London College of Business Ltd v Tareem Ltd
| Jurisdiction | England & Wales |
| Judge | Mr John Martin |
| Judgment Date | 07 March 2018 |
| Neutral Citation | [2018] EWHC 437 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim no: HC2015-001374 |
| Date | 07 March 2018 |
[2018] EWHC 437 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
The High Court of Justice
Rolls Building
Fetter Lane
London EC4A 1NL
Mr John Martin QC sitting as a Deputy Judge of the High Court
Claim no: HC2015-001374
The Claimant appeared by Paul Simms, a director
Gary Blaker QC (instructed by SBP Law) for the First Defendant
The Second Defendant did not appear and was not represented
Hearing dates: 10–12 October 2017
Mr John Martin QC:
Introduction
Since 2006 the claimant, the London College of Business (“the College”) has occupied office premises forming part of Monteagle Court, Wakering Road, Barking, Essex. Throughout that period Monteagle Court has been owned by the first defendant, Tareem Limited (“Tareem”). For much of the period, Monteagle Court was managed on behalf of Tareem by the second defendant, Montague Management Limited. That company has now been dissolved and plays no part in this litigation, although its former managing director, Tony Crabtree (“Mr Crabtree”), who died early in 2016, features prominently in the history of the dealings between the parties.
The College carries on business as a college of further and higher education. Its principal is Doctor Shaik Akbar Basha (“Dr Basha”). From 2008 until the end of 2012 it offered Master's and Bachelor's degrees in business administration under a validation agreement with the University of Wales. The majority of its students came from overseas. In early 2012 a Sky News broadcast suggested that the College had broken immigration rules and given improper assistance to MBA students. Although the College strongly denied this, it led to the revocation of the validation agreement with the University of Wales and the first of three suspensions of its licence to sponsor overseas students. Although the suspensions have been successfully challenged, the College has since January 2014 been able only to offer Edexcel level 7 courses and English language courses.
The College's occupation has on the face of it been governed by a succession of agreements, some of which were not signed by the parties, each of which purports to create a licence. There is an issue as to whether the true relationship between Tareem and the College was that of licensor and licensee or that of lessor and lessee.
In 2013 and 2014 a dispute arose between the parties about the amounts payable by the College in respect of its occupation and in respect of service charges. That dispute has not been resolved, and forms part of a wider issue as to the state of account between the parties that is now to be determined. However, on Sunday 21 September 2014 Tareem, relying on its view that the College was in arrears, excluded the College from the premises it occupied by changing the locks. Employees of the College discovered this when they arrived for work on the Monday morning. On Wednesday 24 September 2014 the Bow County Court granted an injunction requiring Tareem to deliver up the new keys within 30 minutes of service of the order. This was done, and the College was able to reopen for business on the following day; but it claims that the exclusion was wrongful, and that it suffered a substantial loss of profit and of goodwill as a result of its exclusion for the three days from 22 to 24 September 2014. It originally valued its claim at close to £1,000,000, but in the light of the evidence put forward by it as expert evidence has now reduced the amount claimed to £189,415.
In the circumstances I have outlined, there are issues between the parties as to the nature of the College's occupation, as to the legality of Tareem's resumption of possession in September 2014, as to the current state of account between the parties (although the state of account between them in September 2014 is relevant to Tareem's entitlement to take possession), and as to whether and if so what damages are recoverable in respect of the lockout.
Licence or lease?
Monteagle Court is a purpose-built block of offices. It is laid out in an L-shape, and consists of eight units: units 2 to 5 on one limb of the L, units 6 and 6A at the junction of the two limbs, and units 7 and 8 on the other limb. The College occupied at different times units 6, 6A, 7 and 8. At the time of its exclusion from the premises in September 2014, it was occupying all floors of units 6 and 6A. Units 6 and 6A share a common vestibule, from which unit 7 is also accessible.
The agreement under which the College was occupying units 6 and 6A at the time of the exclusion was dated 22 June 2012 (“the 2012 Agreement”). It was in the following terms.
“ THIS LICENCE AGREEMENT is dated 22 JUNE 2012 and is made
BETWEEN TAREEM LIMITED c/o Burnhill House 50 Burnhill Road Beckenham Kent BR3 3LA (hereinafter called the Licensors)
AND LONDON COLLEGE OF BUSINESS of Trocoll House Wakering Road Barking IG11 (hereinafter called the Licensee)
WHEREBY IT IS NOW AGREED AND DECLARED as follows: –
1 IN consideration of the Licensee's obligations under the terms of this Licence, the Licensor gives the Licensee personal permission to occupy the PROPERTY situate at and known as UNITS 6 / 6A MONTEAGLE COURT (hereinafter called the licensed premises) as are shown for identification purposes only by red verge on plan 1 attached for the period commencing on 24 JUNE 2012 and ending on 23 JUNE 2013 (subject to the provisions of Clause 6 of this agreement). The Licence includes the right to park 6 vehicles on the surfaced car park (shown by Blue verge on Plan 1) and a further 6 vehicles on the unsurfaced area (shown by green verge on Plan 1)
2 THE Licensed Premises shall be occupied solely for the purpose of General Office Use/Educational purposes and for no other purpose whatsoever except with the prior written consent of the Licensor.
3 THE Possession Management and Control of the Licensed Premises remains vested in the Licensor, who is the deemed occupier for all material purposes. The Licensor has an absolute right of entry at all reasonable times for the purposes of exercising such management and control (and without prejudice to the generality of the foregoing) for the purposes of effecting any works to adjoining property in the ownership of the Licensor or for any other purposes deemed necessary by the Licensor. The said right of entry is exercisable by the Licensor or its servants or agents, and the rights conferred upon the Licensee by Clause 2 above are subject to all such rights of the Licensor.
4 THE Licensee shall pay to the Licensor a basic Licence fee in the sum of £30,000 pa (Thirty Thousand Pounds Only) plus VAT for the period of the term granted and such fee shall be payable quarterly in advance on the usual Quarter days. In addition the Licensee will make an on account payment in respect of service charge in the annual sum of £5,000 (Five Thousand Pounds only) plus VAT such sum to be paid quarterly in advance.
5 THE Licence agreement merely confers upon the Licensee a personal privilege to use the premises in accordance with the terms of this Licence and for the avoidance of doubt, it is hereby declared that the Licensee may not part with or share possession or occupation of any part of the Licensed Premises nor assign the benefit of this agreement to any third party, company or partnership.
6 THE Licensee shall vacate the Licensed Premises on 30 JUNE 2013, but this agreement will continue thereafter on a month by month basis unless and until either party serves at least 28 days Notice in writing to terminate this agreement
7 THE Licensee further agrees with the Licensor as follows: –
A To use the Licensed Premises only for the permitted use and not to do or suffer to be done to the Licensed Premises anything which may be or become a nuisance, annoyance or disturbance to the Licensors or to the occupiers of any neighbouring units or which may invalidate the Insurance Policies of the Licensor,
B To be responsible for and indemnify the Licensor against any damage caused to the premises caused by the licensee's use and occupation of the premises
C Not to make any alterations to the licensed premises without the Licensor's previous written consent in accordance with the provisions of Clause 2 of this Licence.
D During the licence period to be responsible for Business and Water Rates payable in respect of the Licensed premises together with all electricity and utility charges, telephone charges and any other costs arising from the Licensee's occupation of the premises during the Licence period and for compliance with any and all statutory requirements which may be imposed resulting from the use and occupation of the premises for its permitted use.
8 IT is agreed that this agreement constitutes a personal Licence to occupy by the Licensee and shall not be deemed to constitute a tenancy within the meaning of the Landlord and Tenant Act 1954 (as amended) or otherwise and The Licensee shall not be entitled to any compensation under Part 2 of the Act (or any amendment thereto) upon the revocation or determination of this Licence.
9 THE Licensor shall not be liable to pay any compensation or damages which may be caused to the Licensee by reason of any defect in the Premises or by reason of the failure from any cause whatsoever of the water gas or electricity supply to the Premises, or by reason of act or omission (whether negligent or not) of any servant of the Licensor or independent Contractor.
10 THE Licensor shall have the right to terminate this Licence hereby granted by giving no less that (sic) 14 days Notice in writing in the event is in breach of any of the terms of this agreement or if licence fees remain unpaid for a period of 14 days after payment shall have become due,...
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