Ramzan v Brookwide
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lady Justice Arden |
| Judgment Date | 19 August 2011 |
| Neutral Citation | [2011] EWCA Civ 985 |
| Docket Number | Case No: A3/2010/2669 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 August 2011 |
[2011] EWCA Civ 985
Lady Justice Arden
Lord Justice Lloyd
and
Lord Justice Tomlinson
Case No: A3/2010/2669
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Chancery Division, Birmingham District Registry
Ms Geraldine Andrews QC, sitting as a Deputy High Court Judge
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Mark Anderson QC & Mr David Mitchell (instructed by Bude Nathan Iwanier) for the Appellant
Mr Leslie Blohm QC & Mr John Stenhouse (instructed by Silks Solicitors) for the Respondent
Hearing date: 16 June 2011
This is a remarkable case which involves the assessment of damages and interest resulting from the misappropriation by the appellant, Brookwide Ltd ("Brookwide"), of a room forming part of a property then owned by Mr Mohammed Ramzan, then a bankrupt. The property is now owned by his son, Mr Ausman Ramzan, who is the respondent to this appeal and the claimant in the relevant proceedings below. It not infrequently happens that land is removed from the possession of its owner by a trespasser by the process of adverse possession and initially without protest from the true owner. In this case, however, there was a straight expropriation of the property of Mr Mohammed Ramzan which was objected to from the moment it happened. Moreover, in this case, although the property was part of a building, it was not a normal kind of land since it was a first floor room. The room thus constituted a "flying freehold". That is an unusual form of tenure. Mr Mohammed Ramzan owned the freehold of a first floor room without owning either the ground floor of the building that supports it or the earth beneath it, though he did own the immediately adjacent property so his flying freehold was not entirely isolated. The room was used as part of a curry house, known as the Jewel in the Crown, which Mr Mohammed Ramzan ran from the neighbouring building, the freehold of which he owned. Since 2001, that business has been run by father and son in partnership. The Jewel in the Crown was a popular and successful restaurant.
The acts of the appellant gave rise to no less than seven separate heads of damage, taking the claims of father and son together, exclusive of interest. Issues arise on this appeal on four out of the six heads of damages, and on the interest, awarded to Mr Ausman Ramzan. Before I deal with those issues, I need to explain the unusual background to this case more fully, as well as the judgments below. The judge gave two judgments in this matter, but only the second is the subject of this appeal. The amount of her awards of damages and interest totalled £588,517.43.
Background and judgments of the judge
29 April 1999 was the start of the events leading to Brookwide's misappropriation. Mr Mohammed Ramzan owned 125 Alcester Road, Moseley, Birmingham ("No 125"). The Jewel in the Crown occupied the ground and the first floor. The first floor was not a restaurant with tables but a function room used for special parties, weddings and so on. The property stood in a terrace of houses. The neighbouring property was 123 Alcester Road ("No 123"). A room on the first floor of No 123 opened off an office adjoining the first floor function room in No 125; it comprised a store room and, most importantly, provided access to a fire escape which ran back into the yard behind No 125, the property belonging to Mr Mohammed Ramzan. There was no access to the store room from any other part of No 123. Unless it otherwise appears, the expression "store room" in this judgment refers compendiously to the store room and the fire escape. Following the expropriation of the store room by Brookside, Mr Mohammed Ramzan could no longer use the first floor of No 125 for his restaurant business because of the absence of a fire escape, which was required by regulations for safety reasons.
Mr Mohammed Ramzan had been declared bankrupt in 1997 for non-payment of a debt of £1,200. The fact of his bankruptcy meant that ownership of No 125 had vested in his trustee in bankruptcy. However, the trustee in bankruptcy allowed Mr Mohammed Ramzan to carry on his business. This may have been because it was clear that his creditors could be paid off. There is nothing to suggest that the cause of his bankruptcy had been that the restaurant business at No 125 was unprofitable.
Added to his financial woes, Mr Mohammed Ramzan discovered on 20 April 1999 that the alarm for his restaurant had been set off by builders at No 123. Worse than that, they had broken into part of his premises. They then took down the wall separating the store room from the rest of No 123, bricked up the entrance to the store room from No 125, threw away Mr Mohammed Ramzan's tools and other property in the store room, destroyed the fire escape leaving only the part within the curtilage of No 125 and proceeded to incorporate the misappropriated space into No 123, which was, ultimately, converted into two residential flats and let for a commercial rent. These builders had been instructed by the new owner of No 123, Brookwide.
How had this extraordinary state of affairs come about? In 1992 Mr Mohammed Ramzan had purchased No 125 from Agra Ltd ("Agra"), which also owned No 123. The judge found that the property sold to him by Agra included the store room. Agra was also the parent company to Brookwide, which acquired No 123 in 1994, after the sale of No 125 to Mr Mohammed Ramzan. After the date of the wrongful appropriation (but not before), it came to light that the plans filed at the Land Registry for both properties wrongly failed to show that the store room belonged to No 125.
The store room represented a significant part of the first floor area in No 123. Sometimes there are voids in buildings which are odd places walled up or boxed in, for example to enclose an old fireplace or some unsightly feature. We do not have the precise dimensions but the plans show that, relative to the footprint of No 123, the store room accounted for about 10% of the first floor of No 123 and over 50% of the width of the property. The judge found that without the store room Brookwide would probably not have been able to create a viable flat in that location (second judgment, paragraph 5). No person entering the first floor of No 123 could have been unaware that an area was blocked off. Moreover, the judge found that a person breaking through the wall dividing the store room from the first floor of No 123, and discovering its use, could not have confused it with a void, not least because it contained tools and other possessions.
It is certainly odd for No 125 to have a flying freehold like the store room but Mr Mohammed Ramzan was clearly using it for his restaurant business. The builders went on undeterred.
Mr Mohammed Ramzan was no doubt horrified and distressed to discover that his property had been broken into and appropriated. He called the police but they declined to intervene on the grounds that it was a civil matter. We are not told why Mr Mohammed Ramzan did not immediately seek an injunction, but it may have been because the trustee could not be persuaded to act in time or it may be because Mr Mohammed Ramzan saw the registered plan. What we do know is that the builders blocked up the entrance to the store room at great speed. The trustee in bankruptcy of Mr Mohammed Ramzan is no longer involved as, in 2001, No 125 was transferred for a nominal sum of £1 to Mr Ausman Ramzan. Mr Mohammed Ramzan was discharged from bankruptcy in the same year.
The failure to seek interim relief led inexorably to Brookwide completing its appropriation of the store room. Ignoring the complicating factor of his bankruptcy, Mr Mohammed Ramzan owned No 125, including the store room, but that part of his property was now incorporated into a first floor flat at No 123, which was let out to a third party. His restaurant business was therefore limited to the ground floor of No 125. The fire escape and store room had been lost. Profits of the restaurant business attributable to the first floor function room had been lost. Meanwhile, Brookwide, as trespasser, had the use of the store room as part of the flat which it had constructed, and had received rent for the flat.
The legal consequences of this complex situation then had to be unravelled. Mr Mohammed Ramzan sued for the loss of his tools in the store room. Those tools were by law his, since notwithstanding his bankruptcy he remained entitled to them. The action brought by Mr Mohammed Ramzan was consolidated with Mr Ausman Ramzan's further, and more substantial, claim, which has given rise to this appeal. Mr Ausman Ramzan commenced his proceedings shortly before the limitation period expired and in them he claimed damages for (so far as material) the continuing misappropriation, the continuing loss of use of the store room, mesne profits and an account of profits. In addition he claimed aggravated and exemplary damages for the wrongful acts of Brookwide as continued against him after his acquisition of No 123 on 23 May 2001.
Interim orders were made for liability and damages in the proceedings brought by Mr Ausman Ramzan to be tried separately. The proceedings then came before Miss Geraldine Andrews QC, sitting as a deputy judge of the Chancery Division in Birmingham. The claim by Mr Ausman Ramzan was treated as a claim brought by him in his own right. After the trial on liability, Mr Ausman Ramzan had sought permission to adduce evidence as to an assignment of claims by Mr Mohammed Ramzan to himself...
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