Peakstone Commerce Ltd v Rahman - Court of Appeal Decision

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  Peakstone Commerce Ltd  v Rahman [2026] EWCA Civ 347 (24 March 2026)

URL: https://www.bailii.org/ew/cases/EWCA/Civ/2026/347.html
Cite as:
[2026] EWCA Civ 347 | | |
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| | | Neutral Citation Number: [2026] EWCA Civ 347 |
| | | Case No: CA-2025-000948 |
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT MANCHESTER
HIS HONOUR JUDGE HODGE KC
CH-2024-MAN-000005

| | | Royal Courts of Justice
Strand, London, WC2A 2LL |
| | | 24/03/2026 |
B e f o r e :

SIR ANDREW MCFARLANE, PRESIDENT OF THE FAMILY DIVISION
LADY JUSTICE FALK
and
LORD JUSTICE HOLGATE

Between:
| | PEAKSTONE COMMERCE LIMITED | Claimant/
Respondent |
| | - and ? | |
| | AZIZ ABDUL HOZAN RAHMAN | Defendant/Appellant |

**Rebecca Jones (instructed by Silverdale Solicitors) for the Respondent
The Appellant appeared in person

Hearing date: 17 March 2026**

HTML VERSION OF APPROVED JUDGMENT ____________________

Crown Copyright ©

3. This judgment was handed down remotely at 10.00am on Tuesday 24 March 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
5. .............................
7. Lady Justice Falk:
8. Introduction
9. This is a second appeal in a claim relating to an outbuilding of a property in Manchester which Mr Hozan Rahman, the appellant and defendant below, had operated as a commercial garage (the "Garage"). The claim was for unpaid rent in the region of ?20,000, together with interest and costs.
11. The claim was tried in the County Court at Manchester by DJ Banks, who found against Mr Rahman and in favour of the respondent and claimant below, Peakstone Commerce Limited ("Peakstone"). Under DJ Banks's order, Mr Rahman was ordered to pay (inclusive of interest) ?26,990.66 in arrears of rent and a further ?37,055.34 in costs. Mr Rahman's counterclaim was dismissed.
13. Mr Rahman's appeal against that order was heard by HHJ Hodge KC (the "Judge"), also in the County Court at Manchester. He dismissed the appeal and awarded further costs against Mr Rahman.
15. Mr Rahman appealed again to this court, on 5 grounds. Nugee LJ granted permission on one ground, ground 2, and refused permission on the others.
17. Mr Rahman was represented by Counsel before DJ Banks and the Judge, and also appears to have had some assistance in preparing his grounds of appeal to this court. However, he was unrepresented at the hearing before us. I should pay tribute to the dignified way in which he put his case, as well as thanking Counsel for Peakstone, Ms Rebecca Jones, for her assistance.
19. In summary, I would dismiss the appeal for the reasons set out below.
21. The factual background and procedural history
22. Mr Rahman first went into occupation of the Garage in or around July 2001, at which point the freeholder was a predecessor in title of Peakstone. Peakstone acquired the freehold in 2010.
24. Peakstone's pleaded case relied on a written lease dated 1 April 2010 (the "2010 Lease") at an annual rent of ?6000 (?500 per month), which it said had replaced a written licence dated 26 June 2006. Peakstone claimed that Mr Rahman had remained in occupation following the end of the 5-year term of the 2010 Lease on 1 April 2015, and that no rent had been paid since a payment of ?1000 on 5 June 2018, which Peakstone said covered the rent for March and April of that year. The particulars of claim referred to Mr Rahman having "held over", but it was uncontroversial that what this meant was that he had continued to occupy the Garage under a statutory continuation of the tenancy created by the 2010 Lease, pursuant to section 24 of the Landlord and Tenant Act 1954 (the "1954 Act").
26. On 22 January 2021, Peakstone served a notice under section 25 of the 1954 Act seeking to terminate the tenancy with effect from 30 July 2021. Mr Rahman denied signing the 2010 Lease and, on Peakstone's case, remained in occupation, granting vacant possession only on 20 August 2021. Peakstone claimed arrears of rent, interest and (for the period between 30 July and 20 August 2021) double rent pursuant to section 1 of the Landlord and Tenant Act 1730 or alternatively mesne profits for that period, together with interest and costs.
28. In his (professionally pleaded) amended defence and counterclaim, Mr Rahman denied that occupation had continued beyond 2 January 2018 and also disputed the basis of occupation. His pleaded case was that he had first occupied the Garage in 2001 under an unwritten tenancy agreement at ?400 per month, that this had been replaced by written tenancies, the first in March 2002 for a rent of ?450 per month and the second in December 2002 for a 3-year period (expiring in December 2005) at a rent of ?500 per month (the "December 2002 Lease"). He pleaded that he had continued to occupy thereafter under a statutory tenancy pursuant to section 24 of the 1954 Act, paying rent in cash.
30. Mr Rahman further pleaded that he had refused to sign a further lease in 2010 because he disagreed with some of the terms, including as to whether utility charges were included in the rent. He claimed that he had been denied access to the Garage between January and April 2018, at which point he had paid ?1000 as a deposit for a new lease. He also pleaded that electricity and water supplies were cut off in May 2018 and that he had ceased to occupy the Garage at that time since he could no longer use it for his business. Mr Rahman counterclaimed for loss and damage resulting from being kept out of occupation in the early part of 2018 and what he said was his eviction in May 2018.
32. Before the case came to trial before DJ Banks, Peakstone made two unsuccessful attempts to amend its pleadings. The first, which came before DJ Ranson, was an amendment to assert that the 2010 Lease was in fact executed in or around September 2010 but was backdated to 1 April. The second, which came before DDJ McNall, raised the same backdating point but also sought to introduce an alternative case based on an implied periodic tenancy commencing in or around April 2010, instead of the 2010 Lease.
34. DJ Ranson's reasons for dismissing the first application related, essentially, to the proximity to trial for what was a significant amendment, which was made at a late stage without good reason, and which lacked a real prospect of success on the evidence. DJ Ranson also observed that the real dispute between the parties was whether the defendant was in occupation under a lease after 2018. I agree.
36. DDJ McNall noted that, to the extent that the same application was in effect being repeated, the appropriate course would have been to appeal DJ Ranson's decision. In any event it was still a late application made without a good explanation, and would be prejudicial if allowed. As regards the alternative, "backstop" case relying on an implied periodic tenancy, although that was a point of law and the position was more difficult, the amendment would still cause prejudice. The backstop arose from problems of Peakstone's own making in not preparing properly, and should have been pleaded so that Mr Rahman knew the case against him.
38. The trial before DJ Banks
39. At the trial before DJ Banks, Peakstone raised the backdating argument again. The judge, who it appears was not fully appraised of the earlier attempts to amend the claim, found for Peakstone.
41. In his judgment, DJ Banks commented somewhat adversely on both Mr Rahman and the key witness for Peakstone, and generally preferred to rely on documentary rather witness evidence. Mr Rahman's counterclaim was rejected as unevidenced, and aspects of his evidence were found to be contradictory and to conflict with his pleaded case. Relevantly, this included suggesting that he did not have a lease, contrary to his case that he had entered into the December 2002 Lease and that he had continued in occupation after 2005 under a statutory tenancy.
43. DJ Banks concluded that the lease pleaded by Peakstone had been executed by Mr Rahman, "albeit in early September 2010 and backdated to April 2010", and that as a consequence "from April 2010 the defendant occupied the property pursuant to a tenancy agreement for a period of five years and thereafter pursuant to a statutory periodic tenancy under the 1954 Act". Peakstone's pleading was sufficiently clear for that purpose.
45. On the key issue of when Mr Rahman's occupation had ceased, the judge also preferred Peakstone's case, finding that it was Mr Rahman who decided to cease to use the Garage while squatters were in the neighbouring property but that he had continued to access the Garage thereafter. Based on the evidence it was "clear ? that the defendant remained in legal occupation of the property until he delivered it back to the claimant in August 2021". The alleged problems with utility supplies were not proved and in any event did not affect Mr Rahman's legal occupation.
47. The appeal before the Judge
48. Permission to appeal was initially refused on the papers by the Judge but was granted by HHJ Pearce following an oral renewal. His order explained his concern that DJ Banks had apparently not been fully informed about the failed amendment applications, such that the first three grounds of appeal, which related to the 2010 Lease, had more than a fanciful prospect of success. Permission was also granted on ground 4 (relating to rent) and ground 5 (the counterclaim) on the basis that they could be affected by success on the other grounds. HHJ Pearce ordered transcripts of the judgments of DJ Ranson and DDJ McNall, and of the hearing before DJ Banks.
50. In his ex tempore judgment following the hearing of the appeal, the Judge explained how permission to appeal came to be granted, and that the grounds of appeal had since been expanded. They asserted that the backdating case had not been properly open to Peakstone, having been finally determined against it by DJ Ransom and DDJ McNall, and that its advancement had caused prejudice, including because a specific disclosure application had not been pursued against Peakstone as it would have been if the point had been permitted to be taken, and because it would have affected DJ Banks's assessment of the evidence. There had been serious procedural irregularity. DJ Banks should also have found that no rents were due, because Peakstone could not rely on the lease it had sued upon. Further, and given that disclosure and the assessment of the evidence was affected, DJ Banks was wrong to have found that Mr Rahman did not cease to occupy the Garage in 2018.
52. The Judge also referred to a Respondent's notice that had by that stage been filed by Peakstone. This sought to uphold DJ Banks's decision on the alternative ground that, irrespective of the position regarding any 2010 Lease, Mr Rahman had himself pleaded that, following the expiry of the 3-year term of the December 2002 Lease, he had continued to occupy under a statutory tenancy pursuant to section 24 of the 1954 Act, at the same rent as claimed by Peakstone.
54. The Judge pointed out to Mr Rahman's direct access Counsel, Dr Mike Wilkinson, that "there may have been some losing sight of the wood for the trees". At its heart, the claim was for rent at ?500 per month. Both parties had pleaded that there was a written tenancy at that rent, one for a 5-year term expiring in 2015 and the other for a 3-year term expiring in 2005. Each relied on a statutory continuation of that tenancy under section 24 of the 1954 Act. The real issue was Mr Rahman's argument that his liability for rent had ceased in 2018 by virtue of being excluded from the Garage. The Judge observed that it was no part of Mr Rahman's case that he had determined the tenancy by serving notice under section 27(2) of the 1954 Act, which allows a tenant to bring to an end a tenancy continued under section 24.
56. The Judge decided that the finding that Mr Rahman had remained in occupation between 2018 and 2021 and was liable for the rent for that period was not affected by the procedural background. While it did seem that it was not open to DJ Banks to make the finding that he did about the 2010 Lease, that did not affect the reliability of Peakstone's witnesses or his other findings of fact. The Judge then said this:
58. "43. The reality is that even if District Judge Banks erred in making a finding contrary to the then claimant's pleaded case, it has had no effect on the ultimate outcome of this case. If it was not open to the district judge to find, in accordance with the claimant's pleaded case, that there had been a tenancy created in September 2010, then the only option open to the district judge would have been to find that there had been a statutory continuation of the tenancy pleaded by the defendant in his own defence. That statutory continuation tenancy would have involved the defendant in a continuing liability for rent at the same rate of ?500 a month. On the district judge's findings, that liability continued until the end of July 2021, and then, for a short period of some three weeks, was replaced with a liability for double rent. Had it not, it would have been followed by a liability for mesne profits at the rate of ?500 a month. On any view, the appellant would have been liable for rent at the rate claimed by the respondent of ?500 a month.
60. 44. There would have been no other finding of fact open to the district judge on the pleadings of both parties. It involves no procedural injustice to the appellant to make a finding of fact consistent with the appellant's own pleaded case. In those circumstances, I cannot find that the decision of the district judge was wrong, nor that it was unjust because of any serious procedural or other irregularity in the proceedings before him. Had the district judge known the full history of the applications made by the respondent, unsuccessfully, before first a district judge, and then a deputy district judge, for permission to amend its particulars of claim, then he may well have taken the view that it was not open to him to make the finding that he did; but then, inevitably, he would have had to find that the continuation tenancy asserted by the appellant gave rise to the same financial liability?"
61. The Judge observed that the point had also been made by Peakstone's Counsel in her skeleton argument for trial, adding "I recognise that that was not the case pleaded by the claimant; but it was the case pleaded by the defendant himself; and he cannot complain if the court acts upon that". He dismissed the appeal.
63. The appeal to this court
64. Of the five grounds of appeal to this court, the sole ground on which permission was granted by Nugee LJ was ground 2. In summary, this asserted that the Judge wrongly justified the trial outcome by reference to Peakstone's "supposed alternative case of a periodic tenancy", a case which had been rejected by DDJ McNall. Peakstone's case had been that, prior to 2010, Mr Rahman had only a licence, not a lease. It was contrary to principle for a judge to rely on an unpleaded or expressly disavowed case. Nugee LJ's grant of permission referred to the question being whether the judgment could be sustained on a basis that was not only unpleaded but where permission to amend to plead such a case had been refused.
66. Discussion
67. It is important to emphasise the limited scope of the appeal to this court. Mr Rahman is clearly aggrieved by the outcome of the trial, and feels that he has wrongly been found to have a continued liability for rent at a property he says could not be used for his business. But that is not the basis of the appeal. Mr Rahman has no permission to challenge the factual conclusion of DJ Banks that he remained in occupation of the Garage between 2018 and 2021. Rather, the question for us is whether the Judge was wrong to conclude that DJ Banks would have arrived at the same outcome even if he had not based his decision on the 2010 Lease.
69. The answer to that question is that the Judge made no error.
71. The first point to make is that there has been an unfortunate confusion of terminology, probably not assisted by the language used by DJ Banks in his judgment. As Ms Jones pointed out, the periodic tenancy which DDJ McNall refused permission to advance was not the same tenancy as that relied on by the Judge. That answers the complaint that the Judge decided the appeal on a basis that DDJ McNall had refused permission to advance.
73. The tenancy considered by DDJ McNall was an implied periodic tenancy said to have commenced in or around April 2010, if the 2010 Lease was found not to have been entered into. In contrast, the tenancy relied on by the Judge was a statutory continuation of the tenancy created by the December 2002 Lease. That was not a periodic tenancy. Rather, it was a tenancy first created by a fixed term lease entered into in 2002 and continued beyond the expiry of its 3-year term pursuant to section 24 of the 1954 Act.
75. The second point is that the statutory continuation of the tenancy created by the December 2002 Lease was a central part of Mr Rahman's case at trial. The point is very clear from his amended defence and counterclaim, which Mr Rahman signed. It is also apparent from his trial witness statement and in part of his Counsel's cross-examination at trial, in a passage on which Mr Rahman relied. I appreciate that the transcript of Mr Rahman's own oral evidence suggests that at the time he may not have fully appreciated the difference between a lease and a licence, but that is of no assistance to him given the way in which his case was put.
77. The third point is that, while the function of a judge is limited to deciding the issues raised by the parties, they are not confined to a consideration of the claimant's case alone. It seems to me that Mr Rahman is under a misconception that the sole proper function of a judge is to decide whether the claim is proved by reference to the precise manner in which it is advanced by the claimant. That is not so. For example, in Ali v Dinc [2022] EWCA Civ 34 this court upheld a decision of a trial judge based on an "intermediate" combination of factual assertions from each party's case, a combination which neither party had expressly pleaded. Birss LJ observed at [34] that no prejudice had been identified.
79. In Phones4u v EE & Others [2025] EWCA Civ 869 I considered Ali v Dinc and the earlier cases of Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041 and Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287, [2021] BCC 640. I summarised the position as follows at [194]:
81. "a) The starting point is that a judge is not entitled to decide a case on a basis that has neither been pleaded nor canvassed before him. His function is limited to deciding the issues put before him.
82. b) Where, as in Al-Medenni and Satyam, a 'theory' advanced by the judge is outside the scope of the pleaded issues (in the sense of the facts necessary to establish a claim or defence?), that will generally be a clear indication that reliance on that theory is impermissible.
83. c) However, the key point is the interests of justice and, in particular, the question of prejudice to the losing party.
84. d) This may mean that, even if an uncanvassed 'theory' is not outside the scope of the pleaded issues, it would be unfair in all the circumstances of the case for the judge to rely on it. Conversely, in some cases it might not be unfair for the judge to depart from the scope of the pleaded issues, although generally only if this was fully addressed at trial."
85. A judge is therefore not generally entitled to decide a case on a basis that has not been pleaded. But that does not mean that they are confined to the claimant's case: the pleadings are those of each of the parties. Further, the key question is the interests of justice and the risk of prejudice to the losing party. There can be no such prejudice where, as here, a judge decides a case against a defendant squarely in accordance with the defendant's own pleaded case.
87. A related point is that Mr Rahman's appeal involves an inconsistency. The appeal is based on an argument that Peakstone should not be permitted to go outside its pleaded case. But Mr Rahman must simultaneously say (in effect) that he should not be treated as bound by his own pleaded case. That is not a proper basis for an appeal.
89. The final point is that the Judge did not make the decision that he did without warning. There was a Respondent's notice that sought to uphold DJ Banks's decision on the alternative basis of a statutory continuation of the tenancy created by December 2002 Lease. It follows that there was no arguable procedural unfairness in deciding the appeal on that basis.
91. Conclusion
92. In conclusion, I would dismiss the appeal.
94. I understand that this will be a disappointment to Mr Rahman. If it is the case that the problems caused by his own pleaded case were not brought to his attention by his legal advisers (including when the Respondent's notice was served), then that is concerning. It has resulted in significant costs in two appeals that should have been avoided.
96. Lord Justice Holgate:
97. I agree.
99. Sir Andrew McFarlane, President of the Family Division:
100. I also agree.

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