Relief from Forfeiture following Peaceable Re-Entry

Author: Simon Hill
In: Article Published: Tuesday 08 February 2022

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Where a commercial landlord has lawfully forfeited a lease by peaceable re-entry (without the benefit of a court order) for non-payment of rent, the tenant may wish to apply to the County Court for relief from forfeiture ('RFF'; sometimes called 'relief against forfeiture') under section 139(2) of the County Courts Act 1984.

This article will consider how the law approaches whether or not to acceded to such a RFF application, using the recent case of Keshwala v Bhalsod [2021] 1 WLR 4004 ('Keshwala'), a decision of the Court of Appeal (Birss LJ and Sir Christopher Floyd agreeing with Nugee LJ)[1] - a case on delay/promptness in issuing the RFF application. For those short on time, the conclusion below contains a summary of the position - including Nugee LJ's pithy summary of the Court of Appeal's decision in Keshwala (from paragraphs 63-66 of Nugee LJ's judgment).

For those with more time, consideration will be given to section 139(2), the facts of Keshwala (which require some setting out), before the legal framework within which these RFF applications are made.

Section 139(2) of the County Courts Act 1984

Section 139(2) of the County Courts Act 1984 is the governing section in this situation (RFF application in the County Court following peaceable re-entry of commercial premises for non-payment of rent (without the benefit of a court order)). Section 139(2) enables the lessee to apply to the County Court for relief, within six months from possession being taken, 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."

Facts of Keshwala

As to the facts in Keshwala, theses are set out below is a somewhat simplied [2] summary.

'By a lease dated [12.12.08], [the Landlord's predecessor in title] let [the Premises] to the [Original Tenants] for a term of 20 years from [17.3.08] at an initial rent of £8,000...payable by equal quarterly instalments in advance on the usual quarter days. The lease contained a forfeiture clause in conventional terms enabling the landlord to re-enter if, among other things, any part of the rent should be unpaid for 21 days after its due date whether formally demanded or not.' (paragraph 6)

The demised/subject premises were the second premises for the Original Tenant's business - providing financial services to their franchisor's standards (paragraph 7).

In 2011, the franchisor terminated the franchise, and the Original Tenants agreed to sever their partnership, with one (Mr Keshwala) taking the first premises and Mr Sharma taking the second premises (the subject Premises), with Mr Sharma: (i) being responsible for the outgoing on the second Premises, and (ii) indemnifying Mr Keshwala for the subject Premises outgoings (paragraph 7). The Landlords (Mrs Sharda Bhalsod and Mrs Jayshree Bhalsod) purchased the reversionary interest in 30.4.15, and were registered proprietors 3.7.15 - though the 'actually running and management of the property' (paragraph 8) was undertaken by a third person, a Mr Anil Bhalsod ('Mr Bhalsod'), husband/brother in law to the Landlords. On 21.7.15, the Landlords forfeited the lease for arrears of rent by taking peaceable re-rentry (first forfeiture). Mr Sharma gave prompt notice of his intention to apply for RFF and duly did. By a consent order dated 10.11.15, RFF was granted on terms that c.£5,000 in arrears, costs and bailiff's feess were paid, which was.

Moving forward about 3 years; in 2018:

(a) Mr Sharma 'spent considerable sums on refurbishing and fitting out the property...' (paragraph 13) and planned on opening a hairdresser's or barber's business on the ground floor (paragraph 13)

(b) the Original Tenants failed to pay all the £2,000 rent for the June 2018 quarter on 24.6.18 (they paid £1,500; leaving a shortfall of £500) for the subject Premises.

(c) on 13.9.18, the Landlords relied upon this breach of covenant and forfeited the lease, by instructing bailiffs to effect peaceable re-entry, for non-payment of rent (second forfeiture). On 17.9.18, the £500 shortfall was paid.

(d) On 4.2.19, so nearly 5 months later, with no application for RFF having been made, the Landlords re-let the subject Premises, to a Mr Jakhu (the 'New Tenant'). 22 days later, on 26.2.19, the Orignal Tenants applied to the County Court for RFF - it being common ground that '...if relief were granted it should take the form of restoring the Tenants' lease in reversion on the new lease to Mr Jakhu.' (paragraph 83).

(e) Amongst the interim inter parties correspondence (see from paragraph 18), on 9.10.18, Mr Sharma emailed the Landlords' property agents to the effect that, the agents had failed to tell him how to pay rent and that 'Accordingly, I am now forced to make an applicaion to the court' (paragraph 18(6)), complaining about a lack of response from them and that this was his 4th email to them. The agents responded 14.10.18 '...to the effect that he had specific instructions from his client not to take any action as he was dealing with the matter, and asking Mr Sharma to forward any correspondence to Mr Bhalsod. The e-mail was copied to Mr Bhalsod at "anil.bhalsod@gmail.com"' (paragraph 18(7))

(f) there was then a gap of over 3 months, until late January 2019 (paragraph 18(8)). Mr Sharma said he had tried to contact Mr Bhalsod but Mr Bhalsod would not respond, but there was no other evidence of any attempt by Mr Sharma or his solicitors to contact the Landords, Mr Bhalsod, or the solicitors named on the notice of forfeiture, between 14 October 2018 and 25 January 2019. Between 25.1.19 and 4.2.19, there was some correspondence but: (i) none was correctly sent to Mr Bhalsod, as the email address was misspelt; and (ii) the Landlords' property agents, who were emailed, simply responded that they had been instructed to take no further action in relation to the property (i.e. they were not instructed)(paragraph 18(9)).

(g) As stated, on 4.2.19, the Landlord's re-let the ground floor commerical premises to Mr Jakhu - for a term of 3 years, with a one month break clause on either side (paragraph 19)[3]. At the time of re-letting, Mr Bhalsod was unaware that the Original Tenants had been doing anything, or that Mr Sharma/Original Tenants intended to make an application for relief (paragraph 19)

(h) On 13.2.19, Mr Sharma's solicitor sent an e-mail to Mr Bhalsod (this time correctly addressed) referring to the re-letting and indicating that a claim for RFF would follow. The claim for RFF was then issued on 26.2.19 (paragraph 20)

Judge Hampton at 1st instance (paragraphs 21 to 30[4]), found the forfeiture was lawful (though 'very harsh' (paragraph 21)) and, after stating that neither party presented a particularly appealing position (paragraph 23), refused RFF. On appeal, Martin Spencer J (paragraphs 31 to 33[5]) allowed the appeal and granted RFF. Permission to appeal was granted on the sole ground that Martin Spencer J erred in his treatment of the issue of delay (paragraph 34); the issue in the Court of Appeal on the second appeal was whether Martin Spencer J had been correct to allow the (first) appeal on the effective ground that

'...the [Original Tenants] had applied for relief within six months after the forfeiture, and that in those circumstances they should be treated as having applied with reasonable promptitude, and the fact that they had delayed until nearly the end of the six-month period was not capable of amounting to exceptional circumstances, such as to defeat the claim for relief.' (paragraph 3)

The Court of Appeal allowed the second appeal, and restored Judge Hampton's order (paragraphs 5 and 91), holding that Martin Spencer J had erred in his approach to delay, and that there was no proper basis for disturbing Judge Hampton's decision (paragraph 5)

The Legal Framework

Under the heading of 'The Legal Framework', Nugee LJ in Keshwala:

(1) explained that the wider law on RFF is complex as a result of all the many permutations that can come into play in this area (e.g. forfeiture through proceedings vs peaceable re-entry (without a Court order); RFF application in County Court vs High Court; forfeiture for non-payment of rent vs for other breaches of covenant etc.[6]);

(2) narrowed down through the permutations, to the particular scenario in Keshwala (RFF application in the County Court following peaceable re-entry of commercial premises for non-payment of rent). Nugee LJ noting that[7]:

(i) 'In the present case we are concerned only with forfeiture for non-payment of rent' (paragraph 37);

(ii) the Common Law Procedure Act 1852 ("the 1852 Act") does not apply where forfeiture of the lease occured by peaceably re-entry (paragraph 38); and

(iii) section 38 of the Senior Courts Act 1981 does not apply (if the RFF application is in the High Court; the High Court exercises equitable jurisdiction (paragraph 38));

and that:

(iv) In a case such as Keshwala (RFF application in the County Court following peaceable re-entry of commercial premises for non-payment of rent), as stated at the start, the relevant provision is section 139(2) of the County Courts Act 1984, which enables the lessee to apply to the County Court for relief, within six months from possession being taken (but not thereafter - paragraph 42), and empowers the Court to grant RFF, on such a RFF application, if it thinks fit [8].

Nugee LJ then:

(1) gave a broad summary of the law (after considering Gill v Lewis [1956] 2 QB 1, CA (Jenkins LJ, Hodson LJ and Singleton LJ)[9a], a forfeiture through court proceedings case), at paragraph 47 :

'...in a simple case, where there have been no intervening dealings with the property or any other change of position, the court will ordinarily grant relief to a tenant on payment of rent and costs; the court will not usually refuse relief on the ground of other breaches of covenant, which will generally be irrelevant; but that there may be cases (referred to by Jenkins LJ but not by Hodson LJ as "exceptional circumstances") where the court will refuse relief because of the tenant's conduct.'

(2) stated, after paragraph 47 (quoted above), at paragraph 48:

'That statement of the law ...does justify the proposition that if all that has happened is that the landlord has forfeited and then done nothing with the property - just "stood by to await events" as Chief Master Marsh described the landlord in [Pineport Ltd v Grangeglen Ltd [2016] EWHC 1318 (Ch); [2016] L & TR 28] as having done... - delay by itself will be unlikely to justify the court in refusing relief.'

In Re Brompton Securities Ltd (No 2) [1988] 3 All ER 677, Vinelott J had expressed a similarly instructive summary (quoted in the footnote[9b])

We will now consider the elements of paragraphs 46 and 47, below:

Intervening dealings with the property or other change of position - Where the Premises are Re-Let to Third Parties

Nugee LJ said in Keshwala, at paragraph 82:

'The authorities establish that where a landlord has reasonably re-let, relief may be refused if it would be inequitable either to the landlord or to the new lessee or both.'[10]

A key factor is whether the landlord, when he re-let the premises, was acting reasonably and not precipitately. Nugee LJ referred to a summary of the law provided in Woodfall, at paragraph 17.183, '...to the effect that relief may be refused where the landlord has reasonably and not precipitately granted a new lease to a third party.' (paragraph 81). As Nugee LJ put the principle, in Keshwala, at paragraph 84:

'...the principle appears to be that if the landlord has acted reasonably and not precipitately, and has altered his position in the meantime, it may be inequitable to grant relief.' [bold added]

An element in determining whether the landlord acted reasonably and not precipitately, is whether the landlord was on notice that the tenant intended to seek RFF. As to a landlord being required to act proactively, Nugee LJ said, I do not '...think that a landlord who has forfeited and has heard nothing from his tenant for over three months is obliged to contact the tenant to ask if he intends to apply for relief.' (paragraph 88).

Where RFF is granted in circumstances were there are new tenants, the Court will need to determine which of the new tenants and original tenants: (i) should hold the lease with the immediate right to possession; and which (ii) should hold a lease in reversion, a mesne/intermediate landlord position, entitled to rental payments from the lessee below, but holding no immediate right to possession until that lease below ends. On this, see Fuller v Judy Properties Ltd [1992] 1 EGLR 75, CA; Bank of Ireland Home Mortgages Ltd v South Lodge Developments Ltd [1996] 1 EGLR 91, Bland v Ingram Estates (No.2) [2001] EWCA Civ 1088; and Khar v Delbounty Ltd [1996] EGCS 183, CA.

Other Tenant Breaches of Covenant - Generally Irrelevant

In Gill v Lewis [1956] 2 Q.B. 1, CA, Jenkins LJ (with whom Hodson LJ and Singleton LJ agreed) said, obiter (paragraph 10), at 13:

'...in my view, save in exceptional circumstances, the function of the court in exercising this equitable jurisdiction is to grant relief when all that is due for rent and costs has been paid up, and (in general) to disregard any other causes of complaint that the landlord may have against the tenant. The question is whether, provided all is paid up, the landlord will not have been fully compensated; and the view taken by the court is that if he gets the whole of his rent and costs, then he has got all he is entitled to so far as rent is concerned, and extraneous matters of breach of covenant, and so forth, are, generally speaking, irrelevant.'[11]

The only circumstances/tenant's conduct said to amount to 'exceptional circumstances' ('very exceptional cases' Jenkins LJ, p.13-14) in Gill, were where the tenant was 'notoriously' using the premises as a 'disorderly house' (Jenkins LJ, p.13-14)[12]

It is settled law[13] that the purpose of the term/provisio in the lease, that the landlord may forfeit the lease, for tenant's non-payment of rent, is to secure payment of the rent (loosely, it can be considered like a type of security). In other words, it is a means to an end; being no more than a tool for extracting compliance with the underlying obligation (here, payment of the rent - albeit late). If payment is extracted, and the landlord is put back into the position he would have been in, had there been no breach of covenent to pay rent, then, generally speaking, the tenant should also be put back into the position the tenant would have been in, had there been no forfeiture thereon. In other words, back to the position of being a tenant again, in the original landlord and tenant relationship.

Impecunious Tenant - Likely to be Bad Payer in the Future

In Brompton, the (intermediate) landlord opposed the (under) tenant's RFF application, including on the ground that '[the (under) tenant] is in compulsory winding up and has admittedly no assets with which to meet the rent' (680) - that '...a time must come when persistent failure to pay rent until proceedings are commenced and prosecuted to judgment may justify the court in refusing relief. (680) (the landlord had brought 11 actions in total, 6 prior to the winding up order; the rest afterwards). Vinelott J rejected this ground, stating, at 680-681:

‘The case for [the landlord], in substance, is that it is unfair and unjust that [the landlord] should have to continue to look for payment of rent and performance of the other convenants in the lease to a company which is admittedly insolvent and which is, in effect, a trustee of the benefit of the lease for another. I do not think that that is a ground for refusing relief. Once arrears are brought up to date [the landlord] will be in no different position from any other lessor with an impecunious tenant. It would be an entirely new departure for the court to decline to grant relief on the ground that a tenant has been a bad payer in the past and is likely to continue to be a bad payer in the future.’

In fact, Mr Palmer, the (under) tenant's guarantor and holder of the beneficial interest in the lease, had been paying the rent for a number of years 'After the winding up ...but it was not always, if ever, paid promptly.' (678) Vinelott J said, at 681:

'If Mr Palmer continues to put [the (under) tenant] in funds to pay the rent (and as the beneficial owner of the lease it will be in his interests to do so) [the (intermediate) landlord] will get all that the law says it is entitled to. If he does not, cadit quaestio: [the (intermediate) landlord] will be entitled to possession.'[14]

Within 6 months - but Still Delay in making the RFF Application

The RFF application should be made with 'reasonable promptitude', as a separate condition to being made within 6 months of the peaceable re-entry. In Billson v Residential Apartments Ltd [1992] 1 AC 494, a High Court RFF breach of covenant other than non-payment of rent, case, Nicholls LJ said, at 530A (an analysis which Lewison LJ recently stated in Gibbs v Lakeside Developments Ltd [2019] 4 WLR 6 ('Gibbs') was the correct analysis):

"The concurrent equitable jurisdiction can only be invoked by those who apply with reasonable promptitude. What is reasonable will depend on all the circumstances, having due regard to the statutory time limits . . .' [bold added]

In Pineport Ltd v Grangeglen Ltd [2016] EWHC 1318 (Ch); [2016] L & TR 28 ('Pineport'), Chief Master Marsh said, at paragraph 64, that reasonable promptitude was an elastic concept which was capable of taking into account human factors.

One of the key issues in Keshwala was a question within an aspect of the Court's approach to delay in issuing the RFF application, namely, whether a RFF application will automatically be deemed to have been made with reasonable promptitude, simply because it was made within 6 months of the forfeiture?

After finding that there was no authority on point (paragraph 53), and after surveying a range of authorities in the area (paragraphs 54 to 61[15]), Nugee LJ in Keshwala determined the issue, at paragraph 62:

'In my judgment...there is no principle that a tenant will be deemed to have acted with reasonable promptitude so long as he brings his application for relief before the expiry of six months.'

Bringing in additional considerations, Nugee LJ then set down, at paragraph 62, that:

'A tenant who waits for nearly six months before bringing his application, keeps the landlord in the dark about his intentions, and fails to provide the court with any explanation for the delay, may well find that the court concludes that he has not acted with reasonable promptitude.' [bold added]

Noting an example of each of these 2 additional considerations in turn:

(1) in Keshwala, while Nugee LJ accepted '...that there was evidence in the immediate aftermath of the forfeiture that the Landlords were avoiding communication...' (paragraph 87), Nugee LJ held that '...none of this explains why there was a complete failure by Mr Sharma to contact Mr Bhalsod or the Landlords in writing from 14 October 2018, when [the landlord's property agent] told him that [the landlord's property agent] were no longer instructed, to 25 January 2019...' (paragraph 87).

(2) in Stanhope v Haworth (1886) 3 TLR 34 ('Stanhope'), the application for RFF was made almost 6 months after forfeiture. Lindley LJ said, at 35. 'There was no explanation of the delay by the tenant except that he had not had the money. That was no reason for allowing him now to have relief to the prejudice of the other parties...'

Conclusion

In a simple case, where there have been no intervening dealings with the premises or any other change of position, the court will ordinarily grant relief to a tenant on payment of rent and costs. The Court will not usually refuse relief on the ground of other breaches of covenant, which will generally be irrelevant. However, there may be cases, containing 'exceptional circumstances', where the court will refuse relief because of the tenant's conduct. The given example being, if the premises were used for immoral purposes.

While the RFF application under section 139(2) must be made within 6 months of the peaceable re-entry, the original tenant's RFF application is also required to be made with 'reasonable promptitude'. Delay, in and of itself, is unlikely to render RFF unjust. But where there is delay in issuing the RFF application, and the landlord, in the interim and not unreasonably and precipitately, has granted rights to third parties over the premises, the court may hold that it would now be unjust to grant RFF (even as an intermediate landlord). Summarising the position, at paragraphs 64 to 66, Nugee LJ said:

'If a landlord has forfeited for non-payment of rent and taken possession by peaceable re-entry, the grant of relief is always discretionary, either, in the County Court, because of the express terms of section 139(2) ("may, if it thinks fit, grant . . . relief"), or, in the High Court, because it is exercising an equitable jurisdiction. In the County Court the application must be brought within six months; in the High Court there is no strict time limit, but the court will have regard to the six months.

The discretion is to be exercised (in both the High Court and the County Court) in accordance with equitable principles, including the well-established principle that equity regards the right of re-entry as a security for the payment of the rent, and, other things being equal, the court will ordinarily grant relief if the tenant pays all that is due in terms of rent and costs. If therefore all that has happened is that the landlord has taken possession and then done nothing with the premises, simply sitting back to see what happens, then the mere fact that the tenant has delayed is unlikely to be regarded as sufficient by itself to cause the court to refuse relief.

But that does not mean that so long only as the tenant brings his application before the end of the six months, he will be treated as having acted with reasonable promptitude, or that his delay will always be regarded as immaterial. The longer that the tenant leaves it - and a fortiori if he does not have a good explanation for the delay, and fails to keep the landlord informed of his intention - the more likely it is that he will find that the court will conclude that he has failed to act with reasonable promptitude, and the more likely it will be that intervening events will make it inequitable to grant relief. If the landlord, acting reasonably and not precipitately, has altered his position, it may be unjust to grant relief; as also it may be if the rights of third parties have intervened.'

SIMON HILL © 2022

BARRISTER

33 BEDFORD ROW

NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.

[1] On few points of procedure are also made, which can be conveniently noted simply in this footnote here. It is noted, procedurally, that:

(1) CPR r.55.2 is entitled 'Scope' and comes at the start of CPR Part 55, Section 1 'General Rules'. R.55.2(1) reads 'The procedure set out in this Section of this Part must be used where the claim includes —... (c) a claim by a tenant seeking relief from forfeiture'

(2) the application for relief from forfeiture ('RFF') is made by claim, using claim form N5A 'Claim form for relief from forfeiture'. The application for RFF is made by way of a claim because there are no extant legal proceedings before the court at this point, unlike the situation where the landlord had issued a claim form seeking an order for possession and forfeiture, and the tenant seeks RFF within to those proceedings.

This comes from: CPR Part 55 applies, and r.55.3(5) reads 'The claim form and form of defence sent with it must be in the forms set out in Practice Direction 55A.'

PD55A, paragraph 1.5 reads 'The claimant must use the appropriate claim form and particulars of claim form set out in Table 1 to Practice Direction 4. The defence must be in form N11, N11B, N11M or N11R, as appropriate.'

See then Table 1 of PD4.

(3) CPR r.55.3(1) is entitled 'Starting a claim' and PD55 paragraph 1 require, in almost all cases, that the RFF application by way of a claim, be made in the County Court.

[2] The premises actually consisted of:

(a) a ground floor - commercial premises; and

(b) a residential upper part.

As to the residential upper part, Mr Sharma refurbish it June 2016 for student accommodation, at some expense (paragraph 12). However, the local council refused him a licence to let it as a house of multiple occupation. Unwisely, he went ahead and let it to students. Following a Planning Contrvention Notice being issued in March 2018, the students vacated (paragraph 12). Seee also paragraph 19.

[3] The Landlord's also re-let the residential upper part. Nugee LJ records, at paragraph 19 'They also re-let the residential premises to a Mr Thanga on an assured shorthold tenancy.'

[4] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ summarised what Judge Hampton had reasoned, from paragraphs 21 to 30 inclusive, including that:

'...she turned to ... whether relief should be granted, which she said was a discretionary remedy.... she said that neither party presented a particularly appealing position to the court. As to the Landlords, she reiterated that they had acted harshly and found that they were determined to get the Tenants out of the property...; said that once Mr Bhalsod had realised there was a shortfall in the rent, he had seen his opportunity to swoop and to lock the Tenants out...; and having forfeited by re-entry that he then made life difficult for the Tenants to make good the default, withdrawing instructions from the agents and failing to respond to informal approaches...' (paragraph 23)

'As to the Tenants, she described their position as also unappealing. She referred to the delay between October 2018 and the eventual resumption of correspondence in late January 2019.... She had previously pointed out that that delay was unexplained, save that Mr Sharma had said he was having diffculties getting hold of Mr Keshwala. There was no application for relief; nor was there any correspondence from Mr Sharma or his solicitors to the Landlords or to Mr Bhalsod saying that an application for relief would be forthcoming once they could contact Mr Keshwala. There was simply silence (paras 39—40). When the correspondence was started again in late January, it was unfortunate that it had been sent to an incorrect e-mail address for Mr Bhalsod and not followed up with hard copies being sent to the Landlords personally....' (paragraph 24)

She said it was relevant to her exercise of discretion, that '...although Mr Keshwala was prepared to co-operate, it was quite clear that he wished to have nothing to do with the property.' (paragraph 25). He did not want to be responsible for the subject Premises or its rent, and that 'In addition...Mr Keshwala had a history of making himself absent...' (paragraph 26)

As to delay in issuing the RFF application, Judge Hampton '...accepted that even substantial delay did not mean that relief could not be granted, saying that there were numerous cases, and that one of the relevant factors was whether the premises had been re-let...' (paragraph 27). After distinguishing , Pineport Ltd v Grangeglen Ltd [2016] L & TR 28 (wherein RFF was granted despite a 14 months delay), she referred (paragraph 27) to: (1) the lack of contact between Original Tenants and the Landlords until 0.2.19 (noting Mr Sharma could have instructed his solicitors to write, to make clear a RFF would follow); (2) later emails sent to wrong email address, were not followed up with hard copies sent out; and (3) Landlords faced a business rates bill by 0.1.19, which they had to pay, and knew nothing of Mr Sharma's intention to seek RFF.

Nugee LJ then said, at paragraphs 28 and 29:

'She then set out the factors on each side, namely on the Tenants' side the delay which was not properly explained...; the failure to put the Landlords formally on notice...; Mr Keshwala's unwillingness to have anything to do with the property...; Mr Sharma's management of the property including his failure to pay the business rates...; and the diffculties in contacting Mr Keshwala who was absent in India in a crucial period. On the Landlords' side she referred to the very harsh decision to forfeit the premises with ten years left to run over £500, and to her Þnding that Mr Bhalsod was a most unimpressive and evasive witness, who had "manipulated the situation to his advantage, but he has not done so unlawfully"....

29 Her conclusion was summarised at paras 118—119 which I cite in full:

"118. However, the claimants' inactivity between October and January is not suffciently explained. I am not comfortable with the inconsistencies that there are in [Mr Keshwala's] position as demonstrated by the correspondence. His demonstrated wish to absolve himself of any liability is inconsistent with his purported support of [Mr Sharma] in this application for relief. There is discomfort in imposing on [Mr Keshwala] a liability he plainly does not want, and on the [Landlords] a tenant who is diffcult to get hold of and who does not wish to have any liability in respect of the property. If [Mr Sharma] gets into diffculties again, he must have been in some sort of diffculty not to have paid the business rates in the summer of 2018, the [Landlords] are left with the other reluctant tenant who may not be in the jurisdiction, if any need arises to enforce any financial default on the part of [Mr Sharma].

119. Taking all those matters into account, and as I have said, if this application for relief had been made promptly or at least the [Tenants] had forewarned the [Landlords] promptly in September or October 2018 that there would be an application for relief from forfeiture, I have no doubt that the court would have [had] no diffculty in granting relief. In the circumstances of the case and for the reasons that I have discussed, I fnd that although the matter is finely balanced, it is not appropriate to grant relief from forfeiture in this case, and the [Tenants'] claim is dismissed."

[5] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ summarised what Martin Spencer J's judgment [2020] EWHC 2372 (QB), from paragraphs 31 to 33 inclusive, including that:

'...he accepted [counsel for the Original Tenant's argument]...that the proviso for re-entry was to be treated as no more than security for the payment of rent so that if rent is paid relief should follow unless there is some exceptional reason why it would be unjust to grant relief.... he said that the question for the learned judge should have been "whether the delay in this case comprised such exceptional circumstances as to justify the refusal to grant relief sought"' (paragraph 33). Nugee LJ then quoted from Martin Spencer J's judgment, at paragraph 33:

"In my judgment...although an application for relief from forfeiture may be brought more than six months after possession has been taken by the landlords so long as the elasticity of 'reasonable promptitude' has not snapped, an application brought within six months is to be taken as having been brought with 'reasonable promptitude'. In those circumstances, the factor relied upon by the learned judge in refusing to grant the relief sought, namely the delay within six months, was not capable of amounting to the kind of exceptional circumstances which it is necessary for a landlord to show when inviting the court to refuse relief despite the application having been brought within six months. It may be of significance that, in reaching her decision, the learned judge made no reference to the guidance to be derived from the statutory six-monthtime limit."

Nugee LJ summarised Martin Spencer J as having concluded that '...the re-letting should be no bar to the granting of relief as the residential premises had been vacated by the date of the hearing, and as regards the ground floor business premises the [Original Tenants] had said they would be content with a reversionary lease. Martin Spencer J had '...therefore allowed the appeal and granted relief from forfeiture.' (paragraph 33).

[6] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ said, at paragraph 36:

'The law in relation to relief from forfeiture is unfortunately made more complex than it might otherwise be by the fact that the applicable legal framework depends on a number of variables, such as whether the forfeiture is for non-payment of rent or for breach of other covenants; whether the landlord is enforcing the right to possession through court proceedings or has peaceably re-entered; whether proceedings are in the High Court or County Court; whether the court is exercising a statutory or equitable jurisdiction; and whether the application is by the tenant or by a sub-tenant or mortgagee. It is necessary when reading the authorities to keep this variability in mind and be clear as to precisely what issue the court was dealing with.'

[7] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ, at paragraphs 37-40:

(1) commented about the statutory intervention in the wider RFF areana:

'There is an unusually long history of statutory intervention in this area. It is summarised in the judgment of Sir Nicolas Browne-Wilkinson V-C in Billson [1992] 1 AC 494, 511C—512D. Before the Landlord and Tenant Act 1730 the Court of Chancery claimed power to relieve against forfeiture without limit of time. The 1730 Act was designed to prevent such relief being given more than six months after judgment had been recovered. It was in effect repealed and re-enacted in sections 210 to 212 of the Common Law Procedure Act 1852 ("the 1852 Act") which, as amended, are among the very few provisions of that Act still in force. By section 210 if a landlord recovers judgment for possession, a tenant who does not pay the arrears of rent and costs and apply for relief within six months is barred from relief; section 211 requires the tenant to pay into court the arrears and costs claimed; and section 212 enables a tenant to be relieved if he pays or tenders the arrears or costs before trial. In Gill v Lewis [1956] 2 QB 1 ("Gill") Jenkins LJ held that section 212 differs from sections 210 and 211 by conferring a new substantive right on the tenant to relief. The 1852 Act is, as Browne-Wilkinson V-C says, still the basic statute regulating relief from forfeiture for non-payment of rent.'

(2) Noted that 1852 Act and its remaining statutory provisions, do not apply to all RFF cases:

'But the 1852 Act does not apply to all cases. In particular sections 210 to 212 are only concerned with cases where the landlord has proceeded, or is proceeding, in court, and have no application to cases of peaceable re-entry; sections 210 and 211 are also expressly limited to cases where at least one half year's rent is in arrear.

(3) commented that it is the equitable jurisdiction inherited by the High Court from the Court of Chancery, that is exercised (paragraphs 38-40):

'The High Court has a statutory jurisdiction in section 38 of the Senior Courts Act 1981 to grant relief where the landlord is proceeding in the High Court (whatever the amount of the arrears); but there is no such statutory provision available to the High Court in cases of peaceable re-entry, and in such a case it retains, and exercises, its equitable jurisdiction inherited from the Court of Chancery.

Before observing the absence of a strict time limit with this equitable jurisdiction of 6 months.

'A succession of cases has established that the equitable jurisdiction is not subject to any strict time limit. In Howard [1895] 2 Ch 581 Stirling J at p 588F suggested that a court of equity might possibly say the action for relief must be brought within six months, by analogy with the 1852 Act; but in Thatcher v C H Pearce & Sons (Contractors) Ltd [1968] 1 WLR 748 ("Thatcher"), Sir Jocelyn Simon P said at p 755F that he had rarely come across more guarded wording, and in the case before him, where the tenant was in prison and without ready access to legal advice and had brought an application six months and four days after peaceable re-entry, said at p 755H that it seemed to him contrary to the whole spirit of equity to boggle at a matter of days when justice indicated relief. In Billson [1992] 1 AC 494, 512C Browne-Wilkinson V-C went so far as to draw the conclusion that the High Court could exercise its equitable jurisdiction to relieve in cases of peaceable re-entry "without limit of time"; but in Gibbs [2019] 4 WLR 6 Lewison LJ said (at para 44) that he thought that was highly debatable, and (at para 55) that he considered that the approach of Nicholls and Parker LJJ, who both took a narrower view, was the correct one. What Nicholls LJ had said in Billson was (at p 529B) that equity followed the law but not slavishly or always, and (at p 530A) that courts of equity should apply by analogy the statutory time limits but not with strictness.

It can therefore be taken as settled law that the High Court, in exercising the ancient equitable jurisdiction to relieve for non-payment of rent in cases of peaceable re-entry, will have regard to, but not be strictly bound by, the six-month time limit under the 1852 Act.'

(4) commented that the County Court is governed by County Courts Act 1984 ('1984 Act') and that s.138 of the 1984 Act applies (but only where forfeiture is through court proceedings). At paragraphs 41 and 42, Nugee LJ said:

'Unlike the High Court the County Court only has the jurisdiction conferred on it by statute. The current Act is the County Courts Act 1984 which by section 138 makes provision similar to, but not identical with, the 1852 Act. Thus section 138(1)—(9) enable the lessee to obtain relief by paying the arrears of rent and costs into court, either before the return date or after an order for possession has been made but before it has been executed; and section 138(9A) provides for the lessee to have six months after recovery of possession to apply for relief, as follows:

"Where the lessor recovers possession of the land at any time after the making of the order under subsection (3) (whether as a result of the enforcement of the order or otherwise) the lessee may, at any time within six months from the date on which the lessor recovers possession, apply to the court for relief; and on any such application the court may, if it thinks fit, grant to the lessee such relief, subject to such terms and conditions, as it thinks fit."

That provision does not apply in the present case as the Landlords recovered possession without having first obtained an order.'

[8] In Gibbs v Lakeside Developments Ltd [2019] 4 WLR 6 Lewison LJ said, at paragraph 42:

'Since the county court is a court created by statute, it can in principle do only what the statute permits it to do. Moreover, where Parliament has imposed a particular time limit on an application for relief against forfeiture, that implicitly ousts any broader jurisdiction that the court may have: Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151; Harrison v Tew [1989] QB 307, (affirmed [1990] 2 AC 523). [The Applicant] did not apply for relief against forfeiture until 21 October 2011, nearly one and a half years after the landlords had recovered possession. By that time I consider that it would have been too late for the county court to have granted her relief against forfeiture. For as long as the proceedings stayed in the county court, whether or not the possession order was set aside could have made no difference to the consequences of the landlords’ lawful exercise of their right of forfeiture.'

[9a] In Gill v Lewis [1956] 2 QB 1 ('Gill'), two tenants were in default of payment of rent. The landlord took proceedings in the High Court, and signed judgment in default against one of them. Pausing there - the Gill case is therefore different factual scenario from Keshwala - since in Keshwala there were no court proceedings for forfeiture but peaceable re-entry.

Returning to the facts of Gill: The arrears had been c.£412, of which (i) £400 was paid before the signing of the judgment; (ii) the remaining balance was subsequently paid. The tenants applied for RFF (within 2 months of judgment being entered). RFF was granted at 1st instance, which was upheld on appeal. On the landlord's further appeal, '...the landlord conceded that in the ordinary way the court will make the order as a matter of course when satisfied that the landlord has received, or has been tendered, all that is due to him for rent and costs, but submitted that this was not wholly inflexible and that the court could have regard to the conduct of the tenant and refuse relief in its discretion.' (Nugee LJ in Keshwala, at paragraph 44; a summary of paragraph 1 of Gill)

Nugee LJ said, at paragraph 45:

'Jenkins LJ in fact decided the case on the basis that the judgment against one only of two tenants was ine›ective, that the application for relief was therefore brought under section 212 of the 1852 Act, and that the tenants were entitled to it, seemingly as of right (see at pp 8—9). But he went on to consider what the position would have been had the judgment been regular, and section 212 inapplicable.'

Pausing there. There are two points to note here: (1) since the case was in the High Court, the relevant jurisdiction - in this counterfactual scenario to be explored - was equitable jurisdiction; and (2) since this next part in Gill was not necessary to determine the case, it was obiter and non-binding.

Continuing with Nugee LJ in Keshwala, on Gill, at paragraph 45:

'In such a case the court would have been exercising a discretionary jurisdiction. He accepted that if there had been intervening dealings with the property it might be inequitable to grant relief (as to which see below). But where there had been no change of position, the general position was as stated by Lord Esher MR in Newbolt v Bingham (1895) 72 LT 852, 853 ("Newbolt"), namely that:

"if, at the time of the application, the position is not altered, so that no injustice will be done, I think, if the conditions mentioned in the section are complied with, that, according to the settled practice in equity, there is no longer a discretion in the judge, but that he ought to make the order. It does not matter whether it is called discretionary or not, if the discretion ought always to be exercised in one way."

In those circumstances, Jenkins LJ said (at p 13) that he did not think it would be generally speaking legitimate to take into account other breaches of covenant. His conclusion was as follows (at pp 13—14):

"As to the conclusion of the whole matter, in my view, save in exceptional circumstances, the function of the court in exercising this equitable jurisdiction is to grant relief when all that is due for rent and costs has been paid up, and (in general) to disregard any other causes of complaint that the landlord may have against the tenant. The question is whether, provided all is paid up, the landlord will not have been fully compensated; and the view taken by the court is that if he gets the whole of his rent and costs, then he has got all he is entitled to so far as rent is concerned, and extraneous matters of breach of covenant, and so forth, are, generally speaking, irrelevant.

But there may be very exceptional cases in which the conduct of the tenants has been such as, in effect, to disqualify them from coming to the court and claiming any relief or assistance whatever. The kind of case I have in mind is that of a tenant falling into arrear with the rent of premises which he was notoriously using as a disorderly house: it seems to me that in a case of that sort if the landlord brought an action for possession for non-payment of rent and the tenant applied to the court for relief, the court, on being apprised that the premises were being consistently used for immoral purposes, would decline to give the tenant any relief or assistance which would in any way further his use or allow the continuance of his use of the house for those immoral purposes. In a case of that sort it seems to me that it might well be going too far to say that the court must disregard the immoral user of the premises and assist the guilty tenant by granting him relief."

On the facts however he did not think the matters relied on by the landlord (previous default in paying rent, diffculty of service and the conviction of one of the tenants for indecent assault committed in one of the two houses let) were enough to justify refusing relief.'

Nugee LJ noted, at paragraph 46 of Keshwala that, Hodson LJ said in Gill (also obiter):

"that which I think the court must always keep in mind, that there may be cases where the court will refuse relief because the conduct of the applicant for relief is such as to make it inequitable that relief should be given to him. Particularly must that be so where his conduct is in relation to the premises in question-as in the instance which my brother gave, where a tenant is supposed to have been conducting the premises as a disorderly house; it could hardly be thought, I should suppose, in such a case, that the court would grant relief."

Nugee LJ then said, at paragraph 47:

'It can be seen that the actual decision was that no exercise of discretion was involved, which means that everything said about discretionary relief was strictly speaking obiter, but I would accept that the law is as stated by Jenkins and Hodson LJJ.'

[9b] In Re Brompton Securities Ltd [No 2] [1988] 3 All ER 677, Vinelott J said, at 680:

'It is trite law that, save in very exceptional circumstances, the court will grant relief against forfeiture to a tenant on payment of all rent in arrears and costs, and will do so notwithstanding that actions have had to be brought on previous occasions to recover the rent. The court may refuse to grant relief against forfeiture if the parties have altered their position in the mean time and, in particular, where the rights of third parties have intervened relief ought not to be granted where the effect of it would be to defeat the new rights of third parties or be unfair to the landlord having regard to the way in which he has altered his position (see Gill v Lewis [1956] 1 All ER 844 at 850, [1956] 2 QB 1 at 10 per Jenkins LJ). There are exceptions to this rule, for instance (an example given by Jenkins LJ) where 'the court, on being appraised that the premises were being consistently used for immoral purposes, would decline to give the tenant any relief or assistance which would in any way further his use or allow the continuance of his use of the house for those immoral purposes.' (See [1956] 1 All ER 844 at 852, [1956] 2 QB 1 at 14.)

However, as Gill v Lewis shows, the circumstances must be very exceptional. In that case the Court of Appeal treated the facts that 'the tenants having been bad payers in the past, and the fact that they have been elusive when attempts have been made to serve them' as irrelevant matters for consideration (see [1956] 1 All ER 844 at 854, [1956] 2 QB 1 at 17 per Hodson LJ). One of them had been convicted for indecent assault on the demised premises.'

[10] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ added to this, to found his statement on the authorities, at paragraph 82:

'Thus in [Stanhope v Haworth (1886) 3 TLR 34] Lord Esher MR and Lindley LJ both referred to the landlord as having altered his position, and Lopes LJ to the landlord and other parties interested not being able to be put in the same position as before (para 55 above); in [Gill v Lewis [1956] 2 QB 1] Jenkins LJ summarised the position as being that where parties had altered their position in the meantime, and in particular where the rights of third parties had intervened, relief ought not to be granted where the effect of it would be to defeat the new rights of third parties "or be unfair to the landlord having regard to the way in which he has altered his position" (para 56 above); and in [Silverman v AFCO (UK) Ltd (1988) 56 P & CR 185] Slade LJ said that the court may, in the exercise of its discretion, properly refuse relief from forfeiture even to a tenant who belatedly tenders the full amount of outstanding rent and costs if, during the interim period, the landlord has, not unreasonably or precipitously, granted rights in the premises to third parties on the footing that the original lease is at an end, and the court considers that, in all the circumstances, the grant of relief to the original tenants would cause injustice to the landlord or the third parties or both (para 57 above). So too in [Bank of Ireland Home Mortgages Ltd v South Lodge Developments Ltd [1996] 1 EGLR 91] Lightman J considered separately the question of relief as against the lessor and as against the new lessee (para 59 above).'

In Stanhope v Haworth (1886) 3 TLR 34 ("Stanhope"), the RFF application was made almost 6 months after forfeiture. In the interim, the landlords had: (i) expended considerable sums on the upkeep of the premises (a colliery); and (ii) granted a new lease to new tenants, who had taken up possession of premises - and who had laid out money in purchasing plant to work at the premises. It wa said to be unjust to grant RFF in such circumstances.

In Newbolt v. Bingham (1895) 72 L.T. 852, Lord Esher MR said (as regards the power bestowed upon the courts by Common Law Procedure Act 1852), at 853:

'If, at the time relief is asked for, the position has been altered, so that relief could not be given without causing injury to third parties, I think that the case that was cited to us (Stanhope v. Haworth) applies. But if, at the time of the application, the position is not altered, so that no injustice will be done, I think, if the conditions mentioned in the section are complied with, that, according to the settled practice in equity, there is no longer a discretion in the judge, but that he ought to make the order. It does not matter whether it is called discretionary or not, if the discretion ought always to be exercised in one way. If the conditions are complied with, and no interests of third parties have intervened, there is no longer any real discretion in the matter.' Applying this to case before him, Esher MR said, 'The order for relief in this case will, therefore, be made, if all repairs required by the covenants are done to the satisfaction of a surveyor within one month, and the rent in arrear and all costs, including the costs of this appeal, are paid.'

Rigby LJ said 17: 'I am of the same opinion. It was the settled practice of a court of equity to grant relief against forfeiture for non-payment of rent on payment of all rent in arrear and costs. Of course, the court was not absolutely bound by its practice where it would not do justice, and if some new interest had been created before the application, the court would refuse to interfere. That was not done to put the landlord in a better position, but because the rights of third parties had intervened.'

[11] In Gill v Lewis [1956] 2 QB 1, CA, Jenkins LJ also said, earlier, at 13: 'I do not consider that today it would be, generally speaking, legitimate to take into account other breaches of covenant.' but '...the court is not to exercise this equitable jurisdiction, as it were, "in blinkers."

Later in Gill, Jenkins LJ said, at 14:

'If there are indeed other breaches of covenant, then a landlord objecting to them has his remedy in bringing an action for breach of the covenants in question after all proper notices have been given.'

[12] To put this quote in its wider context, in Gill v Lewis [1956] 2 QB 1, CA, Jenkins LJ said, at p.13-14:

"As to the conclusion of the whole matter, in my view, save in exceptional circumstances, the function of the court in exercising this equitable jurisdiction is to grant relief when all that is due for rent and costs has been paid up, and (in general) to disregard any other causes of complaint that the landlord may have against the tenant. The question is whether, provided all is paid up, the landlord will not have been fully compensated; and the view taken by the court is that if he gets the whole of his rent and costs, then he has got all he is entitled to so far as rent is concerned, and extraneous matters of breach of covenant, and so forth, are, generally speaking, irrelevant.

But there may be very exceptional cases in which the conduct of the tenants has been such as, in effect, to disqualify them from coming to the court and claiming any relief or assistance whatever. The kind of case I have in mind is that of a tenant falling into arrear with the rent of premises which he was notoriously using as a disorderly house: it seems to me that in a case of that sort if the landlord brought an action for possession for non-payment of rent and the tenant applied to the court for relief, the court, on being apprised that the premises were being consistently used for immoral purposes, would decline to give the tenant any relief or assistance which would in any way further his use or allow the continuance of his use of the house for those immoral purposes. In a case of that sort it seems to me that it might well be going too far to say that the court must disregard the immoral user of the premises and assist the guilty tenant by granting him relief."

Later, Hodson LJ in Gill said, at 17:

'...the right to relief is (as it is described) a right to relief in equity.

That being the case, it must, I think, necessarily follow that, as equity reserves to itself the right to refuse relief in an appropriate case, the only remaining question is whether this is an appropriate case.'

And later, at 17:

'...the court must always keep in mind, that there may be cases where the court will refuse relief because the conduct of the applicant for relief is such as to make it inequitable that relief should be given to him. Particularly must that be so where his conduct is in relation to the premises in question - as in the instance which my brother gave, where a tenant is supposed to have been conducting the premises as a disorderly house; it could hardly be thought, I should suppose, in such a case, that the court would grant relief.'

On the facts in Gill, Hodson LJ said, at 17:

'I think that the question of the tenants having been bad payers in the past, and the fact that they have been elusive when attempts have been made to serve them, are irrelevant matters for consideration, and the only material matter is the matter which is the subject-matter of the conviction.'

Pausing there, the conviction was against one of the two joint tenants, in respect to 2 acts of indecent assault; acts were done at one only of these two houses, which are comprised in two separate and distinct leases.

Continuing with Hodson LJ, at 17 'That was considered by the judge; he has considered it as an isolated matter and not as a continuous course of conduct. Upon that matter I think that this court would not interfere with the exercise of his discretion, and would not take such a severe view of the matter that it ought for that reason to deprive the tenant of that which, on the face of it, he would expect to get, namely, relief against forfeiture.' Jenkin LJ had also said, the fact of the indecent assault did not amount to an exceptional circumstance, warranting RFF to be refused.

[13] For instance, in Gill v Lewis [1956] 2 QB 1, CA, Hodson LJ said, obiter, at p16:

'If the question of relief had to be considered, the rule is, I think, very clearly set out in a passage in Halsbury's Laws of England, 2nd ed., vol. 20, p. 264, to which we were referred: "The proviso for re-entry on non-payment of rent is regarded in equity as merely a security for the rent, and accordingly, provided that the lessor and other persons interested can be put in the same position as before, the lessee is entitled to be relieved against the forfeiture on payment of the rent and any expenses to which the lessor has been put."'

[14] In Re Brompton Securities Ltd [No 2] [1988] 3 All ER 677, Vinelott J continued, at 681:

'In fact it is probable the rent will be paid in the future. An application has recently been made to [the (intermediate) landlord] for consent to an assignment to another company, and the inference must, I think, be that Mr Palmer has succeeded into entering into a conditional contract for the further assignment of the lease. If the proposed assignee can satisfy [the (intermediate) landlord] that he is likely to be a satisfactory tenant, [the (intermediate) landlord] will have all the protection that it is entitled to.'

Separately, but also of note, is that Vinelott J said, at 682:

'I understand that cases where an insolvent company is put in funds to pay rent in arrears so as to avoid forfeiture of a lease which may be a valuable and realisable asset are not uncommon.'

[15] In Keshwala v Bhalsod [2021] 1 WLR 4004, Nugee LJ, at paragraphs 53-54:

'53. Most of the authorities I have referred to do not really address this question, being, as can be seen, concerned with the question whether delay beyond the six months prevented the court from exercising its equitable jurisdiction. None of them squarely raised the question whether a tenant who applies within the six months will be taken to have acted reasonably promptly.

54. But there are repeated indications in the authorities that a tenant who leaves it to the end of the six months will not necessarily be taken to have acted promptly, and that such a delay can be a relevant factor.

Nugee LJ then proceeded to work through the authorities, drawing out what indicates there were; from paragraphs 54 to 61:

'54...The earliest such case to which we were referred was Stanhope v Haworth (1886) 3 TLR 34 ("Stanhope") where a landlord forfeited a lease of a colliery for non-payment of rent, took proceedings in the High Court, and obtained possession under a default judgment. The tenant waited until "just before the end of the six months" and made an application for relief under section 210 of the 1852 Act. In the meantime the landlord had kept up the colliery at considerable expense, and other parties who proposed to take a lease of it had laid out money in purchasing plant to work it and were in possession of it. The Divisional Court refused to grant relief, thinking that it would be "monstrous" to do so. This court upheld that decision.

55. What is of interest for present purposes is what the court said about delay. Counsel for the tenant argued that having applied within the six months limited by statute, relief should be given on equitable terms (which I take to mean the normal terms of payment of arrears and costs) but Lopes LJ is reported as saying in the course of argument that the "long delay", of which no explanation had been given, would make it inequitable; and Lindley LJ that relief was not necessarily to be granted within the six months: the statute says that it shall not be granted after the six months, but it may be inequitable even within the six months. Similar statements are found in what was reported to have been said in all three judgments. Lord Esher MR said:

"the defendant, having judgment against him, had made no application until just before the end of the six months, and in the meantime the position of the plaintiff had become altered, as he had to keep up the colliery at considerable expense, and other parties who o›ered to take it had laid out money in purchasing plant to work the colliery and were now in possession. It would be unjust now to allow the tenant to dispossess them and resume possession of the colliery."

Lindley LJ also said that the tenant had delayed his application until just before the end of the six months and in the meantime the position of the plainti› landlord was altered:

"The plaintiff had in the meantime kept the colliery up, and had entered into an arrangement with other parties to let the colliery to them. There was no explanation of the delay by the tenant except that he had not had the money. That was no reason for allowing him now to have relief to the prejudice of other parties, and it would be unreasonable to give him such relief."

Lopes LJ said that he agreed with the Divisional Court that it would be monstrous to give the tenant relief:

"Relief ought not to be granted if the landlord and other parties interested could not be put in the same position as before, and here that was impossible and the relief unjust and inequitable."

It can be seen therefore that all the members of the court took into account the delay on the part of the tenant, albeit it was the fact that that delay had led to the landlord and third parties altering their position which made it inequitable to grant relief.

56. Stanhope has been referred to in other decisions of this court. In Newbolt 72 LT 852, Lord Esher MR said that he thought it applied if, at the time relief is asked for, the position is altered, so that relief could not be given without injury to third parties; and Smith LJ said that if some new interest had been created before the application, the court would refuse to interfere. It was referred to again by Jenkins LJ in Gill [1956] 2 QB 1 as follows (at p 10):

"It will be observed that in that case the landlord and those dealing with him had altered their position on the footing that the lease to the party seeking relief was at an end, and they had been led to do that because the tenant had waited until almost the end of the period of six months allowed to him before he claimed relief. So that case shows that where parties have altered their position in the meantime, and in particular where the rights of third parties have intervened, relief ought not to be granted where the e›ect of it would be to defeat the new rights of third parties or be unfair to the landlord having regard to the way in which he has altered his position."

57. Stanhope was applied in Silverman v AFCO (UK) Ltd (1988) 56 P & CR 185 ("Silverman"). Here the landlord forfeited for non-payment of rent and brought a claim in the High Court for possession. The tenant Þled an acknowledgment of service indicating it did not intend to defend, and the landlord entered judgment in default. The tenant applied for relief but by the time of the hearing had not paid, or tendered the arrears of rent, only o›ering a post-dated cheque. The master refused relief. The tenant did not indicate any intention to appeal, and the landlord, who had been negotiating a new lease for some time, let the property to a Mr Parsons the next day. On appeal Turner J dismissed the appeal holding that the landlords had "not unreasonably given the history of this matter" granted a fresh lease to Mr Parsons. A further appeal to this court was also dismissed. Slade LJ, giving the judgment of the court, said at p 190F that the jurisdiction to grant relief was discretionary, that the question was whether su–cient grounds had been shown to interfere with Turner J's exercise of his discretion, and that a crucial question was whether he was justiÞed in Þnding that the landlord had acted "not unreasonably" in executing a lease. They held that Turner J was entitled to accept the submission that there was no reason why the landlords should have been expected to wait any longer than they did. At p 192 Slade LJ expressed their conclusion as follows:

"At the time when he accepted the lease neither Mr Parsons nor the plainti›s themselves would, in our judgment, have been unreasonable in thinking that the plainti›s were in a position to confer on him a good title to the premises which they were purporting to demise. By the time when the defendants made their Þrst tender of the sums due to the plainti›s, very shortly before the hearing, on December 17, 1987, both the plainti›s and Mr Parsons had substantially altered their positions by the grant and acceptance of the new lease. Mr Michaelson criticised the learned judge's description of the relevant passage from Jenkins LJ's judgment in Gill v Lewis as 'binding and persuasive authority.' In our judgment, however, that passage and the decision in Stanhope v Haworth on which it is based support the proposition that the court may, in the exercise of its discretion, properly refuse relief from forfeiture even to a tenant who belatedly tenders the full amount of outstanding rent and costs if, during the interim period, the landlord has, not unreasonably or precipitously, granted rights in the premises to third parties, on the footing that the original lease is at an end, and the court considers that, in all the circumstances, the grant of relief to the original tenants would cause injustice to the landlord or the third parties or both."

This was not a case where the tenant had delayed in issuing the application for relief, but no tender of the full amount outstanding was made until the eve of the hearing of the appeal, something that was described by Turner J as at the "eleventh-and-a-half hour".

58. Then in Billson, as referred to above (para 50), Nicholls LJ referred to the need for reasonable promptitude, said that what was reasonable depended on all the circumstances, and then considered the particular circumstances of the case, including the fact that the tenant had applied for relief within one week, and concluded that the tenant had acted with promptitude. That certainly suggests that he did not think that a tenant could take as much time as he liked so long as he brought his application for relief in six months.

59. Finally, there are some pertinent comments made by Lightman J in Bank of Ireland Home Mortgages Ltd v South Lodge Developments Ltd [1996] 1 EGLR 91 ("Bank of Ireland"). Here the landlord had forfeited by peaceable re-entry for non-payment of rent on 13 March 1992, and the mortgagee of the lease applied for relief from forfeiture on 10 August 1992, that is well within the six months..., but nearly five months after possession was taken. The mortgagee had written to the lessor on 14 July 1992 undertaking to pay the arrears and threatening proceedings unless the lessor agreed to relief on the usual terms. The lessor did not respond and re-let the premises before it was served with the application for relief. The lessor submitted that as a matter of discretion relief should be refused because the delay of the mortgagee in commencing proceedings for relief was such as to make it reasonable for the lessors to proceed with the grant of the new lease. Lightman J dealt with this submission as follows (at p 93):

'The two principal authorities cited by the lessors make clear that any alteration of position on the part of the lessor or a third party in the interim period between the date of forfeiture and the date of the application for relief (e g the grant of a new lease) is potentially a factor of Þrst importance in the exercise of discretion, for it may make it unjust to grant relief thereafter: whether it does or does not do so must depend on all the circumstances, and in particular the reasonableness or otherwise of the conduct of the lessor and the third party in acting as they did . . .

"Compliance with the six-month time limit on applications for relief is a necessary, but not a su–cient, precondition for relief. It is incumbent on any applicant for relief, whether a lessee or a person deriving title from a lessee, to make application with all due diligence and keep the lessor informed of his intentions and not leave him in the dark, and, if there is any apparent delay, in his evidence fully to explain it. It is not the legislative policy that the premises shall be sterilised producing no return for the lessor during the six-month period, let alone that the lessor shall be occasioned loss. So long as the lessor has given those entitled a reasonable opportunity to apply for relief and has reasonably formed the view that no application will be seriously pursued, he may exercise his rights as owner. What is reasonable in this context must depend on the circumstances of the case e g the amount of rent due, the seriousness of any breach of covenant, the cost to the lessor of retaining, and preserving the value of, the property unlet or unsold and the loss occasioned to the lessor by the delay.

"In the circumstances of this case, but for the receipt of the letter dated the 14 July, I might well have considered that the Lessors acted reasonably in granting the New Lease. The passage of time from the 15 April 1992 (when the Lessors informed the Mortgagee of the condition of the premises and the intention to sell) until the 19 August without any communication from the Mortgagee might reasonably have led the Lessor to believe that there would be no application for relief. But on the 14 July the Mortgagee made clear its position, and though at this stage negotiations for the New Lease were well advanced, the Lessors had every reason to believe, and on the basis of the evidence fled plainly did believe, that there would be an application by a Mortgagee well able and committed to fulÞlling all the conditions for relief and there was no reason to believe that on the grant of relief the Lessors would not be restored to the same position as if there had been no breach of covenant by the Original Lessees. In these circumstances I consider that the Lessors acted totally unreasonably in thereafter ignoring and not replying to the letter; in falsely, for no reason explained in the evidence, informing the New Lessee that the period for an application for relief had expired; and in precipitately granting the New Lease and pocketing the premium, monies from heaven to which they had no moral claim. Accordingly it would be just to grant relief as against the Lessors."

60. It can be seen that Lightman J took the view that it was incumbent on an applicant for relief to act with due diligence, to keep the lessor informed of his intentions, and to explain fully any delay in his evidence; and that if it had not been for the letter of 14 July, he might well have considered that the lessor acted reasonably in re-letting. He undoubtedly proceeded on the basis that delay even within the six-month period could be relevant to the exercise of the discretion.

61. That seems to me right. As Lightman J says, it can scarcely be thought to be the legislative policy that property should be sterilised for six months while a landlord waits for the tenant to decide what he is going to do. As long ago as 1886 Lopes LJ and Lord Esher MR had made a similar point in Stanhope 3 TLR 34, Lopes LJ saying in the course of argument: "Do you say that the landlord is bound to keep up the colliery for the lessee when it suits him to re-enter?" and Lord Esher MR adding: "And has he a right to resume possession in the meantime? Are they to refuse eligible o›ers from other parties to take a lease?"'