England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(MR JUSTICE HART, MR JUSTICE PUMFREY, MR A MANN QC)

		Royal Courts of Justice Strand London WC2 Wednesday, 3rd October 2001

Wednesday, 3rd October 2001

1. LORD JUSTICE JONATHAN PARKER: Before the court are three applications for permission to appeal, all of which arise out of possession proceedings relating to a freehold property, known as 96 Herman Hill, Wanstead E19, registered at HM Land Registry under title number EGL 179973 ("the property"). The applications are made by Mr Dharam Gopee, who appears in person. He is the 9th defendant in the proceedings. In one of the applications he makes the application both on his own behalf and on behalf of a company owned or controlled by him called Barrons Finance Ltd, which is the 10th defendant in the proceedings.
2. The common background to the three applications is briefly as follows. In May 1981 the property was sold by the then registered proprietor, a Mr Charles Frederick Simmons, to a company called the Cross Fire Company Ltd ("CFC") for £63,000. CFC is the 1st defendant in the proceedings. £53,000 of the purchase price of £63,000 was provided by way of loan to CFC by a company called Frederick Charles (Properties) Ltd, the claimant in the proceedings. The loan was secured by a first charge on the property in favour of the claimant dated 19 May 1981 (being the date of completion of the sale). The charge was registered on 27 May 1981.
3. Under the terms of the charge the loan of £53,000 (which it secured) was repayable by instalments over a term of 25 years.
4. CFC (which was compulsorily wound up on 2 September 1998) was owned or controlled by Mr Gopee and/or his wife, Mrs Kassiran Gopee (the 7th defendant in the proceedings).
5. In 1995 a company called Pangold Properties Ltd (the 2nd defendant in the proceedings being another company owned or controlled by the Gopee family) purported to purchase the property and registered a caution. One of the directors of Pangold Properties Ltd is shown at Companies House as being a Mr Motillal Gopee, who was (it appears) at the time some nine years old. Pangold Properties Ltd subsequently became the registered proprietor of the property. In 1998 another company owned or controlled by the Gopee family, Sunshine Estates Ltd (the 3rd defendant in the proceedings) purported to purchase the property from Pangold Properties Ltd for a consideration of £1, and in turn became the registered proprietor.
6. The 4th defendant in the proceedings, Reddy Corporation Ltd - another Gopee company - claims to be chargee under two charges dated 29 June 1998 and 5 October 1998 respectively. The claimant, however, disputes that any moneys were in fact advanced on the security of either of those charges.
7. In July 1999 the 5th defendant in the proceedings, Marketing Web Ltd (another Gopee company) purported to purchase the property from Sunshine Estates Ltd, again for a consideration of £1, and in due course became registered proprietor. Marketing Web Ltd then granted (or purported to grant) a charge over the property in favour of Moneylink Finance Ltd (the 6th defendant in the proceedings and another Gopee company).
8. In August 1999 Mrs Gopee took an assignment of the two charges from the 4th defendant, Reddy Corporation Ltd. She subsequently granted, or purported to grant, sub-charges of those charges to Marketing Web Ltd.
9. The 8th defendant, Newline Corporation Ltd (another Gopee company) claims to have acquired an interest in those charges or some of them.
10. As noted earlier, the 9th defendant in the proceedings is Mr Gopee himself. He was made bankrupt in April 1997 and was discharged from bankruptcy in April 2000. He claims to have acquired Marketing Web Ltd's interest in the property by virtue of an agreement for transfer dated 6 July 2000.
11. While all this was going on the instalments due under the claimant's legal charge fell substantially in arrear, and on 13 August 1999 the claimant commenced proceedings against the first four defendants (the remaining defendants being added to the proceedings subsequently) claiming possession, together with a declaration to the effect that the claimant was entitled to the property free of any interest or claims of any of them. In due course Mr Gopee delivered a Defence and Counterclaim. By his Counterclaim he claimed recission, alternatively the setting aside of the claimant's legal charge on grounds of undue influence, fraudulent misrepresentation and forgery. He also claimed damages for breaches of duty by the claimant in allowing the property to deteriorate and in failing to take proper steps to realise its true market value.
12. On 25 November 1999 Lightman J made an interim freezing order against the defendants, and gave permission to apply for summary judgment. The giving of permission to apply for summary judgment was, it seems, inappropriate in a mortgagee's possession case, but (as will appear) this was overtaken by events.
13. The proceedings came on for substantial hearing in a summary way before His Honour Judge Rich (sitting as a judge of the High Court, Chancery Division). On 8 March 2000 Judge Rich delivered a judgment in which he concluded that the claimant's legal charge was valid and effective. On that basis he made a possession order and declared that the claimant's legal charge had priority over all subsequent transfers and/or charges made or granted between the various Gopee companies, that is to say priority over any claims charges or interests arising after 19 May 1981 (which was the date of the claimant's charge). Judge Rich also continued the freezing order which had been granted by Lightman J.
14. Application was subsequently made to Hart J to set aside the possession order, but on 17 May 2000 Hart J dismissed that application.
15. On 1 and 6 June 2000 Mr Gopee registered cautions against the claimant's charge. These cautions were supported by a statutory declaration dated 31 May 2000 stating that Mr Gopee was involved in litigation against the claimant in his capacity as an occupier with an overriding interest in the property under section 70(1)(g) of the Land Registration Act 1925 who was not a party to the possession proceedings, and that the claimant had obtained a possession order without informing the occupiers or making them parties to the proceedings. On 2 June 2000 Mrs Gopee registered two entries on the charges register on the footing that she was seeking to appeal the orders of Lightman J and of His Honour Judge Rich.
16. On 7 December 2000 Robert Walker LJ dismissed four applications made by Mr and/or Mrs Gopee and the various Gopee companies for permission to appeal against the orders of Hart J, Lightman J and Judge Rich, holding that none of the applications had a reasonable prospect of success. Robert Walker LJ additionally noted that any assignment by Market Web Ltd of its rights and interests in the property to Mr Gopee would appear to be a contempt of court in that it was a breach of the freezing order granted by Lightman J, and continued by His Honour Judge Rich. In the course of his judgment, Robert Walker LJ said this:

"The case differed from the ordinary run of mortgage possession cases, only because of the ingenious lengths to which Mr Gopee and companies controlled by him have gone in order to stave off the judgment. Mr Gopee has, through his companies, fought a vigorous rearguard action relying on numerous expedients, including denial of execution of the legal charge and the plea of non est factum; allegations of misrepresentation, both innocent and (as he put it to me) fraudulent; allegations of undue influence and oppression; and attempts in practice to cloud the issue in obscurity by transactions involving a string of companies controlled by Mr Gopee despite his bankruptcy. I regret to have to record (and it is a matter of public record since it appears on the register at Companies House) that Mr Gopee has in the course of these manoeuvres involved his own children, one as young as nine years of age, in being appointed as company directors, an astonishing abuse of the privilege of incorporation with limited liability."

17. On 18 October 2000 the claimant applied without notice to Jacob J to amend the Particulars of Claim by adding the 8th and 9th defendants (the 9th defendant being Mr Gopee) and seeking an interim freezing injunction against them. That order was duly made. The claimant also applied for an order that the chief land registrar vacate the notices and cautions registered in favour of Mr and Mrs Gopee. That application was heard on 26 January 2001 before Mr Martin Mann QC (sitting as a Deputy High Court Judge in the Chancery Division).
18. It appears that Mr Gopee, who purported to represent all the defendants, was not present at the start of the hearing before the deputy judge, but that he arrived in the course of the hearing stating that he was not aware that the hearing was due to take place that day. The deputy judge considered granting an adjournment, but in the event he held that an adjournment was unnecessary and would constitute an injustice to the claimant. The deputy judge further held that as, following the decision of Robert Walker LJ, there was no further possibility of an appeal against the orders of Lightman J and His Honour Judge Rich, there was no basis for maintaining Mrs Gopee's entries, and that the original justification for Mr Gopee's entries had also been removed.
19. The deputy judge also dealt with various further arguments raised by Mr Gopee. He further held that, by virtue of the order of Judge Rich, Market Web Ltd could have no interest arising out of events after the date of the claimant's legal charge, but that in any event the claims put forward by Mr Gopee, purportedly as assignee of any claims by Market Web Ltd could not create interests capable of justifying the maintenance of cautions or notices on the register obstructing the sale of the property. Accordingly, the deputy judge granted the claimant's application and ordered the removal of the cautions and notices from the register.
20. Permission is now sought to appeal against that order of the deputy judge. That is the first of the three applications before me this morning. The Court of Appeal reference number of that application is A3/2001/0519.
21. On 20 March 2001 the claimant applied to add Barrons Finance Ltd as 10th defendant in the proceedings, and to amend its Particulars of Claim so as to include a claim that the chief land registrar due forthwith cancel an official search with priority which Barrons Finance Services had lodged at HM Land Registry. The effect of lodging such an official search, of course, was to prevent any disposition of the property during the priority period of 30 working days. Needless to say, Barrons Finance Ltd is, as I pointed out earlier, yet another company owned or controlled by the Gopee family. In its application for a search with priority (the application was in Form 94A, being the standard form of application for such a search). Barrons Finance Ltd stated as its reason for making the application that it intended to take a registered charge on the whole of the property.
22. The application in respect of Barrons Finance Ltd came before Hart J on 23 March 2001, when he made the order sought.
23. Permission is now sought to appeal against that order. That is the second of the three applications before me this morning. The Court of Appeal reference number of that application is A3/2001/0797. As pointed out earlier, this application is made by Mr Gopee on his own behalf and on behalf of Barrons Finance Ltd.
24. On 18 April 2001 the claimant applied to strike out Mr Gopee's Defence and Counterclaim and for the dismissal of all the Part 20 claims. That application was heard by Pumfrey J on 21 June 2001, when he made the order sought. Mr Gopee now seeks permission to appeal against that order. That is the third and last of the applications before me this morning. The Court of Appeal reference number for that application is A3/2001/1507. Coupled with that application is an application by Mr Gopee to rely on further evidence, being evidence directed, as I understand it, at establishing breaches of duty by the claimant as chargee.
25. Finally, I should record by way of background that Mr Gopee has told me this morning that the property was sold by the claimant as chargee in about May of this year for some £320,000. Mr Gopee maintains that that was a sale at an undervalue.
26. In the course of his brief oral submissions this morning, Mr Gopee has asserted that Mr Simmons, the original vendor of the property, is a man who is known for failing to account for proceeds of sale of properties of which he is directly or indirectly chargee or mortgagee. Mr Gopee asserts that in the instant case enormous costs have been incurred unnecessarily simply with a view to reducing the balance of the net proceeds of sale available to subsequent chargees or to the chargor. Mr Gopee asserts that he was entitled to protect his position by the entry of the various cautions and notices to which I have referred. He submits that notice should have originally been given to him as an occupier of the premises of the prospective commencement of the possession proceedings, and that in the circumstances he is entitled to the overriding interest which he sought to assert before the deputy judge at the hearing to which I referred earlier in this judgment.
27. I can now turn to the first of the three applications, that is to say the application for permission to appeal against the order of the deputy judge, Mr Mann QC, dated 26 January 2001. In ordering the vacation of the various entries appearing on the register of title, the deputy judge concluded that insofar as such entries were based upon prospective appeals against the orders of Lightman J and His Honour Judge Rich, the refusal by Robert Walker LJ of permission to appeal against those orders meant that there could be no basis for maintaining those entries. The deputy judge also rejected a further argument put forward by Mr Gopee that the court should treat him personally as the chargor, rather than CFC, on the footing that CFC was owned or controlled by him. Alternatively, Mr Gopee had sought to rely on the purported transfer by Marketing Web Ltd dated 6 July 2000 as providing a basis for those entries. The judge rejected those arguments too. He found no good reason for piercing the corporate veil or for treating Mr Gopee as the chargor. As to any claims by Marketing Web Ltd, even if those claims had vested in Mr Gopee they were not, as the deputy judge concluded, the kind of claim which could justify the maintenance of cautions or notices on the register. At most, they were personal claims against the claimant as chargee.
28. By his proposed grounds of appeal against the deputy judge's order, Mr Gopee seeks to assert (in summary) (1) that his claims against the claimant as chargee create an overriding interest, capable of forming a basis for the entries in question; (2) that the deputy judge did not deal with further arguments addressed to him by Mr Gopee, which went beyond the terms of the statutory declaration made by him in support of the entries; and (3) That the deputy judge did not take into account the risk of the claimant absconding with the proceeds of sale of the property.
29. I can, however, see no merit at all in any of the proposed grounds of appeal. The claim based on an alleged overriding interest seems to me to be unarguable, in the light of the judgment of Judge Rich. Moreover, as I have already indicated, the deputy judge dealt expressly with the additional arguments raised by Mr Gopee, and in my judgment he plainly reached the right conclusions on those arguments. The further proposed grounds of appeal seem to me to be plainly misconceived. I accordingly conclude that the proposed appeal against the order of the deputy judge would have no real chance of success, and on that basis I dismiss that application.
30. I turn then to the second of the three applications before me this morning, namely the application for permission to appeal against so much of the order of Hart J dated 23 March 2001 as (a) declared that sufficient notice of the application to vacate the entry of the priority search notice made on behalf of Barrons Finance Ltd (the 10th defendant) had been given to Mr Gopee and to the company; (b) ordered the vacation of the entry; and (c) ordered that Mr Gopee and the company pay the costs of the application to be the subject of a detailed assessment, with an interim payment of £5,000 to be made by 9 April 2001. In his appellant's notice, Mr Gopee sets out the proposed grounds of appeal as being that insufficient notice was given, and that "correspondences imposing a deadline were received after the expiry of the deadline". The notice also indicates that other grounds of appeal will follow. In the event, however, none did.
31. There is no transcript available of the judgment of Hart J, but there is available a full attendance note by the claimant's solicitors. I read an extract from that attendance note:

"Paul Emerson [that was counsel for the claimant] addressed the lack of representation of the Ninth and Tenth defendants. He said that a firm of solicitors had contacted Instructing Solicitors and said they were on the record for the Gopees. They had had two telephone conversations with Instructing Solicitors and had said that they would write to the Court. Instructing Solicitors had faxed those solicitors but had received no response. Those solicitors had said they would not attend but it was not clear whether Mr Gopee would attend. All in all, the correspondence was one sided."

32. It is clear from this attendance note that sufficient notice of the hearing had indeed been given to Mr Gopee. In the circumstances I can see no basis whatever for interfering with the judge's decision to proceed on the footing that such notice had indeed been given. It is to be noted that the judge specifically considered the relevant provisions of the Criminal Procedure Rules (23.74).
33. Accordingly I conclude that there is no basis for the proposed appeal against the order of Hart J dated 23 March 2001, and I accordingly dismiss the application.
34. I now turn to the third of the three applications before me, namely the application for permission to appeal against the order of Pumfrey J dated 21 June 2001 striking out the Defence and Counterclaim in the action, coupled with Mr Gopee's application to rely on further evidence.
35. Insofar as the claims raised by the Defence and Counterclaim related to the original sale of the property in 1981, the judge concluded, plainly rightly in my judgment, that such claims were bound to fail. Insofar as Mr Gopee and his companies sought recission of, or the setting aside of, the claimant's legal charge, the judge pointed out that the charge had lain undisturbed for some 16 years before the possession proceedings were commenced. As to the other claims, the judge pointed out that they were plainly statute-barred. He also concluded that they had never been effectively assigned to Mr Gopee. As the judge noted in the course of his judgment:

"I am satisfied that all the claims by Mr Gopee which relate to the original transaction should be struck out for the reasons which I have given. The rescission claim is hopeless. The other claims are clearly the subject of limitation, and moreover have not in any event been assigned to Mr Gopee."

36. The judge then addressed the claims relating to the alleged breaches of duty by the claimant as chargee. As to those claims he stated his conclusions as follows:

"Whoever may be entitled in relation to this to query the mortgagees' financial account, it seems to me that it is not Mr Gopee, and in those circumstances I strike out the whole of his counterclaim."

37. I can, for my part, see no prospect of the judge's conclusions being successfully challenged on appeal. In the circumstances, Mr Gopee's application to rely on further evidence also falls away.
38. I accordingly dismiss this application also.
(Applications dismissed; no order for costs).