Joseph Carroll (Plaintiff) Jayantilal Monji Manek (First Defendant) Bank of India (Second Defendant)
| Jurisdiction | England & Wales |
| Judgment Date | 12 July 1999 |
| Judgment citation (vLex) | [1999] EWHC J0712-8 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case number: CH.1997-C-3586 |
| Date | 12 July 1999 |
[1999] EWHC J0712-8
In the High Court of Justice
Chancery Division
His Honour Judge Hicks Qc
Case number: CH.1997-C-3586
Jonathan Clay for the Plaintiff (solicitors: Osler Donegan Taylor, Brighton) Katharine Holland for the Second Defendant (solicitors: Penningtons)
Landlord and tenant. Tenancy or licence. Whether hotel manager required to reside in hotel as term of contract of employment.
Rent Acts. Protected tenancies. Exceptions. Licensed premises. Whether living accommodation in bar area "consists of or comprises" licensed premises.
Limitation of actions. Title by adverse possession. Mortgagor's tenant ceasing to pay rent for over twelve years. Whether title acquired against (i) mortgagor, (ii) mortgagee. If against (i) only, position as against mortgagee.
Mortgages. Redemption. Whether right to redeem apportionable in favour of owner of equity of redemption of part only of land charged.
The text of the judgment approved by His Honour Judge John Hicks QC is as follows:
Introduction
The King's Head, Harrow-on-the-Hill, is a hotel of some antiquity; a photograph of its frontage shows it emblazoned with the proud claim: "Established 1535". It is of substantial size and was probably at one time of commensurate respectability; even in its final troubled years as licensed premises it seems to have been quite a busy public house, but since 1992 it has been largely occupied by persons in bed-sitting accommodation supported by housing benefit. The proprietor of the registered title at H.M. Land Registry is the First Defendant, Mr Manek.
Mr Manek charged the property by way of legal mortgage to the Second Defendant, which I shall call "the Bank", on 12 March 1981 to secure all moneys from time to time owing by him to the Bank. In proceedings in this Division against Mr Manek begun by way of Originating Summons on 23 September 1996 the Bank obtained on 13 December 1996 from Master Winegarten an order for possession of the property, expressed to be "without prejudice to the continuing rights of occupation of the existing occupiers other than [Mr Manek] and his family". On 27 February 1997 Mr Justice Rattee made in those proceedings a consent order by which, among other things, the appeal (presumably of Mr Manek) against the Master's order was withdrawn and judgment was directed to be entered for the Bank in the sum of £1,672,033.60. A writ of possession was issued but has never been executed, nor has the Bank taken physical possession by any other means, but in July 1997 it appointed a receiver of the income of the property under sections 101(1)(iii) and 109 of the Law of Property Act 1925. A receiver remains in office under that appointment and is, by virtue of section 109(2) of the 1925 Act, deemed to be Mr Manek's agent. On 9 April 1998 the Bank obtained a charging order absolute in execution of its money judgment against Mr Manek's interest in the following properties:
The Flats, Wiltshire Lane, Ruislip.
College Road, Harrow Wealdstone.
Wakeman Road, Willesden.
East Lane, [sc. Wembley].
Waldron Cottage, Waldron Road, Harrow-on-the-Hill.
a Byron Road, Wembley.
–60 (even) Wolseley Road, Harrow.
Some aspects of the involvement of the Plaintiff, Mr Carroll, with Mr Manek and the King's Head will require detailed examination later, but according to his own account it began in 1977, when as a schoolboy he worked at the hotel for Mr Manek at weekends and during school holidays. In June 1980 he left school and moved into the hotel, where with one exception and subject to one reservation he has lived and worked there ever since, rising in status over the years, and in particular (in circumstances which will appear) at the end of 1992, when at the latest he became the hotel manager. The exception is that for about eight weeks at the end of 1983 he was working elsewhere, while still living in, after a quarrel with the then manageress, Mrs Nicol, each having accused the other of responsibility for the fact that money was missing from the till. The reservation is that Mr Carroll is not, and has never been, an employee of the receiver and so cannot have been the manager of the hotel since the latter's appointment, whatever his status as between him and Mr Manek.
What is not in dispute, since it appears from the licensing records, is that Mr Carroll was the joint licensee of the hotel, with Mr Manek, on a full justices' on-licence from 4 June 1985 to 14 March 1990, and with Mr Manek and Davi Manek from 14 March 1990 until 4 April 1992, when renewal was refused on the ground that they were not fit and proper persons to hold a licence and Mr Manek and Mr Carroll were ordered to pay a total of £16,950 objectors' costs. It is also not in dispute that from December 1992 until July 1995 Mr Manek was serving a sentence of imprisonment for rape. It appears from Mr Carroll's evidence, not I think challenged, that after his release Mr Manek spent an increasing proportion of his time in India, that he has not been in this country since before the commencement of the present proceedings in June 1997, and that since shortly after the beginning of Mr Manek's prison sentence Mr Carroll has held a succession of powers of attorney from him, under which he has conducted Mr Manek's affairs, including his defence to the Bank's mortgage action.
The issues
This action was commenced by Mr Carroll on 27 June 1997. By the Re-amended Statement of Claim he puts the Bank to proof of the existence and effect of its charge. He claims in the first place that since 1983 he has occupied one of the rooms in the hotel as a dwellinghouse on a protected tenancy, alternatively a statutory tenancy, under the Rent Act 1977. He alleges that if his occupation of the room was in breach of the Bank's mortgage the Bank knew of it and waived any such breach, alternatively that he has acquired title by adverse possession to that room, alternatively that if his lease of that room is invalid his previous lease of another room in the hotel has never been surrendered and is a protected or statutory tenancy.
In the second place Mr Carroll asserts a title against both Defendants by adverse possession of the hotel car park and of a garage and a store room on the hotel premises, and alternatively that if that title does not bind the Bank he is entitled to redeem, in respect of those parts of the property, any mortgage which the Bank may prove.
Mr Manek has served no Defence, did not appear at the trial and was not represented.
By paragraph 3A.1 of its Re-re-amended Defence and Counterclaim the Bank claims to be a mortgagee "in possession". I am not clear whether that is a slip of the pen, since the facts about the course of the possession proceedings and the appointment of a receiver set out in paragraph 2 above were not disputed. Moreover, by paragraph 8.1 the Bank asserts that it is "entitled to possession as against [Mr Manek] and is accordingly entitled to possession as against [Mr Carroll]", and by paragraph 8.2 that by obtaining its order for possession it has taken all steps necessary to be entitled to recover possession of the property. It was on that basis rather than on actual possession that the Bank's case was argued; indeed, in so far as the distinction was of any significance, it was at certain points Mr Clay who advanced propositions which treated the Bank as having been throughout entitled to immediate possession as against Mr Carroll and Miss Holland who denied them.
In answer to the claim to a protected tenancy and its alternatives the Bank admits and avers occupation by Mr Carroll of the relevant room and two adjoining rooms, but since 1993 only, and asserts that any occupation was under a service occupancy, alternatively as a lodger. If there was any tenancy the Bank first denies that it was a protected one on the ground that the accommodation was not a "dwellinghouse let as a separate dwelling" and alternatively asserts that it was within the exception for accommodation consisting of or comprising "premises licensed for sale of intoxicating liquors for consumption on the premises", alternatively that after 1991/1992 there was no payment of rent, alternatively that when there was any payment it included payment in respect of board or attendance. As to any tenancy the Bank secondly alleges that it came to an end when Mr Carroll ceased to make payments in 1991/1992 and thirdly relies on the exclusion by the mortgage of the mortgagor's powers of leasing. The adverse possession claim to that room is met by pleas that Mr Carroll cannot assert adverse possession for over twelve years consistently with his claim to have paid rent until 1991/1992 and that any rights by adverse possession as against Mr Manek since 1983 are in any event subject to the Bank's prior legal interest as mortgagee.
In answer to the claim to title by way of adverse possession to the car park, garage and store room the Bank denies that any occupation was adverse to Mr Manek's title and asserts that it was under a licence or tenancy at will, alternatively that it began after the date of the mortgage and is not binding on the Bank. The Bank moreover avers that if Mr Carroll is entitled to redeem he must redeem the entirety of the mortgage.
By way of counterclaim the Bank asserts that Mr Carroll has no right of occupation binding on it and claims possession of the three rooms which he occupies, the car park, the garage and the store room.
By his Re-amended Reply and Defence to Counterclaim Mr Carroll alleges that no term of his contract of employment required him to reside at the hotel, but that if his occupation of the accommodation is under a service occupancy he continues to be employed by Mr Manek and is accordingly...
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