England v Muhith Choudhury & Ors

This is a renewed application for permission to appeal the order made by HHJ McKenna on 14 August 2007, whereby he gave judgment for the claimant in respect of a claim for arrears of rent following the forfeiture of a lease of which the applicant and two others were tenants. The judge also made orders with regards to costs. The applicant applies also for a stay of execution in respect of the judge’s order.

The case arose out of the circumstances relating to the lease of premises at 3-5 New Buildings, Hinckley, Leicestershire, from which an Indian restaurant known as Spice Bazaar operated. It appears that in 2002 an arrangement was entered into by this applicant with his co-defendants, under which this applicant purchased the interest of his co-defendants in the Spice Bazaar business. The lease contained terms which the judge accurately and fairly summarised at paragraphs 4 and 5 of his written judgment. The amount of rent claimed in the proceedings was £7241.41 plus interest. In the event, the judge found that arrears of rent was due, although not in the full amount originally claimed and gave judgment accordingly. The principal issue with which he was faced at the hearing was a claim by the applicant that the landlord had either agreed not to claim or had estopped himself from claiming the outstanding arrears of rent as a result of an exchange of correspondence between the claimant and the applicant with regard to the arrears of rent.

The relevant circumstances are set out in the written judgment. The critical correspondence took place in October 2005. On 9 October, the landlord received a letter from the applicant which enclosed four post-dated cheques totalling £4,406.25. The cheques were accompanied by a letter in which the applicant said this:

“Please kindly explain that trade has been so slow. I therefore write four cheques instead of one for the rent. Thank you.”

The judge found that the cheques submitted with that letter represented the rent due for the period 29 September to 24 December 2005, but excluded other elements of rent, namely, the service charge and management fee which had been set out in the application for payment that had been sent to the applicant. As a result, on the landlord’s behalf, the managing agents replied to the applicant’s letter by a letter dated 13 October 2005. In that letter the agents pointed out that the actual amount outstanding, as at the date of the letter, was £9,947.66 inclusive of the September quarter’s rent. The letter then went on as follows:

“We can confirm therefore, that we would be prepared to accept post dated cheques provided they were at one week intervals for the reminder of the current quarter and that they total the sum of £9,947.77 which is the amount due, i.e. £1,105.31 per week from 21 October. If we receive the cheques by 21 October from you in this way, then we will accept them in good faith in payment of the sums which are due. If however, we do not receive the cheques as described above, then we will resort to the landlord’s right to collect the rent as a single sum without further records to yourself.”

The applicant replied to that letter by a letter of his own, in which he said this:

“Dear Sir/Madam, Please kindly accept my apology for paying in two cheques. Thank you. Yours Sincerely.”

Enclosed with that letter were two cheques. One dated 21 October for the sum of £2,206.25 and the other for the sum of £2,200. Of those two cheques, the landlord banked the one for £2,206.25 on account of the outstanding arrears. The other cheque was apparently post dated. The applicant’s position about this exchange of correspondence appears to be that, by accepting the cheque for £2,106.25 and paying it in, the landlord had entered into some form of agreement or had in some way estopped himself from claiming that the tenant was in breach of his obligations to pay rent and thus disabling himself from forfeiting the lease. However, the claimant did instruct his agents to secure the forfeiture of the lease. Bailiffs were instructed, and the re-entry was effected perfectly lawfully in accordance with the normal procedures. Re-entry was effected, as I understand it, on 27 October 2005.

At the outset of the hearing, the judge expressed some concern with regard to the way in which the matter had been pleaded on behalf of the applicant in his defence and counterclaim and by the way in which the matter was argued in the skeleton argument, used by Mr Uddin on behalf of the applicant at the proceedings before the judge. There was a variance between the two documents. It is not necessary to go into the details of that, except to say that the difference was sufficient to justify the judge raising the matter with Mr Uddin at the outset. Mr Uddin’s skeleton concentrated on the matter in the way that I have sought to summarise earlier, rather than the way in which the matter was originally pleaded. The judge expressed concern about that and did so in vigorous language.

Nevertheless, having done so, following submissions from Mr Dewaal on behalf of the claimant, the judge proceeded to hear the matter in full, both by reference to the pleadings and to the way in which the matter was argued in the written skeleton argument presented by Mr Uddin.

Mr Dewaal has told me and I accept that, throughout the hearing of the evidence, the judge conducted the matter in an entirely courteous and proper fashion. He did not interrupt unduly, nor did he express any hostile view of any witness or of any person, nor did he display any indications of bias at any stage. Mr Dewaal makes the perfectly fair and proper point that, on the contrary, the judge made findings of fact against the landlord in respect of a claim for works of repair, and he did so because of the landlord’s inability to speak directly of the cost of those works having been carried out. The result was that the judge made findings in favour of the applicant in respect of those matters.

It has been necessary to refer to the way in which the judge conducted the matter because three of the grounds of appeal put forward by the applicant are to the effect that the judge did not conduct a fair trial and that he had acted unfairly in not allowing the applicant to cross-examine the landlord with regard to a certain document. In the event, the judge found that there was no such agreement or estoppel of the sought argued for by Mr Uddin. It is important to note that the agreement or estoppel in question was not one that was said to have arisen out of any oral conversations between the landlord and the applicant. Rather, it was an agreement or estoppel which the applicant sought to spell out from the exchange of correspondence to which I have referred, coupled with the landlord’s action in paying one of the cheques into his bank account.

The way the judge dealt with it is to be found at paragraph 27 to paragraph 30 of his judgment. Stated shortly, the judge accepted the argument put forward on behalf of the landlord -- that there had been no such agreement of the sort argued for by the applicant. I do not propose to set out the judge’s reasons for coming to that conclusion. I simply refer to paragraphs 27-30, in which the judge sets out his reasons clearly and carefully, and in a way which cannot possibly be criticised. That was a firm finding of fact and, in the circumstances of that finding, any argument with regard to what was characterised as promissory estoppel simply did not arise.

The principal argument addressed to this court by Mr Uddin was that the judge had fallen into error in dismissing the submissions based on the alleged agreement/promissory estoppel. I am satisfied that there is no substance in that argument whatsoever. It is clear that the judge dealt with this aspect of the matter fully and properly and made findings of fact that he was entitled to make that were fatal to this particular defence.

Another matter raised by the applicant is that the judge acted unfairly in refusing to allow Mr Uddin to conduct a cross-examination with regard to the landlord’s credibility, by reference to a schedule of dilapidations which had been prepared by a surveyor, Mr Hubbard, for the purposes of a dilapidations claim which, in the event, was not pursued by the landlord. According to the landlord, the report had been prepared in the early part of 2006 and the invoices in respect of the work carried out to put right those dilapidations were dated February and March 2006. However, in Mr Hubbard’s report, it appeared that his inspection of the premises that revealed the want of repair took place in June 2006. Mr Uddin wished to cross-examine the landlord about that discrepancy in the dates.

However, as Mr Dewaal pointed out, credibility was not in issue in this case. There was no challenge to any account of an oral conversation by the landlord, as opposed to that put forward by the applicant. The alleged agreement which formed the main plank in the defence was one that was spelt out in correspondence and did not depend on any form of oral exchanges between either of the parties. It is true that the judge dealt with the matter in a fairly peremptory fashion. However, he rightly observed that the dilapidations schedule was no longer relevant to any of the issues in the case and he refused to allow Mr Uddin to cross-examine, with regard to that document, on any issue relating to credibility. In my view he was right to do so, because there simply was no issue about credibility. This was a matter which turned entirely on the proper construction of the correspondence and the action of the claimant in banking one cheque.

There is, therefore, no substance in that particular matter. As to the assertion that the judge was apparently biased, I have read the transcript of the passages complained of. It is fair to say that the judge dealt with Mr Uddin’s submissions -- with regard to his skeleton argument -- with a certain degree of briskness and vigour. However, it does not seem to me that there was anything in what the judge said or did with regard to that matter, which takes it outside the limits of what would ordinarily be appropriate, by way of comment from the judge when faced with a significant difference between a written skeleton and a pleaded case. Having regard to the observations that I made earlier, with regard to the way in which the case was conducted as a whole, I am satisfied that there is no substance in these criticisms of the judge’s conduct of these proceedings.

I have taken some time in dealing with the matters put forward by Mr Uddin in support of his application. However, in the event, I am not persuaded that there is any substance in them. When dealing with this matter on the papers, Lawrence Collins LJ said this when refusing permission to appeal:

“This was a straightforward question of fact. The proposed grounds of appeal fall into 2 categories. The first, third and fourth are that the judge was biased and did not conduct a fair trial, and erred in not allowing the proposed appellants to cross examine the claimant on a document. There is absolutely no basis for the criticism of the judge. The second matter (ground two) is that trial judge did not understand the law on promissory estoppel and therefore his judgment was perverse. I am satisfied that he applied the law correctly.”

I entirely agree with those observations and for those reasons, accordingly, this renewed application is refused.