Bower Terrace Student Accommodation Ltd & Anor v Space Student Living Ltd [2012] EWHC 2206 (Ch)

[2012] EWHC 2206 (Ch)Case No HC12A02376
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, 7 Rolls Building, Fetter Lane, London, EC4A 1NLDate 27/07/2012
Before
MR JUSTICE FOSKETT
Between
BOWER TERRACE STUDENT ACCOMMODATION LIMITED and HERBAL HILL STUDIOS LIMITEDClaimantsSPACE STUDENT LIVING LIMITEDDefendant
Wayne Clark (instructed by Berwin Leighton Paisner LLP) for ClaimantJonathan Small QC and Stephanie Tozer (instructed by Key2Law) for DefendantHearing Hearing dates: 23 and 24 July 2012
Judgment
[1]Herbal Hill Studios Limited (“Herbal Hill”) (formerly known as Ely Property (Herbal Hill) Limited) and Bower Terrace Student Accommodation Limited (“Bower Terrace”) (formerly known as Ely Maidstone Limited) are companies that own the freehold respectively of the properties known as 8 Herbal Hill, London, EC1R 5EJ, and 7 Bower Terrace, Maidstone, Kent, ME16 8RY. Both properties comprise accommodation for occupation by students and are let out for that purpose either on the basis of assured shorthold tenancy agreements or occupational licences. At Herbal Hill there are 45 studio apartments available to let and at Bower Terrace there are 114 studio apartments to let. A good number of units in each property are already let to students for the forthcoming academic year.[2]Space Student Living Limited (“Space”) was incorporated in November 2010. Its relationship with the two companies I have mentioned lies at the heart of the issues I have to consider for the purposes of the application before me.[3]It appears that the driving force behind all three companies is or has been Mr Philip Marley. He certainly claims to be the driving force behind Space which, in his witness statement dated 27 June, he describes as being in the business of the management and letting of student accommodation and says that it presently has 1000 beds split across a number of sites in England and Ireland, including the sites with which this case is concerned as well as sites in Portsmouth and Coventry, in addition to its Irish sites. He speaks of plans for a significant expansion of its operations by the acquisition of a further 3000 beds in Ireland and various sites across England dependent on it securing appropriate finance.[4]The respective Registers of title suggest that Herbal Hill was acquired in July 2008 and Bower Terrace in June 2006 both with the assistance of loans from the National Westminster bank secured by way of a registered charge on each property.[5]It would appear that a re-financing arrangement was made in respect of Bower Terrace in July 2010, but subject to the same charge in favour of the bank on and Herbal Hill was also made the subject of a similar charge on 26 July 2010. I will refer to the material terms of those charges, both in identical terms, shortly.[6]Shortly before the appointment of the two receivers to whom I will refer in a moment the sums owed to the Bank by the two companies were £6.394 million in respect of Herbal Hill and £5.954 million in respect of Bower Terrace.[7]Each of the charges made provision for the appointment of a receiver or receivers of the property. Each makes clear that the receiver, if appointed, will be the owner’s agent and that the owner (and not the bank) will be responsible for the acts, defaults and remuneration of the receiver. The provisions of the charge enable the bank or any receiver to do a number of things including the carrying on of the owner’s business that is conducted at the property and to enter, take possession of and/or generally manage the property. The owner of each property was, of course, the relevant company.[8]On 18 April 2012 Rosalind Jane Goode and Nathan John Pask of GVA Grimley Limited were appointed by the Bank as joint fixed charge receivers over each of the Properties. Ms Goode has some 20 years experience as a receiver.[9]In her witness statements in support of the application before me Ms Goode says that it is the intention of the receivers to sell both properties at the best possible price in order to meet the outstanding debts. She asserts that both assets would be most attractive to buyers who wish to own and manage the properties and that it will be attractive to them to purchase buildings complete with occupiers which then can be managed as they see fit. What the receivers have been seeking to do from the outset has been to take over the management of the two properties, currently being undertaken by Space, to facilitate this objective. However, Space has been unwilling to hand over the management and it is that stance that has led to the present application.[10]Before I come to deal with the way matters have developed since the receivers began their duties, I should, perhaps, refer briefly to the provisions of the two legal charges and, in particular, to the restrictions imposed upon dealing with the properties by their respective owners.[11]In paragraph 3 of the charge it is provided that the owner “will not, without the bank’s consent … permit or create any mortgage, charge or lien on the property … dispose of the property … grant, or accept a surrender of, any lease or licence of the property or consent to a tenant assigning or subletting … part with or share possession or occupation of the property”.[12]The Legal Charge in respect of Herbal Hill was signed by Mr Marley having been authorised so to do, according to a Resolution of the Directors certified by Julia Ind as have been resolved on 26 July. Ms Ind was described as the Secretary of the company.[13]On 19 April Ms Goode wrote a letter to the directors of Herbal Hill drawing attention to her appointment and that of Mr Pask and reminding the directors that their powers to deal with the property were suspended, including their rights to receive rent and other benefits flowing from the property. She also asked for certain information about the property. On the same day, presumably having been informed of an e-mail address for Mr Marley, she sent an e-mail to him asking to met him early the following week to discuss the properties and she told him that in the meantime she and her colleague would attend each of the properties so as to advise the occupiers of their appointment and to make arrangements for future rent collections. On the following day Mr Marley e-mailed Ms Goode asserting that in respect of both properties “the tenant/operator is [Space]”. He said that he would “immediately advise the operator to pass over rent in accordance with their agreements as attached”. Attached to that e-mail was what I will describe as version 1 of what were termed ‘Management and Letting Agreements’ in respect of each of the properties. Both were dated 10 June 2011. Self-evidently, each agreement, whatever its legal nature may be, post-dated the bank’s charges to which I have referred. It is not suggested that the prior consent of the bank to these agreements was sought or obtained.[14]I will return to the contents of version 1 of those agreements shortly and also the contents of what I will call version 2. However, to keep to the chronology, I would observe that Space instructed solicitors, Key2Law, who wrote to Ms Goode on 21 April by letter containing this paragraph:
“[Space] hold the properties under 10 year management and letting agreements which preserve our client’s security of tenure under the Landlord and Tenant Act 1954 and their contractual right to manage the properties in the event of insolvency by the landlord.”
[15]The receivers then instructed Berwin Leighton Paisner (‘BLP’) who challenged the assertion to which I have referred in the following terms:
“The agreements are both vague and full of drafting errors and inconsistencies so as to be void. Even if that is wrong, neither document purports to be a lease and they do not convey any proprietary interest to your client in respect of either of the properties. Accordingly, the provisions of the Landlord and Tenant Act 1954 do not apply and your reference to your client’s tenants is not legally accurate in respect of occupiers at the properties. Should you disagree please explain why. Further, clause 3 of both legal charges require the bank’s consent prior to granting a lease or licence at the properties. No consent was given to the agreements and they cannot therefore bind the bank or our clients….”
[16]There was some not very illuminating correspondence thereafter, but on 27 April BLP reverted to the suggestion that had been made that the bank had consented to the two agreements and invited the provision of evidence to that effect. It is, as I understand it, the case that no such further evidence has been provided.[17]There was further e-mail interchange between BLP and Key2Law, BLP continuing to maintain that the Management and Letting Agreements did not confer any interest in land in favour of Space. On 22 May version 2, as I have called it, of the Management and Letting Agreement in respect of each property was sent by Key2Law to BLP. As I have indicated, I will return to the differences between these two versions shortly, but BLP made it plain that they did not accept that the Management and Letting Agreement conferred any interest in the properties. I should, perhaps, have said that Key2Law asserted, in an e-mail of 21 May, that a Mr Ben Jenkinson on behalf of the bank was informed of the Management and Letting Agreements on 21 December 2011. That, presumably, affords the basis for suggesting that the bank was aware of the agreements. However, this was well after the charges were in place and affords no basis at all for the contention, which does not appear to be maintained, that the bank “consented” to an interest in either property being conferred on Space.[18]On 28 May there was a lengthy letter from Key2Law to BLP which, at paragraph 20, reasserted the suggestion that Space had a protected occupancy by virtue of the Landlord and Tenant Act and said that if this was disputed “then legal proceedings for declaratory or other relief would be appropriate, with various legal issues including the construction of the agreement, rectification and estoppel”. That paragraph ended with this sentence:
“If you choose so to proceed, we will vigorously defend.”
That sentence may be thought to convey the suggestion that if BLP’s clients sought declaratory relief, Key2Law’s clients would defend the proceedings rather than to suggest that it was their clients that were contemplating proceedings.[19]That e-mail was sent on Monday, 28 May. It has since emerged that on the same day letters from a Mr Berni Woods, “for and on behalf” of each of the two companies, addressed to the directors of Space, were apparently sent in which Mr Woods expressed “regret to hear that you have become embroiled in such difficult communication with the Receivers”. He continued that it was “never our intention for you to have to deal with such matters” and confirmed that(1) Space “has exclusive possession of the properties”,(2) that it was the mutual intent of both parties to create a tenancy and(3) that a tenancy was in fact created. It has further since emerged that on 1 June Particulars of Claim asserting this case were issued in the Queen’s Bench Division. I should say that the status of Mr Woods in the two companies was not revealed in those letters.[20]The e-mail of 28 May to which I referred was responded to by BLP on 30 May by virtue of which the Receivers made an offer to resolve matters by retaining certain sums in an escrow account, but otherwise asserting their right to manage the properties in whatever way they considered appropriate in order to preserve the value of the properties as security.[21]By the following Wednesday, 6 June, and thus in the middle of Whit week, Tomlin orders were obtained and sealed in the Queen’s Bench Division in relation to each property which contained the following terms of agreement in the respective schedules: “1. The Management and Letting Agreement entered into between the parties on 10 June 2011 (“Lease”) constitutes a lease; 2. The Lease grants exclusive occupation of the premises known as [the premises are named] to [Space]; 3. To the extent that is necessary, the Lease be rectified to be read as a Lease and Management Agreement; 4. [Space] is granted the relevant protections established under the Landlord and Tenants Act 1954 (as amended) and pursuant to the Lease; 5. Each party bears its own costs”.[22]The Claimant in each of those two actions was Space and the defendant in each case was Bower Terrace and Herbal Hill respectively. The schedule to the Tomlin order was signed by Key2Law for the Claimant and Julia Ind as a director for each of the two defendant companies.[23]The emergence of this order provoked an understandably strong response from BLP because, plainly, the order had been obtained without notifying the Receivers of the applications and, it would appear, not notifying the court fully of the interests of the receivers although paragraph 5 of the Particulars of Claim in each claim said this:
“…the Claimant seeks declaratory relief to confirm its rights under the agreements particularly since there has been assertion that the agreements did not intend to and did not constitute a lease by LPA Receivers of the [company].”
[24]An application to aside that order was to come before me at the same time as the application for the injunction, but, unsurprisingly as it seems to me, agreement was reached prior to the hearing that the orders should be set aside.[25]Since the matter is not strictly speaking before me now, I will say little more about it. However, the episode hardly inspires confidence that the affairs of Space were, certainly at that time, being dealt with in an open way. It appears that the purpose was to try to make the Receivers come to the negotiating table. The first news of the orders made came in a fax sent by Key2Law to BLP at 11.26 on 7 June in which the following paragraph appears:
“You will notice that there are two judgments now recognising our client’s interests in land; exclusive right to possession and rectification of the lease so far as necessary. You will of course make any potential purchasers of the properties aware of the judgments. … Our client again urges a meeting at the earliest convenient moment to further progress a mutual compromise.”
[26]An adviser to Mr Marley, Mr Gerard Murray, an accountant based in Ireland, e-mailed Ms Goode at shortly after 2pm that day saying that he understood that the orders were obtained “as a protected measure and does affect a potential settlement”.[27]So much for the fairly obvious tactics behind what was done. However, there is another feature in what happened in this context that is of interest: the version of the Management and Letting Agreement upon which the Particulars of Claim in each of the two sets of proceedings launched was the first version and not the second version. This is a convenient point at which to highlight the differences between them. However, I should preface what I am about to say with the observation that absolutely no explanation has been given by Mr Marley for the existence of the two versions. He explains in his witness statement that the “model” that his business generally adopts is to have a company, which he calls the PropCo, to own the bricks and mortar of the relevant building, but that Space would be the company that operated the management and letting business. So far as the agreements to that effect are concerned he said this in his witness statement: “I drafted the agreement between the PropCo and [Space], based on previous agreements we have used in Ireland and precedents I found on the internet…. I should highlight that [the first version] was executed in error and the version I produce is the correct version of this agreement”.[28]As I have said, there is no other explanation given for the “error” of execution. The arguments advanced by Mr Jonathan Small QC and Miss Stephanie Tozer on behalf of Space concerning the status of the Management and Letting Agreements have focused on the second version and not the first. Mr Wayne Clark, for the Receivers, has been prepared to argue their case on the basis of the second version, though submits that it is wrong for Space to be entitled to put its case on the basis of that version when very recently it had sought and obtained an order in another division of the High Court on the basis of the first version. I am strongly inclined to agree with him. Given that there is a change between the first version and the second version that, arguably, makes the second version nearer to possessing the hallmarks of a lease, it is an intriguing question, as yet unanswered, as to how and when the second version came into existence.[29]Let me turn to the two versions. The parties are identified with the predecessor company of Bower Terrace Student Accommodation Ltd in one agreement and Herbal Hill Studios Ltd in the other, each being described as the “landlord” respectively and Space as the “management and letting agent”. The term of the agreement for Bower Terrace is said to be 10 years and for Herbal Hill 5 years. Under a clause headed “Rent and outgoings”, the following appears: “1. The Management and Letting Agent [Space] shall take a fee of 11% of the gross rent collected prior to any deductions. Administration costs (including service charges and insurance costs, letting and management expenditure) shall be deducted from the remaining rent collected and the balance will be forwarded to the landlord…. 2. Landlord payments in accordance with [1] of this agreement to be paid quarterly (in arrears), with the first quarter commencing 1st February 2012. 3. [Space] will be responsible for all outgoings relating to the Property. 4. [Space] will provide the booking and administration platform for the operation of the property”.[30]There are then two provisions which provide that Space should insure the property for its full reinstatement value and that it will be responsible for keeping the property (inside and outside) in a good state of repair and condition (fair wear and tear excepted) and that it will redecorate the interior of the property from time to time.[31]A further paragraph refers to the existence of “Letting Guidelines” which provides that Space “shall ensure the relevant guidelines in respect of the letting of the student accommodation are adhered to”.[32]There is then a clause headed “Assignment” which reads simply “this agreement is assignment”. Mr Clark suggests, and it seems the only explanation, that this was intended to read “this agreement is assignable”.[33]There is then a clause which provides that external and structural alterations are “strictly prohibited” and that Space “may not install, alter the route of, damage or remove any service media without the prior written consent of the landlord, not be unreasonably withheld or delayed”.[34]A further provision requires the company to make contributions of £17,500 towards the marketing and promotion of the scheme and that Space has the “exclusive right to book and house students” living at the property.[35]The final paragraph is headed “Special Conditions” and provides that in the event of the landlord’s insolvency the terms of the agreement “shall continue to inure for the benefit of [Space] and it is specifically recognised that [Space] has entered into this agreement on that specific condition and on having its rights preserved”. The final provision is that if for any reason there is an insolvency “or any other voluntary arrangement [Space] will be entitled to receive the full sum as defined and set out in clause 5.1 of this agreement for the period of this agreement between the parties”.[36]That, as I have indicated, was the way in which the first version was phrased. The second version is similar, but there are differences. In the first place, the clause dealing with “Rent and Outgoings” is different in the sense that paragraphs numbered 1 and 2 which I have referred are as follows:
“1. The Management and Letting Agent [Space] is to pass to [the company] 89% of all rent collected per bed space following the deduction of [Space’s] administration costs (including service charges and insurance costs, letting and management expenditure and [Space’s] administration costs). 2. The rent is to be paid quarterly (in arrears) upon the following quarter days: 1 April, 1 July, 1 October and 1 January. The first instalment shall be paid on the date of completion of legal formalities and shall be the proportion of the annual rent payable from the date of completion until the date before the next rent payment date.”
[37]In the new version there is an additional paragraph, not in version 1, that follows that clause which provides that Space will be responsible for paying the rates on the property.[38]The same provisions concerning insurance, repairs and other provisions and the letting guidelines are the same as the first version.[39]The paragraph previously headed “Assignment” is now headed “Alienation” and reads as follows: “Assignment of whole and under-letting of whole of the property is permitted with the prior written consent of the landlord, not to be unreasonably withheld or delayed”.[40]All the other conditions are the same.[41]Mr Clark tells me that a request for a sight of the “letting guidelines” has been made, but they have not been forthcoming. He says that without those guidelines it is impossible to obtain a complete picture of the effect of each agreement. The guidelines could help in determining whether, on an objective construction, either version of the agreement was a lease (or an agreement for a lease) or, as he contends, purely a management agreement creating no proprietary rights for Space. There is force in that submission.[42]Returning to the agreements themselves, each version of those agreements was signed by Mr Marley “for and on behalf of” the relevant company and by Julia Ind “for and on behalf of” Space.[43]As I have recorded previously, Ms Ind was described as the Company Secretary for Herbal Hill in a document she signed. She signed the schedules to the two Tomlin orders as a director of each company and she has signed each agreement that I am currently considering as a director of Space. Mr Marley is a director of Space and also a director of each of the companies. He asserts that he has no interest in what he calls the PropCos, though, as I have said, he acknowledges that he remains a director of each.[44]This emphasises, if emphasis is needed, the close relationship between the various companies and the ease with which transactions and agreements may be created for the benefit of those companies without external institutions or entities being aware of what is going on and the possible implications. Furthermore, it is quite obvious that the directors of the two companies in receivership have at all material times been aware that the companies have no right to convey or create any kind of proprietary interest in the properties those companies owned in favour of any other party without the consent of the bank. On any sensible and realistic view, Space, with probably the same, or at least some of the same, directors as the two companies in receivership, will thus have had knowledge that, if the Management and Letting Agreements were intended to convey a proprietary interest, they could not lawfully do so. It should have been appreciated that all that the agreement could do was to confer management rights and responsibilities.[45]To my mind, that would be sufficient to dispose of all the arguments advanced on Space’s behalf. It would not necessarily mean that the management agreements were not effective as between Space and the two relevant companies, but it would certainly mean that neither bound the bank nor placed the Receivers under any obligation to accept them.[46]If, however, that was thought to be too robust a view, how do the other arguments fare on proper analysis?[47]Mr Clark argues that there cannot even be an equitable lease here because there can be specific performance only of a binding contract. (I should say that it is conceded by Mr Small that the agreements could not operate as leases at law because they exceeded three years and were not created by deed: see sections 52(2) and 54(2), Law and Property Act 1925). Mr Clark contends that the agreements have not been signed appropriately in such a way as to create a binding agreement between the relevant company, on the one hand, and Space, on the other.[48]His short point is that there is no binding contract to grant a lease as the Management and Letting Agreements do not comply with section 2(3) of the Law of Property (Miscellaneous Provisions) Act 1989. This requires that the document incorporating the terms “must be signed by or on behalf of each party to the contract”.[49]He submits that each agreement is not properly signed on behalf of Space or the companies because they are signed by only one director and that is insufficient. He draws attention to sections 43 and 44 of the Companies Act 2006. Section 44 came into force on 6 April 2008.[50]Section 43 provides that a contract may be made by a company, by writing under its common seal, or “on behalf of a company, by a person acting under its authority, express or implied.” Subsection (2) provides that any formalities “required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.” What section 2(3) of the 1989 Act requires is the formality that the document is signed “by or on behalf of each” company. This can be achieved, he argues, only by the application of two authorised signatories, or by a director of the company in the presence of a witness who attests the signature: section 44(2).He submits that this is supported by Redcard Ltd v Williams [2010] EWHC 1078 (Ch) at [10]-[12], per Lewison J, as he then was. He suggests that there was no dissent in the Court of Appeal: [2011] EWCA Civ 466.[51]His argument may be correct and, in the context in which the argument arises, namely, the somewhat amateurish way in which the agreements were drawn up, it is enticing. However, I sense that this is not an area where a clearly established interpretation of a relatively new statutory provision has yet emerged. I think it would be unwise for me, on an application for an interim injunction of this nature to endeavour to come to a concluded view. I would prefer to assign this contention simply into the “arguable” category for present purposes.[52]Assuming, therefore, in Space’s favour that the agreements complied with the necessary formalities, would specific performance be ordered? Relying on Warmington v Miller [1973] QB 877, Mr Clark argues that it would not be ordered. In that case Stamp LJ, with whom Cairns and Davies LJJ agreed, said in respect of a submission advanced that the judge below ought not to have ordered specific performance because it required the landlord to do something that he could not do under the terms of the lease under which he held the premises (namely, the head lease) which, if he did, would expose him to proceedings for forfeiture. Stamp LJ said at p. 886G:
“In my judgment, that submission is well founded. I can see nothing in this case to take it outside the practice of the court, in determining whether to exercise its discretionary power to grant the equitable remedy of specific performance, not to do so where the result would necessitate a breach by the defendant of a contract with a third party or would compel the defendant to do that which he is not lawfully competent to do: see Fry's Specific Performance, 6th ed. (1921), p. 194 and Willmott v. Barber (1880) 15 Ch.D. 96, per Fry J. at p. 107.”
[53]Mr Clark submits that to grant leases to Space by way of specific performance would require each of the companies to be in breach of the terms of the charges to the Bank. Mr Small sought to distinguish that case on the basis that in the present case the Receivers are acting as agents of the company and are not holding under any agreement that would be determined if a lease was granted to Space in each case. If I understood the argument correctly, it continued by suggesting that the bank had already protected its security by appointing the Receivers, that there was no evidence to show that the bank was about to take possession of the properties and that there was, therefore, nothing to prevent a court from awarding specific performance.[54]I do not think that argument stands up either in law or by any realistic appraisal of the circumstances. First, specific performance would require each company (now acting through the Receivers) to enter into leases prohibited by the charges. I cannot see how that differs in principle from what the Court of Appeal said was impermissible in the Warmington case. Second, it is quite clear in this case that the bank would not consent to the grant of such a lease because to do so would inevitably have an effect on the value of each property. It is that very value, on a going-concern basis, that the Receivers are endeavouring to realise for the bank.[55]Accordingly, I reject both those arguments as quite unsustainable and it seems to me that Mr Clark is right in the submission that he makes. The conclusion I have reached arose from the submissions about the possible grant of a lease by virtue of an order for specific performance. Since the position of Space under a contractual licence would also require an order for specific performance, it seems to me that the arguments advanced on that basis must also fail for the same reasons.[56]Mr Small said that if he as wrong about the submissions to which I have just referred (which, with respect, I consider that he was), his “fall-back position” (albeit, as he put it, a real one) was that there was a lease at law in the sense that Space was a periodic lessee because it had entered into possession and paid rent. He put it bluntly by saying that the Receivers could do nothing about it.[57]Given that this argument was not foreshadowed at all in his Skeleton Argument, this smacks of a degree of rather late forensic creativity. If my initial robust approach is valid, the payment and acceptance of regular periodic payments by Space to each of the companies with the result, objectively speaking, that without more a periodic tenancy was created would be negated by the other objective factor, namely, that each party to the transaction would know (through its directors) that creating such a tenancy was unlawful because of the prohibition against doing so in each charge. However, leaving that to one side, Mr Clark is right to say that there is no evidential basis for this assertion in any event. Mr Marley’s witness statement says nothing about this and, Mr Clark tells me, no “rent” has been received by the Receivers since they were appointed. This case was put over from 21 June to enable the filing of evidence by Space, but nothing has been put forward to support such an argument. I consider that there is nothing in this argument.[58]Given the primary conclusion to which I have come, it is not strictly necessary for me to consider the arguments about exclusive possession. To the extent that it matters, I would say that, construing some of the terms of the agreements, version 1 certainly seems more like a management agreement than a lease and the payments of “rent” seem to be nothing more than periodic payments by the agent to the landlord of the rents obtained from the students less certain fees and expenses. There is nothing in that agreement that leads to the view that exclusive possession was given. The only provision in version 2 that might give some support for that construction is the clause entitled ‘Alienation’ to which I have referred above. Mr Clark accepted that that might suggest such a construction of the grant of exclusive possession, albeit only just and in the context of all the other provisions, not at all. That clause might just make the issue arguable, but(a) it seems to me very tenuous and(b) I really do not think it would be right for the court to entertain arguments based upon a document with such an unsubstantiated and unexplained provenance and given that it was not relied upon by Space to seek the Tomlin orders in the Queen’s Bench Division that have now been set aside.[59]For my part, I am satisfied to a high degree of assurance that the Receivers would succeed in demonstrating at a trial that the agreements, whatever their status, were no impediment to their responsibilities and were neither binding upon them nor upon the bank.[60]It is, of course, said on behalf of Space that this whole issue should await a trial. In the period up to the commencement of the hearing before me, it had been the contention in correspondence on behalf of Space that there should be a speedy trial. In a letter of 11 July Key2Law suggested an adjournment of the hearing that in fact took place 14 days later with a view to a consensual application for a speedy trial with a time estimate of 1½ days. On the first day of the hearing I told both counsel that, having discussed the matter with the listing authorities in the Rolls Building, a 2-day trial could be accommodated in 14 days time. Mr Small confirmed at that stage that he thought there would only be two witnesses on his side and that the documentary material needed to resolve the issue would not be great. When I returned to the topic on the second day of the hearing, the list of witnesses for Space had expanded to 8, there were difficulties with a hearing as speedy as the one I had suggested and the earliest Mr Small thought that such a trial could properly be accommodated was late September.[61]He was doubtless acting on instructions given overnight. I am bound to say that this had all the hallmarks of a skilfully and eloquently presented case for buying some time.[62]For my part, and subject to the question of the balance of convenience and whether damages would be an adequate remedy, I cannot see why the Receivers should not be able to carry out the duties for which they have been appointed in order to recoup the substantial indebtedness of both companies to the bank whose customers would be expecting action to be taken in such circumstances. The Receivers are, of course, entitled in principle to carry out these duties without interference from representatives of Space and they are entitled to the information and assistance reflected in the terms of the injunction sought.[63]Much is made on behalf of Space of the special nature of the work undertaken by its employees in the student accommodation. There is no reason to doubt the competence of those who presently work in both properties, but I do not consider that it can sensibly be said that they are indispensable and that experienced Receivers will not be able to take proper steps to replace such people (if that is what they choose to do) and to put in place a satisfactory alternative system. It is, of course, very much in their interests (or, at least, in the interests of the bank by whom they were appointed) to make the system work well in order to make the properties attractive to sell.[64]It is also said that an order of the nature sought will affect the work and reputation of Space more widely. As Mr Clark says, this is a very speculative assertion and I do not see that it should necessarily be so. However, the fact of the matter is that both companies which are closely associated with Space have defaulted on their obligations under the loans from the National Westminster Bank. That is a fact that will not go away whether or not an injunction is granted.[65]The Receivers are prepared to give a full undertaking in damages and possibly other undertakings of reassurance. On that basis, I can see no grounds for declining to grant the injunction sought.[66]Subject to any further representations about the final terms of the order, for the reasons I have given this application succeeds.