Daejan Properties Ltd v Campbell

Permission to appeal on lease construction may be granted where the proposed argument is reasonably arguable and has some prospect of success, even though the first-instance conclusion is strong. Arguability may depend on construing the lease in its historical and factual setting, including the property’s pattern of use and unusual or inconsistent provisions. An apparent discrepancy between references to “premises” and “house” should therefore not be treated as conclusively resolved without contextual assessment. Where further evidence existed below but was not adduced and may affect the interpretation of a later lease, the question of admitting it may be adjourned to the appeal hearing.

The landlord sought an oral renewal of permission to appeal from a judgment of Roth J in a dispute concerning a maisonette lease. The original lease was granted in 1958 and the current 99-year lease was granted in 1999 under the Leasehold Reform, Housing and Urban Development Act 1993.

The dispute concerned a contribution covenant referring to the landlord’s covenant to keep the “premises” in repair. The landlord argued that “premises” was a drafting error and should read “house”. Roth J accepted that construction. The tenant challenged the construction and sought to rely on further evidence, available below but not then adduced, concerning the parties’ earlier position. The central questions were whether the construction issue was reasonably arguable on appeal and whether the further evidence should be admitted.

1. Disposition. The application for permission to appeal was granted in respect of the construction issue. The question whether the further evidence should be admitted was adjourned to the hearing of the appeal.
2. Although Roth J’s conclusion was regarded as quite strong, and had been endorsed by Patten LJ on the papers, the construction argument was reasonably arguable and had some prospect of success. The court was entitled at the permission stage to consider the lease as it stood in 1958, including the pattern of use of the building and unusual features of the lease.
3. Those features included inconsistencies in the contribution and repairing provisions and a provision for a mutual deed of covenant between the tenants. They provided scope for argument that the reference to “the premises” in the landlord’s repairing covenant should not automatically be corrected to “the house”. The court did not determine the final construction.
4. The proposed further evidence had existed when the proceedings were heard below but had not been adduced. It might cast light on the parties’ position before the 1999 lease and therefore on how that lease should be understood. The court identified possible difficulties under Ladd v Marshall but left the admissibility issue for the appeal hearing.

The formal order was: application granted.

• Court of Appeal (Civil Division): On oral renewal, granted permission to appeal on the lease-construction issue and adjourned the further-evidence question to the appeal hearing.
• High Court, Chancery Division: Roth J held that the reference to “the premises” in the repairing covenant should be construed as a reference to “the house”.