Brennan v Kettell & Ors

An appellate court may adjourn an appeal where separate proceedings raise an issue fundamental to the appeal and, if successful, would provide a complete answer to it. A late application, substantial previous costs and inadequate earlier notice do not necessarily prevent an adjournment, but call for stringent protective terms. Those terms may include indemnity costs and an undertaking to prosecute the related proceedings with all reasonable despatch.

Mrs Brennan held a long lease of business premises. Mismatched plans created an issue over an area apparently included in both her lease and a later lease granted by the Royal Bank of Scotland to the Kettells. Judge Maddocks rectified Mrs Brennan’s lease and the registered title to the Kettells’ lease, but did not rectify the second lease because no such claim had been made.

The Kettells’ Part 20 claim against the Bank alleged breach of a covenant for quiet enjoyment. The judge rejected that claim, and the Kettells appealed. The Bank subsequently commenced separate proceedings seeking rectification of the second lease and applied to adjourn the appeal pending their determination. The central issue was whether that separate claim was sufficiently fundamental to justify delaying the appeal.

The Court of Appeal unanimously granted the Bank’s application and adjourned the appeal until the final determination of the separate rectification claim.

1. The rectification claim concerned whether the disputed area formed part of the premises demised by the second lease. If successful, it would provide a complete answer to the quiet-enjoyment issues raised by the appeal. The issue was therefore fundamental and crucial to the appeal.
2. The court considered whether it could determine the rectification issue itself on the findings made by Judge Maddocks. That course was unavailable because counsel for the Kettells had no instructions on the point and was not prepared to argue it. It could also have required the Kettells to surrender the possible argument that the second action was an abuse of process.
3. The application was made late. The Bank had not disclosed the proceedings until the appeal was opened, had previously indicated that it would not seek an adjournment, and the costs already incurred were disproportionate to the sums at stake. Those matters required the adjournment to be granted only on stringent terms. They did not outweigh the need to await determination of an issue capable of disposing of the appeal.
4. The Bank undertook to prosecute the rectification claim with all reasonable despatch, subject to any application by the Kettells to dismiss it as an abuse of process. The Bank was ordered to pay the costs of and occasioned by the adjournment on the indemnity basis, summarily assessed at £6,000.

• Court of Appeal (Civil Division) Adjourned the appeal until final determination of the Bank’s separate rectification claim and ordered indemnity costs of £6,000.
• High Court of Justice, Chancery Division, Liverpool District Registry Judge Maddocks allowed Mrs Brennan’s rectification claim concerning the first lease and the registered title to the second lease, but rejected the Kettells’ quiet-enjoyment claim against the Bank.