Hardy & Anor v Haselden & Ors [2011] EWCA Civ 1387

Excuse the (slightly flippant) title which is a backhanded reference to a recent post by NL. This is actually a slightly sad case.

It is also slightly convoluted set of facts so you will have to bear with me.

Facts
Mr & Mrs Haselden were the owners of a farm in Lancashire along with their daughter, Mrs Ollerton. Mr & Mrs Hardy met with the Haseldens on several occasions during the latter part of 1997 to discuss terms on which the Hardys might move into the farm. In August 1997 Mr Haselden is said to have made an oral statement in front of his wife on the following lines:

(i) that the Claimants move to the [Farm] and occupy a mobile home situate at the property for the purpose of securing it from trespassers;
(ii) that the Claimants could live at the [Farm] for so long as they wished to in the expectation that the Claimants would move into the farm within a very short time;
(iii) that the Claimants could keep livestock, including horses, sheep and pigs at the Farm;
(iv) that the claimants pay rent to the Defendants in the sum of £200 per month and discharge all bills;
(v) that the Claimants renovate and refurbish the farmhouse located at the [Farm];
(vi) that the Defendants would reimburse the Claimants for the cost of the aforesaid renovation and refurbishment.

Crucially, no part of this agreement was ever reduced to writing. Presumably in reliance on this statement the Hardys moved into the farmhouse in October of that year and began renovation works which ultimately cost them around £31,000.
In late late 2002 the Hardys sought to run a child are business, a use to which the Haseldens consented and in spring 2004 part of the farm was sold to a third party who is not relevant to this matter.
Relations turned more problematic in the summer of 2006 when the Hardys discovered that a mortgagee of the farm was seeking an order for possession of the whole property as against any occupiers due to a default in mortgage payments. That possession order was granted in January 2007 but was rescinded in June following discharge of the mortgage. The Hardys meanwhile had been pressing for a formal grant of a lease and repayment of the monies spent as they had become concerned about their position. This correspondence went totally unanswered.
In September 2007 a claim was issued on behalf of the Hardys. It sought a number of things. Probably least controversially it sought repayment of monies spent on the restoration of the farmhouse. Rather more importantly it sought:

a declaration that they had a tenancy of the Farm for their lives taking effect as a term of 90 years pursuant to s.149(6) Law of Property Act 1925 at a rent of £200 a month. In addition they sought an order for specific performance of an oral agreement to that effect they alleged to have been made in or about August 1997 and damages for breach of an implied covenant for quiet enjoyment.

None of the Defendants responded to the claim or appeared at any of the initial hearings. The matter came before DJ Anson in September 2008, again without any response or attendance by the Defendants. The Hardys admitted that expenditure on works had been incurred more than 6 years in the past and this limitation was an issue but made the, perfectly valid, argument that limitation was only an issue if it was raised by the defence. Oddly, DJ Anson, took the view that the Defendants’ failure to correspond amounted to an effective ‘abandonment’ of the farm. In reliance on witness statements produced by the Hardy’s accordingly gave judgement allowing the declaration, ordering the defendants to execute a lease, and giving judgement for just over £40,000 plus costs.
At the start of October 2008 Mr Haselden suffered a heart attack and then died at the end of the month leaving no will. Also in that month DJ Anson made an interim charging order over the farm for the money judgement of £40,000-odd he had already given.
In January 2009 the charging order was made final and in February 2009 a Deputy District Judge executed a lease on behalf of the Haselden’s and Mrs Ollerton in pursuance of DJ Anson’s order. In August 2009 an eviction order in respect of the farm was made pursuant to the final charging order which was to take effect in September 2009.
In October 2009 the farm then fell under the control of Mrs Haselden and Mrs Ollerton as his personal executors when letters of administration were issued to them.

Set Aside
In September 2009 Mrs Ollerton made an application in respect of herself and her mother to have the orders of DJ Anson set aside. This application was made under CPR39.3 which deals with failure to attend trial. It seems that Mr Haselden was severely ill for some time prior to his heart attack and had taken to intercepting all mail sent to the Defendants and placing it in his room and then not opening it. There was in fact some doubt cast as to whether any of the Defendants had actually been aware of the proceedings at all. Mrs Ollerton herself had also been unwell and unable to deal with the matter even if she had been aware.
This application was refused by DJ Bland and the appeal to that decision was then refused by HHJ Appleton. There was no right of appeal to the order of HHJ Appleton.

Appeal
The matter therefore came before the Court of Appeal by way of an appeal against the original decision of DJ Anson along with permission to appeal out of time, permission to adduce fresh evidence, and an order setting aside the decision of DJ Anson and ordering a new trial.
The Court considered the case of Bank of Scotland v Pereira in some detail. We have previously written about this case here and so I will not go into it again. Suffice it to say it deals with the interaction between an application to set aside and an appeal. The Court should be reluctant to allow an appeal when an application to be set aside has already been refused but the failure of an application under CPR39.3 is not an absolute bar to an appeal.

Decision
Ultimately this appeal turned completely on the Court’s interpretation of CPR1 and the overriding objective. Was it more just to allow the decision of the DJ Anson to stand after such an extended period or was it more appropriate to roll back the clock and allow Mrs Haselden and Mrs Ollerton what effectively amounted to a second bite of the cherry.
Undoubtedly, it was a very persuasive factor that the decision of DJ Anson was simply wrong. The statements that the Hardys’ contended had been made by Mr Haselden were not enough to constitute the grant of a tenancy. There was no certainty of term and, unlike in the recent case of Berrisford v Mexfield (our report here) there was no written disposition of land or contract. Therefore there was not grant of a tenancy, never mind one that could be converted to a 90 year term by s149(6) LPA 1925.
In the circumstances the Court were not of the view that it was their role to penalise the Haselden’s for their failure to deal with their business affairs properly.
The Court therefore granted the appeal.

Tidying Up
It only remained for the Court to consider the money claim and the mechanism for moving things forward. They were asked not to disturb the monetary judgement. The part that related to quiet enjoyment was never going to survive a conclusion that there was no tenancy. Given that the agreement was void to create a lease the Court was reluctant to allow it to avoid further consideration.
Therefore, the extension for appeal was granted and the appeal allowed. The decision to DJ Anson was set aside in its entirety and a retrial ordered. The parties had agreed with the suggestion of the Court that if the appeal were allowed it should be remitted to a specialist Chancery judge in Manchester and this was done. The Hardy’s were directed to make application to the Chancery division in Manchester to seek directions for the further disposal of the matter.