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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Loveridge & Loveridge v Healey [2004] EWCA Civ 173 (20 February 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/173.html Cite as: [2004] EWCA Civ 173, [2005] 1 WLR 1405, [2005] WLR 1405

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION(Beatson J)

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

Lord Phillips, MR:

Introduction

1. The Appellants (the Claimants) own a mobile homes site at Droitwich in Worcestershire. At a pitch on that site stands what, when it was placed there, was a mobile home. It is occupied by the Respondent (the Defendant). It was placed on the site under a contractual licence. In this action, which was commenced in the Worcester County Court, the Claimants claim a declaration that the licence is terminated and seek possession of the pitch. One ground upon which they claim this relief is that the respondent has committed a breach of the licence agreement.
2. The agreement is one to which the Mobile Homes Act 1983 applies, by virtue of section 1, which provides:

"1. Particulars of agreements

(1) this Act applies to any agreement under which a person ("the occupier") is entitled-

(a) to station a mobile home on land forming part of a protected site; and

(b) to occupy the mobile home as his only or main residence."

Section 2 of that Act provides:

"2. Terms of agreements

(1) In any agreement to which this Act applies there shall be implied the terms set out in Part 1 of Schedule 1 to this Act; and this subsection shall have effect notwithstanding any express term of the agreement."

Among the terms in Part 1 of Schedule 1 that fell to be implied into the licence agreement was the following:

"4. The owner shall be entitled to terminate the agreement forthwith if, on the application of the owner, the court-

(a) is satisfied that the occupier has breached a term of the agreement and, after service of a notice to remedy the breach, has not complied with the notice within a reasonable time; and

(b) considers it reasonable for the agreement to be terminated."

3. It is common ground that the Claimants have never served the notice required by paragraph 4(a). The issue before us is whether, despite this, they are in a position to satisfy paragraph 4 by reason of an admission made by the Defendant in his pleaded Defence. In a judgment dated 24 April 2003 Mr Recorder Evans held that they are not and gave summary judgment in favour of the Defendant in relation to that part of the claim that was based on an alleged breach of the agreement.
4. The Claimants appealed to Beatson J. In a judgment dated 31 July 2003 he dismissed their appeal. The Claimants now appeal to us, with the permission granted at an oral hearing by Jacob and Auld LJJ. They concluded that the case raised issues of general importance that justified a second appeal.
5. The appeal turns on the effect of the pleadings. The Counsel appearing before us and in the hearings below were not responsible for these pleadings. The Particulars of Claim were originally pleaded on 13 August 1999. To this pleading a Defence was pleaded on 19 October 1999. The pleadings were subsequently amended. I shall set out the relevant parts of the pleadings as amended.

AMENDED PARTICULARS OF CLAIM

2. The following are express or alternatively implied terms of the defendant's licence to occupy the caravan site-

(i) that the mobile home stationed on his pitch was a caravan within the definition of section 29(1) of the Caravan Sites and Control and Development Act 1960 …

3. In breach of the term pleaded at paragraph (i) above, the structure stationed by the defendant on the pitch for which he has the benefit of a licence does not satisfy the definition of a caravan within the 1960 Act in that it is incapable of being moved from one place to another whether by being towed or by being transported on a motor vehicle or trailer. The condition of the structure is such that its weight and condition render it immobile. If any attempt were made to move the structure it would collapse.

4. The claimant has given notice of the need to remedy the breach of the licence agreement in particular on 24^th January 1997. The defendant has had a more than reasonable period of time in order to remedy the breach of the said licence.

5. By reason of the matters aforesaid, the claimant is entitled to terminate the agreement forthwith and they claim an order for possession of the defendant's pitch.

AMENDED DEFENCE

1. The Defendant takes no issue with paragraphs 1 and 2 of the Particulars of Claim … .

2. The Defendant denies the matters set out in paragraphs 3 and 4 of the Particulars of Claim as he had work carried out to the mobile home at the request of the Claimants. However, the Claimants over the years caused problems when the Defendant has undertaken building work by not allowing the builders' lorries and skips lorries etc to come onto the site near to the Defendant's mobile home thus causing increased expense and delay to the Defendant when wishing to carry out work and the Defendant believes that the mobile home can be moved if it need be. However, the Claimants are making this claim to remove the unit and the Defendant for reasons other than the state of repair of his mobile home or the fact that it is blocking the roadway. His mobile home has always been on the plot from before the Claimants purchased the property from Wychavon District Council and the Claimants really wish to develop the site and have tried over the past few years to find reasons to remove the Defendant and his home.

3. The Defendant will say that proceedings were issued in June 1992 on similar grounds and were stayed in 1994 and that he has carried out all the works requested by the Claimants and repeats that it is his view that the Claimants are attempting to remove him from the site for reasons other than the fact that they allege he is living in a sub-standard mobile home and take no account of the Defendant's disability.

4. The Defendant accepts the matter of the notice referred to in paragraph 5 of the Particulars of Claim save that the works requested have been carried out and the Claimants have been trying to disrupt the work carried out by the Defendant for reasons set out in paragraph 3.

4A. The said acts of disruption were caused by the Claimants or others acting on their behalf. By reason of the said acts of disruption the Claimants are estopped from relying upon any failure (which is denied) of the Defendant to carry out works the subject of the said notice.

The reference to 'Paragraph 5 of the Particulars of Claim' refers, in fact, to paragraph 4.

6. The document dated 24 January 1997, that the Claimants had pleaded was a notice to remedy the breach of the licence agreement, was a letter written to the Defendant by a Mr Powell, who described himself as an Environmental Health, Safety and Building Consultant. It read as follows.

"Dear Mr Healey

As you are aware, the owners of Doverdale Park have carried out considerable improvements to the site and have recently had further plans approved by Wychavon District Council to improve the site, increasing the number of mobile homes. The Council have issued a new site licence and, to comply fully with the planning requirements, it will be necessary in the near future to move your mobile home.

A recent survey of the site which you occupy, showed a number of contraventions to the site licence and structurally the property appeared to be in a poor condition.

It is suggested that you contact the Wychavon District Council with a view to re-housing in a more suitable unit. Alternatively, my clients are prepared to provide you with a mobile home for another site, free of charge.

Perhaps when you have had the chance to consider this matter, you will let me know your decisions, however at this stage, I would impress on you not to worry as my clients are anxious to make every effort to ensure that you have satisfactory housing accommodation in the future."

The Claimants accept that this was not a notice calling upon the Defendant to remedy a breach of the licence agreement.

The decisions of the courts below

7. The pleadings raised a number of issues of fact apart from those in the paragraphs that I have quoted. Preparations for the trial proceeded on the basis that no issue arose as to the giving of the notice required by Schedule 1. Three days were set aside for trial and the parties arrived at court with expert witnesses prepared to address the pleaded issues. When the matter came on before Mr Recorder Evans, Mr Granville Stafford, on behalf of the Defendant, launched an application pursuant to CPR 3.4(2) to strike out that part of the claim that was based on breach of the licence agreement on grounds that did not include the absence of the notice required by Schedule 1. He proceeded, however, to draw the Recorder's attention to the letter of 24 January 1997 and contended that the Claimants were not in a position to satisfy the court that the requisite notice to remedy the alleged breach of the agreement had ever been given. Mr Blohm, for the Claimants, contended that the Defendant could not rely upon the Claimants' failure to give the requisite notice as this had been admitted in the Amended Defence. He submitted that the correct course was for the Defendant to apply to amend his Defence to deny receipt of the notice and that, until he did so, the court was bound by the pleadings to find that the notice required by Schedule 1 had been served.
8. The Recorder dealt first with the meaning to be attached to the admission made in paragraph 4 of the Amended Defence. He held:

"The words "accepts the matter of the notice" seem to me not to constitute a plain or express admission that the defendant in terms concedes the legal validity of the notice. I think if the defendant tried to deny as a matter of fact that the letter had been served, he might have been in difficulty, but that is not the argument. My conclusion is that this is not a plain or express admission that the defendant concedes the legal validity of the notice."

9. The Recorder went on to hold that, having become aware that the requirements of Schedule 1 were not satisfied, he was bound to take notice of that fact regardless of any admission made in the pleading. In so concluding he applied jurisprudence in relation to provisions of the Rent Act 1977 and the Housing Act 1985 to which I shall turn in due course. His conclusions appear in the following passages of his judgment.

"17. The next point I hold is that I have a statutory requirement to be satisfied under paragraph 4 that after service of a notice to remedy the breach, whereas I am now in a position where I simply cannot make an order when I have actual knowledge in fact that the notice necessarily does not exist. It is open to the defendant to take the legal point now, as it is plainly a good and right one.

24. … It seems to me I am being asked specifically to assume jurisdiction on the basis of the consent of the parties when I have no jurisdiction and when I know that no good and valid notice in law was served. The failure, of course, to serve a notice specifying the breach and requiring the remedy is not some mere legal technicality, it is fundamental to the protection which Parliament has given to the occupiers of mobile homes. There has to be a notice specifying a beach of the agreement requiring the remedy. That gives an opportunity to the occupier to know what was wrong and have a chance to put if right. Failing to do that seems to me to be not some peripheral or technical matter but a fundamental matter which Parliament has understandably directed the court's attention to."

10. Before Beatson J Mr Blohm repeated his submission that the Defendant had to seek and obtain permission to amend his Defence if he wished to deny that he had received the notice required by Schedule 1. Beatson J. reached the same conclusions on this issue as the Recorder. First he held:

"22. I agree with the learned recorder that the language of the pleading is unhappy, but I have concluded that he did not fall into error in concluding that paragraph 4 did not constitute a plain and express admission that the defendant concedes the legal validity of the notice. This is because "the matter of the notice" can, and in the context should, be understood as referring to its receipt rather than its validity."

11. Next Beatson J dealt with an argument, summarily dismissed by the Recorder, that, by reason of the provisions of CPR 16.5(5), the respondent was deemed to have admitted that the notice was a notice requiring remedy of the alleged breach. His reasoning for rejecting this submission appears to have been as follows. What was at issue was whether the letter of 24 January 1977 was a notice that satisfied the requirements of Schedule 1. That was an issue of law. The CPR did not require a defendant to plead to issues of law. This reasoning I deduce from the following passage of his judgment:

"23. Mr Blohm then relied on CPR 16.5(5) for the proposition that where a pleading does not address a matter and does not deal with it, it is implied by accepted. But this assumes that CPR 16.5(5) indirectly requires a person to deal with a matter of law in his pleading. As Mr Blohm's skeleton argument states, there is no rule of law that one cannot plead to an averment of law, but equally to require a person to deal with all matters of law in the pleading and to require this from the general words of CPR 16.5(5) is a large step.

24. The learned recorder rejected the proposition that this was really a factual averment that a person had been asked to remedy a specific breach which was not a matter of law but a matter of fact.

25. I agree that the conclusion that is sought to be drawn in respect of validity is not a matter of fact. …"

12. Finally Beatson J considered what the position would have been had he accepted that the Defence admitted service of a notice that complied with the requirements of Schedule 1. After considering the same body of authority as the Recorder, he held:

"35. The question is whether the court should look behind what the appellants submit is an apparent consent in the pleadings. I have found that there was no such admission in the pleadings. Had there been, however, the authority of the Housing and Rent Act cases is that the court should look behind it. In the present case, what the court has to be satisfied of is (a) there has been a breach, (b) there has been service of a notice to remedy, (c) there has been non-compliance, and (d) that it is reasonable for the agreements to be terminated. It would require the court, as the learned recorder recognised, to do mental gymnastics to ignore the fact, because of a pleading, that no valid notice has in fact been given."

Conclusions

The construction of the Amended Defence

13. Both the Recorder and the Judge accepted that the plea "the Defendant accepts the matter of the notice referred to" admitted the receipt of a notice. Both held, however, that the plea went no further than this. It did not constitute an admission of the subject matter of the notice. I do not agree with this conclusion. The notice that the Defence admitted receiving was, as pleaded in the Amended Particulars of Claim, "notice of the need to remedy the breach of the licence agreement". The breach alleged was that "the condition of the structure of the Defendant's 'mobile home' was such that its weight and condition rendered it immovable". I do not see that it is possible to give any coherent meaning to the Defendant's pleaded admission other than that the Claimants gave him a notice calling on him to remedy the fact that the weight and condition of the mobile home rendered it immovable. That conclusion is strengthened by the fact that paragraph 2 of the Amended Defence denied the alleged breach as the defendant "had work carried out to the mobile home at the request of the Claimants" and paragraph 4 alleged, in the context of the notice, that "the works requested have been carried out".

CPR 16.5(5)

14. This Rule provides "subject to paragraphs (3) and (4), a defendant who fails to deal with an allegation shall be taken to admit that allegation". I have held, contrary to the finding of the courts below, that the Defendant did deal with the allegation as to the subject matter of the notice by admission. Had I formed the view that the pleading did no more than admit the receipt of a notice, the issue would have arisen as to whether the subject matter of the notice was deemed to be admitted by virtue of CPR 16.5(5). The notice had to call upon the Defendant to remedy the alleged breach of the licence if it was to satisfy the requirements of Schedule 1. Thus the issue was whether the Defence admitted the giving of a notice that had characteristics that rendered it a valid notice for the purposes of Schedule 1. Beatson J appears to have concluded as a consequence of this that the issue was whether, by reason of CPR 16.5(5), the Defendant should be taken to have admitted an averment of law, namely that a valid notice had been given. He ruled that CPR16.5(5) did not apply because a Defendant was not required in his pleading to address allegations of law. Thus it could not be said that the Defendant had 'failed to deal with' the allegation in question.
15. This reasoning is fallacious. The allegation that the Claimants gave a notice that called upon the Defendant to remedy the alleged breach of the licence was an allegation of fact, albeit that the fact had important legal implications. It was an allegation of fact with which the Defendant was required to deal in his Defence – see CPR 16.5(1) and (2). Had he failed to do so, as the Recorder and the Judge found he did, he would, pursuant to CPR 16.5(5) have been taken to have admitted the allegation. Thus on the second issue also I differ from the conclusion reached by the Recorder and the Judge.

Is the Court bound by the admission in the Amended Defence?

16. This is the most difficult issue raised by this appeal. Mr Blohm submits that the question of whether or not a notice was served that satisfied Schedule 1 is one that must be determined by the court in the same way as any other matter in adversarial litigation. It falls to be determined in accordance with the provisions of the CPR. Where a matter is admitted on the pleadings, no evidence is admissible in relation to it. Unless and until the pleading is amended to withdraw the admission the court has no option but to give judgment in accordance with the admission. It cannot pay regard to any material that comes to its notice that is inconsistent with the admission.
17. Mr Granville Stafford submits that the Mobile Homes Act places an overriding requirement on the court to be satisfied of the matters set out in Schedule 1. That requirement will not be complied with simply because those matters have been admitted on the pleadings if it comes to the judge's knowledge that a fact admitted is untrue. Unless the requirements of Schedule 1 are satisfied the court has no jurisdiction to grant an order for possession. The Defendant cannot confer jurisdiction on the court by making a false admission in his pleading.
18. The chain of authority relied on by Mr Granville Stafford in support of this submission starts with Barton v Finchham [1921] 2 KB 291. That case concerned a tenancy to which the provisions of the Increase of Rent and Mortgage (Restrictions) Act 1920 applied. They required that no order or judgment for the recovery of possession of any dwelling house should be made or given unless various criteria were satisfied. A landlord made an agreement with his tenant that the tenant would give a notice to quit and vacate the premises in circumstances where those criteria were not satisfied. The tenant failed to comply with that agreement and the Court of Appeal held that the court had no jurisdiction to order him to do so. In dealing with the scheme of the legislation Bankes LJ said this, at p. 295:

"It appears to me that the Legislature in reference to claims for possession has secured its object by placing the fetter, not upon the landlord's action, but upon the action of the Court. The language used is so clear and precise that there is in my opinion no room for cutting down or restricting the operation of the section. The Legislature has definitely declared that the Court shall exercise its jurisdiction only in the instances specified in the section, and in no others."

19. The approach of the Mobile Homes Act differs from that of the 1920 Act and that of the legislation at issue in the later cases upon which Mr Granville Stafford relies. Under the Mobile Homes Act the protection of the occupier of a mobile home is achieved by implying terms into his licence agreement. When an application for possession of the site of a mobile home is sought, the task of the court is to decide whether the site occupier can establish a right to terminate the licence having regard to the terms, express and implied, of the licence agreement. No issue of jurisdiction arises. Notwithstanding this, the provisions of the Act are intended to protect those who live in mobile homes and the prohibition on contracting out in section 2(1) is particularly significant. Judges should take judicial notice of the requirements of the Act and should not afford relief unless satisfied that the terms implied into a licence by Schedule 1 are satisfied. How the court should be satisfied is the critical issue on this appeal. On that issue the authorities to which we have been referred are of some assistance.
20. Where statute requires that a court may not make an order for possession of premises unless certain criteria are satisfied, a landlord and tenant cannot confer jurisdiction on the court to make such an order simply by agreeing that the tenant will give up possession: R v Bloomsbury & Marylebone County Court, ex parte Blackburne (1982) 2 EG 157; R v Newcastle upon Tyne County Court, ex parte Thompson (1988) 20 HLR 430. Where, however, in the course of litigation a defendant admits that the preconditions to the exercise of the court's jurisdiction are satisfied, the court can properly proceed on the basis of that admission without further enquiry. The admission may be given expressly in a pleading or it may be given by consenting to judgment, always provided that it is clear that, in consenting to judgment, the defendant is admitting that the statutory criteria are satisfied – see Hounslow LBC v Mc Bride (1998) 31 HLR 143.
21. What those cases demonstrate is that the court decides whether the statutory pre-conditions to the exercise of its jurisdiction are satisfied in the same way that it approaches any substantive issue in the litigation. The onus is on the party seeking relief to satisfy the court, by evidence or admission, that it has jurisdiction to make the order sought.
22. In the present case the Claimants, in order to obtain the relief that they seek, must demonstrate, not that the court has jurisdiction, but that a number of contractual pre-conditions to their right to relief are satisfied. The claimants are both bound and entitled to prove their case in accordance with the rules of evidence and civil procedure. The judge is not entitled to have regard to inadmissible evidence, nor can he properly reach a decision which is contrary to an admission which is made on the pleadings
23. Mr Granville Stafford has argued that, in a case such as this, where the right to an individual's home is in issue and there are statutory provisions which protect that right, the overriding objective of the CPR of enabling the court to deal with the case justly requires the court to disregard the pleading rather than to close its eyes to what are admitted to be the true facts. I do not agree. In McPhilemy v Times Newspapers Ltd [1999] 3 All ER 775 Lord Woolf MR observed:

"Pleadings are still required to mark out the parameters of the case that is being advanced by each party. In particular they are still critical to identify the issues and the extent of the dispute between the parties."

It is on the basis of the pleadings that the parties decide what evidence they will need to place before the court and what preparations are necessary before the trial. Where one party advances a case that is inconsistent with his pleadings, it often happens that the other party takes no point on this. Where the departure from the pleadings causes no prejudice, or where for some other reason it is obvious that the court, if asked, will give permission to amend the pleading, the other party may be sensible to take no pleading point. Where, however, departure from a pleading will cause prejudice, it is in the interests of justice that the other party should be entitled to insist that this is not permitted unless the pleading is appropriately amended. That then introduces, in its proper context, the issue of whether or not the party in question should be permitted to advance a case which has not hitherto been pleaded.

24. That was the true issue in the present case. The Recorder was not bound, as a matter of law, to disregard the admission made by the Defendant because it could be demonstrated that the facts admitted were not true. He had to decide whether, having regard to all material matters, it would be right to permit the facts admitted to be put in issue. Mr Granville Stafford told us that, in the course of argument, the Recorder had indicated that he would, if necessary, give permission to the Defendant to amend his pleading. He had made the same submission before the judge, and he fairly told us that he could not now recollect the circumstances in which the Recorder gave that indication. Mr Blohm did not challenge the assertion that the indication had been given, but said that he had no recollection of it. More pertinently, he observed that the issue of whether permission should be given to amend the Defence had not been argued and that it would be wrong to proceed on the basis that the Recorder had ruled on that issue.
25. I agree with Mr Blohm. The Recorder was wrong to hold that, as a matter of law, he was bound to find that the notice required by Schedule 1 had not been served. Until the Defence was appropriately amended, that issue could not arise. The Recorder should have required the Defendant to apply for permission to amend his pleading and then heard and resolved argument as to whether he should be granted that permission.
26. Mr Granville Stafford argued before us that the Recorder would have been bound to grant permission to amend and that the Defendant would then inevitably have succeeded in his application for summary judgment. We do not agree. The importance of the protection that the Mobile Homes Act is intended to afford to those who live in such homes would clearly have been a very relevant factor when considering whether to give the Defendant permission to amend in order to avail himself of that protection. At the same time, however, it would have been relevant to consider the prejudice that would be caused to the Claimants by the very late amendment and to ask the question whether and, if so, what prejudice had been caused to the Defendant by the Claimants' failure to give him a notice in writing requiring him to remedy the alleged breach of the licence agreement.
27. For these reasons I have concluded that the appropriate course is to allow this appeal and set aside the summary judgment. If the Defendant wishes to allege that the Claimants are not entitled to possession of the site because they failed to serve him with the notice required by Schedule 1, he will first have to seek and obtain permission to amend his Defence to raise that point. I greatly regret that the issues raised before us, which have not been easy, have resulted in interlocutory in-fighting that must have given rise to disproportionate expense.

Lord Justice Buxton:

28. I agree that this appeal must be allowed, for the reasons given by the Master of the Rolls. I add only two very short points.
29. First, this case does not determine the issue, which troubled the judge, as to whether there is an obligation to plead to allegations of law. A beneficial effect of the Civil Procedure Rules is that by CPR PD 16 para 13.3(1) it is now made clear, as under the Rules of the Supreme Court it was not, that a party in his pleading may "refer" to any proposition of law on which his case is based. It will often be valuable that he should do so, because parties, and the court, should not be left to speculate upon the relevance in law of a purely factual narrative. At the same time, however, the judge was, with respect, plainly right in the doubt that he expressed in paragraph 23 of his judgment as to whether, if an averment of law does appear in a pleading, the full rigour of CPR 16.5(5) applies to it. That is because of the well-worn principle that the parties cannot, and certainly cannot within the confines of particular litigation, by agreement withdraw from the court the decision of a question of law: see e.g. Alderson B in Scott v Avery (1856) 5 HL Cas 811 at p 845, cited by Denning LJ in Lee v Showmans Guild [1952] 2 QB 329 at 342; and a fortiori that cannot be done by the "agreement" that arises from a failure to plead to an allegation. What the parties can do, and as Mr Blohm demonstrated they are to be taken to have done in this case, is actually or inferentially so to agree the facts that the law when applied to them yields only one answer.
30. Second, both parties had their own reasons for not pursuing before the Recorder the issue of amendment: the appellants because they thought (correctly, as they have established by recourse to this court) that they would succeed on the unamended pleadings; the respondent because he feared the costs implications of even a successful application to amend. But it was wholly inappropriate that the case should have been allowed to proceed on the basis of what was at best a troublesome and obscure pleading. I respectfully agree with the Master of the Rolls, in his paragraph 25, that the Recorder should have intervened, as the Civil Procedure regime expects him to do, and insisted that the case be put on a proper basis. What occurred in this case was all too reminiscent of the faults of a former era, in which the parties were permitted to manage the proceedings based on their own private interests, with little regard to the use of public resources that that entailed. As Lord Woolf put it at page 6 of his Final Report, in contrast to the old regime the court will determine the length of the trial and what is to happen at the trial.
31. I agree that if amendment had been put in hand it cannot be assumed that the application would have been granted; and there might still have had to be argument about the original pleading from the point of view of costs. Nonetheless, both of those processes would have enabled the issues in the case to be seen in their proper perspective, as essentially ancillary to the proper trial of the substance of the action. In those circumstances it must be highly unlikely that permission would have been granted to appeal even from the Recorder, what ever his decisions might have been, let alone, as a second appeal, to this court.

Lord Justice Thomas:

32. I also agree.
Order: Appeal allowed. Respondent to pay the appellant's costs of the appeal and of the appeal hearing before Beatson J. Appellant to pay the respondent's costs of 20/02/04. Counsel to draw up full minute of order. (Order does not form part of the approved judgment)