Vinod Kataria (Applicant v Safeland Plc (Respondents
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SCHIEMANN,LORD JUSTICE BROOKE |
| Judgment Date | 04 November 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1104-11 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 November 1997 |
| Docket Number | CCRTF 96/1366/B |
[1997] EWCA Civ J1104-11
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(His Honour Judge Cotran)
Royal Courts of Justice
Strand, London WC2
Lord Justice Schiemann
and
Lord Justice Brooke
CCRTF 96/1366/B
MR J FERRIS (instructed by Messrs Philippsohn Crawfords Berwald of London WC1) appeared on behalf of the Appellant Respondents.
MR M BARKLEM (instructed by Messrs Walter Wilson Richmond of Harrow, Middlesex) appeared on behalf of the Respondent Applicant.
Tuesday, 4th November 1997
I will ask Lord Justice Brooke to deliver the first judgment.
This is an appeal by landlords against a judgment of Judge Cotran in the Westminster County Court on 3rd September 1996, when he declared that their purported forfeiture of a lease of shop premises in part of the ground floor of Regent House, 93 Kingsway, London WC2, was unlawful.
The lease in question was originally granted on 29th September 1983 by Prudential Nominees Limited to Mr Kataria's predecessors in title, Kandies (Smith Bros) Limited, for a term of 15 years from 27th September 1982 at an initial yearly rent of £3,750, such rent to be paid by equal quarterly payments in advance on the usual quarter days. We have been told that by 1995 that rent had more or less doubled.
The lease contained a forfeiture clause in familiar terms:
"If the rent hereby reserved or any part thereof shall be in arrear for twenty-one days after the same shall have become due (whether any formal or legal demand therefor shall have been made or not) … it shall be lawful for the Landlord or any person on its behalf at any time thereafter to re-enter upon the demised premises … and thenceforth peaceably to hold and enjoy the same as if this Lease had not been made …"
In about 1985 Mr Kataria acquired the lease and he thereafter occupied the premises for the purposes of his shop business. By October 1995 the reversion expectant on the determination of the lease had become vested in Standard Life Assurance Company Limited ("Standard Life"). On 16th October 1995 Mr Kataria owed over £10,000 in arrears of rent.
On 16th October 1995 Standard Life agreed to sell the appellants a portfolio of properties, including their reversionary interest in Regent House, for just over £8 million. It was a term of this agreement that on completion the appellants would assign to Standard Life the right to recover all arrears of rent due under a number of tenancy agreements, which included Mr Kataria's lease at Regent House.
The agreement was completed on 14th November 1995, and on that date the appellants made the requisite assignment. This was in the following terms:
"The Assignor with full title guarantee HEREBY ASSIGNS the right to receive the Arrears and all rights of action in relation to the recovery of the Arrears to the Assignee TO HOLD unto the Assignee absolutely."
Two days later, on the appellants' instructions, certificated bailiffs re-entered Mr Kataria's premises without prior notice, thereby forfeiting the lease on the ground of non-payment of rent. The judge described this conduct as "a monstrous exercise of the right of re-entry, even if it had been lawful".
It was admitted on the pleadings that on 16th November 1995, without prior notice, bailiffs acting for the landlords forced entry into the premises at five o'clock in the morning, as best the tenant could ascertain, and had thereafter excluded the tenant from the premises.
By a letter of the same date the bailiffs gave written notice to the landlords, in the form of a standard letter, that they had re-entered the premises and that the lease was thereby determined. The landlords had declined to enter into correspondence with the tenant beyond a letter from a solicitor, apparently employed directly by them, stating that she had no instructions to enter into correspondence with the tenant's solicitors.
On 23rd November 1995 the tenant's solicitors participated in correspondence with Standard Life in relation to the payment off of the overall debt, amounting at that time to £9,400, by a process of post-dated cheques.
After Mr Kataria had been "thrown out" (to use the judge's vivid expression) he applied to the County Court on 9th February 1996 for a declaration that the purported forfeiture of the lease was of no legal effect, alternatively for relief from forfeiture. He also claimed damages in respect of the unlawful forfeiture and/or breach of the terms of the lease.
On 6th August 1996 Judge Ryland directed the trial of a preliminary issue as to whether or not the purported forfeiture of the lease was lawful and the terms on which any relief should be granted if it was held that it was lawful. On 3rd September 1996 Judge Cotran ruled, as I have said, that the forfeiture was unlawful. He said that if the re-entry had, contrary to his view, been lawful, he would have granted relief from forfeiture on terms that Mr Kataria was entitled to go back into possession immediately on the basis that his liability to pay rent was resumed from the day he went back into possession.
Mr Kataria duly resumed possession of his shop, and we have been told that, although the original term of the lease has now expired, he has entered into short-term arrangements with his present landlords whereby he is in possession for a further short period. Since the appellants have disposed of their reversionary interest in the premises, the only practical issue arising from this appeal, apart from questions of costs, is whether Mr Kataria is entitled to continue with his action for damages for the disruption caused to his business by his summary eviction and for the losses he incurred over the year or so that he was kept out of possession.
The judge found in Mr Kataria's favour because he accepted all the reasons said to have been advanced by his counsel. The first of these reasons was that the only landlords who could enforce the right of re-entry were the present appellants and, as they were owed no rent (having assigned to their predecessors the right to recover it), the re-entry clause could not be activated. The second reason was that, since the appellants had waived or given away their right to the arrears, in the sense of...
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