Grange Lane South Flats Ltd v Cook and another

Rent Act–A somewhat involved procedural matter, but illustrating the substantive point decided in Penn v Dunn–Husband, tenant of flat which was the matrimonial home, left it leaving wife in occupation–County court registrar in possession proceedings struck out tenant’s defence and made order for possession against him only–Wife’s solicitors were present, but did not appreciate significance of registrar’s order in relation to wife–Decision in Penn v Dunn had made it clear that wife’s rights under Matrimonial Homes Act 1967 did not assist her after possession order against husband had effectively terminated his statutory tenancy–Application for leave to appeal against order not filed until some 8 months after it was made–Deputy county court judge decided reluctantly that he must refuse leave–Appeal from refusal to Court of Appeal–Landlords’ solicitors aware of Penn v Dunn when order made by registrar–Deputy county court judge held to have exercised discretion incorrectly in refusing leave–Registrar’s order which, contrary to his intention, deprived wife of any defence to possession claim, was a bad order which could have been instantly upset on appeal by wife–Justice required that leave to appeal out of time should be given–Deputy county court judge’s decision reversed This was an appeal against the refusal of Mr Recorder M J W Marsh, sitting as a deputy county court judge, to grant leave to appeal out of time from an order of the registrar of the Scunthorpe County Court, against Steven Cook, who was the tenant of a flat at 105 Staindale Road, Scunthorpe. The registrar made no order for possession against Ann Cook, the tenant’s wife, although she was in fact in occupation of the flat, her husband having left the matrimonial home. S A Allison (instructed by Winocour & Williamson, of Scunthorpe) appeared on behalf of the appellant, Mrs Ann Cook; Douglas Hogg (instructed by R A C Symes & Co, of Scunthorpe) represented the respondents. Giving the first judgment at the invitation of Megaw LJ, BRIGHTMAN LJ said: This is an appeal from a decision of Mr Recorder Marsh sitting as a deputy county court judge. He refused leave to appeal out of time from an order of the registrar of the Scunthorpe County Court which had been made on October 10 1978. The appeal from the deputy county court judge was out of time, but leave was granted by this court on October 22 for this application to be made. So that today’s application is for leave to appeal out of time from the registrar’s order, contrary to the decision of Mr Recorder Marsh. The facts are as follows. Mr and Mrs Cook are husband and wife. The matrimonial home was a flat, 105 Staindale Road at Scunthorpe. This was held under a tenancy agreement dated in August 1973 granted in favour of the husband. It was a monthly tenancy. At the end of 1977 Mr and Mrs Cook separated. Mr Cook left the matrimonial home leaving his wife in occupation. In May 1978 a notice to quit was given. On July 5 1978 the landlords, Grange Lane South Flats Ltd, the respondents to this appeal, began proceedings in the county court for possession against Mr and Mrs Cook. The claim to possession was based on allegations that Mr Cook, the tenant, was no longer in residence and that breaches of covenant, to do with the keeping, I think, of a caravan on the premises, had occurred. I should say that the premises fall within the Rent Act legislation. On July 21 1978 Mrs Cook filed a defence to the claim. She relied on the statutory tenancy of her husband and on her own rights under the Matrimonial Homes Act 1967. It may be recalled that under section 1(5) of that Act it was declared that a spouse’s occupation by virtue of that section should, for the purposes of the Rent Act, be treated as possession by the other spouse. We were told by counsel, and I have no reason to dispute it, that that was probably declaratory of the existing law. The wife also alleged in her pleading that a contractual tenancy had arisen by reason of payment of rent by her. Mr Cook purported to defend the claim on the basis that he was not in possession of the premises and that, therefore, no order to give up possession could properly be made against him. I will leave the narrative at this point to attempt a brief examination of the law which is applicable to a statutory tenancy of a husband where the wife is also resident on the premises. Putting the matter shortly, I understand the position to be as follows, according to the decision of this court in Middleton v Baldock [1950] 1 KB 657. Where the husband is the statutory tenant and the wife resides on the premises, as in the instant case, the landlords cannot properly be granted an order for possession against the husband unless there are avail- able grounds, under the Rent Act, for possession against both husband and wife, the wife’s residence being equated with the husband’s residence. If, however, an order is made against the husband alone–and it may well be that in the circumstances indicated this would occur only by mistake–the wife will thereby lose her statutory protection. This was decided in Penn v Dunn [1970] 2 QB 686. On September 15 1978 the landlords made an application to the registrar of the Scunthorpe County Court. The landlords applied, first, for leave to amend the particulars of claim by alleging certain breaches of covenant on which I need not dwell; secondly, the landlords sought an order that the defence of Mr Cook should be struck out under the County Court Rules on the ground that it disclosed no reasonable ground of defence; and thirdly, and consequential upon the making of such an order, an order for possession against the first defendant. This came before the registrar on October 10 in the presence of the solicitor for the landlords and the solicitor for the second defendant, Mrs Cook. Mr Cook was not present or represented. The registrar gave leave to amend the particulars of claim. He then directed that the defence of Mr Cook be struck out, because it disclosed no reasonable ground of defence. He made an order for possession against Mr Cook. No reference was made to any order for possession against Mrs Cook. The action came on for trial as between the plaintiffs and Mrs Cook on June 19 of this year. The question of a contractual tenancy was apparently debated first and it became apparent, we are told, that that submission was likely to fail. So Mrs Cook would be thrown back on her defence arising under section 1 of the Matrimonial Homes Act 1967. It then became apparent to all concerned that, if the registrar’s order for possession against Mr Cook stood, Mrs Cook would lose her defence dependent upon her occupation, because the Matrimonial Homes Act does not confer on a wife any greater right to a statutory tenancy than was afforded by the possession of her husband, and her husband had lost his right to possession when the registrar’s order was made. In those circumstances. His Honour Judge Geoffrey Jones, who was the county court judge trying the case, made an order that the action should be stood over on three undertakings: first, that an application for leave to appeal out of time against the registrar’s order be made within 14 days; secondly, and presumably on the hypothesis that that application was granted, an undertaking that an appeal against the registrar’s order be made within 14 days; and thirdly, that Mrs Cook pay to the landlords’ solicitors all mesne profits and arrears of rent to date within 14 days and all future mesne profits as they arise. Without intending to be in any way critical of the course taken by the learned county court judge, it does seem to me that it would have been preferable, had it been possible so to arrange matters, that the county court judge himself should, there and then, have considered an application for leave to appeal out of time against the registrar’s order, then (if leave were granted) have dealt with that appeal and proceeded to try the action before him to its final conclusion. I do not know how exactly the matter proceeded before the county court judge and possibly that simple and convenient course was not available. I should add this, that in fact mesne profits or arrears of rent have not been fully paid to date, but no point is taken by Mr Hogg, who appears for the plaintiff landlords. Apparently the money has been paid by Mrs Cook, who is still in occupation, to her solicitors and they have it available for this purpose. An application to enlarge the time for appealing from the registrar’s order was issued on June 25 and it came before Mr Recorder Marsh on September 3. The learned recorder, with manifest reluctance, refused the application. He said this: In my opinion the learned registrar was wrong in making an order for possession. No criticism, however, whatsoever could be levelled at the learned registrar in view of the omission to draw his attention to Penn v Dunn and the consequences of the making of such an order. However, the second defendant, Mrs Cook, did not appeal against the learned registrar’s order until after the time allowed for doing so had elapsed. The principles governing leave to appeal out of time seem to have been made quite clear by the various authorities on that point, namely, the rules of the court have to be observed. It is not sufficient to show that there would be no expense or injustice to the other side. If the rules are not observed the reason must be explained. Then having regard to the explanation or excuse and all the circumstances I have to decide whether it would be unjust to refuse the application. The learned registrar’s order was made on October 10 1978. The application for leave to appeal out of time was filed on June 26 1979–some 8 months later. The second defendant’s explanation was in effect as follows: It was not my fault; my solicitors did not realise the implication of the registrar’s order. I should not be penalised by his mistake. Had I realised the position I would have appealed in time. The existence of Penn v Dunn and the implications arising therefrom was known to the second defendant’s solicitors in March 1979. Had an application for leave to appeal out of time been made as soon as possible thereafter I would have had no hesitation in allowing that application. That, however, was not the case. Leave to appeal was not filed by the second defendant until August 1979. –I interpose to say that that is a mistake, either in the judgment or in the typing of the note, for June 1979– By that time the case had come before the court and was subsequently adjourned. However, before the case was adjourned it became clear that the second defendant’s first barrel of her defence, that a new contractual tenancy had been granted to her, was bound to fail; and it was only when that position became clear that the second defendant tried to bring her ‘second barrel’ into operation by appealing against the learned registrar’s order. In my opinion, that was too late, and with the utmost reluctance I have to refuse the application to appeal out of time. A little before the passage I have read there appears this finding: ‘Apparently the solicitors for the plaintiffs realised the implications of the making of an order for possession.’  It may not perhaps be absolutely clear from that finding what the solicitors knew. What is certain that they knew is the existence of the authority of Penn v Dunn. They knew that the order being sought against the first defendant, which apparently the solicitors for the second defendant permitted to be made without any representations, would put the second defendant in an impossible position as regards her claim under the Matrimonial Homes Act. It is not absolutely clear to me whether they actually knew that the order was one which ought not to have been made and whether they knew that the order, if made, could have been instantly upset on appeal without further ado. I seek to summarise the arguments presented to us by Mr Allison on behalf of the appellant. He said that an appeal from the registrar’s order is bound to succeed, and I do not think that that is challenged. The order, he said, was therefore wrong. It was a decisive factor on what has turned out to be the most important part of the action, which has yet to be tried. If the order cannot be appealed from at this distance of time it can cause severe hardship to the second defendant. He said that the plaintiffs’ solicitors knew that the point that they took before the registrar was a bad one and that, in the circumstances, notwithstanding the stringency of the rules for appealing out of time, this case falls within that class of case in which leniency should be exercised. Mr Hogg, for the landlords, in a powerful submission, referred to the three authorities of Ratnam v Cumarasamy [1964] 3 All ER 933, Revici v Prentice Hall Incorporated [1969] 1 All ER 772 and Warinco AG v Samor PA [1979] 3 All ER 64 to underline the well-known propositions that rules of court are made to be observed and that a good and cogent reason must be advanced to explain and excuse a default by a party in complying with the time-limits for appealing. Otherwise, of course, the finality which is so important in litigation will be at stake. No matter, said Mr Hogg, that the intending appellant is willing to pay the costs which would be thrown away if the time were enlarged; no matter that no injustice would be done to the intending respondent. As he pointed out, the real question before us is whether the learned recorder exercised76 his discretion wrongly: that is to say, did he direct his mind to the wrong considerations or did he fail to take into account those considerations to which he ought to have directed his mind?  Mr Hogg said that the relevant authorities were before the learned recorder. He was reluctant not to extend the time for appealing but, as found by the recorder, the delay which existed after March 1979, when Mrs Cook’s solicitors knew of Penn v Dunn, was what Mr Hogg aptly described as a ‘knowing delay.’  Therefore, the order of the learned recorder was the only order that could properly be made in the circumstances: it could not possibly be said to be manifestly bad. For these reasons, Mr Hogg urged upon us that it would be quite wrong to interfere with the discretion of the recorder. I myself take the view that this appeal ought to be allowed. With all respect to the learned recorder, I do not think that he fully directed his mind to the correct considerations. I accept that cogent reasons are required to justify an appeal out of time from a final order and no doubt from an interlocutory order in the normal case. But in the instant case the interlocutory order was not made against the intending appellant but against a co-defendant and that order only affected the intending appellant by a side-wind. It was not a decision against the intending appellant upon an issue which was being consciously raised between the plaintiffs and the intending appellant and of course it was never argued. After the registrar’s interlocutory order the action was intended to continue against the appellant and, having regard to the state of the pleadings, it must, in my judgment, be taken to have been in the contemplation of the parties that it would proceed on the basis of the pleadings as they existed between the plaintiffs and the second defendant; and that the defences of the second defendant would in due course be dealt with on their merits, including paragraph 4, which is the reference to the Matrimonial Homes Act. There would, I think by concession, be no conceivable injustice to the plaintiffs in allowing Mrs Cook to appeal out of time against the order of the registrar, so as to enable the defence of the second defendant to be fully raised and argued. The trial of the action is not yet concluded and I think that, to do justice to the parties, it is important that the second defendant should be at liberty to raise her defence under paragraph 4 and should not be shut out by what I described as a side-wind and to my mind is at any rate somewhat of a technicality. I do not think that the matter rests there. There is also this consideration to which I have already adverted. The registrar’s order was clearly one which ought not to have been made. The plaintiffs’ solicitors knew all about Penn v Dunn. They may or may not have appreciated that the order, if made against the first defendant alone, was one which could be instantly upset on appeal by the wife. I myself take the view that it was the duty of an advocate in these circumstances to bring Penn v Dunn to the attention of the registrar. That I think would inevitably have opened up a debate which can hardly have failed to touch on Middleton v Baldock and almost inevitably the order would never have been made. That I think was the duty of an advocate. I do not in any way wish to criticise the solicitors of the plaintiffs professionally, but they had cast themselves in the role of advocate for that occasion and I do not think that their duty to the court can have fallen short of the standard which I have indicated, although they certainly did not appreciate it. To my mind that is a most important consideration in this case and enables, and I think requires, this court to interfere with the manner in which the learned recorder exercised his discretion and requires us to qualify, for the purposes of this case, the application of the authorities to which I have referred. For the reasons which I have attempted to express, I think that this appeal ought to be allowed. Agreeing, BROWNE LJ said: This appeal should be allowed for the reasons given by my Lord, with which I entirely agree. The first two of the three authorities cited to us by Mr Hogg, and to which my Lord has referred, seem to me to have been directed to exploding what was supposed to have been a principle based on some 19th-century authorities that a party in default on a timetable was entitled to an extension on payment of costs unless irreparable mischief to the other side would be caused by the extension. I do not think anybody now would try to maintain that proposition. In the third case the Appeal Committee of the House of Lords emphasised the importance of compliance with time provisions in the relevant rules. Of course this court, and any court, is very conscious of the vital importance of keeping to timetables laid down by the rules. But there is no doubt that the court has a discretion to extend time if, in all the circumstances of some particular case, it is just to do so. On an application for leave to extend time, relevant factors in the decision whether or not to exercise this discretion include both the merits of the decision from which it is sought to appeal and the reasons for the delay. The weight to be attached to these various factors will, of course, vary in each case. In the present case the recorder said that if the application for leave to appeal out of time had been made as soon as possible after he found that the existence of Penn v Dunn, and the implications arising therefrom, became known to the appellant’s solicitors in March 1979, he would have had no hesitation in allowing the application. But his decision was that the further delay from March until June, during which, as I understand his finding, he found that the appellant’s solicitors knew of the implications but did nothing about it, was fatal, and he accordingly refused the application. It seems to me that in the present case the overriding consideration must be the nature of the registrar’s order from which leave is sought to appeal out of time. It is quite plain, and indeed Mr Hogg rightly concedes, that that order was a bad order in the sense that it should never have been made and was bound to be reversed on appeal. There is also no doubt that its effect was to deprive the appellant, the wife, of any defence to the plaintiffs’ claim for possession. As my Lord has said, it is quite plain that the registrar did not intend that result. What he intended by giving judgment only against the husband was that the action should go on and the wife should have the opportunity of raising her defences, in particular the defence based on the Matrimonial Homes Act. It seems to me that the injustice of giving effect to an order of that nature must be the overriding consideration in the present case in deciding whether or not to give leave to appeal out of time. In my judgment, the recorder was plainly wrong in not giving decisive effect to that consideration. Accordingly, for the reasons given by my Lord and such additional reasons as I have tried to give, I agree that the appeal should be allowed. Also agreeing, MEGAW LJ said: I place particular stress upon the last reason given by Brightman LJ in his judgment. This, as appears to me, is a case which falls within the words used by Atkin LJ in Maxwell v Keun [1928] 1 KB 645, where, at p 653, with regard to an appeal to this court asking the court to reverse a trial judge’s order refusing a plaintiff an adjournment, Atkin LJ had this to say: ‘I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does do so.’  In my view, precisely the same observation applies in relation to an application for leave to appeal out of time. Atkin LJ goes on: ‘but, on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the court has power to review such an order, and it is, to my mind, its duty to do so.’ I agree that the appeal should be allowed. The appeal was allowed with costs in the Court of Appeal. Legal aid taxation of appellant’s costs was ordered. Liberty to apply was given in regard to certain other matters affecting costs.