The Tropical Zoo Ltd v The Mayor and Burgesses of the London Borough of Hounslow
Jurisdiction | England & Wales |
Judge | Mrs Justice Bacon |
Judgment Date | 24 May 2024 |
Neutral Citation | [2024] EWHC 1240 (Ch) |
Court | Chancery Division |
Docket Number | Case No: PT-2022-000667 |
[2024] EWHC 1240 (Ch)
Mrs Justice Bacon
Case No: PT-2022-000667
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Rolls Building
Fetter Lane
London, EC4A 1NL
Julian Greenhill KC and Ernest Leung (instructed by Forsters LLP) for the Claimant
Martin Hutchings KC and Daniel Petrides (instructed by Bevan Brittan LLP) for the Defendant
Hearing dates: 22–25 April 2024
Approved Judgment
This judgment was handed down remotely at 10 am on 24 May 2024 by circulation to the parties or their representatives by email and by release to the National Archives.
Introduction
This is a dispute about a lease of approximately 25 acres of land currently designated as green belt ( the Site), which was granted by the defendant council ( LBH) to the claimant ( TZL) in March 2012 for the purposes of use as a centre for education, conservation and leisure including a tropical zoo visitor attraction and associated facilities. The Site lies to the south-west of Faggs Road, East Bedfont, TW14 0LZ, and is near Heathrow airport. The lease included covenants requiring TZL to construct a zoo building and education centre within two years of the grant of the lease.
Since taking on the lease TZL has run Hounslow Urban Farm on the Site, with a collection of (currently) around 489 vertebrates, including mammals, birds and reptiles, plus 73 invertebrates. It has not, however, constructed the zoo, or even commenced construction of the proposed zoo building. LBH now seeks the forfeiture of the lease for non-compliance with the relevant covenants. TZL contends that Hounslow has waived its right to forfeit, or alternatively that the court should grant relief from forfeiture.
The proceedings were initiated by TZL on 3 August 2022 with a claim for declaratory relief that the lease is not liable to be forfeited, alternatively requesting relief from forfeiture. LBH defends the claim on the basis that it has not waived its right to forfeit, and that the court should not grant relief from forfeiture. LBH has since issued a claim for possession in the County Court at Central London, which has been stayed pending the determination of TZL's claim.
While TZL is the tenant under the lease and the claimant in these proceedings, the litigation is in fact being funded and run by a property development company called Canmoor. A subsidiary of Canmoor, Hounslow Ventures Ltd ( HVL), has entered into a Call Option Agreement with TZL which provides an option for it to purchase TZL's shares, and it is said that the option will be exercised if TZL is successful in this litigation. Canmoor's hope is that it will ultimately be able to exploit the lease in order to use most of the Site for an industrial park serving Heathrow airport. In reality and substance, therefore, this is litigation between Canmoor and LBH.
At the trial, Mr Greenhill KC and Mr Leung represented TZL, and Mr Hutchings KC and Mr Petrides represented LBH. I heard submissions from all four counsel, and am very grateful for their assistance.
Witnesses
TZL's witnesses
TZL relied on the evidence of two witnesses. Alice Purdy is a shareholder and employee of TZL and has, together with her father Tony Purdy, run TZL since it was incorporated in 2011. She also previously ran a similar operation with her father at Syon Park in Brentford. Her evidence explained the background to the grant of the lease, TZL's efforts since the grant of the lease to secure funding for the construction of the zoo, and its discussions with LBH during that time. She did not, however, have a clear recollection of some of the events many years ago, including the negotiations with various prospective funders which had been primarily conducted by her father. Nor did she have a good understanding of various of the legal documents. It was apparent that since Canmoor has become involved, it has effectively directed the litigation strategy and its solicitors have drafted letters on behalf of TZL. Nevertheless, in relation to the question of why TZL continued to pay rent after service of the s. 146 notices by LBH, I consider that Ms Purdy knew and understood more than she was willing to admit.
Andrew Ellis is a director of TZL and has been a minority shareholder since 2016. His role has been to assist TZL in finding external investors to support their business and build the zoo on the Site. Most recently, he has been the primary point of contact between TZL and Canmoor, and he gave evidence as to what he understood to be Canmoor's position in relation to the exercise of the call option and the construction of the zoo if TZL were to prevail in these proceedings. He could not, however, speak for Canmoor and was not authorised to do so. Canmoor could have provided evidence itself in the proceedings, but chose not to do so. Accordingly, while Mr Ellis made repeated comments as to his beliefs as to Canmoor's intentions and financial position, those comments were simply speculation (and perhaps hope) on his part.
It is also unfortunate that unredacted versions of the Call Option Agreement, Share Purchase Agreement and subsequent side letter extending the option period were provided by TZL only on the last day of the trial, after the close of the evidence on both sides. The versions of these documents previously provided had redacted all of the figures for the amounts paid by Canmoor or its subsidiaries to TZL and its shareholders, and the amounts to be paid if the call option was exercised. Mr Hutchings noted that if the unredacted documents had been available at the start of the trial, he would have wished to ask Ms Purdy and Mr Ellis questions about those figures and how the sums already paid had been spent. It was very unhelpful for the relevant figures to have been withheld until the last minute, and no explanation was given as to why the unredacted versions of these documents were not provided well before the trial.
LBH's witness
LBH relied on the evidence of a single witness, Dawid Miszkurka. Between 2016 and 2023 Mr Miszkurka was an associate director at Avison Young, which is LBH's agent for the Site and was responsible for sending demands for and collecting payments of rent from TZL. Mr Miszkurka was the main point of contact between LBH and Avison Young relating to the property, and his evidence explained the way in which incoming rent payments are dealt with by Avison Young, LBH's instruction in February 2021 not to accept further rent payments from TZL, and Avison Young's handling of rent payments which were subsequently made by TZL. Mr Miszkurka was a patently straightforward and honest witness, whose evidence was clear and reliable.
Factual background
The negotiations for the lease
From 1998 until 2012 the Purdys operated an animal rescue centre and zoo in the grounds of Syon Park stately home in Brentford. Their lease for the Syon Park site came to an end in 2012, and the Purdys were therefore looking for a site to relocate the zoo. In 2008, in anticipation of the end of the Syon Park lease, they approached LBH in the hope of finding an alternative site within the borough.
The Site was identified as a potentially suitable location in or around 2009. At the time it consisted of parking spaces, an Urban Farm which had become very run-down, and unused greenfield land. The Purdys' ambition was to build an indoor replica of a tropical rainforest on the site, as both an educational centre and leisure attraction.
The proposed zoo building required planning permission, which took several years to be approved by LBH. One of the reasons for the delay was that the Site is green belt land, such that the grant of planning permission required the approval of both the Mayor of London and the Secretary of State. Planning permission was eventually granted by LBH on 7 March 2012, permitting the construction of a zoo building and associated facilities (including classrooms and an adventure play area) at the eastern end of the Site.
LBH's original proposal was to grant TZL a lease of the site of the zoo building, to enable it to relocate the animals there from the site at Syon Park. Once it became clear, however, that the zoo building would take up to two years to construct, LBH revised its proposal and suggested the grant of a building licence over the site of the proposed zoo building, together with a temporary lease of the Urban Farm site so that TZL could temporarily relocate and house its animals on that site until the zoo building was constructed. Once the zoo building was complete, it was envisaged that the zoo animals would transfer there, and the tropical zoo would then be managed as one operation together with the Urban Farm, with a long lease of both sites.
TZL requested instead the grant of an immediate long lease, on the basis that it would need this to secure funding for the zoo building. TZL's note of a meeting with LBH on 13 October 2011 referred to
“The need for a 125 year lease to be granted now rather than after the zoo is constructed.
[TZL's representative] explained that the funders would not advance money to construct the zoo if they could not have an immediate legal charge on the land. After some discussion [LBH's representative] suggested that this would probably not be a problem if the lease contained a provision for forfeiture if the zoo was not built by a long stop date.”
Following the meeting TZL wrote to LBH on 17 October 2011 saying that its (unidentified) funders
“do not want a provision for forfeiture if the Zoo is not built by a longstop date. Even a ‘step in’ provision … does not appeal to them. They are not happy about the prospect of being forced to build out something that...
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