Balogun v Boyes Sutton & Perry

LORD JUSTICE CHRISTOPHER CLARKE: This is a renewed application for permission to appeal the judgment of Mr Michael Bowes QC of February 17th 2015.

Mr Balogun, the would-be appellant, claims against Boyes Sutton, a film of solicitors. He instructed them in February 2011 in connection with his proposed acquisition of a 15 year commercial lease of a unit (Unit 1) on the ground floor and basement of a building at 214 to 218 Northwood Road, London SE27.

The premises were constructed by a company called Anacar Ltd and consisted of commercial premises on the ground and basement levels and residential premises above the ground floor. Anacar sold the freehold of the entire premises to a company called Mizn Properties Ltd and on 13th February 2009 took a 999 year lease back of the commercial units on the ground and basement levels.

Mizn Properties Ltd then sold its interests to London & Quadrant, so that at all material times London & Quadrant were the head landlord and Anacar its tenant of the commercial units. Accordingly the lease which Mr Balogun was to acquire was a sub lease from Anacar in respect of Unit 1.

The unit had a purpose built ventilation shaft which led from the ceiling of the ground floor and ran through the entire building to the roof of the second floor. The shaft had been part of the design of the building, no doubt because Unit 1 had planning permission for restaurant use.

Mr Balogun intended to use the ventilation shaft in order to operate the restaurant that he intended to open at the unit. In the event London & Quadrant refused to consent to him fitting out the ventilation shaft by installing some duct work in a manner required to vent cooking fumes from the restaurant.

The principal ground of complaint at the trial was that the defendants, through Mr Davis, had failed to advise Mr Balogun in respect of express instructions that he had given at a meeting on 8th April 2011, that he would be installing duct work through the ventilation shaft. The main factual issue was whether at that meeting he had made any reference to the need for duct work at all.

The judge found that at this meeting Mr Balogun did not in fact explain to Mr Davis that the ducting would need to be installed in the shaft and accordingly this ground of complaint failed. No appeal is sought to be brought from that decision. However, Mr Balogun had alternative grounds of complaint.

The first was that there was a risk of which he should have been advised arising out of the terms of the underlease. That arose in this way. Clause 3.9 of the provided as follows:

The ventilation shafts, as was common ground, fell outside the demise to the claimant and thus fell within London & Quadrants neighbouring property. Accordingly the only rights that the claimant had over the shaft were those conferred by clause 3.1D of the underlease which made it plain that the grant was of the right to use the Service Media in the Building that belonged to the landlord ie Anacar. But there was specifically excluded from the property demised to Anacar in the head lease:

The demise in the head lease to Anacar was defined as including "conduits and plant to the extent that they are within and exclusively serve the commercial units (but no other conduits or plant)." In other words the demise to the claimant did not carry with it, so it is submitted, the right to use the ventilation shaft.

The judge rejected the claim on this head on the grounds that there was never a clear risk of a dispute over whether the under lease gave the claimant the right to connect into and use the ventilation shaft; and held that the rights granted were sufficiently broad to allow Mr Balogun to connect in and use the ventilation shaft in order to vent Unit 1. He also held that the point was not pleaded and the e-mail correspondence made plain that both Anacar and London & Quadrant accepted that the claimant had the right to vent through the shaft.

It is not entirely plain to me what was the basis upon which the judge held that the rights granted were sufficiently broad to allow access to the shaft. I was told that it may be that he was of the view that the words "belonged to the landlord" should have a meaning wider than a reference to that which was included in the demise to the landlord.

It seems to me however well arguable that in fact there was a real problem in relation to the grant of the underlease and that the total affect of the drafting of the underlease to Mr Balogun, taken in the context of the lease to Anacar, was that in fact the claimant did not obtain by these instruments the right to use the ventilation shaft which fell outside the demise to him. In those circumstances, it seems to me arguable that there was a failure of due care in relation to the drafting of the underlease.

Whether or not the matter was perfectly pleaded it appears to me that there was a general contention of a failure to appreciate that the right to use the ventilation shaft was not included or might not be included in the demise. Further, the position as between Anacar and London & Quadrant in which, as I understand it, there was no dispute as to Anacar's right to connect to the conduit does not appear to me determinative of the problem in relation to the under lease.

Accordingly I propose to grant permission to appeal under this head. What is said is that if this problem had surfaced at the time either there would have been a negotiation of an express right so as to avoid the problem, or, alternatively, if the problem remained insoluble Mr Balogun would not have gone ahead with the underlease. In either case he would not be in the position in which in the end he found himself to be.

The second point sought to be argued is that it was said that Mr Davis had been negligent in failing to request a copy of the approval of the local planning authority in respect of the installation of all flues, ducting and other equipment which had been installed.

Condition 4 of the planning permission in respect of the unit provided that:

The judge had found that Mr Balogun had told Mr Davis that no further work was required in relation to the shaft and that he had discussed condition 4 with the local authority which had told him that it needed nothing more from him. What is said is that in those circumstances it was necessary to seek from the local authority confirmation that their approval had been given as required by the planning permission so that matters could go ahead upon that footing.

In the course of his cross-examination Mr Davis appeared to accept that that was so. The judge found that, if enquiries had been made by Mr Davis, any answers would simply have revealed what was on the planning register and not what the position was on the site. What is said in relation to that is that the finding is curious because, if the planning authority had been asked what the position was in relation to condition 4 of the planning permission it, could be expected that they would either confirm that the necessary approvals had been take given or say they had not and that they would be unlikely simply to say: look at the planning register.

Those points seem to me to be arguable and indeed under both of the headings now sought to be made the subject of the appeal some of the evidence in cross-examination from Mr Davis supports the contentions that are sought to be raised on appeal. That is not necessarily conclusive. However, it causes to me to think that there is a realistic prospect that the Full Court may be persuaded that the judge was in error.

Accordingly I propose to grant permission to appeal on both of the grounds now sought to be put forward.