Bruce Godfrey Streather and Another v Christopher Charles Bodker
| Jurisdiction | England & Wales |
| Judge | Master Matthews |
| Judgment Date | 03 June 2016 |
| Neutral Citation | [2016] EWHC 1311 (Ch) |
| Docket Number | Case No: HC-2016-000255 |
| Court | Chancery Division |
| Date | 03 June 2016 |
[2016] EWHC 1311 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Master Matthews
Case No: HC-2016-000255
Mark Wonnacott QC (instructed by Mishcon de Reya) for the Claimants
Marilyn Kennedy-McGregor (instructed by Bond Dickinson LLP) for the Defendant
Hearing dates: 12 May 2016
Introduction
This is my judgment on an application by the defendant by notice dated 6 May 2016 for an order striking out the claimants' claim under CPR rule 3.4 and/or under the Court's inherent jurisdiction on the grounds that it is an abuse of the process and would result in a multiplicity of actions, and for costs on the indemnity basis. It is supported by a witness statement dated 6 May 2016 of Neil Ian Long, who is the defendant's solicitor, together with one exhibit. No evidence has been filed in reply to that witness statement, though there is other evidence filed on behalf of the claimants to which I will refer in due course. The hearing took place on 12 May 2016, when Ms Marilyn Kennedy-McGregor appeared for the defendant/applicant, and Mr Mark Wonnacott QC for the claimant/respondent.
The application arises in the context of a claim begun by claim form under CPR Part 8, dated 2 February 2016, whereby the claimants acting as administrators of the estate of Jean Jessie Begley deceased ("the Deceased") seek declarations against the defendant in relation to the meaning of the phrase "market value" in a pre-emption agreement dated 20 March 2008 between the Deceased and the defendant relating to the ground and lower floors of the dwelling-house at 43 Lansdowne Road, London W11 2LQ ("the Property"). The claim form was supported by a witness statement dated 22 January 2016 of Catherine Shirley Rolfe, the claimants' solicitor, with one exhibit.
The defendant acknowledged service, through his solicitors, intimating an intention to defend the proceedings, on 19 February 2016. In a short witness statement dated the same day, the defendant's solicitor Mr Long stated that the defendant intended to apply for an order striking out the claim. That application is the one that I am now considering. In the meantime, however, by notice dated 4 March 2016, the claimants issued an application for summary judgment, supported by a witness statement of Emma Mary McIntyre, with one exhibit. That application has been listed for hearing before me on 24 June 2016.
Underlying facts
The underlying facts in the case are as follows. The Deceased died on 11 May 2011, at the age of 95 years. She left a will leaving most of her estate, including her interest in the Property, to a friend (one Peter Peterson), which was disputed by relatives, Mr and Mrs Wilkinson. Mr Peterson eventually agreed to share his entitlement under the will with Mr and Mrs Wilkinson. Subsequently, however, one Nicholas Hill bought the interests of both Mr Peterson and Mr and Mrs Wilkinson. I will come back to Mr Hill. An interim administrator was appointed of her estate, one Richard Roberts. He was later replaced by the claimants, who have now brought this action. It concerns a particular aspect of transactions that took place in relation to the Property in March 2008.
Prior to 8 February 2008, the registered freehold proprietor of the first, second and third floors of the Property was a Mrs Rendel. The Deceased was the registered proprietor of the freehold estate in the remainder of the Property, ie the ground and lower floors, and the roof and airspace above. Thus each of Mrs Rendel and the Deceased owned what is usually termed a "flying freehold". The Deceased's part of the property was known as 43A, and Mrs Rendel's as 43B. In addition the deceased was the registered freehold proprietor of three garages ("the Garages") which served the Property.
The defendant is a businessman. He negotiated to buy 43B from Mrs Rendel. But he recognised that the title to the Property was awkward, largely because of the rules about the (non-) running of freehold covenants. It created problems in relation to repairs of the roof, for example, because the Deceased would have to pay for them while Mrs Rendel had no obligation to contribute to the cost. On the other hand, if the roof leaked, it was Mrs Rendel who would notice the problem first, but she could not require the Deceased to do anything about it.
So the defendant proposed a scheme to the Deceased whereby the freehold of the whole property would be transferred to a company, and long leases would be granted of Nos 43A and 43B to their formerly freehold owners. Because leasehold covenants are enforceable more easily, this was expected to cure the problem about the running of covenants. But he also sought the grant from the Deceased of a right of pre-emption to purchase 43A, and also the Garages, from the Deceased. The Deceased was apparently prepared to agree.
The defendant having acquired the interest of Mrs Rendel in 43B, in March 2008 the whole freehold of the property was transferred to 43 Lansdowne Road Ltd ("the Company"), and long leases were granted of 43A and 43B to the Deceased and the defendant respectively. On 20 March 2008, the Deceased executed two pre-emption agreements, one relating to the Garages, and one relating to 43A, for a period of 21 years. These are the focus of the present claim.
The terms of the two agreements are identical, mutatis mutandis. The purchase price to be paid in case the pre-emption right is triggered is defined as
"the amount that is agreed or determined in accordance with clause 6 to be the market value of the [relevant property] at the date the Offer Notice is served (exclusive of VAT)".
Clause 6 provides a mechanism for agreeing or determining the market value, ultimately involving a reference to an independent surveyor who is a fellow or associate of the Royal Institute of Chartered Surveyors with at least 10 years' relevant experience. The term "market value", however, is not defined.
The dispute between the parties
The dispute between the parties in this claim relates to the meaning of the term "market value", and in particular whether it includes the value to a special purchaser. Catherine Rolfe in her witness statement puts the matter in this way (para 2):
"The claimants say that it does; the defendant says that it does not".
It looks like a straightforward matter of construction. No doubt the claimants will say that the defendant is a special purchaser and would pay more for 43A than anyone else. In fact, it is not quite so simple, because the defendant says there is an issue about estoppel by convention, and another about resort to a private dictionary, that must also be decided. I mention these further below.
However, if matters stopped there, the present application might not have been made. Unfortunately, this is not the only claim extant between the parties concerning the Property. On 5 February 2014, some two years prior to the claim form in the present case, the original administrator of the estate of the Deceased, Mr Roberts, issued a Part 7 claim form against the defendant and the Company, alleging that the Deceased's sale of the freehold of 43A and her grant of the pre-emption rights were procured by misrepresentation and/or actual and/or presumed undue influence by the defendant, and/or were unconscionable transactions. Mr Roberts sought the rescission of the various transactions, including the grant of the leases of 43A and 43B.
That claim does not appear to have progressed very fast, or very far. Service on both defendants was effected on 29 May 2014, and was acknowledged in June 2014. An application for a stay to facilitate settlement discussions was made and granted in July 2014. It expired in October. The Chief Master (to whom the management of that claim is allocated) asked whether the parties were seeking a further stay. There is no response to this on the file. Defences were eventually served on 9 January 2015, and then a Reply, on behalf of the estate administrator, on 9 February 2015. And that is all.
The present claim
Catherine Rolfe in her witness statement says that the present Part 8 claim has been brought "in an attempt to cut the Gordian knot" of the earlier Part 7 claim, seeking to unravel the transactions of March 2008. As she puts it (para 3), "The simple point is that, if the price which the defendant has to pay includes the value to him as a special purchaser, then it may not be worth unwinding the scheme at all".
In his witness statement dated 6 May 2016, in support of the present application to strike out the claim, Mr Long claims that there is another dimension to this litigation. This is that the Defendant is involved in yet further (existing) litigation, though this time about a property joint venture with Nicholas Hill, who (as stated above) is the person who bought out the interests of both Mr Peterson and Mr and Mrs Wilkinson in the Deceased's estate. Mr Hill is apparently therefore the person for whose benefit both the Part 7 and the Part 8 claims are now being prosecuted. Mr Long asserts that both claims now are simply for the purpose of harassing the defendant in relation to the entirely separate property joint venture litigation.
In the skeleton argument for the defendant, counsel argues that, whatever the meaning of 'market value' might otherwise be, in the present case the deceased and the defendant in entering the agreements between them proceeded on a particular basis ( ie that it did not include any uplift for a special purchaser) which therefore acquired the force of an estoppel by convention. Alternatively, she says, the parties created a 'private dictionary', by resorting to the language of surveyors. I will return...
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