Packman Lucas Ltd v Mentmore Towers Ltd and Another
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE COULSON,Mr Justice Coulson |
| Judgment Date | 13 May 2010 |
| Neutral Citation | [2010] EWHC 1037 (TCC),[2010] EWHC 457 (TCC) |
| Docket Number | Case No: HT–10–97,Case Nos: HT-09–410, HT-09–411 & HT-09–412 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 13 May 2010 |
[2010] EWHC 1037 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: The Honourable Mr Justice Coulson
Case No: HT–10–97
Mr Nicholas Vineall QC (instructed by Berrymans Lace Mawer) for the Claimant
Mr Greville Healey (instructed by Mishcon de Reya) for the Defendants
Mr Kulfikar Khayum (instructed by Laytons) for the Interested Party
Hearing date: 6 th May 2010
Approved Judgment
Mr Justice Coulson:
INTRODUCTION
By a Claim Form issued under CPR Part 8, the Claimant (“Packman Lucas”) sought orders for sale pursuant to r.73.10 in respect of:
a) Mentmore Towers (owned by the Defendant, Mentmore Towers Limited, “MTL”) at a price of not less than £28,000,000; and
b) 21 Charles Street and 20 and 21 Hay Mews (owned by the Defendant, Charles Street Holdings Limited, “CSHL”) at a price of not less than £15,000,000.
On 26 th March 2010, Ramsey J gave directions for the exchange of evidence and fixed the hearing for 6 th May 2010. By the date of that hearing, the parties had reached an agreement that, as a matter of principle, an order for sale was appropriate in respect of Mentmore Towers, although there was a dispute as to the minimum figure to be inserted into the order. The parties did not agree that a similar order was appropriate in respect of the Charles Street property.
At the hearing on 6 th May, I concluded that the appropriate minimum figure to be inserted into the order for sale for Mentmore Towers was £16 million. I gave oral reasons for that conclusion. In relation to the Charles Street property, I concluded that the right course was to adjourn the hearing until 11 th June 2010, although I made it plain that, but for a particular combination of circumstances, to which I refer below, I would have been minded to grant an order for sale in respect of that property too. I said that my reasons for that latter decision would be provided in writing.
THE BACKGROUND FACTS
Packman Lucas carried out work for MTL in connection with their proposal to turn Mentmore Towers into a luxury hotel, also involving the In and Out Club in London's Piccadilly. A substantial sum by way of fees was not paid and Packman Lucas sought and obtained adjudication decisions in their favour in respect of the outstanding fees. This sum too was not paid, and Packman Lucas sought to enforce the adjudicator's decisions in the TCC. On 3 rd August 2009 they obtained judgment against MTL in the sum of £187,285.11. That sum has still not been paid.
At the same time as carrying out work at Mentmore Towers, Packman Lucas also carried out work for CHSL in connection with a town house (and associated mews houses) in Charles Street, Mayfair. CSHL is controlled by the same trust that controls MTL. Again, Packman Lucas' fees were unpaid and again they successfully obtained a decision in their favour in adjudication. Again, on 3 rd August 2009, they obtained judgment in the TCC against CHSL in the sum of £23,840.93.
On 16 th October 2009, as a result of the continuing non-payment of these two sums, final charging orders were made against the defendants by Akenhead J. Those final charging orders related to Mentmore Towers in Buckinghamshire and 21 Charles Street and 20 and 21 Hay Mews, London. By this stage, the total debt was £190,201.67 together with £2,981.26 by way of costs on Mentmore, and £24,222.38, with costs of £2,981.26, in respect of the Charles Street property. It is those charging orders which form the basis of the current application for orders for sale.
At the same time, MTL and two other related companies (Goodstart Limited and Anglo Swiss Holdings Limited) were defendants in a substantive action brought by the architects, Fitzroy Robinson Limited, also in connection with unpaid fees on the Mentmore and Piccadilly projects. In that action, I heard both the trial of liability and the trial on quantum 1. The upshot of those proceedings was that those three companies were found liable for about £1 million by way of unpaid fees. I also made
certain orders for indemnity costs in Fitzroy's favour. Again, none of those orders have been met and Fitzroy obtained a final charging order in respect of Mentmore Towers, in a sum of just less than £400,000. It is for that reason that Mr Khayum appeared at the hearing for Fitzroy, who are an interested party.
There can be no doubt that the defendants in these proceedings, and the other two companies identified in paragraph 7 above, are in serious and contumelious default. They appear to have set their face against honouring their debts or complying with the numerous orders of this court made against them by three different TCC judges. In particular, I note:
a) their failure to pay professional fees as they fell due, and the failure to pay the sums ordered by the adjudicators;
b) their failure to pay the sums ordered by the court on 3 rd August 2009.
c) their default in making payment, which has caused Packman Lucas to embark on a round of applications for charging orders, and their failure to pay the costs of those applications, despite being ordered by the court to do so;
d) in the case of MTL, their belated and misconceived attempt to avoid the adjudicator's decisions by issuing court proceedings against Packman Lucas, without first complying with the decisions. As a result of that failed attempt, Akenhead J said in a judgment dated 9 th December 2009 2, that he was satisfied that:
“…there is unreasonable and oppressive behaviour and some elements of bad faith involved in the claimants pursuing these claims without first honouring the adjudicator's decisions (in particular) and the court judgments enforcing them.”
MTL also failed to pay the costs ordered by Akenhead J in that judgment;
e) also in the case of MTL, their subsequent attempt to circumvent that judgment by then referring identical claims to adjudication, again without honouring the original decisions. They were restrained from continuing with those proceedings by Edwards-Stuart J. In a judgment dated 16 th March 2010 3, he said:
“The current referrals are simply another attempt to circumvent the machinery and policy of the HGCRA. It is unreasonable and oppressive for the Defendants to be subjected to further proceedings by way of adjudication when the Claimants have still failed to honour the first awards and the subsequent judgments of the court. It is not enough for the Claimants to make, for example, offers to pay money into court, even if such payment were to be made tomorrow. The Defendants are and were entitled to have a cash award paid in cash. That is the purpose of adjudication.”
JURISDICTION/PRACTICE
All parties were keen that the TCC should deal with these claims for orders for sale, and no jurisdiction or forum point was raised before Ramsey J made his order for directions, or subsequently. However, as I identified in an earlier case ( Harlow and Milner Limited v Teesdale (No 3) [2006] EWHC 1708 (TCC)), there is a potential tension between r.73.10, which makes plain that an order for sale can be made by any division of the High Court, and paragraph 4.2 of PD 73, which notes that “a
claim for an order for sale of land must be started in the Chancery Chambers”. I concluded in that case that, whilst it will usually be appropriate to seek such orders in the Chancery Division, there will be occasions when it is both proportionate and sensible for orders of sale to be made by other divisions of the High Court.
In many ways, this particular claim is a very good example of what I had in mind in Harlow and Milner. An order for sale is an extreme sanction and, as the notes in the White Book at paragraph 73.10.1 make plain, “all circumstances would have to be considered”. Given the long and lamentable history of both the Packman Lucas action and the Fitzroy Robinson action, all of which have been dealt with in the TCC, it is both sensible and cost-efficient for the TCC to deal with the claims for orders for sale. All the parties confirmed that this was the view that they too had reached.
THE ORDER FOR SALE/MENTMORE TOWERS
The parties were agreed that an order for sale was appropriate in relation to Mentmore Towers. They agreed the detailed provisions of the order, for which I am extremely grateful. The one point on which they did not agree was the figure to be inserted into the order as the minimum price to be achieved by any sale.
In their original draft, Packman Lucas had indicated that the minimum sum should be £28 million. However, at the hearing before me, they disavowed that figure; instead, the £28 million became the figure urged on me by MTL. However, in an affidavit provided the day before the hearing, the solicitor acting for MTL had indicated that the property was not worth more than £10 million. At the hearing itself, it was this figure of £10 million that was the figure on which Packman Lucas sought to rely.
The figure of £10 million was identified in a letter from Strutt and Parker to MTL's advisors, Buckingham Securities Holdings Plc, dated 29 th June 2009. The £10 million figure was said to be the result of a desk top assessment only.
The £28 million figure came from a report dated 24 th March 2010 prepared by Mr Connol Coan of Congreve Horner, on behalf of Packman Lucas. Mr Coan had identified a valuation bracket for Mentmore Towers of between £28m and £36m, but he stressed that his was also a desk top valuation and that, as he expressly...
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