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||Neutral Citation Number:  EWCA Civ 1962
||Case No: B5/2011/2319
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EDMONTON COUNTY COURT
(HER HONOUR JUDGE GILLIAN GRASSE)
||Royal Courts of Justice
Strand, London, WC2A 2LL
||23rd October 2012
B e f o r e :
LADY JUSTICE HALLETT
LORD JUSTICE ETHERTON
DAME JANET SMITH
|| KENNY & ORS
- and -
ABUBAKER & ORS
(DAR Transcript of
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Mr Dean Underwood and Mr Leon Glenister (instructed by Trowers & Hamlin Llp) appeared on behalf of the Appellant.
The First Respondent and Second Respondents appeared in person.
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Etherton:
- This is an appeal from the order of HHJ Gillian Grasse, sitting in the Edmonton County Court, dated 10 August 2011. By that order she dismissed the appeal from the order of District Judge Silverman dated 25 June 2010, itself dismissing the appellant's application to set aside the judgment of the District Judge of 20 November 2009, giving judgment to the claimants, who are the respondents, for £8,186.80. That sum comprised £6,900, representing three times a tenancy deposit, pursuant to the Housing Act 2004 ("the 2004 Act") section 214(4).
- The issue on this appeal, as it was before the Judge and the District Judge, is whether or not the appellant has a right to have the judgment on the merits of the claim set aside pursuant to CPR 27.11. That rule is as follows:
(1) A party
(a) who was neither present nor represented at the hearing of the claim; and
(b) who has not given written notice to the court under rule 27.9(1),
may apply for an order that a judgment under this Part shall be set aside and the claim re-heard.
(2) A party who applies for an order setting aside a judgment under this rule must make the application not more than 14 days after the day on which notice of the judgment was served on him.
(3) The court may grant an application under paragraph (2) only if the applicant
(a) had a good reason for not attending or being represented at the hearing or giving written notice to the court under rule 27.9(1); and
(b) has a reasonable prospect of success at the hearing.
(4) If a judgment is set aside
(a) the court must fix a new hearing for the claim; and
(b) the hearing may take place immediately after the hearing of the application to set the judgment aside and may be dealt with by the judge who set aside the judgment.
(5) A party may not apply to set aside a judgment under this rule if the court dealt with the claim without a hearing under rule 27.10."
In particular, the issue is whether or not the appellant had a good reason for not attending or being represented at the hearing of the merits of the claim for the purposes of CPR 27.11(3)(a).
- The factual background may be briefly and simply summarised as follows. By a lease agreement dated 14 December 2005 the appellant let the premises at Flat 509 Omega Buildings, Smugglers Way, Wandsworth SW18 1AZ ("the flat") to Big Red Property ("BRP"). The flat is a three-bedroom apartment on the fourth floor of Omega Buildings. The appellant says that Mr Sajit Abubaker, who is a co-defendant with the appellant in the proceedings, is the owner or a director of BRP. BRP, it will be noticed, does not appear to be an incorporated body.
- The respondents entered into possession of the flat in about March 2008. There was evidence that Mr Abubaker sent to the respondents the template of an agreement for a tenancy of the flat, and that on about 31 March 2008 the respondents signed an agreement for an assured shorthold tenancy of the flat and returned it to Mr Abubaker. It appears that they never retained a copy of the signed agreement, and Mr Abubaker never sent them a copy. It is unclear, therefore, who or which entity was named as the landlord. At about the same time, the respondents paid £4,353.33 either to Mr Abubaker or to agents, that sum including a deposit of £2,300.
- In circumstances which it is not necessary to describe, the respondents left the flat on about 8 September 2008. They ceased to pay rent from that time. The evidence is that the tenancy was surrendered on about that date.
- From about 12 August 2008 the respondents were in correspondence with both Mr Abubaker and the appellant for the return of the tenancy deposit. The deposit has never been repaid. There is no evidence that it was ever dealt with in accordance with an authorised scheme, as required by the 2004 Act section 213.
- Proceedings were commenced on 12 January 2009 by Mr Samuel Kenny, one of the respondents. The other respondents were added later as co-claimants. The proceedings were commenced in the Northampton County Court for recovery of three times the deposit, in accordance with the 2004 Act section 214(4), in the amount of £6,900 plus interest. The defendants to the proceedings were the appellant and Mr Abubaker. The Particulars of Claim endorsed on the claim form described them as "having acted as agent and landlord respectively"; that is to say, as I understand it, referring to Mr Abubaker as the agent and to the appellant as the landlord.
- The appellant filed an Acknowledgment of Service, indicating that he intended to defend all of the claim. He served a defence dated 1 March 2009, in which he said as follows:
"I hereby state and confirm that the claimed amount has never been paid or received by me.
The property in question is managed by the agents Foxton's, Avery, and Big Red Property.
Furthermore I have been informed that the Occupiers left without giving the appropriate notice and furthermore the property was left in a dirty condition and that some of the furniture has been either removed without permission or damaged.
Any requests if any for the return of the deposit would have been forwarded to the respective agents to act upon and deal with in the appropriate manner.
In addition we have informed that the rent is in arrears and the tenants vacated without giving the appropriate notice and therefore any monies due should have been deducted from any deposit received.
The damages are being assessed and an appropriate counterclaim will be submitted shortly."
- On 1 June 2009 District Judge Morley made an order in the Edmonton County Court allocating the claim to the small claims track. On 31 July 2009 District Judge Morley joined the second respondent, Ms Jennifer Watson, and the third respondent, Mr Elliot Witham, to the proceedings as claimants, and also joined Avery Property Co. Limited ("Avery") as third defendant. Avery is mentioned in the defence as one of the agents managing the property. Avery is also named in the lease from the appellant to BRP as the company which was to receive the rent from BRP, that is to say it was to receive the rent as the appellant's agent. District Judge Morley also gave directions for the hearing of the claim on 20 November 2009, including an order requiring the defendants to attend with a copy of the respondents' tenancy agreement and copies of all documents relating to the deposit.
- The claim was heard by District Judge Silverman on 20 November 2009. Neither the appellant nor any of his co-defendants attended court for the hearing of the claim. District Judge Silverman gave judgment for the claimants for £8,186.80, as I have said.
- On 11 December 2009 the appellant delivered to the court an application to set aside the judgment, but he did not pay the fee for his application until 16 December 2009. The consequence of that was that the application of the appellant to set aside the judgment was two days outside the 14 day time limit specified in CPR 27.11(2).
- On 10 February 2010 District Judge Morley gave directions for the hearing of the appellant's application, and ordered that the appellant produce evidence of the contractual relationship with the other defendants at the hearing of the application.
- District Judge Silverman heard the appellant's application on 25 June 2010. He said that the application was one pursuant to CPR 27.11. As I have said, he dismissed the application. His reasoning was that the appellant had failed to satisfy the requirement in CPR 27.11(3)(a) of showing that he had a good reason for not attending the hearing of the claim. The District Judge said as follows:
"3. My ruling is this: that the judgment was given by me at the hearing on 20 November 2009. The application to set aside the judgement was made on 16 December 2009, being the date on which the application notice fee was paid. That is more than 14 days after the date of the hearing.
4. The court may grant that application nevertheless, but it is only if the applicant had a good reason for not attending. In my view where, as I have indicated, Mr Fernandes was named as a defendant he could not abrogate his responsibilities to another defendant, particularly one with whom he was in conflict himself, and therefore failing to attend for that reason is not, in my view, a good reason.
5. Accordingly Mr Fernandes does not come within rule 27.11 and accordingly the judgment will not be set aside.
6. The application of Mr Fernandes is refused on the basis that he did not have good reason for failing to attend the final hearing. The case is therefore dismissed."
- The appellant appealed, as I have said, to HHJ Grasse. She held that the District Judge did not have any discretion under CPR 27.11 since the appellant had failed to comply with the time restriction in CPR 27.11(2), his application being two days out of time. She went on, nevertheless, to consider whether the District Judge had been entitled to reach the conclusion that the appellant did not have a good reason for not attending or being represented at the hearing of the claim. She concluded that District Judge Silverman was not only entitled to reach the conclusion which he did on that point, but that he was indeed right in his conclusion. She said as follows:
"17. So I look at whether or not he had a good reason for not attending. His reason for not attending was because he says he relied on Mr Abukaker and that Mr Abukaker was going to go to court and accept that it was all his responsibility, the dealings with the tenants. But Mr Fernandes was clearly in conflict with Mr Abukaker. They were in conflict with each other, it seems, and that is corroborated by what Mr Witham has just told me, which is that Mr Abukaker was saying, 'It's not my problem, speak to Mr Fernandes about the deposit'. Mr Fernandes says, 'No, it is Mr Abukaker who has had all the dealings'.
Clearly, he should have been at court as well as Mr Abukaker. Both of them should have been there. He cannot give over his responsibility for being a defendant to Abukaker, particularly where they are in conflict. That does not seem to me to be a good reason for not attending or having someone to represent him, or writing to the court at least, and giving all the documentation and information upon which he relied. In those circumstances, it seems to me that when District Judge Silverman considered this, he was absolutely right when he considered what the applicant, Mr Fernandes, should do. He said,
'The court may grant that application nevertheless, but it is only if the applicant had a good reason for not attending. In my view where, as I have indicated, Mr Fernandes was named as a defendant he could not abrogate his responsibilities to another defendant, particularly one with whom he was in conflict himself, and therefore failing to attend for that reason is not, in my view, a good reason.'
19. And I agree. It seems to me, therefore, that Mr Fernandes fails. If he does not fail at the first hurdle of not having made his application to set aside in time, then he certainly fails at the second hurdle of proving that he had a good reason for not attending or being represented or giving written notice. Of course, in those circumstances, I do not need to go on to consider whether or not he would have had a reasonable prospect of success at a hearing.
20. I am anyway dealing with this as an appellate court. It is not for me to impose my discretion in place of the district judge's. I have to consider whether or not the district judge was wrong, or whether there was a serious procedural irregularity. For the reasons that I have just enunciated, I could not possibly say that the district judge was plainly wrong or that there was any serious procedural irregularity. He referred himself to the Civil Procedural Rules. Indeed, in his judgement he read them out verbatim, and I have also referred to them in this judgement. It seems to me, having applied those rules, that he was not plainly wrong in the decision to which he came."
- There is no witness statement from the appellant as to the matters on which he relies. In terms of the evidence, that is to say the facts and matters on which he relies for the purposes of this appeal, he has set out in section 9 of the appeal notice the evidence on which relies as follows, that evidence being verified by a statement of truth:
"In support of my application(s) in Section 8, I wish to rely upon the following evidence:
1. I am the second Defendant in this matter.
2. The proceedings against me in this matter were brought on the basis that I (and the First Defendant) was a landlord of the Claimants.
3. The Claimants alleged that they had paid a Deposit to me, which they have failed to prove in court as their landlord and that pursuant to Sections 213-215 of the Housing Act 2004 I was obliged to return the Deposit to the Claimants when their respective alleged assured shorthold tenancies came to an end.
4. In fact I was never a party to the respective landlord and tenancy agreements that the Claimants had with the real landlord, namely the First Defendant. It is true that I owned the property in question (on mortgage) but I sublet the property to the First Defendant. All formalities and tenancy arrangements were conducted by the Claimants with the First Defendant directly. They paid their respective Deposits and rents to the First Defendant.
5. I was, therefore, never a party to the respective contractual agreement the Claimants had with the First Defendant nor was I therefore subject to the provisions of Sections 213-215 of the Housing Act 2004 as a landlord.
6. The Claimants originally brought these proceedings against me in January 2009. I did not file a fully pleaded Defence but I did file an acknowledgement of service and stated therein that I denied the claim. I also attended at the preliminary hearing held in July 2009. I made it clear that I was resisting the claim brought against me.
7. But after the initial hearing I had discussions with the agent of the First Defendant. I remonstrated with the First Defendant that he should bear all responsibility in this matter as I should not have been included as a defendant to the proceedings. I should have no involvement in the matter. The First Defendant's agent assured me that he was going to deal with the matter and request the court to absolve me from any involvement in the proceedings. It was on the basis of that assurance that I did not attend the hearing held on the 26/11/2009 when the default judgment was entered against me and the First Defendant. I realise now with hindsight that I should never have relied upon the assurance given to me by the First Defendant.
8. As soon as I became aware of the default judgment against me and that the First Defendant failed to attend the proceedings. I took remedial action and applied to the court to have the order set aside.
9. On the 25/06/10 District Judge Silverman refused my application to have the order set aside on the basis that the reasons I have given for my non-attendance at the hearing held on the 26/11/2009 was not good enough reason for the purposes of the provisions of CPR 27. I do not understand why he should have come to that conclusion, nor do I see what should have been a good enough reason. District Judge Silverman appeared to favour of the claimants at the time of hearing of my application to have the judgment set aside in the manner in which he guided the Respondents to answers to the questions that he raised at the time.
10. Due to my gross error of judgment, I was misled and duped by the First Defendant into believing that my attendance at the hearing on the 26/11/2009 would not be necessary. It is not fair or just that any judgment the Claimants might have properly obtained as against the First Defendant should be visited upon me merely because I failed to attend a hearing due to the inappropriate behaviour of the First Defendant. I did not have any contractual relationship with the Claimant whatsoever. I acted promptly to rectify and remedy the mistake of non-attendance.
11. I have consistently maintained that I am not and should not have been included as a party to the proceedings and therefore it is inequitable and unfair that the judgment should be made against me."
- The appellant has been represented today by counsel, Mr Dean Underwood and Mr Leon Glenister. They have been instructed for the appellant by the Bar Pro Bono Unit. I am very grateful for their assistance. Mr Underwood has made oral submissions on behalf of the appellant. He submits that the District Judge and the Judge were wrong in their analysis and decisions. Mr Underwood says that the Judge was too rigorous in her assessment of the appellant's reason for not attending the hearing on 20 November 2009.
- Mr Underwood in his submissions concentrated almost exclusively on the judgment of HHJ Grasse, but I have taken all his submissions in relation to her analysis and conclusion to be exactly the same criticisms that he would direct at the District Judge's analysis. Mr Underwood has referred us to, and has relied upon, statements in the Court of Appeal in a number of authorities which have analysed and commented upon the provisions to be found in CPR 39.3. Those provisions are as follows, so far as relevant:
(1) The court may proceed with a trial in the absence of a party
(3) Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.
(5) Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant
(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;
(b) had a good reason for not attending the trial; and
(c) has a reasonable prospect of success at the trial."
Mr Underwood has pointed out that CPR 39.3(5)(b) is in very similar terms to the provisions in CPR 27.11(3)(a).
- The cases relied upon by Mr Underwood included Brazil v Brazil  EWCA Civ 1135,  CP Rep. 7; Estate Acquisition and Development Ltd v Wiltshire  EWCA Civ 533,  CP Rep. 32; and Bank of Scotland Plc v Pereira  EWCA Civ 241,  1 WLR 2391. Mr Underwood submitted that those authorities show that a structured approach is required in an analysis for the purposes of CPR 27.11(3). He said that, in the first instance, the judge must undertake a fact-finding exercise to establish the true reason for non-attendance, and whether the evidence on that was honest and genuine. The second stage, he said, involves an evaluation exercise, looking at the matter in the round in order to ascertain whether the reason put forward for non-attendance or non-representation is sufficient in the circumstances for the invocation of the court's discretion. He submitted that the authorities show that there may be a spectrum of reasons which can satisfy the requirements, even though the applicant for relief may have acted in a blameworthy fashion in some respects. He also submitted that it is clear from the authorities that there must not be an overly rigorous approach in considering an application under CPR 27.11(3), since that may be contrary to the Overriding Objective and infringe the requirements of Article 6 of the European Convention on Human Rights ("the Convention").
- Mr Underwood submitted that in the present case the Judge made errors of principle. He pointed to certain matters which, he said, she had failed to take into account. He said that she had failed to take into account that a defence had been served by the appellant. He criticised her for failing to appreciate, or to express her appreciation of, the industry of the appellant in relation to the proceedings up to the point at which he had the conversation with Mr Abubaker on which he relies. Mr Underwood also relied on the industry of the appellant in seeking to prosecute the application to set aside the judgment on the merits by virtue, for example, of his application promptly to ask for an extension of time and the way in which he has subsequently prosecuted appeals from the dismissal of the application. He submitted that the evidence was clear from the appellant that the reason for his non-attendance was that the appellant relied upon an assurance by Mr Abubaker that Mr Abubaker would take responsibility for the deposit and would absolve the appellant from any further involvement in the proceedings. He says that that reason was obviously genuine. He pointed to parts of the judgment of HHJ Grasse which, he said, indicated that she seemed to cast doubt on the honesty and genuineness of the appellant's belief.
- Mr Underwood submitted that, contrary to the authorities, the Judge had failed to look at the matter in the round, including failing to take into account the merits of the appellant's defence to the claim. I will return to that point in a moment. He submitted that, once the appellant's explanation for his failure to attend the final hearing, namely his reliance upon the assurances given by Mr Abubaker, was accepted then it was clear that, applying CPR 27.3 in the round, the discretion of the court should have been exercised in favour of the appellant, even if the appellant's conduct was properly described as naive. Part of the background that he has emphasised is that the appellant was acting in person at the time. He did not ignore any legal advice to attend the court, since he did not have any. His non-attendance was not wilfully defiant. To take the view taken by the Judge and the District Judge in the present case, he said, would be to punish the appellant for his genuine and honest reliance on the word of a person he thought he could trust.
- Turning to the merits of the defence, Mr Underwood pointed rightly to the fact that, on the authority of Gladehurst Properties Ltd v Hashemi  EWCA Civ 604,  HLR 36, it was not possible at the time of the judgment on the merits in this case for section 214(4) of the 2004 Act to apply so as to triple the deposit ordered to be repaid. The effect of the judgment in that case has subsequently been reversed by statute in the provisions now in section 214(1A) of the 2004 Act; but, as Mr Underwood and Mr Leon Glenister have pointed out in their skeleton argument, the amendment does not apply to tenancies that were not in effect on or after 6 April 2012.
- In his broad approach to the law, Mr Underwood emphasised that what is clear from the cases is that there must be an holistic approach to an application of this kind to set aside a judgment under CPR 27.11 or the equivalent provisions in CPR 39.3 because it is always necessary for the court to bear in mind the need to satisfy the Overriding Objective and the requirements of Article 6 of the Convention. He noted that the Judge had not been provided with the authorities to which Mr Glenister referred to in his skeleton argument, and to which Mr Underwood has referred us orally in the course of his submissions today.
- Mr Underwood has presented his oral submissions this morning forcefully and elegantly, drawing our attention, in the best traditions of the Bar, to one authority which was potentially to the benefit of the respondents, namely Shocked v Goldschmidt  1 ELR 273, a pre-CPR case. I should say that the respondents are not legally represented today before us. Ms Watson has appeared today in person, with the benefit of a Mr Shakaran acting as her McKenzie Friend, but in the event it has not been necessary to call upon her.
- I agree with Mr Underwood that the Judge was wrong to conclude that there is no power to extend the time specified in CPR 27.11(2). As he submitted, the court does indeed have power pursuant to CPR 3.1(2)(a). There is no need to say more about that aspect.
- Despite everything that Mr Underwood has submitted, I do not consider that the Judge was wrong to dismiss the appeal from District Judge Silverman. District Judge Silverman's conclusion that the appellant did not have a good reason for not attending or being represented at the hearing of the claim was not flawed in principle or manifestly wrong. Nor do I consider that the Judge's own conclusion to the same effect, if she had exercised the discretion afresh, was wrong or erroneous in principle. The proper approach to the interpretation of the requirement in CPR 27.11(3)(a) is now well-established. Mummery LJ set out the basic approach in Brazil at paragraph :
"There has been some debate before us, as there was before the judge, about what is or is not capable of being a "good reason." In my opinion the search for a definition or description of "good reason" or for a set of criteria differentiating between good and bad reasons is unnecessary. I agree with Hart J that, although the court must be satisfied that the reason is an honest or genuine one, that by itself is not sufficient to make a reason for non-attendance a "good reason." The court has to examine all the evidence relevant to the defendant's non-attendance; ascertain from the evidence what, as a matter of fact, was the true "reason" for non attendance; and, looking at the matter in the round, ask whether that reason is sufficient to entitle the applicant to invoke the discretion of the court to set aside the order. An over analytical approach to the issue is not appropriate, bearing in mind the duty of the court, when interpreting the rules and exercising any power given to it by the rules, to give effect to the overriding objective of enabling it to deal with cases justly. The perfectly ordinary English phrase "good reason" as used in CPR 39.3(5) is a sufficiently clear expression of the standard of acceptability to be applied to enable a court to determine whether or not there is a good reason for non-attendance."
- Dyson LJ added the following cautionary commentary in Estate Acquisition and Development Ltd v Wiltshire at paragraph :
"I recognise that it is undesirable to seek to define a "good reason" within the meaning of CPR 39.3(5)(b). But as Mummery LJ pointed out at para 12 of Brazil's case, it is necessary to interpret CPR 39.3(5)(b) (as all other rules) so as to give effect to the overriding objective of deciding cases justly: CPR 1.2(b). Moreover, it must be interpreted so as to comply with article 6 of the European Convention on Human Rights (right to a fair hearing). I refer to the judgment of Brooke LJ in Goode v Martin  EWCA Civ 1899,  1 WLR 1828 para 35. In my view, it is necessary to have both article 6 and the overriding objective in mind when interpreting and applying the phrase "good reason". It should not be overlooked that the power to set aside an order made in the absence of the applicant may only be exercised where all three of the conditions stated in CPR 39.3(5) are satisfied. In addition to the need to show a good reason for not attending, the applicant must have acted promptly and that he has a reasonable prospect of success. If the phrase "good reason" is interpreted too strictly against an applicant, there is a danger that the interpretation will not give effect to the overriding objective and not comply with article 6."
- As Lord Neuberger MR said in Bank of Scotland v Pereira at paragraph , what constitutes promptness and what constitutes a good reason for not attending is in each case highly fact-sensitive. Lord Neuberger also pointed out that an appeal against the Judge's decision under CPR 39.3, or its equivalent CPR 27.11, to refuse to allow an application to set aside a judgment does not involve a challenge to the exercise of a discretion, but an appellate court should nevertheless be slow to overturn a decision of this nature unless satisfied that the Judge went wrong in principle. Mr Underwood accepted that it would be wrong to interfere with the decision of the Judge in the present case unless this court is satisfied that she made an error of principle or was plainly wrong. As I said, Mr Underwood's submission was that the court must approach these matters in the round, taking into account the merits of any defence in order to moderate, where appropriate, what might otherwise be a rejection of an application to set aside a judgment which would give rise to injustice, contrary to the Overriding Objective, or would infringe or potentially infringe Article 6 of the Convention.
- There is some difficulty in seeing how in all cases reference should be made to the merits of a defence in order to see whether there should be some moderation or qualification of what might otherwise be the court's conclusion as to whether or not there was a good reason for not attending. The merits of a defence and a good reason for not attending are separate concepts. I would not, however, disagree with Mr Underwood's approach if and insofar as it is marginal in any particular case whether or not there was a good reason for not attending or not being represented at the hearing; that is to say, a case which is "very close to the line". In those circumstances, it may be appropriate, as Dyson LJ indicated, to take into account whether or not there is a very strong defence in order to ensure that the Overriding Objective is satisfied.
- I do not consider that the facts of the present case are very near to the line. I consider that both the District Judge and the Judge were entirely right to conclude that, in view of the plain conflict between the appellant and Mr Abubaker, the appellant's reliance on his apparent conversation with Mr Abubaker and on the assurances of Mr Abubaker was plainly not reasonable in the circumstances. An unusual feature is that the present case actually is one where looking at the defence does throw light upon the question of whether or not the reason advanced by the appellant for not attending or being represented at the hearing was a good one for the purposes of 27.11(3). The defence in the present case wholly supports the conclusion of the District Judge and Judge that there was such a manifest conflict between the interests and the positions taken by the appellant, on the one hand, and Mr Abubaker, on the other hand, that no reasonable person in the appellant's position would have left the matter entirely to Mr Abubaker's good intentions; that is to say, would have trusted Mr Abubaker's assurance that he would assume full and sole liability to pay three times the deposit which, it appears from the documentation in evidence, Mr Abubaker believed he had never received for himself but had been received by the appellant, and in relation to a property of which the appellant and not Mr Abubaker was the landlord vis-a-vis these respondents.
- The defence of the appellant, as is apparent from what has been set out above, is that the property in question was managed by one or other of a number of agents, including Avery. His defence, furthermore, is that the respondents left without giving notice; the property was left in a dirty condition; some of the furniture had been removed without permission or was damaged; any requests for the return of the deposit would have been forwarded to the respective agents to act upon in an appropriate manner; the appellant had been informed that the rent remained in arrears: the tenants vacated without giving the appropriate notice; and any money due should have been deducted from any deposit received. It will be noted that nowhere in the defence is there any denial that the appellant was the landlord of these respondents. Furthermore, the reference to Avery is, as I have said, a reference to the same entity as acted as the appellant's own agent under the BRP lease. Furthermore, the question of whether or not there was any rent paid or unpaid was a matter that would have been entirely irrelevant if the appellant had not been the landlord.
- Email exchanges which are before the court between the respondents, Mr Abubaker and the appellant during the course of, and following the termination of, the tenancy show that Mr Abubaker was looking to the appellant to remedy disrepair of the property about which the respondents had complained. That would have been entirely inappropriate if Mr Abubaker, rather than the appellant, had been the landlord of the respondents. I should point out that under the BRP lease the obligation to repair was on BRP. Furthermore, an email of 14 May 2008 from the appellant to Mr Abubaker said that it was not acceptable at all for the respondents to carry out the repairs and deduct it from the rent. He said:
"No work of any nature must be carried out without our approval."
- In none of those emails did the appellant say to either Mr Abubaker or the respondents that he was not the landlord, but rather Mr Abubaker was the respondents' landlord and that Mr Abubaker had a responsibility to keep the property in repair both under the BRP's lease and as landlord for the respondents. The emails before the court also show that the respondents and Mr Abubaker were looking to the appellant to re-pay the deposit, on the footing that the appellant had received it. The respondents were plainly regarding the appellant as the landlord, for example in an email of 18 August 2008. In an email of 8 September 2008 Mr Abubaker requested the appellant to:
"...deal with the refund of the deposit directly with the tenant. As you hold the deposit, you would have to deal with the tenant directly."
By another email of 8 September 2008, Mr Abubaker informed the second defendant, Ms Watson:
"The refund will be done directly by [the appellant]."
In an email from Mr Abubaker to the respondent Mr Kenny, of 2 October 2008, Mr Abubaker said:
"The landlord holds the deposit. It is clearly stated in the contract he will refund the deposit within 30 days of the move out. I suggest you supply him with the final utility bills, professional cleaning receipts, and the final council tax bill to confirm it had been paid. They all need to be sent to him."
That was plainly a reference to the appellant. In another email on 2 October 2008 from Mr Abubaker to the person then representing the respondents, Mr Abubaker said:
"As the days go by, I would strongly suggest all matters are addressed before [the appellant] does the refund."
At no stage in the course of those emails did the appellant suggest he was not the landlord, or that he had never received the deposit.
- I should also point out that there is before the court a lease of another property in Omega House dated 2 August 2004. It appears that this document was produced by the appellant. It shows Avery as the landlord of 502 Omega House let to Threshold Housing Support for three years at a weekly rent of £225. That is a situation, therefore, in which the appellant's own agent, Avery, was acting as the landlord of the occupying tenants.
- As I have said, on 10 February 2010 District Judge Morley ordered the appellant to produce evidence of his contractual relationship with the other defendants at the adjourned hearing. No witness statement has ever been produced in response to that direction. Indeed no witness statement has ever been made by the appellant at all. Mr Underwood rightly points out that under the small track procedure matters are dealt with informally, and, unless the court directly orders that a witness statement is produced, any other method of producing evidence would usually be acceptable. The only evidence on which the appellant relies formally before this court is set out in his Notice of Appeal. The appellant's statement in section 9 of that document is, however, unsatisfactory. In paragraph 7 of section 9 there is a confusion in references to discussions with "the agent of the First Defendant", which I take to mean in fact Mr Abubaker, the second defendant, and references to remonstrations with "the First Defendant". There is no clear identification of who the agent of the First Defendant might have been, and there is nowhere to be found either in section 9 of the Notice of Appeal or elsewhere any statement as to why, against the factual background to which I have referred, it was reasonable in the context of CPR 27.11 for the appellant to rely upon an assurance, apparently given by Mr Abubaker that he would assume responsibility for three times the payment of a deposit which, according to the evidence, he has always said he never received in respect of a property of which he was never the landlord.
- Part of the background for the analysis of the Judge and the District Judge was that these proceedings, unlike those under CPR 39.3, were proceedings allocated to the fast track. Those proceedings are intended to be a speedy means of resolving disputes over small amounts between parties who may represent themselves. That explains why there is a strict time limit of 14 days under CPR 27.11(2), as compared with the provision in CPR 39.3(5)(a) that an applicant wishing to set aside a judgment must act promptly.
- The reality is that the respondents, who were flat-sharing, paid a very substantial amount by way of rent deposit in respect of a property which they occupied for only some five months, and they have still not received any repayment of that money. By the time the claim was adjudicated upon by District Judge Silverman on 26 November 2009, the respondents had already waited some 14 months for the recovery of what to them was no doubt a substantial amount.
- Against that background, I consider that it is quite impossible to say that either the District Judge or the Judge made an error of principle or was plainly wrong in concluding that the appellant had, in all the circumstances and looking at the matter in the round, failed to satisfy the requirement of CPR 27.11(3)(a).
- So far as concerns the other aspect of the defence, namely that the effect of Gladehurst Properties is that the District Judge never had power to order three times the amount of the deposit to be paid, I do not consider that this carries the matter any further. For the reasons I have mentioned this is not a case which was ever near the line in terms of whether or not there was a reasonable excuse for failing to attend. Furthermore, it seems to me that now that Parliament has indicated what had always been its intention, namely that it should be possible, even in the case of a tenant who has left the premises and whose tenancy has come to an end, to recover three times the deposit where there has been a failure to comply with section 213 of the 2004 Act, that takes the sting out of much of the merits of this point. Moreover there has never been an appeal from the decision of the District Judge on the Gladehurst Properties point.
- For all those reasons, I would dismiss this appeal.
Lady Justice Hallett:
- I agree.
Dame Janet Smith:
- I too agree.
Order: Appeal dismissed.
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