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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Sandhar & Kang Ltd v Ijaz [2018] EWHC 2604 (Ch) (10 August 2018) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2018/2604.html Cite as: [2018] EWHC 2604 (Ch)

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IN THE BUSINESS AND PROPERTY COURT

		Courtroom No. 10 Chancery Division 7 Rolls Building Fetter Lane London EC4A 1NL
		10th August 2018

This Transcript is Crown Copyright. It may not be reproduced in whole or in part, other than in accordance with relevant licence or with the express consent of the Authority. All rights are reserved.

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MR JUSTICE ZACAROLI:

1. This is an application by the claimant for an expedited trial of its claim in this action.
2. The background briefly is as follows. The claimant is the landlord of premises in Birmingham. On 3 January 2017, the claimant contends that it entered into a lease with the defendant for a term of 10 years from May 2015, pursuant to a lease in standard Law Society form, together with a Rider. The Rider provided for a two-way break clause, enabling the lease to be terminated on three months' notice.
3. On 20 October 2017 the claimant entered into an option to sell the development site including the premises to a developer. The option period expires on 19 October 2018. The developer has indicated it is expected to exercise the option in October 2018.
4. Upon exercise of the option, the claimant would be obliged to provide vacant possession. The earliest date for completion is 20 November 2018. The deadline is a condition of its funding.
5. On 15 March 2018, the claimant served notice, exercising the break clause, terminating the lease as of 30 June 2018.
6. On 1 May 2018, the defendant's solicitors wrote a letter disputing the validity of the notice, contending the claimant was maintaining a 'fraudulent and illegal position'. Although at that stage the defendant said it had entered into a lease dated 3 January 2017, it said it had never seen the Rider to the lease and that there was no break clause.
7. The defendant threatened proceedings against the claimant, including for an injunction, and repeated that threat throughout May, but in the end never issued proceedings. On 31 May, draft particulars of claim were sent by the claimant to the defendant. The covering letter stated that the claimant intended to apply within the next couple of weeks for an expedited trial.
8. The next day, on 1 June, this claim was issued and particulars of claim were served in the same form as the draft served the previous day. On 14 June the defendant served a request for further information on the claimant. The further information was provided on 3 July 2018. On 18 July the defendant served a defence and counter-claim.
9. In essence, the defendant alleges that no lease at all was entered into on 3 January 2017 and that the signatures on the copies of that lease which are in evidence are forgeries.
10. As to a statutory declaration stating that he was aware that he was about to enter into a lease that contracted out of the Landlord and Tenant Act, the defendant admits he did sign this document in November 2016. He contends, however, that he was duped into signing it and it was not attested to by a commissioner for oaths.
11. On 30 July, the claimant served a reply and defence to counter-claim. This was emailed to the defendant and posted. While the defendant accepts that it was received by email, his solicitor appears not to have appreciated it had been received until very shortly before this hearing.
12. On 1 August, this application was issued seeking an expedited trial. The legal test is well known. The overriding question is whether expedition can be justified on the basis of a real, objectively viewed urgency in the case: Delta Europe -v- Makki [2004] EWHC 1631, as recently endorsed by the Court of Appeal in Petter -v- EMC Europe Limited [2015] EWCA civ 480.
13. Four factors to be considered were set out by Neuberger LJ in WL Gore and Associates GMBH -v- Geox SPA [2008] EWCA civ 622. They are as follows: 1. Whether the applicants have shown good reason for expedition. 2. Whether expedition will interfere with the good administration of justice. 3. Whether expedition would cause prejudice to a party. 4. Whether there are any special factors.
14. As to the first of those factors (is there a good reason for expedition?), the claimant relies in this case upon the fact that, having granted the option to the developer to purchase the property last October, it is highly likely to become subject to an obligation to complete by 20 November. If it is unable to give vacant possession, it will breach that obligation and be exposed to a substantial damages claim. The price is commercially sensitive, but it is said to be in the region of several millions of pounds.
15. No further update has been sought from the developer, Taylor Grange, since 5 July when they indicated their stance on this. However, the timing of the exercise of the option is dictated by their funders and the claimant is in a somewhat difficult position, being concerned (as Ms Holmes, Counsel for the claimant put it) not to 'spook' the developer. I see no reason to doubt that the position remains as urgent as it was stated to be on 5 July.
16. The need for commercial certainty is a factor which can, in an appropriate case, justify expedition, as the Petter case itself demonstrates. I regard the fact of the impending option deadline, and the resulting substantial damages claim if the claimant fails to comply with it, as sufficiently good reason for expedition in accordance with the first of the factors to be taken in to account.
17. The defendant says that this urgency is of the claimant's own making, it having chosen to enter into the option. However, if the claimant is correct that the lease contains a three-month break clause, then it did not have any reason to suspect, when it entered into the option agreement a year ago, that its right to terminate on three months' notice would be disputed and that there would need to be a trial at all.
18. Moreover, it exercised its right to serve notice in respect of the break clause with ample time to ensure that the tenant could comply with his obligations before the deadline in October.
19. So far as the second factor is concerned, any order for expedition interferes with the administration of justice in the sense that some other case is likely to have to be put out of the list. Aside from that fact however, which given that it applies in every case cannot be a reason in itself to deny expedition, no particular interference with the administration of justice is identified in this case.
20. The defendant relies most heavily on the third factor (that is, prejudice to him in the event that expedition is ordered). He contends first of all that the defendant and the claimant are not on an equal footing because the defendant does not know what aspects of the defence are in issue. That is a bad point, however, since the reply was served on 30 July 2018, indicating precisely what is and what is not an issue.
21. Even if the defendant's solicitor failed to appreciate he had received the reply until very recently, it was undoubtedly contained in the bundle for this hearing. It was received by his solicitors this Monday. There has been ample time for the defendant to appreciate what is in issue on the pleadings. In any event, this could not be an issue that could be held against the claimant, who had served the reply on 30 July.
22. It is also said that the parties are on an unequal footing because of the lack of resources available to the defendant and his smaller legal team. Care must be taken to ensure that a party with larger resources is not unfairly overburdening the other party in proceedings, and any directions given must be such that the person in the defendant's position, with its resources, can reasonably comply with them. Provided that is so, however, if expedition is otherwise justified, the inequality of resources is not in itself a reason to deny expedition. The critical question is whether, given the resources which the defendant can reasonably be expected to have available, a fair trial within the timetable is possible.
23. Unequal footing is also said to exist because it is the defendant who will have to prove forgery and he will experience difficulty in finding and instructing an expert in the short time available if the trial is expedited. There is no evidence that the defendant has sought to identify and instruct an expert, but has been unable to do so because of unavailability.
24. In any event, he must have known that his own case was that the lease is a forgery for a long time. As I have noted, during May of this year, his solicitors repeatedly said that he was preparing to issue proceedings, including for injunctive relief. Since 1 June 2018, at the latest, the defendant has known for certain that the claimant disputes the allegation of forgery, which in itself is hardly surprising.
25. While, as Mr Mohammed for the defendant fairly points out, it was not until the application for expedition was issued that the defendant knew that there was any urgency about seeking an expert, the fact is that a party pleading a serious allegation such as forgery can be expected to seek to substantiate that allegation with expert evidence at an early stage. The defendant has known that the claimant regarded the resolution of this matter as urgent all along. Overall, the defendant says that a trial that would be fair to it is simply impossible in the timeframe, pointing to the amount of work that he and his legal team would have to undertake in relation to disclosure, witness statements and expert evidence.
26. The claimant for its part says that it is obvious the case can be got ready for trial in the available time. Both sides are incentivised to some extent to play up or play down, as the case may be, the complexities of the case. I have no doubt that an expedited trial will be a challenge for both parties. That does not mean however, that it is a challenge that cannot be met.
27. Mr Mohammed accepts that the essential issue in this case is a narrow one: is the 3 January 2017 lease genuine? While it is true that this will necessitate disclosure, witness evidence and expert evidence, the scope of all such evidence is likely to be relatively confined. Mr Mohammed suggests that it may well be that further complexities will be thrown up, for example issues relating to privilege, or difficulties getting essential documents from third parties, in particular Birmingham City Council. He suggests there may even be a need for further expert evidence going to the genuineness of an email, under cover of which a copy of the purported lease was sent.
28. Any order I make, however, will necessarily be subject to the possibility that in the light of future events, what now appears possible will prove, in the event, to be impossible. If that is so, and it turns out that for some good reason it is impossible for the trial to take place within the timetable without prejudicing the defendant, then the defendant may come back to court and seek to adjourn the trial; see the WL Gore case, cited above, per Neuberger LJ at paragraph 33. At the moment, I am not persuaded that the known difficulties (as opposed to possible unknown difficulties) render it impossible for a fair trial to take place. Accordingly, I do not think that the prejudice to the defendant in this case outweighs the genuine need for urgency.
29. The fourth point is whether there are any 'special factors'. The principal reason relied on by the defendant in this regard is the claimant's delay in making the application. As Ms Holmes accepts, if there had been culpable delay, then that would be a factor to weigh in the balance, although it is not necessarily determinative.
30. The defendant says that the claimant has delayed in making the application for expedition once the proceedings were issued. That is compounded by the fact that the day before it issued the proceedings, as I have already mentioned, its solicitors wrote to the defendant's solicitors indicating the matter was urgent and that they would be applying for expedition within two weeks, but failed to do so for a number of weeks.
31. However, although it was known that the defendant has disputed the existence of the Rider to the lease since the letter of 1 May at the latest, the precise basis on which that was so was unknown (given that, at that stage, the defendant was admitting that he had entered into a lease on 3 January 2017).
32. It was not until service of his defence that his position that the lease was a forgery was articulated. That was on 18 July. The application was issued just two weeks later. It seems to me that the claimant acted reasonably in waiting to see precisely what the defendant's defence was before applying for expedition, particularly if the defendant had been threatening his own proceedings (which never materialised) since 1 May. The fact that the claimant took a different stance in its solicitors' letter of 31 May, perhaps inadvisably jumping the gun, is not a reason for denying it the chance to obtain expedition on the grounds of delay.
33. Accordingly, for those reasons, I am prepared to make an order expediting the proceedings. Subject to further detailed submissions of the parties as to the terms of the order, I propose to modify that timetable slightly, by pushing back the dates that are included in the draft order by a period of one week, where that is relevant.
End of Judgment