Jacob Jumani and Another v Mortgage Express and Another
| Jurisdiction | England & Wales |
| Judge | Mark Cawson |
| Judgment Date | 17 May 2013 |
| Neutral Citation | [2013] EWHC 1571 (Ch) |
| Docket Number | Case No: 1MA30244 |
| Court | Chancery Division |
| Date | 17 May 2013 |
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
Mark Cawson QC
(Sitting as a Deputy Judge of the High Court)
Case No: 1MA30244
Michael Hartman (instructed under the Public Access Scheme) for the Claimants
Benjamin Wood (instructed by Drydens, Solicitors) for the First Defendant
Eva Ferguson (instructed by DAC Beachcroft LLP, Solicitors) for the Second Defendant
Hearing dates: 11, 12, 14 and 21 March 2013
Mark Cawson QC
introduction
In this action the Claimants, Jacob Jumani (" Mr Jumani") and Bilal Tariq (" Mr Tariq") seek against the Defendants, Mortgage Express and Walker Singleton, damages for breach of contract and an order for "possession and control" of certain properties charged by Mr Jumani and Mr Tariq to Mortgage Express, over which Mortgage Express appointed Stephen Nicholas Molloy (" Mr Molloy") and David Heap (" Mr Heap") (together " the Receivers") as Law of Property Act (" LPA") receivers.
Mr Jumani and Mr Tariq allege that at a meeting on 26 February 2009 attended by Mr Jumani, Mr Tariq, Mr Molloy, Stephen George Barker (" Mr Barker") of Mortgage Express, and Zahir Aziz (" Mr Aziz"), a family friend of Mr Jumani and Mr Tariq, a binding agreement was concluded whereunder the relevant properties, or some of them, would be returned to Mr Jumani and Mr Tariq if arrears were cleared. Mr Jumani and Mr Tariq allege that Mortgage Express and Walker Singleton are each in breach of this agreement by failing to return properties to them.
Mortgage Express and Walker Singleton emphatically deny that any such binding agreement was concluded. If an agreement was concluded, then issues arise as to the express and implied terms thereof.
On 29 November 2011, His Honour Judge Pelling QC directed that there be a trial of the following preliminary issues:-
"… whether a legal (sic) enforceable oral agreement was made between the Claimants or either of them and the Defendants or either of them as alleged by the Claimants in paragraphs 11 and 12 of their Particulars of Claim (as amended as provided for hereafter) and if so on what terms" ("the preliminary issues").
The trial of the "preliminary issues" was listed before me on 11, 12, 14 and 21 March 2013. This is my Judgment in respect thereof.
It is important to note that in addition to the present proceedings, Mortgage Express has commenced its own proceedings against Mr Jumani, the short title of which is Claim No. 2MA30124 (" the Mortgage Express Claim"). On 4 March 2013, His Honour Judge Hodge QC, in allowing in part an appeal by Mr Jumani against an order made by District Judge Khan on 21 December 2012 in the Mortgage Express Claim, permitted Mr Jumani to amend his Defence and Counterclaim therein to include, amongst other amendments, a paragraph 31 in the following terms:-
"Further, it was an implied term of the 26 February 2013 agreement and/or it is a term to be implied to give business efficacy to such said agreement and/or so that the Defendant shall be enabled to fulfil the said condition precedent that pending continuance of such agreement the Claimant shall forego its rights under the mortgage to enforce recovery of the debt on each such mortgage upon default thereof and/or as provided by clause 5 therein".
It was common ground between the parties that if I should conclude that a binding and enforceable agreement was concluded on 26 February 2009, I should go on to consider whether the agreement was subject to the implied term referred to in the last paragraph.
THE PARTIES
Mr Jumani and Mr Tariq
Mr Jumani is the legal and beneficial owner of 32 properties (" the Jumani Portfolio") that were bought to let with the benefit of monies advanced by Mortgage Express secured by mortgages granted by Mr Jumani over the respective properties. Mortgage Express has subsequently appointed the Receivers as LPA Receivers over all but one of these properties after the relevant mortgage accounts had got into arrears. Of these 31 properties, 30 of the mortgages granted in favour of Mortgage Express were subject to Mortgage Express's "Conditions 2004" (" the 2004 Conditions"), and one was subject to Mortgage Express's "Conditions 2007" (" the 2007 Conditions").
Mr Tariq is the legal owner of 23 properties (" the Tariq Portfolio"). These properties were, again, bought to let with the benefit of monies advanced by Mortgage Express. The properties were bought in Mr Tariq's name because Mortgage Express would not have been prepared to lend to Mr Jumani to fund the purchase of any more "buy-to-let" properties. The evidence of Mr Jumani and Mr Tariq, which I consider in more detail below, is not consistent as to the extent to which Mr Tariq might have a beneficial interest in one or more of these properties. In any event, Mr Tariq was content to permit Mr Jumani to deal with Mortgage Express and the Receivers in relation thereto. Mortgage Express has appointed the Receivers as LPA Receivers over the whole of the Tariq Portfolio. 11 of the relevant charges were subject to the 2004 Conditions, and the remaining properties were subject to the 2007 Conditions.
Save in relation to six or so of the properties, the Receivers were appointed in or about September 2008. The Receivers were appointed over the remaining properties in early February 2009 as noted in an email from Mr Barker to Mr Jumani dated 6 February 2009 which said: "Basically after long discussions with my manager, it has been decided to take into LPA Receivership the remaining properties … this is because a previous agreement to leave them out of receivership has been broken and they are all two months plus in arrears …".
Mortgage Express
Mortgage Express is an unlimited company that is a wholly owned subsidiary of Bradford & Bingley plc which, as a consequence of the banking crisis of 2007/2008, remains in public ownership.
The decision to appoint the Receivers as LPA Receivers was taken by the appropriate officials of Mortgage Express based at its Head Office. Mr Barker was appointed as "Relationship Manager" for the Jumani and Tariq Portfolios in late 2008 after most of the LPA Receivership appointments had been made. Prior to Mr Barker's appointment, Mr Jumani's point of contact with Mortgage Express was through a call centre.
Mr Barker acted as Relationship Manager with responsibility for the Jumani and Tariq Portfolios until July 2010 when he was replaced by Nicholas Franklin ("Mr Franklin").
Walker Singleton
Walker Singleton is a practice of chartered surveyors that provides a range of property management consulting services, primarily to commerce and industry, from offices located in Halifax, Bradford and Huddersfield.
Within Walker Singleton, Mr Molloy is the "director" with overall responsibility for the operation of LPA Receiverships, which are conducted either in his sole name, the sole name of Mr Heap (a co-director), or in their joint names.
In the course of submissions, and in view of the fact that LPA receivership is a personal appointment, I questioned whether Walker Singleton was the correct Defendant, and whether Mr Molloy and Mr Heap ought to be joined as Defendants. However, no party has taken up this point.
REPRESENTATION
Mr Jumani and Mr Tariq appear as litigants in person, albeit represented by Mr Michael Hartman of Counsel (" Mr Hartman") through the Public Access Scheme.
Mortgage Express is represented by Benjamin Wood of Counsel (" Mr Wood"), and Walker Singleton by Miss Eva Ferguson of Counsel (" Miss Ferguson").
I am grateful to Counsel for their assistance and helpful submissions.
WITNESSES
I heard from the following witnesses:-
20.1 Mr Jumani;
20.2 Mr Tariq;
20.3 Mr Barker and Mr Franklin, on behalf of Mortgage Express; and
20.4 Mr Molloy, on behalf of Walker Singleton.
Whilst a witness statement of Mr Aziz was prepared and served on behalf of Mr Jumani and Mr Tariq, Mr Aziz was not called to give evidence, although parts of his statement were put to Mr Jumani and Mr Tariq in cross-examination.
I say without hesitation that I found Mr Barker, Mr Franklin and Mr Molloy to be frank and honest witnesses doing their best to assist the Court. However, it is important for me to bear in mind that the key events in the present case took place over four years ago, and no doubt over that period of time each of Mr Barker, Mr Franklin and Mr Molloy will have been involved with other individuals in similar situations to Mr Jumani and Mr Tariq, and with other meetings and events of a not dissimilar nature to those involving Mr Jumani and Mr Tariq, giving rise to considerable scope for confusion. Consequently, in considering the reliability of their evidence, and the significance that I should attach to it, it is plainly important that I should have regard not only to my overall view of their credibility, but also, amongst other things, to the contemporaneous documentation and the inherent probabilities of the situation.
For the reasons that I highlight below, I did not find Mr Tariq to be a satisfactory witness. On several occasions I felt that his evidence was tailored to what he considered would be the most helpful answer to give in order to aid Mr Jumani's cause, and to the extent that it is material, his cause. I have similar concerns, albeit less marked, in respect of aspects of Mr Jumani's evidence, in particular so far as it concerned the beneficial ownership of the Tariq Portfolio. Having said that, the overall impression that I gained was that Mr Jumani was, so far as his evidence to me was concerned, an essentially honest witness doing his best to assist the Court. However, where there are conflicts of evidence I...
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Challenging Receivers Insolvency Sales Of Property
...Court dealt with a challenge to a LPA receivership in the case of (1) Jumani (2)Tariq v (1) Mortgage Express (2) Walker Singleton [2013] EWHC 1571 (Ch)). It is always difficult to challenge a receivership - as receivers have a relatively limited set of restrictions and wide powers which are......