Pankhania v Hackney London Borough Council
| Jurisdiction | England & Wales |
| Judgment Date | 23 January 2004 |
| Neutral Citation | [2002] EWHC 2441 (Ch),[2004] EWHC 323 (Ch) |
| Docket Number | Claim No. HC0004094 |
| Court | Chancery Division |
| Date | 23 January 2004 |
[2004] EWHC 323 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before: Geoffrey Vos QC Sitting as a deputy Judge of the High Court
Claim No. HC0004094
Mr Stephen Jourdan (instructed by Cunningham Blake) appeared for the Claimants.
Mr David H. Christie (instructed by Browne Jacobson) appeared for the Defendants.
I direct that pursuant to CPR PD 39A paragraph 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Geoffrey Vos Q.C.
Introduction
1. The Claimants, Vraj Pankhania and his wife Joshnia Pankhania, are property developers. In fact, however, Mr Vraj Pankhania, has always acted on behalf of both himself and his wife in all his dealings in this case. For convenience, therefore, I will refer in this judgment only to Mr Pankhania.
2. The Defendants, the London Borough of Hackney ("Hackney") and the Metropolitan Police Authority (the "M.P.A.") sold two properties (together the "Properties") at an auction on 8 th November 1999. The first property (the "Chocolate Factory") at 14–18 Nile Street and 7 Shepherdess Place London N.1. was registered at HM Land Registry under title number EGL 402879, and was owned by Hackney. The second adjoining property (the "Car Park") at 17–35 Westland Place, London N.1. was registered at HM Land Registry under title number EGL 402877, and was owned by the M.P.A.
3. The Properties were knocked down to Mr Pankhania for £3,925,000 Mr Pankhania calculated his acquisition costs at about £4.2 million, of which he borrowed £2.8 million from the Bank of India. The rest he paid from his own resources. The sale was duly completed on 9 th February 2000.
4. Mr Pankhania brought these proceedings seeking, amongst other things, damages for negligent misrepresentation under section 2(1) of the Misrepresentation Act 1967. The trial of liability came on before Mr Rex Tedd Q.C. sitting as deputy Judge of the High Court in the summer of 2002. Mr Tedd delivered a lengthy judgment on 31 st July 2002 in which he made the following findings and holdings:-
(1) The Defendants, by their agents, represented to Mr Pankhania before the auction sale on 8 th November 1999 that National Car Parks Limited ("NCP") occupied the Car Park under a contractual license, which was terminable on 3 months notice (paragraphs 24–28, 44–45 of Mr Tedd's judgment).
(2) The representation was false, in that, in fact, NCP was a tenant of the Car Park protected by Part II of the Landlord and Tenant Act 1954 (the "1954 Act") (paragraphs 19, 21, 45 and 64).
(3) The representation was made deliberately by the Defendants' agents in the knowledge that it was inaccurate (paragraphs 24, 45 62, 73).
(4) The representation was made in order to induce potential purchasers (and Mr Pankhania in particular) to purchase the property (paragraphs 34, 62, and 63).
(5) Mr Pankhania relied upon the misrepresentation in bidding for and purchasing the property (paragraphs 58 61, 63 and 73).
(6) It was reasonable for Mr Pankhania to rely on the representation (paragraph 63).
(7) The misrepresentation was a misrepresentation of fact (paragraph 56).
(8) But that, in any event, an action lies for a misrepresentation of law (paragraph 55).
(9) Mr Pankhania has suffered loss caused by the misrepresentation, namely at least some part of the payment to NCP (paragraph 67).
(10) The Defendants were, therefore, liable under section 2(1) of the Misrepresentation Act 1967 for damages for misrepresentation to be assessed (paragraphs 68, 69 and 100).
(11) Mr Pankhania would, on the balance of probabilities, not have purchased the property had he known the true position (paragraphs 62 and 73).
Mr Tedd found in the Defendants' favour in respect of another alleged representation concerning the likelihood of planning consent being granted.
5. In consequence, Mr Tedd made an order against the Defendants for damages to be assessed in respect of the misrepresentation that he had found proved. It now falls to me to assess those damages.
The Properties
6. Access to the Chocolate Factory was and is obtained via a narrow road called Shepherdess Place, which is frequently blocked by parked cars and vans (despite the presence of double yellow lines). There was some doubt as to whether or not Shepherdess Place is an adopted highway. Access to the Car Park is from Westland Place, which is an altogether more convenient public road.
7. Mr Pankhania knew, when he bought the Properties, that:-
(1) the Car Park was occupied by NCP;
(2) the planners would permit conversion, but not demolition, of the Chocolate Factory; and
(3) the planners were inclined to grant planning permission for development of the Car Park.
8. Hackney's informal planning guidelines were also available to Mr Pankhania before the auction sale in respect of both the Chocolate Factory and the Car Park. Suffice it to say that the guidelines suggested:-
(1) making a new access to the Chocolate Factory from Westland Place;
(2) converting the Chocolate Factory to mixed use of offices on the lower floors and a mixture of residential and live! work units on the upper floors; and
(3) developing the Car Park so as to provide some 800 square metres of office/ commercial floor-space.
9. There is no doubt that developing the Chocolate Factory without access to the Car Park was always going to be a difficult project for three primary reasons. First the factory site is very tight in that the building is constructed close up to many of the boundaries. Secondly, a crane was likely to be required, and the required size of crane could only conveniently be situated on the Car Park. Thirdly, there was, as I have said, poor access from Shepherdess Place.
Mr Pankhania's dealings with the Properties after the purchase
10. There was a certain amount of dispute on the evidence I heard as to what was done after the completion of the purchase of the Properties on 9 th February 2000. The relevant facts are straightforward, and may be summarised as follows:-
(1) Immediately after completion, Mr Pankhania began stripping out the Chocolate Factory so that it would be ready for development. He did so using the inconvenient access from Shepherdess place, because, of course, the Car Park was occupied by NCP.
(2) On 11 th February 2000, Mr Pankhania gave NCP 3 months notice to quit the Car Park under their supposed licence.
(3) On 21 st February 2000, Mr Pankhania applied for planning permission to redevelop the warehouse broadly in line with the planning guidelines, save that he did not seek to make a new access from Westland Place as Hackney had suggested in the planning guidelines.
(4) On 18 th April 2000, to Mr Pankhania's surprise, NCP's solicitors, Hamlins wrote to Mr Pankhania's solicitors rejecting the validity of his notice and claiming to have a tenancy of the Car Park protected by the 1954 Act.
(5) Without delay, on 25 th April 2000, Mr Pankhania's solicitors served a section 25 notice under the 1954 Act terminating NCP's alleged tenancy. It appears, however, that this notice was later realised to have been invalid.
(6) On 25 th April 2000, Mr Pankhania's solicitors drafted a letter to Hamlins asking what compensation NCP required to give possession of the Car Park by mid-May 2000. It appears that this draft was never sent. Instead, on 2 nd May 2000, Mr Pankhania's solicitors wrote to Hamlins without seeking such proposals.
(7) Mr Pankhania quickly ascertained that NCP was likely to be right in its contention that it had a tenancy of the Car Park. So, he set about negotiating a consensual delivery of possession. He knew that, if negotiations failed, he would have a good chance of obtaining possession by court order on section 30(l)(f) grounds, but he also knew that that would take some time.
(8) At a meeting before 15 th May 2000, Mr Pankhania's solicitors offered NCP £21,148 for immediate possession of the Car Park.
(9) On l5th May 2000, Mr Pankhania's solicitors served a valid section 25 notice under the 1954 Act giving 6 months notice to terminate NCP's tenancy of the Car Park, without prejudice to the contention that NCP occupied only under a licence. The notice stated that Mr Pankhania intended to oppose any application for a new tenancy on the grounds contained in section 30(l)(f) of the 1954 Act, which are that he intended to "demolish or reconstruct the premises…or to carry out substantial work of construction on the holding…and that he could not reasonably do so without obtaining possession of the holding".
(10) On 9 th June 2000, NCP served a notice saying that NCP was not willing to give up possession of the Car Park.
(11) On 22 nd June 2000, Hackney granted planning permission for the redevelopment of the Chocolate Factory.
(12) On 10 th July 2000, the solicitors for Mr Pankhania and NCP met on a without prejudice basis, and Mr Pankhania offered to pay NCP £28,250 (being £13,250 statutory compensation and £15,000 representing one year's income for NCP).
(13) On 16 th August 2000, Hamlins made a counter-offer on behalf of NCP. They suggested a payment of £60,000 to include statutory compensation, and the grant of a new lease for 5 years excluded from the provision of the 1954 Act, terminable only when Mr Pankhania had obtained planning permission for redevelopment of the Car Park and when "works are required to commence for that redevelopment". It seems to me that, whatever the value of such an excluded lease, such an offer was wholly unacceptable, because it deprived Mr Pankhania of access to the Chocolate Factory in order more conveniently to progress the imminent redevelopment of the Chocolate Factory (in respect of which stripping out works...
To continue reading
Request your trial
-
Bacciottini and Another v Gotelee and Goldsmith (A Firm)
...48 We were also referred to the decision of Mr Geoffrey Vos QC, sitting as a Deputy Judge of the High Court, in the case of Pankhania v London Borough of Hackney [2004] EWHC 323 (Ch). He there said in the context of that case (at paragraph 21), after referring to the "normal measure" indica......
-
Briggs v Gleeds (Head Office)
...However, the Kleinwort Benson case was not cited, and Mr Rex Tedd QC, sitting as a Deputy High Court Judge, took a different view in Pankhania v Hackney LBC [2002] EWHC 2441 (Ch), following a detailed review of Kleinwort Benson and other authorities. Mr Tedd said this in paragraph 57 of hi......
-
Brennan v Bolt Burdon (A Firm) and Others
...a contractual one, it cannot be doubted that its effect now permeates the law of contract. In Pankhania v. London Borough of Hackney [2002] EWHC 2441 Ch the question arose as to whether a misrepresentation of law could now found a cause of action. In his lucid and trenchant judgment, Mr. Re......
-
Geoffrey Alan Salt v Stratstone Specialist Ltd T/A Stratstone Cadillac Newcastle
...1 WLR 2333, 2342–4. Mr Rex Tedd QC sitting as a Deputy Judge of the Chancery Division followed these last two decisions in Pankhania v London Borough of Hackney [2002] EWHC 2441 (Ch) rather than continuing a potentially endless chain of judicial reconsideration of the same point at first 1......
-
Taylorooism: when network technology meets corporate power
...documents in their clients’interests which simply misrepresentthe true rights and obligations on both sides.52Pankhania v Hackney LBC [2002] EWHC 2441 (Ch). See Meretz Investments NV v ACP Ltd [2007]EWCA Civ 1303, [118]–[119].53[2017] UKSC 67, [74]. The case held that Ivey was unable to cla......