(In this YAWS version a few editorial alterations have been made to the description of the CPR and Practice Directions, eg references to Part 3.8 have been changed to Rule 3.8, to ensure consistency with the remainder of the site.)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
Royal Courts of Justice
Date: 18 July 2001
Before:
- and -
VENKAT MUN SWAMI NAIDU
Respondent/Defendant
Hearing dates: 12 and 13 June 2001
JUDGMENT
I direct that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
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Introduction - the appeal to the High Court
| 1. |
These proceedings were commenced on 9 March 2000, by the issue of a Part 8
Claim Form. They concern a tenancy held by the Defendant of premises (which
I will call the Flat) known as Flat 4 (or as Duplex Apartment), 6th and 7th
Floors, York House, 17 Great Cumberland Street London W1, the entrance being
from Bryanston Street. The Claimant sought a declaration that the tenancy,
created by an agreement in writing dated 4 August 1995, is an assured
shorthold tenancy. A Part 8 Claim Form was presumably used in the belief
that there was no substantial dispute of fact: see CPR 8.1(2)(a). That
belief turned out not to be justified. On 4 May 2000 an order was made for
the Defendant to serve a Defence, which he did. The order did not, as it
could have done under CPR 8.1(3), include an order that the claim continue
as if the Part 8 procedure had not been used, though the substance of the
directions was such as might have been ordered on that basis. If the court
had made such an order, it could also have allocated the claim expressly to
the multi-track: see PDpdp-08supplementing Part 8, para. 1.6. Since it did not
make such an order, the claim is deemed to have been allocated to the
multi-track: see CPR 8.9(c). Because of the deemed allocation, the appeal
from the eventual judgment is not one of those which, under the Access to Justice Act 1999 (Destination of Appeals) Order 2000, article 4, lies to the
Court of Appeal. That article only applies to final decisions in cases
allocated to the multi-track under CPR 12.7, 14.8 or 26.5, not to those
deemed to be allocated under CPR 8.9(c).
| 2. |
As a result of this quirk, which could not have been foreseen at the issue
of the proceedings, and hardly at the time of the directions order on 4 May,
the matter having in due course been decided against the Claimant at trial
by His Honour Judge Bradbury on 30 October 2000, the appeal lay to the High
Court. Permission to appeal was refused by the judge and, on paper, by
Ferris J, but that judge was then persuaded to grant permission at an oral
hearing, and I have accordingly had the pleasure of hearing Mr Brock Q.C.'s
and Mr Pymont Q.C.'s able arguments for and against the appeal over 2 days.
It would be as well for practitioners to be aware of this oddity of the
regime as regards the destination of appeals, and to take it into account
both in deciding whether to use a Part 8 Claim Form and, where one has been
used but the matter is to proceed with statements of case and disclosure,
whether to ask the court to make an order under CPR 8.1(3) and an express
allocation order.
| |
The issues in the case
| 3. |
In the Particulars of Claim the Claimant alleged an agreement in writing
dated 4 August 1995 by which the Flat was let by the Claimant to the
Defendant for a term from 4 August 1995 to 25 March 2001. The Defendant
admitted that allegation in paragraph 2 of the Defence. The Claimant next
alleged that the Defendant employed an agent, a Mr Mendis who was a licensed
conveyancer, to act on the Defendant's behalf in respect of all matters
leading up to and including the signing of the tenancy agreement. The
Defendant admitted retaining Mr Mendis, but not that the scope of his
instructions was as wide as the Claimant said. The Claimant then alleged
the service on Mr Mendis, as agent for the Defendant, of a notice under
section 20 of the Housing Act 1988Acts, on 4 August 1995 prior to the granting
of the tenancy agreement, such as was necessary for the tenancy to be an
assured shorthold tenancy. As to this the Defendant denied service of the
notice on Mr Mendis on 4 August 1995 (though at trial this was not disputed)
and also denied that, even if it was served on him, it was effective as
against the Defendant. By this the Defendant put in issue two points:
first, whether a notice under section 20 can validly be served on an agent
at all, and secondly whether, if it can, Mr Mendis was the Defendant's agent
for this purpose. Accordingly, on the statements of case (and ignoring the
question as to whether a notice was served on Mr Mendis on 4 August 1995)
there appeared to be two issues: as a matter of law could a section 20
notice be served on an agent, and as a mixed matter of fact and law, was Mr
Mendis the Defendant's agent for the purpose of service on him of the
notice.
| 4. |
As the case proceeded at trial, however, two other matters were in issue,
namely whether the Defendant's tenancy in fact started before 4 August 1995,
he having had access to the Flat from 2 August, and if so whether an earlier
section 20 notice had been served on Mr Mendis on 31 July or 1 August 1995,
before the entry into any tenancy agreement which antedated 4 August. These
two issues were never defined on the statements of case, and they developed
during the two days of the trial, held on 12 and 13 October 2000.
| 5. |
At trial the judge held that the Defendant had been allowed to move into the
Flat on 2 August 1995 as a tenant, accordingly that the tenancy had been
entered into before 4 August, and in fact on 1 August, and held that no
section 20 notice had been served before that date. He also held that, even
if a notice had been served on Mr Mendis, first, it was not within the
latter's authority to receive it on behalf of the Defendant and secondly it
would not have been valid in law even if he had had such authority.
| 6. |
The Claimant appeals both on the point of law, as to whether a section 20
notice can be served on an agent at all, and on the questions of fact, as to
when the tenancy agreement was made and whether Mr Mendis had relevant
authority. It also challenges the ruling that no notice was served on 31
July or 1 August, in case its appeal on the starting date of the tenancy is
unsuccessful. The appeal thus challenges the judge's findings of fact, and
does so in the face of the judge having made findings as to the reliability
of some of the material witnesses who gave evidence as to the relevant
facts.
| |
The history of the case in the County Court
| 7. |
In the light of the criticisms made on the appeal of the judge's findings
and reasoning, it is necessary to pay close attention to the way in which
the new issues came to light. For that purpose, I will summarise the way in
which the matter developed. The Defence to which I have referred was served
on 18 May. Disclosure had been ordered to be given by both parties and,
after an extension of time, was given on 5 June. Witness statements were to
be, and were, exchanged on 15 June. On the Claimant's side there was only a
short witness statement from Ms Amin, the solicitor then employed by S J
Berwin who acted for the Claimant in relation to the tenancy agreement. For
the Defendant there was one from Mr Mendis and one from the Defendant. Mr
Mendis' witness statement showed that he had received a section 20 notice on
4 August, but did not otherwise affect the issues that appeared to be
relevant. The Defendant's witness statement stated that he received the
keys and moved in on 2 August. Thus it seemed to be the basis of an
argument that, even if a section 20 notice was validly served on 4 August,
that was too late. It did not explain how a tenancy was created at an
earlier date.
| 8. |
The Claimant then put in some further witness statements, by permission
granted on 27 September: one more from Ms Amin, and one each from Sara Tack
and Ian Hack, both of Conrad Ritblat, the Claimant's managing agents. These
went into more detail about the negotiations leading up to the entry into
the tenancy agreement, and, as regards Ms Amin, denied that the Defendant
had moved in before 4 August. In response the Defendant served three
further witness statements, one of them under the Civil Evidence Act and one
pursuant to permission granted at the trial: one of these was another from
Mr Mendis, and the other two were from people who said they had helped the
Defendant to move in on 2 and 3 August. Mr Mendis' further statement took
issue with one point in Ms Amin's second statement, as to whether a draft or
blank section 20 notice had been sent by her on 18 July. She had not
mentioned in her statement another section 20 notice sent on 31 July, and Mr
Mendis was also silent on this. Nor did he say anything about the Defendant
being let into the Flat before 4 August, or about the creation of a tenancy
agreement at any earlier date.
| 9. |
That was how the matter stood at the outset of the trial. When Ms Windsor
opened the case to the judge for the Claimant, she gave him several
additional documents to be included in the trial bundle: a draft, or blank,
section 20 notice from S J Berwin's file, said to have been sent with a
letter of 18 July, a completed (but not signed) section 20 notice from the
same file dated 31 July 1995, and a receipt form for access cards to the
outside door in Bryanston Street to the property as a whole signed by the
Defendant and dated 1 August 1995, obtained from the Claimant's records. Ms
Windsor then opened the issues to the judge. She explained that the
Defendant now admitted that Mr Mendis had received a section 20 notice on 4
August, that even if strictly the defence ought to be amended she took no
point on that, and then said that she understood that it was now said the
tenancy agreement was entered into before 4 August. In retrospect, it is
unfortunate that this allegation, at any rate, was not required to be the
subject of some form of particularisation in writing as an amendment to the
admission of the Claimant's case in paragraph 2 of the Defence. It is
understandable that no-one wanted to insist on something that would lead to
unnecessary delay, especially as the judge only had 2 days available for the
hearing, and even as things were, it took the whole of those 2 days. But as
a result of the course in fact taken, the Defendant was free to advance a
case that the tenancy was entered into before 4 August, which is entirely
inconsistent with his Defence, without indicating clearly at any stage, and
certainly not in advance, how he said it came into being.
| 10. |
Moreover, as it turned out, both the Defendant and Mr Mendis gave evidence,
which had not in any way been foreshadowed before, or put to Ms Amin in her
cross-examination, that Ms Amin and Mr Mendis had a telephone conversation
on 1 August in the course of which they agreed that the tenancy should be
effective immediately. By then Ms Amin had left the court, and she was not
recalled to be asked about this new evidence. Mr Thomas, then appearing for
the Defendant, cannot be criticised for not having put this case to Ms Amin,
because it is quite clear that he had no idea, before it came out in
cross-examination, that his client or Mr Mendis would say that any such
telephone conversation took place. If, however, he had been made to put
down on paper at the outset his case as to when, how and on what terms any
tenancy agreement predating 4 August was entered into, he might have found
out that this was his client's evidence, in which event it would have been
put to Ms Amin and the case would have been clearer and less difficult to
deal with because of the way it emerged.
| 11. |
The benefit of hindsight is a wonderful thing, but not very useful in
dealing with what actually happened. Nevertheless, it does seem to me that,
in considering an appeal against the judge's finding that the tenancy
agreement was indeed entered into on 1 August, it is important to bear in
mind the state of the matters in issue on the statements of case and as the
matter was opened to the judge, and the unsatisfactory way in which the
eventually successful allegation emerged in the course of the trial. I will
also have to examine in much greater detail than would otherwise be
necessary the evidence of the three principal witnesses, Ms Amin for the
Claimants, and the Defendant and Mr Mendis. This has contributed to the
length of this judgment and to the time required for its preparation both
being greater than I would have wished.
| 12. |
Mr Brock laid considerable emphasis on the story as it appears from the
documents. Mr Pymont criticised this approach as suggesting that the
documents have a greater significance than they really do. Clearly
documents have to be seen in the context of evidence as to what actually
happened, but, except to the extent that it is suggested that the documents
put in evidence are not what they purport to be, they do at least provide a
solid framework within which to determine the factual issues. I therefore
propose to summarise the history, mainly by reference to the principal
documents, and I will then address the points in dispute against that
background.
| |
| Summary of the history 13. |
The Defendant appeared on the scene for the first time, so far as the
documents are concerned, at the beginning of June 1995. By way of context,
the Flat was being used by a Mr Bescoby, who is now dead, and was the
Claimant's caretaker at the block. The Flat was not otherwise let, and he
was using it for the time being to live in. The Defendant was in need of
living accommodation for himself as he had recently separated from his wife
and had left the matrimonial home. According to his evidence he had seen
the Flat on several occasions before the beginning of June, and had
expressed interest in taking a tenancy of it. The Claimant's managing
agents, Conrad Ritblat, have an internal note recording the Defendant's
interest in the Flat, and his offer of £10,000 per year rent, with a year
rent free, and the names of several people, possibly as referees, one being
Mr Mendis, identified as the Defendant's solicitor.
| 14. |
The Defendant himself wrote to Conrad Ritblat in the middle of June (the
letter is not dated) putting forward his detailed proposal. He knew that
the tenancy would be for a term expiring in 2001. He said that much work
needed to be done to the Flat to improve and repair it, which justified the
rent free period. On 20 June Conrad Ritblat replied, subject to contract,
accepting his proposal in principle. They said, among other things, that a
new lease would be granted for a period expiring in March 2001 on an assured
shorthold basis. On 23 June Conrad Ritblat took up references, including
from Mr Mendis. On 28 June S J Berwin wrote to Mr Mendis to say that they
had been instructed to act for the Claimant on the proposed letting. They
stated the principal terms, including that the tenancy would expire in March
2001 and be on an assured shorthold basis. They asked Mr Mendis to confirm
whether he had instructions and whether the points were agreed in principle.
Mr Mendis wrote back on 30 June, in a characteristically succinct letter,
confirming that he was instructed by the Defendant and saying that he
awaited the draft documents.
| 15. |
It took Ms Amin some time to get the draft documents out, not least, it
seems, because she was accustomed more to commercial than to residential
lettings. She produced a draft tenancy agreement which is certainly a lot
longer than would be normal, and therefore, perhaps, took longer to produce.
On 18 July she wrote the first of the letters as to which the judge made
findings which are controversial. In the first paragraph of the letter she
said that she enclosed: (1) a draft tenancy agreement in duplicate, (2) a
copy of "the notice which will be served by the landlord prior to entering
into the agreement", and (3) copies of two superior leases and the land
certificates relating to the Claimant's title. She commented on various
points of detail, and apologised for the delay in getting the documents out,
explaining the need to liaise with Conrad Ritblat about the form of the
documentation, owing to the building being primarily commercial. She said
that the draft agreement had not yet been approved by her client and Conrad
Ritblat and that changes might be made once they had been consulted. The
copy letter in evidence was from her file, and shows that it was copied, as
blind copies, to Conrad Ritblat and to the British Land group (of which the
Claimant is a member company). Among the documents added to the bundle at
the trial was a copy of a blank section 20 notice form which the judge was
told came from S J Berwin's file immediately after this letter. He held
that no such notice had been sent with the letter, and that the form of
notice said to have been found in the file had been placed there after the
event, and indeed after service of the Claimant's list of documents (early
in June) in the course of preparation for the trial. That finding, not in
itself relevant as to the issues at trial, but highly relevant on issues of
credibility, is directly challenged by Mr Brock.
| 16. |
It is not in dispute that the letter itself was sent, nor that the items
said to have been enclosed and mentioned in paragraph 15 above at (1) and
(3) were enclosed. Documents from a file of Mr Mendis' were disclosed, as
was the folder itself in which the file was kept. This folder had written
on it the only attendance note which was before the judge, in Mr Mendis'
hand. This records that on 21 July the Defendant called and collected the
draft agreement, the land certificate and the copy lease. It does not refer
to a section 20 notice form.
| 17. |
On 27 July Ms Amin wrote again to Mr Mendis, saying that she understood that
the Defendant had met Conrad Ritblat and discussed the terms of the
agreement. She said that she enclosed a further draft agreement, and
referred to a number of particular points. One point calls for mention now.
Clause 5.9.1, as to user, had been amended to include ancillary office use
"in accordance with your client's requirements". But she said that Conrad
Ritblat were checking with the head landlord to ensure that this was
acceptable, since under the head lease the upper floor was to be used only
for residential purposes. She also recorded that she understood the
Defendant wanted to take possession on 1 August, and therefore asked for
confirmation by return that the terms were agreed, so that engrossments
could be prepared for execution by both parties. On the same day Conrad
Ritblat wrote to the head landlord, the Portman Estate, asking, among other
things, if it would be acceptable for the Defendant to be allowed ancillary
office use of part of the premises, perhaps on a basis personal to him.
They too were asked to confirm the position urgently as the Defendant wanted
to move in on 1 August. That letter was copied to Ms Amin. On 28 July Mr
Mendis acknowledged the letter of 27 July, said that he had discussed the
draft tenancy with the Defendant who was happy to proceed on the basis of
the draft documentation as it stood, and would like to complete by 1
August.
| 18. |
The next letter from Ms Amin to Mr Mendis, as to which the judge made
findings which are challenged by Mr Brock, is dated 31 July. According to
the letter, as appears from the copy on S J Berwin's file, it enclosed a
notice under section 20 and an engrossment of the agreement for execution by
the Defendant. It also enclosed a copy side letter which was to be signed
by the Claimant to deal with the question of ancillary office use by the
Defendant. It stated that a copy of the agreement and side letter had been
sent to the Claimant and that she would be able to complete when she had
them back duly signed by the Claimant. Last, she asked Mr Mendis to
acknowledge receipt of the section 20 notice on behalf of the Defendant by
return. The judge accepted that the letter had been posted, but not that
any section 20 notice had been sent. The second of the documents added to
the bundle at the trial was a copy section 20 notice, completed but not
signed, from S J Berwin's file, dated 31 July and expressed in relation to a
tenancy starting on 1 August.
| 19. |
There is no doubt that the engrossment, at least, reached Mr Mendis. On 1
August he wrote back to Ms Amin enclosing it duly signed by the Defendant
and asking for the landlord's part of the agreement, with the side letter
and the keys, to be sent directly to his firm that day. This was sent to S
J Berwin by hand and is stamped received at 1.20 pm.
| 20. |
Meanwhile, on 31 July the Portman Estate wrote to Conrad Ritblat, asking for
clarification of the Defendant's intentions so that a final decision could
be made. They indicated that use of part as a study would be consistent
with residential use and would not require consent, whereas if it was
intended that employees should be in occupation of the premises consent
would be needed. Conrad Ritblat no doubt spoke to the Defendant and on 1
August they replied, saying that he would be using one room as a study for
ancillary office use, with a fax, computer, filing cabinets etc and
occasional visits from a secretary but no other use by employees. It seems
that over the telephone mention was also made of using the address as the
registered office for one or more companies. On 1 August the Portman Estate
replied saying that the degree of business use would be consistent with
residential use and did not require consent, but that the address could not
be used as a registered address for companies. That letter seems to have
been faxed by the Portman Estate to Conrad Ritblat on 1 August, and sent on
by them to S J Berwin by fax on 2 August in the afternoon. I will revert to
the evidence as regards the Defendant gaining access to the premises and the
Flat on 1 and 2 August. As regards the dealings between the professionals,
on 3 August Ms Amin wrote again to Mr Mendis, referring to a telephone
conversation the previous afternoon, which from the context looks as if it
was concerned with the question of business use. By the letter she
explained that the side letter would no longer be used, and explaining also
the basis on which the sort of limited use that had been described would be
regarded as permissible, though not the use of the address as the registered
address for any company. She concluded by saying that she was waiting for
the return of the Claimant's part of the agreement. S J Berwin's files
include a letter of 2 August from British Land, stamped as received at 11.30
on 3 August, enclosing the Claimant's copy of the agreement duly signed. On
4 August (a Friday) she wrote again (by fax, transmitted shortly before 11
a.m.) to Mr Mendis to confirm that she had received her client's part of the
agreement, and enclosing a revised section 20 notice, with the commencement
date of 4 August. She went on:
| |
|
21. |
In reply Mr Mendis did respond, also by fax (it is stamped as having been
received in S J Berwin's office at 12.50), acknowledging receipt of the
letter and the enclosed revised section 20 notice, specifically confirming
receipt of the notice and that the commencement was to be that day. He went
on to refer to a van and to describe the limited contents of the van:
personal belongings and a computer only. He also asked that the managing
agents be asked to allow the Defendant to "at least unload his belongings"
from the van, in order to avoid unnecessary storage and delivery costs being
incurred. I will refer later to what lies behind these references to the
van. Having received this fax, Ms Amin inserted the date of 4 August on the
front page and the first page of both copies of the tenancy agreement, and
inserted appropriate dates consequentially at other points in the agreement
where needed (see clauses 3 and 4.2.1, as to the term and the duration of
the rent free period). On 8 August she wrote again to Mr Mendis, "further
to completion of the tenancy agreement last Friday", enclosing the
Claimant's part of the agreement.
| 22. |
Mr Mendis retired from practice as a licensed conveyancer in 1998. His
files were lodged with the Council of Licensed Conveyancers. They therefore
had to be recovered for the purposes of disclosure. Mr Mendis gave his
authority for that to be done. The Defendant's solicitors obtained in this
way one file, documents from which were disclosed and which was itself
produced at the hearing before the judge and indeed on the appeal. It
contains Ms Amin's letters of 28 June, 18 and 27 July, 3 and 4 August, and
the original draft tenancy agreement sent on 18 July. It does not contain
any section 20 notice form prior to that sent on 4 August, nor does it
contain her 31 July letter. However Mr Mendis in cross-examination referred
to his having kept another file, in which he might well have kept any notes
that he made in the course of the transaction, and into which he also
accepted that he might have put letters or notices.
| 23. |
As I have mentioned the tenancy agreement was unusually long, running to
some 36 pages. On the front page it is described as Assured Shorthold
Tenancy Agreement. The term is expressed by clause 3 to start on a date in
1995 (inserted as 4 August) and to expire on 25 March 2001. The yearly rent
is expressed in clause 4.2 as a peppercorn from a date in 1995 (inserted as
4 August) to a date in 1996 (inserted as 3 August), thereafter £10,000 per
annum, and after that at each anniversary of the term granted the rent was
to be increased by 10%. (These two clauses were those that required
manuscript completion once the commencement date of the tenancy was known,
and were completed on 4 August by Ms Amin.) Clause 5.9.1 is the main user
covenant, in the following terms:
| |
|
24. |
The tenancy also included clause 6.12, headed "Housing Act 1988". This
stated that the tenancy was intended to create an assured shorthold tenancy
as defined in section 20 of the 1988 Act and that the provisions for
recovery of possession by the landlord would apply. Of course that is of no
effect unless the statutory provisions as to the service of notice were
observed, nor would clause 6.12.2, which recorded that a notice had been
duly served, prevail if on the evidence it had not been. But at any rate
someone who read this clause of the agreement would be in no doubt that the
assured shorthold tenancy regime, with particular provisions for recovery of
possession, was intended to apply.
| 25. |
I must add to the foregoing recital of the history, as it appears from the
conveyancing files, what was going on at the premises and the Flat on and
from 1 August. The third document added to the bundles at trial was a
receipt form dated 1 August and signed by the Defendant for 2 access cards
for access out of hours to the main door at the building of which the Flat
formed part. The judge was told that this had been found recently in the
files maintained by Conrad Ritblat. It had been issued by Mr Bescoby, and
might have been found earlier but for his death. These did not allow the
Defendant access to the Flat itself.
| 26. |
The Defendant's evidence was that he was given the keys to the Flat, but not
until the next day, 2 August, and that he went in, brought some possessions
and had some cleaning and clearing done in anticipation of moving his
furniture in. He was helped in this by Miss Jessop, whose statement was
admitted under the Civil Evidence Act, and by Prem Kumar, whose evidence was
admitted late and who attended the trial and was cross-examined. The judge
was satisfied that he was given access to the Flat on 2 August, and that,
though originally disputed, is not now challenged. What is in dispute is
the judge's finding that he moved in as a tenant.
| 27. |
As I have mentioned, at the start of the trial the Claimant's
representatives were on notice that the Defendant would seek to give
evidence that he had had access to the Flat before 4 August. Ms Windsor
therefore came prepared with a couple of decided cases dealing with the
effect and basis of occupation of property in advance of a formal tenancy.
She had not prepared a skeleton argument. Mr Thomas had done so, which he
gave her when they met at court and handed in to the judge as well. In this
skeleton he formulated his client's position as regards what had taken place
before 4 August as follows:
| |
|
28. |
None of that focussed on how a tenancy agreement came to be made on 1 or 2
August. The assertion that the term commencement date was "amended" after 1
August implies that, when signed, the agreement contained a different date
than 4 August, whereas it is clear that it never did contain a date at all
until Ms Amin inserted 4 August as the date, on that very day. As mentioned
in paragraph 10 above, in the course of their evidence the Defendant and Mr
Mendis said that there had been a telephone conversation on 1 August between
Mr Mendis and Ms Amin in which "completion" had been agreed as taking effect
on that day. This was entirely new, to the Defendant's representatives as
well as to everyone else, so it had not been put to Ms Amin in
cross-examination, nor was she recalled to deal with it.
| |
The evidence of Ms Amin
| 29. |
Ms Amin verified her witness statements and answered some additional
questions in chief. She was asked about the blank form of section 20
notice, and said that a copy notice would definitely have gone with the
letter of 18 July, and that she would have checked the contents of all
letters before they left the office. She was then asked about the 31 July
letter, and said she remembered the notice as having been sent. She was
asked what was happening on 1 August. She said the question of ancillary
office use had come up and was then unresolved, as Mr Mendis knew, "which is
why I did not have, I do not think, a special conversation with him on the
day". She also said that Mr Mendis was not chasing for completion because
he knew there were points outstanding. She was asked about her letter to Mr
Mendis of 3 August, and confirmed that they had had a conversation on 2
August, and said that it was about the question of business use, and the
Portman Estate's position. She was then asked about the events of 4 August.
She said she recalled clearly a conversation with Mr Mendis in which she
said his client could not have access to the Flat until he had confirmed to
her receipt of the section 20 notice. The judge asked her at that stage
whether she really did remember the conversation, and she said she did
because it was an unusual case, with lots of telephone calls about why the
Defendant was not being allowed to unload belongings from the van.
| 30. |
Ms Amin was then cross-examined. Mr Thomas first asked her about the blank
section 20 notice form. He challenged her recollection by reference, first,
to the fact that no such form was in Mr Mendis' file, and secondly because
it had not been disclosed in the Claimant's list of documents. It is a fair
comment (and relevant to the judge's eventual assessment of her) that while
she accepted that the blank notice form did not appear in the list, she also
pointed out that the draft tenancy agreement sent on 18 July did not either,
and that, when asked if, when she reviewed the file earlier in the year, she
had seen the blank form, she said that she had and added that she had also
seen the form dated 31 July which she said she thought was more important.
As regards that document she was cross-examined on the basis that, first, it
was not in the disclosure list, secondly, there was no copy even of the 31
July letter in Mr Mendis' file and, later in the cross-examination, thirdly
because she had not mentioned it in her supplementary witness statement, in
answer to Mr Mendis' assertion that he had not seen a section 20 notice
before 4 August, even though she did then mention the form sent on 18 July.
Mr Thomas put to her that she did not send the notice, but her answer was
clear, that she had done. She was also asked about the lack of any
acknowledgement of the notice by Mr Mendis, and said that was not surprising
"because we did not complete the tenancy then. The whole negotiations got
delayed at that stage because of the other points that were brought up." Mr
Thomas then took up that theme and suggested that nothing really remained
outstanding on 1 August other than mechanics and formalities. She said
there were only two things delaying completion, namely getting the form of
tenancy agreement back from her client duly executed, and the question of
business use and the Portman Estate's approval. She said she was in touch
with Conrad Ritblat "virtually every day" at this stage on the point about
business use. Mr Thomas then cross-examined her about the contrast between
the form of notice dated 31 July and that dated 4 August, as found in S J
Berwin's conveyancing files, the latter being signed and the former not.
She said she remembered signing the original of the form dated 31 July and
putting it in with the letter, together with the original lease. In
relation to the tenancy agreement itself, he asked her about the date being
put on, and suggested that there might have been a version with a different
date on, which was then removed and a fresh first page substituted on which
she put the new date of 4 August. This she firmly denied.
| 31. |
She was then asked about her evidence that the Defendant did not move in
before 4 August. It was put to her that this was supposition on her part.
She denied this, but on the basis that he could not have received the keys
because she had not authorised their release.
| 32. |
After brief re-examination, the judge looked at S J Berwin's original
conveyancing file, and cross-examined her himself, in particular about
attendance notes, a point he had already taken up during her evidence in
chief. She accepted that she did not keep attendance notes of the
conversations on 4 August, but said that the points were sufficiently
confirmed by letters written that day, and said that she did remember the
day clearly, it having been a very unusual letting. It is of course true
that no attendance notes were disclosed or produced, and it would have been
better if there had been such notes. But it does seem a fair point that Ms
Amin did write full letters at the time which could serve to some extent as
a record of what had been said and done. Mr Mendis may or may not have made
such notes. If he did they were in his other file, not obtained by the
Defendant's solicitors and therefore not disclosed or produced. His
contemporary letters provide almost no assistance to recollection.
| 33. |
It is apparent from the transcript during and after her evidence that the
judge had formed a critical view of the conduct of S J Berwin in making
disclosure, and he also said, implying that it had not been appreciated,
that the originals of conveyancing files should always be brought to court.
In fact the original S J Berwin file was in court, and the criticism that
might have been legitimate is that the file should have been vetted so as to
remove or conceal privileged documents which ought not to have been open to
inspection by the court or the Defendant. As a result, when the judge did
read it, before asking some questions himself of Ms Amin, Ms Windsor had to
try to make the point to him that there might be privileged documents in the
file (as indeed, from the documents put in on the appeal, it is clear that
there were), an attempt which drew criticism of her. The judge's attitude
on this seems likely to have influenced his view of S J Berwin and to have
contributed to the criticisms he expressed of them in his judgment, even
though that was on a point which was not mentioned during the hearing.
| |
| The evidence of the Defendant 34. |
The Defendant gave evidence during the first day of the hearing. The judge
did not make express reference to his reliability in the course of his
judgment, in contrast to the serious doubts he expressed about Ms Amin and
about Mr Mendis. It is therefore not clear whether and to what extent he
found the Defendant a reliable witness. He did accept that the Defendant
was given access to the Flat on 2 August, and that is not now challenged.
But his evidence about other matters in issue seems to me a good deal less
clear and satisfactory. I will summarise it in relation to the two main
issues: the date on which the agreement was entered into, and the authority
of Mr Mendis. To that latter issue is also relevant the question of his
understanding of the intended transaction, so I will touch on his evidence
about that.
| 35. |
Taking that question first, he was asked early on about the basic nature of
the transaction as it had been discussed and agreed in principle. He did
not accept that it was a fixed term lease; he said there was every prospect
of a renewal so that, in effect, it was not limited to the term stated,
though he accepted that there would be a negotiation of new terms, including
rent. He said he had no knowledge of what an assured shorthold tenancy
meant, though in his witness statement he had said that his expenditure on
the Flat was incurred on the basis that he had an assured tenancy and not an
assured shorthold tenancy. He accepted that he read the letter from Conrad
Ritblat dated 20 June which speaks of an assured shorthold tenancy, but said
he did not know what was meant by that nor did he ask anyone to explain. He
said that he saw that phrase on the front of the tenancy agreement, and in
clause 6.12, but still did not know what it meant, and did not ask Mr Mendis
to explain, nor had he explained it, though he accepted that he did discuss
the tenancy agreement with Mr Mendis on one or two occasions before it was
signed. Not even then did it occur to him to ask Mr Mendis what was meant
by the phrase.
| 36. |
He was asked some questions which went to the extent of the authority given
to Mr Mendis. He said in his witness statement that he did not instruct or
authorise Mr Mendis to receive notices on his behalf. In cross-examination
he accepted that he had put into Mr Mendis' hands the legal part of the
lease, having negotiated all the commercial terms himself. He denied at one
point that it was up to Mr Mendis to deal with completion, though he later
accepted that it was Mr Mendis who had done the completion. There may have
been a misunderstanding here, since he referred to himself having "signed
and completed", thereby perhaps meaning something other than the
arrangements that were made with Ms Amin as regards what lawyers might
regard as completion. His line was that it was up to him to negotiate the
terms, for Mr Mendis to deal with the documentation with S J Berwin, and
then for him to decide whether or not to go ahead with the transaction, at
which stage he authorised and instructed Mr Mendis to deal with the
formalities of completion. He accepted that he read the first draft lease
and discussed it with Mr Mendis; he denied at one point having seen a second
draft lease, though he remembered having a discussion with Mr Mendis on 28
July and at another time he spoke of having approved what he called the
final draft. He also said that there had been about five changes to the
draft agreement that he wanted which, on his instructions, Mr Mendis wrote
to S J Berwin about. There is no such letter. Later he identified these
changes as being the points which S J Berwin had explained to Mr Mendis by
Ms Amin's letter of 27 July, which were not, of course, changes that he had
wanted, but rather changes required by the Claimant to which he was prepared
to agree. He said that, having approved the form of the lease and signed
the engrossment, he said to Mr Mendis: "I approve this lease, this is my
signature, complete it now, send it to them, get the keys".
| 37. |
So far as the actual completion is concerned, he said that, having approved
the final draft agreement on 28 July, he told Mr Mendis to call for the
original for signature, and that he went to Mr Mendis' office to sign it on
1 August, he did sign it then and there and told Mr Mendis to telephone at
once for completion and to get the keys, and that a telephone conversation
did then take place between Mr Mendis and Ms Amin, while he was still in Mr
Mendis' office and that it was then that Ms Amin confirmed completion on the
telephone. He admitted that he did not hear what Ms Amin said during the
conversation, but said that, after it, Mr Mendis had told him that she said
he should go to the property and collect the keys from the reception. He
mentioned several times in his evidence that Ms Amin confirmed in her
witness statement that completion took place on the telephone on 1 August.
This must be a reference to paragraph 14 of her second witness statement,
which ends "completion then took place over the telephone", but it is
perfectly clear that she is describing what took place on 4 August, not on 1
August. The Defendant had misread the witness statement, which does not
support his evidence in any way, just as he had misremembered the point
about changes to the terms of the tenancy agreement, as mentioned in
paragraph 36 above.
| 38. |
Those aspects of his evidence are examples of a tendency on his part to rely
on documents, or indeed on the absence of documents. When cross-examined
about the form and content of the tenancy agreement he went off on a tangent
about why the notice had not been incorporated into the agreement. At other
times, when asked about whether something had been said, he challenged Ms
Windsor to point to a document in which it was recorded. To take another
example, he was shown Mr Mendis' note on his file cover of what documents
had been collected by the Defendant on 21 July, and he pointed out that it
does not record him as having collected any form of section 20 notice, and
went on to comment that this implied that the form of notice had not been
sent.
| 39. |
The Defendant gave some evidence about the issue of business use of the
property. In his witness statement he said that he intended to use the flat
as an office as well as a residence, and had told Conrad Ritblat that he
would use at least one of the rooms as an office. He also said that he
would not have entered into the tenancy had business use been prohibited.
In oral evidence he said that when he saw Mr Mendis and approved the final
draft of the lease, which he thought was on 28 July (which fits with Mr
Mendis' letter of that date), he had told Mr Mendis that it was fine, "it's
residential, they're messing around with the office use, forget it, at the
end of the day I'm going to live there anyway, where I use one room as my
communications and one room my study, it's my business". Later he came back
to that theme, and said that he had already decided he would take the
tenancy anyway, and that the question of the side letter was not important
because he could always use one room as his study, with a fax and with a
secretary coming in. That does not seem consistent with Conrad Ritblat
having spoken to him on 31 July or 1 August (see paragraph 20 above) in
order to be able to answer the query from the Portman Estate, nor with Mr
Mendis having asked in his letter of 1 August for a copy of the side letter.
Later he said he intended to live there and run his business from there, but
then he qualified that by reference to the degree or kind of use. He also
said that he knew "in the last minute" there would be no office use but he
could use one room as a study, which was good enough for him and why he
accepted it. That looks like a reference to Ms Amin's letter to Mr Mendis
of 3 August. It was put to him that he was aware after 1 August that
discussions were going on with Portman Estate about the business use. He
denied knowing about it, or that there was anything to discuss, though he
did say that "they" were supposed to send a letter, which he said was
standard practice for the Portman Estate.
| 40. |
As I have mentioned, he gave evidence that he got an access card to the
property on 1 August and keys to the Flat on 2 August, and went into the
Flat on that day, though he did not move any substantial possessions in
until the van arrived on 4 August. He said in cross-examination that he
went to the property on 1 August after the conversation between Mr Mendis
and Ms Amin on which I have already mentioned his evidence, and after being
told by Mr Mendis that Ms Amin had said the keys would be released to him.
There he saw Mr Bescoby, and asked for the keys. He was given the access
cards to the property on that day, but Mr Bescoby said he must come back the
next day for the keys to the Flat. According to him the reason given was
that Mr Bescoby had to check with S J Berwin that they had received his part
of the agreement. He said much the same several times, that Mr Bescoby
refused to give him the key to the Flat because his part of the lease had
not yet got to S J Berwin, and that only when he knew it had would he be
able to release the key to the Flat to the Defendant.
| 41. |
As regards the events of 4 August, he accepted that there was a difficulty
getting in, and that he had telephoned Mr Mendis to check what was
happening. He said that he asked Mr Mendis to get on to the telephone to S
J Berwin at once, because he wanted to be able to unload his possessions
from the van, and was not prepared to wait for longer than an hour. He
referred in his evidence to S J Berwin's fax to Mr Mendis, and said that Mr
Mendis must have replied at once because of the urgency of the situation as
he had explained it to Mr Mendis. Later he referred again to the exchange
of faxes and said of Mr Mendis' fax confirming receipt of the notice: "that
was purely to get my van unloaded". Later still he referred again to the
problem with the van on 4 August, attributed it to Mr Bescoby being worried
that he might be bringing in office equipment, and that he might therefore
be breaking the covenant about residential use, and also to Mr Bescoby
resenting the Defendant's having got the lease of the Flat which he himself
had previously used.
| |
The evidence of Mr Mendis
| 42. |
Mr Mendis had made two witness statements, both of them brief. Neither
referred to any telephone conversation with Ms Amin, nor in any way to the
process of completion. He did say, in his supplemental witness statement,
that to the best of his recollection no draft section 20 notice was sent
with the letter of 18 July, and that he understood that no such document was
in his file. It is understandable, since Ms Amin did not herself refer to
her letter of 31 July, that he did not do so either. Accordingly he said
that the first time he saw a section 20 notice was on 4 August. His
cross-examination covered a number of points: his instructions and authority
from the Defendant, what advice he had given his client about the nature of
the tenancy, his dealings with Ms Amin, and what communications he had
received from her. It is fair to say that his oral evidence is not
consistent on a number of points, which makes it more difficult to
summarise, and also, of course, more difficult to assess its overall effect,
at any rate on those points, merely from the transcript.
| 43. |
As I have mentioned above, he said that the file of his that had been
produced in court, and made the basis of disclosure, was not his only file.
As regards the other file, he said it was his practice to keep draft papers
in a separate file, and that his notes, including notes of his instructions
and attendance notes, would have been kept there, but that it was also more
than likely that some letters from S J Berwin had been placed in that other
file as well.
| 44. |
He was clear in his oral evidence that he had explained to the Defendant the
nature of an assured shorthold tenancy. This is a point on which he was
consistent throughout his oral evidence, including re-examination. In part
of his evidence he said he was not sure whether he had explained about the
necessary notice under section 20, but later he accepted that he must have
done, and he held to that in re-examination.
| 45. |
He accepted, of course, that he had received Ms Amin's letter of 18 July and
the enclosed draft tenancy agreement, but maintained that he had not
received any draft section 20 notice with that letter. His reasons for
saying that he was sure of this, however, were rather odd. His reason was,
essentially, that she had sent him a notice on 4 August and that there would
have been no point in sending a draft, or a blank form, on 18 July. The
letter of 18 July does mention that a form of notice is enclosed, and he
accepted that he did not follow it up, if there was no such enclosure, by
asking for it to be sent.
| 46. |
As regards the extent of his authority from the Defendant, he accepted that
his instructions were to deal with the legal formalities and complete the
matter (once the Defendant was satisfied with the terms), that the Defendant
had not told him there was anything that he was not to do, and that
accordingly he understood that he had authority to do whatever was required
to complete the tenancy agreement.
| 47. |
So far as the section 20 notice was concerned, he said in evidence that it
had to be served on the Defendant, not on himself, but that he never said so
to Ms Amin, and that he gave her the impression that he was instructed to
deal with all matters leading up to completion of the agreement.
| 48. |
Ms Amin's letter of 31 July is not in the file of his which was produced at
the hearing. He said in cross-examination that he did not believe he had
received it, and did not recollect it. He accepted that he had received the
engrossment, but said he thought that came later, on 1 August, though there
was no sign of a covering letter. He would not accept that he had received
a section 20 notice with the letter.
| 49. |
So far as the question of completion is concerned, he said that on 1 August
he regarded it as concluded, but that on 3 or 4 August Ms Amin phoned him to
say there would be changes. Pressed with his letter of 1 August, asking for
the landlord's part of the agreement, the side letter and the keys, he said
he thought it would have been concluded on 1 August, but accepted that he
was hoping for this. Then he said that he had phoned her on 1 August and
she had said that the keys would be released to the Defendant. He was then
pressed with Ms Amin's letter of 3 August, and with the proposition that
they had had some telephone conversations on 4 August, in the course of
which the transaction was completed, and he apparently accepted that; later
he went back to saying that he thought it was finalised on 1 August, but
that she had then changed her mind, but after that he seemed to accept that
he had regarded the matter as concluded only on 4 August. In re-examination
he was asked about his telephone conversation with Ms Amin on 1 August. He
said that he had said to her that he could now complete and she agreed. He
could not recall whether anyone else was present in the office at that time.
He did recall telephoning the Defendant to tell him of this and asking him
to collect the keys.
| 50. |
So far as the events of 4 August itself are concerned, he accepted that by
then the Defendant was happy with the transaction and wanted the transaction
finalised as soon as possible in order to get into the Flat. He was not
surprised to receive a section 20 notice on that day, and though he said it
should not have been sent to him, he never pointed this out to Ms Amin. The
Defendant never told him that he should not receive such a notice on his
behalf. He accepted it because it was his duty to do so. Then, late in his
cross-examination, he volunteered that he had mentioned the section 20
notice to the Defendant on 4 August. At that point the Defendant was "stuck
to go in" and phoned him at least twice. It was then that he told the
Defendant that he had received the notice. The Defendant did not say he was
not to accept the notice on his behalf. It was put to him that what the
Defendant said was to the effect of "Do whatever you can to get me into this
property quickly", and he said that might possibly have been the gist of
what the Defendant had said.
| |
The judge's findings, and his assessment of the witnesses
| 51. |
The judge made a number of findings of fact, not limited to those strictly
necessary for his decision. He held that Ms Amin did not enclose a draft or
blank form of section 20 notice with her 18 July letter. He held that no
section 20 notice was sent with the letter of 31 July, though he accepted
that the letter was posted. He held that Ms Amin was wrong when in her
witness statement she said that she did not receive the Defendant's signed
agreement until 4 August, which she had in fact received on 1 August. He
found that the Defendant had moved in as a tenant on 2 August. As to what
happened on 1 August he said this:
| |
|
52. |
He also held that when Mr Mendis replied as he did on 4 August he was acting
without instructions and did not understand what he was doing. On the basis
of the findings already mentioned, he said he was satisfied, albeit with
hesitation, that a tenancy was entered into on 1 August and that it was an
assured, not an assured shorthold, tenancy. He also went on to accept the
Defendant's evidence that he gave no authority to Mr Mendis to accept a
section 20 notice on his behalf (even if, contrary to his finding of law,
such a notice could be served on an agent) and that merely instructing a
solicitor to handle the paperwork aspects of a tenancy was insufficient to
allow an inference to be drawn that the solicitor had implied authority to
accept the notice on the Defendant's behalf. He also held that Mr Mendis
had not told the Defendant about the notice received on 4 August and, for
good measure, doubted whether he gave any adequate explanations about the
nature of the tenancy to his client the Defendant.
| 53. |
He said nothing by way of general comment on the Defendant as a witness. As
regards Ms Amin and Mr Mendis he was highly critical, though in different
ways. He started the passage in his judgment which sets out his comments by
saying that they both troubled him as to their reliability and their
honesty. What he goes on to say about Mr Mendis does not explain a
reference to doubtful honesty in his case. He is said to have been a polite
witness with a tendency to agree with any proposition put to him. I can
understand from that a doubt about Mr Mendis' reliability, but not as to his
honesty. As to Ms Amin, the judge did say that he believed she had sought
to distort the truth; the point identified was as to whether she really
could, at the trial, remember signing and enclosing a section 20 notice with
her firm's letter of 31 July.
| 54. |
Though it is not directly a comment on a witness, the judge made the
extraordinary finding that the blank notice form, which, at the time of the
trial, was contained in S J Berwin's original conveyancing file as produced
at the hearing, had been inserted in the file after the preparation of the
list of documents. Since Ms Amin had by then left their employment, it
cannot have been thought to have been done by her. He did not say the same
about the notice dated 31 July, and I must therefore assume that he did not
regard that document as a late fabrication, and that his finding was only
that, although it was prepared at the time, Ms Amin did not in fact include
it with the letter of 31 July which, he accepted, she did write and have
posted that day.
| 55. |
The judge's conclusion about the blank form is, I have to say, an
extraordinary comment for him to have made at all, and especially in the
circumstances. It amounts to finding the firm of S J Berwin guilty of
seeking to mislead the court and for that purpose of fabrication and
dishonesty. At no point during the hearing had he or Mr Thomas or anyone
else suggested that this might have happened. If it had been, and the
suggestion had not been withdrawn, it would have been necessary to afford S
J Berwin the opportunity to give evidence on the point, and to Ms Windsor to
make submissions about it. It is extremely improbable, not only because of
the inherent unlikelihood that a firm of solicitors would fabricate a file
in this way, but also because the blank notice form is of very little
intrinsic importance to the case. The judge's comment is based on an
assumption that, if the blank form had been present on the file when
disclosure was given, its relevance would have been appreciated and
therefore it would have been disclosed. That overlooks the point, which Ms
Windsor would no doubt have made if given the chance, that lists of
documents were served on 5 June, at a time when the only issues of fact
discernible from the statements of case were whether Mr Mendis had authority
from the Defendant to receive a section 20 notice on 4 August and whether a
notice was in fact served on Mr Mendis on that date. There would therefore
have been no reason to think that the blank form enclosed with the 18 July
letter would in itself be relevant. It might be said that, since the letter
was disclosed, so should its enclosures have been. Even if that is a
legitimate point, the remedy would have been for the Defendant to ask for
disclosure of the documents enclosed, and they would no doubt have been
produced. The judge's conclusion that the form cannot have been on the file
at the time of the list seems to me wholly unwarranted - even if it should
have been disclosed the explanation for it not having been disclosed is far
more likely to have been inadvertence than it not having existed, and
therefore having later been fraudulently concocted. I have mentioned that
the judge expressed serious disquiet about disclosure on the part of S J
Berwin during the hearing (though not on this point) and it seems to me that
his adverse reactions in this respect coloured his view of what the firm had
done and also of Ms Amin, their former employee (she had left the firm some
time before the trial), and did so unfairly and without justification.
| 56. |
On one point his rejection of her evidence is based on a plain mistake on
his part. He said that she had said in her witness statement that she did
not receive the Defendant's signed agreement until 4 August whereas it was
clear that she had it on 1 August. In fact what she said in her witness
statement was that she did not receive the Claimant's part of the agreement
until 4 August. The evidence indicated that this reached her firm on 3
August but she said she did not see it until the following day. A curious
thing about this mistake is that, in the course of Ms Windsor's final
submissions, the judge expressed exactly the same mistake but then corrected
himself. By the time he gave judgment, however, he had forgotten that this
impression was a mistake, and he therefore condemned Ms Amin quite wrongly
for false evidence on this point.
| 57. |
The judge referred to Ms Amin as "feisty and unduly aggressive". Of course
that is very much a matter of impression from seeing the witness. It is
true that neither she nor the other two principal witnesses always answered
precisely the questions put to them with relevant material and nothing else.
Judging from the transcript both the Defendant and, from time to time, Mr
Mendis were at least as prone to this as she was. For all that the judge
indicated that Mr Mendis was highly suggestible, he too had a way of
answering a question with irrelevant material or argument, such as how he
dealt with the question as to why he was certain that no blank form had been
sent on 18 July, and his digressions into the need to serve the section 20
notice on the tenant personally.
| |
| Appeals on fact: principles 58. |
For the Claimant's appeal to succeed, I must be satisfied that the judge was
wrong in his finding that a tenancy was entered into on 1 August, and that
Mr Mendis had no authority from the Defendant to accept a notice under
section 20 on his behalf, as well as that he was wrong on the issue of law,
so that section 20 permits a notice to be served on a duly authorised agent.
I will come to the issue of law later, but the appeal on the issues of fact
requires me to reject the judge's findings of fact, made after seeing the
witnesses, and in circumstances in which it is clear from his judgment,
supported by comments during argument, that his impression of the witnesses
was important to him. Mr Brock therefore faces a challenging task on the
appeal.
| 59. |
He submitted that, with the introduction of the new regime for appeals in
May 2000, in CPR 52, the position has changed. The appeal is to be allowed
if the appeal court thinks the judgment below was wrong: CPR 52.11(3)(a).
Permission is now required for every appeal (with exceptions not now
relevant). He submitted that, once permission has been given, the
appellant's task on the appeal is simply to persuade the appeal court that
the finding of fact was wrong. That, however, always was the task of an
appellant on fact: see | 60. |
Appeal courts have often had occasion to comment on the nature of the task
facing them where a judge's findings of fact are challenged. No cases were
cited to me on this, but they are familiar. In the course of preparing this
judgment I have reminded myself of the principles, by reference to the
following cases (as well as that already cited): | |
|
|
If I cannot come to that conclusion, the appeal cannot succeed on the
questions of fact.
| 61. |
The one feature of this appeal that is new derives not from the CPR
themselves but from the new regime as regards the destination of appeals,
referred to at paragraphs 1 and 2 above. This appeal, like many others,
comes before an appeal court consisting of a single judge, rather than two
or three judges in the Court of Appeal, and a further appeal is only
possible in very restricted circumstances: see the Access to Justice Act
1999 section 55. That is the decision of Parliament, and the parties are
entitled to the decision of the appeal court judge according to the best
judgment and conscience of that single judge. However, it does seem to me
that, on an appeal which lies from one judge who has seen the witnesses to
one judge who has not, rather than to the collegiate body of the Court of
Appeal, where the appellant, to succeed, has to persuade at least two judges
of the merits of the appeal, the single appeal court judge should be even
more careful than one of several judges would be about differing from the
views of the judge in the lower court who found the facts based on the
evidence of the witnesses who gave evidence.
| |
Did a tenancy come into existence on 1 August?
| 62. |
The judge's finding was that Mr Mendis and Ms Amin had a telephone
conversation on 1 August, in the course of which they agreed that the
tenancy should start immediately and that the Defendant could have the keys
at once. Of course there was some evidence from Mr Mendis which supported
that conclusion, and also some from the Defendant, though his evidence was
in fact inconsistent in detail with that of Mr Mendis. As against that,
this was a case which had never been thought of or mentioned before the
hearing, and which was therefore never put to Ms Amin. That would in itself
give rise to a doubt as to its credibility, and as to the appropriateness of
disbelieving Ms Amin on a point not put to her. Moreover, the circumstances
that existed on 1 August, and were common ground, must cast doubt on that
conclusion. Ms Amin did not then have in her possession her client's part
of the agreement. Since she was not cross-examined on this aspect of the
case, there is no proper basis for suggesting that she had been told by 1
August that the Claimant was content to enter into the agreement at once.
The judge referred to her evidence that she spoke almost daily to Conrad
Ritblat (Mrs Tack), but since neither she nor Mrs Tack was cross-examined
about those conversations, it cannot have been right for the judge to rely
on them for any relevant finding. The judge said that, at the time of the
phone conversation with Mr Mendis on 1 August, she had forgotten the need to
serve a section 20 notice before the tenancy was entered into. That is a
very odd conclusion on the documents. The judge accepted that the letter of
31 July was genuine and was posted on that day. In that letter she
expressly referred to a section 20 notice as being enclosed and asked that
its receipt be acknowledged on behalf of the Defendant and, even if she had
not enclosed the notice, she had prepared it and placed a copy in the file.
His conclusion involves her having forgotten on 1 August the point to which
she was plainly alive on 31 July, and of which she was again aware on 4
August. He does say that this kind of transaction was novel to her, that
she was working under pressure of work and had inadequate secretarial
support. However, her correspondence shows that she was taking particular
care with this transaction, and while this may have added to her pressure of
work it does not justify an inference that she had overlooked so important
an element of the transaction. She clearly knew about the need for a
section 20 notice, as appears from her 18 July letter, from the terms of
clause 6.12 of the tenancy itself, and from her letters of 31 July and 4
August. It seems bizarre to suggest that on Tuesday she had forgotten or
overlooked what she plainly had in mind on the Monday and the Friday.
| 63. |
Moreover, the finding that she did authorise the Defendant to enter the Flat
as a tenant is inconsistent with a feature of the Defendant's own evidence,
namely that he was not allowed the keys to the Flat until 2 August, and as
to the reasons for this. On the Defendant's case, the transaction was
complete on 1 August and he was to be allowed the keys at once. However,
all he got on that date was access to the premises as a whole, not the Flat.
As regards the Flat, Mr Bescoby told him he had to wait until the solicitors
authorised him to be allowed in. The reason he said had been given by Mr
Bescoby was that his part of the lease had not been received by the
Claimant's solicitors. That does not seem likely, since we know that it was
received during 1 August. It may be that the true reason was something
else, but at any rate so far as Mr Bescoby was concerned the Defendant was
not to be treated as a tenant on 1 August, and that seems to have derived
from something said to him by Ms Amin - again not something put to her in
cross-examination.
| 64. |
Another reason for questioning the theory of completion on 1 August is Mr
Mendis' willingness on 4 August to go through the procedure that would be
appropriate for completion on that date, and for the tenancy agreements to
be dated that day, without demur. No suggestion has been made at any stage
that the agreement should be rectified so that it should bear the date 1
August and, more substantively, that the dates in clauses 3 and 4.2.1 should
be calculated by reference to 1 August rather than 4 August.
| 65. |
From near the beginning of the trial the judge indicated clearly and
consistently that he regarded the question of possible business use of the
Flat as an irrelevance, and he strongly discouraged Ms Windsor from
exploring it in evidence or submission. On the statements of case as they
stood that attitude is fully understandable, since there was no allegation
of a tenancy entered into before 4 August. However the relevance of the
question emerged as the Defendant's case for a contract before 4 August
emerged. As mentioned in paragraph 30 above, Ms Amin was clear in her
evidence that on 1 August there were two things that prevented her from
concluding the agreement at once: she had not got her clients' part of the
agreement back from them duly signed, and the question whether the
Defendant's intended business use was consistent with the Claimant's lease
from the Portman Estate had not yet been resolved. In the end the latter
was not a problem, but on 1 August it was envisaged that a side letter would
be needed and used. On that day Mr Mendis, in his letter to Ms Amin, asked
her to send him the side letter, with the Claimant's part of the agreement
and the keys. On that or the previous day Conrad Ritblat had spoken to the
Defendant about his intentions: see paragraph 20 above. Accordingly the
Defendant's evidence that this issue was of no importance already before 1
August cannot be right. The judge's observation that the side letter
"appeared irrelevant to the grant of the tenancy" is not a fair comment in
relation to the position as seen by either Ms Amin or Mr Mendis on 1 August.
His comment, a few sentences before, that the Defendant knew nothing of the
letters written on 3 August also fails to take into account the fact that it
seems to have been from Ms Amin's letter of 3 August that the Defendant
learned that the office use was no longer a problem: see paragraph 39
above.
| 66. |
Ms Amin's evidence was that no conversation took place between her and Mr
Mendis on 1 August. At that stage the importance of that evidence was not
so apparent as it became later, since neither the Defendant nor Mr Mendis
had mentioned such a conversation, let alone advanced a case that it
included the entry into the tenancy agreement. The judge's finding of fact
involved rejecting her evidence on this, and making findings of
extraordinary conduct on the part of a conveyancing solicitor, on a basis
which had never been put to her. His unfavourable view of her evidence was
of course partly based on her demeanour and response when under
cross-examination. However it was undoubtedly also influenced by his error
which I have referred to in paragraph 56 above. It seems to me that it is
likely (at the very least) to have been influenced by his very critical view
of her former employers, S J Berwin, which I have described and discussed in
paragraphs 54 and 55 above.
| 67. |
He expressed serious doubts as to Mr Mendis' reliability as well, so it
might seem that the latter's evidence provides a slender basis for a finding
that completion took place on 1 August. Accepting that there is a good deal
of confusion within Mr Mendis' evidence as to how he regarded the position
on and after 1 August, it seems to me that it is indeed difficult to regard
his evidence as any solid support for a finding of completion on that date,
which is inconsistent with the way he dealt with things thereafter. The
judge's finding in this respect could only be based on the view that Mr
Mendis did not really know what he was doing at any stage. He did of course
express reservations as to this, but I find it difficult to see what the
justification was for this, of someone who had been a licensed conveyancer
for some years and before that a barrister. But even if his evidence is
viewed in this disparaging light, that does not create a substantial case
for the Claimant to answer. In turn, the Defendant's evidence on this
particular aspect was of little assistance to the court. His evidence as to
a relevant telephone conversation on 1 August was plainly an afterthought,
not having been mentioned, even to his own solicitors and Counsel, earlier,
and it was quite confused. Moreover, on his own evidence, whatever happened
on 1 August did not give him immediate access to the Flat until 2 August, so
that it is the more difficult to justify a contention that whatever happened
on 1 August made him a tenant at once.
| 68. |
Accepting that the experienced judge had the privilege of seeing and hearing
the witnesses, whose evidence I can take only from the transcript, I have
nevertheless come to the conclusion that his findings on this issue were
plainly wrong. It seems to me that he did not derive the assistance that he
could have done from seeing the witnesses, because he was led astray by
errors in relation to the evidence given. He made the mistake mentioned at
paragraph 56. He came to the extraordinary and unwarranted conclusion
mentioned in paragraphs 54 and 55. His finding is undermined by his
incorrect view that the question of the business user of the Flat, which was
still outstanding and unresolved on 1 August, was of no significance. He
failed to take account of the fact that the case as to completion on 1
August emerged as a very late afterthought and was not put to the Claimant
or its witness Ms Amin. He was influenced by a critical view of the conduct
of the Claimant's case, which failed to have regard to the late emergence of
any relevant issue of fact in the case at all other than that of Mr Mendis'
authority. Even his rejection of Ms Amin's evidence that she could remember
signing and enclosing a section 20 notice in the letter of 31 July does not
of itself justify a finding that no such notice was sent with the letter.
The absence of the letter and notice (and indeed of the blank or draft form
of section 20 notice as regards the 18 July letter) from Mr Mendis' file
could well be explained, as Mr Mendis accepted, by them being in the other
file which had not been produced. The only plausible explanation for Mr
Mendis having received the engrossment of the agreement was that it came
under cover of the 31 July letter. That being so, and a section 20 notice
being referred to in the letter, the natural assumption would be that the
notice was indeed sent, especially as such a notice existed in the file. As
mentioned above, in paragraph 54, the judge did not say that he regarded
this document as a forgery or late fabrication. It follows that the judge's
findings amount to this: Ms Amin prepared the letter, and posted it, she
prepared the engrossment of the agreement, and included it with the letter,
she prepared the section 20 notice for inclusion in the letter, and put a
copy into the file, but unaccountably she failed to enclose that one
document with the letter. Whether or not she could consciously remember
that process in detail, the overwhelming probability is that she did enclose
the notice with the letter, and therefore that a section 20 notice was
served no later than 1 August. It is clear that the mere fact that the
Defendant was allowed access to the Flat before 4 August does not show that
he moved in as a tenant. In such a situation, access to or occupation or
use of property in advance of a formal agreement which is about to be
finalised can in law be attributed to a licence, and this is a much more
likely explanation for it than an informal tenancy.
| 69. |
Mr Pymont argued that the only explanation for the Defendant being allowed
in on 2 August which was consistent with Ms Amin's evidence and that of Mr
Hack about the Claimant's policy as regards keys was that a tenancy had been
entered into. Certainly their evidence was that the landlord's policy was
not to let people have access in advance of a formal tenancy, but it does
not follow that there may not have been exceptions, whether deliberately or
by mistake. At all events, the fact of access being allowed does not of
itself prove that an agreement was come to for the creation of a tenancy,
and an examination of the evidence directly relevant to the question of when
a tenancy was entered into shows, as I have indicated, that no tenancy
agreement was entered into until 4 August.
| 70. |
For these reasons I conclude that the judge was wrong to find that a tenancy
agreement was entered into on 1 August at all, and also wrong to find that a
section 20 notice was not served on Mr Mendis no later than 1 August, under
cover of Ms Amin's letter of 31 July. Though it does not matter directly as
regards the result of the case, I also hold that his finding that she did
not enclose the blank or draft form of section 20 notice with her letter of
18 July was incorrect.
| 71. |
Mr Brock also relied on a point of law in relation to the argument in favour
of a tenancy made on 1 August. The documents which are dated 4 August are
executed under hand only, not as deeds. They take effect as an agreement.
The term of the tenancy was for over five years. It was therefore not such
a lease as could take effect otherwise than by deed, which must be one
taking effect in possession and for a term not exceeding three years: see Law of Property Act 1925Acts sections 52(1), (2)(d) and 54(2). Therefore, in
the absence of a deed, a valid tenancy could only take effect in equity,
under a valid and specifically enforceable agreement. On the Claimant's
case, what happened on 4 August amounted to the creation of a valid
agreement for lease, made in writing and so satisfying the Law of Property
(Miscellaneous Provisions) Act 1989 section 2. On the Defendant's version,
accepted by the judge, what happened on 1 August could not amount to such an
agreement, because it was not in writing, and therefore was void. That is
another reason for holding that a tenancy was not entered into on 1 August.
A defence under section 2 might be open, in appropriate circumstances, to a
response by way of estoppel or constructive trust (see | |
Can a notice under section 20 of the Housing Act 1988Acts be validly served on the
prospective tenant's agent?
| 72. |
Having held that a tenancy agreement was not entered into until 4 August, it
is clear that a section 20 notice was served on Mr Mendis before the
agreement was concluded. That then raises two other questions, both of
which the judge also decided adversely to the Claimant: does the Housing Act
1988 permit the service of a notice under section 20 on an agent for the
tenant, or does it require personal service in all circumstances, and, if
service on an agent is permitted, was Mr Mendis duly authorised so as to be
the Defendant's agent for this purpose? I will address the point of
statutory construction first.
| 73. |
The relevant words of section 20 are these:
| |
|
74. |
The prescribed form allows expressly for the notice to be served by an agent
on behalf of the landlord, but says nothing about an agent for the tenant.
It is addressed to the tenant as "you". Among the opening words of the
notice is advice to the tenant that "if there is anything that you do not
understand, you should get advice from a solicitor or Citizen's Advice
Bureau before you agree to the tenancy."
| 75. |
There is no doubt that, as a matter of general law, notices may be served by
and on agents as well as by and on the principals, whether the notice is to
be served by landlord on tenant or by tenant on landlord. In the context of
assured shorthold tenancies, it would be common for landlords to have an
agent acting for them, but it must be fairly uncommon for the prospective
tenant to have an agent. This agreement was unusual as regards its duration
as well as its complication. The question of service on an agent acting for
the prospective tenant is therefore probably one that would arise
only rarely in fact.
| 76. |
Mr Pymont showed me the decision of the Court of Appeal in | 77. |
Mr Brock, on the other hand, relied on | 78. |
The essence of Mr Pymont's submission is that the importance of the notice
to the tenant is such that its statutory function would be subverted if it
did not have to be served on the tenant himself. He said that it was far
more important than the other types of notice which have featured in the
decided cases cited to me, and therefore the conclusions reached in those
cases were not a reliable guide to the proper reading of section 20. I do
not accept that argument. I find nothing in the section which suggests
that, in those rare cases where a person who is about to enter into an
assured shorthold tenancy as tenant has agents acting for him (for example a
solicitor or a surveyor), the necessary notice cannot properly be served on
that agent. Of course the question of the scope of the agent's authority
will always need to be addressed, but if it is found to be wide enough, I
can see no reason why the statute should be supposed to have required the
notice to by-pass the agent and go to the tenant in person. Where (as here)
the would-be tenant does use a professional to act for him, for good reason,
that person should be capable of explaining the transaction and of passing
the notice, or its effect, on to the principal, and it would only be an
inconvenience to the principal to require the landlord to take the extra
time to serve the notice on him, and therefore to make himself available to
receive the notice, before the tenancy can commence. By way of
illustration, in the present case, it would certainly have delayed the
moment when the Defendant's van could be unloaded if he had either to wait
for the landlord's notice to be served on him at an address where he was to
be found, or had to present himself at either Mr Mendis' office or S J
Berwin's office to receive and acknowledge service of the notice.
| 79. |
The judge's reason for holding that a notice must be served personally on the tenant was the fact that the requirement of a notice cannot be waived, as some notices can be, for example a notice before seeking possession under section 8. I do not find that a persuasive reason for supposing that only personal service would suffice. I therefore hold that a notice served in the appropriate form on a duly authorised agent for the person who is to be the tenant under the tenancy is valid for the purposes of section 20.
| |
Was Mr Mendis authorised to receive the notice on behalf of the Defendant?
| 80. |
So, I come at last to the question of the scope of Mr Mendis' authority, on
which the judge found that it did not extend to the receipt of a section 20
notice. So far as this is concerned, I can limit my consideration to the
position on the morning of 4 August, between the receipt by Mr Mendis of Ms
Amin's fax enclosing the section 20 notice and asking him to confirm
receipt, and his fax later that day when he did confirm receipt of the
notice. As the judge explained his conclusion, he accepted the Defendant's
evidence that he gave no such authority to Mr Mendis, he said that nothing
in the Defendant's actions and negotiations with the Claimant entitled them
to assume that he had given such authority, and said that the mere
instruction of solicitors to handle the paperwork aspects of a tenancy was
not sufficient to allow an inference that the solicitor has implied
authority to accept the notice. It appears later in his judgment that a
factor relevant to his conclusion was that Mr Mendis had not explained the
nature of the tenancy to the Defendant and that the Defendant had not agreed
explicitly to the nature and limitations of an assured shorthold tenancy,
and also that Mr Mendis did not tell the Defendant that he had received the
notice on 4 August.
| 81. |
Thus, on this aspect of the judgment as well, the judge made and relied on
findings of fact, in this case as to what was or was not said as between Mr
Mendis and the Defendant. Mr Brock invited me to hold that Mr Mendis did
have actual authority from the Defendant, based on the evidence of what
happened on 4 August itself, as well as putting an alternative case based on
implied authority. On that day, the Defendant had a load of his possessions
brought out of storage to the property in a van, which he wanted to unload.
He was not allowed to do so, despite having been allowed access to the Flat
previously. Mr Bescoby would not let him unload. Precisely why he took
this position does not matter, but it seems likely that among his concerns
was that too much business equipment was to be moved in, and that the
intended use might not after all be residential. The Defendant therefore
telephoned Mr Mendis and told him to get on to S J Berwin so that he could
get his van unloaded. Mr Mendis spoke to Ms Amin. She had already sent her
fax of 4 August to Mr Mendis, with a section 20 notice, asking for its
receipt to be acknowledged, and telling him that after that she would be in
a position to complete. When they spoke, it seems to me that she must have
said that she would not tell Mr Bescoby to allow the van to be unloaded
until the notice had been acknowledged and the agreement completed, and
subject no doubt to assurances as to the contents of the van. Later Mr
Mendis sent his fax, acknowledging receipt. He referred in his fax to the
van, which had been mentioned in their telephone conversation. He offered
an assurance that the business equipment was very limited, and asked
permission at least to unload the van that afternoon. After he had sent
that fax, they probably spoke again on the telephone and agreed completion.
In that context, the question is whether Mr Mendis had authority to
acknowledge the notice on behalf of the Defendant, the person to whom it was
addressed. He did not express any doubt to Ms Amin about his authority, but
that in itself is not conclusive. Whether he did have authority depends
mainly on what transpired between Mr Mendis and the Defendant before the
former sent his fax to Ms Amin that day.
| 82. |
The Defendant gave evidence that he had spoken to Mr Mendis during the day,
so as to sort out the problem of access for unloading the van. He spoke of
Mr Mendis' fax of that day as having been sent "purely to get the van
unloaded". Mr Mendis gave evidence, unprompted, that he had mentioned the
section 20 notice to the Defendant on 4 August, when the Defendant rang him
because he had the problem about the van. His evidence was that the
Defendant did not tell him that he should, or that he should not, accept the
notice. The Defendant was clearly anxious to get his possessions into the
Flat. It seems highly likely, both from Mr Mendis' evidence and from
general probability, that Mr Mendis told him the position as it then stood,
including the receipt of the notice and of Ms Amin's fax, and that it would
be possible to complete the transaction subject only to replying
acknowledging receipt of the fax. It is fair to say that Mr Mendis did not
put forward his own recollection of what the Defendant told him in that or
those telephone conversations in cross-examination or in re-examination.
But what Ms Windsor put to him, and he accepted as possible, seems highly
likely, namely that the Defendant's instructions to Mr Mendis were to do
whatever was necessary to get him into the property as quickly as possible.
If that is correct, then it seems to me that those instructions did indeed
give Mr Mendis actual authority to accept the notice on the Defendant's
behalf, and generally to proceed to completion. It is consistent with the
Defendant's evidence that the fax was sent purely to get the van unloaded.
The word "purely" in that answer cannot be taken as an indication that the
Defendant was seeking to evade the natural consequences of the fax having
been sent with his authority. Mr Mendis knew, and on his evidence explained
to the Defendant, what the position was and what was needed to get Ms Amin
to agree to let the Defendant have full access, namely completion of the
agreement, following confirmation of receipt of the notice. Nor is that
inconsistent with the Defendant's own evidence of what happened on 4 August.
Mr Mendis did say in evidence that the Defendant never instructed him to
accept service of a section 20 notice. In terms, no doubt that was correct.
However, on his evidence as to what was said between them on 4 August, the
question is what does that amount to, even if the notice was not mentioned
expressly. It seems to me that it does constitute the giving of authority
to do what was necessary to get to completion, including accepting service
of the notice, because only in that way would the Defendant be allowed to
unload. In those circumstances I do not need to consider the Claimant's
alternative case based on implied authority.
| 83. |
Accordingly, in my judgment the judge was wrong to hold that the Defendant
did not give authority to Mr Mendis to accept the notice. He did so, at any
rate at the moment when it mattered, and when the notice had to be accepted
if completion was to take place.
| 84. |
In reaching that conclusion I do so despite findings of fact by the judge.
One is that Mr Mendis did not tell the Defendant about the notice sent on 4
August. In making that finding the judge ignored the fact that Mr Mendis
gave evidence that he did tell the Defendant about the notice. That
evidence was not prompted by questions from Counsel, but was something which
occurred to him of his own accord. Indeed Counsel's question assumed a
negative answer: "You cannot remember discussing that notice with Mr Naidu?"
There is therefore no reason to discount that evidence as being due to Mr
Mendis' willingness to agree with any proposition put to him. That evidence
is also consistent with that of the Defendant at least to the extent that
they did speak on the telephone at that time, and is not inconsistent with
any evidence of the Defendant. The judge's failure to refer to this
evidence seems to me to undermine his finding on this point.
| 85. |
Moreover, the judge relied, in this context, on the proposition that the
Defendant had never explicitly agreed to the limitations of an assured
shorthold tenancy. I have to say that I find that an unconvincing
proposition. Even if, as the judge thought, Mr Mendis had not explained the
nature of the tenancy to him (not a very difficult task in itself) the
Defendant's evidence was clear that he had seen reference after reference to
the intended tenancy being an assured shorthold tenancy - in Conrad
Ritblat's letter of 20 June, on the face of the tenancy agreement in draft
and final forms and in clause 6.12 of the agreement (and, in that clause,
also to particular provisions for the recovery of possession by the
landlord) - and had not asked anyone to explain these to him. Regardless of
whether Mr Mendis was or was not in breach of his professional duty, that
evidence justifies the conclusion that the Defendant was intending to accept
whatever an assured shorthold tenancy amounted to, whether or not blind, so
to speak, as to its true nature. He also knew, as his evidence makes clear,
that the tenancy would expire in 2001, though he confidently expected it to
be renewed. In that respect he knew the essential feature of an assured
shorthold, as opposed to assured, tenancy.
| |
Conclusion
| 86. |
For those reasons, reached after careful thought, particularly as to the
limited circumstances in which it is proper for an appeal court to differ
from a trial judge on findings of fact where he has seen the witnesses and
formed views as to their credibility which are relevant to his conclusions,
I am satisfied that he was wrong to find that the tenancy agreement between
the parties was entered into on 1 August, or on any date prior to 4 August,
1995, and that Mr Mendis did not have authority to accept service on behalf
of the Defendant of the section 20 notice sent to him on that day, and to
hold that in any event a notice under section 20 may not validly be served
on an agent for the person who is to be the tenant under the tenancy.
| 87. |
Mr Pymont submitted that, if I considered that the judge's findings of fact
were not justified by the evidence, I should remit the case for a retrial.
I reject that submission. I am satisfied both that those of the judge's
findings of fact that I have mentioned were wrong, and as to what the
correct findings are on the evidence. There is no need for a new trial of
any of the issues.
| 88. |
I therefore allow the appeal and will declare that the tenancy granted by
the Claimant to the Defendant was an assured shorthold tenancy.
| |