3PLR – WYNNE V. LIVERPOOL CITY COUNCIL

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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WYNNE

V.

LIVERPOOL CITY COUNCIL

COURT OF APPEAL, CIVIL DIVISION

[1995] 3 ALL E.R.

4, 28 APRIL 1995

3PLR/1995/48  (SC)

 

HOUSE OF LORDS

SIR THOMAS BINGHAM

MR, HIRST AND

ALDOUS LJJ

 

REPRESENTATION

Timothy King QC and David Bennett (instructed by Gregory Abrams, Liverpool) – for Mrs Joyce

Timothy King QC and Grant Lazarus (instructed by Stephen Irving & Co, Liverpool) – for Mr Wynne

Edward Bartley Jones and Tania Griffiths (instructed by Sharpe Pritchard, agents for Paul F Taylor, Liverpool) – for the council

Cur adv vult

 

MAIN ISSUES

ADMINISTRATION OF JUSTICE;

Arbitration: LANDLORD AND TENANT;

Other Landlord and Tenant

County court – Arbitration – Reference of proceedings to arbitration – Automatic reference – Small claims – Suitability of claims for arbitration – Claims for specific performance or injunction against landlords in respect of breach of repairing covenants – Whether district judge sitting as small claims arbitrator having jurisdiction to grant injunction or specific performance – CCR Ord 19 – Landlord and Tenant Act 1985, s 11.

Landlord and tenant – Repair – Landlord’s covenant – Breach of covenant – Arbitration – Reference to small claims procedure – Grant of injunction or specific performance – Landlord and Tenant Act 1985, s 11.

 

MAIN JUDGEMENT

A district judge has jurisdiction to grant both interlocutory and final injunctions (other than Anton Piller orders and Mareva injunctions) and to order specific performance when determining claims referred to arbitration under the small claims procedure laid down in CCR Ord 19a, including claims under s 11b of the Landlord and Tenant Act 1985 to enforce a domestic landlord’s implied repairing covenant (see p 121 b to g, p 123 c and p 124 e, post).

a    Order 19, so far as material, is set out at p 118 h to p 119 a, post

b    Section 11, so far as material, provides:‘(1) In a lease to which this section applies [ie a lease of a dwelling-house granted on or after 24 October 1961 for a term of less than seven years] there is implied a covenant by the lessor to keep [the property] in [good] repair …’

Afzal v Ford Motor Co Ltd [1994] 4 All ER 720 considered.

Notes

For automatic reference of small claims to arbitration, see 10 Halsbury’s Laws (4th edn) para 273A.

For the Landlord and Tenant Act 1985, s 11, see 23 Halsbury’s Statutes (4th edn)(1989 reissue) 344.

Cases referred to in judgment

Afzal v Ford Motor Co Ltd [1994] 4 All ER 720, CA.

Bourne v McDonald [1950] 2 All ER 183,[1950] 2 KB 422, CA.

Calabar Properties Ltd v Stitcher [1983] 3 All ER 759,[1984] 1 WLR 287, CA.

Chiodi’s Personal Representatives v De Marney (1988) 21 HLR 6, CA.

Davies v Peterson (1988) 21 HLR 63, CA.

De Vries v Smallbridge [1928] 1 KB 482,[1927] All ER Rep 613, CA.

Kenny v Preen [1962] 3 All ER 814,[1963] 1 QB 499,[1962] 3 WLR 1233, CA.

Pepper v Healey [1982] RTR 411, CA.

R v Cheshire County Court Judge, ex p Malone [1921] 2 KB 694,[1921] All ER Rep 344, CA.

Simpson v Crowle [1921] 3 KB 243,[1921] All ER Rep 715, DC.

Taylor v Knowsley BC (1985) 17 HLR 376, CA.

Cases also cited or referred to in skeleton arguments

Jeune v Queens Cross Properties Ltd [1973] 3 All ER 97,[1974] Ch 97.

Sella House Ltd v Mears (1988) 21 HLR 147, CA.

Appeals

Joyce v Liverpool City Council

The plaintiff, Angela Frances Joyce, appealed pursuant to CCR Ord 37, r 6 with leave granted by Judge Marshall Evans QC from his judgment given on 25 November 1994 in the Liverpool County Court dismissing the plaintiff’s appeal from the order of District Judge Gee given on 24 October 1994 allowing only fixed costs to the plaintiff on the basis that her action against the defendant landlords, Liverpool City Council, for damages and an order for specific performance in relation to the council’s repairing obligations under s 11 of the Landlord and Tenant Act 1985, should have been heard in arbitration in accordance with the procedure laid down by CCR Ord 19. The facts are set out in the judgment of the court.

Wynne v Liverpool City Council

The plaintiff, William Edward Wynne, appealed with leave granted by Judge Hedley from his order made on 6 January 1995 in the Liverpool County Court whereby he dismissed the plaintiff’s appeal from the order of District Judge Wolfson dated 7 October 1994 referring the plaintiff’s claim against the defendant landlords, Liverpool City Council, under s 11 of the Landlord and Tenant Act 1985 for damages and an order for specific performance to arbitration pursuant to CCR Ord 19, r 3. The facts are set out in the judgment of the court.

The appeals were heard together.

28 April 1995. The following judgment of the court was delivered.

SIR THOMAS BINGHAM MR. These appeals raise an important and disputed question. The question is: in proceedings by a domestic tenant alleging a breach by his landlord of a repairing covenant, may a district judge sitting as small claims arbitrator grant relief by way of specific performance or injunction?

The question is important to the tenant because the answer determines whether a tenant’s claim in which such relief is sought may be referred to small claims arbitration. That in turn determines whether, if successful, the tenant may recover his legal costs and thus, in practice, whether he will be granted legal aid and have the benefit of legal representation. The landlord will often have the benefit of representation either by lawyers or employees experienced in resisting such claims, so the tenant (if unrepresented) may be at an obvious disadvantage in preparing and presenting his claim. The question is of importance to landlords. Where the tenant is legally represented, the cost to the landlord of resolving a claim within the financial limit of the small claims arbitration procedure is likely to exceed, by a significant factor, the financial value of the claim. Many defendant landlords (such as that in these cases) are local authorities, some of them burdened with an ageing housing stock and under constant pressure to make ends meet. The cost to them of meeting tenants’ legal costs, added to the cost of making good defects, is not inconsiderable.

The importance of this question is not limited to claims for breach of repairing covenants, for if the district judge’s small claims arbitration procedure is precluded in any proceeding in which equitable relief by way of specific performance or injunction is sought various claims otherwise apparently suitable for the more informal and summary procedure would have to go to trial: for example very petty disputes between neighbours based on allegations of trespass or assault or nuisance, or perhaps claims for the return of goods of small value.

In the two cases before the court this jurisdictional question arises in different ways. It is convenient to summarise the relevant facts at this point.

Mrs Joyce

Mrs Joyce was a weekly tenant of 58 Grovehurst Avenue, Liverpool 14. On 13 May 1994 she issued proceedings against her landlord, Liverpool City Council. In her particulars of claim she alleged that the council had failed to comply with its repairing obligation implied into her lease, despite notice of the defects. Annexed to her particulars of claim was a schedule in which ten defects were specified. The cost of repairing these ten items, inclusive of value added tax, was said to be £687·37. She also alleged that as a result of these defects she had been put to additional heating expense, estimated at £75 for one year. She claimed that as a result of the defects she had suffered inconvenience, discomfort, distress, loss and damage. She claimed damages not exceeding £5,000.

On 21 June 1994 District Judge Whitehead gave directions. He ordered the council to file its defence within 21 days with a Scott Schedule (see The Supreme Court Practice 1995, vol 1, para 18/12/18 (65)) annexed and to send a copy to Mrs Joyce. He gave a number of other routine directions and set a trial date for a hearing estimated at two hours.

The council served a defence dated 30 June 1994. In this, various defects were admitted, although some of the costs of repair were challenged. It was denied that five of the defects specified in Mrs Joyce’s schedule fell within the scope of the council’s repairing obligation.

Mrs Joyce in September 1994 served a reply in which it was admitted that one of the items in her schedule did not fall within the scope of the council’s repairing obligation.

On 3 October 1994 Mrs Joyce’s claim was tried by District Judge Gee. The question then arose of the costs to which Mrs Joyce was entitled. On this issue the district judge delivered a very helpful written judgment on 24 October 1994.

In his judgment the district judge recorded that certain of the items in Mrs Joyce’s schedule had been repaired before the hearing, and in respect of others the council had undertaken to complete repairs within 56 days of the hearing. Only one item remained in issue between the parties. The district judge concluded that this was not a defect falling within the council’s repairing obligation. He assessed Mrs Joyce’s damages for distress and inconvenience in the sum of £50. Mrs Joyce’s counsel asked for the costs of the hearing on scale 1 of the county court scale. Counsel for the council submitted that the case should have gone to arbitration and that only fixed costs or alternatively lower scale costs should be awarded. The district judge rejected the suggestion that lower scale costs were appropriate, since the amount in issue was more than £100. He took the view that it was necessary to look at the totality of the claim and not just at the ultimate award.

The argument before the district judge turned on the question whether the case should have been automatically referred for small claims arbitration or whether it should have been litigated in court. Counsel for Mrs Joyce, in his submission on damages, had suggested that £300 would be an appropriate award. Counsel for the council submitted that if this sum were added to the cost of repairs in the schedule, the resulting figure would still be less than £1,000 and for that reason the claim should have been arbitrated with fixed costs only being awarded. Mrs Joyce’s counsel replied that this submission could not be right, since the claim included an application for specific performance and the district judge had no power to order specific performance in arbitration. Accordingly, in his submission, Mrs Joyce was entitled to scale 1 costs.

The district judge was therefore obliged to consider whether, sitting as small claims arbitrator, a district judge had power to order specific performance. He reviewed the provisions of the County Courts Act 1984 and the County Court Rules 1981, SI 1981/1687, and took account of a recent decision in Liverpool that district judges did not have power to order specific performance but also took account of the Court of Appeal’s recent decision in Afzal v Ford Motor Co Ltd [1994] 4 All ER 720 and concluded that a district judge did have power to order specific performance. He concluded:

‘In closing, may I say that there does seem to be a divergence of opinion on this point and the sooner that there is an authoritative ruling on the point the better it will be for everyone concerned in such cases.’

Mrs Joyce appealed to Judge Marshall Evans QC from the district judge’s decision on costs. Judge Marshall Evans delivered a written judgment on 25 November 1994. Like the district judge, he went to great lengths in order to identify the point at issue and to paint the background picture and we are greatly indebted to him for the help which he has given us in resolving this question. At the outset of his judgment, the learned judge described the background to cases of this kind in a manner which is invaluable in seeking to take account of the practical aspects of the matter. This passage deserves quotation in full:

‘The case is one of the type commonly described as a “s 11” or “housing disrepair” case. The reference is to s 11 of the Landlord and Tenant Act 1985 which bears the heading “Repairing obligations in Short Leases”. By virtue of the section there is to be implied, in what in practice amount to virtually all leases of dwelling houses, a number of repairing covenants by the landlord covering the structure and exterior, rain-water goods, plumbing and sanitary fixtures, electric wiring and gas pipes and heating equipment. It is by no means uncommon for tenants to complain that landlords have been less than assiduous in discharging their wide ranging and fairly onerous obligations and—usually after some history of failure to remedy defects over some period of time—to commence actions in the county court seeking enforcement of the obligations and damages for the failure of the landlord to comply with those obligations after notice of the relevant defect or defects. The covenants are of course, by long established authority, to be construed as covenants to repair on notice. Although some of the s 11 cases in the Liverpool County Court are against private landlords, the vast majority are against Liverpool City Council in respect of council houses let under local authority tenancies. Almost without exception the plaintiffs are legally aided. Faced with an ageing housing stock, limited resources and their wide obligations under the implied covenants Liverpool City Council struggles—not always as effectively as it might—to carry out the appropriate repairs. Determined tenants, dissatisfied with delayed and partial responses by the housing office, consult solicitors and commence proceedings to enforce their undoubted legal rights. What happens is that the solicitors obtain from one of the local surveyors experienced in the field a report in the form of a priced Scott Schedule listing such defects as the surveyor believes fall within the scope of the covenants implied by statute. In accordance with the local practice direction that schedule is attached to the particulars of claim, which seek an order for rectification of the defects set out in the schedule and damages for their continuance without rectification after notice. The city council investigates and files a defence admitting or denying the defects, and whether they fall within the covenants. There may be a joint inspection by the city council’s surveyor and the plaintiff’s surveyor, and a resultant joint report or completion of the Scott Schedule setting out the defendants’ contentions. Often the existence of defects is agreed by the defendants and repairs to some or all of such defects are completed before the case reaches a hearing. At the hearing it is commonplace for the case to be settled, at least on an interim basis, with the defendants admitting defects and undertaking to rectify them within 56 days, and agreeing a sum of damages, usually moderate, to stand as a final assessment provided the defects are then rectified in accordance with the undertakings given. In a proportion of cases, of course, there has to be a hearing to determine the existence and extent of a defect, whether it falls within the statutory covenants, and the causation and quantum of damage. Even in such cases where defects are established at the hearing it has been the normal practice to adjourn the claim for an order enforcing compliance with the covenants upon undertakings by the defendants to rectify the defects found proved. From time to time there have been, and doubtless there will continue to be, disputes as to whether the defendants’ undertakings have been complied with. In the past there have been difficulties as to the appropriate method of enforcement, and whether further damages can accrue, but recently there has developed among the local practitioners in this field a consensus about an appropriate form of order (of some complexity) of which they carry a blank draft. The form appears to me to dispose of most if not all of the technical difficulties, although obviously factual disputes about compliance with undertakings will still occasionally have to be resolved by the court, and further orders may have to be made. In practice it is virtually if not entirely unknown for a plaintiff in a case of this character to recover as damages the costs of carrying out the necessary remedial work on the basis that he will have it executed himself. Similarly court orders to the defendants to carry out the work are likely to be extremely rare. Section 11 cases routinely appear amongst other cases in the daily lists of circuit judges sitting in the Liverpool County Court. It is my belief, however, that most are listed in court before district judges, who have jurisdiction under CCR Ord 21, r 5(1)(b), as being an action or  matter the value of which (assessed on the basis of the cost of repair plus the damages) does not exceed £5,000. By Ord 21, r 5(2B) the district judge when trying the action has the same powers under s 38 of the 1984 Act as a circuit judge, which of course includes powers to grant specific performance or an injunction. This provision of the rules is parallel to that contained in Ord 50, r 2, which provides:”(1) Where the district judge is authorised by or under any Act or these rules to hear and determine any action or matter or to deal with any proceedings or to exercise any other jurisdiction, he shall, within the limits of that authority and subject to any right of appeal to or review by the judge, have all the powers of the judge” Both rules however make clear that they give no authority to a district judge to commit any person to prison (Ord 21, r 5(2B) and Ord 50, r 2 (2)). It follows that ultimate enforcement of either of the equitable remedies to which I have referred by committal to prison is reserved to a circuit judge (or Lord Justice of Appeal, High Court judge or recorder sitting in the county court: see s 5(3) of the 1984 Act). Accordingly, any application to commit pursuant to a district judge’s order for specific performance or order by way of injunction would necessarily have to be listed before such a judge. It remains only to add that s 11 actions by council house tenants are routinely financed by legal aid. Such tenants normally have a nil contribution. The actions when based on a report by a qualified surveyor are very low risk and are so regarded by the Legal Aid Board. I am told that the actions virtually never fail to procure relief, and of course when heard in court normally produce orders for costs on scale 1 (exceptionally on scale 2) against the city council. I am further told that in ordinary cases such as the present costs on scale 1 would be likely to tax out at a figure in the region of £1,800 to £1,900. From the city council’s point of view they will of course also incur their own costs so that the whole process is an expensive one for them. On the one hand, this has the advantage of encouraging them to avoid litigation by meeting their legal obligations timeously, and so benefiting all their tenants; on the other hand, it has the disadvantage of diverting resources from more directly beneficial expenditure.’ (Judge Marshall Evans’ emphasis.)

After reviewing the 1984 Act and the rules, and rejecting the arguments advanced on behalf of Mrs Joyce to show that a district judge sitting as small claims arbitrator had no power to order specific performance, the judge reached the same conclusion as District Judge Gee had done:

‘I am accordingly satisfied that a district judge sitting as arbitrator in the “small claims” procedure under Ord 19 has power to award specific performance, which is the equitable remedy in fact being sought by the plaintiff in this case. It follows that as the amount involved was below £1,000 the case should have been referred to arbitration, and District Judge Gee was correct in so deciding and ordering costs as he did. The appeal will accordingly be dismissed. I reach this conclusion with some regret because of the likely consequences on the availability of legal aid for plaintiffs and the difficulties they will face. Section 11 is primarily aimed at securing decent housing provision for the less well-off citizen and even quite minor disrepair, in the sense that it will not cost a large sum to rectify, can cause considerable discomfort, and yet to the council tenant living on state benefits present an insuperable financial obstacle to self-help. But the difficulty is not really greater than that facing a plaintiff in a personal injury case, and the intent of Afzal is clear.’

The learned judge went on to consider, although recognising that his conclusion would be obiter, whether a district judge could grant a mandatory injunction as well as order specific performance. He concluded that he did have such power. The judge accordingly dismissed Mrs Joyce’s appeal but added:

‘This matter obviously has raised a point of great practical importance and significance, both as to the availability of legal aid and as to the conduct of county court proceedings. For that reason, and in response to District Judge Gee’s plea for an authoritative ruling on the point, the divergence of opinion amongst the judges and district judges of this court, and the application of both counsel whichever way I might decide, I grant leave to appeal to the Court of Appeal. It is obviously a matter which ought to result in a uniform practice both in this court and nationally. It is also one which ought to be determined as speedily as practicable in view of its practical effects.’

Mr Wynne

Mr Wynne lived at 14 Eldersfield Road in Liverpool. On 23 June 1994 he issued proceedings in the Liverpool County Court against the council as his landlord alleging that the council had failed to comply with its implied repairing obligation under s 11 of the Landlord and Tenant Act 1985. He annexed to his particulars of claim a schedule containing details of 13 alleged defects. The cost of rectifying these, inclusive of VAT, was £399·50. He alleged that the council had failed to rectify these defects despite complaints made by him since January 1992 and claimed that as a result he had suffered loss, damage, frustration, anxiety, inconvenience and diminution in the value of his demise. He claimed specific performance of the council’s repairing covenant and damages or damages in lieu limited in total to £1,000. His particulars of claim ended with an unusual paragraph:

‘For the avoidance of doubt,[in] the event of any reference to Arbitration or Application for such reference, the Plaintiff will seek to rescind such reference or oppose such application on the grounds, inter alia, that the nature of the proceedings and relief claimed are wholly unsuitable for such reference, and by reason of the gross inequality in representational/bargaining power between the Plaintiff as a litigant in person and the professional litigation department of the defendant.’

On 7 October 1994 District Judge Wolfson gave directions that the council should file and serve a defence, that on failure to do so the council should be debarred from defending the action and that if a defence were filed the matter should be referred to arbitration. On 21 October 1994 the council served a defence in which no admission was made of the defects alleged by Mr Wynne and it was not admitted that six of those defects fell within the council’s repairing obligation. The council indicated that it would rely on a report by its surveyor. The council pleaded that the matter ought properly to be referred to arbitration because Mr Wynne had no reasonable prospect of receiving damages in excess of £1,000. This allegation, it would seem, prompted Mr Wynne to amend his particulars of claim to raise the sum claimed for damages or damages in lieu from £1,000 to £3,000. The last paragraph of the original pleading was deleted. Mr Wynne appealed against the order that the matter should be referred to arbitration and the appeal came before Judge Hedley on 6 December 1994. The judge dismissed the appeal and gave directions for the hearing and gave leave to Mr Wynne to appeal.

Mr Wynne’s appeal was one of three which the learned judge had to consider. In the other two cases he concluded that the tenant could reasonably expect to recover more than £1,000 and in those cases he allowed the appeal. He concluded, however, that Mr Wynne could not reasonably expect to recover more than £1,000 and for that reason dismissed his appeal. In reaching his decision on the likely value of Mr Wynne’s claim, the learned judge expressed certain views which are the subject of challenge and which will be considered below. He also considered the grounds upon which the small claims arbitration procedure could properly be treated as inappropriate under the 1981 rules. This also is considered below. On the issue whether a district judge sitting as small claims arbitrator could award specific performance he adopted the reasoning of Judge Marshall Evans.

Both tenants challenged on appeal the conclusions of Judge Marshall Evans and Judge Hedley that district judges exercising their small claims arbitration jurisdiction could order specific performance and grant injunctions and that claims for such relief did not preclude the exercise of that jurisdiction. It is convenient first to review this jurisdiction question.

The powers of judges and district judges of the county court

In argument, a detailed analysis was made of relevant provisions in the 1984 Act and the 1981 rules. Attention was drawn to changes effected following the Report of the Civil Review Body on Civil Justice (Cm 394 (1988) chairman, Sir Maurice Hodgson). It is convenient to begin by considering how matters stood in 1990, before these changes took effect.

Section 15 of the 1984 Act conferred jurisdiction on county courts, subject to exceptions, to determine claims in contract or tort where the debt, demand or damage claimed did not exceed the county court limit, which then stood at £5,000. Section 21 defined the county court’s jurisdiction in actions for the recovery of or determination of title to land by reference to the annual value for rating of the land in question, and in relation to land within the county court’s jurisdiction so defined s 22(1) provided:

‘… a county court shall have the same jurisdiction as the High Court to grant an injunction or declaration in respect of, or relating to, any land, or the possession, occupation, use or enjoyment of any land.’

Section 23 defined the county court’s equity jurisdiction. The court had jurisdiction to hear and determine various classes of action, including—

‘(d) proceedings for the specific performance, or for the rectification, delivery up or cancellation, of any agreement for the sale, purchase or lease of any property, where, in the case of a sale or purchase, the purchase money, or in the case of a lease, the value of the property, does not exceed the county court limit.’

Despite this apparent restriction, the Court of Appeal has held that specific performance can be ordered even though the agreement in question is not of the specified description: see Bourne v McDonald [1950] 2 All ER 183,[1950] 2 KB 422. This ruling was based on what is now s 38 of the 1984 Act, which, so far as relevant, provided:

‘(1) Every county court, as regards any cause of action for the time being within its jurisdiction,—(a) shall grant such relief, redress or remedy or combination of remedies, either absolute or conditional … as ought to be granted or given in the like case by the High Court and in as full and ample a manner.’

This provision was not as broad as its terms might be thought to suggest, since there had in the ordinary way to be a money claim within the county court limit before an injunction or declaration could be granted ancillary to that money claim: see R v Cheshire County Court Judge, ex p Malone [1921] 2 KB 694,[1921] All ER Rep 344, Simpson v Crowle [1921] 3 KB 243,[1921] All ER Rep 715, De Vries v Smallbridge [1928] 1 KB 482,[1927] All ER Rep 613 and Kenny v Preen [1962] 3 All ER 814,[1963] 1 QB 499.

Section 64 of the 1984 Act provided that county court rules might prescribe cases which should or might be referred to arbitration and provided that any arbitral award should be as binding as if made by the judge.

Section 75 conferred a broad rule-making power. Rules could be made, among other things—

‘(3)…(d) prescribing cases in which—(i) the jurisdiction or powers of a county court or the judge of a county court may be exercised by a registrar or some other officer of the court …’

The powers of the registrar (or district judge as he was shortly to become) and the procedure for small claims arbitration were spelled out in greater detail in the rules.

The registrar’s trial jurisdiction was defined in Ord 21, r 5:

‘(1) The registrar shall have power to hear and determine—(a) any action or matter in which the defendant fails to appear at the hearing or admits the claim;(b) any action or matter in which the sum claimed or the amount involved does not exceed £1000;(c) any action in which the mortgagee under a mortgage of land claims possession of the mortgaged land ; and (d) by leave of the judge and with the consent of the parties, any other action or matter …’

The registrar’s small claims jurisdiction was defined by Ord 19, r 2, which provided in paras (3) and (4):

‘(3) Any proceedings in which the sum claimed or amount involved does not exceed £500 shall stand referred for arbitration by the registrar upon the receipt by the court of a defence to the claim, but the registrar may, on the application of any party, refer the proceedings for arbitration by the judge or by an outside arbitrator.

(4) Where any proceedings are referred for arbitration by the registrar under paragraph (3), he may, on the application of any party, rescind the reference if he is satisfied—(a) that a difficult question of law or a question of fact of exceptional complexity is involved ; or (b) that a charge of fraud is in issue; or (c) that the parties are agreed that the dispute should be tried in court; or (d) that it would be unreasonable for the claim to proceed to arbitration having regard to its subject matter, the circumstances of the parties or the interests of any other person likely to be affected by the award.’

It is a little unfortunate that the language of arbitration was ever used in this context, since small claims arbitration lacks the consensual basis of true arbitration and the Arbitration Acts do not (and could not) apply to it. The language of arbitration is capable of giving rise to misunderstanding. But no harm is done so long as it is remembered that the small claims arbitration procedure is no more, and no less, than a procedure for resolving low value claims, almost always by the district judge, with a minimum of formality and expense.

The powers of the registrar were governed by Ord 50, r 2, which provided:

‘(1) Where the registrar is authorised by or under any Act or these rules to hear and determine any action or matter or to deal with any proceedings or to exercise any other jurisdiction, he shall, within the limits of that authority and subject to any right of appeal to or review by the judge, have all the powers of the judge.

(2) Nothing in this rule shall authorise the registrar to commit any person to prison.’

It would seem clear, on the express wording of this rule, that it applied to the registrar when acting either as trial judge or as small claims arbitrator.

In their commentary on Ord 21, r 5, the editors of The County Court Practice 1990, p 315 accepted that proceedings in which an injunction was claimed were within the registrar’s trial jurisdiction if the action or matter fell into any of the categories mentioned in para (1) of the rule. This commentary seems to us to be an accurate summary of the effect of s 38 of the 1984 Act and Ord 50, r 2 of the 1981 rules. The same commentary (although not made) would in our view have been appropriate if made with reference to the registrar’s small claims arbitration jurisdiction, since in this respect neither the Act nor the rules provided any basis for distinguishing between the two jurisdictions.

But the registrar’s power to grant injunctions was undoubtedly subject to two restrictions. The first restriction, which also bound the judge, was on his power to grant an injunction otherwise than as a claim ancillary to a money or other claim within his jurisdiction. The other was peculiar to him. Order 13 governed applications and orders in the course of proceedings. By Ord 13, r 1(6) such applications might, in the absence of a contrary direction by the judge, be made to the registrar. But this rule did not apply to applications for the grant of an injunction made by any party to an action or matter before or after the trial or hearing. Such an application could only be made to a judge : see Ord 13 r 6(1) and (2). Specific performance is, by its nature, a remedy ordinarily granted as a final and not as an interlocutory order. Subject to this, we see no basis for drawing a distinction between injunctions and specific performance.

In the Civil Justice Review many procedural changes were recommended. Among those relevant for present purposes were recommendations that the general trial jurisdiction of registrars should be raised to £5,000 and that the upper limit of the automatic small claims jurisdiction should be raised to £1,000. It was also recommended that the rule precluding the grant of an injunction in the absence of a claim to money or other relief within the jurisdiction of the county court should be abrogated (para 189) and that ‘in all cases falling within their jurisdiction registrars should have all the powers of the county court, including those relating to injunctions and specific performance’(para 190). An exception was made in relation to Anton Piller orders and Mareva injunctions, but that is of no present relevance. The small claims arbitration procedure was discussed at length in the report of the Civil Justice Review, but the only recommendation of immediate relevance was that plaintiffs should be required to state ‘if it be the case’ that the amount involved exceeded £1,000, in default of which statement the case should, if defended, proceed under the small claims arbitration procedure.

Section 1 of the Courts and Legal Services Act 1990 gave the Lord Chancellor wide powers to confer jurisdiction on the county court in matters which had previously been within the exclusive jurisdiction of the High Court.

By s 3 of the 1990 Act a new s 38 was substituted in the 1984 Act. This gave effect to the recommendation that a grant of an injunction or other equitable relief should not be precluded where it was not ancillary to a claim for money or other relief within the jurisdiction of the court.

The County Court (Amendment No 2) Rules 1991, SI 1991/1126, increased the limit on the registrar’s trial jurisdiction in Ord 21, r 5 (1)(b) from £1,000 to £5,000 and the limit on claims automatically referred to arbitration under what was then Ord 19, r 2(3) from £500 to £1,000. Order 13, r 1(6), dealing with applications, was not amended, and nor was Ord 13, r 6(1), dealing with applications for the grant of an injunction made before or after the trial or hearing. But Ord 13, r 6(2) was amended to read:

‘Except where the district judge has power under Order 21, rule 5 or otherwise to hear and determine the proceedings in which the application is made, the application shall be made to the judge and rule 1(6) shall not apply.’

Thus the district judge was henceforward empowered to entertain an application for an injunction made before or after the trial or hearing if, but only if, the application was made in the course of proceedings which he had power to hear and determine under Ord 21 r 5 ‘or otherwise’.

Order 21, r 5 was also amended so as to insert a new para (2B):

‘Without prejudice to Order 50, rule 2, a district judge may, at any stage of an action or matter which he has power to hear and determine under paragraph (1) and subject to any right of appeal to the judge, exercise the same powers under section 38 of the Act as the court ; but nothing in this paragraph shall authorise the district judge to commit any person to prison.’

Read in conjunction with the substituted s 38, this amendment made clear that when exercising his trial jurisdiction under Ord 21, r 5(1) the district judge could grant an injunction in the absence of any other claim, which he had not formerly been empowered to do, and that he could do so at any stage of the proceedings, which again he had not formerly been empowered to do. This amendment is consistent with, but in part overlaps, the amendment already noted to Ord 13, r 6(2). Whereas Ord 13, r 6(2) gives the district judge jurisdiction to grant an injunction at any stage in any proceedings which the district judge has power to determine under Ord 21, r 5 ‘or otherwise’, Ord 21, r 5(2B) is in terms limited to proceedings which he has power to determine under Ord 21, r 5(1). It is noteworthy that Ord 21, r 5 (2B) is not intended to derogate from Ord 50, r 2.

Order 19, dealing with the small claims arbitration procedure, was further amended by the County Court (Amendment No 2) Rules 1992, SI 1992/1965. No amendment was made to the substance of what had been Ord 19, r 2 (3) and (4), quoted above, apart from the increase in the limit from £500 to £1,000.

Order 50, r 2 has not been amended. But since this provides that the district judge shall, within his jurisdiction, have the same powers as the judge within his, it necessarily follows that any enlargement of the powers of the judge operates, in the absence of specific restriction, to enlarge the powers of the district judge.

The upshot of this analysis is in our view as follows. A circuit judge, acting within his jurisdiction and subject to express exceptions not here relevant, may exercise all the powers of a High Court judge. These include the power to grant both interlocutory and final injunctions (other than Anton Piller orders and Mareva injunctions) whether or not any claim is made to money or any other relief within the jurisdiction of the county court. That is the effect of s 38 as it now stands. He may do so at any stage of the proceedings. That is the effect of Ord 13, r 6(1) and (2). The district judge, acting within his jurisdiction under the 1984 Act or any other Act or the rules, has all the powers of a judge. That is the effect of Ord 50, r 2. That power is confirmed, in relation to his trial jurisdiction under Ord 21, r 5(1), by Ord 21, r 5(2B). His power to grant injunctions before or after the hearing in proceedings which he has jurisdiction to determine under Ord 21, r 5 ‘or otherwise’ is confirmed by Ord 13, r 6(2). The expression ‘or otherwise’ must cover proceedings automatically referred for arbitration by the district judge, since these undoubtedly are proceedings which the district judge has power to hear and determine and these are also proceedings which the district judge is authorised to hear and determine under the 1984 Act and the rules. Save that there is, under the general law, no power to make a declaration or, probably, order specific performance as an interlocutory remedy, what is true of an injunction is true of these other remedies. It makes no difference that the small claims procedure conducted by the district judge is, in our view inaptly, described as arbitration: he remains a salaried judicial officer throughout; his powers and procedures are governed by the 1984 Act and the rules; his award takes effect as a judgment (s 64(3) of the 1984 Act); the hearing is in practice conducted at and in the name of the county court.

We are in complete and respectful agreement with the decisions of the judges below on this jurisdictional question. We would add that where, as here, the plaintiff’s claim is by a tenant against a landlord for breach of a repairing obligation, it seems to us plain that s 17 of the 1985 Act envisaged that the court dealing with that claim would have jurisdiction to grant specific performance.

Rescission of automatic reference

If, contrary to his primary argument, a district judge had power to order specific performance under the small claims arbitration procedure and so to entertain under that procedure an action in which such relief was claimed, counsel for the tenants submitted that the judges below had misapplied Afzal v Ford Motor Co Ltd [1994] 4 All ER 720 by wrongly treating that authority as requiring s 11 claims, where the cost of repairs plus the likely general damages would not exceed £1,000, to be automatically subject to the small claims arbitration procedure. This argument on analysis involved three contentions : first, as to the effect of Afzal; secondly, as to the differences between accidents at work and claims under s 11; and, thirdly, as to the unfairness of expecting an unrepresented tenant to prepare and present a case against a well-armed and represented landlord. In Afzal this court undoubtedly discountenanced the view that claims against employers arising out of accidents at work were necessarily unsuitable for determination under the small claims arbitration procedure (at 733). The court pointed out that the grounds for revocation of an automatic reference specified in Ord 19, r 3(2)(a) referred not merely to the existence of a question of law but to a difficult question of law and not merely to the existence of a question of fact but to a question of fact of exceptional complexity (at 734). The court also pointed out that the claimant’s lack of representation could not of itself provide a ground for ordering a trial in court where the defendant was represented, since Ord 19 r 7(4) expressly recognised that one party might be represented and the other not (at 734). While holding that the judge’s rescission of the reference to arbitration in 16 cases could not be supported, however, the court did not substitute its own decision that the cases should be referred to arbitration, but instead remitted them for individual consideration by the district judge (at 735). This shows that while in the ordinary way low value claims will be determined under the small claims arbitration procedure the final decision must rest with the district judge who is charged with the task of doing substantial justice in the particular case. It is for him to decide, making a judgment in accordance with the rules, whether—

‘it would be unreasonable for the claim to proceed to arbitration having regard to its subject matter … the circumstances of the parties or the interests of any other person likely to be affected by the award.’ (See Ord 19, r 3(2)(d).)

He, as the final decision-maker, is likely to be the best judge whether that test is met in any given case or whether it is not. Great respect should be paid to his decision, not only because of his experience of dealing with individual cases but also because of the knowledge he will have of the local situation.

It is of course true that an accident at work is, in fact and in law, very different from a landlord’s breach of a repairing covenant. But that is in itself of little or no significance. In either field, difficult questions of fact and law may arise in borderline cases. But in either, the solution is likely to be fairly obvious in the ordinary run of cases. It may be that expert evidence will be more important in s 11 claims than in many claims against employers, but armed with an expert’s report (which will have been obtained, usually with legal assistance, before proceedings are issued) the burden on the tenant of preparing and presenting his case is proportionately reduced. It must also be borne in mind that the common defects likely to fall within the financial scope of the small claims arbitration procedure—immovable or ill-fitting windows, minor leaks in the roof, over-flowing drains, defective boilers—are not things which the average tenant (or the tenant’s spouse) will find it hard to understand or describe.

In Pepper v Healey [1982] RTR 411 the plaintiff claimed damages arising out of a motor collision which the defendant said had never occurred. The plaintiff had no insurance against legal costs and so was obliged to conduct the case herself. The defendant was insured and legally represented. In that situation the registrar thought it unreasonable to send the case to arbitration. On appeal the judge and the Court of Appeal supported his decision. This authority was relied on as establishing a general rule. In our view it did not. It represented an exercise of judgment in a particular case at a time when the small claims arbitration procedure was, perhaps, a good deal less well established than it now is. We have seen a helpful and well-prepared leaflet entitled ‘An arbitration hearing—how do I prepare ?’. It might also be helpful (unless they already do this) if citizens’ advice bureaux or the county court itself were to make available written guidance specifically directed to s 11 claims. The district judge conducting a small claims arbitration is under a clear duty to ensure that the case of the claimant does not go by default: see Ord 19, r 7. If the defendant’s conduct puts the claimant to unreasonable expense the claimant can be compensated : see Ord 19, r 4(2)(c). Despite all these safeguards cases will arise in which, despite the smallness of the sums involved, justice cannot be done to an unrepresented claimant under the arbitration procedure. Trial may then be ordered. But for the great mass of small and relatively simple claims the arbitration procedure must be the norm. Section 11 claims cannot form any general exception. Reasonable housing conditions are without doubt a condition of ordinary human happiness. But the evidence before us does suggest that court trial of minor s 11 claims yields a benefit to the legal profession out of all proportion to that gained by the tenant and diverts the funds of local authority landlords from purposes more germane to their public function.

Value

Judge Hedley held, agreeing with the district judge, that Mr Wynne could not reasonably expect to recover more than £1,000. Counsel for Mr Wynne argued that this decision was wrong, and that the claim should have been valued at a sum above the £1,000 limit for small claims arbitration.

Not all the items listed in Mr Wynne’s schedule fell within the council’s repairing covenant. The cost of repairing those that did amounted to £282. The defects were: two badly spalled bricks ‘which may allow water ingress to occur’; a blocked side gully and missing grid; warped window casements in one room and minor decay to the external casement timbers; a broken power socket and insecure switch; missing and loose vinyl floor tiles in the kitchen and the bathroom; deterioration of the sink base storage unit and constant blocking of the waste outlet; missing ceramic tiles behind the sink; seizing of bedroom window casements and defective hinges. Mr Wynne pleaded (and it must for present purposes be accepted) that his complaints to the council about these defects began in January 1992 and had continued without remedy until he issued proceedings in June 1994. On these facts it was argued that Mr Wynne could reasonably expect to recover general damages of more than £718.

We were referred to authority. In Calabar Properties Ltd v Stitcher [1983] 3 All ER 759,[1984] 1 WLR 287 Judge Stabb QC had awarded the tenant general damages of £3,000—

‘”for the disappointment, discomfort loss of enjoyment and bouts of ill-health which he [the tenant’s husband] suffered during the five years that he was occupying what was supposed to be a high-class flat”, and which were due to the landlords’ “persistent refusal to take any steps to remedy the breaches of which they were made well aware”.’ (See [1983] 3 All ER 759 at 762,[1984] 1 WLR 287 at 290.)

There had been very serious damp penetration, causing the tenant to vacate the flat, and the figure for general damages was not the subject of appeal.

In Taylor v Knowsley BC (1985) 17 HLR 376 the tenant suffered from various defects: a lack of hot water for five months, lack of a ceiling light in the living room for three months and a leak from the bathroom ceiling causing dripping 123 and damp for eight months. The judge awarded general damages of £159. The Court of Appeal considered the award to be low, but not so low as to justify interference.

In Chiodi’s Personal Representatives v De Marney (1988) 21 HLR 6 an award of £5,460 was made to the tenant, calculated at £30 per week for 3 years. The Court of Appeal considered the award to be at the very top of what could be regarded as a proper award, but declined to interfere. Throughout the period of the claim the tenant was without hot water. Window panes fell out and were not replaced. Cracks in the walls and holes in the roof and ceiling and windows permitted the entry of water. The tenant’s arthritis was exacerbated and she suffered colds and influenza. On any showing this was an extreme case.

An award of £250 was increased by the Court of Appeal to £1,000 in Davies v Peterson (1988) 21 HLR 63. It appears that in that case one bedroom and the living room were rendered uninhabitable by damp for a period, it would seem, of at least 12 months.

On the facts here the judge below was fully entitled to regard Mr Wynne’s claim for general damages as modest. The defects did not compare in seriousness with those causing loss of use of parts of the premises, or lack of the basic amenities of life or ill-health. They were in truth defects of a kind with which many owner-occupiers, not themselves DIY devotees, are familiar. The district judge’s assessment was not one with which this court could properly interfere.

We would dismiss both appeals on all the grounds argued.

Appeals dismissed.

L I Zysman Esq Barrister.

 

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