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 LANDS TRIBUNAL
(His Honour Judge Michael Rich QC)

		The Royal Courts of Justice Strand London WC2 Thursday 12 September 2002

Thursday 12 September 2002

1. MR JUSTICE CARNWATH: This is an application for permission to appeal against a decision of Judge Rich on a preliminary issue in proceedings in the Lands Tribunal. It arose out of a claim for compensation for the extinguishment of the business of a nightclub following a compulsory purchase order by the London Borough of Islington. The business in the latter period seems to have been operated on the basis of offering the club to external promoters, who would stage club nights themselves. The authority has taken the point that any improved profitability due to that use should be left out of account in assessing compensation because of a term in the lease prohibiting the sharing of occupation or possession.
2. The surveyor member of the tribunal, Mr Rose, directed that three issues should be the subject of a preliminary hearing. Issue A was whether there was a breach of the lease; secondly, B, if so, whether it had been waived in some way or the landlord would have been estopped from relying on it; and, thirdly, C, if there had not been such waiver, what adjustment, if any, should be made to the profit figure. Judge Rich was appointed to determine the first two issues, but in the event he dealt only with issue A, apparently because the London borough had wanted to adduce evidence on B but had failed to comply with time limits for the relevant statements. He indicated that he would give directions to determine issue B if so requested. Issue C, it was agreed between the parties, should be left for determination as part of the main reference by the surveyor member.
3. Judge Rich, on the basis of the evidence and submissions to him, decided the issue of whether there was a breach against the authority. He decided that there was no breach of covenant and on that footing issue B, the issue of waiver, did not arise.
4. Before this court, Mr Gaunt seeks permission to appeal. We are satisfied that, although the judge's reasoning is persuasive, there are certainly reasonable arguments the other way and ones which it would be appropriate to allow to be ventilated in this court if that were the sole issue. We are, however, a little concerned about the course the proceedings have taken, in that, if Judge Rich had been in a position to determine issue B, and if he had determined that in favour of the claimants, then issue A would have become academic. We therefore raised with Mr Gaunt whether it was appropriate for this court to deal with an appeal on issue A in advance of the determination of issue B, and whether that would represent the most efficient and economic way of disposing of the proceedings. Of course Mr Gaunt is not in a position to speak for the other side, and understandably there have been no discussions pending the consideration of the matter by this court.
5. We think that the matter can be dealt with best in this way. We will give permission to appeal on issue A, but we will indicate that the claimants should be at liberty to apply to this court for directions if they have reason to think that there would be an advantage in delaying the disposal of this appeal pending a determination by the Tribunal of issue B.
6. Whether that would be the most efficient and economic way of determining the matter is something on which we cannot form a view on the material before us. We would hope that there would be discussions between Mr Gaunt and counsel for the claimants to consider that matter. If, in the light of the those discussions, the claimants wish to make an application to this court, then we will direct that it should come before a single Lord Justice (if possible myself); and it may be made by written representations. If, of course, the parties are agreed that that is not the way forward and they are agreed that the appeal should come on, then the court office can be informed of that fact.
7. I should add that there is also a question in my mind as to how these preliminary issues will affect the ultimate compensation. The basic issue for the Tribunal under section 5(2) of the Land Compensation Act is the market value of the interest. Therefore, as I would see it, the issue for the Tribunal will be: how would the market view the effect of these various terms of the lease? Mr Gaunt has drawn attention to rule (4), which provides that compensation shall not include any increase attributable to an activity which is contrary to law. However, it seems doubtful whether that has any relevance to something which is purely contrary to a lease, as opposed to being contrary to a public legal prohibition. However, that is a matter on which it is unnecessary to form a view at this stage, since those will be matters for discussion before the surveyor member if and when the matter reaches that stage.
8. At this stage, I would simply grant permission to appeal on issue A, the point which is before us, but give permission to the claimants, if so minded, to apply for directions on the points that I have indicated to a single Lord Justice, if possible myself, and I would direct that the application may be by written representation.
9. LORD JUSTICE WALLER: I agree.
ORDER: Application allowed as to the issue of breach with liberty to the claimants to apply by written representations for an adjournment of the appeal pending the determination of the waiver issue. (Order not part of approved judgment)