England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
Judge Mayer

		Royal Courts of Justice Strand, London, WC2A 2LL
		20 July 2004

Lord Justice Brooke :

1. This matter was listed before us for a ruling on a jurisdictional issue.
2. The claimants, Scribes West Ltd, were the lessees of business premises on the ground floor and basement of the Barkers Centre, Kensington, pursuant to the terms of a lease dated 25^th January 1991 which was granted to them by House of Fraser plc. The first defendants Relsa Ansalt (whom I will call "RA") were registered as the freehold proprietors of the premises on 10^th November 1993.
3. The claimants ceased trading on 1^st May 1997, being the day on which they were granted a licence to assign the lease to London Sportsman's Club Limited (whom I will call "LSC"), and on which they also entered into a second charge over the leased premises to secure a loan they had made to LSC. In November 1999 the claimants entered into a voluntary arrangement with their creditors.
4. On 28^th February 2001 the defendants assigned their reversionary interest to Relsa Barkers Limited, (whom I will call "RB"), pursuant to the terms of a transfer document which was described as "TR1". On the same day RB gave notice to LSC of the assignment and required them to pay the rent to them. On 16^th July 2001 RB peaceably re-entered the premises on the grounds of arrears of rent. On 25^th July 2001 RB granted a new lease of the premises to a company called Settle Up Limited (whom I will call "Settle Up").
5. For the purposes of deciding the jurisdictional issue it is unnecessary to say any more about the facts. The present proceedings were commenced on 19^th December 2001 and were constituted as an action by the claimants against RA claiming relief from forfeiture. The claimants' interest derived from their status as chargees of the valuable security constituted by the lease.
6. On 23rd February 2002 District Judge Madge allocated the action to the multi-track and joined Settle Up as second defendants.
7. On 19^th July 2002 the claimants made an application to amend their particulars of claim and to join a number of new parties to the proceedings. By the proposed amendment they also sought a declaration that RB's peaceable re-entry was ineffective to forfeit the lease, as an alternative to their claim for relief from forfeiture. Their application notice contained an application for a "declaration that the proposed grant of a lease to the Second Defendant was ineffective or alternatively a declaration that the lease has not been forfeited, or that relief from forfeiture be granted." It did not, however, comply with paragraph 2((2) of the Practice Direction to Part 24, although an accompanying witness statement indicated that it was intended to be an application for summary judgment. At all events RA did not recognise it as such, and did not file any evidence in response to it.
8. On 24^th March 2003 RA applied for an order striking out the claim, alternatively for summary judgment, on the grounds that the claimants' claim – and their proposed amended claim - were misconceived. Their case was based on the contention that they had assigned the right to rent to RB who in turn were entitled to forfeit the lease pursuant to section 141(2) of the Law of Property Act 1925. They also contended that delay should prevent the claimants from obtaining relief from forfeiture. Alternatively they sought to strike out the claim on procedural grounds, but they did not pursue that part of their application before the judge.
9. On 7^th April 2003 District Judge Price directed that both sides' applications should be listed for hearing before a circuit judge, together with another application which need not concern us. Although he directed a timetable for the service of the claimants' evidence in response to RA's application, he made no such direction in relation the claimants' application. It was by this route that the two applications came to be decided by Judge Mayer, sitting for the purpose in the Barnet County Court.
10. The first day of the hearing, in which the claimants and RA were both represented by leading counsel, was on 28^th May 2003. The skeleton argument filed by RA's leading counsel before the hearing betrayed no awareness that the claimants were seeking summary judgment on the prayer to their Amended Particulars of Claim at the same time as they were seeking permission to amend. The claimants' wishes in this regard seem to have been clarified at the hearing on 28^th May, and in the interval between 28^th May and 2^nd July, when the hearing resumed, the claimants filed and served a second skeleton argument to which RA responded. This supplementary skeleton argument, which was said to be submitted on behalf of both RA and RB (even though RB was not a party to the action), contained in paragraph 2 the following statement:

"The First Defendant has been able to serve additional evidence. That evidence is also attached to this skeleton. Subject to that evidence being admitted, the First Defendant and [RB] will not object to the above question being finally determined as between all relevant parties."

11. The hearing then resumed on 2^nd July 2003 with nobody apparently paying much attention to procedural niceties. In much the same way as the claimants' initial application had been ineptly drafted (I leave on one side the question whether a party can seek to amend its statement of case and seek summary judgment on the amended statement of case at one and the same time), nobody seems to have addressed the question whether RA was now accepting that the hearing included an application for summary judgment, or was acquiescing in an unformulated proposal that the judge was instead being invited to try an issue on the amended pleading pursuant to CPR 3.1 (2) (i) – or, possibly, CPR 3.1 (2) (m). But the judge could not do this unless she granted permission to amend, with the effect that the requested declaration would bind not only RB and RA but also the second defendants Settle Up; and also LSC and a Mr Lewis (who also had an interest as a chargee). We were told that LSC and Mr Lewis, who were among the parties whom the claimants sought to join to the proceedings, had written letters to the court (or to the parties?), but we were not shown those letters, and the court certainly had no power to make a declaration which could bind them in respect of their interests without them first being formally joined to the proceedings and being given notice of the declaration it was sought to make. Settle Up were trading from the premises under the new lease which had been granted to them by RB in July 2001, and they had instructed a solicitor to look after their interests in court, although he did not play an active part in the proceedings.
12. On 26^th August 2003 the judge delivered a reserved judgment. Its opening paragraph was in these terms:

"… I am asked to decide essentially whether a lease could be forfeited by a landlord who does not hold the reversionary interest, the latter not having been registered in the Land Registry at the relevant time. Subject to my decision on this point there are procedural issues I have to deal with."

13. In paragraphs 3-19 she set out a chronology of events. In paragraph 14 she described the claimants' application dated 19^th July 2002 as including an application for summary judgment on a declaration that the lease was extant. The rest of this narrative betrayed no understanding that she was deciding a preliminary issue in the action. Paragraphs 20-50 contained the judge's analysis of the interesting legal issues in the case (which had warranted the retention of leading counsel on both sides). She made it clear that she preferred the defendant's submissions. Her judgment ended in this way:

"51. I therefore, find: (1) RB were entitled to the rent from LSC pursuant to the TR1 and (2) RB were entitled to re-enter and forfeit the lease on 16^th July 2001 and, having done so, the lease is no longer extant. The only remedy available to the claimants is an application for relief from forfeit pursuant to section 146 of the Law of Property Act 1925. This application is still outstanding.

52. I now turn to deal with the individual applications before me: (1) I refuse the claimants' application for permission to amend the particulars of claim; similarly, I refuse joining any further defendants to this claim; (2) I strike out the claim against the first defendant, RA, and I substitute RB for RA as first defendant. As I have already said, the only outstanding application, therefore, remaining is the claimants' application for relief from forfeit. That hearing I adjourn to another time and transfer it back to the Central London County Court.

53. I adjourn the hearing for hearing submissions about the final order and about costs; written submissions from both parties on the above by 9 September 2003."

14. On 17^th September, after considering the parties' submissions, she decided to direct that the claim should be struck out after all. She gave her reasons for taking that course, and said that she had concluded that the correct course was to strike out the entirety of the present proceedings.
15. In the meantime the claimants had filed a notice of appeal at the Civil Appeals Office, and on 24^th November 2003 Chadwick LJ granted permission to appeal, saying that he was persuaded that the points raised in the appellant's skeleton argument were of sufficient general importance to require consideration by the Court of Appeal. The Civil Appeals Office then raised a query as to whether the Court of Appeal had jurisdiction to hear the appeal, in the light of what the judge had said at the end of her judgment.
16. There was then a further short hearing before Judge Mayer, who declined to amend her order. She said that on the face of her order this was not a final decision because it arose out of applications for summary judgment and striking out. Although she had been invited to add a declaration by way of amendment to her order, she was persuaded that this was inappropriate since this would affect parties who were not present at the hearings. She made it clear that at all times she intended to decide the issue of whether the lease was validly forfeit by RB by virtue of their standing, and she hoped that this was clear from her judgment. The other matters, she said, were consequential on this point.
17. In these circumstances the claimants contend, for reasons which I will explain, that the appeal properly lay to the Court of Appeal. Alternatively they wish to invite the High Court and/or the Court of Appeal to "leap-frog" the High Court pursuant to the jurisdiction conferred by CPR 52.14. The first defendants for their part contend that appeal lies to the High Court, and that it should stay there on the grounds that the principal point raised by the appeal is a small (albeit interesting) point of construction on a statute passed some 79 years ago, and that this certainly does not justify a departure from the normal route of appeal.
18. It is disappointing that difficulties are still arising in relation to the interpretation and/or implementation of the provisions of the Access to Justice Act 1999 (Destination of Appeals) Order 2000 ("the Destination Order"). The relevant provisions of this Order read as follows:

"1 (2) In this Order –

(a) 'decision' includes any judgment, order or direction of the High Court at a county court;

(c) 'final decision' means a decision of a court that would formally determine (subject to possible appeal or detailed assessment of costs) the entire proceedings whichever way the court decided the issues before it.

(3) A decision of a court shall be treated as a final decision where it -

(a) is made at the conclusion of part of a hearing or trial which has been split into parts; and

(b) would, if made at the conclusion of that hearing or trial, be a final decision under paragraph (2)(c)."

Article 4 provides, so far as is material:

"4. An appeal shall lie to the Court of Appeal where the decision to be appealed is a final decision -

(a) in a claim made under Part 7 of the Civil Procedure Rules 1998 and allocated to the multi-track under those Rules, or

(b) made in proceedings under the Companies Act 1985 or the Companies Act 1989 or to which Sections I, II or III of Part 57 or any of Parts 58 to 63 of the Civil Procedure Rules 1998 apply."

19. So far as the language of Article 1(2)(c) is concerned, the draftsman of the Order decided to adopt the language of RSC O59 r1A, which came into effect pursuant to the Rules of the Supreme Court (Amendment Rules) 1993, in an attempt to bring to an end the uncertainty created by the former rules which simply referred to interlocutory and final orders and left it to the judges to determine how to categorise a particular order. RSC O59 r1A(3) and (4) provided that:

"(3) A judgment or order shall be treated as final if the entire cause or matter would (subject only to any possible appeal) have been finally determined whichever way the court below had decided the issues before it.

(4) For the purposes of paragraph (3), where the final hearing or the trial of a cause or matter is divided into parts, a judgment or order made at the end of any part shall be treated as if made at the end of the complete hearing or trial."

20. I explained the effect of the Destination Order in my judgment in Tanfern Ltd v Cameron-Macdonald [2001] 1 WLR 1311 in these terms:

"16. The normal route of appeal will not be followed where … a circuit judge in the county court… gives the final decision in a multi-track claim allocated by a court to the multi-track...

17. For this purpose a final decision is one that would finally determine the entire proceedings, subject to any possible appeal or detailed assessment of costs, whichever way the court decided the issues before it (DO, Article 1(2)(c)). A final decision includes the assessment of damages or any other final decision where it is 'made at the conclusion of part of a hearing or trial which has been split up into parts and would, if made at the conclusion of that hearing or trial, be a final decision' (DO, Article 1(3)); it does not include a decision only on costs. This means that if a judge makes a final decision on any aspect of a claim, such as limitation, or on part of a claim which has been directed to be heard separately, this is a final decision within the meaning of this provision. …

18. Orders striking out the proceedings or a statement of case, and orders giving summary judgment under CPR Part 24 are not final decisions because they are not decisions that would finally determine the entire proceedings whichever way the court decided the issues before it."

21. I returned to this topic in Lloyd Jones v T-Mobile Ltd [2003] EWCA Civ 1162; [2003] EGLR 55, in a judgment which I hoped would receive wider publicity because difficulties were continuing to be experienced over the effect of this part of the Destination Order. This was a case involving the trial of a preliminary issue, in which experienced City solicitors wrongly believed that appeal lay to the High Court. After going over the ground I have just covered, I said:

"24 Practitioners who rely only on the White Book for their procedural law will not have obtained the full flavour of what I said in my judgment in Tanfern. An abbreviated summary of this passage is given in the third main paragraph on page 1256 of Part 1 of the 2003 Edition. This is why I am returning to this topic now. There is a rather fuller treatment of the topic in Volume 1 of the Civil Court Practice 2002 (the Green Book) at pp 907-8.

25. For the purposes of article 1(2)(c) and article 1(3) the relevant proceedings are the proceedings which relate to the issue whether notice of objection was served by the claimants within three months of completion of the installation of the apparatus. In the event Judge Morgan decided that issue in favour of the claimants, and he determined it finally in the sense that the defendants could not have reopened it when the eventual trial on the merits took place. If he had decided it in favour of the defendants, that would be the end of the action. In either case the dissatisfied party's only method of redress was by way of appeal."

22. Before applying the Destination Order to the facts of the present case I must give a strong warning that nothing will be gained under the CPR regime by a return to the old case-law when this court was having to decide, without statutory guidelines, whether an order was an interlocutory order within the meaning of the former rule. In Salter Rex v Ghosh [1971] 2 QB 597, 601 Lord Denning MR said:

"This question of 'final' or 'interlocutory' is so uncertain that the only thing for practitioners to do is to look up the practice books and see what has been decided on the point."

23. In White v Brunton [1984] QB 570, 574 Sir John Donaldson MR observed:

"[A]s is well known, this clarity conceals the obscurity of what is or is not an interlocutory order".

24. In Holmes v Bangladesh Binan Corporation [1988] 2 Lloyd's Rep 120, an appeal from a judge's order deciding a preliminary issue of law in a Fatal Accidents Act case (which would be readily categorised as a "final decision" under the modern Destination Order), Bingham LJ was constrained to say, in the absence of any assistance contained in the pre-1993 rules:

"Order 33, r. 3 gives the Court a wide discretion to order the separate trial of different issues in appropriate cases and a decision is not to be regarded as interlocutory simply because it will not be finally determinative of the action whichever way it goes. Instead, a broad commonsense test should be applied, asking whether (if not tried separately) the issue would have formed a substantive part of the final trial. Judged by that test this judgment was plainly final, even though it did not give the plaintiff a money judgment and would not, even if in the airline's favour, have ended the action." (Emphasis added)

25. I am mentioning the difference between the old judge-made caselaw and the code contained in the Destination Order because by what Waller LJ said in Roerig v Valiant Traders Ltd [2002] EWCA Civ 21; [2002] 1 WLR 2304 he might have tempted practitioners to go back to the old case-law. In that case he said at p 2320 that it seemed to him that what the present rules in fact reflected, in relation to treating a decision as final where it was made at the conclusion of the hearing of a preliminary issue, what Bingham LJ said in this passage in his judgment in Holmes. It would be very much safer, in my judgment, for practitioners and judges to put Holmes behind them and stick to the language of the Destination Order and the interpretation given to it in my judgments in Tanfern and Lloyd Jones v T-Mobile. See also Clark v Perks [2001] 1 WLR 17 at para 54.
26. By the time all the relevant cases had been identified and were before the court it became obvious that the answer to the question about the destination of this appeal was readily obtainable once it was ascertained what decision the judge had in fact made. Mr Weekes, for the claimants, maintained that her decision should be interpreted as if she had granted the amendments his clients sought, had directed the trial of a preliminary issue as to whether RB had been entitled to forfeit the lease, and had then made a declaration to the effect that it was so entitled. In that case appeal would have lain to this court from a final decision on a preliminary issue in the multi-track.
27. Mr Bruce, for the defendants, maintained on the other hand that the judge had made a favourable decision on his clients' application that the claim should be struck out. In that case appeal lay to a High Court judge because a striking order is not a final decision. The judge's reasoning had included her finding that RA had successfully assigned to RB the right to re-enter in the event of the tenant's failure to pay the rent reserved by the lease, but her decision was that the present action should be struck out. Even if an order had been drawn up describing the fate of the claimants' application, it would have been drawn up to the effect that the court had dismissed their applications to amend and to join new parties, and had also dismissed their application for summary judgment (given that the amendments were refused and the judge was in any event not disposed to grant the declaration sought). In that event, too, appeal would have lain to a High Court judge.
28. I can understand why the claimants are seeking to draw out of RA's supplementary skeleton argument (in which RB curiously joined: for this skeleton argument see para 10 above) a willingness on their part to invite the judge to make a final determination of the legal issue at the heart of this dispute, and why they are seeking to interpret what happened when the hearing resumed on 2^nd July as if the matter had proceeded along those lines. But nobody seems to have articulated this clearly to the judge, and as she was to observe the following February, the other parties (RB, LSC and Mr Lewis) would have had to be formally joined in order for any declaratory order to be binding on them.
29. The judges of this court (and the staff at the Civil Appeals Office) have to interpret the order of the lower court as we find it. The relevant decision (see para 18 above) is the court's order, and the Destination Order determines where appeal should lie from that order. If the parties (or one of them) believe that the order has not been drawn up correctly, then the correct procedure is to ascertain whether the lower court is willing to amend its order under the slip rule (and on the present occasion Judge Mayer was not willing to make any such amendment). If that party is disappointed by the lower court's response then this may be one of the complaints it may make on its appeal to the appeal court, but the appeal court must be the one that is readily ascertainable from the face of the court's order, and not one which would or might have been ascertainable if the judge had made a different order. It would be intolerable if appeal courts had to be subjected to a complicated examination of the types of order that might have been made if the parties had dealt with things differently in the lower court, merely for the purpose of determining whether they possess jurisdiction. The destination of the appeal should be ascertainable from the language of the order.
30. In case he failed on that point, Mr Bruce had another reason for submitting that any appeal from this order did not lie to the Court of Appeal, He argued that a claim issued on Form N5A under CPR Part 55 (see CPR 55.3, the Practice Direction to Part 55, para 1.5 and the Table in the Practice Direction to Part 4) is not "a claim made under Part 7 of the Civil Procedure Rules within the meaning of Article 4 of the Destination Order".
31. The present language of Article 4 was introduced by the Civil Procedure (Modification of Enactments) Order 2003. Before this order came into effect, Article 4 was in these terms:

"An appeal shall lie to the Court of Appeal where the decision to be appealed is a final decision –

(a) in a claim allocated by a court to the multi-track under rules 12.7, 14.8 or 26.5 of the Civil Procedure Rules 1998; or

(b) made in proceedings to which rule 49(2) of the Civil Procedure Rules 1998 refers or to which any of Parts 57 to 62 of those Rules applies."

32. Until the change made to Article 4 of the Destination Order in 2003, a Part 55 claim allocated to the multi-track pursuant to CPR 55.9 was not covered by the language of that article, and the purpose of the amendment was evidently to introduce a much more straightforward regime. The guidelines are set out in the third section of the Practice Direction to Part 7:

"The claim form

3.1 A claimant must use practice form N1 or practice form N208 (the Part 8 claim form) to start a claim (but see paragraphs 3.2 and 3.4 below).

3.2 Rule 7.9 deals with fixed date claims and rule 7.10 deals with the Production Centre for the issue of claims …

3.3 If a claimant wishes his claim to proceed under Part 8, or if the claimant is required to proceed under Part 8, the claim form should so state. Otherwise the claim will proceed under Part 7 …

3.4 Other practice directions may require special practice forms to be used to commence particular types of proceedings …"

33. Claim Form N5A, the form required to be used in claims for relief from forfeiture, does not state that the claim is proceeding under Part 8. The claim therefore is a claim proceeding under CPR Part 7 and falls within the language of the new Article 4 of the Destination Order. I therefore reject Mr Bruce's alternative submission.
34. For these reasons I consider that on the proper interpretation of the Destination Order, appeal from Judge Mayer's order lies to a High Court judge. Whether it is appropriate to transfer the appeal from the High Court to this court is a different issue, which I will determine as a High Court judge when I have had the opportunity of considering any further submissions which I invited the parties to send to the court once they had had the opportunity of considering this judgment in draft.

Lord Justice Mance:

35. I agree.

Lord Justice Dyson:

36. I also agree.