London Borough Of Hackney v Amadi & Anor

A court has discretion to permit a counterclaim, but the overriding objective requires expeditious and fair case management. A counterclaim first raised at trial, without a drafted pleading and after breaches of directions, may properly be refused where it would disrupt the hearing. An occupier cannot rely on a councillor’s assurance as a local-authority licence without proof of authority or holding out. A letter offering a tenancy on terms and conditions to be agreed is an invitation to treat, not an offer capable of acceptance. Permission to appeal should be refused where the proposed grounds have no real prospect of success and no other compelling reason supports an appeal.

Hackney sought possession of a flat occupied by the defendants, together with monetary judgments. The property had originally been let to another tenant, who had sublet part of it to Mr Amadi. The defendants relied on a note from a councillor in 1989 and on a without-prejudice letter from Hackney in 1995 offering a tenancy on terms to be agreed.

At trial, the defendants were permitted to rely on two issues: whether the councillor had granted a licence and whether a tenancy agreement had been made in 1995. His Honour Judge Reid QC refused a late application to add an unpleaded counterclaim, rejected both defences, and ordered possession. The defendants renewed their application for permission to appeal and sought a stay. The central questions were whether the counterclaim should have been allowed and whether either alleged licence or tenancy agreement gave the defendants a legal right to occupy.

Lord Justice Peter Gibson dismissed the renewed application for permission to appeal. The application for a stay was also unsuccessful.

1. Counterclaim. The trial judge had a discretion to permit a counterclaim. That discretion had to be exercised consistently with the overriding objective in Civil Procedure Rules Part 1, including dealing with the case expeditiously and fairly. The application was made when the trial had begun, without a drafted pleading, after repeated procedural defaults and contrary to directions limiting the issues. Allowing it might have caused a further adjournment and was properly refused.
2. Alleged licence. The councillor’s note did not purport to grant a licence and read as advice. In any event, a licence could have legal effect only if the councillor had the Council’s authority or the Council had held him out as having authority. His elected status and leadership of the dominant political group did not establish authority. A Council subcommittee’s reference to a possible moral obligation did not create a legal right. The later indication that the occupier was to be evicted was inconsistent with any continuing licence.
3. Alleged tenancy agreement. The 1995 letter stated that the proposed tenancy was subject to terms and conditions to be agreed. It was therefore incapable of acceptance as a concluded contract and amounted only to an invitation to treat. Even if it had been an offer, the defendants had to prove acceptance and agreement of the tenancy terms. The judge was entitled to find that the alleged letters had not been received, and unsupported assertions about other documents could not establish a contract.
4. Permission threshold. The proposed appeal had no real prospect of success and there was no other compelling reason for it to proceed. The formal order was: application dismissed.

• Court of Appeal (Civil Division): On 21 May 2001, Lord Justice Peter Gibson dismissed the renewed application for permission to appeal and the application for a stay. [2001] EWCA Civ 850
• Central London County Court: His Honour Judge Reid QC ordered possession of the property and entered monetary judgments against the defendants on 21 December 2000.