Ezekiel v Orakpo
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CAIRNS,LORD JUSTICE SHAW |
| Judgment Date | 27 May 1976 |
| Judgment citation (vLex) | [1976] EWCA Civ J0527-5 |
| Date | 27 May 1976 |
| Court | Court of Appeal (Civil Division) |
[1976] EWCA Civ J0527-5
In The Supreme Court of Judicature
Court of Appeal
(Appeal of Defendant from Order of His Honour Deputy Judge Hammerton, Lambeth County Court, July 3, 1975.)
Lord Justice Cairns,
Lord Justice Lawton and
Lord Justice Shaw.
MR. A. HITCHING for MR. J. MILLS, Q. C. and MR. K. HORNBY, (instructed by Messrs. Sylvester &mall & Co.) appeared on behalf of the Appellant (Defendant).
MR. N. PRIMOST and MR. P. WULWIK, (instructed by Messrs. Kaufman, Kramer & Shebson) appeared on behalf of the Respondent (Plaintiff).
Lord Justice Lawton was unable to stay for the delivery of the judgment on this appeal because of his commitments elsewhere. The judgment of the court will be read by Lord Justice Shaw. It is, of course, approved by Lord Justice Lawton as well as by myself.
This is an appeal by the defendant in the action from a judgment of His Honour Judge Hammerton given on the 3rd July 1975, at the Lambeth County Court. The plaintiff sought an order for possession of shop premises in Kennington Lane, London, S. E.11. which the defendant held under a lease for 7 years granted by the plaintiff on the 15th January, 1973. The ground on which the plaintiff claimed that he was entitled to possession was that he had exercised his right of forfeiture pursuant to provisions contained in the lease following the defendant's defaults in due payment of the rent reserved by it. By his particulars of claim which were dated the 23rd January 1975, the plaintiff asked for incidental relief in the form of payment of arrears of rent and mesne profits.
The answer to the claim was set out in a defence and a supplement thereto both of which were settled by the defendant himself. He challenged the plaintiff's right to forfeit the lease, alleging that collateral contracts purporting to confer on the defendant an option to purchase from the plaintiff a property known as Albert House, which included the shop premises the subject matter of the lease, had in some way converted his status from that of a lessee to that of a purchaser of those premises so that forfeiture was inoperative and inapplicable. No counterclaim for relief against forfeiture was put forward. Mr. Orakpo did, however, pleadthat as a receiving order in bankruptcy had been made against him on the 6th January, 1976, the proceedings issued by the plaintiff on the 23rd of that month were invalid and should have been stayed under the provisions of Section 7 or of Section 9 of the Bankruptcy Act 1914. These contentions together with other aspects of the case were argued by the defendant in person at the trial in the Lambeth County Court. The learned judge held that the effect of Section 7 was to deprive him of jurisdiction to deal with the money claims put forward by the plaintiff, but that they did not affect the claim for forfeiture. Accordingly he gave judgment in favour of the plaintiff for possession in 21 days, but obtained from him an undertaking hot to part with the proceeds of any sale of the premises without prior notice to the defendant or his trustee in bankruptcy if the bankruptcy proceedings against him resulted in his adjudication. The defendant applied for a stay of execution in regard to the order for possession, but this was refused. He was told that he could appeal against that refusal to the Court of Appeal, Mr. Orakpo did go to that court, and was granted a stay pending the determination of his appeal in this court against the order for possession.
At the hearing of that appeal he had the advantage of being represented by Mr. John Mills Q. C., who has advanced on his behalf every possible argument on the materials that are available.
The history of the matter, so far as it was established by the evidence in the court below, is fully set out in the careful judgment given by the learned judge. He said: "By a Lease which was dated 15th January 1973 the Plaintiff demised to the Defendant the Ground Floor Shop premises at Albert House, Kennington Lanefor a term of 7 years at a yearly rent of £2,000. The rent was to be paid by quarterly instalments on the normal quarter days and there was a re-entry clause in clause 6 (1) providing for re-entry in the event of rent being 21 days in default after becoming due or if execution should have been levied on the Defendants goods. The Ground Floor Shop premises at 5/11 Kennington Lane formed part of a larger property called Albert House which has belonged to the Plaintiff since 1970 and the remainder of the premises were the subject of an agreement made on 15th January 1973 which I propose to refer to as "the option agreement" which recites that in consideration of £100 the Purchaser i. e. Defendant, should have the option to purchase Albert House for an estate in fee simple for a price of £40,000. The option was to be exercised in this way before 1st February 1974 and on its exercise the Purchaser should pay by way of a deposit the sum of £3,000. It provided that the date for completion should not be later than 25th March 1974 or on or before 14 days from the date of exercise of the option. Furthermore the option agreement also provided in express terms that on completion the Vendor would allow the intending purchaser the sum of £10,000 against the cost of repairs which was to be allowed by way of deduction from the purchase price payable by the Defendant and from the date of the option agreement to the date of the exercise the Defendant should be entitled to receive rents from the flats subject to paying all outgoings and assessments and should be entitled to let flats which might become vacant. There were 6 flats of which 4 were unfurnished. The furnished flats were let at substantial rents and the unfurnished flats at rents which might have amounted to £300 net. The premises were in a poor state of repair. The defendant produced a priced estimate of £21,830 for thecost of repairing and carrying out works at Albert House."
The judge went on to deal with and to reject the defendant's contentions as to the consequences of the options to purchase and the lease of the shop premises in combination. Not surprisingly, he was much troubled by the fact that, in the expectation of acquiring a title to the whole property comprised in Albert House, Mr. Orakpo had expended very substantial sums on repairs and improvements. If his lease of the shop premises was forfeited and he was left without any contractual right to purchase the property, the whole of that expenditure would be lost to him. In a corresponding measure the plaintiff would benefit from what would be a substantial windfall. It was this consideration that impelled Judge Hammerton to put the plaintiff on terms as to the disposition of the proceeds of any sale of the property.
In this court Mr. Mills has not pursued any argument founded on the exercise or...
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