Upholding a Rent Judgment on the Defendant’s Own Pleaded Statutory Continuation Tenancy: No Prejudice, No Procedural Unfairness

Case: Peakstone Commerce Ltd v Rahman
Citation: [2026] EWCA Civ 347
Court: England and Wales Court of Appeal (Civil Division)
Date: 24 March 2026

1) Introduction

This second appeal concerned unpaid rent for an outbuilding in Manchester used as a commercial garage (the “Garage”). The claimant landlord, Peakstone Commerce Limited (“Peakstone”), pursued rent arrears of around £20,000 (plus interest and costs). The defendant tenant, Mr Hozan Rahman, resisted liability principally on the basis that his occupation had ended in 2018 and/or that the landlord’s pleaded contractual basis (a 2010 lease) was not made out.

The litigation became procedurally complex because Peakstone made (and lost) two pre-trial amendment applications seeking (i) to allege that the 2010 lease was executed later but backdated, and (ii) in the alternative, to plead an implied periodic tenancy if the 2010 lease was not proved. Despite those refusals, the trial judge (DJ Banks) found the 2010 lease had been executed in September 2010 and backdated, and ordered Mr Rahman to pay substantial rent arrears and costs. On first appeal, HHJ Hodge KC dismissed the appeal, concluding that even if the trial judge’s reasoning about the 2010 lease was problematic, the same outcome was inevitable because Mr Rahman’s own pleaded case asserted a statutory continuation tenancy at the same rent.

The Court of Appeal granted permission on a single issue: whether the first appeal judge impermissibly upheld the result on a basis that was unpleaded (or effectively barred by the refusal of Peakstone’s amendment applications).

Key issue on the second appeal

  • Whether it was wrong (or procedurally unfair) to uphold the rent judgment on the basis of a tenancy framework derived from Mr Rahman’s own pleaded case (a statutory continuation under section 24 of the Landlord and Tenant Act 1954), notwithstanding defects in Peakstone’s pleaded reliance on the 2010 lease and the earlier refusal to permit Peakstone to plead an implied periodic tenancy.

2) Summary of the Judgment

The Court of Appeal dismissed Mr Rahman’s appeal. It held that the first appeal judge did not err in concluding that the outcome would have been the same even if the trial judge should not have found that the 2010 lease was executed in September 2010 and backdated.

Central to the decision were the following points:

  • The “periodic tenancy” Peakstone had been refused permission to plead (an implied periodic tenancy commencing around 2010) was not the same as the basis relied upon by the first appeal judge (a statutory continuation of the fixed-term December 2002 Lease, pleaded by Mr Rahman himself).
  • A court is not confined to the claimant’s pleaded route to liability; it may decide the case by reference to the issues and facts arising from both parties’ pleadings, provided it does not cause injustice.
  • The decisive consideration is prejudice/fairness. There is no procedural unfairness in deciding against a defendant on a basis that is “squarely” consistent with the defendant’s own pleaded case—especially where the point was flagged by a Respondent’s notice.

3) Analysis

A) Precedents Cited

1. Ali v Dinc [2022] EWCA Civ 34

The Court relied on Ali v Dinc to confirm that, in appropriate circumstances, a trial judge may reach a conclusion based on an “intermediate” combination of factual assertions drawn from both parties’ cases, even if neither party pleaded that precise composite route—provided that no prejudice is shown.

In Peakstone, this supported the proposition that adjudication is not a mechanical exercise in checking only whether the claimant proves its pleaded “route”, but rather a determination of the issues actually joined between the parties, where fairness permits.

2. Phones4u v EE & Others [2025] EWCA Civ 869

The judgment treated Phones4u v EE & Others as a recent synthesis of principles on when a court may (or may not) decide a case on an unpleaded or uncanvassed basis. The Court quoted a summary given at [194] in that case, emphasising:

  • the “starting point” that a judge is not entitled to decide on a basis neither pleaded nor canvassed;
  • the significance of whether the judge’s “theory” falls outside the scope of pleaded issues;
  • the “key point” being the interests of justice and prejudice;
  • the possibility, in some cases, of departing from pleadings where fully addressed and fairness allows.

Peakstone applies that synthesis in a particular direction: where the basis is within the defendant’s pleaded case and the defendant identifies no real prejudice, the fairness objection collapses.

3. Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041

Al-Medenni was referenced (via Phones4u) as an example of the orthodox constraint: it is generally impermissible for a judge to decide on a “theory” outside the pleaded issues (and thus outside the case parties came prepared to meet). Peakstone does not dilute that rule; rather, it locates this appeal outside Al-Medenni territory because the basis used (statutory continuation under the December 2002 Lease) was not foreign to the pleadings—it was central to Mr Rahman’s own case.

4. Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287, [2021] BCC 640

Satyam was likewise cited (via Phones4u) to illuminate the boundary between permissible issue-determination and impermissible judicial invention. Peakstone uses the Satyam line of authority to reinforce that the operative question is not labels (“unpleaded”) in the abstract, but whether the losing party was unfairly disadvantaged by the basis of decision. Here, the Court found none: the defendant could not plausibly complain of being held to his own pleaded tenancy framework.

B) Legal Reasoning

1. Identifying the true scope of the permitted appeal

The Court emphasised that the appeal did not permit Mr Rahman to re-litigate the key factual finding that he remained in occupation between 2018 and 2021. The only question was whether HHJ Hodge KC was wrong to hold that the same legal liability for rent followed even if the 2010 lease finding fell away.

2. Correcting a category error: “periodic tenancy” vs statutory continuation under the 1954 Act

The central move in the Court’s reasoning was to disentangle two different constructs:

  • The implied periodic tenancy Peakstone unsuccessfully sought to plead (as a “backstop” if the 2010 lease was not proved), said to have commenced around April 2010.
  • The statutory continuation of the tenancy created by the December 2002 Lease, continued beyond its fixed term by section 24 of the Landlord and Tenant Act 1954, pleaded by Mr Rahman.

The Court held that DDJ McNall’s refusal to allow the first did not bar reliance on the second, because they were different tenancies with different juridical foundations. This answered the core complaint that the first appeal judge had “revived” a rejected amendment case.

3. Pleadings constrain the court—but pleadings belong to both parties

The judgment restates a practical, sometimes misunderstood point: while the court’s function is to decide issues the parties have put before it, the “issues” are not synonymous with the claimant’s pleaded theory alone. The defendant’s pleaded case is equally part of the defined dispute.

On the facts, Mr Rahman’s pleaded case asserted:

  • a fixed term written lease in December 2002 (expiring December 2005);
  • continued occupation under a statutory tenancy pursuant to section 24 of the 1954 Act thereafter;
  • rent at the same level claimed by Peakstone (£500 per month).

Against that backdrop, HHJ Hodge KC’s “inevitability” reasoning was straightforward: if Peakstone’s 2010 lease route failed, the court would still have to address the alternative tenancy framework already pleaded by Mr Rahman, which generated the same rental liability.

4. Fairness/prejudice as the decisive criterion

Applying the Phones4u framework, the Court treated prejudice as the controlling consideration. There could be no procedural injustice where:

  • the tenancy basis used was “squarely” within the defendant’s own pleaded case;
  • the point was not sprung unexpectedly—Peakstone filed a Respondent’s notice expressly advancing it;
  • Mr Rahman’s argument implicitly required the court to ignore his own pleaded position while insisting rigid adherence to Peakstone’s pleading—an inconsistency the Court rejected.

C) Impact

1. Clarification for “unpleaded basis” challenges

The case underscores that “unpleaded basis” objections should be analysed with care:

  • A party cannot easily characterise a basis as impermissibly “unpleaded” where it arises from the other side’s pleaded defence (or from its own pleadings), especially if addressed in argument and flagged procedurally (e.g., Respondent’s notice).
  • Prior refusal of a claimant’s amendment does not automatically prevent reliance on a different legal analysis arising from the opposing party’s pleaded case, even if the end result (liability) is similar.

2. Practical lesson for litigants in 1954 Act rent disputes

In business tenancy disputes, pleading a section 24 continuation can have far-reaching consequences: it can preserve liability for rent unless and until terminated by the statutory mechanisms (e.g., landlord’s section 25 notice; tenant’s section 27(2) notice). Peakstone highlights the forensic risk of advancing a pleaded statutory tenancy narrative while simultaneously attempting to deny ongoing liability without clearly engaging the statutory termination framework.

3. Appellate restraint and “harmless error” logic

Although not framed in those terms, the decision exemplifies a robust “no difference to outcome” approach: where the appellate court is satisfied that correcting a pleading/route error would not change the result given the parties’ pleaded positions and findings of fact, it will not overturn the judgment on procedural grounds alone.

4) Complex Concepts Simplified

  • “Holding over” / section 24 continuation (Landlord and Tenant Act 1954): When a business tenant’s fixed term ends, the tenant may remain in lawful occupation and the tenancy continues by statute on similar terms until brought to an end using the Act’s procedures.
  • Section 25 notice (1954 Act): A landlord’s notice to end the statutory continuation tenancy or to oppose renewal, specifying a termination date.
  • Section 27(2) notice (1954 Act): A tenant’s mechanism to terminate a tenancy that is continuing under section 24 (relevant because the first appeal judge noted it was not part of Mr Rahman’s case that he served such a notice).
  • Implied periodic tenancy: A tenancy inferred by conduct (e.g., occupation and periodic rent payments) without a valid fixed-term lease, typically rolling month-to-month or year-to-year.
  • Mesne profits: A remedy (often calculated like rent) for occupation after the right to occupy has ended—essentially damages for use and occupation.
  • Double rent (Landlord and Tenant Act 1730, section 1): A statutory uplift that can apply in certain “holding over” situations after notice to quit/termination (the claim here pleaded double rent for a short post-termination period, alternatively mesne profits).
  • Respondent’s notice: A procedural step allowing a respondent to an appeal to uphold the decision below on different or additional grounds from those relied upon by the lower court.

5) Conclusion

Peakstone Commerce Ltd v Rahman confirms that appellate courts will not set aside a rent judgment merely because the trial judge adopted a questionable route tied to the claimant’s pleaded case, where the same result follows inevitably from the defendant’s own pleaded tenancy framework and no prejudice is shown. The decision also sharpens the distinction between an implied periodic tenancy (which Peakstone had been refused permission to plead) and a statutory continuation tenancy under section 24 of the 1954 Act (which Mr Rahman pleaded), and it reinforces that fairness—particularly the absence of prejudice—remains the decisive touchstone when assessing objections to reliance on “unpleaded” bases.