Cowley Property Investment Ltd v Oxford Karting Ltd, Court of Appeal - Chancery Division, October 30, 2018, [2018] EWHC 2824 (Ch)

Resolution Date:October 30, 2018
Issuing Organization:Chancery Division
Actores:Cowley Property Investment Ltd v Oxford Karting Ltd
 
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Neutral Citation Number: [2018] EWHC 2824 (Ch)

Case No: CH-2018-000109

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

CHANCERY APPEALS (CHANCERY DIVISION)

Rolls Building

Fetter Lane, London, EC4A 1NL

Date: 30 October 2018

Before :

MR JUSTICE ARNOLD

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Between :

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Timothy C. Dutton QC (instructed by Howard Kennedy LLP) for the Claimant/Appellant

Andy Creer (instructed by Freeths LLP) for the Defendant/Respondent

Hearing date: 18 October 2018

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MR JUSTICE ARNOLD :

Introduction

  1. This claim relates to part of a property known as Oxford Stadium, Sandy Lane, Oxford OX4 6LJ (``the Stadium''). For many years the Stadium was owned by GRA Ltd. In 2013 GRA disposed of its interest to GRA Acquisition Ltd. On 7 September 2016 the Claimant (``Cowley'') purchased the Stadium subject to occupational leases.

  2. Inside the Stadium, a go-karting business has operated since 1998 in an area known as the Old Tote Building and the Karting Track. On 14 August 2007 Karting UK (Oxford) Ltd (``Karting'') took a lease of the Old Tote Building and the Karting Track from GRA for a term of five years at an annual rent of £15,000 payable monthly in advance (``the 2007 Lease''). In August 2011 the go-karting business was taken over by the Defendant (``Oxford''). The 2007 Lease expired on 13 August 2012. The Defendant remains in occupation of the Old Tote Building and the Karting Track paying the rent specified in the 2007 Lease.

  3. On 16 November 2016 Cowley commenced the claim seeking:

    ``1. A declaration as to the basis and terms of the Defendant's occupation and use of the Old Tote Building and the Karting Track ...

  4. Payment of £73,232.65 for gas and electricity consumed by the Defendant, together with interest thereon.''

  5. On 27 March 2018 Cowley discontinued the claim for payment of £73,232.65. The claim for a declaration was tried by Her Honour Judge Baucher sitting in the County Court at Central London on 3 and 4 April 2018. On 11 April 2018 she handed down a reserved judgment dismissing the claim.

  6. Cowley now appeals against the dismissal of its claim for a declaration with permission granted by Birss J. As counsel agreed at the hearing of the appeal, the appeal turns upon a very narrow point arising out of the rather curious procedural history of the claim.

    Procedural history

  7. Cowley's Particulars of Claim, which was verified by a statement of truth, began by setting out brief particulars and selected terms of the 2007 Lease, a copy of which was annexed to the Particulars. The pleaded terms included the annual rent of £15,000 payable monthly (i.e. £1,250 a month). The Particulars then pleaded that Cowley had been the registered proprietor of the Stadium since 4 October 2016. Under the heading ``The legal basis of the Defendant's occupation and use'', it recited that Cowley's solicitors had asked Oxford in a letter dated 27 March 2015 to explain the basis of its occupation and use of the Old Tote Building and the Karting Track and that Oxford's solicitors had replied by letter dated 24 April 2015 saying that Oxford had taken an assignment of the 2007 Lease in August 2011 and that Oxford's occupation since August 2012 had been as a monthly periodical tenant under the Landlord and Tenant Act 1954. A copy of the 24 April 2015 letter was annexed to the Particulars together with its enclosures, which included a letter from Andrew Cooper of Oxford to Maureen Ridley of GRA dated 9 August 2011. This letter explained that a management buyout of Karting was taking place and that Oxford had been formed to take over the business. Details of Oxford's company number, VAT registration number and bank account were set out. The letter concluded:

    ``The management intends to run the new company as previously.... We look forward to continue doing business with you under the same terms and conditions as before.''

  8. The Particulars of Claim continued, so far as relevant:

    ``11. [The Defendant's entitlement to occupy and use the Old Tote Building and the Karting Track] is said to predate GRA Acquisition and the Claimant's acquisition of Oxford Stadium. With that in mind,

    a. If it be alleged that the Defendant took an assignment of the 2007 Lease prior to its expiry on 13 August 2012 then the same is admitted;

    b. If it be alleged that the Defendant's occupation of the Old Tote Building and the Karting Track after 13 August 2012 was a monthly periodical tenant on the terms of the 2007 Lease (so far as consistent with a monthly periodical tenancy) then that also is admitted;

    c. Save as aforesaid the Defendant is put to struct proof of its entitlement to occupy and use Oxford Stadium (or any part of it) and of the factual basis on which that entitlement is said to have arisen.

    ...

    Have the terms of the Defendants' occupation and use been varied?

    ...

  9. In the premises the Claimant's case in relation to the terms on which the Defendant is entitled to occupy and use the Old Tote Building and the Karting Track is as follows:

    a. If it be alleged that the terms of the Defendant's occupation are founded on the terms of the 2007 Lease then this is admitted ...;

    b. If it be alleged that those terms have been varied (whether before or after the expiry of the 2007 Lease) then the same is denied;

    c. Save as aforesaid no admissions are made.''

  10. Oxford's Defence admitted the brief particulars and selected terms of the 2007 Lease. It then pleaded as follows:

    ``12. In or about August 2011, the Defendant purchased the assets of Karting ... which was believed to include the 2007 Lease as varied, and went into occupation of the Site with the knowledge and express or implied agreement of GRA.

  11. If such transfer of the 2007 Lease was not a valid assignment...

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