Claim No: M01NG755 and M01NG756
Courts of Justice, Edward St, Truro TR1 2PB
Before :
DJ James Field
Between :
M01NG755 | |
(1) Mr Simon Dinnage (2) Ms Amanda Yeates | Claimants |
- and – | |
(1) SMCFO Holdings Limited (2) Auckland Hotel Trading Limited | Defendants |
AND Between: | |
M01NG756 | |
Mr Jui-Pin Wu | Claimant |
-and- | |
(1) SMCFO Holdings Limited (2) Auckland Hotel Trading Limited | Defendants |
Mr Mark Baldwin (instructed by Bryan and Armstrong Solicitors) for the Claimants
Ms Joanne Phillipson (acting on a direct access basis) for the Defendants
Hearing date: 26 May 2026
Approved Judgment
This judgment was handed down remotely at 10.00am on 5 June 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives
DJ James Field:
This Judgment is given in relation to applications in two claims currently being case managed and listed together.
Both claims concern the forfeiture of long commercial leases of units within a building known as 75 Truro Road, St Austell, Cornwall, PL25 5JQ. The Claimants in both claims each took a 125 year lease of a unit within that building. Mr Dinnage and Ms Yeates paid a premium of £89,950, Mr Wu paid a premium of £115,400. The landlord and freeholder of the building was CHF 8 Ltd. Whilst the background to the grant of those leases is, largely, beyond the scope of this Judgment, it is common ground between the parties, or else a matter of public record, that:
The leases were sold on the basis that they would function as an investment producing a return for the Claimant lessees;
Upon grant of the lease, the Claimant lessees would grant a sublease back to the CHF 8 Ltd (‘the Subleases’).
The leases were sold on the basis that the building would be re-developed as a care home and it was through the operation of that care home that profits would be produced;
The building was never re-developed and CHF 8 Ltd entered into administration on 28 November 2019 and later liquidation on 2 December 2020;
The investment has been characterised by the parties to this litigation as a “Ponzi Scheme” (a form of fraud where money from new investors is used to pay investment returns to earlier investors).
The liquidator for CHF 8 Ltd filed with Companies House a notice to disclaim the Subleases on 17 February 2021 pursuant to section 178 of the Insolvency Act 1986;
On 21 April 2021, the liquidator sold the freehold to the building, subject to the Leases, to Phoenix Commercial Property Development Ltd.
The Building was subsequently sold to SMCFO Holdings Ltd, the First Defendant in these claims, on or about 19 December 2023;
On or about 3 April 2024, the First Defendant purported to exercise a right of peaceable re-entry in respect of the Claimants’ respective leases;
On 15 October 2024, Auckland Hotel Trading Ltd, the Second Defendant purchased the Freehold from the First Defendant.
The First Defendant and the Second Defendant have common directors and shareholders but are not said to have any association with CHF 8 Ltd.
The practical effect of the above chronology is that the Claimants have paid a significant premium (£115,400 in respect of Mr Wu and £89,950 in respect of Mr Dinnage and Ms Yeates), for a leases of units within an undeveloped, derelict building which has since been forfeit. The Defendants contend that the Claimants’ leases are 2 of 33 leases granted by CHF 8 with similar facts.
The Claimants assert that they had no knowledge of the transfers of the freehold and that they did not receive any correspondence or notices concerning any rental arrears or forfeiture prior to 20 March 2025 when they received a notice from the Land Registry informing them of an application to close their registered leasehold title.
Mr Wu and Mr Dinnage and Ms Yeates instructed the same firm of solicitors to advise and represent them in connection with these matters. These proceedings were issued in the County Court at Nottingham in December 2025. I am told that:
They had previously attempted to issue the proceedings in April 2025 but they had been rejected on account that the claim included a money claim and the court office directed that the claim should therefore have been issued through the CNBC. I do not have a copy of the previous draft of the proceedings and so I do not know whether this was correct having regard to Paragraph 5.1 of PD 7A.
There is another claim brought by one of the other 33 leaseholders who is also represented by the same of firm of solicitors. It is proceeding in the County Court at Mansfield. There is a hearing listed on 17 June 2026 in those proceedings to consider many the same issues which are the subject of this Judgment.
In the proceedings with which I am concerned, the Claimants have issued their claims using the Part 8 procedure. They seek:
Relief from forfeiture and an order restoring them to possession of the properties;
A declaration that the forfeiture of the lease was wrongful and/or of no effect; and
Such other relief as the court thinks fit.
Whilst the claims were issued using the Part 8 procedure, CPR 55.2 provides that Part 55 must be used where the claim includes a claim by a tenant seeking relief from forfeiture. Such a claim must be issued using Form N5A (Paragraph 1.5 of PD 55A).
Notwithstanding that the claim was made by way of the Part 8 Procedure, the Claim Forms were accompanied by Particulars of Claim (rather than witness evidence as required by CPR 8.5(1)).
In both claims, the Claimants assert that there was no rent or other relevant sums payable under the lease as at the date of re-entry, such that the First Defendant had no right to re-enter or forfeit the lease.
The claim by Mr Dinnage and Ms Yeates was listed for a case management hearing before me on 25 March 2026 with a time estimate of 30 minutes. At that hearing I noted the procedural issues identified above, and also that it appeared that pursuant to s.139(2) of the County Courts Act 1984, the County Court did not have jurisdiction to hear the claim for relief from forfeiture since the claim had been issued more than 6 months since re-entry. However, there was insufficient time to address this issue in any detail and the Claimant’s advocate was not prepared to address that issue. I was informed that the claim by Mr Wu was also proceeding in the County Court at Bodmin and that there was significant overlap between the cases and so I directed that the hearing be adjourned to 26 May 2026, to be heard alongside the CMC in Mr Wu’s claim.
I further directed that the statements of case would stand as the parties’ respective statements of case under Part 55 and the case would continue under that procedure. Finally, I directed that at the adjourned hearing under CPR 55.8, the court would consider:
Whether the claim ought to be struck out as disclosing no reasonable grounds for bringing the claim having regard to s.139(2) of the County Courts Act 1984;
Allocation; and
Directions.
Regrettably, the parties’ preparation for that adjourned hearing has been far from straight forward and certainly has not assisted the court in furthering the overriding objective:
On 27 April 2026, the Defendants sought to make an application for Strike Out and Summary Judgment in respect of the Claimants’ claims. That application did not comply CPR 24.5(1). The applications were therefore returned unissued.
On 7 May 2026, further revised applications for Strike Out and Summary Judgment were made by the Defendants.
On 12 May 2026, the Claimants wrote to the court (without making any formal application) asking that the hearing on 26 May 2026 be adjourned until after the hearing in the case proceeding in the County Court at Mansfield listed on 17 June 2026;
On Thursday 21 May 2026, the Defendants filed their skeleton argument
On Friday 22 May 2026, the Claimants applied for transfer of the proceedings to the High Court pursuant to S42 of the County Courts Act 1984 and relief from sanction in the alternative.
Later that day, the Claimants filed and served two hearing bundles for the hearing on Tuesday following the bank holiday.
On Saturday, the Defendants filed further bundles for the hearing as well as four statements of costs.
At 9.30am on Tuesday 26 May 2026, the Claimants filed their skeleton argument and authorities bundle.
Suffice to say, parties are expected make applications in the proper form, complying with the relevant procedure rules, in good time and providing adequate notice in advance of hearings. Bundles should be produced collaboratively such that the court and the advocates are able to work from the same, paginated and bookmarked bundle. Statements of costs should be filed as soon as possible and not less than 24 hours before the hearing, disregarding those days when the court is not open. Skeleton arguments, where they are to be filed, should be filed the day before the hearing, disregarding days when the court is not open.
The issues to be addressed at the hearing on 26 May 2026 were plain to the parties well in advance of that hearing and there is no reason that the hearing could not have been prepared for accordingly.
The Applications
The applications and issues to be considered and determined at the hearing were:
Whether all or any parts of the claims ought to be struck out, whether of the court’s own volition or on the Defendants’ application;
Whether the Defendants should be awarded summary judgment on their application;
Whether the claims should be transferred to the High Court, whether of the court’s own volition or on the Claimants’ belated application;
Any other directions.
In respect of all of these issues, the parties drew no meaningful distinction between the Claimants in the two sets of the proceedings, or the position of each of the Defendants. I adopt the same approach in this judgment and refer to all the Claimants together and both Defendants together without distinction.
There is significant overlap between (a)-(c) above. The Defendants took issue with the court determining the question of transfer to the High Court first, on the basis that the application for transfer was made too late and with inadequate notice. However, the court has the discretion to transfer to the High Court of its own motion pursuant to section 42(3) of the County Courts Act 1984. Further, when considering whether to strike out a claim by reason of a defect, the court should first consider whether that defect is capable and cure and if so the court should ordinarily give the relevant party an opportunity to remedy the defect before striking out the claim (Soo Kim v Youg [2011] EWHC 1781 (QB)). With that in mind, notwithstanding the late timing of the application for transfer to the High Court, it is logical that this should be court’s starting point.
Transfer
The relevant statutory provisions and civil procedure rules are as follows:
Where a lessor has enforced against a lessee, by re-entry without action, a right of re-entry or forfeiture as respects any land for non-payment of rent, the lessee may at any time within six months from the date on which the lessor re-entered apply to the county court for relief, and on any such application the court may, if it thinks fit, grant to the lessee such relief as the High Court could have granted.
Section 42(1), (2) and (7) of the County Courts Act 1984
Where the county courtis satisfied that any proceedings before it are required by any provision of a kind mentioned in subsection (7) to be in the High Court, it shall–
(a)order the transfer of the proceedings to the High Court; or
(b)if the court is satisfied that the person bringing the proceedings knew, or ought to have known, of that requirement, order that they be struck out.”
(2)Subject to any such provision, the county court may order the transfer of any proceedings before it to the High Court.
The provisions referred to in subsection (1) are any made–
(a)under section 1 of the Courts and Legal Services Act 1990; or
(b)by or under any other enactment.
Rule 30.3, Civil Procedure Rules
Paragraph (2) sets out the matters to which the court must have regard when considering whether to make an order under—
section 40(2), 41(1) or 42(2) of the County Courts Act 1984 (transfer between the High Court and the County Court);
…
The matters to which the court must have regard include—
the financial value of the claim and the amount in dispute, if different;
whether it would be more convenient or fair for hearings (including the trial) to be held in some other court;
the availability of a judge specialising in the type of claim in question and in particular the availability of a specialist judge sitting in an appropriate regional specialist court;
whether the facts, legal issues, remedies or procedures involved are simple or complex;
…
The meaning and effect of Section 40(1) of the County Courts Act 1984 has been considered by the Court of Appeal in Restick v Crickmore [1994] 1 WLR 420. Section 40(1) is drafted in identical terms to section 42(1), save that it relates to proceedings which have been started in the High Court but which were required to be started in the County Court rather that the other way around.
The Court of Appeal held that the effect of S40(1), was that even where the court concluded that a party knew or ought have known that there was a relevant requirement for proceedings to be begun in the County Court, the High Court retained the discretion to transfer the proceedings to the County Court, rather than being required to strike out the case under section 40(1)(b).
The reasoning in Restick applies equally to section 42(1) and cases begun in the County Court which are required to be issued in the Hight Court.
However, the facts of this case do not strictly fall within the ambit of section 42(1) at all. When read in conjunction with Section 42(7), section 42(1) concerns claims where there is a statutory provision made under Section 1 of the Courts and Legal Services Act 1990 or any other enactment which positively require the proceedings to be in the High Court. That is not the case here. There is no statutory requirement for a claim for relief from forfeiture to be in the High Court. It is simply that the County Court, which is a creature of statute, only has jurisdiction to grant relief where proceedings are begun within 6 months of re-entry. There is no statutory provision which provides that, after that time, they must be begun in the High Court.
The reason for this is that the High Court’s power to grant such relief following peaceable re-entry is not statutory nor constrained by statute. It is an exercise of the High Court’s equitable jurisdiction (Pineport v Grangeglen [2016] EWHC 1318).
It follows that Section 42(1) is of no direct application to the current case. Instead, what is in issue is whether the court should exercise its more widely drafted discretion to transfer any proceedings before it to the High Court under Section 42(2). Section 42(2) does not expressly require the court to consider strike out as an alternative to transfer. However, in circumstances where the County Court does not have the power to deal with part of the Claimant’s claim, the striking out of that part of the claim would necessarily follow from a refusal to transfer. To the extent there is any material difference between the exercise of the court’s discretion under Section 42(1) and Section 42(2), it would seem that under the latter, the court might place less emphasis and importance on any failing by the Claimant and the imposition of any sanction for such failure.
CPR 30.3(2) sets out a list of factors which the court must consider deciding how to exercise that discretion. However, in addition to those factors, the court must also consider the overriding objective, including the need to deal with the case justly, allotting to it an appropriate amount of the court’s resources and enforcing compliance with court rules and procedures.
Further, although there is no express sanction set out in either the civil procedure rules or any statute for issuing a claim in the County Court for which only High Court has jurisdiction, the Claimant accepted that case law concerning applications for relief from sanction, including the three stage test set out in Denton v TH White Ltd [2014] EWCA Civ 906, applied by analogy.
The failure to issue the claim in a court which had the necessary jurisdiction to deal with a significant aspect of the claim was undoubtedly serious. It has delayed the progression of the claim and necessitated two, otherwise unproductive court hearings. Without some action to regularise the position, it would be fatal to part of the Claimants’ claims.
There was no good reason for that failure. The Claimant is represented by solicitors who, prior to accepting instructions are required to satisfy themselves that the litigation is within their expertise and experience, or else ensure that they are able to familiarise themselves with the relevant law. Thomson Reuters’ Practical Law has a practice note on relief from forfeiture which plainly states the limits on the County Court’s jurisdiction in such claims, as does Woodfall on Landlord and Tenant, and many other texts that one might expect solicitors to consult.
In deciding therefore whether to transfer the proceedings to the High Court, it is necessary to consider all the circumstances of the case, including those matters set out in CPR 30.3 and the Overriding Objective. In this regard the relevant circumstances can be summarised as follows:
The Claimants, or rather their solicitors, have been very slow in applying for transfer. If they were unaware of the jurisdictional issues prior to the first hearing on 25 March 2026, they were certainly aware of it from that time onwards. No satisfactory explanation was given for the delay in applying for transfer until 22 May 2026.
By delaying in making the application for transfer, the Claimants have made it more likely that the application would be opposed, thus consuming a greater proportion of the court’s resources, both in Bodmin and in Mansfield.
The application in respect of transfer is not the only instance of delay or a lack of promptitude by the Claimants or their solicitors. Notwithstanding having instructed solicitors by April 2025, these proceedings were not issued until December 2025. Whilst some explanation has been proffered concerning an attempt to issue the claim in April 2025 but proceedings having been rejected by the court due the inclusion of a money claim, these matters have not been adequately explained or evidenced by the Claimants.
Delay in the context of a relief from forfeiture case is of even greater significance that in many other types of litigation. Not only is the County Court’s jurisdiction limited to those cases in which the claim is issued within 6 months of re-entry, the High Court will treat that six month period as a guide when exercising its equitable jurisdiction (Pineport v Grangeglen [2016] EWHC 1318 at paragraphs 15-19).
It may be that the significant delay between re-entry (April 2024) and the issue of proceedings (December 2025) is damaging to the prospects of the Claimants’ claims succeeding, however in most circumstances when dealing with case management issues and applications for relief from sanction, the court should not embark on an investigation and analysis of the merits of the underlying claim (HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64). This principle is, in my view, of even greater importance in circumstances where the court dealing with the case management decision does not have jurisdiction to determine the claim itself.
Only the High Court has jurisdiction to hear the claim for relief from forfeiture, such that all the factors in CPR 30.3 would necessarily tend in favour of transfer.
There needs to be some incentive to follow court rules, including issuing claims in the correct court, and some penalty where parties do not do so. This is necessary to ensure that the court is case managing claims in a way that enforces those rules. However, the court must consider whether some sanction short of refusing the transfer would suffice. In this regard it is relevant that court could make an award of costs against the Claimant so as to achieve that aim.
The persons responsible for the failure to issue the claims in the correct court cannot be said to be the Claimants themselves in any real sense. Litigants can reasonably expect to rely upon their solicitors to identity the correct procedures in respect of their claim. Ordinarily, the court will not distinguish between the acts of a party and the acts of their solicitor, but where the practical effect of a failure or mistake would be the striking out of part of a claim, this is a factor which the court is entitled to take into account when considering the proportionality of any decision. Plainly it is more proportionate for a litigant who is knowingly and willingly in default to have their claim struck out, than to strike out the claim of an innocent litigant who has relied upon the advice of their solicitors leading them into default.
The Claimants would be significantly prejudiced by a refusal to transfer the claim to the High Court. They would be precluded from pursuing a claim for relief from forfeiture. Whilst it might be said that such prejudice could be ameliorated by the Claimant’s suing their solicitors, that is not necessarily an adequate or sufficient answer. Firstly, the outcome of a claim in negligence could only ever result in an award of damages, rather than the lease being re-instated. Further, in the circumstances of this case, it is very difficult to see how the loss of a chance to re-instate the subject leases would be valued in monetary terms. A claim for loss of chance will inevitably be less valuable than whatever monetary value the relief from forfeiture would actually have to the Claimants.
The Defendants would not be significantly prejudiced by the transfer. The Defendants may be prejudiced and inconvenienced by the litigation generally, but that is different to being prejudiced by the transfer itself. The Defendants purchased the properties knowing their history and knowing that history brought with it a risk of litigation. Transferring the proceedings to the High Court would simply allow them to proceed as they always should have done.
Taking all those factors into account, whilst the delay on the part of Claimants in making the application for transfer is a particularly troubling feature of the case, and requires censure, to refuse transfer and thereby effectively strike out the claim would cause disproportionate prejudice to the Claimants who may be left with insufficient recourse to any third party. In circumstances where it is common ground between that parties that the Claimants have been the victims of a fraud, that prejudice would be unacceptable and would not be just.
I therefore allow the application for transfer to the High Court.
Strike Out
The Defendants pursued their application for strike out of the Claimants’ claims on two grounds.
The first proceeds under CPR 3.4(2)(a), on the basis that the Claim does not disclose reasonable grounds for bringing the claim for relief from forfeiture, since the County Court does not have jurisdiction to determine such claims brought more than 6 months after re-entry. Having concluded that the case should be transferred to the High Court, which does have jurisdiction to hear the claim, that aspect of the application must now fail.
The second ground was couched as an abuse of process argument under CPR 3.4(2)(b) (abuse of process). The Defendant contended that issuing the claim under Part 8 was an abuse by “procedural irregularity”, as was a failure to pay the correct court fee and a failure to adequately particularise the losses claimed. This was not strongly pursued by the Defendant either in their skeleton argument or oral submissions, and sensibly so. There is no evidence to suggest that by issuing the claim using the Part 8 Procedure, paying the reduced court fee that this would attract and drafting the Particulars of Claim in the manner in which they have, the Claimants have sought to use the court process for an improper purpose or for a purpose that is significantly different to that which was intended. The background chronology to these proceedings is not analogous to any of the categories of abuse summarised in at paragraphs 3.4.4 to 3.4.16 in the White Book (2026) (Volume 1), nor the examples of other forms of abuse given at paragraph 3.4.17. At their highest the Defendants’ criticisms might have founded an application for strike out under 3.4(2)(c) (failure to comply with a rule, practice direction or court order). However, even had the application been put in these terms, it would not have been successful. The most significant breaches would have been the failure to issue the claim using the Part 55 procedure and the failure to issue the claim in the High Court. The failure to issue using Part 55 has already been rectified by my order of 25 March 2026 pursuant to CPR 3.10 (at least in the respect of the claim by Mr Dinnage and Ms Yeates). The failure to issue in the High Court has been addressed by my approval of the application for transfer.
In the circumstances therefore, the application for strike out must be dismissed, leaving only the application for summary judgment in respect of the Claimants’ claim for wrongful forfeiture.
Summary Judgment
The Defendants contend that the Claimants claim for unlawful forfeiture has no real prospect of success.
The approach which the court must take on an application for summary judgment under CPR 24 is familiar and relevantly summarised in the White Book at paragraph 24.3.2:
The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 1 All E.R. 91;
A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
…
However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No.5) [2001] EWCA Civ 550;
…
… it is not uncommon for an application under Pt 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it… ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.
The Defendant contends that it was lawfully entitled to re-enter the property pursuant to the terms of the lease. The relevant lease terms relied upon are:
Definitions
…
Annual Rent: rent at the initial rate of £250 per annum from the 1st June 2026 and doubling every 25 years from the 25th anniversary of that date.
…
Insurance Rent: the aggregate in each year of:
the Tenant’s Proportion of the gross cost of the premium before any discount or commission for:
the insurance of the Building, for its full reinstatement cost (taking inflation of building costs into account) against loss or damage by or in consequence of the Insured Risks, including costs of demolition, site clearance, site protection and shoring-up, professionals' and statutory fees and incidental expenses, the cost of any work which may be required under any law and VAT in respect of all those costs, fees and expenses; and
public liability insurance in relation to the Communal Areas;
the gross cost of the premium before any discount or commission for insurance for toss of rents from the Building for three yeans; and
any insurance premium tax payable on the above.
Rent Payment Dates: every 1st January and 1st June thereafter from the Sublease End Date
Sublease: means the sublease of even date herewith and made between the parties
Sublease End Date: 28 March 2028 or the date of termination of Sublease (whichever is the earlier)
…
GRANT
…
The grant is made with the Tenant paying the following as rent to the Landlord from the Sublease End Date:
The Annual Rent and all VAT in respect of it
the Insurance Rent
all interest payable under the lease
…
THE ANNUAL RENT
The Tenant shall pay the Annual Rent and any VAT in from the date that it is due in accordance with clause 2.3 above in advance in two equal instalments on or before the Rent Payment Dates…
…
INSURANCE
…
The Tenant shall pay to the Landlord on demand (but only from the Sublease End Date):
the Insurance Rent;
…
RATES AND TAXES
The Tenant shall from the Sublease End Date pay all present and future rates, taxes and other impositions and outgoings payable in respect of the Property, its use and any works carried out there…
…
UTILITIES
The Tenant shall from the Sublease End Date pay all costs in connection with the supply and removal of heat, air conditioning, electricity, gas, water, sewage, telecommunications, data and other services and utilities to or from the Property.
…
COMMON ITEMS
The Tenant shall from the Sublease End Date pay the Landlord on demand a fair proportion of all costs payable by the Landlord for the maintenance, repair, lighting, cleaning and renewal of all Service Media, Communal Areas, structures and other items not on the Building but used or capable of being used by the Building in common with other land.
…
DEFAULT INTEREST AND INTEREST
If any Annual Rent or any other money payable under this lease has not been paid by the date it is due, whether it has been formally demanded or not, the Tenant shall pay the Landlord interest on that amount at the Default Interest Rate (both before and after any judgment). Such interest shall accrue on a daily basis for the period beginning on the due date and ending on the date of payment.
…
COSTS
The Tenant shall pay the costs and expenses of the Landlord including any solicitors or other professionals costs and expenses (incurred both during and after the end of the term) in connection with or in contemplation of any of the following:
the enforcement of the tenant covenants of this lease; or
serving Any notice In connection with this tease under section 146 or 147 of the Law of Property Act 1925 or taking any proceedings under either of those sections, notwithstanding that forfeiture is avoided otherwise than by relief granted by the court; or
(c) serving any notice in connection with this lease under section 17 of the Landlord and Tenant (Covenants) Act 1995; or
the preparation and service of a schedule of dilapidations in connection with this lease; or
any consent or approval applied for under this lease, whether or not it is granted (unless the consent or approval is unreasonably withheld by the Landlord in circumstances where the Landlord Is not unreasonably to withhold it)
the recovery or attempted recovery of rent arrears.
…
RE-ENTRY AND FORFEITURE
The Landlord may re-enter the Property (or any part of the Property In the name of the whole) at any time after any of the following occurs:
any rent is unpaid 21 days after becoming payable whether it has been formally demanded or not;
The Defendant’s position is that, as at 3 April 2024 when it re-entered the property, the following sums, reserved as rent pursuant to clause 2.3, were unpaid:
Annual Rent in the sum of £897.38 falling due since 17 February 2021 (the date on which the Sublease was disclaimed by the liquidator of CH8 Ltd);
£737.23 in respect of Insurance Rent for the calendar years 2021 and 2022;
£259.30 in respect of interest on sums due under clauses 8,9,10 and 13 of the lease for the years 2021, 2022, 2023 and 2024.
In respect of the Annual Rent, the Defendants contend that upon disclaimer of the sublease by the liquidator, pursuant to clause 2.3, the Claimants became liable to pay the Annual Rent, the Insurance Rent and all interest.
The only notices or demands relied upon and evidenced for the purposes of the summary judgment application were a statement of rent arrears dated 25 March 2024 and a separate document entitled “Statement of Rent Arrears (Excluding Annual Rent)” dated 31 March 2024. These are each dated less than 21 days prior to the First Defendant re-entering the properties. There is no evidence either in the form of a covering letter or witness statement to say how, when or even whether these documents were served on the Claimants. The Defence states that they were sent to “both the contractual service address contained within the lease and the Property”.
The Defendants contend that:
the Annual Rent is due and payable without the need for any demand (there being no lease term requiring it to be demanded);
Notwithstanding that clause 7.3 provides that the Insurance Rent is liable to be paid by the tenant “on demand”, it was nonetheless “payable” for the purposes of clause 34.1 without the need for any demand;
Interest is payable on “any other money payable under this lease [which] has not been paid by the date it is due, whether it has been formally demanded or not”.
The Defendants state therefore that the First Defendant was entitled to re-enter the property on 3 April 2024, without needing to evidence that they or any of their predecessor’s in title had made any demand under the lease more than 21 days before re-entry.
The Claimant accepted, for the purposes of the summary judgment application at least, that the Annual Rent is payable without the need for any demand and that there is no requirement under the lease for the landlord to serve a notice or demand in respect of arrears of Annual Rent prior to exercising a right of re-entry under clause 34.1. However, the Claimants deny that they had any liability for Annual Rent prior to 1 June 2026. In this regard they rely on clause 1.1 which defines the Annual Rent as “£250 per annum from the 1st June 2026” (emphasis added).
The Claimants say therefore that, although clause 2.3 requires the Annual Rent (as well as Insurance Rent and Interest) to be paid from the Sublease End Date and the Sublease End Date was 17 February 2021, there was no Annual Rent falling due prior to 1 June 2026.
As to the Insurance Rent, the Claimants argue that it cannot be the case that a landlord is entitled to exercise a right of re-entry in respect of unpaid Insurance Rent without first making a demand for that sum, in circumstances where the lease itself provides that Insurance Rent is to be paid “on demand” and the Claimants would have no way of knowing what sum they are required to pay.
The Claimants made limited submissions in their skeleton argument and oral submission in respect of Interest, but argued that in order for the Defendants to be able to rely on arrears of interest, they would need prove the Claimants’ liability or the underlying sums upon which interest is said to have accrued.
I consider that the Claimants have a real prospect of showing that the re-entry was unlawful:
There may be some ambiguity or contradiction between the definition of Annual Rent in clause 1.1 of the lease and clause 2.3 of the lease in respect of when the liability to pay Annual Rent commences. Lease terms are to be construed objectively, having the meaning that they would give to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of they entered into the lease. There is at least a real prospect that the proper construction of the lease is that:
The earliest date on which Annual Rent is payable by the Claimants was 1 June 2026; and
Subject to that, the Annual Rent would be come payable on Sublease End Date.
Notwithstanding that the court can determine short points of construction on a summary Judgment application, I do not consider it would be appropriate for me to do so where there is no cross application for summary judgment on this issue by the Claimants and there may be further evidence at trial which would be relevant to the matrix of fact to be included within the construction exercise. I am satisfied however that the Claimants have a more than fanciful or arguable case that Annual Rent did not fall due prior to 1 June 2026, notwithstanding the earlier termination of the Sublease. If the Annual Rent did not fall due prior to 1 June 2026, it would necessarily follow that the Defendants were not entitled to exercise a right of re-entry in respect of non payment of Annual Rent in April 2024.
Similarly, whilst I decline to determine this point of construction in the absence of a cross application by the Claimants for summary judgment, I am satisfied that the Claimants’ have a real prospect of successfully arguing the Defendants were not entitled to re-enter on the grounds of unpaid Insurance Rent. Clause 7.3 provides for the Claimants’ liability to pay the Insurance Rent to arise “on demand”. In this sense it is at least more than fanciful or arguable that the Insurance Rent does not “become payable” for the purposes of clause 37.3 until there has been a demand for its payment. That would be a common sense construction, since how can the tenant be at risk of forfeiture for not having paid a sum which they are unaware of. The Defendants’ construction would appear difficult to maintain. In the context of this summary judgment application, the Defendant has failed to evidence any demand for the Insurance Rent, other than in the form of the statement of rent arrears dated 31 March 2024. There is insufficient evidence of how, when and where that statement was served and, in any event, it was less than 21 days prior to re-entry so does not assist the Defendants
With regards to interest under clause 12, I am also satisfied that the Claimant has a real prospect of successfully arguing that no such interest had been unpaid for more that 21 days after it became payable, such that there was no right of re-entry under clause 37.3. Whilst clause 12 provides that “If … any other money payable under this lease has not been paid by the date it is due, whether it has been formally demanded or not, the Tenant shall pay the Landlord interest on that amount” (emphasis added)and that interest would accrue daily, the reference to there being no need for demand relates to the conditions to be met in order for interest to accrue. Clause 12.1 is silent on whether there then needs to be a demand for the interest in order for the interest itself to become payable. I consider that, in circumstances where the lease may be forfeited for non- payment of interest and interest may accrue on sums which have not been demanded and which the tenant may have no knowledge of (such as professional costs and maintenance expenses incurred by the Landlord), there is a real prospect that the lease may be construed as requiring a demand for interest to be made before it “becomes payable” for the purposes of clause 37.3, notwithstanding that interest may accrue from an earlier date.
Further, and in any event, the Defendants would need to prove that there were in fact sums due upon which interest has accrued. In the context of this summary judgment application, the only evidence of the sums upon which interest is said to have accrued, is the rent statement dated 31 March 2024. It provides no particulars of sums said to have fallen due under clauses 8, 9, 10 and 13 of the lease. It only provides a figure for the interest which is said to have accrued on liabilities under each clause in the years 2021 to 2024. The Claimants are entitled to challenge and put the Defendants to proof that the Claimants were liable for such sums under clauses 8, 9, 10 and 13. In the absence of any particulars, let alone evidence of those liabilities having been provided by the Defendants in support of the application for summary judgment, the court is entitled to consider the additional evidence which may be available at trial and to conclude that the Claimants have a real prospect defeating this element of the Defendants’ case
In the circumstances, I dismiss the Defendants’ applications for summary judgment .
Summary
It follows from the above that the claim will now need to be transferred to High Court, Business and Property Courts in the Property, Trusts and Probate list for further case management and directions.
The Claimants contend for a transfer to the District Registry in Birmingham. The Defendants say the District Registry in Bristol is the appropriate forum. Mr Wu is resident in Taiwan. Mr Dinnage and Mr Yeates live in London. It may be that ultimately there are similar claims by other leaseholders which will need to be case managed and/or tried together with these proceedings, perhaps including the Mansfield Claim. I do not know where the other leaseholders reside. It would appear to me in these circumstances the appropriate District Registry is the District Registry closest to the subject property, namely Bristol.
I would invite the parties to agree a form of order in respect of both the transfer to the Bristol District Registry and also, so far as they are able, in respect of costs.
With regards to costs, in the event that they are not agreed, I will need to hear submissions at the handing down of this Judgment as to what costs order(s) should be made.
To this end, I should address briefly the status of the Defendants and how this might affect any claim for costs which they might make.
Prior to the hearing on 25 March 2026, the court office had noted that all documents filed on behalf of the Defendants had been filed by a Mr Stephen Purvis, by email. Those emails were signed off as “Principal, Pendlebury Wild”. The documents were described as being filed “on behalf of” the Defendants. The court office had sought to clarify whether Mr Purvis or Pendlebury Wild was acting on behalf the Defendants, but received no reply.
So far as I have been able to ascertain, Pendlebury Wild is not a firm of solicitors regulated by SRA and Mr Purvis is not a solicitor regulated by the SRA. I sought to address Mr Purvis’ status at the start of the hearing on 25 March 2026 and he explained to me that he was a director of the Defendants. Upon reviewing the records held by Companies House I noted that in relation to each company an AP01 confirming Mr Purvis’ appointment on 1 February 2026 had been filed on 25 March 2026 (i.e the day of the hearing).
I rehearse these facts in the Judgment simply due to the fact that there was a significant claim for costs set out in Forms N260 submitted by the Defendants in advance of the hearing on 26 May 2026, totalling approximately £14,000. The majority of those costs comprise, Mr Purvis’s time, said to have been calculated at 66% of the Guideline Hourly Rate for Grade A Fee earners in National 2 regions.
The Defendants would only be entitled to seek such costs pursuant to CPR 46.5(3)(b), in the event that they had incurred costs for legal services relating to the conduct of proceedings and Mr Purvis was a person authorised to conduct litigation for the purposes of the Legal Services Act 2007.
It may be that, since I have not yet heard submissions on costs, I have misunderstood the basis on which the Defendant’s claim for costs was made. However, to the extent costs are not agreed between the parties and the Defendants maintain any claim to costs at the handing down of this judgment, greater clarity and evidence concerning Mr Purvis’s involvement, connection to the Defendants and professional status shall be required.