Mean Fiddler Holdings Limited v London Borough of Islington

Permission to appeal may be granted on a preliminary issue where the first-instance reasoning is persuasive but reasonable arguments exist for the alternative view. If another unresolved issue could make the appeal academic, the appellate court may allow an application for directions, including an adjournment, to promote efficient disposal. In compulsory-purchase compensation, the relevant question under the Land Compensation Act is the market value of the interest and the effect of lease terms as viewed by the market. The court indicated, without deciding, that the statutory exclusion for activities contrary to law might not apply to activity contrary only to a lease.

The London Borough of Islington sought permission to appeal from Judge Rich’s preliminary decision in Lands Tribunal proceedings concerning compensation for the extinguishment of a nightclub business following compulsory acquisition. The judge held that the business arrangements did not breach the relevant lease covenant. He therefore did not decide the separate issue of waiver or estoppel, while the valuation issue was left for the substantive reference. The central procedural question was whether permission should be granted on the breach issue before the waiver issue had been determined, since the latter might make the appeal academic.

1. Permission to appeal. Lord Justice Carnwath gave the substantive reasons, with Lord Justice Waller agreeing. Although Judge Rich’s reasoning on the breach issue was persuasive, reasonable arguments existed in the opposite direction. Permission to appeal was therefore granted on issue A.
2. Case management. The court recognised that issue B, concerning waiver or estoppel, might be decided in the claimants’ favour and thereby render an appeal on issue A academic. The claimants were accordingly given liberty to apply to a single Lord Justice, preferably Carnwath LJ, by written representations for directions or an adjournment. This preserved the possibility of resolving the proceedings in the most efficient and economic manner.
3. Compensation. Carnwath LJ observed that the Tribunal’s basic task under section 5(2) of the Land Compensation Act was to assess the market value of the interest, including how the market would view the effect of the lease terms. This was not finally decided at the permission stage.
4. Rule (4). The court indicated that the provision excluding compensation for increases attributable to activities contrary to law might have no relevance where the activity was contrary only to a lease rather than to a public legal prohibition. The point was left for consideration by the surveyor member if the matter reached that stage.

Order: application allowed as to the issue of breach, with liberty to apply in writing for an adjournment pending determination of the waiver issue.

1. Court of Appeal (Civil Division) — Permission to appeal granted on the breach issue, with liberty to the claimants to apply by written representations for an adjournment pending determination of the waiver issue.
2. Lands Tribunal — Judge Rich determined the preliminary breach issue in favour of the authority, holding that there was no breach of covenant. The waiver or estoppel issue was not determined, and the valuation issue was reserved for the main reference.