Bradley-Hole v Cusen
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SOMERVELL,LORD JUSTICE JENKINS,LORD JUSTICE HODSON |
| Judgment Date | 18 December 1952 |
| Judgment citation (vLex) | [1952] EWCA Civ J1218-5 |
| Court | Court of Appeal |
[1952] EWCA Civ J1218-5
LORD JUSTICE SOMERVELL
LORD JUSTICE JENKINS and
LORD JUSTICE HODSON
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
MR. L. A. BLUNDELL and MR. J. T. PLUME (instructed by Messrs. Preston, Lane-Claypon & O'Kelly, agents for Messrs. John Ray & Son, Hastings) appeared on behalf of the Appellant (Defendant).
MR. MUIR HUNTER (instructed by Messrs. Henry Boustred & Sons, agents for Messrs. Percy Walker & Co, Hastings) appeared on behalf of the Respondent (Plaintiff).
I will ask Lord Justice Jenkins to deliver the first Judgment.
This is an appeal from a Judgment of His Honour Judge Archer concerning the right claimed by the Appellant tenant, a Mr. Cusen, to deduct in respect of his tenancy of 27 Magdalen Road, St. Leonards, rent overpaid byhim to the landlord in excess of the rent lawfully recoverable under the provisions of the Rent Restriction Acts. It appears that whereas the standard rent of the premises under the Acts was 15s. 6d and there were permitted increases which brought the rent up to a maximum of some 19s. 5 ½d, a substantially larger weekly rent was, in fact, reserved and paid. In the ordinary way, there would be no difficulty in the matter as the provisions of section 14(1) of the Act of 1920 would enable the tenant, having made these overpayments, to recover them from the landlord to whom they were made or, alternatively, to deduct them from subsequent rent payable, at all events to that landlord. The difficulty in the case is that on the 23rd August, 1951, a Receiving Order was made against the landlord and on the 21st September, 1951, the Plaintiff, now Respondent, was appointed the landlord's trustee in bankruptcy. The question thus arises whether the right/of deduction given by section 14(1) of the Act of 1920 is exercisable against the trustee in bankruptcy of the landlord?
I should next read the provisions of section 14(1) of the Act: "Where any sum has, whether before or after the passing of this Act, been paid on account of any rent or mortgage interest, being a sum which is by virtue of this Act, or any Act repealed by this Act, irrecoverable by the landlord or mortgagee, the sum so paid shall be recoverable from the landlord or mortgagee who received the payment or his legal personal representative by the tenant or mortgagor by whom it was paid, and any such sum, and any other sum which under this Act is recoverable by a tenant from a landlord or payable or repayable by a landlord by a tenant from a landlord or payable or repayable by a landlord to a tenant, may, without prejudice to any other method of recovery, be deducted by the tenant or mortgagor from any rent or interest payable by him to the landlord or mortgagee". In conjunction with those provisions it is necessary to look at section 12(1)(f) of the Act, whichsays: "The expressions 'landlord', 'tenant', 'mortgagee', and 'mortgagor' include any person from time to time deriving title under the original landlord, tenant, mortgagee, or mortgagor". If the expression "the landlord" where it occurs at the end of section 14(1) in the passage "may, without prejudice", and so on, "be deducted by the tenant or mortgagor from any rent or interest payable by him to the landlord or mortgagee" means, in accordance with the definition, the landlord or any person from time to time deriving title under him, it would seem that the trustee in bankruptcy's claim in this case would be fraught with great difficulty for, on that construction, the statute would have provided a statutory right of deduction in terms exercisable against the landlord for the time being which would, so far as I can see, include the trustee in bankruptcy as one of the possible successors in title of a landlord. There is, however, some authority to the effect that the expression "the landlord" in that passage is limited by the context to the landlord who receives the excess payment. That authority is provided by the Irish case of Murray v. Webb (reported in Irish Law Times, volume 59 at page 41). It was there held that upon its true construction the expression "the landlord" in that passage was confined to the landlord who had been overpaid. Speaking for myself, I desire to keep that question of construction open for determination if and when it becomes necessary to decide it in some other case. For the purposes of the present case, I am prepared to assume that the construction placed upon it by the Irish Court was the right one so that the only right of deduction given by section 14(1) is a right of deduction against the overpaid landlord as distinct from a successor in title of the overpaid landlord. Mr. Blundell, for the Appellant tenant, invited us, in effect, to deal with the matter on that footing, and that is how I propose to deal with it.
The learned Judge came to the conclusion that the rightof deduction claimed to be exerciseable by the tenant was not, as contended by the tenant, available against the trustee in respect of rent accrued to the trustee from the time of the bankruptcy. The note of his reasons (which is very brief) is in these terms: "Although there is no reference to or argument on section 14, it appears that what Lord Justice Cohen held in Kitchen's Trustee v. Madders involves the point in his Judgment at the end where he deals with the sum recoverable". Accordingly, the learned Judge rejected the tenant' contention and gave judgment in favour of the trustee for the full amount of recoverable rent accrued since the bankruptcy claimed by the trustee. It is true that in the case of Kitchen's trustee v. Madders there was a claim in respect of rent overpaid of a similar nature to the claim in this case. That case is reported in 1950 Chancery, at page 134. It was an exceedingly complicated case, but the only aspect of it material for the present purpose is this: The trustee in bankruptcy of a landlord sued the Defendants for five quarters' rent due under a tenancy granted to them by the bankrupt landlord. Two of those quarters' rent had accrued due before the bankruptcy, and three had accrued due after the bankruptcy. In the Court below, the case had been argued with reference to a set off claimed in respect of an entirely different matter into which I need not now enter; but in this Court the Defendants were allowed to introduce by amendment a claim to the effect that the premises comprised in the tenancy were subject to the protection of the Act and that the rent claimed by the trustee was in excess of the recoverable rent and, moreover, that the Defendants had paid rent in excess of the recoverable rent and were, therefore, entitled to deduct or set off the excess payments they had made against the rent claimed by the trustee. The effect of the deduction or setoff they claimed to make, as I understand it, was to exhaust the two quarters' rent claimed in respect of periods prior tothe bankruptcy and to leave a balance of overpaid rent amounting to £20 which, as I understand it, they sought to set off against the rent accrued due after the bankruptcy. There seems to have been no argument addressed to the Court on the point which has been debated before us. Lord Justice Cohen, after referring on page 147 to the amendment raising the Defence based on the Rent Act, and discussing and deciding in favour of the Defendants the question whether the premises were a dwelling-house to which the Act applied, went on: "It seems to me that those facts reinforce the conclusion to which the Master of the Rolls came, and that there is nothing in the terms of the lease which can prevent us from holding that this house was at the material time a dwelling-house within the meaning of the Acts. The effect of that, of course, is that the rent was payable only at the rate of £140 a year instead of at the rate of £500 a year. On that basis, Mr. Browne claims that the sum recoverable, instead of being £625 should be £85. In making that calculation, however, he went too far, because he tried to set off the £90 (which his clients had overpaid for the quarter's rent paid in advance), not only against the first two standard quarters' rent aggregating £70, as to which it was clearly a proper subject-matter of set off, but also (to the extent of £20) against the rental...
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