“will enable ACP (if it needs or desires so to do) to execute a first legal mortgage . . . in favour of any commercial lender in respect of a capital amount of up to One Million Five Hundred Thousand Pounds and to grant standard occupational leases in terms acceptable to banks, building societies and other commercial lenders so as to ensure that the same are regarded as satisfactory security and mortgageable by the purchaser of each penthouse (once the same has been constructed and is ready to be sold).”
“It is intended that the penthouses (the development of which may take place on a phased basis) shall be placed on the market for sale on long lease (in accordance with paragraph 5.2), through reputable Residential Property Agents (to be appointed by ACP with the approval of the Freeholder such approval not to be unreasonably withheld or delayed). ACP will use all reasonable endeavours to dispose of such penthouses at prices which they consider to represent the then open market value of the same (taking into account the recommendations of such Residential Property Agents). ACP shall be at liberty to dispose of all or any of the penthouses by way of presale or at any stage of the Project.”
“. . .. in the event of ACP being in breach of its obligations in respect of the provisions of para 12.2.5 then: . . .. 12.4.1 The Freeholder may at its sole discretion grant an extension of time to ACP for such further period as it may consider to be reasonable … but if at the expiration of such further period ACP are still in breach of such obligations then the terms set out below shall apply… 12.4.2 The Freeholder shall have the right to serve a written notice upon ACP calling for and requiring a development sub-lease to be granted back to the Freeholder in respect of such part of the roofspace of the Property which has not been developed by ACP (excluding the areas covered by the modules in respect of any penthouse or penthouses then actually constructed by ACP and in situ and/or any associated roof terracing or roof garden intended to be used by the owner or occupier of such penthouse or penthouses).”
“1. Britel will henceforth hold the property and the net rents and income from it in trust for CHAPS absolutely 2. This trust shall continue from the date hereof until such time as the conditions referred to in recital 2 (a) and 2 (b) above have been satisfied whereupon the freehold of the Property will immediately be transferred to CHAPS or to whom it may direct, free of mortgage charge or other financial obligation.”
“Mr Stern has negotiated a finite sum that is acceptable to NUBBH Ltd in discharge of their second Charge over the freehold of Albert Court and thus far they have not been involved in the Meretz Investments N.V. Introduction Agreement and I believe that Mr Stern’s sole concern is not to “rock the boat” as far as NUBBH Ltd is concerned and set hares running unnecessarily.”
“Lloyds [Bank] have apparently expressed concern over … the car parking position. The latter point must be read in conjunction with what we are doing vis-a vis the Royal Albert Hall and I do not think we should under-estimate the damage that RAH can do. It is not a question of the number of spaces so much as the fact that the lease of the car-parking spaces has a restriction on assignability by requiring us to offer it back to RAH at market value and only being allowed to assign 28 days later if the offer is rejected. Our obligation to ACP, however, is to grant a lease within the new car park and although the Preliminary Agreement does refer to the RAH agreement, the practical fact is that it will cause problems with a purchaser who will be advised that they have no certainty of being able to sell with the penthouse a car parking space.”
“If it transpires that any consideration given has not been used in the development, NUBBH would regard this as a most serious state of affairs.”
“Both ACP and Britel have certain financial obligations to Meretz and The Freshwater Group and they quite naturally required security from ACP in respect thereof.”
“To the extent that everything is charged to Meretz which in turn has sub-charged it to Highdorn, I should not really be worried as there is nothing DK can extort. On the other hand, DK has a powerful blackmail weapon in that he knows NUBBH is unaware of the Meretz commission and he must feel that there is some room for manoeuvring for him in that respect. We have been reasonably successful in pretending to NUBBH that Meretz is within the Freshwater sphere of influence but of course DK knows better …”
“and the security given to [FP] is thereby suspended”
“[ACP] joins in this Deed for the purpose of (inter alia) better securing the rights of Varlet … and undertakes with each of the parties hereto to observe the provisions of this Deed, the Lease, the Agreement and the Introduction Agreement (which continue in full force save as varied by this Deed) at all times and not in any way to prejudice or affect the enforcement of such provisions or to do or suffer anything which would be a breach of the terms of this Deed, the lease, the Agreement and the Introduction Agreement”
“Wherever there is a reference to the completion of a sale of a penthouse completion shall for that purpose be deemed to take place on the date of actual completion or on a date when it is first reasonable to assume that a completion shall never take place”
“Use the£1.5M 1st charge to avoid a loss.”
“FP is likely to foreclose and take control of the development lease.”
“… the latest version of the draft Contract … along with a copy of a Supplemental Agreement dealing with Project Management and a substantial re-design to suit the Purchaser’s requirements (bearing in mind that it was originally intended that penthouse A would have three bedrooms but this particular Purchaser would like the property re-designed so that it has five bedrooms).”
“As part of [FP’s] contingency plans are plans to step in as mortgagee in possession over the Development Lease and to sell it on to a developer or to develop it as mortgagees in possession. … FP would be willing to act as designers and builders for the developer who bought the development lease. FP would charge£300,000 for the existing design should the developer wish to use that. If not, the developer would have to do their own design.”
“Our plan is first to have the Loft released and then to take charge by stepping in as Mortgagees in Possession, arrange finance and building out or to sell the development lease to a developer where we would reinvest the purchase price into the development in return for being able to build and participate in the profit.”
“subject to … further legal opinion and any ruling or decision by the courts the Company would take expedient action deemed appropriate and necessary and which was in the best interests of it and the group collectively.”
“The way forward seems to be: 1. FP to obtain funding for the Loft, then use the money to buy out NUBBH/Britel, and take a transfer of the NUBBH charge. 2. ACP grant a sublease of the Loft to FP … 3. FP sells the ACP lease as mortgagee to QQH, subject to obtaining [CHAPS’] consent…. 4. QQH continues with the development, possibly using the services of FP.”
“ACP are developers and FP are builders. FP have the expertise staff and do design and construction for ACP and charge net cost, plus a builders margin and interest. ACP has got no capital of its own and have to pay FP out of sales and/or bank loans. FP has provided ACP with a floating credit facility which means that ACP builds up a debt to FP and pay off that debt whenever they have money. ACP is building up a debt to FP during construction. This debt goes down when a sale occurs and then builds up again until the next sale, etc. The idea was that by the end of the project FP would have been fully paid leaving a profit for FP. Unfortunately, delay costs due to litigation, etc have now eroded the profit for ACP and the prospect for FP to be fully paid.”
“My client in this matter is First Penthouse which has now lent some£2 m to ACP in relation to this development, all of which is fully secured but of which£1 m has priority to the subsequent charges in favour of NUBBH and Meretz. FP is in the position of watching ACP lose money to an extent which could prevent ACP from carrying on with the development and in those circumstances, in the absence of any settlement between our respective clients, FP will have no alternative but to take enforcement action, either by way of exercising mortgagee powers or by seeking the appointment of an administrator.”
“I think we still need to be ready to enforce the [FP] mortgage and/or put ACP into administration, should the meeting fail to produce a settlement or if the Meretz proceedings start to look bad.”
“Our clients are advised that it would be inappropriate and improper in the circumstances that have arisen for First Penthouse to exercise any power of sale as mortgagee.”
“I asked him about the fax that he had sent me the previous day. He said he wanted to think about it but it was not intended during these discussions for First Penthouse to sell under their power of sale. He realised that if they tried to do so there would be endless litigation and an injunction application. That was to the benefit of nobody. Regardless of the rights and wrongs each party would litigate if there was not a settlement. He said that they would not take any action without giving us notice. It was not his style to do two acts in a way where he would not give us notice.”
“I feel it in my bones that we need to do something. Time is now crucial for the cashflow and here are my thoughts. We did not agree a deal yesterday and to protect our position we should now • Enforce the mortgage • Explain to the Stern camp that we are still happy to do a deal but we are running out of time • Explain to Tamimi what we had to do and why, that no bank will finance until litigation with Stern has ended and that he is the only one who can now finance his penthouse. If he agrees so that we can get cracking now, then we will agree to do the additional design that he has asked for and to sell him the Loft. We can also ask him if he would prefer that someone else than FP completes his penthouse if they also finance.” • Enforce the mortgage • Explain to the Stern camp that we are still happy to do a deal but we are running out of time • Explain to Tamimi what we had to do and why, that no bank will finance until litigation with Stern has ended and that he is the only one who can now finance his penthouse. If he agrees so that we can get cracking now, then we will agree to do the additional design that he has asked for and to sell him the Loft. We can also ask him if he would prefer that someone else than FP completes his penthouse if they also finance.”
“We need to concentrate on what will generate money quickest.”
“Surely the Court will recognise that FP’s charge is there to protect its£1M .”
“FP has not commenced enforcement yet, but the relevant loans are overdue and demand has been made on ACP… FP regards the principal reasons for the need to enforce is because of the delays which have occurred due to the obstruction from Mr Stern and his associates, and which seem likely to continue so long as Mr Stern and his associates are able to influence matters.”
“It is for this very reason that [FP] is contemplating a sale as mortgagee, in order to protect its own position as first chargeholder.”
“Accordingly, please be informed Britel proposes to injunct and/or set aside any attempted disposal of the Development Lease to your client company or any other entity.”
“We have had problems with the former freeholder represented by Mr William Stern who has delayed the project in different ways. FP, who has got a first legal charge over its daughter company ACP’s roof lease, has therefore decided to exercise its rights. To protect its interests, FP decided to sell the roof lease to enable finance of the project to its completion, thereby disconnecting Mr Stern from the project.”
“My principals have been informed that: (a) Your client, Mr Tamimi, would prefer that [FP] should finish the construction of Penthouse A rather than entrust the construction to the builder selected by my principals and CHAPS … (b) Your client is prepared to finance [FP] in the sense of providing it with the funds necessary to discharge the balance of the sum ACP owes to NUBBH. (c) [FP] intends to exercise the Power of Sale it has got in the First Charge and proposes to sell the Development Lease to your client. (d) Your client intends to acquire the Development Lease and to retain [FP] to complete the construction of Penthouse A in any event and possibly Penthouses D and F, if planning permission for the latter is obtained. (e) Although your client is aware that the Development Lease is subject to the provisions of the Preliminary Agreement and that Britel, Meretz as well as CHAPS, in its capacity as the lessee of the Overriding Lease, are entitled to enforce the covenants in the Preliminary Agreement, your client feels that upon application to the Court he will be granted an extension of time to enable construction of penthouse A at the very least.”
“FP and Mr Tamimi shall … seek to enforce the FP security and hereafter execute and exchange a contract for the sale and purchase of the [Development] Lease … in the agreed form.”
“They have developed a well thought through and finely balanced plan that we need to stick to in order to save the project. So far everything is going as planned and the next important steps that should happen this week are: 6.4.1.1 Paying Meretz to give Orbach clean title 6.4.1.2 Paying NUBBH to get our hands on their legal charge 6.4.1.3 FP to ask ACP for its money back and ACP confirming that it can not pay 6.4.1.4 FP to sign sale agreement with Tamimi and assign ownership of the development lease.”
“Mr Tamimi will contract with [FP] to carry out the works and there is no doubt about the ability of [FP], given the fact that they have already completed three, and have done so using techniques which do not cause inconvenience to the existing tenants in Albert Court.”
“Wherever there is a reference to the completion of a sale of a penthouse completion shall for that purpose be deemed to take place on the date of actual completion or on a date when it is first reasonable to assume that a completion shall never take place”
“I add that in the light of the case put forward by ACP in the Debt Claim, the Directors considered, as did I, that completion of the sale of penthouses A, D and F by ACP would never take place.”
“24. If ACP was to sell, transfer or otherwise dispose of the Development Lease that would be a breach by ACP of its covenants in the Preliminary Agreement and the Introduction Agreement. 25. If First Penthouse was to sell, transfer or otherwise dispose of the Development Lease that would be a breach by First Penthouse of its covenants in the Guarantee. It would also be a breach by First Penthouse of the covenants on the part of ACP in the Preliminary Agreement and the Introduction Agreement. Those are both collateral agreements containing tenant covenants in relation to the Development Lease. Those covenants would bind First Penthouse if First Penthouse as mortgagee in possession took possession with a view to selling the Development Lease.”
“26. The claimants therefore seek a quia timet injunction to restrain First Penthouse and ACP from breaching those covenants by selling, transferring or otherwise disposing of the Development Lease before the issue of the certificate of practical completion in respect of the project.”
“There is (so far as I am aware) no connection between the purchaser and either ACP or FP, save that FP has contracted with him as I have mentioned and save that he has already contracted to purchase from ACP a lease of another penthouse in the building.”
“On19th July 2002 , in the exercise of its power as mortgagee undersection 101 of the Law and Property Act 1925 , FPL entered into a contract to sell the lease to a third party buyer. The immediate question is whether FPL can be restrained by injunction from completing that sale.”
“impossible now for Britel or Meretz to say that they are entitled to rely on some collateral contractual arrangement under which FPL is restricted from exercising the rights conferred on it by the 1997 charge. The time to raise that point was before the 1999 Deed of Priorities was executed, and had that point been raised, then it might or might not have been expressly provided for; but to execute a deed which confirms the full force and effect of the 1997 charge is quite inconsistent with their contention that the power of sale under it could never be exercised while the development remained uncompleted.”
“By a transfer dated19 July 2002 NUBBH transferred the benefit of the NUBBH Charge to FP. The effect of this transfer was that, from19 July 2002 , such sums as might fall due under clause 9 of the Preliminary Agreement were charged to FP, and the only persons with a direct financial interest in the late completion of the Project under the Preliminary Agreement were ACP (as the developer) and FP.”
“The issue raised before me is whether the 1999 Deed of Priorities likewise precludes CHAPS as successor in title to the reversion upon the Lease from exercising the power to refuse consent to an exercise of the power of sale on the ground that it will defeat the rights in question. In my view the answer is clearly in the affirmative.”
“The Preliminary Agreement is, I think, a collateral agreement within the definition contained in s 28 of the 1995 Act. But, as it seems to me, the Preliminary Agreement sufficiently expresses the intention that the Option shall be personal to ACP and not be a tenant covenant. The provision for the grant of the Option is part of machinery set up for payment by ACP to Britel of a premium for the grant of the Lease. The premium is payable when and if ACP has fulfilled its obligation to complete the Project expeditiously and to sell the completed penthouses. The provision granting the Option is a default provision, arising in the event of default by ACP in fulfilling this obligation.” (Emphasis added)
“He refers to the 1999 Priorities Deed as indicating that there was no intention that FP could exercise its rights as chargee of the Lease in disregard of its obligations as guarantor under the Guarantee. On the contrary, he says, cl 13 of the 1999 Priorities Deed, which contains an agreement by Britel to extend the time limits in paras 12.2.3 to 12.2.5 of the Preliminary Agreement, ends: “AND First Penthouse acknowledges that this Variation shall not in any way affect its guarantee dated March 7, 1996, given to Britel in respect of the obligations of ACP under the Agreement.” [55] Mr Morgan says that this court in the Injunction Action does not appear to have had its attention drawn to cl 13. He argues that the 1999 Priorities Deed left FP’s obligations under the Guarantee unaffected, the effect of the Guarantee and the 1999 Priorities Deed being that FP had the benefit of its charge over the Lease but was not free to disregard its obligations as guarantor under the Guarantee. [56] He suggests that this court in the Injunction Action may have decided the case on points which were not advanced by the parties. Whether that is right or not does not seem to me to matter. He says more pertinently that this court was wrong in the view which it formed and that in any event the citation of the judgments in this court in that case contravened paras. 6.1 and 6.2 of the Practice Direction (Citation of Authorities)[2001] 1 WLR 1001 , which states that a judgment on an application for permission to appeal may not be cited unless it clearly indicates by an express statement that it purports to establish a new principle or to extend the present law. [57] Mr Dutton went so far as to say that this court’s decision was binding on this court as being a decision on the construction of the 1999 Priorities Deed. I do not think that that can possibly be right, particularly in view of the Practice Direction to which I have referred. However, in my judgment the decision of two experienced members of this court in a case in which it had heard argument from counsel on both sides on the effect of the same deed as that under consideration here and when this court was saying that neither Britel nor Meretz had any cause of action by reason of the effect of that deed, can properly be taken into account by this court. Indeed it seems to me close to an abuse of process for Britel and Meretz through its trustee CHAPS to have another go at the effect of the 1999 Priorities Deed, having failed in their argument in 2002. Be that as it may, I regard the earlier judgments as persuasive. [58] Nor am I persuaded that they are wrong. Jonathan Parker LJ at para. 47 pointed out that the Preliminary Agreement expressly contemplated the possibility that ACP might mortgage the Lease (albeit to a commercial lender), and that inherent in that was the possibility that the mortgagee might exercise the power of sale, thereby rendering the completion by ACP of the development impossible. He read the 1999 Priorities Deed as acknowledging in cl 2 that on the discharge of the Varlet Charge the FP Charge, by once again coming into full force and taking effect and automatically being reinstated as the first charge, was effective to create a valid security over the Lease according to its terms, and held that a submission on behalf of Britel and Meretz that FP was unable to exercise its security under the FP Charge was flatly inconsistent with the terms of the 1999 Priorities Deed. Chadwick LJ expressed himself similarly in his judgment, saying in para. 65: “to execute a deed which confirms the full force and effect of [the FP Charge] is quite inconsistent with [Britel’s and Meretz’s] contention that the power of sale under it could never be exercised while the development remained uncompleted.” [59] I do not accept that the reference to the Guarantee in cl 13 of the 1999 Priorities Deed has the wide effect which Mr Morgan suggests. The variation referred to in the tailpiece of the clause was merely to the extensions of time referred to earlier in that clause. [60] In my judgment the judge reached the right decision for the right reasons on this point.” (Emphasis added)
“The particular type of estoppel relied upon . . . . . is estoppel per rem judicatam. This is a generic term which in modern law includes two species. The first species, which I will call “cause of action estoppel,” is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, i.e., judgment was given upon it, it is said to be merged in the judgment, or, for those who prefer Latin, transit in rem judicatam. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. This is simply an application of the rule of public policy expressed in the Latin maxim “Nemo debet bis vexari pro una et eadem causa.”
“Cause of action estoppel extends also to points which might have been but were not raised and decided in the earlier proceedings for the purpose of establishing or negativing the existence of a cause of action.”
“Issue estoppel, too, has been extended to cover not only the case where a particular point has been raised and specifically determined in the earlier proceedings, but also that where in the subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier.”
“In my opinion your Lordships should affirm it to be the law that there may an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result.”
“…. where a given matter becomes the subject of litigation in and of adjudication by a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have from negligence, inadvertence or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a Judgment, but to every point which properly belongs to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
“… the goods in question were shipped under a contract of carriage the terms of which (as set out in the Hague Rules or the Hague-Visby Rules) regulate the respective rights and obligations of the parties. In these circumstances, the mere fact that the pleader can, so to speak, get the case on its feet by alleging short delivery or delivery of the goods not in the like good order and condition as when shipped, does not in my opinion assist. For it is wholly unrealistic to regard the cause of action as being other than a cause of action arising under the contract, which provides for the relevant duties of the shipowners regarding the seaworthiness of the ship and the care of the goods. Even if attention is concentrated on the liability of the shipowner as bailee, the fact remains that he is a bailee for reward, and that accordingly his liability will be governed by the terms of the contract of carriage…. Here, … it is necessary to identify the relevant breach of contract; and if it transpires that the cause of action in the first action is a breach of contract which is the same breach of contract which constitutes the cause of action in the second, then the principle of res judicata applies, and the plaintiff cannot escape from the conclusion by pleading in the second action particulars of damage which were not pleaded in the first.”
“[The present case] is rather concerned with a single incident, i.e., the fire during transit which broke out in the cargo over which the plaintiffs’ consignment of munitions was stowed, which resulted in the damage to that consignment and to loss (by jettison) of a small part of it. Furthermore, as appears from the pleadings, that loss or damage might have resulted from breach of more than one term of the contract, for example breach of the obligation to make the vessel seaworthy under article III, rule 1, of the Hague-Visby Rules, or breach of the obligation to load and stow, etc., the vessel carefully under article III, rule 2. However, for present purposes, there is no need to distinguish between the two breaches; because the factual basis relied upon by the plaintiffs as giving rise to the two breaches is the same, and indeed was referred to compendiously by the plaintiffs in the Cochin action as “negligence”
“Even when the court has expressly determined the same issue in the earlier proceedings an issue estoppel will not necessarily result. Only determinations which are necessary to the decision, and fundamental to it, will found an issue estoppel. Other determinations, however positive, cannot.”
“The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”
“There is, of course, no doubt that Mr Johnson could have brought his action as part of or at the same time as the company's action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court.” (Emphasis in original)
“It may be reasonable and sensible for a plaintiff to proceed against A first, if that is a relatively simple claim, in order to use the proceeds to finance a more complex claim against B. On the other hand, it would I think normally be regarded as oppressive or an abuse of process for a plaintiff to pursue his claims against a single defendant separately in order to use the proceeds of the first action to finance the second, at least where the issues largely overlap so as to form, in Sir James Wigram V-C's words … "the same subject of litigation".”
“In the opinion of their Lordships it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon a different assumption of fact; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted.”
“Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest.”
“Thus in relation to trust property I think there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa.”
“Particular care, however, needs to be taken where the plaintiff in the second action is not the same as the plaintiff in the first, but his privy. Such situations are many and various, and it would be unwise to lay down any general rule. The principle is, no doubt, capable in theory of applying to a privy; but it is likely in practice to be easier for him to rebut the charge that his proceedings are oppressive or constitute an abuse of process than it would be for the original plaintiff to do so.”
“The principles to be derived from the authorities, of which by far the most important is Johnson v Gore Wood & Co[2002] 2 AC 1 , can be summarised as follows: i) Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process. ii) A later action against B is much more likely to be held to be an abuse of process than a later action against C. iii) The burden of establishing abuse of process is on B or C or as the case may be. iv) It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. v) The question in every case is whether, applying a broad merits based approach, A’s conduct is in all the circumstances an abuse of process. vi) The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C.”
“A party who litigates in different rights is in law separate persons. A decision for or against him in one representative capacity is not binding on him personally or in another capacity.”
“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole.”
“It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed byarticle 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression.”
“Indeed it seems to me close to an abuse of process for Britel and Meretz through its trustee CHAPS to have another go at the effect of the 1999 Priorities Deed, having failed in their argument in 2002.”
“Several centuries ago equity evolved principles for the enforcement of mortgages and the protection of borrowers. The most basic principles were, first, that a mortgage is security for the repayment of a debt and, secondly, that a security for repayment of a debt is only a mortgage. From these principles flowed two rules, first, that powers conferred on a mortgagee must be exercised in good faith for the purpose of obtaining repayment and secondly that, subject to the first rule, powers conferred on a mortgagee may be exercised although the consequences may be disadvantageous to the borrower.”
“(1) A mortgagee with the power of sale is not a trustee of that power, the power being given to the mortgagee for his own benefit. (2) A mortgagee is not under a general duty of care to the mortgagor and can act in his own interests in deciding whether and when he should exercise his power of sale. (3) A mortgagee, however, is subject to an equitable duty to act in good faith and to obtain the best price reasonably obtainable at the time he decides to sell. That duty is owed to those interested in the equity of redemption. They include the mortgagor, other mortgagees and a guarantor of the mortgage debt, but they do not include a tenant at will of the mortgaged property, nor, where the mortgagor is a trustee, a beneficiary of the trust.”
“The owner of property entering into a mortgage does not by entering into that mortgage cease to be the owner of that property any further than is necessary to give effect to the security he has created. The mortgagor can mortgage the property again and again. A second or subsequent mortgage is a complete security on the mortgagor's interests subject only to the rights of prior encumbrancers. If a first mortgagee commits a breach of his duties to the mortgagor, the damage inflicted by that breach of duty will be suffered by the second mortgagee, subsequent encumbrancers and the mortgagor, depending on the extent of the damage and the amount of each security.”
“Equity intervenes to ensure that proper account is taken of the interests of the mortgagor and others interested in the equity of redemption. The mortgagee is only interested in the discharge of the debt owed to him, but equity makes sure that the mortgagee acts fairly to those interested in the equity of redemption when the mortgagee exercises the power of sale.”
“As Lord Templeman noted in the China and South Sea Bank case, at p. 545, a mortgagee can sit back and do nothing. He is not obliged to take steps to realise his security. But if he does take steps to exercise his rights over his security, common law and equity alike have set bounds to the extent to which he can look after himself and ignore the mortgagor's interests. In the exercise of his rights over his security the mortgagee must act fairly towards the mortgagor. His interest in the property has priority over the interest of the mortgagor, and he is entitled to proceed on that footing. He can protect his own interest, but he is not entitled to conduct himself in a way which unfairly prejudices the mortgagor.”
“It seems that a mortgagee who genuinely seeks payment of sums due will not be defeated merely because he has an additional improper motive.”
“The mortgagee was not a trustee of the power of sale for the mortgagor, and if he was entitled to exercise the power, the Court could not look into his motives for so doing. If he had a right to sell on June 1, and he then said, 'The mortgagor is a member of an old county family, and I don't wish to turn him out of his property, and will not sell it at present,' and then on July 1 he said, 'I have had a quarrel with the mortgagor, and he has insulted me; I will show him no more mercy, but will sell him up at once' - if all this was proved, the Court could not restrain the mortgagee from exercising his power of sale, except on the terms of payment of the mortgage debt. The Court could not look at the mortgagee's motives for exercising his power. Lord Eldon had never said anything of the kind which Vice-Chancellor Stuart supposed him to have said. The Vice-Chancellor was entirely mistaken, and must have been citing the judgments to which he referred from his recollection, without looking at the reports. Of course there were some limits to the powers of the mortgagee. He, like a pledgee, must conduct the sale properly, and must sell at a fair value, and he could not sell to himself. But he was not bound to abstain from selling because he was not in urgent want of his money, or because he had a spite against the mortgagor.”
“In pursuit of his own objectives [the second defendant] embarked upon a course, having as its first objective disruption of the receivership under the [second] debenture. His intention in urgently acquiring the [first] debenture and accepting appointment as receiver was not for the purpose of enforcing the security under the [first] debenture but for the purpose of preventing the enforcement by the plaintiffs of the [second] debenture.”
“So the objective is plain. It was not to enforce the security or to obtain repayment or anything of that kind. It was in order to get possession of the house and to overcome the protection of the Rent Acts.”
“…on the facts of this case it is as plain as a pikestaff that the purpose of the bringing of these proceedings via Mrs. Quennell is not for her own benefit to protect or enforce the security which she holds as the transferee of the legal charge but for the benefit of her husband as mortgagor to enable him to sell the property with the benefit of vacant possession. In substance she is suing as his agent.”
“In the present case it is clear from the facts and the evidence that the mortgagee, Mrs. Quennell, is not bona fide exercising her rights and powers for her own purposes as mortgagee but for the purpose of enabling the landlord mortgagor (her own husband) to repudiate his contractual obligations and defeat the statutory tenancy of the tenant which is binding on the landlord. Mrs. Quennell does not even pretend to be acting in her own interests as mortgagee. She brings this action to oblige her husband. In my judgment the court must therefore treat this action, although in form brought by a mortgagee, as an action brought for and on behalf of the landlord mortgagor.”
“…it is said that the mortgagee exercised his power of sale with an indirect motive, not with the view of realizing his security, but with the object of conferring a benefit upon the defendant Garrard by giving him an option masquerading as a sale.”
“I am unable accordingly to inquire into the motives of the defendants Bass, or to hold that the sale is vitiated because they desired to confer a benefit on the purchaser by selling to him upon terms, which included a fair price.”
“(2) Where a conveyance is made in exercise of the power of sale conferred by this Act, or any enactment replaced by this Act, the title of the purchaser shall not be impeachable on the ground— (a) that no case had arisen to authorise the sale; or (b) that due notice was not given; or (c) where the mortgage is made after the commencement of this Act, that leave of the court, when so required, was not obtained; or (d) whether the mortgage was made before or after such commencement, that the power was otherwise improperly or irregularly exercised; and a purchaser is not, either before or on conveyance, concerned to see or inquire whether a case has arisen to authorise the sale, or due notice has been given, or the power is otherwise properly and regularly exercised; but any person damnified by an unauthorised, or improper, or irregular exercise of the power shall have his remedy in damages against the person exercising the power.”
““Purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property except that in Part I of this Act and elsewhere where so expressly provided “purchaser” only means a person who acquires an interest in or charge on property for money or money’s worth; and in reference to a legal estate includes a chargee by way of legal mortgage; and where the context so requires “purchaser” includes an intending purchaser”
“section 104(2) makes it clear that the purchaser is not protected if he has actual knowledge of the impropriety. But if the purchaser has no notice of the impropriety, then on the face of it he takes free. Thus, the completed sale by a mortgagee pursuant to his statutory power is vulnerable only if the purchaser has knowledge of, or participates in, an impropriety in the exercise of the power.”
“Blind-eye” knowledge approximates to knowledge. Nelson at the battle of Copenhagen made a deliberate decision to place the telescope to his blind eye in order to avoid seeing what he knew he would see if he placed it to his good eye. It is, I think, common ground - and if it is not, it should be - that an imputation of blind-eye knowledge requires an amalgam of suspicion that certain facts may exist and a decision to refrain from taking any step to confirm their existence.”
“In summary, blind-eye knowledge requires, in my opinion, a suspicion that the relevant facts do exist and a deliberate decision to avoid confirming that they exist. But a warning should be sounded. Suspicion is a word that can be used to describe a state-of-mind that may, at one extreme, be no more than a vague feeling of unease and, at the other extreme, reflect a firm belief in the existence of the relevant facts. In my opinion, in order for there to be blind-eye knowledge, the suspicion must be firmly grounded and targeted on specific facts. The deliberate decision must be a decision to avoid obtaining confirmation of facts in whose existence the individual has good reason to believe. To allow blind-eye knowledge to be constituted by a decision not to enquire into an untargeted or speculative suspicion would be to allow negligence, albeit gross, to be the basis of a finding of privity.”
“In this, as in all other normal conveyancing transactions, after there has been a subject to contract agreement the parties hand the matter over to their solicitors who become the normal channel for communication between vendor and purchaser in all matters relating to that transaction. In so doing, in my judgment the parties impliedly give actual authority to those solicitors to receive on their behalf all relevant information from the other party relating to that transaction. The solicitors are under an obligation to communicate that relevant information to their own clients. At the very least, the solicitors are held out as having ostensible authority to receive such information. Whether there be express or ostensible authority, the purchaser is in my judgment estopped from denying that he received the information relating to the transaction which has been communicated to his solicitors acting in the same transaction. In my judgment, such knowledge should be imputed to the principal.”
“(1) A deed executed by a mortgagee purporting to transfer his mortgage or the benefit thereof shall, unless a contrary intention is therein expressed, and subject to any provision therein contained, operate to transfer to the transferee – (a) the right to demand, sue for, recover, and give receipts for, the mortgage money or the unpaid part thereof, and the interest then due, if any, and thenceforth to become due thereon; and (b) the benefit of all securities for the same, and the benefit of and the right to sue on all covenants with the mortgagee, and the right to exercise all powers of the mortgage; and (c) all the estate and interest in the mortgaged property then vested in the mortgagee subject to redemption or cesser, but as to such estate and interest subject to the right of redemption then subsisting.”
“In a recent case, Paragon Finance Plc v Pender[2003] EWHC 2834 (Ch) ,25 November 2003 , it was held by Peter Smith J that section 114 has no application to registered land. We have no reason to doubt Peter Smith J's conclusions but in any event, as he observed, section 114 provides for a transfer "unless a contrary intention is expressed" in the mortgage. Thus if section 114 applies, all depends upon the true construction of the mortgage and, in our judgment, for the reasons given earlier, on the true construction of the sub-charge, there was no such transfer in this case.”
“In my judgment Mr Page's reliance onsection 114 of the Law of the Property Act 1925 is wholly misplaced, for the reason which the judge gave: viz. that section 114 is concerned with transfers of mortgages of unregistered land (transfers of mortgages of registered land being dealt with bysection 33 of the Land Registration Act 1925 ). To interpret section 114 as applying also to transfers of mortgages of registered land would produce a fundamental and wholly illogical conflict between the two regimes in relation to transfers of mortgages. Bearing in mind what Lord Oliver of Aylmerton said in Flegg … I can see no conceivable basis for interpreting section 114 in a way which produces that result and every reason for not doing so. Accordingly I respectfully agree with the observations of this court in Marks with reference to the instant case.”
“There are a number of contenders for the test of the state of mind that amounts to an "intention to injure" in the context of the tort that we have described as "unlawful interference". These include the following: (a) an intention to cause economic harm to the claimant as an end in itself; (b) an intention to cause economic harm to the claimant because it is a necessary means of achieving some ulterior motive; (c) knowledge that the course of conduct undertaken will have the inevitable consequence of causing the claimant economic harm; (d) knowledge that the course of conduct will probably cause the claimant economic harm; (e) knowledge that the course of conduct undertaken may cause the claimant economic harm coupled with reckless indifference as to whether it does or not. A course of conduct undertaken with an intention that satisfies test (a) or (b) can be said to be "aimed ", "directed", or "targeted" at the claimant. Causing the claimant economic harm will be a specific object of the conduct in question. A course of conduct which only satisfies test (c) cannot of itself be said to be so aimed, directed or targeted, because the economic harm, although inevitable, will be no more than an incidental consequence, at least from the defendant's perspective. None the less, the fact that the economic harm is inevitable (or even probable) may well be evidence to support a contention that test (b), or even test (a), is satisfied.”
“The gist of the tort of unlawful interference is the intentional infliction of economic harm. In other words, it must be shown that the object or purpose of the defendant is to inflict harm on the claimant, either as an end in itself, or as a means to another end. If foresight of probable consequences or subjective recklessness sufficed as the mental element of the tort, this would transform the nature of the tort. This, in effect, is what Mr Browne sought to persuade us to do when he advanced tests (d) and (e) as sufficient to satisfy the mental element in the tort of unlawful interference. Indeed, we take the view that satisfaction of test (c) would not be sufficient to establish the requisite mental element. However, as mentioned in para 159 above, establishing that the defendant knew that the claimant would suffer economic loss may well be evidence which can support a contention that test (b) or even test (a), is satisfied.”
“In my judgment, the alleged conspiracy is established in respect of these three defendants, and they are not exempt from liability on account of counsel’s opinion or because they may have believed in good faith that the transaction did not transgress s 54. If all the facts which make the transaction unlawful were known to the parties, as I think they were, ignorance of the law will not excuse them: see Churchill v Walton ([1967] 2 AC 224 at 237). That case was one of criminal conspiracy, but it seems to me that precisely similar principles must apply to a conspiracy for which a civil remedy is sought. Nor, in my opinion, can the fact that their ignorance of, or failure to appreciate, the unlawful nature of the transaction was due to the unfortunate fact that they were, as I think, erroneously advised excuse them (Cooper v Simmons, and see Shaw v Director of Public Prosecutions, where the appellant had taken professional legal advice). If they had sincerely believed in a factual state of affairs which, if true, would have made their actions legal, this would have afforded a defence (Kamara v Director of Public Prosecutions ([1974] AC 104 at 119)); but on my view of the effect of s 54 in the present case, even if£500,000 had been a fair price for the share capital of Maximum and all other benefits under the agreement, this would not have made the agreement legal.”
“A person is a party to a conspiracy if he knows the essential facts to constitute that conspiracy even though he does not know that they constitute an offence (see Churchill v Walton). Since there was a breach of s 54 and the defendants through their directors made all the arrangements and knew all the facts constituting the breach, it would follow that they conspired together to contravene s 54, the object of their conspiracy being Belmont, and if Belmont suffered damage they are liable.”
“Mr Randall submits that Mr De Winter's mistaken belief was no defence in this case. Mr De Winter's mistake was in part a mistake of fact as to whether Mainstream had rejected the Findern site or could not afford it. But it was also a mistake of law in that the assurance given by Mr Young and Mr Broad could not relieve them of a breach of duty: only the fully informed consent of Mainstream could have done that. In addition, the assurance did nothing to prevent a misappropriation of the employer's property by making telephone calls in his time and using Mainstream's office premises. Mr Randall submits that the correct approach to a mistake of law is set out by Goff LJ in Pritchard v Briggs[1980] Ch 338 at 414G. A party does not avoid liability simply because through ignorance of the law he does not realise that his conduct is tortious.”
“In the light of these developments in the law, this court must ask whether the policy behind the tort of interference with contractual relations would be furthered if a defendant to a claim based on this tort were to be prevented from relying on a mistake he made on the law to explain why he took the action he did. In my judgment there is nothing in the policy of this tort that requires this bar. It is clearly important that the law should provide proper incentives to parties to familiarise themselves with the law, but if the bar under consideration does not now apply to the recovery of money paid under a mistake, it is difficult to see why it should apply to the economic tort of interference with contractual relations.”
“A conspiracy to injure by unlawful means is actionable where the claimant proves that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so.”
“Mr. Judge submits that although the judge posed the correct test, namely, whether the defendants had an equal or superior right to that of the plaintiffs, he reached the wrong conclusion in law because he confused the defendants' commercial interests with the required legal right, sustainable under the civil law, deriving from their contract. He accepted that if the defendants had exercised their rights under the legal charge, such exercise might have had the effect of interfering with the plaintiffs' contract, and had that been the case the defendants would have been justified. For example, if they had called in the loan and exercised their power of sale, this would have had the inevitable consequence of putting an end to the plaintiffs' contract; but such action would have been justified. But, he submits, if for their own commercial advantage they elect not to exercise any of their legal rights but instead adopt a course of conduct which intentionally interferes with the plaintiffs' contract, they are not justified and must pay.”
“The defendants had the rights of a secured creditor, that is to say the right to be repaid their loan together with interest; in support of that right they had the remedies or rights granted by the legal charge and the law, namely, to sell the land or appoint a receiver. They were not bound to exercise these remedies in defence of their rights, but they could do so. Had they done so, it is common ground at least in so far as the power of sale and I think probably also on the appointment of a receiver, that the plaintiffs' contract would have come to an end. If, instead of exercising these remedies in their full rigour, they reach an accommodation with the mortgagor in defence and protection of their right as secured creditor, which has the same result of putting an end to the plaintiffs' contract, it would in my judgment be anomalous and illogical if they were justified in the one case, but not in the other. Nor can it make any difference that the accommodation reached is one that is more beneficial to the [mortgagor] than the straightforward exercise of the right of sale or appointment of a receiver. Why, it may be asked, should the defendants be justified in interfering with the plaintiffs' contract if they exercise their power of sale as mortgagee in possession, but not if by agreement they permit the mortgagor to conduct the sale in the hope of achieving a better deal for both? Why should they be justified if they appoint a receiver, who has power to build-out the development and appoint architects, but not if they agree to finance the mortgagor to perform this task? I cannot find any logical answer to these questions. Moreover, I think it would be undesirable if the law were to insist that a mortgagee in such a position should exercise his strict legal rights if he is to be justified in interference with contracts between the mortgagor and third parties; and could not be justified if he reached some sensible and reasonable accommodation which may be to the benefit of both himself and the mortgagor, but which has the same effect on the third parties' contract. The accommodation is designed to protect or defend the mortgagees' equal or superior right as a secured creditor, who had in this case financed the entire purchase and development of the site so far. And the accommodation was reached against the background of the remedy of sale or the appointment of a receiver. There can be no doubt that these rights existed once a formal demand for payment was made, a demand which could not have been met.”
“I do know … that First Penthouse had a first charge in priority over Meretz and also I knew that if the money at the end of the day that could be salvaged was not enough to pay First Penthouse, then Meretz would suffer.”
“Participation in a conspiracy is infinitely variable: it can be active or passive. If the majority shareholder and director of a company consents to the company being used for drug smuggling carried out in the company's name by a fellow director and minority shareholder, he is guilty of conspiracy. Consent, that is the agreement or adherence to the agreement, can be inferred if it is proved that he knew what was going on and the intention to participate in the furtherance of the criminal purpose is also established by his failure to stop the unlawful activity.”