Belgravia Insurance Company Ltd v Meah
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE RUSSELL |
| Judgment Date | 30 October 1963 |
| Judgment citation (vLex) | [1963] EWCA Civ J1030-1 |
| Date | 30 October 1963 |
| Court | Court of Appeal |
[1963] EWCA Civ J1030-1
In The Supreme Court of Judicature
Court of Appeal
(Interlocutory List)
The Master of The Rolls
(Lord Denning)
and
Lord Justice Russell
MR J.L. KNOX (instructed by Messrs. A. & Co.) appeared as Counsel on behalf of the Appellant (Applicant).
MR KENNETH BAGNALL (instructed by Messrs. William caston & Sons) appeared as Counsel on behalf of the Respondents (Plaintiffs).
(Reserved)
We are here concerned with a shop at 14, York Way, King's Cross, which has for many years been used as a restaurant. On 8th January, 1958, the Belgravia Insurance Co., Ltd., let the premises to one Zanelli for seven years from 24th January, 1958, at £450 a year, with an option of renewal for afurther seven years. The lease contained the usual covenants to repair and paint, and not to assign or part with possession of the premises or any part thereof without the landlord's consent, such consent not to be unreasonably withheld. It also contained the usual forfeiture clause. On 27th January, 1958. with the landlord's consent assigned the lease to Ernest John Sorenti for £500, Mr Sorenti entered into possession and carried on for four years there the business of a restaurant.
During his four years' occupation Mr Sorenti paid his rent regularly and fulfilled the convenants of the lease save for one rather lapse. At the end of 1958 the drains were in bad condition and the Public Health authorities called on him to repair them. He delayed so long that they threatened to close down the shop. He was not frank with the landlord's agents on the matter. But eventually, early in 1959, he did repair them, and thenceforward there was no trouble. Another thing that happened early in 1959 was that Mr Sorenti proposed to assign the lease and asked for the landlord's consent, but the landlords looked into the credentials of the proposed assignees and found they had been convicted of keeping a dis-orderly house. So the landlords refused their consent. Those incidents passed off and for the next three years there seems to have been no trouble at all.
In January, 1962, Mr Sorenti sold the lease to one tutter Meah for £2,650. Mr Meah produced references which appeared to be satisfactory and the landlords gave their consent to the assignment. The lease was assigned to Mr Meah. Mr Meah could not, however, find all the purchase money and £1,000 was left on mortgage. The Deed of Mortgage was dated 25th January, 1962. It said the tutter Meah "hereby charges by way of legal mortgage all that the leasehold property described above with the payment" of the £1,000 to Mr Sorenti.
Mr Meah went into occupation of the premises but he didnot pay the rent due under the lease. On 21st May, 1962, the landlords issued a writ against him and he paid up. On 27th November, 1962, they issued another writ and he paid up again. On 22nd February, 1963, they issued the writ in this action against him claiming forfeiture for non-payment of rent. He had not paid the whole of the December quarter. The sum of £39. 15. 3d. was the balance outstanding of the rent due on 25th December, 1962. In addition the Plaintiffs claimed arrears of rent to date of writ (22nd February, 1963) amounting to £73. 19. 5d. and means profits. Meah did not enter an appearance. On 3rd April, 1963, a receiving order was made against him. On 12th June, 1963, the landlords obtained leave to sign judgment against Meah for possession, £113. 14. 8d. and profits. On the same day Mr Sorenti, the mortgagee, applied in that action for relief against forfeiture. It appeared in the evidence that Mr Sorenti, if he got relief, was proposing to assign the lease to one Abdul Noor for £3,000; this would be dependent, of course, on satisfactory references and getting the landlord's consent. It further appeared that the premises had been closed for two months and were out of repair and needed a good deal of work done to comply with the convenants. But no notice had been served under section 146 requiring the defects to be remedied.
Mr Sorenti's application for relief was dismiseed by the Master and by the Judge. He now appeals to this Court.
The first thing to notice is that the ground of forfeiture was for non-payment of rent. Relief from such a forfeiture is treated differently from relief for other breaches, such as disrepair and so forth. In case of non-payment of rent, relief is still based fundamentally on the jurisdiction of Courts of Equity to grant relief, subject to the limitations imposed by sections 210 and 212 of the Common Law Procedure Act, 1852. In case of other breaches, relief is based on section 146 of the Law of Property Act, 1925.
In the case of a leasee himself seeking relief from forfeiture for non-payment of rent, the relevant principles have been stated recently by this Court in Gill v. Lewis, 1966 2 Queen's Bench 1. But here we are concerned with the position of an under-leasee to whom somewhat different considerations apply. I say an under-leasee because, although Mr Soranti is a mortgage holding a charge by way of legal mortgage, he is to be treated as if he held a mortgage by sub-demise: see section 87 of the Law of Property Act, 1925, and Grand Junction Co., Ltd., v. Bates, 1954 2 Queen's Bench 160: that is, as if he was an under-leasee.
When an under-l or a mortgagee by sub-demise (as all mortgagees are now) claims relief from forfeiture for non-payment of rent, he can either cliam under the equitable jurisdiction (which is preserved by section 46 of the Judicature Act, 1925) or under section 146 (4) of the Law of Property Act, 1925. Mr Sorenti claimed under both. It was suggested before us that there was some difference between the principles applicable. I do not think there is. I will deal with them separately.
First, the application under section 46 of the Judicature Act, 1925.
The jurisdication to give relief under section 46 of the Judicature Act, 1925, is founded on the jurisdiction of the old Court of Chancery. The Court of Chancery from its earliest days held that, wherever the Court could fully compensate the party entitled for breach of a condition, i.e., wherever it could ensure that the party would get all that was due to him, it would grant relief against a forfeiture. It was so held in 1682 by Lord Chancellor Nottingham in Propham v. ampfeild, 1682 1 Vernon, at page 83, and in 1707 by Lord Chancellor Cowper in Griton v. Lord Bruce, Sad, 196. In accordance with this principle it granted relief not only to , but also to under- and to mortgagees by assignment or by sub-demise, provided always that all the convenants were performed.
A good instance was in 1689 when the then Lord Salbury granted a lease at a certain rent and the leasee covenanted to repair. The leasee granted a hundred under-leases to a hundred subtenants. The leasee did not pay the rent nor perform the covenant to repair. So Lord Salisbury re-entered. Six out of the one hundred sub-tenants applied for relief, joining the leasee and Lord Salisbury as parties. The Court granted relief on the terms that the six sub-tenants paid the whole rent in arrear and repaired the premises: see abber v. Smith, 1689, 2 Vernon, 103. It would seem that the principle of that case was applied to mortgagee, whether by assignment or by sub-demise. For it was expressly recognised by the legislature in the Landlord and Tenant Act, 1730. That Act made it clear that, if a leasee or sub-leasee sought relief in equity from forfeiture for non-payment of rent, he had to apply within six months of execution. And it made a similar provision for mortgagees. It was expressly provided that "nothing herein contained shall extend to bar the right of any mortgagee or mortgagees of such lease or any part thereof, who shall not be in possession, so as such mortgagee or mortgagees shall and do within six calendar months after such judgment obtained and execution executed, pay all rent in arrear, and all costs and damages sustained by such less, person or persons entitled to the remainder or reversion aforesaid, and perform all the convenants and agreements which, on the part and behalf of the first leasee or l, are or ought to be performed". In 1852 the Statute was re-enacted in virtually the same terms in section 210 of the Common Law Procedure, 1852. In 1860, by section 1 of the Common Law Procedure Act,...
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