In his ruling, Lochrane said that he was “driven to the conclusion” that the company was pursuing litigation that “if it came to trial… was highly unlikely to be successful, in the hope that, by the deployment of a lot of noise and resources, the defendant would be overawed and battered on the anvil of litigation into surrender”.
Judges rarely make so-called ‘indemnity costs orders’ where one side is ordered to pay all legal costs, and only do so when the conduct of one side is unreasonable in a way “out of the norm”.
Mikproud is a vehicle company set up by Paul Koopman of property asset management firm Koopmans to buy the freehold of the property in 2016. According to the ruling, it seemed likely that there were plans to redevelop the building into flats.
David v Goliath
Khan, the tenant, who lives and works in the building, “is of very modest means and commercial experience”, according to the ruling, whereas Koopman was described as being “clearly very experienced in these matters” and has “not insignificant resources at his disposal”.
According to the ruling, in May 2017 Mikproud issued a claim against Khan seeking possession of the property, claiming that the terms of the lease had been broken.
Specifically, the claim said Khan was in default because he hadn’t paid around £4,000 into a rent deposit account.
Khan fought the claim, leading to almost two years of legal wrangling before Koopman withdrew the lawsuit before trial. By then, Khan’s lawyers had found that the rent deposit account didn’t exist when the claim was made, meaning that the lawsuit was based on a false premise.
Khan’s lawyers applied to the court for all of their legal costs from Mikproud, and in a ruling on 8 January county court judge Judge Lochrane agreed.
Significant criticism
“The reality is that the defendant throughout, at least until July or August 2017, was labouring under the misapprehension that there was indeed an account as there should have been,” the judge said.
“The only party, in the context of this litigation at least, who was aware there was not an account was the claimant. The claimant and Mr Koopman were clearly well aware that the account did not exist. Indeed, they hadn’t bothered to set one up. The suggestion that somehow they should found, even in part, an application to put Mr Khan and his family out of their home and their business on the basis of a premise which they knew to be false and had not alerted him to being false must attract significant criticism,” he said.
“It does seem to me, on consideration of the evidence to which I have had my attention drawn, that the combination of the apparent motivation for the purchase of the freehold in the first place, that is the redevelopment of the property following a surrender, with the subsequent pursuit of this litigation over an extensive period of time, with a certain measure of precipitation and aggression, in circumstances in which, from the outset, the claimant knew, or ought to have known, that the litigation was unsustainable and indeed, that certain allegations contained in the litigation were indeed fallacious, all adds to a position in which one is driven to the conclusion that this was litigation which was being pursued by Mr Koopman and the claimant in the knowledge that, if it came to a trial, it was highly unlikely to be successful, in the hope that by the deployment of a lot of noise and resources, the defendant would be overawed and battered on the anvil of litigation into surrender,” the judgment said.
High-pressure dispute
Jonathan Rich, the barrister who represented Khan along with solicitor Hannah Wilson of Blackstone Solicitors, said that his client’s victory came after a long, high-pressure, dispute.
“This was a classic David and Goliath battle,” he said. “The amount of pushing we had to do, for example to get even proper disclosure out of Mikproud, was huge. The personal stakes for Mr Khan couldn’t really have been much higher – with his family business, life and home all at risk for two years.
“Judge Lochrane rightly found that, from the outset to the end, those behind the claimant knew Mr Khan was trying to assign the lease and that the case was based on false allegations.
“If the true facts came to light, they could not win the case, yet they proceeded with it and brought their financial muscle to bear.”
The judge gave an oral ruling at the hearing in January that has recently been transcribed by the court.
Mikproud (Holloway) Ltd (Claimant) v Rashid Khan (Defendant)
Before HH Judge Lochrane (Central London County Court), 8 January 2019.
