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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Magnic Ltd v Ul-Hassan & Anor  EWCA Civ 224 (18 March 2015)
Cite as:  EWCA Civ 224
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ON APPEAL FROM THE BRENTFORD COUNTY COURT
HH Judge Powles QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE PATTEN
LORD JUSTICE TOMLINSON
| MAGNIC LIMITED
|- and -
NASIM AKHTAR MALIK
David Holland QC and Gabriel Buttimore (instructed by Teacher Stern LLP) for the Respondent
Hearing date : 17 February 2015
Crown Copyright ©
Lord Justice Patten :
(i) either that planning permission was obtained before 1 March 2010 (or if refused before that date and appealed before 1 March 2010 then on appeal);
(ii) that any conditions imposed were complied with within 3 months of the grant of permission; and
(iii) that building regulation consent was applied for and obtained in respect of the works necessary to implement the planning permission; or as an alternative to (i)-(iii)
(iv) that Mr Malik surrendered the Sub-Lease and the take-away business ceased within 28 days of the refusal of planning permission.
It was also made a condition of relief that the defendants paid a total of £7,672.60 in respect of the claimant's costs.
"the business, which is required to cease completely by 11 February 2011 by the terms of the Order of 14 January 2011, is the Appellants' primary source of income and they will suffer irremediable prejudice should that Order be reversed in the respect; conversely the Respondent can point to no prejudice if the business continues pending the appeal."
"… in my judgment when the February date came and passed, and the defendants continued to trade, they were continuing to trade in breach of Judge Allen's order, but that because execution of the order, the enforcement of the order was stayed the claimants could do nothing about it. In my judgment staying of execution in effect staying enforcement of the order does not render lawful what Judge Allen's order made unlawful. It simply provided that the claimant could do nothing about it. It seems to me the fact that they may not have taken any point on that, in fact they may not have been aware of it. It deals with the either or proposition advanced, cannot affect the simple fact that in my judgment a stay of execution does nothing but to prevent the unlawful act from being enforced. It does not render them lawful."
"The conclusion I have come to in the light of the cases to which our attention has been directed is that, certainly in relation to the jurisdiction of the court to vary an order granting an extension of time by granting a further extension, no distinction is to be drawn between cases of relief against forfeiture for non-payment of rent and other cases where relief against forfeiture is sought. The common feature in all these cases is that a penal provision is involved and the court grants relief against the forfeiture which would otherwise follow therefrom in such circumstances as justice requires, and it does so on such terms as are equitable in these circumstances. If it should later appear that the relief by way of extension of time first granted ought to be extended, and that in fairness to the other party this can be done, I see no difficulty in holding that the court has the jurisdiction to do that which the justice of the case is seen to require. Naturally enough, the court will scrutinise with particular care an application for further relief and will be more reluctant to grant it than in the case of a first application; but that goes to the likelihood of the later application succeeding and not to the court's jurisdiction to entertain it."
"… the court should show great reserve when exercising its jurisdiction to consider interfering with the time limits in the orders because 'any lessee who has obtained relief on conditions cannot expect to get further indulgence from the court in the matter of time unless good grounds are shown'."
"I hold the view without hesitation that notwithstanding the omission of the words "liberty to apply" an order of this kind, which gives relief on terms to be performed within a specified time, is one in respect of which the court retains jurisdiction to extend that time if circumstances are brought to its notice which would make it just and equitable that extension should be granted.
It is not, of course, to be understood from anything I say that lessees who obtain orders for relief are entitled to treat the conditions laid down in them lightly. Any lessee who has obtained relief on conditions cannot expect to get further indulgence from the court in the matter of time unless good grounds are shown. Lessees must not think for one moment that they are entitled to be slack or casual about the performance of terms. If they are so and then endeavour to get further indulgence from the court, the court will know how to deal with them, but in a case where on all equitable grounds a period of limitation ought in fairness to be extended and its extension will do no more than apply the principle that the condition of re-entry is nothing more than security for the rent, there is no reason why equity should not lend its aid notwithstanding the original order."
"1. The court should exercise discretion after scrutinising the application with great care only where there are good grounds to do so.
2. After obtaining relief in January 2010 the Defendants only obtaining further relief in January 2011 due to the concession made by the Claimant.
3. That required the takeaway business to stop by 14th February 2011. It did not.
4. It did not stop by deliberate decision. In my judgment in the circumstances of this case there should be no distinction between the actions of the Defendants and/or their lawyers.
5. Whilst the Claimant did put the Defendants on notice, the obligation to seek relief promptly rested entirely with the Defendants.
6. The fact of a windfall must be present in all forfeiture actions; it cannot therefore of itself be a significant factor. Whilst the Defendants referred to this claim as the Claimant's third attempt at seeking possession, more properly it is the Defendants' third attempt at seeking relief. The windfall argument in these circumstances therefore carries little weight.
7. I do not find any other relevant prejudice will be suffered by the Defendants.
8. Some sixteen months after DJ Allen found "… little purpose in granting relief from the forfeiture … ," there has been no substantive change in the Defendants' position other than delay for which they are responsible.
9. I do not find there are good grounds to grant further relief."
"The breach the landlord has from the start sought to remedy is a composite one namely user of the premises for a business requiring fume extraction without planning permission nor landlords consent for the necessary ducting. This had been the problem for some 2½ years and I find it cannot truly be said that the breach is only in respect of trading for 3½ months."
"53. As far as whether the actions of lawyers should be seen as distinct from those of their clients is concerned, the issue goes to the gravity of the breach. For my part I would not judge a man more or less harshly if he be shown to have made an honest mistake than a man who follows inaccurate advice from his solicitor believing it to be true. Although in the latter case there is the added factor that he does have a remedy against those who have misled him. In my judgment this issue takes the argument no further. The underlying question is perhaps in finding as he did (and I believe rightly so) that there should be no distinction between the actions of the Defendants and/or their lawyers, has the District Judge lost sight of the need to assess the gravity of the breach?
54. Mr Knox submits the breach is entirely innocent. However reading the District Judge's reasons as a whole it is reasonably clear that he considered the breach to have been continuous from the start and unabated by the service of the s.146 notice or any enforcement action by the Landlord or steps taken by the defendants or their son. He said at 6.4 that the breach did not stop by deliberate decision. In this he was correct. As I say the breach had been continuous from the start. There was no sudden desire to end that breach merely an erroneous belief that the Court had somehow sanctioned its continuance until the hearing of an Appeal. That erroneous belief might well be innocent in the sense of honest acceptance of lawyers' advice, but the continuing underlying breach was certainly not.
55. In my judgment the District Judge did not fail to have regard to the gravity of the breach."
"56. Mr Knox questions paragraph 6.6 where the District Judge discusses the windfall argument. On analysis, it is clear the District Judge is not saying windfall is irrelevant merely that in this case it carries little weight. Mr Knox's primary submission is that the 3'12 months of breach post 14th February 2011 should be weighed against the windfall to the Landlord said to be £150,000. To my mind this is to ignore the sorry history of failure and continuous breach of the Defendants.
57. The balance between windfall and other factors was first drawn at the time of the original consent order. The parties came to their own conclusion how to balance up their competing interests including the appropriate way to address relief from forfeiture. The Defendants failed to meet those conditions, but were given a yet further opportunity to escape the forfeiture by District Judge Allen on 11th January 2011. This was the second occasion on which the balance between breach and windfall would have been struck. The condition to cease trading by 14th February 2011 was clear. It cannot now be said that it did not itself give proper consideration to the Defendants' position nor sufficient weight to the windfall element.
58. By the time we get to the third attempt at obtaining relief from forfeiture before the District Judge the Court is bound to approach the case with all the caution suggested by Edmund Davies LJ in Starside. Confronted by the argument that the breach is only 3½ months and should be balanced against the full windfall value I can see that one approach is to say that the potency of the windfall argument has been dissipated in the two previous orders, which in my judgment is a fair interpretation of paragraph 6.6. Seen in that light the District Judge has not made the error of law contended for. The Law of Property Act and the authorities require all the circumstances to be looked at. I cannot accept the District Judge has failed to give proper weight to the undoubted windfall the Landlord will receive."
(i) in paragraph 6(4) his reference to the continuation of trade being a deliberate decision and to there being no difference between the position of the defendants and that of their solicitors for this purpose;
(ii) the judge's treatment of the windfall effect of forfeiture in paragraph 6(6); and
(iii) his statement in paragraph 6(8) that there had been no substantive change in the defendants' position since the decision of District Judge Allen on 14 January 2011.
The Master of the Rolls :
Lord Justice Tomlinson :