicants paid £25,000 into court by 28 January. In the event, £21,000 was paid on that day on account of arrears of rent, with a further £4,000 being paid on 15 February.
15. On 13 February a default costs certificate in respect of the claimant's assessed costs of the proceedings was issued in the sum of £42,227. The applicants applied to have that certificate set aside. That application has, as I understand it, been adjourned pending the outcome of the present applications.
16. On 15 February the case came back once again before the judge on a further application by the applicants to stay execution of the order for possession. At this point the claimant was about to issue a statutory demand against the applicants in the sum of £67,000 or thereabouts, representing outstanding arrears of rent and costs. The judge refused the applicants' application for a further stay of twelve months or so in order to raise the money to pay off the arrears, taking the view that such a step would be pointless, given the claimant's intention to issue a statutory demand. He did, however, extend time for payment of the arrears to 19 April 2002.
17. In the meantime the applicants had applied to this court for permission to appeal against the possession order dated 10 December 2001 and against the orders dated respectively 17 January and 15 February 2002. Those applications came before Chadwick LJ on the papers on 19 April 2002, when he refused permission. In his written reasons for refusing permission, Chadwick LJ referred to the applicants' reliance on a letter from Miss Kamal's father confirming that he was willing to pay off the arrears, but Chadwick LJ concluded that, notwithstanding that evidence, there was no real prospect that the Court of Appeal would interfere with the orders in question.
18. The applicants renewed their applications at an oral hearing before Chadwick LJ on 1 May 2002. In a written skeleton argument presented to Chadwick LJ by Miss Kamal on behalf of the applicants, the applicants offered undertakings to pay forthwith the monthly rent of £6,500, together with a sum of £10,000 either into court or to the claimant, or as directed by the court. The skeleton argument went on to say that the applicants would require eight weeks in order to pay off the arrears by means of a re-mortgage of the property. At that hearing, Chadwick LJ made the order to which I referred at the start of this judgment. In a judgment which he delivered on that occasion, Chadwick LJ, after setting out the factual and procedural background, continued as follows:

"12. The applications are now renewed before me in different circumstances. It is now said that Miss Kamal can raise the money necessary from the remortgage or sale of a property, Flat 3, 3 Strathmore Garden, London W8, which she owns and which is rented out. The new material before me suggests, first, that the value of that property is amply sufficient to secure a loan of the amount that she would need to discharge her obligations under the orders so far made; and, second, that she has been advised by mortgage brokers acting for the St James's Place Partnership that mortgage finance should be obtainable within six weeks without undue difficulty. As I have said, the flat is rented out so and so is, itself, a source of income to service a loan.

13. Further it is now said, in a skeleton argument put before me this morning, that the judge ought to have found that the circumstances made it unconscionable for the landlord to seek to take advantage, by way of forfeiture, of the substantial sum which Miss Kamal had expended in repairing structural defects in the property. At the least, it is said, she should have been warned when she embarked on the repair of this property that the landlords would be minded to forfeit after the repairs had been effected if she fell into arrears of rent; or, as is contended in the claim form, on the basis that she was in breach of her repairing covenants."

19. Chadwick LJ went on to refer to the difficulty facing the applicants in that that point had not been taken before the judge. Nevertheless, Chadwick LJ concluded that it was a point which merited further consideration. On that footing Chadwick LJ made the order to which I referred earlier, adjourning the application for permission to appeal to come on, on notice to the claimant, with the substantive appeal to follow if permission were to be granted. Chadwick LJ continued at paragraph 17:

"It may be that in the meantime Miss Kamal will succeed in raising funds on her flat at 3 Strathmore Gardens and will be in a position, before this matter comes back, to pay off the arrears of rent and the amount of costs. The adjournment gives her that opportunity; but is not ordered for that purpose."

20. The present position in relation to payment of the current rent and the arrears appears from a witness statement of Mr John Redding of Druces & Attlee, the claimant's solicitors, to be that the outstanding balance of the judgment debt, costs, additional rent or mesne profits and interest amounts to some £77,613.57. There is, however, a dispute which emerged in the course of oral submissions this morning as to whether the rent amounting to £6,500 payable on the June quarter-day has in fact been paid by Miss Kamal. Mr Redding for the claimant asserts that it has not been paid; Miss Kamal insists that it has. As to the possibility of the balance of the sum owing to the claimant being paid off, we have had placed before us a letter indicating that a remortgage application which Miss Kamal has made will take some six to eight weeks to complete. Miss Kamal has also told us, and we accept, that she has been ill and that this has hindered her in making the necessary arrangements for remortgaging the premises.
21. I can now turn to the submissions which Miss Kamal has made in support of her application on behalf of both applicants for permission to appeal. Those oral submissions have been based upon a written skeleton argument, which we have read and considered, which has recently been filed and which is expressed to supersede all earlier formulations of her proposed grounds of appeal and earlier skeleton arguments. In this latest skeleton argument Miss Kamal raises a number of grounds of appeal, to which I now turn.
22. Firstly, in section A of the skeleton, she asserts that His Honour Judge Cowell's decision in making the order for forfeiture was "unjust because of serious procedural or other irregularities". Under paragraph 1 in that section of the skeleton argument, the applicants assert that the claimant failed to comply with the court's directions in relation to expert evidence. I can for my part see no substance in that ground whatever. The position appears to have been that, although permission was granted for each side to call a structural engineer to give expert evidence, the reports of the experts were included in the trial bundle and it was agreed at the hearing that the works undertaken to the beam were works which required to be done. I can see no basis, therefore, for any assertion of injustice in relation to expert evidence.
23. Then there is an allegation under paragraph 2 under section A of the skeleton, that the claimant failed "effectively to comply with CPR". This ground is based upon an alleged failure by the claimant to include in the trial bundle a report by Chisholm Nurser & Partners Ltd, dated February 1999. That report, a copy of which Miss Kamal has supplied to us, is concerned with a number of properties, including 24 Gloucester Road, and it refers briefly to the condition of that property. I can see no ground on which that report, made after the work on the beam had commenced, could be in any way relevant to the issues which the judge had to decide.
24. Miss Kamal then goes on, in ground 3 of section A of the skeleton argument, to contend that the judge failed to give her a sufficient opportunity to make submissions on the law relevant to the issues in the case. I say at once that I can see no ground for criticising the judge in any way in his handling of the trial. I shall turn in a moment to the question whether there is any substance in the various arguments upon which Miss Kamal now seeks to rely.
25. In ground 4, under section A, Miss Kamal complains of a breach of duty on the part of the legal representatives of the claimant, in failing to bring to the attention of the trial judge the law as to misrepresentation, implied terms and unjust enrichment. These are matters to which I shall turn in a moment.
26. Under paragraph 5 she makes a submission concerning the burden of proof in which I, for my part, can see no substance.
27. In ground 6 she asserts that the judge should have addressed the issue and decided whether the applicants were contractually obliged to carry out the work in question under the tenants' covenant to repair. That, in my judgment, is a misconception. It was sufficient for the judge, as he said, to conclude that, whether or not there was an obligation on the applicants to do the work under the tenants' covenant for repair, what was clear on the facts was that there was no obligation upon the landlord in respect of the expenditure thereby incurred. That was indeed enough to enable the judge to decide the case.
28. I turn to the substantive matters on which the applicants rely. First of all, implied term. It is suggested that there is an argument that there is to be implied into the Lease a provision saddling the landlord with the obligation to undertake the work in question. I find that submission impossible to sustain. Any such implied term would, so far as I can see, run flatly contrary to the express provision in the lease, contained in the tenants' repairing covenant.
29. Secondly, Miss Kamal seeks to rely on misrepresentation, asserting that the managing agent for the then landlord, General Accident, made an actionable misrepresentation to the effect that it was the applicants' responsibility to carry out the work. The letter on which she primarily relies is a letter dated 11 October 1996 from Mr Howell of the managing agents, Hartnell Taylor Cook, in which Mr Howell says this:

"I can confirm that the four items you have mentioned are, in our opinion, your responsibility under the terms of the existing lease. You should, therefore, deal with these items during your current refurbishment work."

30. In the first place that cannot, on any footing, amount to an actionable misrepresentation. It represents Mr Howell's opinion as to the legal liability of Miss Kamal to carry out the work. Secondly, and in any event, that assertion was emphatically rejected by Miss Kamal, as can be seen from the terms of her response to that letter, dated 29 October 1996, in which she says:

"These items are therefore the Landlord's responsibility and I look forward to receiving your confirmation of this."

31. This attitude on the part of Miss Kamal is borne out by further letters from her to Mr Howell dated 1 May 1997 and 23 November 1997. Thus it is clear from the contemporary correspondence that Miss Kamal, and hence Mr Kempster, never relied upon any misrepresentation by the then landlord.
32. I turn next and finally, in this context, to the suggestion of unjust enrichment. This, as I have already noted, was a point which Chadwick LJ considered to be worthy of some consideration at this adjourned hearing. Having considered the point, however, I am for my part of the clear view that there is no substance in the allegation of unjust enrichment affording some kind of restitutionary remedy to the applicants. A restitutionary claim could, as I see it, succeed in this context only if the applicants established that the claimant was taking advantage of a mistake, and that the mistake was one for which the claimant was in some way responsible. I cannot see how those conclusions could be drawn from the facts of this case. It is clear, as I have said, that the assertion of the then landlord that the applicants were liable to carry out the work in question was not accepted by the applicants, who disputed that they were so liable but who nevertheless went ahead and undertook the work and incurred the expenditure. In my judgment, to hold that the claimant would be unjustly enriched by forfeiting the lease for non-payment of rent in such circumstances would be inconsistent with the judge's plainly correct conclusion that the claimant is under no liability to the applicants in respect of the expenditure which they have incurred.
33. Accordingly, I can see no substance in the three substantive proposed grounds of appeal on which the applicants seek to rely. It follows that permission to appeal must be refused.
34. There remains, however, the question whether there should be a final opportunity afforded to the applicants to pay off the arrears and obtain relief from forfeiture. The evidence in this respect is unsatisfactory. Nevertheless, forfeiture is a draconian remedy and the court must afford all reasonable opportunities to a tenant faced with a forfeiture claim to obtain relief from it. In the circumstances of this case, I am persuaded that it would be right and just, in the circumstances, to afford the applicants a final opportunity to obtain relief against forfeiture by paying off the arrears; but this is on the basis that the £6,500 rental payment due on the June quarter-day either has been paid or will be paid within the next seven days. On that basis I would for my part suspend the execution of the possession order for a further eight weeks to enable Miss Kamal and Mr Kempster within that time to pay off the arrears and thereby obtain relief. I would expect that this will be the final opportunity they will have to do that, and I emphasise that this is not an order which will enable them to allow matters to rest until the last day of the eight-week period and only then take some steps to try to raise the necessary finance to make the required payment. It is important for them that they set to work immediately and with all speed to raise the necessary finance for that purpose.
35. I would only add that for my part I think it would be appropriate to direct that any further applications in this matter, whether relating to the payment of rent which was due on the June quarter-day or to any other aspect of the case, should be made to the county court. That is the order which I would propose.
36. LORD JUSTICE BROOKE: I agree.
ORDER: Applications dismissed with costs to be subject to detailed assessed if not agreed. If the June quarter-day payment has been paid or is paid within seven days of the date of this judgment, the execution of the possession order will be stayed for a further eight weeks to allow the applicants to pay off the arrears of rent and thereby avoid repossession. (Order not part of approved judgment)