Smith v McGoldrick

Action for possession–Regulated tenancy–Possession required by landlord for occupation as a residence for himself–‘Admission’ by tenant that she had no defence–Tenant under mistaken impression that she would be rehoused by council–County court judge refused leave to withdraw admission–Judge in error–Rent Act case–Reasonableness to be decided at date of hearing–Retrial ordered This was an appeal by the defendant in a possession action against the county court judge’s order for possession. The defendant, Eileen Maud McGoldrick, was the tenant of a house at 7 Tollgate Road, Dorking, let to her by the plaintiff, Peter Philip Smith. The facts are set out in the judgment of Cairns LJ. N J Forwood (instructed by Tuck & Mann, of Dorking) appeared on behalf of the appellant; R Rundell (instructed by Hart, Scales & Hodges, of Dorking) represented the respondent. Giving judgment, CAIRNS LJ said: This is an appeal from a decision of His Honour Judge Potter given in the Reigate County Court making an order for possession of a house. The defendant appeals and asks for a new trial. The circumstances are very unusual and unfortunate. The defendant was the tenant of the plaintiff in a house, 7 Tollgate Road, Dorking, on a furnished tenancy from July 17 1973 to January 16 1974. It was a furnished tenancy at a monthly rent of £60. After the expiration of that tenancy on January 16 1974, the defendant continued in possession in pursuance of a letter to her from the plaintiff dated December 30 1973 saying that he was prepared for her to continue for an indefinite period on a monthly basis. She did so continue. In due course notice to quit was served upon her. There is no question that it was a proper notice to quit served on May 30 1975 requiring possession on July 16 1976. Admittedly this was a regulated tenancy under the Rent Act 1968 as amended by the Rent Act 1974. In due course the plaintiff started the action for possession, and for some reason it was set out in paragraph 2 of the particulars of claim that the plaintiff was an owner-occupier within the meaning of section 79 of the Rent Act 1968. That allegation would only be relevant if possession were sought under Case 10 of Part II of the Third Schedule to the Act of 1968. The possession was not sought under that case, because paragraph 7 of the particulars of claim says expressly: ‘The plaintiff requires occupation of the said property under Case 8 of the Third Schedule to the Rent Act 1968.’  Case 8 is a case ‘Where the dwelling-house is reasonably required by the landlord for occupation as a residence for–(a) himself’–and I need not read paragraphs (b), (c) and (d) or the tailpiece of the section referring to the date when the landlord became landlord by purchase. I should refer to Part III of the schedule, which in reference to Case 8 provides that the court shall not make an order for possession under that case if the court is satisfied that, having regard to the circumstances of the case, including the question whether other accommodation is available for the landlord or the tenant, greater hardship would be caused by granting the order than by refusing to grant it. I should refer also to section 10 of the Act of 1968, which is the section of the Act dealing with general grounds for possession, and providing under subsection (1) that an order for possession shall not be made unless the court considers it reasonable to make such an order. 54 Those particulars of claim having been served on September 12 1975 the defendant’s solicitors wrote to the registrar of the county court a letter in these terms: ‘We have now taken our client’s instructions. Our client does not have a defence to this action and will you kindly accept this letter as an admission of the claim. It is to be hoped that the court will give her not less than 28 days from October 7. You will appreciate that there are children involved here. We are sending a copy of this letter to the plaintiff’s solicitors.’  And so they did. We are told that at the time when the defendant gave the instructions to her-solicitors which led to that letter being written she was expecting to get alternative accommodation in a council house. Afterwards she found that she was not going to get that accommodation and, therefore, wished to defend the proceedings. Accordingly her solicitors on October 3, just four days before the return date, told the plaintiff’s solicitors that the defendant had now changed her mind, and that message was confirmed by a letter written on October 6–that was a Monday–requesting an adjournment and enclosing a draft defence. The draft defence consisted mainly of admissions. In the first three paragraphs of it the only denial was a denial of the plaintiff being an owner-occupier, which was irrelevant to the claim under Case 8. But in paragraph 4 of the draft defence it was sought to be alleged: ‘The defendant denies the plaintiff is entitled to possession of the said dwelling-house as alleged and claims the protection of the Rent Act 1974.’  At the hearing counsel then appearing for the defendant asked for leave to file the defence out of time and to withdraw the admission contained in the letter of September 12. The learned judge, having heard arguments on both sides on that matter, rejected the application and proceeded to consider the case on the basis of the admission that had been made, and on the basis of that admission held that the plaintiff was entitled to his order for possession. In considering whether the judge was right in taking that course it is of the utmost importance to remember that this was a case relating to a tenancy protected under the Rent Acts. Those Acts provide that where there is such a tenancy an order for possession can be made only in certain cases, and subject, as I have already indicated, to the overriding considerations in relation to the relevant case here of greater hardship and of reasonableness. It is quite clear that those questions have to be considered as at the date of the hearing, not at any earlier date. Putting it at its highest, it does not appear to me that the letter of September 12 could constitute such an admission as enabled the landlord without more to discharge the onus on him under the Rent Act in relation to the matter of reasonableness. It was impossible on September 12 to admit any more than that in the circumstances existing at that time it would be reasonable that an order should be made and that it would not then cause greater hardship to the defendant than any refusal of the order would cause to the plaintiff. I, therefore, with great respect to this experienced and careful judge, am not able to accept the proposition which appears towards the end of his judgment in these terms: ‘As the letter of admission requested 28 days and as the plaintiff has offered twice that time, then that must be reasonable. It is like two advocates agreeing an order.’  In my view, it was necessary for the learned judge to consider at the time of the hearing before him, whatever may have been the situation three weeks or so earlier, whether at that time it was reasonable to make the order. It was very natural for the learned judge to take the view that, this letter having been written on behalf of the defendant, it was something which should be regarded as binding on her; and I can see that it might be said that the withdrawal of the admission would be prejudicial to the plaintiff inasmuch as the time for obtaining possession of the house, if he was entitled to get possession, would be deferred. But, for the reasons that I have given, I am of opinion that it was the duty of the judge to consider this matter afresh as at the date of the hearing, taking into account the letter that had been written on September 12 and taking into account also any fresh evidence that might be given by the defendant as to the circumstances at that time. I am, therefore, of opinion that this appeal should be allowed and that the matter should go back to the county court for a rehearing, and I think it would be appropriate in all the circumstances of the case that the defendant should now have leave, if so advised, to file a fresh defence out of time. The matter should, in my view, be considered at the earliest possible date, and, without any sort of reflection on the learned judge who heard it the first time, it should go before a different judge. ROSKILL LJ: I entirely agree. With great respect to a most experienced county court judge, I think on this occasion he went wrong. I think he went wrong because perhaps momentarily he overlooked what my Lord has stressed in his judgment, that it was his duty to consider the merits of the Case 8 claim in the light of the facts as they were proved at the trial. He would have been entitled to take into account the fact that the admission letter had been written earlier, but that fact of itself did not without more, in my judgment, in a Rent Act case, entitle the plaintiff to proceed to judgment for possession. It seems to me, therefore, that the judge was wrong in refusing leave to withdraw this admission. He should have given leave, and he should then have gone into the matter on the evidence, with an adjournment (if necessary)–and he obviously had that in mind–if he thought that that was required to do justice to both parties. I see no escape from the fact, as my Lord has suggested, that there will have to be a new trial, and I respectfully agree that it should go back to the county court for a rehearing, and, without any disrespect to Judge Potter, before a different judge, the defendant having leave, if she so wishes, to file a defence. I think that should be done quickly, and I think the retrial should come on as a matter of urgency, because this case has hung about far too long. I would only add in conclusion my gratitude to Mr Forwood, who found himself in an unenviable position this morning with a brief in his hand in a case of which he had no knowledge, and if he will allow me to say so, I do not measure his skill by the fact that he has succeeded, but by the way he dealt with a difficult situation. SIR JOHN PENNYCUICK: I agree with both judgments which have been delivered and do not wish to add anything. The court expressed the view that the defence should be delivered within seven days. The costs of the appeal were ordered to be costs in the new hearing. No order had been made as to the costs of the original hearing and this position was not disturbed by the Court of Appeal.