Peakstone Commerce Limited v Aziz Abdul Hozan Rahman

A judge is not confined to the claimant’s pleaded case. The judge must decide the issues raised by the parties and will generally be unable to rely on a basis neither pleaded nor canvassed. The controlling consideration is the interests of justice, especially prejudice to the losing party. Where the decisive basis is squarely set out in the defendant’s own pleadings, deciding the case on that basis does not ordinarily create procedural unfairness, even if it differs from the claimant’s case or an amendment to plead another basis was refused. A statutory continuation of a tenancy under section 24 of the Landlord and Tenant Act 1954 is distinct from an implied periodic tenancy.

Peakstone sought rent, interest, double rent or mesne profits concerning a garage occupied by Mr Rahman. The trial judge found that Mr Rahman had executed a 2010 lease, backdated to April 2010, and had remained in occupation until August 2021. Judgment was entered for Peakstone, and Mr Rahman’s counterclaim was dismissed.

HHJ Hodge KC dismissed Mr Rahman’s first appeal. On the second appeal, permission was granted on one ground only: whether the result could be upheld by reference to the statutory continuation of the tenancy created by the December 2002 lease, although that was not Peakstone’s pleaded case and an amendment concerning a different tenancy had been refused.

1. Disposition and scope. The appeal was dismissed. Permission had been granted on ground 2 only. The factual finding that Mr Rahman remained in occupation between 2018 and 2021 was not open to challenge. The issue was whether the first appeal judge was wrong to conclude that the same outcome followed without reliance on the 2010 lease.
2. Different tenancy concepts. The implied periodic tenancy which DDJ McNall had refused permission to plead was said to have begun in or around April 2010 if the 2010 lease had not been entered into. The basis relied on by HHJ Hodge KC was different: it was the statutory continuation under section 24 of the Landlord and Tenant Act 1954 of the fixed-term tenancy created by the December 2002 lease. That was not an implied periodic tenancy, so the refusal of permission did not determine the issue relied on by the Judge.
3. Pleading and prejudice. A judge generally cannot decide a case on a basis neither pleaded nor canvassed. The judge is not, however, confined to the claimant’s case. The pleadings include the cases advanced by both parties. As explained through Ali v Dinc [2022] EWCA Civ 34, Phones4u v EE & Others [2025] EWCA Civ 869, Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041 and Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287, the controlling question is the interests of justice, particularly whether reliance on the basis caused prejudice to the losing party.
4. Application. Mr Rahman’s signed defence and counterclaim squarely pleaded the December 2002 lease and continued occupation under section 24 at rent of £500 per month. Peakstone’s Respondent’s notice also identified that basis. Treating Mr Rahman as bound by his own pleaded case caused no procedural unfairness. He could not insist that Peakstone be confined to its pleadings while denying the effect of his own.
5. Result. On the trial judge’s findings, the statutory continuation supported liability for rent until July 2021, followed by double rent or mesne profits for the short subsequent period. The first appeal judge therefore made no error in upholding the outcome.

1. Court of Appeal (Civil Division): In this judgment, [2026] EWCA Civ 347, permission was granted on ground 2 only and the appeal was dismissed.
2. County Court at Manchester, HHJ Hodge KC: The defendant’s first appeal was dismissed, with further costs awarded against him.
3. County Court at Manchester, DJ Banks: Judgment was entered for Peakstone for rent arrears, interest and costs. The defendant’s counterclaim was dismissed.