England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(Mr M Spencer QC
sitting as a Deputy High Court Judge)

		The Royal Courts of Justice The Strand London WC2A Friday 26 January 2001

1. LORD JUSTICE BUXTON: This is a renewed application by Mr Joseph Carroll for permission to appeal against two orders made by Mr Michael Spencer QC, sitting as a Deputy Judge of the High Court on 13 October 2000.
2. The Deputy Judge's order was solely concerned with costs and, as he himself recognised, it is not usual to entertain appeals from such an order. However, the orders that the judge made, and the circumstances in which they arose, were both slightly unusual and the judge accordingly considered the costs matter at some considerable Length.
3. The background is extensive and complicated. For the purpose of this judgment, it is necessary to say only that on 4 February 2000 a possession order, that had been obtained originally as long ago as 1996 and then supplemented in 1999, was exercised on behalf of the first defendant in these proceedings, the Bank of India ("the bank"), over a hotel, the King's Head Hotel, in Harrow on the Hill. That property was at that time not, properly speaking, a hotel but was being operated as a hostel or premises for homeless persons. Its owner was a Mr Manek, who had previously been the landlord until circumstances caused him to lose his licence. The possession proceedings had been issued against Mr Manek and his wife.
4. Resident at the hotel was Mr Carroll, the present applicant, who tells me that he had been living there and, as I understand it, at least at some stage working in the management of the hotel, for some 20 years. It was the understanding of all concerned that he was a licensee without limitation in respect of the whole of the premises. He had in 1997, after the first possession order, brought proceedings against the bank to assert a separate entitlement in law to part of the premises. The bank had appointed the second defendant in the present application, Mr Kirker, as a Law of Property Act receiver under the 1996 order.
5. Mr Carroll was unsuccessful in his application to establish a separate and distinct right of possession in the King's Head Hotel. Although I have not seen a transcript of the proceedings, the judge recorded (and no one suggests that he was wrong) that judgment was given against Mr Carroll in that action in August 1999, and that an appeal to the Court of Appeal was unsuccessful. Judgment was given against him on 31 January 2000 in this court, which is no doubt why the eviction proceedings of 4 February followed very shortly thereafter. Although Mr Carroll complains that no previous notice was given to him of that eviction, the judge rightly observed that he could hardly have been surprised when eviction occurred, he having only very recently come to the end of the road in his assertion that he had a right to live there. Nonetheless, he complained before the judge that he should not himself have been evicted because he was living in a flat that belonged to Mrs Manek rather than to her husband. The judge observed that no action had been brought by Mr Carroll so asserting; nor, apparently, had that claim been made in the previous proceedings.
6. All that is by way of background. The claimant was required by the bailiffs, who attended, to leave the premises. There remained within the premises a substantial quantity of goods and chattels and also a substantial number of documents. The claimant asserted that a large number of these documents were his, or he was a bailee of them for other persons; and that all the property was his own and therefore was not lawfully under the possession of Mr Manek or of his receiver.
7. Although the matter does not appear to have been gone into in very great detail before the judge, Mr Carroll has put before this court some correspondence, which he would seek to adduce in any appeal, between Messrs Penningtons, the bank's solicitors, and the solicitors who were advising Mr Carroll at that time and who represented him before Mr Spencer. In my original order refusing permission to appeal I determined, and I now confirm, that such documents could not be introduced in the appeal, because they were available at the time that Mr Spencer dealt with the matter. Nonetheless, Mr Carroll having put them forward, it is clear from that correspondence that proper and legitimate concerns were expressed by the receiver as to the nature of the property claimed. Some considerable part of it, though not all, appeared to be equipment or items more appropriately to be found in an hotel rather than a private residence, and therefore serious questions arose as to their ownership.
8. As to the documents, complaint is made that the receiver took such documents away. Vigorous action was taken by Mr Carroll to recover them. He issued an application for an injunction on, I think, 8 February - that is to say, four days after the intervention - which was considered by Wright J. It became clear before him that a good deal of uncertainty arose as to the ownership of many of the documents. There are a number of competitors: Mrs Manek; Mr Manek (or, more properly, he being bankrupt, his trustee in bankruptcy); the bank; the receivers; and a gentleman, also represented by solicitors, who said that he had placed a large number of documents in Mr Carroll's safe keeping, that Mr Carroll was a bailee of them, and that they were not documents that should appertain to the receiver.
9. Mr Carroll's real complaint appears to be that the receiver scrutinised and, as he says, took copies of a substantial number of the documents and that, very shortly thereafter and as a result of what they saw, the bank successfully applied for a freezing order in the Chancery Division, restraining Mr Carroll's assets; they having a substantial claim against him in respect of costs in the original proceedings that I have indicated. The freezing order was in support of proceedings brought to reopen the costs order made in the Chancery Division proceedings.
10. Mr Carroll pursued the action with which we are concerned, it being directed principally to ensuring recovery of his property. The matter about documents was, as I understand it, eventually largely sorted out. Mr Carroll says that, although some of his property was returned to him, a significant proportion of it was not. He therefore took the view that, although he had achieved part of what was required, he had not achieved all of it. Nonetheless, when he made the current application to discontinue the action and be paid his costs, it was on the basis that his objective in the action had been fully achieved.
11. Faced with that application, the learned judge had to decide who should pay the costs of the action which had been discontinued. He concluded that the costs should be paid by Mr Carroll. He did so on two grounds. One was that the claimant's objective was to recover the documents so that it would not become apparent to the receiver and to the bank that the basis existed for a freezing order. Mr Spencer said that, in so far as that was Mr Carroll's motive, he had not succeeded in the action. Secondly, however, the judge also concluded, as a quite separate reason, that it was unnecessary for the claimant to bring the proceedings at all. He was satisfied, from what he had been told and what he had seen, that the claimant's property would be properly dealt with by the receiver and by the solicitors, Messrs Penningtons, and that it had been unnecessary for the applicant to take proceedings and move the court in order to get back the goods and papers to which he was entitled. Mr Spencer also took the view that the receivers had been justified in proceeding with caution in determining what was the bank's property, what was Mr Manek's property and what was Mr Carroll's property. That was a decision within Mr Spencer's discretion, and not one which the Court of Appeal would go behind. Mr Spencer awarded costs on an indemnity basis. He heard extensive argument on that point, again with full representation on behalf of Mr Carroll. That was a matter for his judgment: again, the Court of Appeal will not interfere with it.
12. I should say two further things. Mr Carroll's principal complaint about the proceedings before Mr Spencer was that they turned largely on the circumstances of the freezing order. He complains in his application that he has, in effect, been branded as a dishonest man and that the bank inappropriately introduced into the proceedings before Mr Spencer what had occurred in the course of the freezing order. I do not think that that is a correct analysis. First of all, Mr Spencer did not in his judgment rely on, much less decide the case on, any view that he had formed about Mr Carroll's honesty or dishonesty as emerging from the circumstances surrounding freezing order. Secondly, so far as I can see the freezing order, and the account of it that was given to the judge by counsel on behalf of the bank, came into these proceedings because complaint was made on behalf of Mr Carroll that the receiver and the bank had behaved inappropriately in using the documents in pursuit of the freezing order. Counsel faced with that complaint, which potentially might have been relevant to the reasonableness or otherwise of Mr Carroll bringing the injunction proceedings, told the judge about what happened in the freezing order proceedings and made it plain to the judge that a series of Chancery judges had considered the application, had enquired (as is clear from part of the transcript before Neuberger J that I have seen) about the provenance of the information, and had not held that it had been improperly used. It was perfectly reasonable of the bank to introduce that consideration before Mr Spencer, because they were in effect defending themselves against a complaint that they had behaved wrongly. Looking at the transcript of the argument before Mr Spencer, I do not think that it is right to say that the whole matter turned on the freezing order, much less that the bank gratuitously introduced it simply to blacken Mr Carroll's name.
13. Secondly, Mr Carroll makes complaint that the matter was not properly handled on his behalf before Mr Spencer. He was at that time represented by counsel instructed by solicitors who had acted for Mr Carroll throughout these proceedings. Looking at it as best I can, it seems to me that no complaint can reasonably be made of the way in which Mr Carroll was represented. But I fear that, even if it could be, the course adopted before Mr Spencer having been consciously adopted by the legal advisors, Mr Carroll cannot complain about it now.
14. I am grateful to Mr Carroll for the restrained and courteous way in which he has addressed me this morning, but I fear that there are no grounds upon which Mr Spencer's judgment could be interfered with.
15. For those reasons, therefore, permission is refused on both applications.
ORDER: Applications refused