PA (Pension) Ltd v Kempster & Anor

On a renewed application for permission to appeal, the Court of Appeal may relist the matter with a stay where new evidence and a potentially arguable legal issue require informed argument and the attendance of an affected party. The fact that the point was not pleaded below remains a serious obstacle. If the point were entertained, a new trial might be required, a course approached with reluctance. An adjournment may give a party time to raise funds and discharge the judgment debt, but it does not amount to permission to appeal or indicate that the appeal will succeed.

Tenants applied for permission to appeal against orders made by His Honour Judge Cowell in the Central London County Court. The landlord had obtained possession and money judgments following forfeiture of a commercial and residential lease for rent arrears and alleged covenant breaches. The judge rejected the tenants’ proposed set-off for structural repair expenditure and their case that the landlord had agreed to fund the works. Permission to appeal was refused.

On renewal, the tenants relied on evidence that funds might be raised by remortgaging or selling another property. They also advanced a contention, not properly pleaded at trial, that forfeiture would give the landlord an unconscionable windfall because it had encouraged expenditure on structural repairs. The central issue was whether the applications should be relisted for fuller consideration.

Lord Justice Chadwick ordered that the renewed applications for permission to appeal, together with the applications to rely on further evidence, be relisted on notice to the landlords for a hearing before a two-judge court in July 2002. Execution was stayed in the meantime. Any appeal was to follow only if permission were granted.

1. Further consideration required. The new material suggested that the tenants might obtain sufficient mortgage finance to discharge the arrears and costs. More importantly, the tenants raised a legal argument that the landlord had encouraged expenditure on structural repairs and might obtain a substantial windfall if permitted to forfeit the premises without compensation. The judge considered that point required fuller consideration, informed argument and an opportunity for the landlord to attend and be heard. The tenant should also have the opportunity to obtain legal representation.
2. Unpleaded point. The argument had not been properly raised in the pleaded case or at trial. If it were permitted to affect the appeal, the likely consequence would be a new trial. The Court of Appeal would approach that course reluctantly because the point had not been taken below, although the tenant had been unrepresented and had sought an adjournment.
3. No indication on the merits. The adjournment was not ordered merely to allow the tenant to raise funds. It did not imply that permission would be granted or that the appeal would succeed. The tenant was warned to prepare to meet the arrears and costs if the legal point failed.

• Court of Appeal (Civil Division): Renewed applications for permission to appeal and to rely on further evidence were relisted on notice to the landlords, with a stay of execution pending the hearing before a two-judge court.
• Central London County Court: His Honour Judge Cowell held after trial that the tenants could not set off the cost of structural repairs against rent, rejected the alleged agreement that the landlord would pay for the works, and gave judgment for the landlord with possession, arrears, interest, mesne profits and costs. Permission to appeal was refused.
• High Court, Chancery Division: The proceedings were commenced there. Master Price gave conditional permission to defend the claim and transferred the proceedings to the County Court.