Simon Howard v Chelsea Yacht and Boat Company Ltd
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 16 May 2018 |
| Neutral Citation | [2018] EWHC 1118 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2017-001398 |
| Date | 16 May 2018 |
[2018] EWHC 1118 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Master Clark
Case No: HC-2017-001398
Philip Rainey QC & Timothy Polli QC (instructed by Hamlins LLP) for the Claimants
Zia Bhaloo QC & Paul Jarvis (instructed by Mishcon de Reya LLP) for the First Defendant
Andrew Bruce (instructed by The Port of London Authority) for the Second Defendant
Hearing date: 2 May 2018
Judgment Approved
This is the first case management hearing in this Part 8 claim, at which the parties have agreed that I should deal with the following matters:
(1) whether to order the trial of a preliminary issue;
(2) directions for the hearing of the first defendant's application for summary judgment and/or to strike out the claim for the Criminal Declaration (defined in paragraph 15 below) (‘the summary judgment application’);
(3) directions for the hearing of the first defendant's application to strike out the claims of certain identified claimants on the grounds that they have no interest in the litigation (‘the strike out application’).
The parties and the claim
Next to Cheyne Walk in London, there are a boatyard and some moorings which are known as “Chelsea Reach”. That part of the Thames is tidal, and therefore it falls under the jurisdiction of the Port of London Authority (‘the PLA’), the second defendant in these proceedings.
By a River Works Licence dated 24 May 1989 (“the RWL”), the PLA granted to the first defendant, Chelsea Yacht and Boat Company Limited (‘D1’),
“ a licence in accordance with section 66 of the [Port of London Act 1968] to retain the Works [being, by way of summary, the moorings, piers, pontoons etc at Chelsea Reach] subject to the conditions and stipulations hereinafter contained for the term [being 58 years] from the commencement date [1 September 1988] (subject to termination as hereinafter provided).”
D1 (the ownership of which has changed on several occasions since the grant of the RWL) operates the boatyard and moorings at Chelsea Reach pursuant to the RWL.
There are 61 permanent residential berths at the Chelsea Reach moorings. These proceedings concern 50 of those berths at which are permanently moored houseboats either owned or occupied by the claimants.
Some of the houseboats moored at Chelsea Reach are there pursuant to formal sub-licences issued by D1 granting the houseboat a licence to remain for a term of years. Others, particularly those claimants who have been resident at Chelsea Reach for many years, either have never had such a formal sub-licence, or their licence has expired.
The claimants whose licences continue pay annual mooring fees for their occupation of the moorings. In addition, they pay a maintenance charge – which may be considered the equivalent of a service charge.
The claim arises in the following statutory context.
Section 70 of the Port of London Act 1968 (“the Act”) includes the following provisions:
“ (1) No person shall carry out, construct, place, alter, renew, maintain or retain works unless he is licensed so to do by a subsisting works licenceand except upon the terms and conditions, if any, upon which the licence is granted and in accordance with the plans, sections and particulars approved in pursuance of section 66 (Licensing of works) of this Act.
(2) A person who contravenes the provisions of this section or who fails to comply with any term or condition upon which a works licence is granted by the Port Authority shall be guilty of an offence and liable to a fine not exceeding level 5 on the standard scale and to a daily fine not exceeding £50.”
The claim concerns two practices of D1:
(1) having charged or seeking to charge a premium or licence fee when granting a licence for a term of years (rather than from year to year) to moor at Chelsea Reach; and
(2) having included in its mooring licences an option entitling the licensee to renew the licence upon payment of a premium (in addition to the continuing payment of some annual mooring fees).
The claimants' case is that:
(1) the two practices set out above are or would be in breach of the terms of the RWL; and
(2) these breaches constitute the commission of a criminal offence, contrary to s.70(2) of the Act.
The claimants rely upon the following terms in the RWL:
(1) a positive obligation owed by D1 to the PLA to grant mooring licences and to charge mooring fees for the use of the berths at the moorings – see para 13(a) of the Second Schedule to the RWL;
(2) an obligation by D1 to pay to the PLA, by 4 equal quarterly instalments, an annual licence fee equivalent to 20% of the total annual mooring fees payable to D1 by vessels moored at Chelsea Reach – see paras 1(3) and 2 of the Third Schedule to the RWL;
(3) provisions for the annual licence fee payable by D1 to the PLA to be reviewed every 6 years – see paras 1(1) and 2(3) of the Third Schedule to the RWL;
(4) an obligation by D1 to provide in the mooring licences granted by it to those mooring boats at Chelsea Reach that there would be periodic reviews of the licence fees payable under those licences, each such review date being one year before the date of the review of the licence fee payable by D1 to the PLA – see para 13(b) of the Second Schedule to the RWL.
The claimants' case is that D1's practice, when granting a licence for a term of more than one year, of charging a premium by way of a licence fee in addition to the obligation set out in that licence to pay annual mooring fees (at market rate), constitutes a breach by D1 of its obligations under the RWL; and thereby constitutes a criminal offence within s. 70 of the Act, which the Claimants say is an offence of strict liability.
The claimants have sought to persuade the PLA that D1 is in breach of the RWL by, amongst other things, charging premiums; but the PLA's position, as set out in their letter of 8 December 2016 to D1, is that the RWL does not prohibit payment of premiums.
The claimants therefore seek in their Details of Claim two declarations, which relate to D1's past and future conduct:
(1) “A declaration that D1's practice of charging a premium by way of a “licence fee” when granting a mooring licence for a number of years, and of charging a premium upon the exercise of an option to renew a mooring licence for a number of years, constitutes a breach by D1 of the RWL.” (‘the Civil Declaration’);
(2) “A declaration that, by reason thereof, charging a premium by way of “licence fee” when granting or renewing a mooring licence for a number of years constitutes a criminal offence contrary to s. 70 of the Port of London Act 1968; or would, if continued constitute a criminal offence contrary to s.70 of the Port of London Act 1968 and hence or would if continued, be illegal.” (‘the Criminal Declaration’).
In these circumstances, the issues which arise in the claim are:
(1) Whether the claimants have standing to bring a claim, notwithstanding the fact that they are not parties to the RWL;
(2) Whether the claimants' construction of the RWL is correct;
(3) If so, whether it is appropriate for the Civil Declaration to be made;
(4) If the claimants' construction of the RWL is correct, whether their contention as to the effect of s.70 of the Act is correct;
(5) If so, whether it is appropriate for the Criminal Declaration to be made.
The claimants' position is that the core facts in the claim are proved by contemporaneous documentation and are not the subject of dispute; and that for this reason the Part 8 procedure adopted by them is appropriate. Notwithstanding this, the evidence in support of the claim includes factual evidence as to a number of matters which are irrelevant or marginally relevant (e.g. the conduct of the current owner of D1, Andrew Moffatt, in relation to another mooring site, Cadogan Pier); to which D1 has responded fully.
The preliminary issue
The preliminary issue which D1 seeks to be tried is set out in its application notice dated 31 July 2017:
“Whether the court ought to exercise its discretion to grant the second declaration (‘the Criminal Declaration’) sought in the Part 8 Claim Form.”
(“the Issue”)
Whether to order a preliminary issue – the test
The Court of Appeal has warned on several occasions of the risks of delay and increased costs resulting from trial of preliminary issues, particularly in complex cases. In Rossetti Marketing Ltd & Anor v Diamond Sofa Company Ltd [2012] EWCA Civ 1021, [2013] Bus L.R. 543, Lord Neuberger described preliminary issues as offering a siren song to the parties. There have been other warnings as well, in the cases of SCA Packaging Ltd v Boyle [2009] UKHL 37, [2009] ICR 1056 and Bond v Dunster [2011] EWCA Civ 455. It is clear from these authorities that I should take a cautious approach to deciding whether to order a trial of a preliminary issue.
There are several useful summaries of the factors which the court should take into account in making its decision. These are found in:
(1) Section 8 of the Technology and Construction Court (“TCC”) Guide – 2018 White Book, Vol 2, paras 2C-43;
(2) Steele v Steele [2001] CP Rep 106 – a decision of Neuberger J, in which he identified 10 factors which could be relevant;
(3) McLoughlin v Jones [2001] EWCA Civ 1743, [2002] QB 1312, in which David Steel J set out the following principles:
(i) Only issues which are decisive or potentially decisive should be identified;
(ii) The questions should usually be questions of law;
(iii) They should be decided on the basis of a schedule of agreed or assumed facts;
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Maurice Arnold Tomlinson v Attorney General of Jamaica
...which would only give rise to further delay and he cited the authority of Howard & Ors v Chelsea Yacht and Boat Company Ltd & An'or [2018] EWHC 1118 (Ch) as providing useful guidance on the principles relevant to a ‘split trial’ in this regard. Specific reference was made to paragraphs 19 ......