06/09/2020

The Parable of the Property Developer

Ruby Triangle Properties Ltd v Jesus Sanctuary Ministries Ltd (2020) EWHC 2247 (Ch)

An unlawful eviction case, but not a residential one. A note because it is an interesting case of a badly behaved property developers, a church an a question over general damages.

Ruby Triangle Properties own an area of land off the Old Kent Road in London (known as Ruby Triangle), which has planning permission for a major development. Ruby took ownership in March 2019. Jesus Sanctuary Ministries Ltd is an evangelical church and mission which since 2009 occupied part of building on the Ruby Triangle site.

On 24 October 2019 , RTP took possession of the building without a court order. On 25 October JSM obtained an injunction for re-entry. “Possession was restored to JSM at around 8pm in the evening of 25 October 2019 after the police had been in attendance for a number of hours.”

JSM then brought a claim for a declaration that it was a tenant and had protection under Part II Landlord and Tenant Act 1954, and also for damages for unlawful eviction and for £70,670.25 it alleged that RTP’s agents had removed from the property when it was under their control.

In response, RTP served a section 25 notice, without prejudice, and a notice to quit by 2 May 2020. RTP argued that JSM ocupied under a permissive licence which had been terminated, but without prejudice to that permission, “applied under section 29(2) of the 1954 Act for an order for the termination of any tenancy held by JSM and protected by Part II of the 1954 Act relying on grounds (a), (b) and (f) of section 30(1) of Part II of the 1954 Act.”

RTP’s application was adjourned to a later trial, with planning permissions, s.106 agreements and the question of any obligation to RTP to arrange relocation to be determined.

By the time JSM’s claim had got to trial, RTP’s defence had somewhat collapsed.

There was a written agreement between a predecessor in title and JSM:

an agreement in writing headed “Church Hire/Rental Agreement made on 3 May 2009 between (1) World Harvest Christian Centre as “the Owner” and (2) Jesus Sanctuary Ministries as “the Licensee”. The period of time of the agreement was from 3 May 2009 to 30 June 2012. The agreement Fee was £25,000 per annum, exclusive of water rates, heating, lighting and cleaning, payable in advance upon signing the document and by yearly advance payments. The agreement gave the Licensee exclusive possession of any part of the premises comprising (1) Auditorium, (2) Two Offices, (3) One Kitchen, (4) Male & Female Lavatories, (5) One Disabled Lavatory, (6) One Reception, and (7) a set designated car park for Jesus Sanctuary GO.

RTP conceded that this meant JSM were a tenant, with occupation after 30 June 2012 being under Part II Landlord and Tenant Act 1985.

RTP had themselves sent JSM a ‘deed of assignment of rent arrears’ in March 2019.

RTP’s explanation that they had occupied the building because it was in a poor and dangerous condition was not accepted on the evidence, and they had in August 2019 offered JSM a one year lease, which was not consistent with the later excuse as to the condition of the property.

RTP had not used regulated bailiffs or enforcement agents to enter and take possession, a couple of unqualified men were asked to do it by RTP.

RTP effectively conceded that the eviction was unlawful. We’ll come to the damages assessment below.

However, JSM’s claim in conversion for the £70,000 odd allegedly taken from the property by RTP’s agents failed. CCTV footage did not show anyone taking the money or being in the room where the money apparently was for long enough to have taken it from locked drawers. Moreover, JSM had not initially raised the missing money after it went back into occupation, or when initially issuing the claim. It was first mentioned in the later particulars of claim two and half weeks after regaining possession. Finally, it seemed unlikely that such a large sum, apparently collected in donations over a period of time, would have been left in the property rather than banked.

On damages, JSM had claimed aggravated and exemplary damages, as well as some specific costs.

The court awarded £1500 in general damages for loss of amenity, nuisance and distress and inconvenience, in respect of the 40 odd hours excluded from the property.

Special damages of £850 for a locksmith.

Aggravated damages could not be be awarded to a limited company, Eaton Mansions (Westminster) Limited v Stinger Compania De Inversion SA [2013] EWCA Civ 13, as a limited company can’t suffer distress and injury to feelings.

Exemplary damages of £6,250 were awarded on the basis that RTP had taken a ‘calculated risk’ and

The motives of RTP and its agents were or included wanting to avoid having to spend further management time dealing with the JSM or attempting to negotiate further. RTP clearly wanted to avoid if it could the expense and time of court proceedings. It hoped to avoid further negotiation including the issues to which protection under Part II of the 1954 Act might give rise.

Calculated as:

I consider however that looking at all the circumstances, a relatively modest award of exemplary damages should be made against RTP in favour of JSM. In determining the amount, I have taken into account:-
(i) RTP knew that JSM had been in occupation for a considerable time;
(ii) RTP treated JSM as a tenant for the purposes of giving notice of assignment in order to be able to collect any rent arrears;
(iii) the notice of eviction did not provide a reasonable notice to vacate;
(iv) activity such as a place of worship was capable of being protected under Part II of the 1954 Act;

However

(i) the Rental Agreement was not produced before possession was taken on 24 October 2019
(ii) no rent or use of occupation monies were being tendered by JSM;
(iii) a short term lease to regularise occupation was offered to JSM by RTP in August 2019.

That came to some 3 months rent.

RTP had counterclaimed for rent arrears. The Deed of Assignment of Rent Arrears from the predecessor in title did not specify any arrears, so did not have effect. There was therefore no need to go into the equitable set off of various pre -assignment costs and damages raised by JSM.

JSM had paid no rent since March 2019 and RTP were entitled to those arrears, which could be set off against the damages awards.

JSM entitled to costs to the return hearing of the injunction at the indemnity rate.

(The judgment is silent on costs of the claim overall, but one would expect that JSM would get at least the large part of their costs.)

Comment

There is one bit in this whole sorry saga that is puzzling me. The position on aggravated damages and limited companies is clear – aggravated damages are in respect of the particular impact on the mind of the claimant – distress and injury to feeling, and one can’t injury a company’s feelings. But would this also not extend to general damages for loss of amenity, distress and inconvenience? How can a limited company suffer loss of amenity other than in direct consequential costs and expenses? How can a limited company be distressed?

 

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

4 Comments

  1. John (not Jon)

    JSM managed to get the re-entry injunction pretty damn quick, didn’t they? Compare that to the typical residential tenant who would be lucky to find an available housing solicitor within a couple of weeks, by which time the property would probably have been re-let and their possessions disposed of.

    Reply
    • Giles Peaker

      That would be pretty much the usual timescale for a re-entry injunction. Finding someone to do it is a whole separate problem…

      Reply
      • John (not Jon)

        To clarify that – do you mean two weeks is usual (if you can find someone in the first place)?

        Reply

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