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 HIGH COURT OF JUSTICE
CHANCERY DIVISION (IN BANKRUPTCY)
(Miss Sonia Proudman QC
(sitting as a deputy High Court judge))

		Royal Courts of Justice Strand London WC2 Tuesday 12th March, 2002

1. LORD JUSTICE ALDOUS: This is a renewed application for permission to appeal made by the Lime'In Ltd. It is an application for which an extension of time is sought.
2. The basic facts are not in dispute. On 15th May 2001 Hallmill Ltd, who were the company's landlords under a lease dated 23rd March 2000, served on the company a statutory demand for £6,884.24. The debt was made up of about £1,100 in respect of a claim for service charges, about £5,700-odd for rent.
3. Clause 1 of the lease required payment of rent, calculated from 1st November, during the period from that date until 31st July in the sum of one peppercorn and thereafter from 1st August a yearly rent of £19,420 per year until there was a review.
4. The company did not pay the statutory demand and on 25th July 2001 a petition was issued to wind up the company. The winding-up order was resisted upon the ground that the debt was disputed and that the company had a good counterclaim for breaches of contract. That dispute came before Miss Proudman QC, sitting as a deputy judge of the Chancery Division. In her judgment dated 5th November 2001 she held that the company did not have any reasonable grounds for disputing the amount of the debt. She went on to consider the claim made under the counterclaim, and concluded that there was no prima facie evidence proving the facts, and that there was no reasonable ground supporting the cross-claim other than the mere assertion by the company, which she concluded was not enough. She therefore made the usual winding-up order and refused permission to appeal.
5. An application was made to this court for permission to appeal. It was considered by me on paper. I said:

"I am surprised that an order stamped 13th December 2001 could not have been obtained before 7th January 2002. If the application is renewed, evidence setting out what was done supported by contemporaneous documents should be provided.

The judge appears to have been entitled to come to the conclusion she did. There is no real prospect of an appeal succeeding."

6. There has been produced to me today a statement of David Stanclift, who is the appellant's solicitor, in which he explains the efforts that were made to obtain a stamped form of the order. I accept that evidence. It appears to show a valid ground upon which it would be right to grant an extension of time.
7. I therefore turn to the merits. Mr Noble, who appeared before me, raised two points. First, the amount of the rent. He drew to my attention that the company is now out of the premises and has been out of the premises since November. The deposit has been forfeited, but he says there is a real dispute as to the amount of the rent.
8. The lease, as I have said, provides for a rent of £19,420 plus VAT. The company says that the true rent was £15,000. Their case before the judge was that that was agreed and that was supported by the fact that the deposit was £3,750, which amounts to a quarter of a rent of £15,000 per year.
9. They therefore started an action for rectification, which proceeded in the Bow County Court. They sought to rectify the lease to record that the rent was £15,000 per year. That action was struck out by the District Judge on 6th March because he concluded that the matter had been decided adversely to the company in the judgment of the judge.
10. The position is this. The lease records in writing a rent of £19,420 per year. It is a document which was entered into between the parties. Further, rent has been paid by the company upon that basis - in fact three instalments have been paid on the basis that it was £19,420 - and no document has been produced which supports the contention that the rent was only £15,000 per year. In those circumstances, I do not believe there is a real prospect of this court being persuaded that the judge was wrong when she came to the conclusion that there was no real case that the rent was other than recorded in the lease. She said this:

"There have been two previous petitions based on petition debts for rent and service charge due; the first one in November 2000 and the second one in January 2001. In the first case the Company applied for and obtained an injunction without notice against presentation of the petition, later discharged on notice, on abuse grounds. However, in neither case was the assertion made that the rent claimed was too high. Mr Stanclift, the solicitor representing the company before me, sought to explain this by the assertion that Mr McEwen is a bottom line man and did not look at the items that made up the debt, but in the circumstances of the two previous petitions I am not persuaded by this."

11. I am of the same view as the judge.
12. The second point taken by Mr Noble relates to the rent-free period. He submitted that this was a case where the fitting out was not completed on time, and therefore the rent-free period started later than provided for in the lease.
13. The judge considered the rent-free period on page 4 of her judgment. She recorded that there was an agreement that the company was allowed into possession on 1st July and that there would be a long stop commencement date for the rent-free period of 1st November, but this was left out of the agreement for lease which simply referred to the earlier heads of agreement. She recorded that there was evidence supporting the explanation as to why it was left out. She referred to the company's solicitor's letter written at the time when he was dealing with completion. She set out that letter dated 22nd March 2000, written by the company's solicitors, which I will quote:

"I have your letter of 6th March, which has caused me to review my file.

I have to say having reviewed my file, you are of course quite right about the long stop date. I am afraid when the issue of the rent free period came up again this January I could not recollect exactly what had been agreed and referred to the file. I looked at the contract of course and my letter to you of 24th May. In my defence I have to say the contract does not reflect the agreement about the long stop date nor is this confirmed in our correspondence. Having said this I have looked at the file further and see from my correspondence with my client it was clear that there was an understanding that the long stop date would override everything else. I have therefore advised my clients accordingly and they have accepted this advice.

Once again all I can do is to apologise.

Having stated all of this, I confirm I am now in possession of the executed lease and rent deposit deed and therefore we are in a position to complete."

14. In my view, that letter explains everything so far as the rent-free period is concerned.
15. Mr Noble raises the prospect of a counterclaim based upon the fact that the premises were not ready as had been agreed. But again there are no documents to support it. It is bare assertion and, for the reasons given by the judge, she was entitled to come to the conclusion that there was no prima facie evidence proving the facts that were sought to be established.
16. In those circumstances, upon the documents in this case, I conclude that there is no real prospect of success of an appeal. I therefore refuse permission.
ORDER: Application for an extension of time granted; application for permission to appeal refused. (Order not part of approved judgment)