Shah and Others v Colvia Management Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lord Justice Maurice Kay,Lord Justice Pill |
| Judgment Date | 18 March 2008 |
| Neutral Citation | [2008] EWCA Civ 195 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3 2008/0016 |
| Date | 18 March 2008 |
[2008] EWCA Civ 195
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ANTHONY ELLERAY QC sitting as a Deputy High Court Judge
HC07C01115
Lord Justice Pill
Lord Justice Maurice Kay and
Lord Justice Lloyd
Case No: A3 2008/0016
Michael King (instructed by Wellers) for the Appellant
Martin Young (instructed by H Montlake & Co) for the Respondents
Hearing date: 29 February 2008
This appeal concerns an attempt to regulate the use of congested car parking areas forming part of the Barking Industrial Park. The estate comprises 87 industrial units, with areas for parking which, at the trial, were estimated to be capable of providing parking for some 350 to 370 vehicles. This space is inadequate to meet current demands.
The estate was developed by Barking Industrial Park Ltd, which sold off the individual units on 999 year leases in standard terms. The Appellant, Colvia Management Co Ltd, was set up to be the management company for the estate, on the basis that each leaseholder would be a shareholder and, once all the units had been sold, Colvia would be owned and controlled by the lessees themselves. That has happened, and moreover Colvia has since then taken a transfer of the freehold reversion, so that the lessees control not just the management but also the ownership of the estate.
It may well be better for the lessees that they, between them, own and control the freeholder and the management company than if the freeholder or the management company, or both, were a third party at arms' length. However, in a sense this collective ownership merely transfers the consideration of conflicting demands to a different forum, namely meetings of the management and the shareholders of the company. Ultimately, if the course taken by the company, following decisions taken by the majority vote of the shareholders, is not accepted by one or some of the lessees, then, absent some issue of company law (which does not arise in the present case), the resolution of the dispute must turn on the rights and obligations of the parties under the respective leases, just as it would if the landlord or the management company were at arms' length from the lessees.
In the present case two practical problems have arisen as regards the provision for car parking. One is that the local authority levied non-domestic rates on Colvia in respect of the parking areas for the first time in 2006, in the sum of £33,000 or so, which presented Colvia with the need to raise the money to pay this liability. The other is that the space available is inadequate for the demand, and that some occupiers, including the Claimants, run vehicle repair businesses and need more space in the parking areas than most other types of business.
The Claimants between them run six car repair businesses, and there are said to be up to another 15 such businesses on the estate. The use to which units are put is subject to planning control, and of course also to market pressures, but the landlord and the management company have no control under the lease as to the use to which any unit is put. In theory, yet more units could be devoted to car repair businesses. Car repairers have a particular need for space outside their units on which to place cars awaiting repair, which they cannot house within their units. Between them, the six Claimant businesses need up to some 75 car parking spaces in order to accommodate vehicles awaiting inspection and then repair, as well as courtesy vehicles for use by customers while a vehicle is being repaired. Other types of business are also said to have a high demand for the use of parking spaces, particularly during the day, such as shop fitters.
These factors lead to the car parking spaces being filled up early in the morning, so that, typically, by about 8. 30 or 9 there is no vacant space to be found in the car parking areas. That creates a severe problem both for staff arriving any later than that for work at any of the units and also for visitors such as customers, couriers, suppliers and others, arriving during the day. The shortage of space leads to the use for parking of areas which are not allocated for such use, causing further congestion, and potential danger if emergency vehicles were to require access. It is common ground that something has to be done about this. The Claimants' expert, Mr Cutting, recorded that “significant congestion existed on the site” on the occasion of his visit to the site in late July 2007. He had to wait for 10 minutes in his car while HGV's worked out how to pass one another. His car had to be parked across the back of other cars, effectively blocking them in. It was impossible to drive down some of the intermediate service roads without asking people to move their cars. He saw no empty car parking spaces during his visit.
Problems are known to have existed since early in the 1980's when the estate was new. A survey of tenants was undertaken in the late 1980's but this cannot now be found. Later, in 2000, the car parking areas were given proper surfaces, so as to encourage their use. At that time there was already an issue with the extent of use of the car parking areas by car repairers. Particular areas were allocated to car repairers, but these were not adhered to. Then a colour coded system was introduced, to allocate space between different uses or businesses. This was difficult to police. In 2003 there was a further allocation of space to some car repairers. Also at that time yellow lines were painted on some areas, and also yellow junction boxes, to improve parking and traffic control, but this was also ignored, and could not be effectively policed. At other times, including in 2006, a system of placing stickers on cars for removal was used, but this did not work (at any rate in the early period) because the cars which were removed (at Colvia's expense) were not always reclaimed. Some of them may not have been worth reclaiming. The Claimants' witnesses considered that the sticker system could have worked properly if it had been properly policed, but its effect was in fact limited, for whatever reason. Colvia also introduced a car disc system in 2006, but this did not apply to vehicles under repair or courtesy cars of the car repairers. Thus, none of these systems of control worked well enough to deal with the problem of the shortage of spaces and the particularly high need for spaces on the part of some businesses, especially the car repairers.
So far as the rates liability was concerned, the local authority first sought to charge rates on the car parking spaces to individual lessees or occupiers of units, but this failed as they pointed out that they had no right to any allocated space. After the council had charged rates to Colvia, the latter first sought to pass this on to lessees in proportion to the number of spaces which it thought each was using. This was greeted with strong protests, and the demands were withdrawn, to be replaced by a charge by reference to rateable values, which corresponds with the service charge provisions in the leases. That led to further protest because of the substantial difference between the extent of use of car parking spaces by some businesses (such as the car repairers) as compared with others.
The management of Colvia considered how to deal with these issues. General meetings were held in January, February and March 2007 to discuss this. In the course of these meetings a proposal was developed for the banning of overnight parking, with limited exceptions, for which payment would have to be made, in order to reduce the extent to which the car park is used on a long term basis and also to free up space first thing in the morning, so that potential users arriving in the morning should not find so many spaces already occupied by vehicles which had been there overnight. Colvia came to an arrangement with a company called ISTM Group Ltd for the management of the car parking scheme. The scheme was approved by a majority of about 64% to 36% of those voting, the car repairers forming the bulk of the minority.
In March 2007, Colvia gave notice to occupiers (including subtenants of the lessees) of a parking control scheme to be introduced from 1 May 2007, and ISTM gave notice of the details of the scheme. It has been modified in some respects, including during the proceedings. What is at issue is the validity of the scheme as so modified. The Claimants issued proceedings on 25 April 2007. Colvia deferred the introduction of the scheme, first by agreement and later pursuant to an interim injunction pending a speedy trial. The trial came on before Mr Anthony Elleray Q.C. sitting as a Deputy Judge of the Chancery Division on 11 to 13 December and he gave judgment for the Claimants on 14 December, declaring that the scheme was unreasonable in two respects. Since the lessees are only bound to comply with reasonable rules and regulations, the consequence is that the scheme is not valid or effective.
On several points I agree with the judge. Although, for reasons which I will explain, I consider that his conclusion that the scheme was unreasonable was not correct, I would pay tribute to his speed and diligence in producing a long judgment on the day after the end of the three day trial, including a full review of the extensive factual and expert evidence given during the trial.
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