Dean Golding v Deborah Allen Martin
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton,Lord Justice Lewison,Lord Justice McCombe |
| Judgment Date | 15 March 2019 |
| Neutral Citation | [2019] EWCA Civ 446 |
| Docket Number | Case No: B2/2018/0746 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 March 2019 |
[2019] EWCA Civ 446
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON
His Honour Judge Luba QC
C01BR087
Royal Courts of Justice
Strand, London, WC2A 2LL
THE MASTER OF THE ROLLS
Lord Justice Lewison
and
Lord Justice McCombe
Case No: B2/2018/0746
Mr Simon Sinnatt AND Mr Michael Walker (instructed by Wannops LLP) for the Appellant
Mr Philip Rainey QC AND Mr Faisel Sadiq (instructed by SA Law LLP) for the Respondent
Hearing date: 6 th March 2019
Approved Judgment
Sir Terence Etherton MR, Lord Justice Lewison and
Introduction and background
The background to this appeal is a cautionary tale about the danger to a lessee in leaving a flat unoccupied and moving abroad without giving the landlord a forwarding address for correspondence.
The issue for which Asplin LJ gave permission to bring this second appeal was what counts as “success at the trial” in a claim to relief against forfeiture for non-payment of rent. DDJ Mohabir held that the grant of relief against forfeiture did not count as “success”. But HHJ Luba QC disagreed with him.
Ms Martin was the lessee of a flat in Sidcup. She held under a long lease, which had been extended under the Leasehold Reform, Housing and Urban Development Act 1993, in return for a substantial premium. That lease incorporated the terms of a previous lease. Those terms included an obligation to pay a service charge, which was reserved as rent. Under the terms of the lease, it was liable to forfeiture if the rent remained unpaid for 21 days.
In 2003 Ms Martin moved to Majorca, leaving the flat unoccupied. She left no forwarding address. Mr Golding acquired the reversion in 2012. He carried out extensive refurbishment work to the block containing Ms Martin's flat. There was a dispute about how much of that work fell within the scope of the service charge. Ms Martin left her brother Paul to deal with the dispute, with the aid of a surveyor called Nigel Watson. Ms Martin's brother also instructed solicitors to help. The firm in question was Parker Arrenberg, who also acted for her on the grant of the extension lease. Mr Harrington, who is employed by Mr Golding's solicitors, asked Parker Arrenberg at least twice (in July and August 2015) for a correspondence address for Ms Martin. But the requests appear to have gone unanswered.
In November 2015 Mr Golding's solicitors sent a demand for service charge to Ms Martin at the flat. A copy was also sent to Mr Watson. Following that, an application was made to the FTT for determination of the amount that Ms Martin was required to pay by way of service charge. On 23 February 2016 the FTT decided that her liability was £11,794.66. At some point it appears that a money judgment for that sum was given by the county court at Bromley. We have not seen a copy of that order.
The possession order and its aftermath
On 15 June 2016 Mr Golding began proceedings in the county court seeking forfeiture of the lease. DDJ Thomas made an order for possession on 15 July 2016. We will return to the form of order shortly. On 23 August 2016 Mr Golding took possession of the empty flat. On 17 October 2016 he granted a new lease of it to his daughter, by way of gift. She has subsequently sold it to a third party purchaser. In early December Ms Martin learned of the existence of the order; and on 23 January 2017 she applied to have it set aside under CPR Part 39.3 (5). On 23 February 2017 the period of six months from the date of Mr Golding's resumption of possession expired.
The legislative and procedural framework
In the county court, forfeiture of a lease for non-payment of rent is governed by section 138 of the County Courts Act 1984. That provides, so far as material:
“(1) This section has effect where a lessor is proceeding by action in the county court (being an action in which the county court has jurisdiction) to enforce against a lessee a right of reentry or forfeiture in respect of any land for non-payment of rent.
(2) If the lessee pays into court or to the lessor not less than 5 clear days before the return day all the rent in arrear and the costs of the action, the action shall cease, and the lessee shall hold the land according to the lease without any new lease.
(3) If—
(a) the action does not cease under subsection (2); and
(b) the court at the trial is satisfied that the lessor is entitled to enforce the right of re-entry or forfeiture,
the court shall order possession of the land to be given to the lessor at the expiration of such period, not being less than 4 weeks from the date of the order, as the court thinks fit, unless within that period the lessee pays into court or to the lessor all the rent in arrear and the costs of the action.
(4) The court may extend the period specified under subsection (3) at any time before possession of the land is recovered in pursuance of the order under that subsection.
(5) If—
(a) within the period specified in the order; or
(b) within that period as extended under subsection (4), the lessee pays into court or to the lessor—
(i) all the rent in arrear; and
(ii) the costs of the action,
he shall hold the land according to the lease without any new lease.
(6) ….
(7) If the lessee does not—
(a) within the period specified in the order; or
(b) within that period as extended under subsection (4), pay into court or to the lessor—
(i) all the rent in arrear; and
(ii) the costs of the action,
the order shall be enforceable in the prescribed manner and so long as the order remains unreversed the lessee shall, subject to subsections (8) and (9A), be barred from all relief.
(8) The extension under subsection (4) of a period fixed by a court shall not be treated as relief from which the lessee is barred by subsection (7) if he fails to pay into court or to the lessor all the rent in arrear and the costs of the action within that period.
(9) Where the court extends a period under subsection (4) at a time when—
(a) that period has expired; and
(b) a warrant has been issued for the possession of the land, the court shall suspend the warrant for the extended period; and, if, before the expiration of the extended period, the lessee pays into court or to the lessor all the rent in arrear and all the costs of the action, the court shall cancel the warrant.
(9A) Where the lessor recovers possession of the land at any time after the making of the order under subsection (3) (whether as a result of the enforcement of the order or otherwise) the lessee may, at any time within six months from the date on which the lessor recovers possession, apply to the court for relief; and on any such application the court may, if it thinks fit, grant to the lessee such relief, subject to such terms and conditions, as it thinks fit.
(9B) Where the lessee is granted relief on an application under subsection (9A) he shall hold the land according to the lease without any new lease.”
Procedurally, a claim by a landlord for possession is governed by Part 55 of the CPR. Once the claim has been started, the court will fix a date for hearing it: CPR Part 55.5(1). Witness statements in support of the claim must be filed at least 2 days before the hearing: CPR Part 55.8 (5). At the hearing the court may either (a) decide the claim or (b) give case management directions: CPR Part 55.8(1). Where the tenant does not appear at the hearing, and has not filed a defence, the court will normally decide the claim.
CPR Part 39.3 (5) provides:
“(5) Where an application is made [to set aside an order] by a party who failed to attend the trial, the court may grant the application only if the applicant—
(a) acted promptly when he found out that the court had exercised its power … to enter judgment or make an order against him;
(b) had a good reason for not attending the trial; and
(c) has a reasonable prospect of success at the trial.”
The court also has the general powers of case management conferred by CPR Part 3. These include a power to “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective:” CPR Part 3.1 (2) (m). In addition, a power to make an order includes a power to revoke or vary the order: CPR Part 3.1 (7).
The proceedings below
The application to set aside the order came before DDJ Mohabir on 27 June 2017. He noted that it was implicit in the application that the judgment was a regular judgment; and therefore inferred that it had been properly served, even though Ms Martin lived in Spain. He decided:
i) Ms Martin had acted promptly in seeking to set the order aside once she learned of its existence;
ii) She had a good reason for not attending the hearing; but
iii) She did not have a good prospect of success at trial. She had no defence to the
claim for possession. Although she could have applied for relief against forfeiture, that was not a defence to the claim for possession.
Ms Martin appealed. HHJ Luba QC heard the appeal. He upheld the district judge's decision on promptness. He then considered the question of “success at the trial.” He held that if the tenant has a reasonable prospect of obtaining relief against forfeiture at a hearing following the setting aside of the possession order, that counts as “success at the trial”. With the permission of Asplin LJ, Mr Golding brings this second appeal.
Grounds of appeal and Respondent's Notice
The ground of appeal, as set out in the Appellant's Notice, is that the grant of relief against forfeiture is not “success at the trial”.
By way of Respondent's Notice, Mr Rainey QC, on Ms Martin's behalf, sought to argue:
i) That the possession order was defective with the consequence that Ms Martin was entitled to have it set aside as of right.
ii) That this was not a case...
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