Van Haarlam and another v Kasner and another PDF

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Van Haarlam and another v Kasner and another Chancery Division January 22 1992 (Before Mr Justice HARMAN) Estates Gazette September 12 1992[1992] 36 EG 135  Landlord and tenant — Whether right of forfeiture waived — Whether tenant entitled to relief from forfeiture in relation to breach of a covenant not to use the premises for any illegal or immoral purposes  By a lease dated July 29 1985 the plaintiff was granted in consideration of a premium of £36,695 a term of 99 years from June 24 1983 of 35 Silver Birch Close, London N11 — The defendants are trustees of the Kasner Charitable Trust and the assignees to the reversion to the flat — The lease contained provisions for forfeiture and a covenant by the tenant that he would not use the premises for any illegal or immoral purposes, but would use the same as a single private dwelling-house — On April 2 1988 the plaintiff was arrested and charged with offences under the Official Secrets Acts — On May 23 1988 the defendants allowed a demand for ground rent from June 24 1988 to be sent to the plaintiff and on June 17 the ground rent was paid on the plaintiff's behalf by his solicitor — On November 21 1988 the defendants made a further demand for rent, which was eventually paid on February 13 1989 — On March 3 1989 the plaintiff was convicted and sentenced to 10 years' imprisonment — On December 8 1989 a document was sent to the plaintiff at the flat alleging breach of covenant by using the premises for illegal purposes, namely for acts preparatory to the commission of offences under the Official Secrets Act 1911 and stating that the breach of covenant was incapable of remedy — On December 21 1989 the defendants re-entered the flat — Rent demands were prepared on May 22 and November 20 1989 but not sent to the plaintiff — The plaintiff asserted that the notice given on December 8 1989 lacked proper particularity and did not satisfy section 146 of the Law of Property Act 1925, that the nonservice of the rent demand in respect of the June quarter day 1989 was a wrongful act, that there was a waiver of the defendants' rights of forfeiture by reason of the delay from the date of the conviction on March 3 1989 to the service of the notice on December 8 1989, that there had therefore been waiver of the right to forfeit the lease — Alternatively, if the defendants were entitled to possession, the plaintiff should have relief from forfeiture Held: Judgment was given to the plaintiff — The notice of December 8 1989 satisfied section 146 of the 1925 Act notwithstanding that it made no reference to that provision — The notice was served within the terms of section 196(3) of the 1925 Act even though at the date of service it

was known that the plaintiff was in prison and unlikely to receive it — Because the paraphernalia for spying was found in the flat there had been illegal acts in breach of covenant — However, the demand and receipt of rent in respect of the June and Christmas quarter days 1988, with the knowledge that the plaintiff had been arrested for offences which founded the breach of covenant, were sufficient acts which amounted to an affirmation of the tenancy and waived the right of forfeiture [1992] 2 EGLR 59 at 60 — Had the defendants been entitled to possession of the flat, relief from forfeiture would have been granted

The following cases are referred to in this report. Chrisdell Ltd v Johnson (1987) 54 P&CR 257 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340; [1985] 3 WLR 359; [1985] 2 All ER 998; [1985] 2 EGLR 85; (1985) 275 EG 1011 & 1129, CA Hoffman v Fineberg [1949] Ch 245; [1948] 1 All ER 592 Rugby School (Governors) v Tannahill [1934] 1 KB 695; [1935] 1 KB 87, CA Scala House & District Property Co Ltd v Forbes [1974] QB 575; [1973] 3 WLR 14; [1973] 3 All ER 308; [1973] EGD 342; (1973) 227 EG 1161, CA This was an action by the plaintiff, Erwin Van Haarlam, to recover possession of 35 Silver Birch Close, London N11, from the defendant trustees, Josef Kasner and Elfreda Erlich, who had effected peaceable reentry pursuant to provisions for forfeiture in a lease dated July 29 1985. The second plaintiff, the Leeds & Holbeck Building Society, discontinued their action on agreed terms with the defendants.

Michael Gettleson (instructed by Ross Williams Neilson & Co) appeared for the first plaintiff; Howard Smith (instructed by B Erlich, solicitor to the Kasner Charitable Trust) represented the defendants; the second plaintiffs, Leeds & Holbeck Building Society, did not appear and were not represented. Giving judgment, HARMAN J said: This is an action which began by writ on January 17 1990. The plaintiffs were one Erwin Van Haarlam and the Leeds & Holbeck Building Society. The building society came to a financial arrangement with the defendants immediately before the start of this trial and with leave discontinued the action on behalf of the second plaintiff building society without any order as to costs. There thus remains only one plaintiff. The defendants were originally sued as the Kasner Charitable Trust. It appears that that is not a corporate body and has no existence in law and could not properly be a party to the action. Accordingly, the parties were amended by leave and the defendants are now one Josef Kasner and Elfreda Erlich. Those two persons are the present trustees of the Kasner

Charitable Trust. I have not seen the trust deed and I do not know anything about the powers of the trustees, but no point has been taken upon that matter. The statement of claim alleges, and it is admitted, that by a lease dated July 29 1985 a company called Smardene Properties Ltd, as lessor, demised to the plaintiff, Mr Erwin Van Haarlam, a flat now known as 35 Silver Birch Close, sometimes described as being in Finchley and sometimes described as being in Colney Hatch. The lease was for a term of 99 years from June 24 1983, the premium paid was £36,695, the ground rent reserved was £65 pa for the first 33 years rising to £130 for the second 33 years of the term and £195 for the last 33 years of the term. The defendants are the assignees of the reversion to that flat, which is part of a block of flats built at that time by Smardene Properties Ltd. The lease contains very ordinary covenants including a proviso for re-entry. I cannot say which actual page of the lease that is because the lease is divided into schedules, but in clause 5, subclause 2, of the relevant schedule the proviso for re-entry, in very ordinary form, runs: If the rent hereby reserved, or any part thereof, shall be in arrear and unpaid for 21 days after becoming due and payable, whether formally demanded or not, or if there shall be any breach of any covenants or agreements on the part of the lessee herein contained, then the lessor may lawfully re-enter upon the demised premises and thereupon the demise shall cease and determine. One of the covenants by the tenant was that he would not use the premises for any illegal or immoral purposes, but would use the same as a single private dwelling-house for one family only. Mr Van Haarlam appears to have at once moved into the flat, although I have no direct evidence of it. Mr Van Haarlam himself has given no evidence in this case and has kept clear of the witness box. He seems to have occupied the flat in a quiet and normal manner, living, as far as I can make out, by himself and causing neither trouble nor difficulty to anyone. The defendants produced the rent ledger for the charitable trust of which they are trustees and that shows payments of the ground rent half-yearly in sums of £32.50 due in advance on Midsummer Day and Christmas Day, demanded very sensibly rather in advance of that, although, as I have read, there is no obligation whatever upon the landlord for the time being to make any demand for rent. The ground rent was demanded in May 1986 and paid in May 1986 for the quarter starting on Midsummer Day 1986, that is a month later. It was paid again on December 3 1986, June 5 1987 and December 10 1987. All those appear to be impeccable payments of ground rent in an entirely desirable and regular manner. Thereafter, an event occurred which has led to this litigation. On April 2 1988, Mr Van Haarlam was arrested. He was arrested and charged with offences under the Official Secrets Acts. He eventually came

to trial at the Old Bailey, I think in late February 1989 or early March. The indictment which is before me states the offence as: Doing acts preparatory — notice that — to the committal of an offence under Section 11C of the Official Secrets Act 1911 as amended by the Official Secrets Act 1920, contrary to Section 7 of the Official Secrets Act 1920. — and the particulars are — Erwin Van Haarlam on divers days between 1 May 1975 — long before the grant of this lease — and 2 April 1988 — the date of his arrest — for a purpose prejudicial to the safety or interests of the State did acts preparatory to communicating to another person, information which was calculated to be, or might have been, or was intended to be, directly or indirectly useful to an enemy, (i) by residing in the United Kingdom, (ii) by having in his possession equipment for the receipt of secret information, (iii) by receiving secret radio transmissions from a person or persons in Czechoslovakia, (iv) by having in his possession materials for the communication of secret information to others, and (v) by having in his possession a list of places in the United Kingdom where secret information could be left or collected. That indictment was drawn on September 30 1988. Mr Van Haarlam was, as I say, arrested and there has been an application before me, which I have ruled was a proper one, to admit in evidence under the Civil Evidence Act 1968 statements made by Mr Van Haarlam, evidence given about him and, most importantly, the summing up by Simon Brown J to the jury which appears in the volume and is a substantial document. The summing up started on Thursday March 2 and was completed by a further direction on the afternoon of Friday March 3 1989, and the jury returned their verdict at 3.30 pm on that day. The jury found Mr Van Haarlam guilty. Simon Brown J sentenced him to 10 years' imprisonment. I think I can properly take judicial notice of the fact that 10 years is a fairly severe sentence, perhaps particularly so bearing in mind that Mr Van Haarlam was not charged with doing, nor was there any evidence given that he had done, any actual act prejudicial to the interest of the state. He was charged with acts preparatory to so doing. There is no doubt that those acts fall within the Official Secrets Acts, the sections which I have referred to, and there is no doubt that they are, as Simon Brown J's sentence marked, serious criminal offences. The evidence given at trial and referred to by the judge in his summing up shows that Mr Van Haarlam had acted as an employee of Hilton Hotels, England, down to, I think, about 1985. He acquired the lease of this flat and, roughly simultaneously, it is not necessary to be precise, gave up his employment subsequently to be engaged as an art dealer. That occupation appears to have been, undoubtedly on the evidence recited by

the judge, a cloak or sham. His art-dealing was of minimal quantity and contained a good many false entries in his books purporting to record transactions that had not happened. Further, he practised in some small degree as an artist himself — he was said to have some little talent, but again in that capacity he persuaded people to “buy” pictures made by him by giving them the money which they then paid to him in order to “buy the picture”. Thus, again, the transactions had a fairly bogus air. In addition, Mr Van Haarlam appears to have taken a very great interest in jewish matters. He got to know many persons in the jewish community and, in particular, was concerned with organisations and activities which were then concerned with obtaining or giving help to jewish persons, notably in the former Soviet Union but also, I think, in other Eastern block countries. That activity does not appear on the evidence to have done anything harmful to any individual; Simon Brown J, at p 75B of his summing up, said: There is no evidence that Mr Van Haarlam personally did anything whatever to try to damage the interests of individual Jews or, indeed, of the Refusenik [1992] 2 EGLR 59 at 61 movement as a whole. There is thus nothing that he did which is shown to have damaged Jewish, in the broadest sense, interests. The evidence was that he was associating with and, if I may speak colloquially, getting close to persons involved with organisations, several of which were mentioned by Simon Brown J. He mentions a number of organisations: “Conscience”, “Women's Commission for Soviet Jewry”, “Liberal Jewish Synagogues' Soviet Jewry Group”, “The Conservative Friends of Israel” and “The Labour Friends of Israel”. All these are, of course, organisations connected with jews desiring, perhaps, to escape from countries where relations with judaism are unhappy, jews who are oppressed and people of that faith or race who wish to escape. I break off to observe that all this has a curiously old-fashioned air. I observed during this trial that the Soviet Union can properly be referred to only as the former Soviet Union, as it no longer exists. Czechoslovakia, with which Mr Van Haarlam was said to have communicated, was then of course — I think I can properly take judicial notice of this — a communist country forming a part of the Eastern block wedded, I think it was called, by the Warsaw Pact. Czechoslovakia had very close relationships and, upon the evidence given at Mr Van Haarlam's trial, was used very much by the former Soviet intelligence organisations to assist in anti-jewish activities. Czechoslovakia is now more or less a free country, the communist party has ceased to control it, indeed the communist doctrine has been abandoned and totally discredited as an economic system and has in many cases been given up as the sort of faith which it formerly was. All those extraordinary events have happened in just under three years since Mr Van Haarlam's original trial took place and it merely shows how

astonishingly the world changes. It may well be that were Mr Van Haarlam to be arrested and charged now it would not be thought necessary to lock him up for very long on the ground that the persons with whom he formally communicated have now ceased to have any power to damage Israel or jews at all. However, he was convicted before the fall of the Berlin Wall and before the destruction of the former Soviet empire or association, however it may be called. The defendants here are the two individuals who are trustees of the Kasner Charitable Trust. That charitable trust I am told, (I have not seen the trustee deed), exists for the purposes of benefiting jews and jewry both within and without the United Kingdom. Mr Kasner in his statement of evidence, which was exchanged, observes that he, on hearing of this arrest and charge and upon reading information about the alleged offences, was, as a devout jew, deeply and bitterly offended. Indeed, that would be very natural. He could not then have known, what Simon Brown J later said, that there was no evidence of any actual harm to any jewish person or interest. Mr Kasner was minded, he said, to forfeit the lease of the flat, 35 Silver Birch Close, held by Mr Van Haarlam. He went to the legal adviser, Mr B Erlich, the solicitor who regularly advises the trust, who happens to be his nephew and who advises the trust in an unpaid and honorary capacity, as I understood him. The solicitor gave evidence before me and all questions of legal professional privilege upon that matter were waived. Mr Kasner sought advice as to whether he could forfeit the lease held by Mr Van Haarlam. He was advised, according to his statement, that: Until Mr Van Haarlam was convicted and the facts relating to his arrest were proved to a court of law, no action should be taken against him for breach of his covenant against illegal use, and if such action was taken it would be unlawful. In my judgment, that was not accurate advice. Plainly, if there was knowledge of illegal activities in the flat, that knowledge has to be proved only to a civil court in forfeiture proceedings on the balance of probabilities. There is no question of any presumption of innocence having anything to do with the matter, contrary to the impressions which Mr Erlich, the nephew and solicitor, observed to me that it had. And there is no difficulty whatever in proceeding in the civil court to a decision different from that in the criminal court where matters have to be proved in the old-fashioned phrase “beyond reasonable doubt” and in the modern phrase “so that the jury is sure”. Consequently that advice must have been erroneous. However, it was given and bona fide acted upon by Mr Kasner. Mr Kasner, in consequence, went on and allowed to be sent out on May 23 1988, something like six weeks after the arrest, the demand for the ground rent for June 24 1988 to Christmas Day. On June 17 that ground rent was paid by a cheque drawn by a solicitor, a Mr Dennis Lynch. Mr Lynch was the duty solicitor who had been got in to advise Mr Van Haarlam when he was first arrested and who gave evidence before me.

On June 16 Mr Lynch wrote a letter on the writing paper of his firm, Neilson & Co, addressed to the Kasner Charitable Trust, referring to the flat, 35 Silver Birch Close, enclosing the cheque for £32.50 for the ground rent and saying that any problems should be referred to him. I also had shown to me the demand addressed to Mr Van Haarlam at the flat and the cheque. There is no doubt from the evidence before me from Mr Kasner, Mr Erlich and his sister, Miss Erlich, who acts as the typist to type the charitable trust rent demands in the intervals of her work from Mr Kasner's private property companies, that that demand was sent deliberately and the rent was accepted with full knowledge that Mr Van Haarlam had been arrested and charged with the offences with which he was later convicted. That is to say the offences, put in broad and colloquial terms, of spying by the use of the flat for that purpose. It is also clear that Mr Kasner also knew of the allegations that Mr Van Haarlam had been getting close to persons in the organisations concerned with jewry, which was the reason why Mr Kasner was so anxious to forfeit Mr Van Haarlam's lease and cease to have any further contact with him. That was followed on November 21 1988 by a further demand for rent. That demanded the rent in respect of Mr Van Haarlam in the sum of £32.50 from Christmas Day 1988 to Midsummer Day 1989 and was addressed specifically to Mr Lynch at Neilson & Co, Seymour Place, W1. Perhaps, not surprisingly, Mr Lynch was somewhat busy at that time with the trial coming on; the indictment, as I have said, had been drawn in September and the trial date must have been coming up. He overlooked the matter and eventually on February 13 1989 wrote a letter apologising for the delay in sending the ground rent, sent his own client account cheque for the £32.50, asked for a receipt, and said he was available. That rent was accepted and was, on February 15, paid into the Lloyds Bank account of the charitable trust. I have had produced to me, as I have said, the housing ledger of the charitable trust with a page for Mr Van Haarlam and this particular flat. That records the payments to which I have already referred. The page has attached to it in the top left-hand corner a typewritten slip which is stuck on to the corner of the ledger sheet. It says: As Mr Van Haarlam will not be available at his flat for some time (years perhaps), contact Mr D Lynch, Neilson & Co, Solicitors, 98 Seymour Place [telephone number given] for any ground rent problems. I was told by Miss Erlich that she typed that. I was told by her that she probably was instructed by either her brother or her uncle to type it, and that it was a result of knowing about the charges for spying, loosely socalled, (although they are only acts preparatory and no actual spying is alleged in the indictment or found in the summing up) and that the typing was done towards the end of 1988, although the date could not be given. I acc...