Licence — Eviction — Damages — Section 28 of Housing Act 1988 — Whether occupier held lease or licence — Determination of reasonable period of notice to determine licence — Liability for receiver — Assessment of statutory damages — Trespass — Whether aggravated and exemplary damages payable — Assessment of damages
In March 1992 the first defendant bank appointed A
as the receiver of hotel premises of which R, the fifth defendant, was a
registered proprietor, the premises having been charged to the bank. Under the
terms of the charge, A was deemed to be the agent of the chargor;
A
the hotel manager. In October 1993 the plaintiff commenced occupation of a room
in the hotel premises pursuant to an oral agreement made with M. M told the
plaintiff that he had the consent of the bank and the receiver to the
arrangement. Under the arrangement, the plaintiff was to have sole use of a
particular room on a long-term basis; the monthly rent included a fortnightly
change of bed linen. In January 1994 the receiver, acting on the instructions
of the bank, contracted to sell the hotel to a purchaser. On 6 May 1994 the
plaintiff’s belongings were removed from his room and the lock was changed;
completion of the sale took place later that day. The plaintiff made several
attempts to be readmitted, obtaining local authority advice and seeking the
assistance of the police. He had the benefit of an interlocutory injunction
restoring him to possession, but that was later discharged on the ground that
his licence did not bind the purchaser. He finally left the property on 20 May
1994. The plaintiff claimed damages for unlawful eviction, trespass, breach of
contract, conspiracy and negligence against: the bank; A, the receiver; N and
C, who were concerned with the company appointed by the receiver to run the
hotel; and R, the owner. The claim against the bank was struck out in January
1996. The claim against C was settled, and judgment in default was obtained
against A and N with damages to be assessed (they did not appear at the trial).
The hearing concerned the liability of R and the assessment of damages.
Mountford [1985] AC 809 distinguished. Having regard to the long-term arrangement,
four months’ notice was a reasonable period to terminate the licence. R was the
relevant landlord and liable for the actions of A, the receiver, and N, the
manager. A valuation under section 28 of the Housing Act 1988 must be based on
the actual position of the landlord and the actual financial gain to him. On
the evidence, a figure of £45,000 represented the statutory damages recoverable
from R. These were not recoverable against A, the receiver, or N, the hotel
manager. There was trespass by N, for which A and R were responsible, and by A
himself; compensatory damages of £10,000 were awarded. A further award of
£10,000 was made for aggravated damages and £7,500 for exemplary damages. There
was breach of the contractual licence by R, but aggravated and exemplary
damages would not have been available. The non-statutory damages for which R
was vicariously liable were set off against the statutory damages. In view of
the liability of A and N for trespass, as joint tortfeasors, it was unnecessary
to consider their further liability for the additional pleaded causes of action
of conspiracy, negligence and wrongful interference with the licence.
The following cases are
referred to in this report.
AB v South
West Water Services Ltd [1993] QB 507; [1993] 2 WLR 507; [1993] 1 All ER 609
Abbeyfield (Harpenden) Society Ltd v Woods [1968] 1 WLR 374; [1968] 1 All ER 352; (1968) 19
P&CR 36
Ashburn Anstalt v
Arnold (No 2) [1989] Ch 1; [1988] 2 WLR 706; [1988] 2 All ER 147; (1988)
55 P&CR 137; [1988] 1 EGLR 64; [1988] 23 EG 128, CA
Australian Blue Metal Ltd v Hughes [1963] AC 74; [1962] 3 WLR 802; [1962] 3 All ER
335, PC
Broome v Cassell
& Co Ltd [1972] AC 1027; [1972] 2 WLR 645; sub nom Cassell & Co Ltd
v Broome [1972] 1 All ER 801, HL
Burroughs Day v Bristol
City Council [1996] 1 EGLR 167; [1996] 19 EG 126
Drane v Evangelou
[1978] 1 WLR 455; [1978] 2 All ER 437; (1977) 36 P&CR 270; [1978] 1 EGLR
30; 246 EG 137
John v MGN Ltd
[1997] QB 586; [1996] 3 WLR 593; [1996] 2 All ER 35
Jones v Miah
[1992] 2 EGLR 50; [1992] 33 EG 59; (1992) 24 HLR 578
Luganda v Service
Hotels Ltd [1969] 2 Ch 209; [1969] 2 WLR 1056; [1969] 2 All ER 692; (1969)
20 P&CR 337
Marchant v Charters
[1977] 1 WLR 1181; [1977] 3 All ER 918; (1976) 34 P&CR 291; [1977] 1 EGLR
44; [1977] EGD 125; 241 EG 23
Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd [1955] 2 QB 556; [1955] 3
WLR 212; [1955] 2 All ER 722
Messenger Newspaper Group Ltd v National Graphical Association [1984] 1 All ER 293; [1984]
IRLR 397
National Justice Compania Naviera SA v Prudential Assurance Co Ltd: The Ikarian Reefer
[1993] 2 Lloyd’s Rep 68; [1993] 2 EGLR 183; [1993] 37 EG 158; [1993] FSR 563
National Justice Compania Naviera SA v Prudential Assurance Co Ltd: The Ikarian Reefer
[1995] Lloyd’s Rep 455, CA
Nwokorie v Mason
(1994) 26 HLR 60; sub nom Mason v Nwokorie [1994] 1 EGLR 59;
[1994] 05 EG 155
Rookes v Barnard
[1964] AC 1129; [1964] 2 WLR 269; [1964] 1 All ER 367; [1964] 1 Lloyd’s Rep 28,
HL
Sampson v Wilson
[1996] Ch 39; [1995] 3 WLR 455; (1995) 70 P&CR 359; (1997) 29 HLR 18;
Spenborough Urban District Council’s
Agreement, Re [1968] Ch 139; [1967] 2 WLR 1403;
[1967] 1 All ER 959; (1967) 56 LGR 300
Stanton v Callaghan
[1999] 2 WLR 745; [1998] 4 All ER 961; [1998] 3 EGLR 165
Street v Mountford
[1985] AC 809; [1985] 2 WLR 877; [1985] 2 All ER 289; [1985] 1 EGLR 128; (1985)
274 EG 821, HL
Thompson v Metropolitan
Police Commissioner [1998] QB 498; [1997] 3 WLR 403; [1997] 2 All ER 762
Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173; [1947] 2 All ER
331, HL
This was the hearing of
claims by the plaintiff, Jal Mehta, against CG Adams and Stephen Nolan, for
damages to be assessed, and against Falheli Gulam Hussein Ramji for the
determination of liability and damages.
The plaintiff appeared in person and was
unrepresented; Peter Brunner (instructed by Keegan Williams) represented
Falheli Gulam Hussein Ramji.
Giving judgment, MR RICHARD SOUTHWELL QC said: I should say in advance
that the great majority of the authorities to which I refer were not cited to
me in the course of the hearing. I decided not to add to the costs of this case
by calling the parties back for further argument because I think that that was
not necessary, as will be apparent from the form of the judgment.
The plaintiff, Mr
Jal Mehta, was wrongfully evicted from premises in which he was resident in May
1994, the premises being at 30 Old Brompton Road, London SW7. As a result of
the eviction, several legal proceedings have been commenced by him. I will
consider the history of those proceedings at the end of this judgment because
they provide some lessons for the conduct of civil actions, particularly those
commenced by litigants in person such as Mr Mehta, unsupported by Legal Aid or
the services of counsel or solicitors acting pro bono. The trial before
me in this action is the first trial, as opposed to interlocutory proceedings,
that has taken place. In the present action, 1995 M 2065 (which I shall refer
to as action 2065), the defendants and their positions are as follows:
1. The Royal Bank of Scotland (which I will refer
to as the bank). The claim in action 2065 against the bank was struck out on 29
January 1996 by order of Rix J and this was upheld by the Court of Appeal on 23
July 1996, when leave to appeal was refused.
2. Mr CG Adams is now bankrupt and is represented
by Mr F Satow, the trustee in bankruptcy. Judgment in default has been obtained
against Mr Adams and I have to assess the damages, if any, payable by Mr
to Mr Mehta for which Mr Mehta will be able to prove in the bankruptcy. Mr
Adams and Mr Satow were not represented before me but Mr Satow sent letters to
the court setting out his position.
3. Mr Stephen Nolan. Judgment in default has been
obtained against Mr Nolan and I have to assess the damages, if any, payable by
him. Mr
of the trial, a solicitor acting for Mr Nolan attended and told the court that
he was seeking Legal Aid for Mr Nolan.
4. Mr Graham Corrett. Mr Mehta has settled with
this defendant and has been paid £6,500 in respect of liability and costs
(though without any admission of liability).
5. Mr Falheli Gulam Hussein Ramji FCA (Mr Ramji).
Mr Ramji disputes liability and the trial has taken place before me on
liability and damages. He was represented by counsel Mr Peter Brunner.
This case is concerned with premises at 30 and 32
Old Brompton Road, London SW7. At the material times, number 30 was being run
as a hotel, the Brompton Hotel, except that the ground and basement floors were
let on long leases, the basement as a restaurant and the ground floor as a wine
bar. So the hotel occupied the first and higher floors. Number 30 was
originally an ordinary South Kensington house, the upper floors having been
little altered for the purposes of use as a hotel. Number 32 contained a
self-contained flat.
Some question has been raised before me as to
whether there was established user of the premises as a hotel for planning purposes,
but in my judgment it is reasonably clear that there was such established user.
On 2 November 1987 the freehold of 30 Old Brompton Road was transferred to Mr
Ramji and a Mr Mohammed Dossa as tenants in common for £1m. Mr Dossa appears to
have dropped out of the picture quite soon and no reference was made to him
during the trial. This purchase was apparently financed by a loan from a
finance company.
In October 1988 Mr Ramji also acquired a 99-year
lease of part of 32 Old Brompton Road, consisting of the self-contained flat.
In October 1998 Mr Ramji charged both numbers 30 and 32 in favour of the bank,
pursuant to two legal charges dated 28 October 1988, to secure the finance
provided by the bank for refinancing the purchases of the two properties.
Mr Ramji was acting for a partnership comprising
himself, Mr S Akbarali, Mr SG Ali, Mr HD Ladak, Dr S Sumer and Yellow Hammer
Investments Ltd, a Guernsey company controlled by two Tanzanian citizens.
The Brompton Hotel was not successful. On 28
January 1992 the bank demanded payment by Mr Ramji and his partners of sums
totalling £1,158,285.80 in respect of principal, interest and charges to that
date. Such sums were not paid.
By deed of appointment dated 9 March 1992, the
bank appointed Mr
Law of Property Act 1925 sections 101 and 109 and the powers contained in the
legal charges.
Pursuant to section 109, and clause 4.3 of the
legal charges, Mr
Ramji, the chargor (and not of the bank, the chargee) and Mr Ramji was to be
solely responsible for the receiver’s acts, defaults and remuneration.
Mr Adams, as receiver, continued the trading of
the hotel, no doubt with a view to ultimate sale. On 23 February 1993 Mr Adams
gave written instructions to ‘Nolan Associates’ to act as management agent for
the properties for a consideration of £275 per week. It appears that by
February 1994 the weekly management fee had been reduced to £250 per week, as
shown by invoices submitted by ‘Nolan Associates Ltd’ dated 14 February, 6
April and 3 May 1994. It is not clear to me whether Mr Adams appointed Mr
Nolan, trading as Nolan Associates, or the company of that name, but, for the
purposes of this judgment, it seems not to be material. The primary person
whose services Mr Adams wished to secure was Mr Nolan himself.
On 13 May 1993 Mr Ramji wrote to Mr Adams
confirming that Mr
manage and operate the Brompton Hotel, and Mr Adams’ powers to manage and
operate were specified in a schedule attached to the letter. Such powers were
of a general nature, relating to the non-charged assets of the two properties,
the hotel business carried on in number 30 Old Brompton Road and the realisation
of the two properties, using the name of any of Mr Ramji and his partners. By
October 1993 a Mr John McKerchar had become the manager of the hotel, appointed
apparently by Mr
Mehta, the plaintiff, approached Mr McKerchar with a view to taking a room in
the hotel. It appears that there were two relevant conversations between Mr
Mehta and Mr McKerchar. The first was on about 25
what Mr Mehta wanted was discussed, but Mr McKerchar indicated that he would
have to seek authority from Mr
29 October 1993, in which agreement was reached orally, Mr McKerchar having
obtained the necessary authority. The agreement was an oral one, not evidenced
in writing. I have heard only the evidence of Mr Mehta. Mr McKerchar has not
been called as a witness. The only documents which throw any helpful light on
what was agreed in October 1993 are the invoices from the hotel to Mr Mehta and
a few documents in the period immediately before the unfortunate events of 6
May 1994 to which I will refer later.
I have no doubt that Mr Mehta tried to give me, in
his evidence, a full and honest account of what was said and agreed in October
1993. However, I have some concern that, in the intervening five years, much of
which have been occupied by legal proceedings relating to his eviction from 30
Old Brompton Road, his memory of October 1993 may have become to some degree
inaccurate. For example, his evidence was that from the outset payment of £450
per month was agreed; but the invoices relating to the month of November 1993
show that he was charged and paid £500, and the rate of £450 per month applied
from December 1993. Also, his evidence was that he was not charged VAT, but the
great majority of the invoices record that the sums he paid were inclusive of
VAT.
However, despite these discrepancies, I am
satisfied that, in fundamentals, Mr Mehta’s account was a true one.
Mr McKerchar told Mr Mehta that the bank was the mortgagee
in possession of the hotel, that Mr Adams had been appointed as a receiver of
the hotel, which was in due course to be sold, and, in the first conversation,
that he needed the bank’s and Mr Adams’ consent to the proposed agreement with
Mr Mehta. In the second conversation Mr
consents had been given. Mr Mehta told Mr McKerchar that he was a Londoner,
resident in London and not a visitor, and that he needed accommodation, not
short-term as a hotel
of the hotel and Mr Mehta was the following:
1. Mr Mehta was to have exclusive possession for
his sole use of room number 418 on the top floor of the hotel ‘on a long-term
basis’.
2. The room being en suite, Mr Mehta would share
no facilities with occupants of other rooms, except the common parts of the
hotel for access to his room.
3. Mr Mehta was to pay a monthly rent, to be paid
in part by deposits or instalments of £100 or £150 per week, the balance to be
paid at the end of each month.
4. The initial rent was £500 per month but after
one month (November 1993) this was reduced by agreement to £450.
5. The hotel’s two part-time maids were to clean
the room. Mr
fortnight. For these limited services no extra charge was to be made.
What was then agreed with Mr Mehta continued to be
performed on both sides down to 6 May 1994, a period of just over six months.
The first issue that this court has to decide is
what was the status of Mr Mehta’s occupation of room 418.
As a litigant in
person, though one with some experience in that capacity, Mr Mehta had no
little difficulty in presenting coherent submissions on this and other issues.
He referred to the decision of the House of Lords in Street v Mountford
[1985] AC 809*. In that case the question considered was whether an agreement
granting the occupier the right to occupy two rooms for a weekly payment
subject to termination by 14 days’ notice, which agreement was entitled
‘licence agreement’ and contained a declaration by the occupier that she
understood that the licence did not give her a tenancy protected under the Rent
Acts, was a tenancy or some lesser right of occupation. The House of Lords held
that this was a tenancy, the tenant having been granted occupation for a term
at a rent with exclusive possession, the landlord providing neither attendants
nor services. Lord Templeman, in the only speech, distinguished the position of
a ‘lodger’, where, although the occupant has exclusive enjoyment of the
premises, the landlord provides attendance or services requiring the landlord
or his employees to exercise unrestricted access to and use of the premises:
pp817H‑818F.
*Editor’s note: Also reported at (1985) 1 EGLR
128; [1985] 274 EG 821
Lord Templeman pointed out that both a tenant and
a lodger may have exclusive possession, and exclusive possession by itself may
not be a sufficient indicium of a tenancy.
Mr Mehta pointed to the exclusive possession he
was given of room 418 and to the limited nature of the services provided by the
hotel. His case was that exclusive possession, coupled with a monthly rent and
the express reference to a ‘long-term basis’, showed that a tenancy was
intended and granted, the tenancy being, accordingly, an assured tenancy within
section 1 of the Housing Act 1988 (which I will call the 1988 Act).
He would, if he had been able, have referred also
to later passages in the speech of Lord Templeman in Street v Mountford.
At p825C Lord Templeman said:
But in my opinion, in order to ascertain the
nature and quality of the occupancy and to see whether the occupier has or has
not a stake in the room or any permission for himself personally to occupy, the
court must decide whether on its true construction the agreement confers on the
occupier exclusive possession. If exclusive possession at a rent for a term
does not constitute a tenancy then the distinction between a contractual
tenancy and a contractual licence of land becomes wholly unidentifiable.
Again at p826E-F Lord Templeman said:
But in addition to the hallmark of exclusive
occupation of residential accommodation there were the hallmarks of weekly
payments for a periodical term. Unless these three hallmarks are decisive, it
really becomes impossible to distinguish a contractual tenancy from a
contractual licence save by reference to the professed intention of the parties
or by the judge awarding marks for drafting.
In the present case these ‘three hallmarks’ were
present:
(1) Mr Mehta had exclusive possession;
(2) there were monthly payments; and
(3) there was a periodical term.
In addition, reference could be made to these
other factors:
(4) this was a room in a hotel, (though, as Mr
Mehta pointed out, a hotel being run in what was still recognisably built as a
house);
(5) the room was let as a furnished room;
(6) the limited services of cleaning and
fortnightly bedsheet changing which Mr Mehta rightly described as ‘almost
minimal’;
(7) it was known to both parties that the hotel
was in the hands of a receiver and presumably to be sold as a going concern, if
possible;
(8) it was known to both parties that Mr Mehta
wanted long-term possession of the room;
(9) the agreement was clearly on a special basis
expressly distinguished by the parties from the ordinary arrangements for a
hotel room;
(10)
in the West London County Court in May 1994 by counsel and solicitors, the
pleading was based on a ‘licence’, not a tenancy (but Mr Mehta told me that
this was contrary to his instructions and corrected by him subsequently by
amendment) and the interim injunction was discharged on the ground that a
licence was not binding on the purchaser on the hotel with notice following dicta
of the Court of Appeal in Ashburn Anstalt v Arnold (No
[1989] Ch 1*;
Editor’s note: Also reported at [1988] 1 EGLR 64;
[1988] 23 EG 128
(11) when Mr Mehta’s claims based on his eviction
were struck out on other occasions at first instance or by the Court of Appeal
it was assumed by the courts that he had no more than a licence;
(12)
requirements of the local authority for long-term letting on the footing that
the hotel did not have established user, but, as already indicated, I do not
accept that the user was not established, or that there were any relevant local
authority requirements;
(13) in documents prepared shortly before Mr Mehta
was evicted the following descriptions were used:
(a) in a handwritten fax dated 28
from the manager appointed by the purchaser Reedfax Ltd, Mr David Cecil, to
Mr
the week commencing 1 May 1994, Mr Mehta was described as ‘resident’;
(b) in a fax of the same date from the purchaser’s
solicitors to Mr
document (a) whether Mr Mehta was ‘resident’;
(c) in a fax dated May 1994 from the purchaser’s
solicitors to Mr
For example, this Mr Mehta whom your clients, in
the first instance, said was a resident. This tied in with what our client was
advised that someone had been living there for 9 months. This is obviously of
great importance to our client who may be landed with a character with some
security of tenure… One further point: surely it must be extremely easy for
your clients to clarify and, indeed, set our client’s mind at rest regarding
this supposed long term guest…
(d) in a fax dated 5 May 1994 from the purchaser’s
solicitors to Mr
There are two residents in the hotel: a Mr Mehta
occupying a small room at the top of the building. Apparently he has been there
for about nine months and he pays £450 a month. The other occupant [etc]…
(e) in a second fax dated 5 May 1994 from the
purchaser’s solicitors to Mr Adams’ solicitors, they stated (inter alia):
It was agreed that we would complete tomorrow
upon receiving confirmation from yourselves that the two long term guests have
vacated. Regarding the two long term guests, we further understand they will be
given the opportunity to return to the hotel if they wish to do so.
These documents were relied on by Mr Mehta as
evidencing what he had agreed orally with Mr McKerchar. In my judgment, the
question
is not an easy one to answer and the approach of the House of Lords in Street
v Mountford is not easy to apply in circumstances such as these. I have
taken some time to consider what is the correct answer to this question, though
in the end I have reached a clear conclusion, that what was agreed between Mr
Mehta and Mr McKerchar was a contractual licence and not a tenancy.
In reaching this conclusion, I might be considered
to be going contrary to Lord Templeman’s view that the three hallmarks to which
he referred are decisive in favour of a tenancy (see the passages from [1985]
AC 809 at p825 and p826 already cited). In my judgment, the observations in Street
v Mountford were directed primarily to a case in which the three
hallmarks were the factors of overriding importance and in which the landlord
had deliberately set out to try to exclude Rent Act protection for the tenant.
Those observations cannot be applied indiscriminately, and particularly not in
a case in which there are other, equally significant factors to be taken into
account in addition to the ‘three hallmarks’. Having regard to all the factors
I have enumerated, I am satisfied that this is a case to be distinguished from Street
v Mountford on its facts. Like Lord Templeman, I have concerns as to how
contractual tenancies and contractual licences are, in general, to be
distinguished, but, in my judgment, there is no simple, all-embracing test for
such a distinction. The search for such a test would be a search for a
chimaera. What each court, faced with the need to make the distinction, has to
do is to weigh all the relevant and significant factors and to decide in the
light of them on which side of the line the particular case falls. This case
falls on the contractual licence side of the line. I have referred to a number
of other authorities and in particular to the decisions of the Court of Appeal
in Abbeyfield (Harpenden) Society Ltd v Woods [1968] 1 WLR 374, Luganda
v Service Hotels Ltd [1969] 2 Ch 209 and Marchant v Charters
[1977] 1 WLR 1181* (the first and third of which were considered by Lord
Templeman in Street v Mountford at pp823-825), which, though
distinguishable on their facts, support the conclusion that I have reached.
Editor’s note: Also reported at [1977] 1 EGLR 44;
(1977) 241 EG 23
It is necessary for this court to decide what
length of notice was required to determine the licence. Statute imposed a
minimum period. Section 5 of the Protection from Eviction Act 1977 (the 1977
Act) (as amended by the 1988 Act, section 32) imposed by subsection (1A)
certain restrictions on the right to determine a periodic licence to occupy
premises as a dwelling, namely: (1) the notice to quit had to be in writing;
(2) the notice had to contain the information prescribed by the Notices to
Quit, etc (Prescribed Information) Regulations 1988, SI 1988/2201; and (3) the
notice had to be given not less than four weeks before the date on which it was
to take effect. (The licence was not an excluded licence for the purposes of
section 5(1)(b) of the 1977 Act).
Mr Brunner argued that, given that the agreement
was for a licence on the basis of monthly payments, one month’s notice would
have been sufficient. Mr Mehta argued that, given the agreement was to be on a
‘long-term’ basis, whether it was a tenancy or a licence, he was entitled to a
term of three to five years; or, alternatively, if it was a licence, at the
very least to notice of three to six months.
In my judgment, it
would not be consistent with the agreement that Mr Mehta was to occupy the room
on a long-term basis to hold that either he or the hotel could merely give a
month’s notice to quit. If the long-term basis for the agreement were to be
qualified in this way, that would have to have been spelt out as part of the
express terms of the agreement. As stated in Chitty on Contracts 28th
ed, para 13-019, where a contract contains no express provision for its
termination but was clearly to be capable of being terminated, ‘the question is
not one of construction in the narrow sense of putting a meaning on language
the parties have used, but in the wider sense of ascertaining, in the light of
all the admissible evidence and in the light of what the parties have said or
omitted to say in the agreement what the common intention of the parties was in
the relevant respect where they entered into the agreement’. This is a
quotation from Buckley J in Re Spenborough Urban District Council’s
Agreement [1968] Ch 139. See also per Lord Uthwatt in Winter
Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC
173 at pp198-199 and Australian Blue Metal Ltd v Hughes [1963] AC
74 from NSW Supreme Court at pp98-99.
This agreement was clearly one intended to be
terminable by either party on reasonable notice. What length of notice would
have been reasonable must be determined with regard to the facts existing at
the time when the notice was given, having regard to all the then relevant
circumstances: Martin-Baker Aircraft Co Ltd v Canadian Flight
Equipment Ltd [1955] 2 QB 556 per McNair J at p581.
Though I am doubtful, in the present case, whether
it makes any difference whether the required length of notice is determined at
the date of the contract or the date of the actual notice to terminate, I will
return to this question after taking the history down to 6 May 1994.
In December 1993, following what was, in effect, a
cry for mercy from Mr Ramji and his partners to the bank, the bank and the then
partners (Mr Ramji, Mr Akbarali, Mr Sumer and Yellow Hammer Ltd) agreed by a
countersigned letter of 15 December 1993 that: (1) the bank would accept £100,000
in full and final settlement of the outstanding liabilities following sale of
the hotel provided that the total of £100,000 was paid over a period of six
years by the instalment specified in the letter; but (2) the bank reserved its
full rights to look to the partners for full repayment of the outstanding
borrowing after sale of the hotel if any of the specified instalments was not
paid in full and on the due date.
In early 1994 a potential purchaser of the hotel,
Reedfax Ltd, came into sight. This was an off-the-shelf company, then
controlled by Mr
instructions of the bank, Mr Adams, as receiver, acting expressly on behalf of
Mr Ramji as his principal, entered into a contract to sell the hotel as a going
concern (and the flat in 32 Old Brompton Road) to Reedfax for £800,000.
On 7 April 1994 the then shareholders in Reedfax
sold their shares by an agreement of that date to Mr Corrett and Mr Andrew
Reid, a solicitor and partner in the firm of Reid Minty. Mr Corrett and Mr Reid
agreed to ensure that Reedfax had sufficient funds to complete the contract
with Mr Ramji for the purchase of the hotel and the other property, to pay
£30,000 for the Reedfax shares, and to provide £40,000 to replace a loan to
Reedfax by the vendors of the shares.
It appears to have been the intention to complete
the sale of the hotel on 29 April 1994 to Reedfax, now controlled by Mr Corrett
and Mr
subsequently changed to 6 May 1994. On that date (29 April) the bank discharged
its registered charges over the hotel and the flat in number 32 Old Brompton
Road, leaving Mr Ramji as the registered proprietor of the properties with
unencumbered title.
Mr Brunner for Mr Ramji relies on the settlement
agreement of 15
basis for an argument that on 6 May 1994, when Mr Mehta was evicted, it was the
bank on whose behalf Mr Adams and Mr Nolan were acting and not Mr Ramji. This
argument is, in my judgment, misconceived. The settlement was of the outstanding
liabilities to the bank of Mr Ramji and his partners after the sale of the
hotel. Naturally, the bank released the charges on 29 April 1994 (with the
intention, in the event not fulfilled, that this would be contemporaneous with
completion of the sale to Reedfax) so that the sale could be completed (since,
without release, the properties would have remained encumbered and completion
could not be achieved). But Mr Ramji remained the owner of the properties, and
Mr Adams, as receiver, continued to act for Mr Ramji until completion so as to
ensure that the properties were duly sold to Reedfax and the net proceeds of
sale transmitted to the bank in reduction of the pre-sale liabilities to the
bank of Mr Ramji and his partners.
The settlement and the discharge of the charges
afford Mr Ramji no defence to Mr Mehta’s claims. Apparently, Mr Ramji also
contends that he has a claim over against the bank. That may well be so, but
such a claim over cannot affect the position of Mr Mehta as against Mr Ramji,
and, in any event, is not before this court in the form of third party
proceedings.
During the period from 28 April to 5 May 1994
there were the communications between Reedfax’s solicitors and Mr Adams’
solicitors, to which I have already referred, and in which the special position
of Mr Mehta was mentioned, using words or phrases including ‘resident’ and
‘long-term guest’, and indicating at least a fear that he might have ‘some
security of tenure’. It appears from the correspondence that consideration of
Mr Mehta’s position from 28
of the hotel sale to be put off from 29 April to 5 May and again to 6 May 1994.
On 5 May 1994, by Reedfax’s solicitors’ first
letter to Mr Adams’ solicitors, it was indicated that both parties were aiming
for completion the next day, but that the preconditions included removal of Mr
Mehta, and, in their second letter, Reedfax’s solicitors recorded agreement for
completion on 6 May ‘upon receiving confirmation from yourselves that the two long-term
guests have vacated’.
Mr Mehta’s evidence concerning 5 May 1994 was that
he was told by Mr John McKerchar that completion was to take place and that
Reedfax were taking over operation of the hotel. Mr McKerchar was at the hotel
desk from about 7am to 2.30 to 3pm and then left, his employment having
apparently ceased. At about 2pm on 5 May 1994 Mr Mehta met Mr Adams and Mr
Nolan.
He was told by Mr Nolan that he would have to
leave the hotel the next day. If he wanted to continue to occupy a room in the
hotel he would have to sign a new contract and pay £40 per day. Mr Mehta
refused to accept this, maintaining that he occupied room 418 on a long-term
basis.
On 6 May 1994 Mr Cecil, the new manager engaged by
Reedfax, was at the hotel desk from 7am, and also Mr Nolan and Mr Corrett. Just
after 10am Mr Mehta was leaving the hotel. He saw Mr Adams who told him that
Reedfax required him to leave the hotel, and that Mr
seeking legal advice concerning Mr Mehta’s position, and would talk further with
Mr Mehta when he returned about noon. Mr Mehta then went out of the hotel.
Mr Adams’ own note dated 9 May 1994 of the events
on 6 May indicates that he then told Mr Nolan that he would hold Mr Nolan
liable if completion did not take place that day. Mr Mehta’s evidence was that
Mr Adams and Mr Nolan were both responsible for removing Mr
belongings from room 418 and placing them on the staircase leading to the
hotel. This is what Mr Mehta found when he returned to the hotel at about noon
on 6 May 1994. Mr Nolan then told Mr Mehta that he could not go to room 418,
and that, although Mr
been changed. Mr Mehta was told to go no further than the hotel reception area.
Mr
they arrived, declined to assist Mr Mehta.
Mr Mehta went round to the offices of the local
authority, where he saw Ms Jennifer Hunt of the Tenancy Relations Service, part
of the Legal Services Department of Kensington and Chelsea Royal London Borough
Council. She advised Mr Mehta that: (1) he was protected against eviction by
the 1977 Act; (2) at least 28 days’ notice in proper form had to be given; (3)
after expiry of the notice he could not be evicted unless the landlord had
first obtained a possession order from the court; and (4) if the landlord
wrongfully evicted Mr Mehta, the local authority could bring criminal
proceedings against the landlord.
Miss Hunt rang the hotel and gave the manager the
gist of her advice. Mr Mehta, in his evidence, said that the manager was
Mr
Mr
May 1994. It seems probable that Miss Hunt spoke to Mr Cecil. The manager said
that he could not himself take the decision to readmit Mr
need to obtain higher authority.
Completion of the sale to Reedfax took place
during the afternoon of 6 May 1994. It appears that after completion Mr Nolan
continued to act on behalf of Reedfax (and no longer for Mr Adams) and
continued to play a major role in preventing Mr Mehta’s return to the hotel.
At about 2.45pm Miss Hunt spoke on the phone with
Ms Susan Mitchell, Mr Adams’ assistant, and again conveyed the gist of
Ms
other solicitors, one of whom, Mr Reid, was on the premises when Mr
was evicted about noon, took the view that Mr Mehta had no right to stay in the
hotel. It appears that Ms Hunt told Ms Mitchell to seek further advice, and
that Ms Mitchell agreed to ring back once she had done this.
Mr Mehta waited until 4.15pm at the local
authority’s offices, but Ms Mitchell failed to ring back. Ms Hunt then arranged
for the police and Mr Mehta to attend the hotel at 4.45pm. For this purpose, Ms
Hunt gave Mr Mehta a letter from her setting out her advice as to the legal
position, which Mr Mehta was to show to the hotel staff and the police in
confirmation of his position. This Mr Mehta did. He was not allowed into the
hotel but the policemen were and they talked to Mr Nolan. They then told Mr
Mehta not to re-enter the hotel and to seek enforcement of his civil rights, if
any.
It is a matter for regret that the police failed
to have regard to the legal position correctly set out in the letter from Ms
Hunt, a responsible officer of the local authority, and condoned by their
inaction what was, in my judgment, a blatant commission of a criminal offence
under the 1977 Act, which was committed in order to profit from being able to
give vacant possession on completion of the sale.
At that stage, Mr Mehta’s belongings had been
moved outside the main entrance to 30 Old Brompton Road and the policemen told
him to remove his belongings, otherwise they would be stolen.
Mr Mehta went to a call box and rang New Scotland
Yard. They agreed to send further police officers to look into the matter.
Mr Mehta returned to the hotel at about 5.45pm. By
then his belongings had been moved to the street pavement. He was again refused
entry. Police officers came from New Scotland Yard and told Mr Mehta that it
was for the local police in Kensington to investigate the matter. Mr Mehta went
to the police station, arranged for further police to come to the hotel and
went back to the hotel. At about 7.30 to 7.45pm policemen came again and told
Mr Mehta that Mr Nolan and Mr Corrett refused to admit him to the hotel, that
the police could not assist him, and that he must pursue his civil rights.
This was repeated again with a further visit by
the police and the same response at about 9.45 to 10pm, when Mr Nolan again
refused entry to the hotel.
Mr Mehta collected his belongings, took them by
taxi to Victoria Station, left them in the left luggage office, and (clearly in
great distress of mind) spent the rest of the night in the station.
On Saturday and Sunday 7 and 8 May 1994 Mr Mehta
stayed in a hotel in Paddington. On Monday 9 May 1994, with the help of
Ms
sought on notice to Reedfax and obtained from West London County Court,
ordering the restoration of Mr Mehta to his room in the hotel with a return
date of 13 May 1994. Mr Mehta was readmitted to the hotel, and, after an
initial refusal by Mr Corrett, was readmitted to room 418. As I have said, the
relief was granted by the court on the basis of a pleading in which a licence,
not a tenancy, was alleged. On 13 May 1994 the injunction was discharged on the
ground that Mr Mehta’s licence was not binding on Reedfax as purchaser of the
property with notice. Mr Mehta was given seven days to leave the hotel and
left, finally, on 20 May 1994.
It seems not to have been appreciated by the
county court that, in any event, Mr Mehta’s occupation could not be ended except
by taking the steps laid down in the 1977 Act.
I have set out the events of 5 to 20 May 1994 at
some length, because the manner of the eviction and its effect on Mr Mehta are
relevant when I come to consider what damages Mr Mehta is entitled to recover.
His evidence was that he was devastated by the eviction, he suffered
considerable inconvenience and hardship, and he was considerably affected in
his mind.
I am satisfied that Mr Mehta did not exaggerate
the effect of his unlawful eviction in his evidence. After leaving the hotel on
20 May 1994 he had to move into a room in Battersea which was subsequently
declared unfit for habitation, with an outside lavatory.
It is plain that the eviction of Mr Mehta was
carried out in order to enable completion of the sale of the hotel to Reedfax
to take place, and
1994: (1) completion would not have taken place that day; (2)
would in any event have been delayed; and (3) the sale to Reedfax might
ultimately have fallen through. The documents before me show that Mr Reid and
Mr Corrett, as the new owners of Reedfax, would not have proceeded to
completion unless and until Mr Mehta had been removed from his room.
It follows that Mr Ramji, Mr Adams and Mr Nolan
each profited substantially by the eviction: Mr Ramji, because sale of the
hotel was a condition of his and his partners’ settlement with the bank, and
receipt of the proceeds of sale of £800,000 by the bank was an essential part of
that settlement; Mr Adams, because, as receiver, he had failed to take any
timeous steps to resolve Mr Mehta’s position and, if necessary, to take
proceedings against Mr Mehta to secure possession, and if completion was unduly
delayed or the sale went off, he would not be paid his substantial fees as
receiver, and might be at risk of claims for damages at the suit of Mr Ramji
and the bank; and Mr Nolan, for reasons substantially the same as those I have
set out in relation to Mr
I now turn to the causes of action relied on. Mr
Mehta’s much-amended statement of claim is not a model of clarity but from it I
deduce the following alleged causes of action:
Mr Ramji:
(1) the statutory tort provided for in section 27
of the 1988 Act and the statutory damages for that tort;
(2) trespass; and
(3) breach of the contractual licence. In respect
of the statutory tort, it appears that only the statutory damages can be
recovered. In respect of (2) and (3) Mr
aggravated and exemplary damages.
Mr Adams:
(4) trespass;
(5) conspiracy to injure as between Mr
and Mr Corrett;
(6) negligence; and
(7) breach of the contractual licence or wrongful interference
with Mr Mehta’s rights under the licence.
In respect of (4), (5), (6) and (7) Mr Mehta
appears to claim ordinary, aggravated and exemplary damages, including a claim
for damages measured by the loss of the opportunity to buy the Brompton Hotel
for £800,000.
Mr Mehta also seeks to claim on the basis of the
statutory tort, treating Mr Adams as the landlord. The statutory tort lies only
against the landlord, and not against his employees or agents, and Mr Adams was
merely an agent of the landlord.
Mr Nolan:
(8) trespass;
(9) conspiracy to injure;
(10) negligence; and
(11) wrongful interference with Mr Mehta’s rights
under the contractual licence.
In respect of (8) to (11) Mr Mehta appears to
claim ordinary, aggravated and exemplary damages, as against Mr Adams.
Mr Ramji: statutory
tort
Section 27 of the 1988 Act imposes on landlords
liability in damages for a statutory wrong in the nature of a liability in
tort. I consider the statutory requirements and exclusions in turn.
1. There must be a residential occupier of
premises defined in section 1 of the 1977 Act as meaning (inter alios):
‘a person occupying the premises as a resident whether under a contract… giving
him the right to remain in occupation or restricting the right of any other
person to recover possession of the premises’. Mr Mehta was the residential
occupier of room 418 of the hotel by virtue of the contractual licence agreed
with Mr McKerchar.
2. There must be a ‘landlord in default’, or a
person acting on behalf of the landlord in default, who ‘unlawfully deprives
the residential occupier of any premises of his occupation of… the premises’
(or does one of the acts prohibited by section 27(2) of the 1988 Act). As I
have held, Mr Ramji was the landlord on 6 May 1994 until completion of the
sale. Those who deprived Mr Mehta of his occupation of room 418 (Mr
and Mr Nolan) were acting on behalf of Mr Ramji, and Mr
Mr Mehta in respect of their acts carried out within the scope of their
authority: see Kerr on Receivers and Administrators, 17th ed (1989),
p378, Bowstead & Reynolds on Agency, 16th ed (1996), pp518-519. Mr
Ramji was ‘the landlord in default’ for the purposes of section 27, and the
deprivation was carried out unlawfully on his behalf.
3. Subject to section 27(4)-(8), Mr Ramji, as ‘the
landlord in default’, is liable to pay to Mr Mehta, as ‘the former residential
occupier’, in respect of Mr Mehta’s loss of the right to occupy room 418 as his
residence, damages assessed on the basis set out in section 28 (see section
27(3)).
4. The liability under section 27(3) is in
addition to any tortious or contractual liability, but Mr Mehta cannot recover
damages twice in respect of the same loss (section 27(4) and (5)).
5. There is no liability on the landlord’s part
if, before the date on which proceedings to enforce the liability are finally
disposed of, ‘the former residential occupier is reinstated in the premises in
question in such circumstances that he becomes again the residential occupier
of them’, or the court orders his reinstatement in such circumstances: section
27(6). As I have already indicated, an interim injunction was granted on 9 May
1994 restoring Mr Mehta to room 418. That injunction was discharged on 13 May
1994 (because the licence was not binding on Reedfax as the purchaser) and Mr
Mehta was forced to leave on 20 May 1994. In my judgment, these circumstances
do not come within section 27(6). Mr Mehta was not reinstated in room 418 so
that he became again ‘the residential occupier’ of room 418. The interim
injunction granted on 9 May 1994 gave him no more than temporary occupation
until the return date of 13 May 1994, and the discharge of that injunction on
13 May 1994 resulted in him again having no more than temporary occupation
until he was forced to leave on 20 May 1994. He was not even given the benefit
of the protection of the 1977 Act.
6. There are no grounds for reducing the damages
under section 27(7).
7. No defence was raised under section 27(8). In
my judgment, therefore, Mr Mehta is entitled to the statutory damages against
Mr
basis for the assessment of these damages is set out in section 28(1) and is:
the difference in value, determined at the time
immediately before the residential occupier ceased to occupy the premises in
question as his residence, between —
(a) the value of the interest of the landlord in
default [ie his interest in the hotel and its curtilages: section 28(2)]
determined on the assumption that the residential occupier continues to have
the same authority to occupy the premises as before that time; and
(b) the value of that interest determined on the
assumption that the residential occupier has ceased to have that right.
For the purposes of these valuations it is to be
assumed (section 28(2)), inter alia:
(a) that the landlord in default is selling his
interest on the open market to a willing buyer;
At this point it is necessary to complete my
consideration of the length of notice required for the termination of Mr
Mehta’s contractual licence of room 418. For the reasons already expressed, I
am satisfied that the parties’ intention was not that the licence should be
terminable on one month’s notice: that would be entirely inconsistent with the
agreed ‘long-term’ basis. I consider the reasonable notice to terminate, in all
the circumstances I have described, would lie between three and six months. The
assessment as to where, within that bracket, a reasonable period lies is a
difficult one. Having regard to all the circumstances I have described, I
consider that four months’ notice represented the reasonable period of notice
for either party to give.
Before turning to the rival expert valuations,
there is one point of importance arising on the application of section 28(1) of
the 1988 Act.
premises, the value of his interest will be assessed on the basis that he could
give a four-month notice to quit and then have the room no longer occupied by
Mr Mehta and with vacant possession. The difference between that value, and the
value with Mr Mehta having ceased to occupy, could relatively easily be
assessed.
But that was not the position in this case. Mr Ramji
wanted very much to sell the hotel. His agents (Mr Adams and Mr Nolan) had
failed to consider the position of Mr Mehta, to take careful legal advice and
to give an appropriate notice to quit. Instead, when faced on 5 May 1994 with
the prospect of completion due the next day, and of completion being postponed
or the sale falling through unless Mr Mehta was removed, Mr Ramji, through Mr
Adams and Mr Nolan, and Mr Adams and Mr Nolan on their own account, found
themselves in a distinctly awkward position.
The question is whether, in valuing Mr Ramji’s
interest with Mr
made on a purely hypothetical basis, or to be made having regard to the actual
circumstances in which the landlord, through his agents, and the agents
themselves were desperate to remove Mr Mehta, and substantially to profit from
his removal. It seems to me clear that the purposes aimed at by including
sections 27 and 28 in the 1988 Act were:
1. to give evicted occupiers ‘compensation based
on the financial gain to the landlord of securing vacant possession of his
property’; and
2. to provide ‘a very powerful deterrent to
landlords who have always been tempted to realise substantial profits by
driving out their tenants [Licensees were also added by the 1988 Act] by
harassment or illegal eviction’.
I quote from the speech of the Secretary of State
for the Environment on second reading in the House of Commons, setting out the
mischief intended to be remedied (123 House of Commons Official Report 624, 30
November 1987, quoted in Halsbury’s Statutes, vol 23, 4th ed, 1997
reissue, pp481-482).
In my judgment, the valuation must be based on the
actual position of the landlord if the actual financial gain to the landlord is
to be assessed under section 28.
Mr Mehta called as an expert witness Mr David
Dowson. He was for many years a Fellow of the Royal Institute of Chartered
Surveyors, and involved as a professional surveyor in valuation work in west
and south‑west London, though by the time of the trial he had retired
from the Royal Institute. His experience was considerable and relevant, and he
was quite an impressive witness. However, his report (though to a lesser extent
than the expert called for Mr Ramji) involved speculation as to the legal status
of Mr Mehta’s occupancy, and much argument as to the elements in the
valuations. I was, therefore, able to place only a limited reliance on the
figures that he put forward.
Mr Ramji called as an expert witness Mr Simon
Scott-Barrett, also a Fellow of the Royal Institute of Chartered Surveyors and
a partner in Cluttons Daniel Smith since 1985. He also had considerable
relevant experience. Unfortunately, he and those instructing him were not aware
of the proper function of an expert witness. In his written report, he thought
it appropriate to include conclusions and opinions as to Mr
status in the hotel, which were out of place and anyway not within his
expertise, since he is not a qualified lawyer. He seemed to imagine that it is
a proper function of an expert witness to act generally as a supernumerary
advocate in the client’s cause. It is somewhat surprising that in November 1998
lawyers and surveyors should remain in ignorance of the true functions of
expert witnesses, which are clearly summarised in the Supreme Court Practice
1999 at paras 38/4/2 and 3 and by Cresswell J in the ‘The Ikarian Reefer’:
National Justice Compania Naviera SA v Prudential Assurance Co
[1993] 2 Lloyd’s Rep 68; [1993] FSR 563*; (the observations on expert witnesses
were not disturbed by that Court of Appeal when reversing that decision on the
facts: [1995] 1 Lloyd’s Rep 455, CA), since the trial by Otton LJ in Stanton
v Callaghan [1998] 4 All ER 961†, in the Access to Justice report
of Lord Woolf in chapter 13 (and by me sitting as a deputy judge of the High
Court in Burroughs Day v Bristol City Council* (1996), reported
in Arbitration: Journal of the Chartered Institute of Arbitrators, vol
62, no 3 supplement August 1996 at pp68-69). Therefore, I was not able to place
any firm reliance on Mr Scott-Barrett’s opinions, though I have taken full
account of his evidence, both oral and written.
*Editors’ note: Also reported at [1993] 2 EGLR
183; [1993] 37 EG 158
†Editor’s note: Also reported at [1998] 3 EGLR
165
‡Editor’s note: Also reported at [1996] 1 EGLR
167; [1996] 19 EG 126
The hotel (with its tenants on the ground and
basement floors), as well as the flat in 32 Old Brompton Road, were agreed to
be sold to Reedfax in January 1994 for £800,000. In February 1994 Reedfax
advertised these properties for sale at £1.1m. In May 1995 the properties were
resold by Reedfax for £860,000.
It appears from clause 20.1 of the agreement for
sale to Reedfax of 12 January 1994 (which provided for consultation with
Reedfax if ‘a customer of the premises wishes to enter in advance to a
reservation of more than one week’) that the price of £800,000 was agreed on
the footing that there would not be a residential occupier such as Mr Mehta in
the hotel. It appears that the resale price of £860,000 was agreed on the same
footing.
Reference was made to two earlier valuations:
(1) a valuation for the bank by Bernard Thorpe
dated 11 November 1991, in which it valued these properties at £1.05m on a
forced sale basis with vacant possession, and at £1.2m as ‘the open market
value for loan purposes on the basis of a sale within six months’; and
(2) a valuation for Mr Adams as receiver by Edward
Symmons & Partners dated 30 November 1992, in which it questioned whether
the hotel had established user for planning purposes, and gave these values:
£850,000 as the current open market value with established user; £700,000 as
the present open market value for conversion as flats in the absence of
established user or planning consent for use as a hotel; but recommended the
invitation of offers at around £1.25m.
I have some difficulty in placing any real weight
on either of these two valuations, because I have received from the experts who
gave evidence before me little help as to the relative state of the hotel
market at November 1991, March 1992 (or indeed November 1992), January and
February 1994, and March 1995, or as to the decorative and other state of the
hotel as between these dates, except that Mr Dowson gave evidence that when he
stayed in the hotel in March 1995 the state of the hotel was poor, and
presumably had declined over a period before that date.
Mr Dowson’s valuations were: (a) £800,000 with Mr
Mehta resident at the hotel; and (b) £975,000 with Mr Mehta having been
removed. His valuation (a) was based on the assumption that Reedfax, when
agreeing in January 1994 to pay this amount, knew of Mr Mehta’s rights of
occupancy; that assumption was incorrect, as I have already observed. His
valuation (b) appears to have been based to no small extent on the
advertisement in February 1994, and was not based on an inspection of the
property by Mr Dowson. Since both of his valuations were not soundly based, I
cannot give weight to his assessment of the statutory damages at £175,000.
Mr Scott-Barrett correctly criticised Mr Dowson’s
valuation on similar grounds. He rejected any question of the statutory damages
being recoverable, stating as a matter of law that Mr Mehta was not a ‘residential
occupier’. However, in his para 42 he did state:
If I am wrong in stating that section 28 has no
relevance then I would assess the difference in value between Mr Ramji’s
interest in the hotel, subject to a licence terminable at, say, 14 days’
notice, and his interest with no such licensee present, at a nuisance value
based on the perceived cost and time of removing Mr Mehta. In the eyes of a
purchaser, this might be indicated by a range of between £5,000 and £10,000. I
believe the figure should be very much at the lower end of this range.
It is clear that Mr Scott-Barrett took too short a
required period of notice, ignored the rights under the 1977 Act, and also gave
too little weight to the time it would have taken lawfully to remove Mr Mehta.
In cross-examination, Mr Dowson suggested that one
guide to the cost to the landlord of delay in removing Mr Mehta was to take the
cost based on a commercial rate of interest on £800,000 over the relevant
period. Periods of only 7, 14 or 28 days were put to him by Mr Brunner. If one
takes a commercial rate of interest in 1994 of 12% pa and assumes a period of
up to six months before any lawful eviction could be achieved (ie four months
plus two months for delays in proceedings) this would give a figure of £48,000.
Another approach put to Mr Dowson was: (1) to take
away from £800,000 the value of the let ground and basement floors; and then
(2) to divide the remaining amount by 17 for the number of rooms in the hotel,
1/17th of the remainder giving a maximum value to be attributed to the room. Mr
Dowson correctly rejected this approach as misconceived.
However, Mr Scott-Barrett advocated this approach
in his evidence-in-chief, and arrived at a capital value for Mr Mehta’s room of
£25,000 less the rent he paid. In my judgment, this approach has no logic, and
ignores the requirement in section 28 to value the premises as a whole (not
just the part occupied by the plaintiff) on the two bases. His evidence in
cross-examination was no further assistance, except that he made clear that his
instructions on behalf of Mr Ramji were merely to comment on Mr Dowson’s
report.
With this inadequate expert evidence on both sides
I have to assess the statutory damages, if any. The value of the whole premises
without Mr Mehta was, in my judgment, £800,000. That was the offer that the
receiver accepted, and it appears that no higher offer was received. The sale
by Reedfax in March 1995 at £860,000 does not assist, since it may well be that
the market improved generally between January 1994 and March 1995.
It is more difficult to assess the value with Mr
Mehta in occupation, with his rights both statutory and contractual, as a
residential occupier. In my judgment, however, a prospective purchaser would
discount the figure of £800,000 to take account of the negative effect of an
occupier on a long-term basis. If the prospective purchaser required Mr Mehta
to be removed before the sale was completed, then taking a commercial rate of
interest on £800,000 for the period involved provides some guide to the
discount that might be required. A nuisance value assessment would also provide
some guide, although Mr Scott-Barrett’s range of £5,000 to £10,000 was based on
only a 14-day delay, which was much too short a period. If the period was four
to six months, the figure would have to be substantially higher, probably
between £40,000 and £50,000.
On the basis of all the evidence before me, I am
satisfied that, with Mr Mehta in occupation, a purchaser, if prepared to
purchase at all, would have required a substantial discount, and such a
discount would not have been less than £45,000. In my judgment, this figure of
£45,000 represents the statutory damages that Mr Mehta is entitled to recover
from Mr Ramji. He cannot recover the statutory damages from Mr
Nolan: Sampson v Wilson [1996] Ch 39 per Bingham
at pp49-50, rejecting dicta to the contrary in Jones v Miah (1992)
24 HLR 578*.
Editor’s note: Also reported at [1992] 2 EGLR 50;
[1992] 33 EG 59
Trespass
There was both trespass to land and trespass to
goods by Mr Nolan in the course of the eviction, for which Mr Adams was
responsible as the receiver who employed Mr Nolan, and for which Mr Ramji, as
the landlord for whom Mr Adams was acting, was also responsible. There was
similarly trespass by Mr Adams himself. I will consider the damages suffered by
Mr Mehta, or recoverable by him (these may give rise to different figures) by
reference to: (1) ordinary compensatory damages; (2) aggravated damages; and
(3) exemplary damages. I will, however, do so relatively briefly because: (a)
the damages in (1), (2) and (3) are unlikely in total to be as large as the
statutory damages; and (b) it seems to me as a matter of principle that all
these damages should be set off against, and not added to, the statutory
damages.
This is clear in relation to ordinary compensatory
damages. It has been so held in relation to aggravated damages: Nwokorie
v Mason (1994) 26 HLR 60; [1994] 1 EGLR 59*. The same principle must, in
my view, apply to exemplary damages: see McGregor on Damages, 16th ed
(1997) at para 1521, where this view is supported. This principle would not
apply in respect of damages awarded in relation to conduct before the eviction,
which would be treated separately (Sampson v Wilson, above, and McGregor
at para 1522) but that situation does not arise in the present case.
*Editor’s note: Also reported at [1994] 05 EG 155
In relation to damages, Mr Brunner helpfully
referred to Quiet Enjoyment, Arden and Partington’s Guide to Remedies for
Harassment and Illegal Eviction, 5th ed (1998), published by the Legal
Action Group, paras 3.54 and following, in which examples of damages awarded by
the courts are given. None of those cases is of direct assistance because each
case turns on its own facts. But they show that, in general, in the absence of
any substantial special damages, the level of compensatory damages has been
relatively low, as have been the levels of aggravated and exemplary damages.
Ordinary
compensatory damages
In assessing these I must take account of all the
circumstances I have described, including in particular: (1) the substantial
value to Mr Mehta of a room in South Kensington at £450 per month over a
four-month period at least; (2) the fact that he could find alternative
accommodation only in a building in Battersea with an outside toilet, which was
unfit for human habitation; and (3) a small element of special damages,
including two nights (7 and 8 May 1994) in another hotel, taxis and the left
luggage costs. The room in the Brompton Hotel, if occupied by the night, would
have been subject to a charge of perhaps £40 a night. Over four months this
would have cost £4,920. Mr Mehta would have paid £1,800 at the agreed rate of
£450 per month. Instead, he could obtain only inadequate alternative
accommodation some distance away at £260 per month, or over four months,
£1,020.
Damages for mental distress can be awarded where
trespass to property is the cause of action sued on. This is particularly
important in a case of wrongful eviction, and the more so where the eviction
has been carried out to enable the landlord and his agents greatly to profit
from the eviction, as was the case here. As Lawton LJ said in Drane v Evangelou
[1978] 1 WLR 455† at p461:
To deprive a man of a roof over his head in my
judgment is one of the worst torts which can be committed. It causes stress,
worry and anxiety. It brings the law into disrepute if people like the
defendant can act with impunity in the way he did.
†Editor’s note: Also reported at [1978] 1 EGLR
30; (1977) 246 EG 137
These words, spoken in the context of a judgment
concerning exemplary damages, apply equally to the present case, except that
the disgraceful conduct was not of the landlord Mr Ramji himself, but of his
agents. Mental distress may represent the largest element of compensatory
damages in cases in which suitable alternative accommodation is found
reasonably soon after the eviction. Here, the alternative accommodation was
most unsuitable and plainly the mental distress suffered by Mr Mehta continued
for some considerable time.
Having regard to all these matters, in my judgment
the correct figure for compensatory damages is £10,000.
Aggravated damages
The legal principles relating to aggravated
damages and their assessment are still relatively unclear. The prime sources of
guidance are Rookes v Barnard [1964] AC 1129 per Lord
Devlin, Thompson v Metropolitan Police Commissioner [1998] QB
498, and the Law Commission report no 247 on ‘Aggravated, Exemplary and
Restitutionary Damages‘ (September 1997). Aggravated damages may be awarded
where the conduct of the defendant has aggravated the injury done to the
plaintiff. So in Rookes v Barnard (above) at p1221 Lord Devlin
said:
Moreover, it is very well established that in
cases where the damages are at large the jury (or the judge if the award is
left to him) can take into account the
the plaintiff. There may be malevolence or spite or the manner of committing
the wrong may be such as to injure the plaintiff’s proper feelings of dignity
and pride. These are matters which the jury can take into account in assessing
the appropriate compensation. Indeed, when one examines the cases in which
large damages have been awarded for conduct of this sort, it is not at all easy
to say whether the idea of compensation or the idea of punishment has
prevailed.
Two questions arise out of this quotation from
Lord Devlin. First, whether aggravated damages can be in addition to
compensatory damages for mental distress. Second, whether aggravated damages
are to be awarded primarily as compensation for injury, or as punishment in the
same way as exemplary damages.
Later in his speech, after setting out new
guidelines for awards of exemplary damages, Lord Devlin at pp1229-1230
distinguished between aggravated and exemplary damages in a way that made
clear, in my judgment, that the prime function of aggravated damages is
compensatory not punitive.
The Law Commission in its report no 247 provides a
guide to the present law relating to aggravated damages (and exemplary
damages). The relevant preconditions to an award of aggravated damages are
stated by the Law Commission in para 2.4 as: (1) exceptional or contumelious
conduct or motive on the part of a defendant in committing the wrong; and (2)
mental distress sustained by the plaintiff as a result.
In para 2.6 the Law Commission has collected from
the decided cases, particularly Rookes v Barnard (above), Broome
v Cassell & Co Ltd [1972] AC 1027 and Thompson v Metropolitan
Police Commissioner (above), examples of the circumstances that have been
held or said to be ‘exceptional conduct’ for this purpose, including wrongful
evictions. In my judgment, the conduct of Mr Adams and Mr
behalf of Mr Ramji (which I have described above) was clearly exceptional
conduct of this kind. Equally clearly, it caused serious injury to Mr Mehta’s
feelings and mental distress. Aggravated damages can be awarded in respect of a
cause of action for trespass to land: see the cases cited by the Law
Commission, para 2.10 footnote 59. As regards the assessment of aggravated
damages, the Court of Appeal decision in Thompson v Metropolitan
Police Commissioner (above) provides the most recent and clearest guidance
and is helpfully summarised in the Law Commission report at para 2.14:
(a) Aggravated damages are appropriate where the
plaintiff would not receive sufficient compensation for the injury if the award
was restricted to ordinary compensatory damages.
(b) Usually a separate award of aggravated damages
should be made.
(c) Aggravated damages are unlikely to be as much
as twice ordinary compensatory damages ‘except perhaps where on the particular
facts the basic damages are modest’ ([1998] QB 498 at p516F).
(d) The total of ordinary compensatory and
aggravated damages should ‘not exceed… fair compensation for the injury which
the plaintiff has suffered’.
The Law Commission goes on to consider (inter
alia) the answers to the two questions that, as I have stated, arise out of
Lord Devlin’s speech in Rookes v Barnard. The Law Commission
concludes in para 2.17 that the grant of aggravated damages is more punitive
than compensatory. However, in my judgment, the Court of Appeal in Thompson
plainly regarded aggravated damages as compensation for injury to feelings or
mental distress, and as having only an incidental punitive effect on the
defendant, which has to be taken into account when deciding whether or not to
award, in addition, exemplary damages.
The Law Commission, in paras 2.21 to 2.25,
considered whether aggravated damages could be awarded in addition to ordinary
compensatory damages for mental distress, and concluded that, because they can
be awarded in addition, it follows that their prime function is punitive. This
seems to me to be inconsistent with propositions (a) and (d) above, which I
have drawn from Thompson v Metropolitan Police Commissioner. My
conclusion is, as already stated, that the function of aggravated damages is to
provide a further and full element of compensation where an award of ordinary
compensatory damages alone would result in the plaintiff not receiving
sufficient compensation for the injury he has suffered. Punishment of a
defendant where relevant and appropriate is by means of an award of exemplary
damages and only by means of such an award.
In the present case, in my judgment:
1. There was exceptional conduct and motive on
part of the defendants, Mr Adams and Mr Nolan, acting on Mr Ramji’s behalf.
Their conduct was designed solely for profit. The legal rights of Mr
were brought squarely to their attention by the local authority through Ms
Hunt, but they completely ignored what the local authority told them. They
persuaded the police effectively to take their side in the matter, so that on a
number of occasions the police, when called to the scene, also ignored the
local authority’s advice and decided not to assist Mr Mehta but rather to
insist that Mr Mehta remove himself from the vicinity of the hotel. Mr Mehta’s
belongings were dumped in the street, and it was simply good fortune that none
of his belongings were stolen. The profit for Mr Adams and Mr Nolan consisted
of the substantial fees that remained unpaid, and that the bank would have been
unlikely to pay if completion fell through as a result of their serious
negligence in failing to sort out Mr Mehta’s position earlier. Such fees for
Mr
Mr Nolan a considerable part of his total fees of £34,000.
2. Mr Mehta suffered substantial mental distress
over a prolonged period as a result of the wrongful eviction.
3. The ordinary compensatory damages of £10,000
would not be sufficient compensation for the injury done to Mr Mehta.
4. The nature of the conduct involved on the part
of the defendants, together with the nature of the injury done to Mr Mehta,
call for a substantial award of aggravated damages.
5. I have regard to the Court of Appeal’s warning
(proposition (c) above) that usually aggravated damages will not be as much as
twice the ordinary compensatory damages.
6. In the circumstances of this case, an award of
not less than £10,000 is appropriate as further compensation for Mr Mehta’s
injury.
Exemplary damages
Mr Mehta claims also exemplary damages. The
present case is one in which exemplary damages could be awarded because:
1. The case falls within the second category laid
down by Lord Devlin in Rookes v Barnard (above), that of wrongful
conduct calculated by the defendant (here Mr Adams and Mr Nolan acting for Mr
Ramji) to make a profit for himself that may exceed the compensation payable to
the plaintiff. In my judgment, plainly Mr
as to whether their conduct was wrong, and chose to go ahead with the eviction
because they were desperate to complete the sale that day (6 May 1994) and
thereby to secure the £800,000 for Mr Ramji, and payment of their fees for
themselves. There was no question of Mr Adams or Mr Nolan having made merely an
honest mistake. I have already set out the size of the fees of which these men
wished to secure payment.
2. The cause of action sued on, that of trespass,
is one for which exemplary damages had been awarded before Rookes v Barnard:
see AB v South West Water Services Ltd [1993] QB 507.
3. The total of ordinary compensatory and
aggravated damages (£20,000) would not in my judgment be adequate to punish the
defendants for their misconduct so that the ‘if, but only if’ test of Lord
Devlin in Rookes v Barnard [1964] AC 1129 at p1228 (see also Lord
Diplock in Broome v Cassell [1972] AC 1027 at p1126) is satisfied.
4. Mr Mehta is the victim of the defendant’s
misconduct: see Lord Devlin in Rookes v Barnard [1964] AC 1129.
5. Though criminal proceedings were threatened at
the time by the local authority, they were not brought. It is unlikely that
such proceedings would now be brought. So there is no realistic possibility of
this form of double jeopardy arising.
6. There is no question of Mr Mehta having
provoked the wrongful eviction by his own conduct: no suggestion was made that
he behaved other than entirely properly throughout.
I turn, therefore, to the question whether this
court should award exemplary damages in the circumstances of this case. The
relevant factors include the following:
(a) Unless an award of exemplary damages is made,
each of the defendants (and particularly Mr Ramji) will have potentially
profited from the eviction to a greater extent than the ordinary and aggravated
damages together. For this purpose, I naturally leave out of account the
statutory damages already awarded.
(b) The means of the defendants are relevant (Rookes
v Barnard at p1228). Mr Adams is bankrupt and Mr Mehta will recover only
a small dividend in the bankruptcy. There is no evidence as to Mr Nolan’s means
but I take into account the statement by his solicitor at the commencement of
the trial that he was seeking legal aid for Mr Nolan. There was no evidence as
to Mr Ramji’s means at the time of trial. In Thompson v Metropolitan
Police Commissioner the Court of Appeal held that where vicarious liability
of the employer is under consideration, the means of the employer, not those of
the employee, are relevant. Although here the agents, Mr Adams and Mr Nolan,
are also liable to Mr Mehta, given that it is unlikely that Mr Mehta will in
any event recover much, if anything, from these defendants, I do not consider
that any award of exemplary damages should be reduced by reason of their lack
of means.
(c) Awards of exemplary damages must be assessed
by reference to Lord Devlin’s principle of moderation and restraint (Rookes
v Barnard at pp1227-1228). Because an award of exemplary damages is
penal in nature it ‘should never exceed the minimum sum necessary to meet the
public purpose underlying such damages, that of punishing the defendant,
showing that tort does not pay and deterring others’: John v MGN Ltd
[1997] QB 586 at p619.
(d) Another reason for moderation and restraint is
to ensure that the plaintiff does not receive a substantial windfall, in excess
of compensatory and aggravated damages.
(e) Where there are two or more joint tortfeasor
defendants, only one sum can be awarded as exemplary damages and this sum
should be limited to what is necessary to punish the defendant who appears who
bears the least responsibility for the tort: Broome v Cassell,
above). Here Mr Adams and Mr Nolan were equally at fault and Mr Ramji is
vicariously liable for the misconduct of each of them. I do not consider that
any reduction in any sum awarded as exemplary damages is necessary or
appropriate in these circumstances.
But I respectfully observe that the Commonwealth
jurisdictions that take a different approach, and make separate awards of
exemplary damages (if appropriate, of different amounts) against each
tortfeasor, have adopted a wiser course, and one more consonant with the
principles underlying awards of exemplary damages: see in this connection the
Law Commission report at para 4.80.
It is in the light of these factors that I have to
decide whether to award exemplary damages and if so how much. It is a matter of
particular concern that if no award of exemplary damages were made (for this
purposes leaving the statutory damages on the one side), Mr
Nolan would have profited from the eviction by receiving substantial fees that
otherwise well might not have been paid, and Mr Ramji would have profited even
more, since his settlement with the bank was predicated on the successful
completion of the sale of the hotel and the adjoining flat. That is of
particular concern, because wrongful evictions are by no means infrequent,
particularly where statutory protection is not available, and it is easy for
landlords and their agents to profit from wrongful evictions if they need not
fear that such profits will be removed by awards of exemplary damages. That is
why, in cases such as Drane v Evangelou (above), the courts have
recognised the need to mark wrongful evictions in appropriate cases with a
suitable award of exemplary damages. In my judgment, such an award is appropriate
and indeed necessary in the circumstances of this case. Taking all the factors
already mentioned into account, and bearing strongly in mind the need for
moderation and restraint, I consider that an award of £7,500 as exemplary
damages should be made.
Two further points need to be mentioned in
relation to the common law damages:
(i) Mr Mehta put forward a claim for damages based
on an alleged loss of the opportunity to buy the hotel for £800,000, a claim
that in part seemed to be based on the misinterpretation of the 1988 Act. I
have seen no evidence on the basis of which it could for a moment be suggested
that Mr Mehta was in a position to buy the hotel.
(ii) The damages that I have awarded are higher
than in most of the cases summarised in Arden and Partington’s Quiet
Enjoyment. In part, this is because almost all the cases there cited are
county court cases within the then limits of county court jurisdiction. Perhaps
a more important reason is that I am dealing with a case in which much larger
profits were made by the tortfeasors, and the element of distress was not
confined to the time of eviction, but continued for some months after it.
Other causes of
action
As against Mr Ramji, a claim is made for breach of
the contractual licence. No doubt there was such a breach, for which Mr Ramji
could be held liable in damages, but aggravated and exemplary damages would not
be available. Accordingly, the recoverable damages would be no more than the
£10,000 indicated above. As against each of Mr
Mehta claims in conspiracy, negligence and either breach of the contractual
licence or wrongful interference with Mr Mehta’s rights under the licence. The
allegation of a conspiracy adds nothing to the straightforward claims in
trespass. There was probably no duty of care in law owed by either of these
defendants to Mr Mehta. In any event, the damages recoverable in negligence
would not include either aggravated or exemplary damages.
There was an unlawful interference with Mr Mehta’s
contractual rights. For this tort it is possible that aggravated damages might
be recovered (Messenger Newspaper Group Ltd v National Graphical
Association [1984] IRLR 397 per Caulfield J) and exemplary damages:
see the Law Commission consultation paper no 132 paras 3.57-3.64. It is
unnecessary to lengthen this judgment further by detailed consideration of this
cause of action in view of the conclusions I have already reached in relation
to the cause of action in trespass.
Conclusions
1. Mr Mehta was a licensee not a tenant.
2. He was entitled to four months’ notice to
determine the licence.
3. Mr Ramji was the relevant landlord and is
liable for the actions of Mr Adams, the receiver, and Mr Nolan.
4. Mr Ramji is liable to Mr Mehta on the basis of
the statutory tort under the 1988 Act, and I assess the statutory damages at
£45,000.
5. Mr Ramji is also liable vicariously to Mr Mehta
for the trespass committed by Mr Adams and Mr Nolan. I assess the ordinary
compensatory damages as £10,000, aggravated damages at £10,000 and exemplary
damages at £7,500: a total of £27,500. These damages, in relation to Mr Ramji,
are to be set off against the statutory damages, and are not recoverable in
addition from Mr Ramji.
6. Each of Mr Adams and Mr Nolan is liable to Mr
Mehta in trespass, and is liable as a joint tortfeasor for the same common law
damages, totalling £27,500.
7. Each of these defendants may also be liable to
Mr Mehta in respect of other causes of action, but it is unnecessary to
consider the other causes of action further for the reasons outlined above.
8. I will wish to hear argument as to interest and
also as to costs.
Other proceedings
As indicated earlier, I propose briefly to
summarise the position in the various proceedings started by Mr Mehta, all
except the initial county court proceedings pursued by him as a litigant in
person.
1. Action 1995 768 (action 768). These proceedings
were started in West London County Court. The interim injunction was discharged
by reference to the Ashburn Anstalt case (above), apparently ignoring
the security given to residential occupiers by the 1977 Act as amended by the
1988 Act. The proceedings were transferred to the High Court. The defendants,
by that stage, were Reedfax and Mr Adams. The trial was fixed for September
1995 before a deputy High Court judge. For reasons that are unclear, the judge
decided to hear a summons by Mr
on 12 September 1995. For
Adams. Given that, in my judgment, it is clear that Mr Adams is liable in
trespass to Mr Mehta, and that by this judgment I have held Mr
liable for aggravated and exemplary damages in addition to ordinary
compensatory damages, it is difficult to comprehend on what basis the claim
against Mr Adams in action 768 could have been struck out. Unfortunately, Mr
Mehta failed to appeal to the Court of Appeal against this decision. There
followed lengthy hearings in relation to Mr Adams’ legal costs, which were
substantially reduced from the amount claimed. Reedfax secured an adjournment
of the trial of action 768. Subsequently, Reedfax applied to strike out action
768, and on 19 March 1996 Sir Maurice Drake, sitting as a deputy High Court
judge, struck out action 768 as against Reedfax. The primary ground on which
Sir Maurice relied was that, following Ashburn Anstalt, Mr Mehta’s
rights (which Sir Maurice held to be limited to those of a licensee) were not
binding on Reedfax as a successor in title. Leave to appeal to the Court of
Appeal was refused on 23 July 1996. No reference was apparently made to Mr
Mehta’s rights under the 1997 Act and the 1988 Act, or to the facts that I have
described above, and that show that after completion of the sale of the hotel
Reedfax, and Mr Corrett personally, continued the wrongful acts involving
Mr
Mr Mehta sued Mr Corrett and Mr Corrett settled with Mr
Viewed with the benefit of hindsight, it can be
seen that Mr Mehta had an arguable claim against Reedfax as well as against Mr
Corrett, though for materially less damages than he could recover against the
principal actors in his eviction, and Mr Mehta was entitled to take his claim
against Reedfax to trial. It is regrettable that this claim should have been
struck out. (I should not, however, be taken by Mr Mehta to be encouraging him
to recommence proceedings against Reedfax, which, in the light of the present
judgment and his settlement with Mr
probably barred by abuse of process estoppel).
2. Action 2065. Mr Mehta next brought the present
action, action 2065, against the bank and Mr Adams. He was no doubt encouraged
to pursue that action against the bank by the following passage at p13 of Sir
Maurice Drake’s judgment:
As a contractual licensee, any claim that Mr
Mehta might have in contract must prima facie be against the other
contracting party. He originally pleaded that Mr
for the owner of the hotel, that is Mr Ramji; but the latest Statement of
Claim, the amended Statement of the Claim, correctly, as I understand the
facts, pleads that Mr McKerchar was acting under the authority of the receiver
Mr Adams, himself acting for the Royal Bank of Scotland as mortgagees in
possession. Any claim in contract should prima facie be brought against
the Royal Bank of Scotland.
On 15 December 1995 I ordered that action 2065 be
stayed against Mr Adams until the costs due from Mr Mehta to Mr Adams in action
768 had been paid. At a later date, after Mr Adams had become bankrupt, this
stay was lifted. On 29 January 1996 action 2065 was ordered to be struck out as
against the bank by Rix J on the ground that, pursuant to section 1099 of the
Law of Property Act 1995 and the terms of the legal charges, the receiver, Mr
Adams, acted on behalf of Mr
and not on behalf of the bank, which, as mortgagee, had not entered into possession
of the hotel. On 23 July 1996 the Court of Appeal refused leave to appeal.
3. Action 1997 no 558. Mr Mehta then brought
another action (action 558) against the bank. This was ordered be struck out by
Curtis J on 7 May 1997. Leave to appeal was refused by the Court of Appeal on
17 October 1997. In his judgment in action 558, Robert Walker LJ made, inter
alia, the following points:
(a) In law the bank, as mortgagee, was probably
not responsible for the actions of Mr Adams, though it was the bank that had appointed
him as receiver. Under the general law and under the terms of the mortgage, it
was the mortgagor, Mr Ramji, who would normally bear such responsibility.
Robert Walker LJ drew attention to the harshness
of this principle, since it is almost always the mortgagee, not the mortgagor,
who has the funds necessary to make good the receiver’s wrongful acts. I
respectfully add my voice to that of the Court of Appeal. This is a long‑established
principle, which requires reconsideration in modern conditions, because, not
infrequently, it can work serious injustice.
(b) Mr Mehta appeared to have an arguable cause of
action against Mr Nolan and against Mr Adams.
(c) Mr Mehta appeared to have been a contractual
licensee and not a tenant of room 418.
Subsequently, Mr Mehta resurrected action 2065,
the present action, and after a number of interlocutory hearings the trial has
taken place.
This is a brief summary of the many and various
legal proceedings, describing only the major battles and not the many
skirmishes on the way. The lessons that I draw are these.
The absence of legal aid has meant that virtually
all the proceedings have been conducted by Mr Mehta as a litigant in person.
This has resulted in a number of abortive proceedings, involving much wasted
costs, time and effort, not least on the part of the courts. If the litigant in
person had been able to obtain competent and effective legal advice from the
outset, the right defendants could have been sued in respect of the right
causes of action. Instead, the time of the courts has been spent on many
occasions unnecessarily. This is not the fault of the litigant in person, Mr
Mehta, who has, as Robert Walker LJ recognised, floundered without knowledge or
guidance in a legal system that provided virtually no help to him as a litigant
in person. It is not improbable that the costs of unnecessary court time have
substantially exceeded, in the demands made on the public purse, the cost of
simple legal aid if provided to Mr Mehta.
It seems to me that, in the course of the present
reforms of the civil justice system, one aim needs to be to achieve a better
balance between: (1) the cost to the taxpayer of abortive civil proceedings
before the courts; and (2) the cost of providing effective and legal advice and
assistance so as to avoid such abortive proceedings. Unless this is achieved,
the unnecessary burden on the civil courts is likely to rise substantially.
