Pittalis and another  v Grant and another

Rent Act 1977, section 137(3) — Position of subtenants on expiry of superior tenancy — Whether subtenants qualified for protection — Question of law not raised in county court — Court of Appeal decide that the special rule in Smith v Baker & Sons, although established by the House of Lords, should no longer be applied to appeals from county courts — The general rule as to points not raised in the court below should apply to both High Court and county court appeals The circumstances which gave rise to questions of both substantive law and procedure were briefly as follows — Property subject to a long headlease consisted of a dwelling-house (a flat on the first floor) and a shop (on the ground floor) — The lease prohibited user for certain liquor trades but contained no other restrictions on user — The headlessees granted a tenancy of the flat in 1977 which became a statutory tenancy in 1980 — The headlease expired by effluxion of time in 1981 but, as it was a business tenancy within Part II of the Landlord and Tenant Act 1954, a new lease was granted — However, the headlease itself was surrendered to the freeholders (the plaintiffs and present appellants) in 1987, thus bringing the freeholders and the occupiers of the flat (the present respondents), who had been statutory tenants, into direct relationship — The freeholders brought proceedings for possession of the flat and the question arose whether the occupiers were protected by section 137(3) of the Rent Act 1977 — This question depended on whether the flat formed part of ‘premises’ which had been let as a whole on a superior tenancy and were otherwise qualified under the words of that subsection — It was here that the substantive and procedural aspects of the case became interwoven — Counsel who appeared for the freeholders in the county court (not counsel appearing for them on appeal) had there conceded that the property constituted ‘premises’ in the above sense, thus making it inevitable that the judge should decide in favour of the occupiers of the flat — The appellants now wished to argue that the property did not constituted ‘premises’ within section 137(3) at all, but this was to raise a point of law not raised in the county court, contrary to the rule in Smith v Baker & Sons The court decided to deal first with the substantive point on the assumption that it could be raised and then consider the status of the rule in Smith v Baker & Sons — On the substantive question the case of Maunsell v Olins (which remained fully authoritative except in relation to agricultural holdings, where it was specifically reversed by the last limb of section 137(3)) was decisive in favour of the appellant freeholders — The property, being within Part II of the Landlord and Tenant Act 1954, did not qualify under Lord Wilberforce’s test for ‘premises’, namely, ‘premises which, for the purposes of the Rent Act, are treated as dwelling-houses’ The court then considered at length, and with a wealth of authority, both the general rule applied to appeals from the High Court as to matters not raised below and the special, more rigid, rule established since Smith v Baker & Sons, in regard to appeals from the county court — They came to the conclusion that, having regard to the modern right of appeal on both law and fact, and the rarity of resort to section 80 of the County Courts Act 1984 or its predecessors, there was no longer a good ground for a distinction between county court and High Court appeals — Thus the Court of Appeal did what ‘may seem a strong thing’, namely, resolved to sweep away a rule established by the House of Lords — Applying the general rule to the present case, the requirements of that rule, as settled by authority, were found to be satisfied and the appellants were thus entitled to raise the substantive issue before the court — Appeal allowed The following cases are referred to in this report. Boyer v Warbey [1953] 1 QB 234; [1954] 1 All ER 269, CA Cadogan v Henthorne [1957] 1 WLR 1; [1956] 3 All ER 851 Clarkson v Musgrave (1882) 9 QBD 386; 51 LJQB 525; 31 WR 47 Cousins v Lombard Deposit Bank (1876) 1 ExD 404; 45 LJQB 573; 35 LT 484; 25 WR 116 Cowburn, Re, ex parte Firth (1882) 19 ChD 419; [1881-5] All ER Rep 987, 46 LT 120, CA Davies v Warwick [1943] KB 329 Jackson (Francis) Developments Ltd v Stemp [1943] 2 All ER 601 Jones v Department of Employment [1989] QB 1; [1988] 2 WLR 493; [1988] 1 All ER 725, CA Legge v Matthews [1960] 2 QB 37; [1960] 2 WLR 620; [1960] 1 All ER 595, CA MacDougall v Knight (1889) 14 App Cas 194 Maunsell v Olins [1975] AC 373; [1974] 3 WLR 835; [1975] 1 All ER 16, HL Oscroft v Benabo [1967] 1 WLR 1087; [1967] 2 All ER 548, CA Rhodes v Liverpool Commercial Investment Co (1879) 4 CPD 425 Seymour v Coulson (1880) 5 QBD 359; 49 LJQB 604, CA Sharrock v London and North Western Railway Co (1875) 1 CPD 70; 33 LT 341; 24 WR 346, CA Smith v Baker & Sons [1891] AC 325; 7 TLR 679, HL Snell v Unity Finance Co [1964] 2 QB 203; [1963] 3 WLR 559; [1963] 3 All ER 50, CA Tasmania (Ship Owners and Freight Owners) v Smith City of Corinth (Owners), The Tasmania (1890) 15 AC 223; 6 Asp MLC 517, HL; 51 Digest (Repl) 830 Whall v Bulman [1953] 2 QB 198; [1953] 3 WLR 116; [1953] 2 All ER 306, CA This was an appeal by Kyriacos John Pittalis and his wife, Erato Pittalis, from the decision of Judge Goldstone, at Barnet County Court, dismissing their action as plaintiffs against John Forsyth Grant and his wife for possession of the flat at 92 High Road, East Finchley, London N2, and for mesne profits. Philip Engelman (instructed by Simon Wakefield & Co) appeared on behalf of the appellants; D J Reade (instructed by Henry Wimborne) represented the respondents. Giving the judgment of the court, NOURSE LJ said: This is a Rent Act case in which the substantive question is whether, on the determination of a superior tenancy, a statutory subtenancy of part of the premises continued to qualify for protection under section 137(3) of the Rent Act 1977; cf Maunsell v Olins [1975] AC 373. The point which is now relied on by the landlords was not raised before91 the county court judge, and so we must also decide whether it can be raised now: cf Smith v Baker & Sons [1891] AC 325. By a headlease dated December 9 1882 the dwelling-house and shop now known as 92 High Road, East Finchley, London N2 (‘the property’), was demised to the lessee therein named for a term of 99 years from June 24 1882 at a yearly rent of £10. The headlease contained a lessee’s covenant against carrying on or permitting to be carried on the trade or business of a tavern-keeper, inn-keeper, victualler or beer-house keeper, but no other covenant against user. It did not contain any covenant against assigning, subletting or parting with possession of the property or any part thereof. By an agreement in writing made on August 17 1977, the then head-lessees, Bartons (Basildon) Ltd, granted to the first defendant, Mr John Forsyth Grant, a subtenancy of the upper part of the property (‘the flat’) for a term of three years from February 1 1977 at a monthly rent of £26. On May 17 1979 Bartons (Basildon) Ltd assigned the headlease to Porter Nash Ltd, who were still the owners thereof when it expired by effluxion of time on June 23 1981. It is agreed that the property then included premises (ie the lower part) which were occupied by Porter Nash Ltd for the purposes of a business carried on by it, so that the tenancy created by the headlease was subject to the provisions of Part II of the Landlord and Tenant Act 1954. Porter Nash Ltd duly acquired a new lease of the property under the 1954 Act, but on June 15 1987 they surrendered it to the freehold owners of the property, the plaintiffs Mr Kyriacos John Pittalis and Mrs Erato Pittalis. Meanwhile, on January 31 1980 the subtenancy of the flat had expired by effluxion of time and the first defendant continued in occupation as the statutory tenant thereof. He and his wife are still in occupation. It is agreed that their occupation was protected by the Rent Acts while Porter Nash Ltd remained the headlessees of the property. But the effect of the surrender of the headlease was to bring them into a direct relationship with the plaintiffs. The substantive question is whether the effect of section 137(3) of the 1977 Act was to continue the defendants’ protection as against the plaintiffs. On August 13 1987 the plaintiffs commenced proceedings against the defendants in the Barnet County Court, seeking possession of the flat and mesne profits from the date of the surrender of the headlease. The action came on for trial before His Honour Judge Goldstone, by whom it was dismissed on November 27 1987. The plaintiffs now appeal to this court. Section 137(3) of the Rent Act 1977, as amended by the Agricultural Holdings Act 1986, is in these terms: Where a dwelling-house — (a)   forms part of premises which have been let as a whole on a superior tenancy but do not constitute a dwelling-house let on a statutorily protected tenancy; and (b)   is itself subject to a protected or statutory tenancy, then, from the coming to an end of the superior tenancy, this Act shall apply in relation to the dwelling-house as if, in lieu of the superior tenancy, there had been separate tenancies of the dwelling-house and of the remainder of the premises, for the like purposes as under the superior tenancy, and at rents equal to the just proportion of the rent under the superior tenancy. In this subsection ‘premises’ includes, if the sub-tenancy in question is a protected or statutory tenancy to which section 99 of this Act applies, an agricultural holding within the meaning of the [Agricultural Holdings Act 1986]. As to this provision, there has at all times been agreement on two points. First, the property, while it was let as a whole under the headlease, did not constitute a dwelling-house let on a statutorily protected tenancy. That was because the tenancy created by the headlease was one to which Part II of the 1954 Act applied: see section 24(3) of the 1977 Act. Second, the flat was itself a dwelling-house subject to a statutory tenancy. However, in the court below it was conceded by counsel who then appeared for the plaintiffs that the property was ‘premises’ within the contemplation of section 137(3)(a). His only argument was one which was rejected by Judge Goldstone, in our view correctly, as being contrary to the decision of Hallett J in Cadogan v Henthorne [1957] 1 WLR 1, a decision which was approved by this court in Legge v Matthews [1960] 2 QB 37. The learned judge therefore had no alternative but to hold that section 137(3) applied to the flat and to dismiss the plaintiffs’ claim for possession accordingly. Mr Engelman, who now appears for the plaintiffs, has argued that the property is not ‘premises’ within the contemplation of section 137(3) at all, so that the subsection does not apply to the flat and does not protect the defendants’ occupation of it. He seeks to withdraw the concession made below and to amend the plaintiffs’ notice of appeal accordingly. It is clear, as Mr Engelman fully accepts, that he seeks to raise a question of law which was not raised and submitted to the county court judge at the trial. Although his ability to do so is, strictly speaking, a preliminary question, the more convenient course is to deal first with the substantive question. Once that question has been identified it will be easier to decide whether it is one which can be raised in this court or not. Mr Engelman has relied on the decision of the House of Lords in Maunsell v Olins [1975] AC 373, which was not cited below. That case was decided on section 18(5) of the Rent Act 1968, which was for all material purposes in identical terms to those of section 137(3), except that the last paragraph of the later subsection was not included. It was held that the ‘premises’ to which section 18(5) related included any premises ‘which, as a matter of fact, applying accepted principles, would be held to be a dwelling-house for the purposes of the Act’: see p 389C, per Lord Wilberforce, with whom the other members of the majority agreed. That case was concerned with the subtenancy of a cottage on a farm which had been let on an agricultural tenancy. The head tenancy having been determined, the freeholder succeeded in his claim for possession of the cottage against the subtenants on the ground that the farm was not ‘premises’ within Lord Wilberforce’s test. The effect of that decision in regard to agricultural holdings has now been reversed by the final paragraph of section 137(3), but its authority continues in full force and effect in regard to other types of property. The question, then, is whether, on June 15 1987, the property fell within Lord Wilberforce’s test or not. Mr Reade, in a clear and tenacious argument on behalf of the defendants, contended that the question depended on whether the property was, as a matter of fact and applying accepted principles, a dwelling-house or not. He submitted that that was a question which was not decided by the learned judge and could have been decided only on evidence which was not before him, a submission which is of cardinal importance in relation to the plaintiffs’ ability to raise the substantive question in this court. We do not think that Mr Reade’s submission is correct. It ignores the requirement that the property must be held to be a dwelling-house ‘for the purposes of the Act’. The supremacy of that requirement becomes clearer from an earlier passage in Lord Wilberforce’s speech at p 388H, where, after stating the narrowest view of ‘premises’, he turned to the narrower view which he favoured: A less narrow view would be to say that ‘premises’ includes not only dwelling-houses in the normal popular sense, but premises, which, for the purposes of the Rent Act, are treated as dwelling-houses. Everybody knows, and the draftsman must be taken to have known, that protection under the Rent Acts is given not merely to single, identifiable, pure dwelling-houses or dwelling units, but also to units of a mixed character — houses let with a garden or a yard or a garage or a paddock, houses part (even a substantial part) of which is used for business purposes. The same point is made in the speeches of Lord Reid and Viscount Dilhorne, at pp 383C and 384B-C respectively. The converse of Lord Wilberforce’s last example is business premises, part (even a substantial part) of which is used for residential purposes. That seems to be what we are concerned with here. Admittedly, we do not know the precise facts, but what we do know is that on June 15 1987 the tenancy of the premises was one to which Part II of the 1954 Act applied. The consequence, under section 24(3) of the 1977 Act, was that it was not a regulated tenancy. It necessarily follows that the property, whatever its actual state may have been, was not to be treated as a dwelling-house for the purposes of the 1977 Act and for that reason was not ‘premises’ within the contemplation of section 137(3). There is a further objection to Mr Reade’s argument. Even if the view which we have expressed as to ‘premises’ were incorrect, he would still have to show that the new notional tenancy of the flat was to be for residential purposes, because otherwise the application of the 1977 Act for which section 137(3) provides would not assist the defendants. Here he encounters the difficulty that the Act is to apply as if there had been separate tenancies of the flat and the lower part of the property ‘for the like purposes as under the superior tenancy’. Mr Reade submitted that the word ‘purposes’ is to be construed distributively, so that you look at the purposes for which each part of the property was used on the material date, it being clear that the flat was then used for residential purposes. That is another submission92 which we are unable to accept. What have to be regarded are the purposes under the superior tenancy, not the purposes under the subtenancy of the flat nor the use to which it was actually being put. The purposes under the superior tenancy were those under the headlease, which described the property as a dwelling-house and shop and, broadly speaking, prohibited it from being used as a public house. And so the purposes under the superior tenancy were partly business and partly residential and it is for those dual purposes that the notional separate tenancies of each part of the property would be deemed to be granted if it constituted premises within the contemplation of section 137(3). Mr Reade would say that that would be a very bizarre result. But it would, we think, be the result of the words which Parliament has used. If, on the other hand, the view which we have expressed as to ‘premises’ is correct, then everything falls into place and there is nothing bizarre about it at all. Indeed, we think that the real utility of this second point is to confirm the view that ‘premises’ are limited to premises which, for the purposes of the 1977 Act, are to be treated as dwelling-houses. Authoritative support for the view that the draftsman of the subsection did not have in mind any superior tenancy other than one for residential purposes is to be found in the observations of Lord Reid in Maunsell v Olins, at pp 382G-383C. For these reasons we are of the opinion, first, that the substantive question is a pure question of law which does not depend on evidence as to the actual state of the property at the material date; and, second, that if it is open to the plaintiffs to raise it in this court, it ought to be decided in their favour. The stance which an appellate court should take towards a point not raised at the trial is in general well settled: see MacDougall v Knight (1889) 14 App Cas 194 and The Tasmania (1890) 15 App Cas 223. It is perhaps best stated in Ex p Firth, Re Cowburn (1882) 19 Ch D 419, at p 429, per Sir George Jessel MR: . . . the rule is that, if a point was not taken before the tribunal which hears the evidence, and evidence could have been adduced which by any possibility would prevent the point from succeeding, it cannot be taken afterwards. You are bound to take the point in the first instance, so as to enable the other party to give evidence. Even if the point is a pure point of law, the appellate court retains a discretion to exclude it. But where we can be confident, first, that the other party has had opportunity enough to meet it, second, that he has not acted to his detriment on the faith of the earlier omission to raise it and, third, that he can be adequately protected in costs, our usual practice is to allow a pure point of law not raised below to be taken in this court. Otherwise, in the name of doing justice to the other party, we might, through visiting the sins of the adviser on the client, do an injustice to the party who seeks to raise it. If the present case were governed by the general rule, we would hold that these three requirements were satisfied, so that the plaintiffs should be allowed to raise the substantive question in this court. But ever since the decision of the House of Lords in Smith v Baker & Sons [1891] AC 325 a special rule has been established in regard to appeals from the county court. It has been held that there is no right of appeal on a question of law, even on a pure question of law, which was not raised and submitted to the county court judge at the trial. Although exceptions have from time to time been allowed, the existence of the rule was recognised in this court as recently as 1987 in a case in which another exception was made: see Jones v Department of Employment [1989] QB 1. But at p 14H Glidewell LJ said: Smith v Baker was of course decided at a time when effectively the only right to appeal from a decision of the county court was on a point of law. Now that the right of appeal from the county court on questions of fact has been substantially extended, the scope of the rule in Smith v Baker may be open to future consideration. Mr Engelman would be well content that we should make yet another exception now, if such we can properly do. But encouraged no doubt by the words of Glidewell LJ, he has asked us to reconsider the rule in principle and, if we may, to sweep it away altogether. That has set us upon a careful examination of the provisions of successive County Courts Acts, of the authorities which gave rise to the rule and of those which have succeeded it. It was provided by the County Courts Act 1850 (section 14) that if either party should be dissatisfied with the determination or direction of the court ‘in point of law, or upon the admission or rejection of any evidence’ such party might appeal; and (section 15) that such appeal should be in the form of a case agreed on by both parties and, if they could not agree, that the judge of the county court should settle the case and sign it. In Sharrock v The London & North Western Railway Co (1875) 1 CPD 70 it was held, perhaps more accurately it was confirmed, by this court that section 14 gave no right of appeal on a question of fact. With the passage of time it was found that the system of appeal by way of special case was unsatisfactory. Accordingly, it was provided by the County Courts Act 1875, section 6: In any cause, suit, or proceeding, other than a proceeding in bankruptcy, tried or heard in any county court, and in which any person aggrieved has a right of appeal, it shall be lawful for any person aggrieved by the ruling, order, direction, or decision of the judge . . . to appeal against such ruling [etc] . . . by motion to the court to which the appeal lies, instead of by special case, . . . And at the trial or hearing of any such cause, suit, or proceeding, the judge, at the request of either party, shall make a note of any question of law raised at such trial or hearing, and of the facts in evidence in relation thereto, and of his decision thereon, and of his decision of the cause, suit or proceeding . . . There was also provision for the note to be signed by the judge. In Cousins v Lombard Deposit Bank (1876) 1 Ex D 404 it was held by the Divisional Court of the Exchequer Division that that section was procedural only, giving an alternative right of appeal; and that it had not extended the substantive right of appeal, which remained an appeal in point of law only. In that case it was unnecessary to decide what was the effect of that part of section 6 which provided for the making of a note by the judge and it seems that it would have been well arguable, as a matter of construction, that it was not made a condition precedent to the right of appeal that a note should be made. However, in Rhodes v Liverpool Commercial Investment Co (1879) 4 CPD 425 it was held by the Divisional Court of the Common Pleas Division that where the judge actually took a note of the evidence, but was not requested to make a note of any question of law raised at the trial and did not do so, no appeal could be brought in relation to such a question. In Seymour v Coulson (1880) 5 QBD 359 it was held by this court that it was unnecessary for the request to be made at the trial, if the judge had in fact noted the question of law and the evidence in relation thereto and the note was available to the higher court. That was thought to have thrown some doubt on the authority of Rhodes v Liverpool Commercial Investment Co, but in Clarkson v Musgrave (1882) 9 QBD 386 it was held by the Divisional Court of the Queen’s Bench Division that that was not so. It was held in terms that it was a condition precedent to the right to appeal under section 6 of the 1875 Act that the question of law upon which it was desired to appeal should have been raised before the county court judge at the trial. Those were the principal decisions under the County Courts Acts 1850 and 1875. Smith v Baker & Sons [1891] AC 325 was decided under the County Courts Act 1888, section 120 of which was to the same effect as section 6 of the 1875 Act. In that case the decision in Clarkson v Musgrave was expressly approved and thus the rule became firmly established. At this stage it is helpful to understand how it had come about that the raising of the question of law at the trial was a condition precedent to the right of appeal. The rule cannot, we think, have been rested solely on the language of section 6, which did not express the right of appeal to depend on the making of the judge’s note. Rather it was the product of what the judges who decided those cases thought to be a necessary practice, influenced as they no doubt were by the difficulties, not to say injustices, which would or might have arisen if material questions of law were not identified at the only level of decision at which the facts could be found. Remember also that in those days there were no pleadings in the county court and the facts were often found by juries. The first of these considerations finds expression in many of the judgments in the early cases. In Rhodes v Liverpool Commercial Investment Co the plaintiff, a trustee in bankruptcy, sought to recover a sum which he alleged had been paid to the defendants by the debtor by way of fraudulent preference. Before the county court judge evidence was adduced only on behalf of the plaintiff. The question was whether the facts established by that evidence amounted in law to a fraudulent preference. At the close of the plaintiff’s case the defendants did not ask for a nonsuit, but argued the case on the facts. Although the judge made a note of the plaintiff’s evidence, he was not requested to make, and he did not make, a note of any question of law. Judgment having been given against the defendants, they appealed, unsuccessfully, on the ground that the facts disclosed in the judge’s notes of the evidence did not entitle the plaintiff to a verdict. It was held that that was a question of law which, not having been raised at the trial, could not be raised on appeal. At (1879) 4 CPD 425, Grove J said at p 429 that the object of section 6 was: . . . to prevent that which would work manifest injustice, viz persons taking their chance of the decision of the county court being in their favour, and afterwards, on finding the decision against them, taking advantage of a mistake in some point of law to which the attention of the judge had never been called. In Clarkson v Musgrave the plaintiff claimed compensation for injuries under the Employers Liability Act 1880. The jury found that the accident occurred through the negligence of the defendants. The judge was requested to take a note of the evidence, but he was not requested to make a note of any question of law nor did the defendants contend at the trial that there was no evidence to go to the jury as to the question of liability under the 1880 Act. It was held that they could not advance that contention on appeal. At (1882) QBD 386 at p 391, Field J said: The object of the provisions of section 6 is clearly to let the opponent of the party who asks for the note to be taken know what the question of law is, and to give him the opportunity of meeting it by necessary evidence. The judge must be asked to decide the question of law, and it is of great importance that he should be asked to take a note of the evidence relating thereto, both in the interest of the opponent, and in order that this Court on appeal should have a complete and clear record of what the point raised at the trial was, and of the judge’s decision upon it. At p 393 Cave J said: All cases, including Seymour v Coulson, recognise this at least — that the point must be taken at the trial, when it might be cured by evidence, and ought not to be taken for the first time on appeal, upon notes sent up to this Court for the purpose of raising another and a distinct point of law. In Smith v Baker & Sons the plaintiff again claimed compensation under the Employers Liability Act 1880. At the close of his case the defendants, relying on the principle volenti non fit injuria, unsuccessfully asked for a nonsuit. The jury, having then heard the evidence adduced on behalf of the defendants, found that they had been negligent, that there had been no contributory negligence on the part of the plaintiff and that he did not voluntarily take a risky employment with a knowledge of its risks. There was an appeal on the volenti issue to the Divisional Court, who dismissed it but gave leave for a further appeal to be brought to this court, where it was allowed on an entirely new ground of law, namely that there had been no evidence of negligence on the part of the defendants to go to the jury. It was held by the House of Lords that that question, not having been raised at the trial, could not be raised on appeal. It is interesting to note that counsel for the plaintiff relied not only on Clarkson v Musgrave but also on a submission that the same principle had been applied by the House to actions in the High Court, for which purpose he referred to The Tasmania and MacDougall v Knight; at the same time, counsel for the defendants did not argue that Clarkson v Musgrave was wrongly decided: see [1891] AC 325 at pp 329 and 331. At p 333, Lord Halsbury LC said: My Lords, this was an action originally tried in the county court, and it is very important to bear in mind that only a limited appeal is allowed by law in actions so tried. There is no power to review the decision of fact arrived at in the county court by any other tribunal than the county court itself. A matter of law can be made the subject of appeal, but then only when the point has been raised at the trial before the learned judge . . . My lords, I think that there are good reasons for the enactment which has so limited an appeal, and in truth even where written pleadings render such precautions as the statute has enforced in the county court less necessary, the same precaution has been constantly enforced where applications for a new trial have been made in the Superior Courts. It is obvious that it would be unjust to one of the parties if the other could lie by and afterwards, having failed on the contention that he in fact set up, be permitted to rely on some other point not suggested at the trial, but which if it had been suggested might have been answered by evidence: see MacDougall v Knight. At p 358, Lord Herschell, after saying that he saw no reason to think that the decision in Clarkson v Musgrave was erroneous, continued: It would, in my opinion, be very mischievous if an appeal from a decision of a county court could be sustained on the ground that there was no evidence to go to the jury when that point had not been raised before the county court judge. These observations, when read in context, suggest that the primary objective of the founders of the rule was to prevent injustice in a case where, if the point had been raised when it ought to have been, the other side would or might have been able to adduce evidence to answer it. In such a case protection would be given by the general rule. Especially significant is Lord Halsbury’s reference to MacDougall v Knight which, as has been shown, is one of the leading authorities on the general rule. But because none of the early cases was clearly one where the new question was a pure question of law, the judges who decided them did not have to ask themselves whether a distinction ought to have been made in such a case. We do not say positively that it ought to have been. Unless anything could have been made of the words ‘and of the facts in evidence in relation thereto’ as suggesting that only questions of law which depended on evidence were in view, the distinction was not made by section 6, which was otherwise expressed to apply to all questions of law alike. The more significant point is that the rule in regard to questions of law was established as an adjunct to the implied statutory prohibition against any appeal on a question of fact. The important question which we may have to decide is whether, now that the prohibition has gone, there is any sound basis for the perpetuation of the adjunct. In none of the many reported decisions since Smith v Baker & Sons have we been able to discover that any examination of the origins of the rule was made. Apart from the exceptions which have from time to time been allowed, it has been taken to apply to all questions of law alike, whether they depend on evidence or not. By 1952 it had been clearly recognised that in this respect county court appeals differed from High Court appeals: see Boyer v Warbey [1953] 1 QB 234, at p 239, per Sir Raymond Evershed MR. At that time the County Courts Act 1934 was in force, which was in all material respects to the same effect as the 1888 Act. The rule was given renewed vigour by the decision of this court in Oscroft v Benabo [1967] 1 WLR 1087. By that time a limited right of appeal on questions of fact had been given by the County Courts Act 1959, but the possible consequences of that were not considered. Before coming to the more recent legislation, we find it convenient to deal next with the exceptions to the rule which have so far been established and then to consider whether they support a further expansion in this case. The first exception is where the county court has acted without jurisdiction, for example by making an order for possession of premises which are protected by the Rent Acts (see eg Davies v Warwick [1943] KB 329, at p 336, per Goddard LJ and Francis Jackson Developments Ltd v Stemp [1943] 2 All ER 601, at pp 602-603) or by making an order on a false hypothesis of fact (see Whall v Bulman [1953] 2 QB 198, as explained by Diplock LJ in Oscroft v Benabo [1967] 1 WLR 1087 at p 1099F-G). The second is where the county court has enforced an illegal contract: see Snell v Unity Finance Co Ltd [1964] 2 QB 203. The third is where the plaintiff’s proceedings are liable to be struck out as disclosing no cause of action: see Jones v Department of Employment [1989] QB 1. In that case Glidewell LJ was of the opinion that the question was in any event one of jurisdiction: see p 15D-E. Mr Engelman has submitted that here we have another case in which the county court judge has acted without jurisdiction. He said that the judge had refused to make an order for possession when he ought to have done so. But we agree with Mr Reade in thinking that that is not a matter of jurisdiction at all. It is altogether different from a case where, without the power to make it, an order for possession is made. It is a case where the judge has acted (through no fault of his own) on a mistaken view of the law. That distinction was made very clear by Diplock LJ in Oscroft v Benabo where, after observing that a court may, among other examples, lack jurisdiction to make the kind of order made, eg an order for possession of premises protected by the Rent Acts, he continued at [1967] 1 WLR p 1100F-G: A mere error of law, however, made by a county court judge on an application of a kind which he is entitled to entertain between parties between whom he is entitled to adjudicate, resulting in an order of a kind which he is entitled to make, does not affect his ‘jurisdiction’ to make the order. It is an erroneous determination in point of law. Then it was said that, as in Whall v Bulman, the judge had been asked to decide the case upon the false hypothesis that the property was ‘premises’ within the contemplation of section 137(3) of the 1977 Act. But that was a false hypothesis not of fact but of law and, as Diplock LJ pointed out at [1967] 1 WLR 1101B, that makes all the difference. For these reasons, we are of the opinion that the present case does not fall within any of the established exceptions to the rule, which perhaps can be loosely described as being restricted to illegality and lack of jurisdiction or the next best thing. If the rule is to be upheld, we are bound by authority to hold that the present case is within it. And so everything depends on whether we ought to accede to the93 broader submission that, the substratum having gone, there is nothing left to uphold it. We turn, then, to the County Courts Act 1959. Section 107 contained a general provision to the effect that no judgment or order of a county court, nor any proceedings therein, should be removed by appeal, motion, certiorari or otherwise into any other court, except in accordance with the 1959 Act. Section 108 retained the pre-existing right of appeal to this court on questions of law. Section 109(1) introduced, for the first time, a right of appeal to this court on questions of fact in the proceedings mentioned in subsection (2), eg certain actions founded on contract or tort, or for money recoverable by statute, and certain actions for the recovery of land. Section 110(1) introduced a right of appeal to this court on questions of fact in admiralty proceedings. Section 112 retained the provisions as to the judge’s note on appeal in much the same form as they had taken in sections 120 and 121 of the 1888 Act and then in section 108 of the 1934 Act. By the Supreme Court Act 1981, sections 107, 109 and 110(1) of the 1959 Act were repealed and section 108 was amended so as to give a general right of appeal on both law and fact, subject to the leave either of the county court judge or of this court in certain classes of proceedings from time to time prescribed by order made by the Lord Chancellor. Section 112 was also amended in minor respects. The amended section 108 has now been re-enacted as section 77 of the County Courts Act 1984, subsection (1) of which is in these terms: Subject to the provisions of this section and the following provisions of this Part of this Act, if any party to any proceedings in a county court is dissatisfied with the determination of the judge or jury, he may appeal from it to the Court of Appeal in such manner and subject to such conditions as may be provided by the rules of the Supreme Court. The amended section 112 has now been re-enacted as section 80 of the 1984 Act, which is in these terms: (1)  At the hearing of any proceedings in a county court in which there is a right of appeal [or from which an appeal may be brought with leave], the judge shall, at the request of any party, make a note — (a)   of any question of law raised at the hearing; and (b)   of the facts in evidence in relation [to any such question]; and (c)    of his decision [on any such question] and of his determination of the proceedings. (2)  Where such a note has been taken, the judge shall (whether notice of appeal has been served or not), on the application of any party to the proceedings, and on payment by that party of such fee as may be prescribed by the fees orders, furnish him with a copy of the note, and shall sign the copy, and the copy so signed shall be used at the hearing of the appeal. The words in square brackets show the minor amendments which had been made by the 1981 Act. The broad effect of sections 77 and 80 of the 1984 Act is this. A party to proceedings in the county court may appeal on law or on fact or on both. Although leave is required in certain classes of proceedings, no distinction is for that purpose made between questions of law and questions of fact. In relation to questions of law, the county court judge is still required, on request, to make the note which he has been required to make ever since the enactment of section 6 of the 1875 Act. Although there is now an equal right of appeal on questions of fact, the judge is not required to make a note of any question of fact raised at the hearing. That may be no more than an oddity or it may suggest that section 80 is now an outdated survival from more primitive times. Certainly it would seem that the provisions now embodied in that section have in practice been overtaken by the modern developments in pleading in the county court, by the virtual disappearance of juries there and by the judge’s inherent duty to make a note of the proceedings coupled with the provisions of RSC Ord 59, r 19(4). None of us has ever known of a case where the parties have made a formal request to the judge, either at the hearing or afterwards, pursuant to section 80 or its predecessors. We would therefore think that, even without the equal right of appeal on questions of fact, section 80, the representative of section 6 of the 1875 Act, had become an unsure foundation for the rule in Smith v Baker & Sons. But when account is taken of the ability of this court now to overturn the county court on fact as much as on law, there is seen to be no foundation for the rule at all. The statutory prohibition as an adjunct to which it was established has gone. There is no longer any good ground for a distinction between county court and High Court appeals and the general rule should apply to both. For these reasons we hold that the rule in Smith v Baker & Sons ought no longer to be applied. We are conscious that it may seem a strong thing for this court to hold thus of a rule established by the House of Lords, albeit one enfeebled by exceptions, the statutory support which gave it life at last turned off. But where it can see that the decision of the higher court has become obsolete, the lower court, if it is not to deny justice to the parties in the suit, is bound to say so and to act accordingly. We allow the substantive question to be raised in this court and we decide it in favour of the plaintiffs. We therefore allow the appeal and, subject to submissions as to the date when it should take effect, we will make an order for possession of the flat. The appeal was allowed and respondents directed to pay appellants’ costs of appeal as from January 3 1989, such order not to be enforced without leave of the court; order made for legal aid taxation of respondents’ costs. Leave to appeal to House of Lords was refused.