Baker v Sims
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SELLERS,LORD JUSTICE PEARCE |
| Judgment Date | 03 October 1958 |
| Judgment citation (vLex) | [1958] EWCA Civ J1003-1 |
| Court | Court of Appeal |
| Date | 03 October 1958 |
[1958] EWCA Civ J1003-1
In The Supreme Court of Judicature
Court of Appeal
The Master Of The Rolls (Lord Evershed)
Lord Justice Sellers, and
Lord Justice Pearce.
MR. B.C. SHEEN (instructed by Messrs. Herbert Reeves Co., Agents for Messrs. Kellock & Cornish-Bowden, Totnes, Devon) appeared on behalf of the Appellants (Plaintiffs).
MR. F. PETRE (instructed by Messrs. Crane Hawkins) appeared on behalf of the Respondent (Defendant).
: This appeal has raised a question of construction of the Act known as the Leasehold Property (Repairs) Act, 1938, which is one of very exceptional difficulty; and we are greatly indebted to the learned Counsel in the case for the assistance which they have given to us.
The matter comes before us in this way. The Plaintiffs (who are Appellants in this Court) are the lessees of certain property 4 Mitchison Road, Islington, under a lease for 99 years from the 25th December, 1860. An under-lease had been granted of that term less the last seven days Which at the relevant date was vested in the Defendant (Respondent) Mr. Sims. The under-lease would have expired on the 18th December next year in any event; but (as will presently appear) it has in fact been surrendered.
Mr. Sims acquired his interest in the year 1931; and in 1952 the Plaintiffs took the view that there had been and was continuing to be a breach of the covenant for repair which I need not read but which is in usual in a full repairing lease. Although we have net in fact seen it, a schedule of alleged breaches was prepared, and that was served upon Mr. Sims, with a notice pursuant to the 1938 Act, in April, 1953. He (Mr. Sims) in the following month served a counter-notice under the same Act. Nothing, however, then transpired: no proceedings were taken: but in the following year, 1954, Mr. Situs in fact assigned the unexpired remainder of his term under the sub-lease to a limited company, Alsen Properties Limited, who were joined as third parties in these proceedings but who are not parties to this appeal. That third party, in December, 1955 (some four years, therefore, before the expiration by effluxion of time of the sub-lease) surrendered the term to the Plaintiffs, and that surrender was accepted. In November of 1957 the present proceedings were commenced by way of a claim by the Plaintiffs against Mr. Sims for damages for breaches of the repairing covenant which it was alleged had been committed during the time that Mr. Sims was the sub-lessee. He (Mr. Sims) brought in as third parties the Alsen company; but, as I have said, they are not concerned with this appeal.
When the matter came "before His Honour Judge Sir Shirley Worthington Evans in the County Court, the point was taken on behalf of Mr. Sims that the action was incompetent because it was said that in the circumstances the leave of the Court to the commencement of the proceedings was a prerequisite for the jurisdiction of the Court. Admittedly no leave had been asked for or obtained. Whether leave was required is the question which we now have to determine; and it turns particularly on the language of sub-section 3 of section 1 of the 1938 Act. The learned County Court Judge came to the conclusion that the point taken by Mr. Sims was well taken; that in default of leave having been obtained there was no right to sue; and he therefore dismissed the claim. It is from that decision, upon what was treated as a preliminary question of law, that the appeal comes to this Court.
The sub-section in question, sub-section 3, I must read and examine in due course. The argument (very briefly put), which I now anticipate, is, that, if you look at sub-section 3, upon its own terms, with your mind unaffected and unbiassed by anything which you think is to be discerned from the other sub-sections in the same section, then the result is plain enough: it is, that, once a counter-notice has been served (and those last words I take from Mr. Petre's argument), then there is an absolute bar against proceedings of this kind without leave of the Court.
Now in order to answer the problem it is, I think, necessary to have some regard to history; for one cannot (and so much Mr. Petre conceded) properly construe a particular paragraph in an Act of Parliament without at least having in one's mind the relevant context in which it appears. For present purposes, I must go back to the Law of Property Act, 1925, to make a reference to section 146, the well-known section which imposed a restriction on a landlord's right to forfeit or re-enter for breach of covenant. That, of course, was not novel. Section 146 was a re-enactment (though not in quite the same terms) of the previous restriction which appeared in the Convincing Act of 1881. Sub-section 1 of section 146 is well-known. It provides that a right of re-entry or forfeiture under any proviso or stipulation in a lease for breach of any covenant is not enforceable by action or otherwise unless and until the lessor serves on the lessee a notice specifying the breach requiring remedy if it is capable of remedy and requiring the lessee to make money compensation. Observe, that the restriction is one related only to re-entry or forfeiture but it is not limited to the particular breach of covenant on which the claim may be founded.
The Leasehold Property (Repairs) Act of 1938 picks up, so to speak, the matter from section 146, and confers a new benefit upon lessees, going beyond that given by section 146 but nevertheless (a will, I think, appear) in some respects at any rate, plainly enough limited. Sub-section 1 of section 1 of the 1938 Act reads as follows: "Where a lessor serves on a lessee under sub-section 1 of section 146 of the Law of Property Act, 1925, a notice that relates to a breach of a covenant or agreement to keep or put in repair during the currency of the lease a house of a rateable value of one hundred pounds or less, and at the date of the service of the notice five years or more of the term of the lease remain unexpired, the lessee may within twtenty eight days from that date serve on the lessor a counter-notice to the effect that he claims the benefit of this Act".
Observe at this point that the effect of sub-section 1 (briefly) is, first, that it is limited to cases where the section 146 notice is founded upon a breach of a repairing covenant: second, that it is limited to the case of a long term lease, where the house is of a small rateable value "and" (this being the vital point for present purposes) "at the date of the service of the notice five years or more of the term of the lease remain unexpired" - given those conditions, then, if the section 146 notice is served (as it would have to be served), the lessee is given a right to serve a counter-notice claiming "the benefit of the Act".
I pass now to sub-section 2, which takes the matter a stage further and gives to the lessee a further right. Sub-section 2 no longer is confined to the case of the lessor seeking forfeiture or re-entry, "but relates to a claim for damages - but again, it will be seen, a claim for damages only where the breach alleged is a breach of a repairing covenant; and once again you find this limitation that there must be, if the lessee is to have this right to claim the benefit of the Act, five years or more of his term unexpired. I will read sub-section 2: "A right to damages for a breach of such a covenant as aforesaid" - that is, a repairing covenant - "shall not be enforceable by action commenced at any time at which five years or more of the term of the lease remain unexpired unless the lessor has served on the lessee not less than one month before the commencement of the action such a notice as is specified in sub-section 1 of section 146 of the Law of Property Act, 1925, and where a notice is served under this sub-section, the lessee may, within twenty eight days of the service thereof, serve on the lessor a counter-notice to the effect that he claims the benefit of this Act".
Now, in order to dispose of it at this stage, it is right to say that those provisions have been amended (in the lessee's favour) by section 51 of the Landlord and Tenant Act, 1954, subsection 1 of which reads: "The Leasehold Property (Repairs) Act, 1938 (which restricts the enforcement of repairing covenants in long leases of small houses) shall extend to every tenancy (whether of a house, or of other property, and without regard to rateable value) where the following conditions are fulfilled, that is to say" (and (a) relates to the length of the term of the tenancy) "….(b) that three years or more of the term remain unexpired at the date of the service of the notice of dilapidations or, as the case may be, at the date of commencement of the action for damages"; and then (c) excludes agricultural holdings.
I shall have to come back to make a reference to that sub section later; but (for reasons which I need not take time to expound) the amending provision has no relevance to this particular case and therefore shall proceed (and it helps to simplify the matter) by assuming that the conditions as they were laid down in sub-sections 1 and 2 of the first section of the Act of 1938 are the relevant conditions.
No question turns upon the rateable value of the house; but the vital matter again is that sub-sections 1 and 2 contemplate a restriction where (putting it briefly) five years or more of the term - the lessee's interest - remain unexpired.
So far it will be noted that the two sub-sections have conferred, in the circumstances, and the plainly limited circumstances, stated, a right to a lessee to claim "the benefit of this Act". We...
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