Before: The Hon. Mr. Justice Blayney
 
 

B E T W E E N

JUDGMENT
 
DATED: 31 March 1993

Blayney J

In 1959 the plaintiffs became tenants of a house in Chapel Lane, Ballincollig, Co Cork at the weekly rent of £1.50. The landlord was James Walsh. His interest was acquired by the defendants in 1974.

By a letter dated the 23rd April 1987, written on behalf of the plaintiffs by their solicitor, the plaintiffs claimed that they had acquired title to the house by adverse possession. This claim was rejected by the defendants and a notice to quit was served. The plaintiffs then issued the present proceedings seeking a declaration of their title, and by a subsequent amendment, claiming in the alternative a declaration that they had a lien on the house for monies they had expended on reinstating it after it had been damaged by two fires, one in 1981 and the other in 1983. In their defence the defendants denied the plaintiffs' claim and counterclaimed for possession.

The plaintiffs' claim was dismissed by His Honour Judge Murphy and an order for possession was made on the counterclaim. The entire of that order was appealed by the plaintiffs and the appeal came before me in Cork on the 22nd February 1992. With the agreement of both parties, I dealt solely with the issue of whether the plaintiffs had acquired a statutory title, and I held against the plaintiffs on that and confirmed the order for possession on the counterclaim but put a stay on that order pending the decision on the plaintiffs' alternative claim to a lien for the monies spent on reinstating the house.

That issue was argued before me on the 5th March, 1993 and was confined to the question of whether, accepting the facts as pleaded by the plaintiffs, they had a valid claim for a lien. This claim was pleaded as follows in the civil bill:-

"5(b) Further and in the alternative and without prejudice to the foregoing in or about the year 1981 the premises the subject matter of these proceedings was substantially damaged by fire without fault to the plaintiffs or one of them herein. Subsequently the plaintiffs expended the sum of £27,000 on the reinstatement of the said premises without covenants, contract or obligation to do so.

(c) Further in or about the year 1983 the premises the subject matter of these proceedings were further damaged by fire without fault to the plaintiffs or one of them herein. Subsequently the plaintiffs expended the sum of £16,000 on the reinstatement of the said premises without covenants, contract or obligation to do so.

(d) The plaintiffs rely on the matter set out in the next preceding paragraph in order to establish a lien on the premises to the extent of £43,000 together with interest thereon running from the date of expenditure."

Mr Hayden, on behalf of the plaintiffs, put their case on two separate grounds:-

1. Proprietary estoppel, and

2. unjust enrichment.

As regards the first ground, he submitted that estoppel may give rise to a cause of action and that this was a case of estoppel by acquiescence. The defendants stood idly by while the plaintiffs spent substantial monies reinstating the house, and this precluded them from recovering the house now without compensating the plaintiffs for their expenditure.

When regard is had to the particular facts of this case, I am satisfied that this submission is not well-founded. The relationship of landlord and tenant existed at all times between the parties. The plaintiffs had, accordingly, exclusive possession of the house. They were entitled to carry out whatever repairs they liked. The defendants had no right to stop them. So it was not a case of the defendants standing idly by. As long as the plaintiffs' tenancy continued to subsist, the defendants were not entitled to interfere.

It seems to me that the case comes within the following quotation from the judgment in Ramsden v. Dyson (1886) LR 1 HL 126 at 140:-

"For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights."

The plaintiffs knew that they held the house as tenants from the defendants, so they knew they were reinstating a house to which the defendants were entitled subject to their tenancy. They cannot, accordingly, prevent the defendants from claiming the house with the benefit of their expenditure on it.

The plaintiffs' position was somewhat similar to that of a purchaser of property who goes into possession before completion and then rejects the title. "He may be ejected by the vendor; and cannot at law claim any allowance for improvements or repairs; nor will equity afford him any relief unless there has been fraud on the part of the vendor" (Dart on Vendor and Purchaser 7th edition at p 516-517).

In my opinion this is not a case in which the facts give rise to a proprietary estoppel and so the plaintiffs' first ground fails.

In support of his second ground, unjust enrichment, Mr Hayden cited Rogers v. Louth County Council [1981] IR 265, [1981] ILRM 144 and O'Connor v. Listowel UDC [1957] Ir Jur Rep 43. In my opinion both of these cases are clearly distinguishable on their facts from the instant case. In Rogers v. Louth County Council [1981] IR 144, [1981] ILRM 144 the issue was whether the plaintiff could recover monies which had been paid under a mistake of law, and in O'Connor v. Listowel UDC [1957] Ir Jur Rep 43 the question was whether an engineer, whose appointment by the UDC was void, was entitled, by way of an action on a quantum meruit, to recover reasonable remuneration for services actually rendered to the UDC. There is clearly no question of the plaintiffs being able to recover on a quantum meruit in the instant case, and in so far as monies paid under a mistake of law are concerned, no monies were paid by the plaintiffs to the defendants so the claim is not a claim to recover monies alleged to have been paid but monies alleged to have been expended on reinstating the house.

There are two things that the plaintiffs would have to establish in order to succeed in their claim for a lien: firstly, that they are entitled to recover from the defendants the amount they expended in reinstating the house, and secondly, that in law the amount of the expenditure is a charge on the house and so gives the plaintiffs a lien on it. For the reasons I have given I am satisfied that the plaintiffs cannot establish the first of these matters and it follows that they cannot be entitled to any lien.

It would appear that from the time the plaintiffs stopped paying rent for the house, which was in the early 1970s, they may have been under a misapprehension that they owned the house, or at least that they would become the owners, and this may have influenced them in deciding to reinstate it after the two fires. Unfortunately for them they were still tenants and the fact that they may have acted under a misapprehension gives them no rights against the defendants as the latter were in no way responsible for the plaintiffs being under a misapprehension. In the circumstances I have to decide this issue also against the plaintiffs with the result that their entire appeal must be dismissed.

This judgment should be read in conjunction with the judgment I have just delivered in the equity proceedings in which I set out the facts which gave rise to the litigation between the parties.

This appeal is against the order of His Honour Judge Murphy made on the 1st February, 1993 refusing to extend the time for service by the plaintiffs of a notice of intention to claim relief. The application was made by notice of motion dated the 29th January, 1992 and sought an order under Section 83 of the Landlord and Tenant Act, 1980. That section provides as follows:-

"Where a person fails to do any act or thing in the time provided for by or under this Act, the Court may, on such terms as it thinks proper (and shall unless satisfied that injustice would be caused) extend the time where it is shown that the failure was occasioned by disability, mistake, absence from the State, inability to obtain requisite information or any other reasonable cause."

The application was grounded on the affidavit of the second-named plaintiff, Mrs O'Callaghan. Having referred to the notice to quit served on the 2nd day of July, 1987 which expired on the 12th day of July, 1987 she set out as follows the grounds on which the extension of time was being sought:-

"In view of the equity proceedings before the Circuit Court and the High Court on appeal as aforesaid and in view of the potential disposition of all matters herein in the High Court on appeal, in the event that the High Court was satisfied that the applicants hereto had a claim in adverse possession in respect of the within premises a notice of intention to claim relief was not served within the time limit specified in section 20 of the Landlord and Tenant Act 1980."

Mr Hayden, on behalf of the plaintiffs, put their case on two alternative grounds: firstly, that the failure to serve the notice in time had been occasioned by mistake, and secondly, in the alternative, that it had been occasioned by some other reasonable cause.

Whether either of these grounds can be established depends on what is averred in the passage cited from Mrs O'Callaghan's affidavit. Put in simple terms, what she says there is that the notice was not served in time because of the equity proceedings before the Circuit Court and the High Court on appeal which could have disposed of all the matters in contention between the parties if decided in favour of the plaintiffs.

Does that establish that the failure to serve the notice in time was occasioned by mistake? Mr Hayden submitted that it does, the mistake being that the plaintiffs mistakenly believed that they had acquired title to the house by adverse possession. I cannot agree. This is not what Mrs O'Callaghan said in her affidavit. She made no reference to their having made any mistake. The reason she gave for not serving the notice in time was simply the existence of the Circuit Court proceedings and the appeal to the High Court. Her grounding affidavit was sworn on the 29th January, 1992 which was before the appeal to the High Court was heard, and no doubt at that stage the plaintiffs were still hoping that their appeal would be successful. In this they were wrong, but it does not follow that their failure to serve the notice of intention to claim relief was due to mistake. It was due to their having decided with their eyes open to pursue a form of relief which was inconsistent with their serving the notice at the time at which it ought to have been served. So this ground for having the time extended fails.

The alternative submission was that the plaintiffs could rely on "any other reasonable cause" and that under the relevant section the Court had a very wide jurisdiction. The reasonable cause put forward was that the plaintiffs had spent substantial monies on the house and once their claim to a lien had been dismissed, as it has been, a great injustice would be done to them if they were debarred from seeking a new tenancy. They would suffer the total loss of the benefit of the monies which they had expended in reinstating the house after the two fires in 1981 and 1983.

In support of his submission Mr Hayden referred me to the case of Wigoder v. Moran [1977] IR 112 and Londonderry and Lough Swilly Railway Company Limited v. Fuller High Court, 7 May, 1984. The first of these cases was decided under the corresponding section in the Landlord and Tenant Act, 1931 which provided as follows:-

"45. Where by or under this Part or any of the foregoing parts of this Act a period is fixed for the doing of any act or thing, the Court may, either before or after the expiration of such period, extend such period upon such terms as the Court thinks proper."

Kenny J dealt with the principle to be applied in deciding an application under the section:-

"It is impossible to state any general principle which a court should apply in every case to decide the issue whether the time for service of notice of intention to claim relief should be extended, except that the Court should make the order when justice requires that it should."

In Londonderry and Lough Swilly Railway Company Ltd v. Fuller, High Court, 7 May 1984 McCarthy J said in his judgment.

"The principle being applied under section 45 does not appear to me to have varied between O'Neill v. Carthy [1937] IR 580 and Wigoder v. Moran [1977] JR 112 the Court should grant the relief when it would be just to do so, a principle not restricted, I think, to the law of landlord and tenant.

Section 83 of the Landlord and Tenant Act 1980 may be said to have altered the emphasis. It prescribes that where it is shown that the failure was occasioned by disability, mistake, absence from the State, inability to obtain requisite information or any other reasonable cause, the Court shall unless satisfied that injustice would be caused extend the time."

I would understand what McCarthy J said as meaning that the essential principle is still that time should be extended when it would be just to do so, but that the principle test to be applied in deciding if it would be just is whether injustice would be caused to the landlord. If the Court is satisfied that injustice would not be caused, the time is to be extended, provided of course that one of the grounds set out in section 83 Landlord and Tenant Act 1980 can be established.

It seems to me, accordingly, that the position in law is that if I find there was some reasonable cause for not serving the notice at the appropriate time, I must extend the time unless satisfied that an injustice would be caused to the landlords.

The first question then is, was there reasonable cause? Was it reasonable for the plaintiffs not to have served notice because they had commenced equity proceedings seeking to establish a title by adverse possession to the defendants' interest?

This question has given me a lot of trouble. With some hesitation I have come to the conclusion that the failure was reasonable. If the plaintiffs had served a notice of intention to claim relief at the appropriate time, they would have been making contemporaneously two wholly inconsistent claims. To avoid this, I think it was reasonable not to serve the notice pending the resolution of the first claim. It may be that having opted to make a claim to the defendants' title, the plaintiffs cannot now pursue a claim for a new tenancy, but as Mr Hayden rightly pointed out that is not an issue to be decided at this stage when the sole question to be considered is the extension of time.

Finally, I am not satisfied that injustice would be caused to the defendants by extending the time. The only case made by the defendants on this issue is to be found in paragraph 5 of Mr O'Connell's replying affidavit which is as follows:-

"I beg to refer to paragraph 6 of the affidavit of the applicants herein and I categorically reject the suggestion that no injustice would be done if the relief claimed herein were granted. Had the applicant in these proceedings given evidence to this Court, in the course of the equity proceedings referred to above or in the High Court on appeal that it was her intention and the intention of her co-applicant to proceed with a notice of intention to claim relief and to proceed to apply to the Court for a new tenancy none of the adjournments already granted to the applicants, or the other indulgences granted to the applicants would have been granted to enable the applicants to delay the expeditious conclusion of the above mentioned equity proceedings. Further I say that the question of costs in the above mentioned proceedings would not have been reserved or adjourned had the Court been informed of the applicants' intention to proceed with this notice of intention to claim relief."

The grounds put forward do not in my opinion establish that injustice would be caused to the defendants. They relate solely to what has happened in the past. There is no reference to any injustice which may be suffered in the future.

In the circumstances I will allow the appeal and extend the time for service of the notice of intention to claim relief by one week from today's date.