England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ORDER OF HIS HONOUR JUDGE BRADBURY
(Sitting at the Central London County Court)

		Royal Courts of Justice Strand, London WC2 Tuesday 16th January 2001

Tuesday 16th January 2001

THE VICE CHANCELLOR: This is the appeal of the defendant,

Mr Mohammed, brought with the permission of Potter LJ from the order of His Honour Judge Bradbury, sitting in the Central London County Court, made on 12th July 2000. By that order the judge ordered Mr Mohammed to give possession of a flat, 33D Craven Road, London W2, to the claimant, Mr Leeman. He dismissed Mr Mohammed's counterclaim. There are outstanding issues as to damages sustained by Mr. Leeman which were adjourned by the judge to be tried later.

The issue between the parties depended and depends on whose interest in the flat took priority. Mr Mohammed claimed by virtue of an assignment of a leasehold interest, dated 7th July 1999. Mr Leeman claimed under an underlease dated 8th July 1999, granted to him by the same persons who were the assignors to Mr Mohammed. In addition to his appeal Mr Mohammed also seeks permission to adduce fresh evidence. In the light of that fresh evidence the order he seeks from us is an order for a new trial.

It is necessary to explain the background facts in some detail. The title to the property starts with a lease dated 23rd October 1963 of 33, 35 and 37 Craven Road and other property granted by Lintang Investments Ltd to a Mr and Mrs Soteriades for 150 years from 25th March 1957. In 1986 a sublease was carved out of that headlease in respect of 33D Craven Road, when Saffron Valley House Ltd granted to Sylvester Mittee a lease thereof for 120 years from 25th March 1984 at an annual rent of £100. On 8th July 1986 Mr Mittee's leasehold title was registered under title number NGL 558110.

Between 1986 and 1996 there were a number of transactions with the lease apparently effected by Mr Mittee. It seems likely that on 15th November 1989 he transferred the benefit of the lease to Mr Webb, and subsequently with or without his concurrence Mr Webb transferred the lease to a Mr Walker. Certainly it is that on 20th December 1989 Barclays Bank paid £260,000 to solicitors acting for Mr. Walker as a mortgage advance to enable Mr. Walker to purchase the lease, the loan to be secured on it.

It seems there was some evidence before the judge to the effect, that all this was part of some mortgage fraud. In 1991 Barclays registered a caution against the leasehold title on the footing that they were equitable mortgagees, having lent the money I have mentioned to Mr Walker to finance his purchase of the lease. That caution is still outstanding and its existence is the explanation for the unusual transactions which took place between the parties to this appeal. On 11th September 1996 Mr Leeman acquired the reversionary headlease from Saffron and his title was duly registered at that time. Therefore he became the lessor to Mr Mittee.

Coming then to 1999 the relevant events start on 26th May 1999 when a power of attorney was apparently granted by Mr Mittee to Mr Walker authorising him to let the flat to Mr Mohammed. According to Mr Mohammed on 30th May 1999 he moved into the flat. Then on 1st July 1999 two further powers of attorney were apparently granted by Mr Mittee to Mr Walker. The first one authorised him to dispose of the flat to Mr Mohammed, and the second authorised him to deal with the lease generally without identifying the person in whose favour it might be disposed.

On that day also there was an agreement entered into apparently between Mr Mittee and Mr Mohammed, Mr Mittee acting by Mr Walker as his attorney for the latter to buy the lease from the former for £60,000 payable by instalments, the transactions to be completed on 6th July 1999. The following day, on 2nd July, through his solicitors, Mr Mohammed registered a caution against the leasehold title in respect of his agreement to buy that lease from Mr Mittee. I mention that as part of the history, although it has no bearing on the issues before us because, as the judge found, the caution was ineffective as it had been lodged during the priority period of an official search made on behalf of Mr Leeman to protect the registration of a lease to be granted to him subsequently. The assignment of the lease from Mr Mittee to Mr Mohammed was due to be completed on 6th July, but was deferred due to some disagreement or uncertainty as to whether the rent and other outgoings had been duly paid. Thus it was that it was not completed until 7th July 1999 when a transfer of the benefit of the lease from Mr Mittee to Mr Mohammed was completed by Mr Walker, not only on his own behalf but also as attorney for Mr Mittee. That is the transaction under which Mr Mohammed claims title to possession of the property in priority to that of Mr Leeman.

The transaction in favour of Mr Leeman took place the following day, 8th July 1999. Through the attorney granted by Mr Mittee to Mr. Walker, Mr Leeman took an underlease of the flat for 21 years from 8th July 1999 at a rent of £25,000 for the first year, £15,000 for each of the next three years and a peppercorn rent for every year thereafter. The underlease contained various covenants by Mr Walker and Mr Mittee not to deal in any way with the reversion to the lease. It also contained two options to renew the lease for successive periods of 21 years at a peppercorn rent.

It is clear now, but was not before the judge because the relevant documents had not, as they should have been, been disclosed, that on the same day, that is to say 8th July 1999, two further leases were granted by Mr Mittee through his attorney, Mr walker, to give effect to the options for renewal if in due course they were properly exercised. Each of those leases was dated 8th July 1999 and was expressed to run from 8th July to respectively 2020 and 2041. In each case the rent was a peppercorn and covenants in each of the leases, and of the first lease, were in substantially identical terms.

On 19th July Mr Leeman registered a caution also against

Mr Mittee's title to the leasehold interest. These proceedings were started by Mr Leeman on 27th October 1999. He sought possession of the flat and other relief by way of damages against Mr Mohammed. He did so on the basis that Mr Mohammed had no interest in the flat and had tried to go into possession of it on 2nd August 1999. Mr Mohammed's defence was filed on 7th December. He claimed to have gone into actual occupation of the flat on 30th May 1999. He claimed to have contracted with Mr walker as the beneficial owner to buy the reversionary sub-lease and to having taken a transfer of the same duly executed by Mr Walker as the attorney of Mr Mittee, the legal owner.

As I have indicated, the matter came before Judge Bradbury on 3rd July 2000. He heard oral evidence from Mr Leeman,

Mr Mohammed and Mr Mohammed's solicitor, Mr Lazarus. The judge was plainly unimpressed. He commented in his judgment that:

"Both the claimant and the defendant have however they say been willing to deal with Mr Mittee through Mr Walker, who they have been willing to regard as Mr Mittee's agent. The fact that each of them has chosen to do that raised doubts in my mind about the integrity and/or the gullibility of both the claimant and the defendant."

In relation to the evidence of Mr Lazarus he said:

"Over the years I have heard many solicitors give evidence. I cannot recall one who appeared to me to be quite to so uncertain and apparently confused in his responses as Mr Lazarus appeared to be when he gave his evidence. My conclusion, having heard oral evidence from him and his client, is that neither he nor his client had any intention at all of seeking to register the transfer to the defendant. Indeed, I am satisfied that there was a deliberate decision not to register the transfer because of the Barclays Bank caution, and the caution recorded on 5th July 1999 in favour of the defendant was instead to be used to try to protect the defendant's position."

In relation to the evidence of Mr. Mohammed concerned with whether he was in actual occupation of the property on 8th July 1999, he referred to his evidence to the effect that he had moved two beds into the property and by inference was sleeping there as "an obvious lie."

The conclusions reached by Judge Bradbury are fully set out in the transcript of his judgment. He concluded that the power of attorney authorising Mr Walker to deal on behalf of Mr Mittee with the flat generally had been in existence on 1st July 1999. It followed from that finding that the lease to Mr Leeman on 8th July was valid. He concluded, as I have indicated, that Mr Mohammed nevertheless intended to register the transfer of the lease in his favour, but he concluded that the consequence of that was that the transfer in favour of Mr Mohammed was unauthorised and of no effect. He considered that the statement of Mr Mohammed that he had left two beds in the flat was an obvious lie, and decided that at no time before 8th July had Mr Mohammed stayed at or left possessions in the flat. His conclusion was that Mr Mohammed was not in actual occupation of the flat on 8th July 1999.

The first application of Mr Mohammed for permission to adduce fresh evidence on that hearing was made on 14th August 2000. He seeks leave in respect of five statements, one from a Dr Critchlow made on 11th August 2000, the second from Mr Philip Centurione dated 13th July, a statement of Mr Ali, a statement of Mr. Komayli dated 10th August and a statement of Mr Alex Liu, dated 10th August 2000. In addition, he seeks leave in respect of certain photographs he claims were taken by himself on 12th June 1999 and which bear a date stamp to that effect.

The second application for permission to adduce fresh evidence was made on 2nd December 2000. The fresh evidence in respect of that application consists of a statement of Mrs Betty Nwosu dated 16th October 2000. The six statements to which I have referred up to now all deal with the question of whether or not Mr Mohammed was in actual occupation of the flat during the month of June in the year 1999.

The second application also seeks leave to adduce a statement from Mr Walker, whom neither party had sought to call to give evidence at the first hearing in relation to the execution of the three leases in July 1999. In addition, the application covered a statement of Mr Mohammed's current solicitor and certain correspondence with Barclays Bank in respect of which the application was not pursued. These applications in turn led to a response from Mr Leeman who in turn relied on statements primarily from his builders dated 4January 2000 and 10th December 2000.

In this state of affairs the case for Mr Mohammed can be summarised as follows. He claims that on the signing of the contract dated 1st July 1999 he thereby obtained an equitable interest in the flat. He submits that it is irrelevant to that proposition, if it be the case, that the parties never intended that transfer to be registered. He submits that the judge was wrong to have concluded that Mr. Mohammed was not in actual occupation at the time of the lease to Mr Leeman. In addition, he contends that the judge was wrong to have accepted that the lease to Mr. Leeman was properly executed because of the suspicious circumstances in which the third power of attorney had been produced.

The fresh evidence in his submission demonstrated that he, Mr Mohammed, was in actual occupation on 8th July 1999 and that Mr Leeman should have registered his three leases as a single composite term of 63 years rather than as three separate leases for individual terms of 21 years, the alleged consequence being that his interest was equitable only and subsequent in time to that of Mr Mohammed so that Mr. Mohammed's interest obtained priority.

The case for Mr Leeman is to the effect that the fresh evidence on actual occupation should not be admitted. It was available at the trial, it is not credible and it is insufficient to disturb the judge's findings of fact. It is submitted that the admission of the evidence of the three leases, which was not in the end opposed, made no difference to the issues which we have to determine on this appeal.

Mr Leeman supports the judge's conclusion that Mr Mohammed was not in actual occupation on 8th July 1999 and submits that that finding of fact is crucial and fatal to the defence of

Mr Mohammed. In addition, it was submitted that the judge's conclusion that Mr Mohammed did not intend to complete his purchase by registration did invalidate his interest for the purpose of section 70(1)(g) of the Land Registration Act and that proposition was not challenged in the notice of appeal. In addition, he submitted that Mr Mittee had no beneficial interest capable of being assigned to Mr Mohammed, the only interest he could pass to Mr Mohammed being the legal interest which was invalidated by section 122 of the Land Registration Act.

I can express my conclusions in relation to the chronological sequence of events as follows. The contract entered into between Mr Mittee and Mr Walker on the one hand, and Mr Mohammed on the other, on 1st July 1999 for the sale of the residue of the 120 year lease granted to Mr Mittee was valid and effectual to confer on Mr Mohammed an equitable interest in the lease capable of being an overriding interest. This appears to me to be clearly established by the decision of Harman J in Bridges v Mees [1957] 1 Ch, 475 at 486. But until the consequential transfer was registered, which it never was, Mr Mittee was deemed to remain the proprietor and therefore capable of granting interests, having priority over that of Mr Mohammed (See Land Registration Act 1925 section 22(1).)

The attempt to protect Mr Mohammed's minor interest by means of the caution sent to the Land Registry on 2nd July 1999 failed because of the priority notice to which the judge referred in the transcript of his judgment at page 8G. The completion of the contract by the transfer executed on 7th July 1999 in favour of Mr Mohammed does not assist him either because it was never registered. (See section 22(1) of the Land Registration Act 1925.) It seems to me to be wholly immaterial whether the failure to register was intentional or not. In the case of compulsory registration the Act provides for subsequent invalidation for want of registration. (See sections 123 and 123A of the Land Registration Act as amended.) There is no such time limit regarding the registration of transfers and I do not consider that section 109 of the Land Registration Act 1925 has any effect on the validity of the equitable interest originally obtained under the contract.

The grant of a lease for 21 years or less thereby confers a legal estate on the grantee as if it were a registered disposition. (See the concluding words of section 22(2) of the Land Registration Act.) Consequently if the lease granted to

Mr Leeman by Mr Mittee and Mr Walker on 8th July 1999 fell within section 22(2)(a) of that Act, Mr Leeman obtained a legal estate subject only to overriding interests under section 70(1)(g) of the Land Registration Act.

Mr. Mohammed seeks to go behind the judge's finding as to the authenticity of the power of attorney under which the lease to Mr Leeman was granted, but there does not appear to me to be any justification for doing so. There is no fresh evidence directed to that issue. With regard to the two further leases it is true that they should have been disclosed on discovery, but I see no justification for the suggestion that the original lease was a sham, or the power of attorney false. The subsequent leases are explained by the options contained in the contract. There is now no other evidence on the point either in relation to those leases or to the grant of the power of attorney or to the production in the various forms in which they were respectively produced.

The further leases ran from 8th July 2020 and 2041 respectively at a peppercorn rent. But were they executed in escrow to give security against the exercise of the contractual options?. If they were, then they can have no effect on the outcome of the appeal. But the judge made no finding on that point. He could not have done because he did not know about them. If, as I assume, they were not executed in escrow then the third lease is undoubtedly avoided by section 149(3) of the Law of Property Act 1925, but that conclusion is irrelevant to any point we have to decide. I find it unnecessary to reach concluded view as to whether the second lease is likewise avoided for there are two other grounds on which it is clear that the second lease is irrelevant too. First, it is clear that there is no merger of the first and second leases at common law. This is clear from the judgment of Nicholls LJ (as he then was) in Toyota (GB Ltd v Legal and General Assurance (Pensions Management) Ltd [1989] 1 EG 123. In that case at page 124(L) Nicholls LJ said:

"The two leases were executed as part of a single transaction, and their linkage is underlined by the provision in the second lease that the demise thereby made was subject to the first lease not having been forfeited. This is not to say that the two leases can be treated simply as if they were one. The distinction between the two leases is in law a real one. For example, the covenants under the two leases relate to different periods of time. A breach of covenant by the tenant leading to a right to forfeit the first lease would not necessarily be a breach of covenant by the tenant of a covenant in the second lease. Furthermore, although the two documents were executed at the same time, the question ultimately is what is the true construction of the language appearing in the individual document. Nevertheless, it is proper to have some regard to both documents when construing each of them as individual deeds."

So in this case assuming the two leases to have been executed at the same time and as part of the same transaction, they were pursuant to the contractual term giving effect to options to extend and they related expressly to different terms. Thus the covenants, although in the same terms, had substantially different effect and there was no possibility of a merger between the two leases. It seems to me, therefore, that for that reason the second lease is irrelevant. But also our attention was drawn to the provisions of Land Registration rule 47 which provides as follows:

"Where a lease in possession and a reversionary lease to take effect in possession upon, or at any time within one month after, the expiration of the first-mentioned lease, are so held that the interest under both instruments belongs to the same person in the same right, such leases, so far as they relate to land comprised in both instruments, shall be deemed for the purposes of section 8 of the Act, and of these rules, to create one continuous term."

Section 8 of the Act deals with the question of permissive registration of leaseholds. So far as relevant it provides that:

"Where the title to be registered is a title to a leasehold interest in land -

(a) any estate owner...holding under a lease for a term of years absolute of which more than twenty-one are unexpired, whether subject or not to encumbrances;

...

may apply to the registrar to be registered in respect of such estate..."

Thus it is clear that rule 47 deems the two leases that comply with its terms to have been a single lease for one continuous term, and if the continuous term amounts to more than 21 years unexpired at the date of application for registration, then the owners of the leases can apply under section 8.

What rule 47 does not do is have any effect on the provisions of section 22 which, except from the requirement to register a transfer of a lease, or the grant of a lease for a term not exceeding 21 years. It follows therefore that rule 47 is not applicable. There is nothing therefore in the Land Registration Act which requires these two leases to be treated as one. Nor, for the reasons given by Nicholls LJ in the Toyota case, is there anything in the common law either to that effect.

Section 22(2) of the Land Registration Act provides:

"An underlease made by the registered proprietor which is not required to be registered or noted on the register shall nevertheless take effect as if it were a registered disposition immediately on being granted."

If it were a registered disposition, then the legal estate would be vested in the lessee. It follows that on the grant of the lease, which was for not more than 21 years, Mr Leeman obtained a legal estate; that is to say, on 8th July 1999.

It also follows from the foregoing that Mr Mohammed's interest lost its temporal priority vis a vis the lease to Mr Leeman unless it was an overriding interest within section 70(1)(g). That depends whether Mr Mohammed was in actual occupation of the flat on 8th July 1999. What constitutes actual occupation depends on the nature of the property and all the facts of the case. See Lloyds Bank v Rosset [1989] 1 Ch 350), where at page 377 Nicholls LJ said:

"In my view the test of residence propounded by the bank is too narrow. As the judge observed, what constitutes occupation will depend upon the nature and state of the property in question. I can see no reason in principle and in practice, why a semi-derelict house such as Vincent Farmhouse should not be capable of actual occupation whilst the works proceed and before anyone has started to live in the building."

The same point was made by Lord Oliver in Abbey National Building Society v Cann [1991] 1 AC 56, at page 93 where he said:

"It is, perhaps, dangerous to suggest any test for what is essentially a question of fact, for "occupation" is a concept which may have different connotations according to the nature and purpose of the property which is claimed to be occupied. It does not necessarily, I think, involve the personal presence of the person claiming to occupy. A caretaker or the representative of a company can occupy, I should have thought, on behalf of his employer. On the other hand it does, in my judgment, involve some degree of permanence and continuity which would rule out mere fleeting presence."

All the fresh evidence in relation to actual occupation was available to Mr Mohammed at the trial. Its effect could be crucial, but its credibility depends upon cross-examination at a new trial. Thus it cannot be said that it would have an important impact on the result, only that it might. There was originally no indication that Mr Mohammed could pay the costs of the proceedings so far, let alone the cost of a re-trial if he failed. During the course of the hearing he offered through his counsel to pay the costs of Mr Leeman to date and to provide security for the costs of a new trial.

For my part, I would reject his application for permission to adduce the fresh evidence on actual occupation. The power to admit fresh evidence is contained in the Civil Procedure Rules, rule 52.11(2) the principles applicable to the exercise of the discretion of the court thereby conferred have been explained in three recent decisions of this court. I quote from my own judgment in Banks v Cox [17th July 2000] Paras 40-42 as follows:

"Thus the permission of the Court is still required but it is no longer necessary to show 'special grounds'. The discretion of the Court under this rule must also be exercised in accordance with the overriding objective.

"In my view, the principles reflected in the rules in Ladd v Marshall remain relevant to any application for permission to rely on further evidence, not as rules but as matters which must necessarily be considered in an exercise of the discretion whether or not to permit an appellant to rely on evidence not before the Court below. As May LJ, with whom Forbes J and I agreed, said in Hickey v Marks (Court of Appeal 6th July 2000) unreported:

"The principle for the future will be that, since the Civil Procedure Rules are a new procedural code, the former body of authority will not apply, although of course the intrinsic persuasiveness of all relevant considerations, including, if they arise, those which were considered persuasive under the former procedure, will be capable of contributing to a just result.

"The contrary was not argued. For my part, I would accept as apt the description of counsel for Mr and Mrs Cox that the court is free from the straitjacket of the so-called rules."

That dictum was applied by this court in Hertfordshire Investments Ltd v Bubb [2000] 1 WLR 2318. Thus the first point is whether with reasonable diligence the evidence now sought to be adduced could have been available at the trial. Mr Mohammed frankly accepts the answer is yes. As he said in paragraph 5 of his witness statement made on 11th August 2000:

"I believed that the evidence to be given by myself and my solicitor would be more than sufficient to show actual occupation, hence I did not take steps to ask Messrs Centurione, Crichlow, Komayli, Liu and Abd-Allah to verify the fact of my occupation and as far as the photographs are concerned, I had not appreciated that they provided actual evidence of my possession of the flat. It was only when I discovered that the trial judge had not accepted my witness evidence that I remembered taking the photographs. I immediately looked at them and discovered that they provided unequivocal evidence that, contrary to the judge's finding, the two beds were indeed in the flat as of 12th June 1999. I drew my solicitor's attention to the existence of this evidence, as I felt it ought to have been considered by the Court."

Whatever may be said about the statements of others the explanation given by Mr Mohammed for not producing the photographs is, to say the least, surprising.

Is the evidence for which he seeks permission to adduce at this late stage prima facie credible, and would it have an important influence on the result of the case? Counsel for

Mr Mohammed emphasised that none of the six witnesses had any axe to grind. All of them apparently speak to the same effect that Mr Mohammed was living in the flat with two beds in one room in June 1999. For my part, I accept that none of the six had apparently any axe to grind, but it must be noted that their evidence is inconsistent with the case for Mr Mohammed and undoubted contemporary documents. His case is that he went into occupation in May 1999. The new witnesses speak to the position as at June 1999. The relevant dates are 1st and 8th July 1999 respectively, the date of Mr Mohammed's contract and the grant of the lease to Mr Leeman.

But the case for Mr Mohammed is inconsistent with, for example, a letter at page 79 in the bundle dated 30th June 1999 and apparently signed by Mr. Walker. It is addressed to

Mr Mohammed in relation to the flat and says:

"This letter is to confirm that I have today changed the locks on the property and given you the new keys. I also give you permission to enter the property on my behalf."

Why, submits counsel for Mr Leeman, should that letter come to be written if Mr Mohammed was, as he claims, in occupation of the property and had been at all times since 30th May? Likewise, occupation in June is apparently inconsistent with the terms of the contract which was executed on 1st July 1999. This document, at pages 16 to 18 of the bundle, was apparently signed by Mr Walker as seller, although the seller is described in the text as Mr Mittee. It describes the buyer as Mr Mohammed, provides for completion on 6th July 1999 and a purchase price of £160,000, of which £2,000 had already been paid by the buyer to the seller. If, as Mr. Mohammed claims, he was already in occupation of the property it is difficult to understand why Mr Lazarus, on his behalf in preparing this contract, should have included special conditions 2 and 10. Special condition 2 provides:

"The seller shall allow the buyer immediate access to the property forthwith on exchange of contracts to enable the buyer to commence redecoration of the property and to measure the property etc."

Obviously that would not be necessary if indeed Mr Mohammed had been in occupation since 30th May. Likewise, condition 10 provides:

"Completion shall be conditional on the seller providing satisfactory written confirmation to the buyer that the freeholder/head lessor and his servants or agents will no longer occupy the property without the consent of the buyer."

That would seem to be odd if indeed Mr Mohammed, as he claimed, had been in occupation consistently and continually since 30th May. Occupation by Mr Mohammed in June is also inconsistent with the evidence of Mr Lazarus of a conversation that he had with Mr Mohammed on 7th July. That conversation is recorded in an attendance note and therefore the date of it is clearly fixed. The note records advice having been tendered by Mr Lazarus to Mr Mohammed on 7th July. The further cross-examination of Mr Lazarus went like this:

"Your advice seems to have been along the lines of this, that Mr walker was not necessarily someone who was a straightforward businessman and to avoid any problems Mr Mohammed should take up occupation as soon as possible. Is that right?

A. No. Mr Mohammed told me that he had been visiting the property on a daily basis. He had told me about the difficulties he had prior to exchange about finding Mr Leeman's builders there and I said to him by way of practical advice to avoid the matter going backwards and forwards, each one asserting occupation, that it was a sensible step to ensure that there was somebody staying at the flat. I thought that was a piece of practical advice to avoid the police being called every 10 minutes to adjudicate on who had the right to be there.

Q. The police were called for the first time a week later, were they not?

A. My client showed me, or I had seen the letter of 30th July..."

That is a mistake for 30th June.

"...written by Walker. I had seen the letter of 1st July by Walker to Shaw & Croft and I felt it was a sensible step for my client to take that he or somebody should be there full time."

The point is obvious. If Mr Lazarus was telling the truth, the six additional witnesses must be mistaken in the evidence that they are invited to give on behalf of Mr Mohammed.

Finally, there was no cross-examination of Mr Leeman at the first trial before Judge Bradbury about the beds being in situ by June 1999. Mr Leeman had given clear evidence that he visited the flat four times a day because he was in effect the relevant clerk of the works. He had given evidence as to the continual presence of his builders and of their materials in the flat for the purpose of restoring the roof. The allegation of the beds did not crop up until after Mr Mohammed's examination in-chief, and a substantial way into his cross-examination. It arose in this fashion:

"I was at my solicitor's office signing the exchange with Mr Walker."

I interpolate on 1 July.

"Q. By this time you had not moved any belongings into the property.

A. I had two beds there. I moved them between ---

Q. I say you have just made that up. That has not been suggested before, has it, that you moved beds into the property?

A. You asked me what did I do to the property in terms of repairs and refurbishment.

Q. Is there any reason why Mr Leeman could not have been asked if there were beds in the property that you know of?

A. I do not understand your question.

Q. What I am suggesting is that you have never mentioned beds going into the property before and you are doing that because you have just thought of it.

A. No, it was between May and June, when I realised that

Mr Leeman had broke in and I sorted out the electrics and the plumbing to the bathroom, I decided to move in until the dispute is sorted out. The flat was never finished totally.

Q. When was that? Before you signed the agreement in your solicitor's office?

A. Before, yes."

Counsel for Mr Mohammed seeks to explain the late introduction of the account in relation to the beds on the footing that it had been agreed between him and Mr Short on behalf of Mr Leeman that the evidence of actual occupation might be dealt with on a somewhat informal basis, and that he himself had only shortly before the hearing replaced counsel who had before that been consistently acting on behalf of Mr Mohammed. So be it, but the fact is this was an addition. The matter had never been put to Mr Leeman in cross-examination and the judge was apparently entitled, as he did, to find that it was a lie created in the witness box for satisfying the judge as to a matter in respect of which Mr Mohammed found himself in difficulties.

In addition, it is noteworthy that even at that stage no reference was made to the photographs on which Mr Mohammed now relies, and Mr Mohammed did not even then claim to have been sleeping in the beds in June. For my part, I do not think the new evidence is so compelling as to necessitate its admission. All it would do would be to lead to a new trial. I am by no means persuaded that the result is likely to be any different.

Finally, I turn to the offer to pay the wasted costs of the first hearing. It was made in response to questions from the court, and the validity and worth of the offer has not been examined by Mr Leeman. For my part, I do not think it should lead us to make any different decision from that which we would have made anyway. If, as Mr Mohammed frankly admitted, the evidence was available at the time of the trial, then it is not just to permit Mr Mohammed to buy his way out of the problems of his own making. First, it would not compensate Mr Leeman for the delay or worry of continuing litigation. Second, it ignores the effect on other court users if parties can so re-open matters if the tactics they deliberately pursued at the first trial prove not to be effective. Accordingly, I, for my part, would reject the application for permission to adduce all the fresh evidence except in relation to the two reversionary leases. In those circumstances, there is no ground on which to reconsider the judge's finding of fact that Mr Mohammed was not in actual occupation of the flat on 8th July 1999. Accordingly, the interest of Mr Mohammed in the flat on that day was not an overriding interest, and is necessarily postponed to that of Mr Leeman arising out of the 21 year lease granted to him on 8th July. It follows that in my view the order for possession was rightly made and this appeal should be dismissed.

LORD JUSTICE MANCE: I agree.

Order: appeal dismissed with costs; possession of the flat on or before 28 days from today; costs to be paid within 28 days from today. Order does not form part of approved judgment.