Hardy & Anor v Haselden & Ors

An oral arrangement allowing occupation indefinitely at the occupiers’ choice, without a term certain, did not create a lease for lives. Although such terms might support a life tenancy, the statutory formalities for a disposition of land under s.54(2) and s.53 Law of Property Act 1925, or for a contract under s.2(1) Law of Property (Miscellaneous Provisions) Act 1989, still had to be satisfied. They were not. Section 149(6) Law of Property Act 1925 therefore could not convert the arrangement into a 90-year lease, and specific performance was unavailable. A failed CPR rule 39.3 application did not itself create issue estoppel against an appeal, although it remained a weighty consideration when seeking a retrial or fresh evidence.

The claimants occupied a farm after alleged oral arrangements with its registered proprietors. They paid rent and carried out repairs. They claimed a tenancy for their lives, taking effect as a 90-year term under s.149(6) Law of Property Act 1925, together with specific performance and damages.

The defendants did not attend the trial. District Judge Anson declared that the claimed tenancy existed, ordered execution of a lease and awarded £40,095. Applications under CPR rule 39.3 to set aside that order were refused by District Judge Bland and, on appeal, by HH Judge Appleton. The Court of Appeal considered whether the underlying declaration was legally sustainable and whether the earlier refusal prevented an appeal or retrial.

1. Disposition. The Chancellor gave the leading reasons, with which Lord Justice Hooper and Lady Justice Rafferty agreed. The time for filing the appellants’ notice was extended, permission to appeal was granted, and the appeal was allowed. District Judge Anson’s order was set aside and the claim was ordered to be retried in the Manchester County Court by a specialist Chancery Circuit Judge.
2. The alleged terms, particularly occupation for as long as the claimants wished, were inconsistent with a lease or tenancy for a term certain. The Chancellor applied the reasoning in Berrisford v Mexfield Housing Cooperative Ltd [2011] UKSC 52. While the arrangement might have supported a life tenancy, there was no written disposition or contract. It therefore failed to satisfy s.54(2) and s.53 Law of Property Act 1925, or s.2(1) Law of Property (Miscellaneous Provisions) Act 1989. There was no grant of a lease for lives to which s.149(6) Law of Property Act 1925 could apply, and no contract capable of specific performance. The declaration and lease order were unjustified and wrong in law.
3. The prior refusal of the CPR rule 39.3 application did not create an issue estoppel preventing an appeal. Under Bank of Scotland v Pereira [2011] EWCA Civ 241, a failed rule 39.3 application was nevertheless a weighty, though not conclusive, consideration on an application for fresh evidence or a retrial. The present appeal succeeded because the legal error was apparent from the claimants’ own case and did not depend on the defendants’ additional evidence.
4. The monetary award also had to be set aside. The £8,000 lost-profit claim was prima facie excessive because the implied covenant for quiet enjoyment fell with the invalid lease. Recovery would otherwise depend on a new cause of action which the defendants had to be able to contest. The £31,000 repairs claim raised issues not previously considered. The appropriate course was therefore to set aside the whole order and retry the claim. The fresh-evidence application was left unresolved; permission would not be required to rely on that evidence at the new trial.

1. Court of Appeal (Civil Division): In [2011] EWCA Civ 1387, the court extended time, granted permission to appeal, allowed the appeal, set aside the order of District Judge Anson and remitted the claim for retrial in Manchester.
2. Preston County Court: District Judge Anson granted the claimants a declaration of a 90-year tenancy, ordered execution of a lease and awarded £40,095 on 18 September 2008.
3. Preston County Court: District Judge Bland refused the defendants’ application under the relevant provisions of the Civil Procedure Rules 1998 to set aside the judgment on 26 January 2010.
4. Appeal to the circuit judge: HH Judge Appleton dismissed the defendants’ appeal on 8 February 2011, principally because the application had not been made promptly.