Kassam v Gill & Gill (13th August 2018, County Court at Birmingham) (copy of judgment here)

Regular readers and long term twitter followers will know that we tend to take a dim view of unqualified, unregulated ‘evict your tenant’ set ups. Here is a very interesting case involving just such a company and in which their actions were a central issue. The case is also interesting on the extent to which a defective section 8 notice can be waived.

Ms Kassam was the assured shorthold tenant of the Gills. It appears that rent arrears accrued. After serving a section 21 notice which turned out to be defective, the Gills sought the services of a set up called “Remove a Tenant” (RaT), a trading name of Fentham Group Limited. RaT served a section 8 notice seeking possession on grounds 8, 10 and 11, as ‘agents’ for the Gills.

After expiry of the notice, a possession claim was filed online via PCOL. The evidence was that the Gills had attended RaT’s office. RaT had completed the claim form, including adding the Gills’ names to the signature box but Mr Gill had ticked the verifying check box by the statement of truth. RaT’s address appeared on the form as that of the claimants’ solicitors. RaT had also prepared the particulars of claim. RaT’s evidence was that it did not have a PCOL account and that one had been opened in the Gills’ name. The fee was paid on RaTs’ card.

Subsequently, RaT did the following

(i) instructed Jeffreys solicitors to arrange for an advocate for the subsequent hearing

(ii) preparation of a witness statement verifying the claim for the Claimants to sign;

(iii) preparation of a hearing bundle, which it sent to Jeffreys to pass on to the advocate, with a note about the proposals the Defendant had made to it, and the Claimants response. Copies were also sent to the Defendant and the Court;

(iv) signed certificates of service in relation to the section 8 notice and the hearing bundle. These were signed by Mr Turner as the “Claimant’s …friend”. In the box next to his signature, which requires completion is signing on behalf of a firm or company, he typed “Administrator Fentham Group”.

At the first hearing, the Deputy District Judge granted a possession order, and was apparently under the impression that RaT had an inhouse solicitor and were SRA regulated,

Ms K appealed on the following grounds:

The Judge was wrong to find as a fact that the Claimants had used Solicitors to conduct litigation in circumstances where there was no evidential basis for concluding the same.

 The Judge was wrong to not strike out the claim in light of the fact that the claim had been issued and prosecuted in breach of section 12 Legal Services Act 2007.

 The Judge was wrong to find as a matter of law and fact that Ground 8 in Schedule 2 to Housing Act 1988 was proven.

The Circuit Judge dealt with a number of discrete issues.

i) Validity of claim form.

CPR PD 55B (on the PCOL system) at 9.1 provides

Any provision of the CPR which requires a document to be signed by a person is satisfied by that person entering his name on an online form.

The Gills had not entered their names, RaT did that. Did this invalidate the claim form?

Ticking the box to verify the statement of truth was not a signature. The PCOL form allowed for names to be entered once, at the start, which then populated the signature box. This was not a happy fit with the rules.

CPR 22.1 provides that a court may strike out a statement of case not verified by a statement of truth, or that the statement not be struck out but cannot be relied upon. In this instance, the statement would not be struck out, but it was not fatal to the claim that the claim form could not be relied upon as there were the Gills’ signed witness statements.

ii) Were RaT ‘conducting litigation’ within the meaning of section 14(1) Legal Services Act 2007, which is a reserved activity?

Schedule 2 paragraph 4 (1) of the 2007 Act provides that:

The “conduct of litigation” means –

(a)       the issuing of proceedings before any court in England and Wales,

(b)       the commencement, prosecution and defence of such proceedings, and

(c)        the performance of any ancillary functions in relation to such proceedings (such as entering appearances to actions)

There was very limited case law on this. A recent lawtel note on Ellis v Ministry of Justice Court of Appeal 12 June 2018 did not assist and the transcript of judgment was not yet available.

As this was a criminal offence, a restrictive interpretation of conduct of litigation should be adopted. And it was important that this was a commercial organisation, providing services for a fee, rather than, say someone voluntarily assisting a family member. “The policy which underlies the need for those conducting litigation to be trained, insured and subject to discipline is unlikely to be undermined by that sort of “assistance”.”

The Practice Guidance (McKenzie Friends)(2010) 1 WLR 1881 at para 27 notes the kind of activities that may be involved, in the context of remunerated services:

Litigants can enter into lawful agreements to pay fees to MFs for the provision of reasonable assistance in court or out of court by, for instance, carrying out clerical or mechanical activities, such as photocopying documents, preparing bundles, delivering documents to opposing parties or the court, or the provision of legal advice in connection with court proceedings. Such fees cannot be recovered from the opposing party.

But what RaT did extended beyond these activities.

The context here is that Remove a Tenant are in business to provide these services for a fee, aware of the restrictions on the work it can undertake, and of the fine line between assistance and conducting litigation. They provide a package of services, which in the particular circumstances of this case, included functions which were ancillary to the issuing of these proceedings and their prosecution. It was more than assisting with clerical or mechanical matters; Remove a Tenant were closely involved in the issue and prosecution of this claim. Its role included providing advice, drafting the proceedings, paying the issue fee, preparing a witness statement and certificates of service, preparing a hearing bundle and serving it on the Defendant and the Court, making arrangements (through properly qualified solicitors) for an advocate to represent the Claimants, paying for that service, and corresponding with the other party (albeit briefly).

Within that package is the drafting and issue of the claim form. I can accept that the online PCOL form involves some box ticking, but it also involves some drafting and the identification of how to put the claim. It is not particularly complicated, but the point is that the drafting was done by Mr Turner. More importantly perhaps for the purposes of the statutory definition of the conduct of litigation, Mr Turner has filled in the form in such a way that (on my reading of the rules) he has entered the Claimants name(s) on the form, thereby applying their signature to it. He has also entered Remove a Tenant’s address in circumstances where that has then appeared on the Claim form as the “Claimant or Claimant’s solicitor’s address to which documents or payments should be sent …”.

The evidence of Mr Gill is that he ticked the statement of truth icon, and Mr Turner’s evidence is that he entered his address only as a correspondence address. That mitigates the position, but I have concluded that the package of work taken together, and this aspect in particular, crossed the line, and breached the provisions of the 2007 Act. If I am wrong about that, it came perilously close.

So, there had been conducting litigation on RaT’s part.

iii) Did this make the claim an abuse of process?

Ms K’s argument was that, as per Lewisham LBC v Malcolm (2008) UKHL 43, the court cannot be expected to give legal effect to an unlawful act. RaT’s actions were unlawful.

The Gills’ argued that the claim should not be struck out as it was not an ‘exceptional case’, as per Summers v Fairclough Homes (2012) UKSC 26

The CJ held:

It would neither be just nor proportionate to deprive the Claimants of their judgment. They have committed no wrong. I raised with Mr Walder the question of whether it was appropriate to strike out because that was the only means the court had to prevent this sort of abuse. He submitted that it was a matter for the criminal law, not for this court. Having considered the matter, I agree. The proportionate response would be to disallow costs, but save for the issue fee, none are claimed. There is no discernible effect on the fairness of the trial, and it should not prevent the Claimants proceeding with their claim.

iv) The section 8 notice.

The drafted section 8 notice did not include the following part of ground 8

and for the purpose of this ground “rent” means rent lawfully due from the tenant

despite the notes to Form 3 stating that the grounds relied on should be set out in full.

The relevant part of the notice served stated:

Give a full explanation of why each ground is being relied on; Grounds 8 and 10; The rent of £1750 is due monthly in advance as per a tenancy agreement commencing on 21^stNovember 2016 and at the date of service of its notice the tenant owes more than 2 months’ rent and is a total of £10520.39 in arrears.

Following Masih v Yousah (2014) EWCA Civ 234 (our report), it was not enough for the notice to state rent due at the time of service to rescue the omission. The issue was that the tenant must know that rent lawfully due at the time of the hearing must also be in at least 8 weeks/two months/a quarter. That was the purpose of stating the full ground.

At [22] in Masih Floyd LJ noted the argument that in Mountain v Hastings (1992) 2 EGLR 53 the notice went on to state that the total amount was due and payable, but he noted that that was still only in relation to what was due at the date of the notice. It did not contain the assertion that rent was lawfully due or owed at the date of the hearing. It is apparent from the result in Mountain v Hasting, and its treatment in Masih v Yousah, that without such an assertion the notice was not saved by stating that rent was owed at the date of the notice. Even taking a purposive approach, and reading paragraph 3 with paragraph 4, this notice does not contain the assertion that the amount was lawfully due or owed at the date of the hearing. I conclude that this notice is invalid and the claim under Ground 8 cannot succeed.

The appeal was allowed in part, possession order set aside and claim remitted to proceed under grounds 10 and 11. There was a disrepair and deposit protection counterclaim to be raised.

Comment

Any ‘Evictions’R’Us’ style set up will need to consider this carefully

1. A PCOL form completed by the non-lawyers will not be something that can be relied upon if the landlord’s name has been added by the non-lawyers, and may even be struck out.
2. Conducting litigation is a criminal offence if done without qualification. It is clear from this judgment that ‘assisting’ the landlord can certainly cross the boundary. In this instance, drafting and issuing the claim form and giving the RaT’s address for communications in particular crossed the line, but also taken in the context of “drafting the proceedings, paying the issue fee, preparing a witness statement and certificates of service, preparing a hearing bundle and serving it on the Defendant and the Court, making arrangements (through properly qualified solicitors) for an advocate to represent the Claimants, paying for that service, and corresponding with the other party (albeit briefly)”.
3. There is a boundary line that needs further clarification here. It may be that Ellis v MoJ will help when the full judgment becomes available.

Given the potential criminal offence under LSA 2007, any ‘Evictions’R’Us’ set up should be considering what they do very carefully. And given their unregulated, yet fee paid status, they should also pay close attention to Practice Guidance (McKenzie Friends) (2010) 1 WLR 1881 as suggesting the extent of their involvement in the issue and furtherance of proceedings.

The section 8 notice issue is yet another reminder that there is no reason to depart from the Form 3 form. Indeed, that RaT did not use Form 3 would be a reminder why a regulated and insured practitioner is a better bet…