Bello v Idealview Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE FLAUX |
| Judgment Date | 14 May 2010 |
| Neutral Citation | [2009] EWHC 2808 (QB),[2010] EWHC 1559 (QB) |
| Court | Queen's Bench Division |
| Date | 14 May 2010 |
| Docket Number | IHQ/09/0645,CO/8136/2009 |
[2009] EWHC 2808 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: Mr Justice Flaux
IHQ/09/0645
MR NICHOLAS MACLEOD—JAMES appeared on behalf of the Applicant/Defendant
MR CARL FAIN (instructed by Kingsley Napley) appeared on behalf of the Respondent/Claimant.
A P P R O V E D JUDGMENT
: This is an appeal by the defendant, Adejola Bello, against the judgment of His Honour Judge Behar at the Wandsworth County Court on 23 October 2008, whereby he made an order for possession of premises at 143 Eardley Rod, London SW16, of which the defendant was the tenant, on forfeiture for rent arrears. At a renewed oral application for permission to appeal against that judgment on 9 July 2009, (permission having previously been refused on paper) Blair J gave permission to appeal on one ground alone, as appears in more detail hereafter. The essential facts are not in dispute and can be stated shortly.
By a lease dated 5 May 1969 the then freeholder of the premises let them for a term of 50 years from 25 March 1969. By clause 1 of that lease the rent payable during the first 25 years of the lease was the sum of £60 per annum. Clause 2 was a rent review clause which provided, so far as relevant, as follows:
“The Lessee shall pay for such residue”
That is to say, the residue after the first 25 years of the lease.
“hereinbefore mentioned of the said term an annual rent which shall be determined in accordance with the following formula that is to say such rent shall be the rent (but not less than the rent firstly hereinbefore reserved) at which the demised premises first mentioned might reasonably be expected to be let in the open market by a willing landlord by a Lease for a term of years equivalent to such residue as aforesaid without regard for anything built on the land on the same terms and subject to the same incidents in all other respects as this present demise, provided that if no agreement is reached between the parties by the penultimate quarter day prior to the commencement of such residue as aforesaid as to the rent at which the demised premises might reasonably be expected to be let in the open market on the basis hereinbefore described, then the question shall be referred to the decision of a single arbitrator to be appointed by the President for the time being of the Royal Institution of Chartered Surveyors in accordance with the provisions of the Arbitration Act 1950 or any statutory modification or re-enactment thereof for the time being in force, provided further that until such new rent shall have been determined the rent firstly hereinbefore reserved shall continue to be payable and any difference between that and the said new rent during such period as this last proviso operates shall be added to and be payable with the next instalment of rent due after the said new rent has been determined.”
The first 25-year period expired on 24 March 1994. No rent review took place. The defendant apparently purchased the premises at auction on 14 July 2005. At that time a rent review under clause 2 had still not taken place. However, as Tomlinson J pointed out in refusing permission to appeal on paper, the terms of sale excluded the seller's liability for arrears of rent above the £60 per annum so that the defendant might, if he had considered the matter, have realised that there was a potential liability on him as the buyer for any arrears of rent above £60 per annum which might result from a rent review.
The claimant's company acquired the freehold interest from the original freehold owner on 8 March 2006. In due course, the claimant raised with the defendant the question of a rent review under clause 2. There was no constructive response from the defendant, let alone one suggesting that any such review was too late and, accordingly, the claimant referred the issue of rent for the residue of the term to an arbitrator, Mr Copping Joyce, pursuant to the terms of clause 2 of the lease. The defendant was notified of the arbitration by both the claimant and the arbitrator, but chose, no doubt for reasons of his own, not to participate. On 22 August 2007 the arbitrator issued his award, determining the rent at £1,700 per annum, or £425 per quarter from 25 March 199No attempt was made by the defendant to appeal the arbitrator's award or to seek to set it aside before this court.
On 29 September 2007 the rent as determined by the arbitrator fell due under the terms of clause 2 of the lease. On 30 November 2007 the claimant's solicitors wrote to the defendant enclosing by way of service a notice under section 166 of the Commonhold and Leasehold Reform Act 2002 of the rent due following the arbitrator's award. The schedule to that notice and the letter itself make clear two things: firstly, that the defendant had not paid any of the passing rent from the date that the claimant acquired the freehold interest, i.e. the figure of £15 per quarter from 25 March 2006; and, secondly, that the claimant assumed in the defendant's favour that such rent had been paid before the claimant's acquisition of the freehold. Accordingly, the rent arrears were claimed only for the quarters from 25 March 2006 up to and including the quarter of 24 June 2007 at the original rate of £15 per quarter, and what was claimed thereafter at the 29 September 2007 quarter date was, as was explained in the schedule, rent from 25 March 1994 to 29 September 2007 at £425 per quarter less rent at £15 per quarter, assumed to have been paid prior to the claimant's acquisition of the freehold reversion.
The defendant made no reply to this letter. Before the learned judge he tried to claim that he had not received the letter or the notice, but the judge rejected that contention and held that, on a balance of probabilities, it was received. In his Defence the defendant ran two substantive defences: first, a point on section 168 of the 2002 Act, which the learned judge held was unsustainable. No permission to appeal that conclusion has been given. The second defence was a defence that any claim for the arrears of rent was time-barred under section 19 of the Limitation Act 1980. That provides as follows.
“No action shall be brought, or distress made, to recover arrears of rent, or damages in respect of arrears of rent, after the expiration of six years from the date on which the arrears became due.”
The judge concluded that, pursuant to clause 2 of the lease, the arrears claim did not fall due until 29 September 2007, the quarter day when the next instalment of rent was due after the determination by the arbitrator. Accordingly, he held that the claim was not time-barred. However, as the judge pointed out, the defendant, who appeared in person before the judge, raised a number of additional arguments which the judge allowed him to raise, on abandonment, estoppel, acquiescence and laches, all focusing on the delay of 13 years from 1994 to 2007 in seeking a rent review under clause 2 of the lease. The judge held at paragraph 34 of his judgment that the short answer to those arguments was that the defendant was bound by the determination of the arbitrator, which he had not appealed, so that he could not raise those matters which should have been raised before the arbitrator.
However, the judge went on to deal with the arguments, as he said shortly, and, in dismissing them, he made three findings which are critical for the purposes of this appeal. Firstly, he held at paragraph 36 that clause 2 did not stipulate that time was of the essence and that there was no basis for the implication of a term. Secondly, he held at paragraph 37 that the defendant was not relying on anything more than the delay and, in those circumstances, he held that the decision of the Court of Appeal in Amherst v James Walker Limited [1983] 1 Ch 305 was a formidable obstacle in the way of the defendant's argument. Thirdly, he held at paragraph 38 that there was no evidence upon which to found a discrete defence of estoppel, waiver, acquiescence or abandonment, and in his view laches did not apply on the facts. Accordingly, the judge held that the defence failed.
The defendant sought to appeal the judge's conclusions on a number of grounds. As I have already said, his application was refused on paper by Tomlinson J in February of this year. He then instructed Mr Macleod-James, who appears before me today and who drafted an amended notice of appeal. That was considered by Roderick Evans J on 24 th April, and he made an order that the application for permission to appeal in relation both to the original grounds and the revised grounds should be listed for oral argument. It was on that basis that the matter came before Blair J, who refused permission to appeal on all grounds but one, and gave permission on that single ground described as limitation.
Mr Fain, who appears on behalf of the claimant, as he did before the learned judge, argued that that meant that only the section 19 point was in play before me, but I accept Mr Macleod-James' contention that Blair J must have had in mind the wider issue of delay generally and its impact. Otherwise I cannot conceive on what basis he could have thought that the limitation defence under section 19 on its own was arguable. Accordingly, I have approached the case on the wider basis.
Having said that, like the learned judge I consider that the complaints about delay in seeking the rent review are all matters that the defendant could and should have...
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...claim under clause 7.1 at the time does not matter (compare e.g. Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305 and Idealview Ltd v Bello [2009] EWHC 2808 (QB), [2010] 1 EGLR 39). In the end, I have concluded that, while Mr Mill's contentions are not without substance, th......
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Real Estate Update - May 2011
...a deadline, it is likely the landlord will still be able to review the rent if the date is missed. The case of Idealview Ltd v Bello [2009] EWHC 2808 (QB) allowed a rent review to go ahead 13 years late. Mr Bello purchased a 50 year lease in 2005. The review due in the middle of the lease, ......