Shah & Ors v Colvia Management Company Ltd

This is the trial of a claim to prevent the introduction of a particular parking scheme at Barking Industrial Park (“BIP”).

BIP was developed by Barking Industrial Park Limited (“the developer”) in the late 1970s. The site was the former Magnavox factory estate at Alfred’s Way, Barking.

The developer laid out about 87 industrial units on the estate. The site has afforded two main car parking areas. The larger area is near the entrance to the estate from Ripple Road. A second row of parking is at, as I understand it, the back of the estate and along the boundary of the estate with the A13 Barking Bypass. As asphalted in and since 2000, the car parking areas afford between 350 and 370 spaces.

The developer devised a leasehold “general scheme” to sell each unit at a premium on a 999-year lease from 29 September 1979 at a peppercorn rent. It promoted Colvia Management Company Limited (“the company”) to be the estate management company and to be a party to the leases. The members of the company were to be and are the unit lessees.

One example lease is that of Unit 40, which is at page 39 of the trial bundle, and that lease is now held by one of the claimants.

The 999-year demise at clause 1 was at the premium of £29,800. The demise included, insofar as the developer could grant the same, the rights set out in the second schedule. Those included: “(i) The right to pass and re-pass on foot over and along the footpaths and with or without vehicles to pass and re-pass only over and along the accessways, roads and rights of way shown on the plan … but only insofar as is necessary for gaining access to or egress from the demised premises and subject to the compliance by all persons exercising such rights with all reasonable regulations, directions and signs as may be made or erected by the company or the landlord for controlling the free flow of traffic throughout the estate… “(iii) The full right and liberty for the tenant and all persons authorised by him (in common with all other persons entitled to the like right) to use the car parks on the estate and the amenity land on the estate for the purpose from time to time allocated by the company and subject to such reasonable rules and regulations for the common enjoyment thereof as the company may from time to time prescribe.”

The use of the car parks and other amenity land for the purpose from time to time allocated by the company has been subject to the rules and regulations prescribed by the company. Those rules and regulations have however had to be “reasonable” and for the common enjoyment of the car parks and amenity land.

Clause 2 of the lease has comprised covenants with the developer landlord including to perform the tenants’ covenants and give notice of assignments or underleases exceeding seven years.

Clause 3 has comprised covenants “in accordance with the general scheme and for the benefit of the tenants of the remainder of the units.” The covenants were with the landlord and the company and the tenants for the time being of the other units within the estate. I am not concerned with whether such tenants of other units could, in fact, directly enforce covenants.

Clause 3(ix) has comprised a covenant to use the units only for such purpose as should from time to time be permitted by the appropriate planning authority. Clause 3(xii) comprised a standard covenant not to permit or suffer, for example, nuisance or annoyance with the proviso that use of the unit in a reasonable and proper manner in accordance with the permitted user should not be a breach.

Subject therefore to planning, there has been nothing to prevent a unit being used in particular relevance where I am concerned, by a vehicle repairer.

Clause 3(xvi) has been a covenant relating to rubbish and roads and accessways. “Not to place on any part of the estate any rubbish or material except in those receptacles and in those positions from time to time specified by the company for that purpose and not to obstruct or permit to be obstructed any roads or accessways on the estate provided that this shall not prevent the tenant from loading or unloading vehicles where necessary for the carrying out of is trade or business, such loading or unloading to be done as expeditiously as possible and so as to cause the minimum of obstruction or inconvenience to the other owners or occupiers of units on the estate.”

Clause 3(xvii) has been a covenant relating to parking and the maintenance and repair of vehicles. “Not to allow vehicles to be permanently parked in any area set aside for parking and not to allow any vehicle to be maintained or repaired on any road, accessway or any part of the other land on the estate apart from that area demised by this lease.”

By the second part of that covenant the parties to the lease would appear to have contemplated the repair and maintenance of vehicles and to have agreed that such would only take place within the demised unit. By the first part of the covenant the parties were agreeing that the tenants would not allow a vehicle to be permanently parked on the car parks. That raises the question of what is “permanent” parking in the context of vehicles at the estate for the purpose of repair in a unit. It is a question to which I shall return.

Clause 3(xx) provided a covenant “to comply with and observe all regulations which the company may from time to time make in general meeting consistent with the provisions of this deed to govern the use of the units and the common parts, roads, accessways and amenity land on the estate, which regulations may be restrictive of acts done on the estate detrimental to its character and amenity or the rights of other owners or occupiers of units contained within the estate.”

The estate scheme or the letting scheme has thus foreshadowed that the reasonable rules and regulations that might affect the car parks could be restrictive of parking or other acts done on the estate which might be detrimental to its character and amenity or to the rights of other owners and occupiers of units.

Clause 3(xxi) has been a covenant “to contribute and pay on demand; (a) the proportionate part set out in the schedule hereto of all costs, charges and expenses from time to time incurred or to be incurred by the company in performing and carrying out the obligations and each of them on the part of the company herein contained including all administrative and other expenses set out in the fourth schedule hereto…”

The first reference in that covenant to schedule was intended as a reference to the fourth schedule.

The proportionate part as defined in the fourth schedule is a part “calculated until the 31^st day of December 1980 by reference to the square footage of the demised premises and thereafter by reference to rateable value.” That part is of relevant cost to the company of providing services as described in the fifth schedule.

The fifth schedule contained a list of services and obligations of the company under 13 heads. The list includes at paragraph (ix) “the payment of any rates or taxes from time to time payable in respect of the common areas.”

It has followed that where the company has had to pay rates in respect of the car parks, it has been able to recover a proportionate part from a unit tenant, calculated by reference to the rateable value of that unit.

Clause 6(i) of the lease has provided the landlord’s covenant for quiet enjoyment. Clause 6(ii) is a landlord’s covenant in qualified terms to enforce performance of tenants’ covenants at the request of another tenant of a given unit.

Clause 7 has comprised a covenant by the company to perform its fifth schedule obligations and an agreement that it will take such advice and action as it should consider necessary for proper performance of those obligations.

The company is a company apparently limited by guarantee. Its members have been the unit tenants. Each member has apparently one vote per 100 square foot of unit space.

In 1980 the freehold of the estate was transferred to the company so it became the landlord as well as the management company.

The unit-holders have been long lessees. In many cases the unit-holders have been sub-letting units at rack rents, including cases in which the unit holder has sub-divided the unit into two or more sub-units. In this judgment I shall refer to long lessees holding the 999-year demises of units as “tenants” and occupiers holding under sub-tenancies or licences as “sub-tenants”.

Each of the six claimants is a vehicle repairer.

The first claimant is a partnership of two brothers, one of whom, Azhar Shah, has given evidence to me. Those two brothers are tenants of Unit 18. They trade as A&S Motors. Their business is vehicle repairs, including work for insurance companies. They took an assignment of the relevant lease in October 2001.

In the context of insurance work, following a road traffic accident, a vehicle is delivered to the firm. Pending inspection by the insurance company engineers, the vehicle has to be stored. If the engineer agrees the car is a write-off, it is then removed from site to salvage agents or wherever. If repairs are approved it is then repaired in the unit. The unit can accommodate about ten cars to work on.

The firm has needed between ten to 20 car parking spaces. The need relates to the store of vehicles pending inspection, the holding of a given vehicle before repair can start on it in the unit, and the accommodation of four courtesy cars when those courtesy cars are not in use.

The second claimant is Mr Alloway trading as M & A Motors. Mr Alloway has been the tendant of Units 16 and 17 since 1999. He is also the sub-tenant of Units 14 and 15. Since about 2000 his business has been car repair bodywork.

Mr Alloway has given evidence. His units can accommodate about 45 vehicles overnight and 25 during the working day. He has needed about four car parking spaces for recovery vehicles and ten for cars being stored pending engineer inspection and a repair approval or write-off approval. His need for car parking spaces is currently, and it would hope temporarily, reduced as he has recently lost a major insurance client.

The third claimant is Mr Willsone, who has also given evidence to me. He has traded as C&D Services. He is the tenant of Unit 80 and has been such since 1998. He is also an informal sub-tenant of Unit 69.

He has carried out insurance repair and fleet contract work. He uses up to ten to 15 car parking spaces. He is, in fact, leaving the site in the New Year for premises elsewhere.

The fourth claimant is a company. It is owned by two of four brothers, from one of whom, Hardev Singh Sira, I heard evidence. There are, in fact, four brothers who are tenants of Units 42, 32 and 30. The company has been the sub-tenant of Unit 42 since 1981. The brothers have been sub-letting the other two units to third parties, though the company currently has use of Unit 30 for car storage.

That company, the fourth claimant, does not do insurance work. Its customers own the cars it repairs, including salvage cars. It needs car parking spaces for immobile cars delivered to it pending its getting to work on them. It needs about four spaces for that purpose.

The fifth claimant is a firm of which Mr Burgess-Allen is a partner and has given evidence. It is a sub-tenant of Units 53 and 55 and has been so since October 2004. Those units can accommodate 25 vehicles overnight and 15 during the working day. It carries out car repairs. It needs some ten to 15 spaces during the day.

The sixth claimant is a company owned by Mr Tivey and his wife. Mr Tivey has given evidence. Mr Tivey or the company became in 1988 the assignee of the lease of Unit 40. Mr Tivey has been on site, including in other units, since 1981. He or his company in 2006 and 2007 have sub-let other units, namely Units 51 and 31. Unit 31 has been sub-let specifically to store vehicles.

The business of Mr Tivey’s company has been car repairs and is now all insurance company work. It has a need for four spaces for immobile vehicles pending relevant inspection, and it would ideally need about ten spaces. It took the sub-tenancy of Unit 31 to store cars against a background of site manager complaint of his company “taking up all the room in the car park”. He runs about 20 courtesy vehicles.

Mr Tivey has explained that in relation to insurance work the car is likely to be on site for about 20 days and up to a maximum of 30 days. The insurance contracts provide for return of write-offs to salvage agents within a maximum of 30 days.

The claimants have been represented before me by Mr Bromilow. The company is the defendant; it has been represented before me by Mr King.

There has been common ground on the evidence before me that the estate has considerable parking and traffic congestion problems.

The first problem is that the demand for car parking spaces exceeds the capacity of 350 to 370 spaces.

The claimants and other vehicle repairers are, at the lowest, inherently part of that problem. The 87 units have an approximate total floor space of about 180,000 square feet. As one of the company’s witnesses, Mr Lowe, has put it, it is obvious that the car parks could only afford about two spaces per 1,000 square foot if spaces were allocated in reference to the square feet of units. It is in the nature of the claimants’ business that cars delivered to them, including immobile cars awaiting inspection and repair approval or removal for salvage, involves the need for a number of car parking spaces.

Mr Hansen, the finance director of the company has given uncontroverted evidence to me that the spaces the claimants say they require in nearly all cases substantially exceeds two spaces per 1,000 square feet of their units.

The claimants are not the only vehicle repairers on site. Mr Shah has told me there may be as many as ten to 15 other vehicle traders on the estate.

I heard evidence from Mr Hughes, who was the company’s site manager between 1996 and 2007 when he retired. He was then replaced by Mr Wolmarans, but the latter only lasted two months and Mr Hughes has come back temporarily as site manager. He praised the claimants in his evidence to me as professional and responsible car repairers. He distinguished other amateur operators on site, including some different types of operators who have appeared in recent years. The latter in his view have not co-operated with attempts to clear cars from the site which should not be there, including, for example, untaxed cars and cars simply for sale as and when.

Mr Hughes also told me that others using the site, in particular shopfitters, are as “bad” as vehicle repairers have been in the usage of car park spaces, whether with vehicles loading or unloading materials or in connection with the disposal of materials, including in skips taking up in any given case one or more spaces.

Mr Hughes counted the number of cars on the car park on five evenings between 12^th and 16^th May 2007 on visits he made between about seven o’clock and ten o’clock in the evening. The numbers he counted varied between 127 and 163 vehicles, from which he infers many vehicles would remain overnight. It would follow that a substantial number of vehicles would still be there in the morning.

Further, in the morning vehicle repairers such as the claimants would move out of their units some cars kept there overnight to free up working space on other cars.

It has followed that a substantial number of car park spaces have been filled in the morning before those working in units attend for work.

Obviously those attending for work may come by car and seek daytime car parking spaces.

Witnesses called by the company have commented on the car parks filling up. Mr Lawrie is a lessee of Units 45 and 11 from which a company of which he is an officer, Theo Plastics Limited, trades. He has also been the lessee of other units. He says that after 8 a.m. there are no spaces left. Mr Lowe, of Unit 71, says that the upper car park is 50 per cent full when he arrives at 7.30 a.m., and is generally totally full by 8.30 a.m. Another witness, Mr Guiver, says it is impossible to find a space by 9 a.m. Another witness, Miss Jemmett, the employee of a company in another unit, says the car parks are generally full by 8.30 a.m.

It is now a commonplace for employees to have cars. The particular demands of, for example, the vehicle repairers and shopfitters are in competition with commuting employees for spaces in the morning.

Mr Cutting, a consulting engineer called by the claimants as an expert, has referred me to the Planning Service Parking Standards. In simplistic terms, those identify development standards which, for an estate such as this if now developed, would suggest a need for 700 to 710 car spaces and 24 commercial vehicle spaces. Indeed, as I understand it, the guidelines might suggest a need for these days about eight spaces per 1,000 square feet of a unit. That evidence suggests that the car parks at the estate are too small for modern usage, any particular problems attending a tenant, for example, a vehicle repairers’ needs, being left aside. Mr Joseph, a surveyor called by the defendant as an expert before me, indeed comments that it is quite common in industrial estates for there to be a ban on vehicle repairers, the reason being that their needs for space for vehicles is bound to be large and is best suited to an estate with substantial open areas.

A particular problem on which the claimants’ witnesses and Mr Hughes have commented has been that of “abandoned” or “dumped” or “rogue” cars. Those cars are not the cars of customers of vehicle repairers awaiting the insurance engineer and then to be put through the repair chain as speedily as practicable. Rather, and for whatever reason, whether or not by a tenant or sub-tenant, they have been left to rest in car parking spaces. Mr Sira told me that this summer, on some self-policing by the claimants, they were readily able to identify and force the removal of some 20 dumped cars, so freeing up the relevant car parking spaces.

However, the early morning filling of the car parks has led to the problem that motorists arriving slightly later have tended to park on access roads or in front of units. Mr Joseph, the defendant’s expert, described BIP as he saw it in an inspection in August this year as effectively “lawless”. Parking on accessways causes problems for deliveries and, as Mr King pointed out to me though the matter was not explored in evidence, there had been concerns expressed in correspondence in relation to access in the case of emergency for emergency service vehicles.

There is common ground on the expert evidence of Mr Cutting and Mr Joseph, which I accept without hesitation, that car parking at BIP calls for some rationing.

Mr Hansen, the financial director of the company, became a long lessee of Unit 12 in November 1979, thus at the outset of BIP. He later purchased the lease of Unit 19. He runs from the units Turnright Limited, a light engineering business. He has been on the board of the company since about 1981.

Mr Hansen has given me a history of estate parking problems. He comments that as early as 1983 the company circulated unit-holders with a notice that vehicles parked for in excess of seven days were likely to be towed away. Matters became of greater concern by the late 1980s when the company carried out a written survey of unit tenants or sub-tenants in relation to vehicle usage. That survey is now a lost record. I infer that increasing use of the car parks was caused in part by the selling off of more and more of the units as the estate developed in the ownership and under the management of the company. Mr Hansen comments on the point that the site manager had difficulties in the 1990s preventing access road parking, as opposed to parking on the car parks, because the car parks were un-tarmac-ed and uneven and loose stones tended to damage car paintwork. The company accordingly in 2000 asphalted the upper and main car park and has since asphalted the A13 car park.

The company has sought to address the particular needs and demands of car repairers. On 27^th October 1999 at a time when Mr Lowe was chairman of the company’s board, it foreshadowed the planned 2000 asphalting and a need to allocate parking. The company did not have a problem with repairers using a space for perhaps two to three days for a vehicle awaiting repair but was concerned to deal with “dead vehicles”. Mr Lowe says he left the board in 1999, though the records before me seem to suggest he did not stand down as chairman until, according to the minutes, 2001. The 2001 meeting minuted resolved ultimately that 30 spaces on the main car park should be allocated to the car repairers. In 2002 there were complaints that the car repairers were not keeping to allocated places. In that year a scheme was introduced by the company of colour coding areas of the car park, including one area for the vehicle repairers. That apparently proved difficult to police. In 2003 there was a fresh allocation of 25 bays in the main car park and ten on the A13 road car park to particular vehicle repairers including the businesses of Mr Sira and Mr Shah.

In 2003 the company introduced double yellow lining and yellow junction boxes on the accessways purportedly banning parking there, but that again has apparently proved difficult to police.

At various times the company has introduced car sticker systems, car stickers calling for removal of particular cars under threat that they would otherwise be towed away. To an extent, that worked in the late 1990s but the towing away proved very expensive to the company since many cars were simply never claimed. A reintroduction of such a scheme in 2006 has proved largely unsuccessful because of antagonism towards the site manager and the sheer number of cars needing removal.

The claimants’ witnesses are all of the view that the stickering system would have worked beneficially to all, if it had been properly policed by a dedicated employee or employees, but the system has had limited effect, whether for want of proper policing or otherwise.

The company also introduced in 2006 a car disc system, and tenants and sub-tenants applied for about 290 discs, including for vehicles that may only come onto the site infrequently. The discs did not apply to vehicles under repair or, for example, courtesy cars of the vehicle repairers.

Under new legislation the local authority in March 2006 issued tenants and sub-tenants with a rates bill on a charge based on rateable value of £300 per car space. That led to appeals by tenants and sub-tenants on the basis that they did not have allocated spaces in the car parks.

In April 2006 the company was then invoiced by the rating authority in respect of the parking spaces in a total sum for 2006 of £33,792.02.

In September 2006 the company sought to invoice each tenant or sub-tenant a proportion of the bill in accordance with the number of spaces it considered the unit-holder was occupying. Those invoices were withdrawn after protests. In November 2006 the company invoiced in reference to rateable values and thus in accordance with the service charge provisions in the lease which I have cited. Issue arose, however, between unit-holders who had difficulty in parking by reason of, in part or in particular, the use by car vehicle repairers with vehicles for repair and courtesy cars.

In November 2006 Mr Lowe spoke to a meeting attended by some of the claimants and indicated that he had a “scheme” that was not then disclosed by him to them.

An EGM of the company was called for 25^th January 2007. The meeting was called to discuss “the ins and outs of the recent rates bill regarding parking areas.” Mr Lowe addressed the meeting and suggested that the rates bill should be charged out in accordance with how the car park was used. He suggested that if spaces were not allocated, there should be a “no overnight parking scheme”. He is minuted as saying: “There should be no overnight parking and if people wanted this facility they would have to pay for it and therefore money could be raised for the company. He believed that the car park would be managed at no cost and that there would be enough money from overnight parking to cover the £33,000. He stated that he knew of people who would rent these overnight parking spaces, thus raising the £33,000.” He proposed an AGM in a month’s time to decide on implementing the scheme he suggested. In the event a sub-committee was set up to consider it.

An EGM meeting was then called for 21^st February 2007 to consider an overnight parking scheme under which commercial vehicles would be charged £100 per year and tenants £5 per bay per day and sub-tenants £8 per bay per day. As I infer but is not crystal clear from the minutes, the suggestion was on long term contracts.

A further meeting was called for 7^th March 2007 which makes that last point that has been inferred expressly clear, in which it was resolved that, in addition to commercial vehicles being charged £100 per year, the £5 per parking bay per day was reduced to, where tenants were concerned, £3.50 per bay per day on a yearly contract, and £5 per bay per day on a quarterly contract, whilst the charges for sub-tenants would be £5 per bay per day on a yearly contract and £8 per bay per day on a quarterly contract.

The sub-tenant claimants did not attend the first meeting as they were not, as tenants were, members, but it was arranged that they could be proxy-holders for the second of those meetings. At both meetings vehicle repairers voted almost, if not entirely, as one, but were outvoted in principle by non-vehicle repairer traders by about 64 per cent to 36 per cent.

On 19^th March 2007 the company gave notice to tenants and sub-tenants of its overnight scheme as was to be operated by ISTM Group Limited (“ISTM”), to whom Mr Lowe had introduced the board. The scheme was planned to come into force on 1^st May 2007. The notice repeated the charges on which the company had resolved. It added provision for a short term parking area for up to ten bays for a maximum of one week, and for an out of hours drop off bay of spaces of about six bays. The notice provided for an area of ten to 15 bays for HGV and vans at what was described as a “nominal” £100 per year.

Shortly afterwards ISTM issued a notice to tenants and sub-tenants referring to there being no overnight parking on the estate, though to there being 70 bays available at the resolved charges, and enclosing an application form. The scheme as described in the ISTM notice is similar, though not identical, to the scheme as described in the company’s notice (see paragraph 10 of Mr Bromilow’s skeleton argument).

The scheme has subsequently been slightly modified to provide for 76 rather than 70 bays , though it is unclear to the claimants where the six further bays may be, the ten short term parking spaces being in addition to the 76 spaces, though the scheme now suggests a drop off area limited to only four spaces.

The claim was issued on 25^th April 2007 by which the claimants have alleged the company has unreasonably (my emphasis) interfered with their right to park vehicles in the car park and sought an injunction and damages.

Following issue of the claim, the company offered to reduce the charges it proposed to an annual charge of either £2 or £3 and a quarterly charge of either £3 or £6.50 for respectively the tenants and sub-tenants.

Those amended prices were not to be pleaded in the company’s defence, though the

Mr Bromilow points out that applying the average reduced charges to the 76 spaces would generate an income of over £100,000, and even if all subscription was at the lowest available charge, i.e. by tenants on annual contracts, that would still produce an income of £54,480. The draft agreement between ISTM and the company provides for the company to recover 65 per cent of income. Thus the income will be more than enough to meet the rates bill.

On the issue of the claim the company agreed to postpone implementation of the scheme to 1^st June 2007.

The claimants then applied for and obtained an interim injunction preventing the company from introducing the parking scheme it had approved at the EGMs on 21^st February and 7^th March 2007 until final judgment. The company did not oppose the interim injunction on the footing that directions were given, as they were, for a speedy trial. This trial has resulted from those directions and compliance with them.

The claimants have sought at this trial continuation in permanent form of the interim injunction.

As I indicated during Mr King’s closing submissions on behalf of the company, if I were, in effect, to strike down the claim should the claimants succeed in their case, it appears to me sufficient that I should make a relevant declaration as to why the scheme is unreasonable. This trial has been conducted throughout with regard and respect between those running the claimants and those on the board of the company. I have no doubt the company would not seek to impose the scheme if found not to be a reasonable regulation in accordance with the lease, and declaratory relief accordingly should be sufficient. Should a later board of the company seek to act contrary to rights the subject of the declaration, then doubtless further relief can be sought from the court.

Mr Cutting gave evidence to me that in general terms car parks can be rationed in usage by pricing, allocation or need. As to pricing, charges can limit use to those who, by need and means, choose to afford the relevant spaces. As to allocation, the spaces could be allocated to units in reference to square feet. As to need, that would involve doubtless value judgments by the company.

Mr Cutting accepts, as of course is inevitable, that some car parks do introduce overnight bans. The rationale includes helping to ensure that parking spaces are available daily to occupiers of the offices or units served by the car park. There is also less need for expense in relation to supervising night time use of the car park.

The claimants, because of their need for spaces, would be adversely affected by allocation in reference to floor areas. I have already noted the evidence of Mr Hansen that most of the claimants appear to need more spaces than they would receive on an allocation in relation to floor space.

Mr Joseph has noted the rejection by the claimants and indeed by tenants and thus members of the company generally of allocation.

Mr Joseph expresses the view that, in the circumstances, the commonplace of an overnight ban is reasonable and, as he sees it, the company’s only alternative to allocation. He does however recognise and indeed recommend that car park organisation should incorporate policing of the daytime usage of the car park as well as night time.

As I understand it, Mr Joseph recognises that, if it had power to do so, the company could introduce general charging for parking.

In one sense, the overnight scheme does involve rationing by pricing, forcing the payment for overnight allocated bays.

Mr Joseph questions whether use of spaces by road traffic accident cars awaiting repair or salvage could be parking as permitted in Schedule 2 paragraph (iii), such being in effect, as he sees it, car storage, even if for a limited time.

But the parties to the lease have always treated use of spaces by car repairer tenants or sub-tenants as permitted parking. Thus, for example, Mr Tivey refers to clause 3(xvii) as prohibiting maintenance or repair work outside the unit. He does not understand parking of immobile cars awaiting inspection and then repair or salvage as prohibited.

It does appear to me that upon the true construction of covenant 3(xvii) in the circumstances that it was taken under the letting scheme, relevant parking would not be in breach unless it became “permanent”. That may be relatively easily shown in the case of a dumped car. There may be in particular circumstances difficult questions as to whether other use of a car parking space by, for example, an immobile car might be thought permanent.

But for present purposes the company does not argue the contrary, that relevant vehicle repairer parking properly organised is not permitted, or that storage or parking of damaged vehicles awaiting inspection and then repair or removal for salvage is a breach of the clause.

If that is right, the corollary is that under the overnight scheme the company is purporting to charge for parking on the allocated bays.

In that context and before me, neither the claimants nor the company dispute the company’s right by regulation to charge for the relevant parking.

It would follow, in my judgment, if the company can charge for overnight parking in allocated bays, it could also charge if it so wished for daytime parking and thus the “pricing” option for rationing would be wider than that Mr Joseph has considered in his report.

There is common ground before me that the parking scheme would be a company regulation for the purposes of the qualification of the parking right in the second schedule paragraph (iii) of the standard lease and in the context of compliance with covenant 3(xx).

A regulation qualifying the right to park in common with others has to be “reasonable” for the common enjoyment of the right.

A regulator in the position of the company could, of course, introduce a range of parking schemes which might be reasonable.

The claimants have not contended and do not contend that an overnight ban would necessarily be unreasonable, notwithstanding their need for overnight parking. Further, the overnight scheme recognises the need in relation to the overnight bays to make some provision for overnight parking, most obviously where the needs of the vehicle repairers are concerned.

The claimants do not contend that the rationing of those bays is unreasonable. By an open letter of 8^th November 2007, they have indicated that they would wish to take all 70 bays on offer. That was a letter that did not challenge in context, should their offer be accepted, the principle of the overnight ban. The letter, I should say, in general terms sought to offer or introduce a scheme which will include not simply night time but daytime policing of the car park. At all events, the claimants do not challenge as unreasonable the decision for an overnight ban coupled with provision of overnight bays of either 70 or 76 bays.

There was some suggestion by Mr Bromilow in closing submissions that the scheme might be considered unreasonable for want of giving reasons for the particular number of spaces, but I did not understand any serious challenge to be made at trial to the proposed allocation on the introduction and for its trial period of 70 or 76 bays to those subscribing for overnight bays. The overnight scheme is intended to free up spaces for the morning, and I accept the company has been balancing general car parking needs with a need for overnight provision in particular for the vehicle repairers.

The claimants’ primary challenge to the overnight scheme is that it is discriminatory against them, as it makes them or other vehicle repairers pay the whole of the car park rates, leaving other tenants or sub-tenants to continue to use the car parks for free.

Mr Shah told me that the scheme had been put forward at the February and March meetings on a “like it or lump it” basis. He blames Mr Lowe as the author of the overnight plan, and now to an extent Mr Hansen, for not listening to the claimants’ objections. Mr Shah is not in principle opposed to the overnight ban with the attendant available bays for hire, but he contends the charge is too much even at what is now, following these proceedings, the reduced rate on offer.

Mr Willsone complained that, as a sub-tenant, he was not able to attend the February meeting. He considers that the minutes of the meeting merely showed a resolution for a scheme, not the particular overnight scheme of which the company and ISTM were subsequently to give notice. He feels that the claimants have been victimised, and that the scheme of which notice is given and the appointment of ISTM has been instigated by Mr Lowe. Though Mr Willsone is leaving BIP in January, he continues to be a claimant and to be here to give evidence as an active claimant because of the charges under the overnight scheme.

Mr Alloway believes the committee of the company were “bullied” by Mr Lowe. He has offered in the past to go on the committee to help clear the site of dumped cars. I understand he would be concerned at the level of charges, as and when he obtains a new insurance contract or contracts.

Mr Sira is concerned that he would go out of business if he does not have overnight spaces, so he will have to obtain them. He agrees to regulation provided the costs are reasonable.

Mr Burgess-Allen’s firm would only occasionally need overnight spaces. Nonetheless, he is an active claimant, because he considers it grossly unfair that overnight charges are being raised to cover the rates bill.

Mr Tivey needs the overnight accommodation and considers the charges proposed to be extortionate at £8 or indeed at the lower figures now on offer. He considers that £300 per bay might be reasonable, particularly when compared with the proposed charges for commercial lorries and vans which, as I have noted, have been described as “nominal”. He, with other claimants, feels that with proper policing including daytime policing rogue dealers’ misuse of the car park could have been prevented. Mr Tivey does acknowledge, as Mr Burgess-Allen expressly confirmed, that the car parking problems have, however, now become on site “chronic”.

I should note that the company called Mr Guiver, who is a vehicle repairer at Unit 21, where he has been since 1988. He, unlike the claimants, supports the overnight ban scheme but his business is on a small scale and he does not need spaces for damaged cars or courtesy cars. He told me in cross-examination that £700 would not be unreasonable for a bay, but I do not think he had given that previous thought or that he would necessarily think that, if he actually needed to and was going to apply for a bay.

Mr Lowe trades as ACL Autos and is a vehicle repairer and, perhaps predominantly, an MOT centre carrying out repairs consequent upon the outcome of MOT tests. His principal unit for his centre is Unit 71. He is, however, the lessee of a number of other nearby units which he sub-lets. I think I properly recall that he says he owns perhaps the most in number of units of any lessee. He was chairman of the board of the company for a number of years until either 1999 or 2001, when he stood down in circumstances of some criticism of him as chairman. His evidence to me is that the parking problems have become chronic, and he blames in particular context the vehicle repairers. His view, trenchantly expressed in his witness statement, is: “Bodywork repairers (obtain) a pecuniary advantage at the expense of the other unit-holders. They are effectively using the car park free of charge to store their stock in trade.”

I also heard from Mr Lawrie, called on behalf of the company, whose company, Theo Plastics, and units I have already mentioned. He confirmed that parking in recent years in particular by the car body repairers has made the parking problems at BIP worse and worse.

Mr Lowe identified in the manner which I have quoted from minutes already, the overnight scheme that he considered would solve problems at the January meeting. Mr Lowe appeared to me as a witness a man who, having made up his mind on a course, is determined to see it through, and a man who is concerned and does act to procure his way or view. I do not say that by way of criticism; it is merely that he is a forceful character. In the circumstances I have outlined, it does appear to me that the company resolved in the February and March meetings on what was, in effect, Mr Lowe’s scheme as put forward by him in January as the solution to current problems.

It does appear to me at the lowest that it was unfortunate that at the January meeting Mr Carter’s opening words as chairman were ignored. Those words were to the effect that the rates problem arising from the change of legislation in 2005 and the parking congestion problems were issues which needed to be dealt with separately. Mr Lowe suggested a resolution of the rates issue was his overnight ban point with tenants or sub-tenants subscribing for allocated overnight bays in effect paying the rates. As I have said, the February and March EGMs, as I understand what happened, effectively followed by majority vote, his proposals, subject to any slight modification.

The company through Mr King has raised the point that in adopting the overnight scheme it relied on advice from ISTM, but chronologically that does not seem correct. It was introduced to ISTM by Mr Lowe when it had already resolved on the overnight scheme. It was able to agree, either in final or draft form, ISTM’s offer to police overnight and its price for its services including its share of income from those hiring overnight bays, together with the effective fine for removing dumped cars. It was only after service of the claim form that, in fact, a report was received from ISTM, and no witness from that company was called before me.

I have heard no evidence that the company considered or researched a proper overnight space rental figure. It is true that neither Mr Cutting nor Mr Joseph suggests that the particular figures of which notice had been given in reference to the overnight scheme were unreasonable, but the evidence before me is that the figures given in that notice and indeed the figures in the reduced figures since offered by the company have been calculated simply in reference to the need to generate sufficient income for the company to meet the rates.

Mr King warns me correctly that I should not confuse the income of the company, including income which it may obtain from the car parks, with the payment of the rates. The income, of course, merely helps fund the whole of the outgoings of the company. It is not proposed to hypothecate overnight charges to rates.

Nonetheless, the Lowe proposals, or the company’s proposals that followed his original proposal, were made expressly on the footing that the income would be enough to meet or cover the rates charges. When I say “expressly” I refer in terms in particular to the passage I have cited from the January minutes. I do not blame the claimants for their perception or understanding that they are being called upon to pay all the car park rates through charges they will have to meet to obtain overnight spaces which are necessary to their business in their units.

Mr Bromilow submits that the overnight scheme is unreasonable, in particular because:

He submits accordingly on this first principal point that the scheme is objectively unreasonable and is thus not a proper regulation.

Mr King submits that that last point is the wrong test. As he points out, the company is a regulator. He submits that I could only “strike down” the scheme on Wednesbury principles. It will be recalled that in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223, 228-230, the Court of Appeal seminally observed that in considering whether a local authority in exercise of relevant powers had acted unreasonably, the court was only entitled to investigate the action of the authority with a view to seeing if it had taken into account any matters that ought not to have been taken into account or disregarded matters that ought to have been taken into account. The court could not interfere as an appellate authority to override a decision of such an authority but only as a judicial authority to see whether it had contravened the law by acting in excess of its powers.

Here, of course, the company has been exercising a discretion but it is in relation to its management of matters relating to the leasehold scheme of BIP. The contractual right of the tenants to use the car park is subject to “reasonable” regulation. I agree with Mr Bromilow that contractually the regulation or discretion to introduce regulations is qualified and not unlimited, as was the power of the relevant authority in Wednesbury. In context, therefore, I do consider that tenants or some tenants can challenge the reasonableness of a regulation and that the court can consider whether the challenge shows that objectively a regulation is unreasonable.

Mr King warns me that if that is so, management companies’ or committees’ decisions will be constantly the subject of review in the courts.

I do not agree. Such companies or committees will always have a wide discretion in relation to regulations upon which they decide or adopt, and on any given issue they may well have a very wide range of reasonable resolutions available to them. But they will have, in the exercise of discretion and having in mind other parties to the lease and rights under the lease, to reach, in regard to regulations, regulations which are reasonable.

Mr King also cited to me the decision of the Court of Appeal in International Drilling Fluids Limited v. Louisville Investments (Uxbridge) Limited [1986] Ch 513. The case related to a decision of a landlord to refuse consent to an assignment and the case of the tenant that the refusal had been unreasonably withheld. The landlord’s appeal was dismissed. Balcombe LJ at 519H-521D set out seven relevant propositions of law in relation to the exercise by a landlord of his power reasonably to refuse consent to a given application by a tenant. It was not suggested that the reasonableness of refusal was subject to Wednesbury considerations. The first of Balcombe LJ’s points referred to the purpose of a covenant against assignment without consent of a landlord, such consent not being unreasonably withheld. He identified in citation of earlier authority, the purpose is the protection of the lessor from having his premises used or occupied in an undesirable way or by an undesirable tenant or assignee. In context on the facts of that case, the landlord’s refusal was considered unreasonable because it sought to take some collateral advantages of the application for consent to which it was not entitled, and it was not refusing consent on the basis of its interest protected by the covenant against assignment. In this case the purpose of regulation now under consideration is the common enjoyment of the car park by all tenants and sub-tenants.

There is little authority cited to me concerning management committee “parking” decisions. Mr King rightly cited Montrose Court Holdings Limited & Anor. v. Shamash & Ors. [2006] EWCA Civ. 251. That was a decision of the Court of Appeal. Simplistically, a relevant issue arose as to a parking scheme introduced to regulate use of car parking spaces by given houses and a block of flats, the householders and flat-owners having like rates, where demand exceeded supply. In dismissing a relevant appeal by some householders who complained of substantial interference with their car parking rights granted under the lease by the relevant regulation, the Court of Appeal distinguished Saeed v. Plustrade Limited [2002] EWCR Civ. 2001, another Court of Appeal authority. In the latter case there had been by the regulation a cutting down of spaces available to all having the like right. In Montrose the relevant scheme did not seek to prevent existing rights to compete for relevant car parking spaces but to enable those with the relevant rights to compete to do so in an orderly way (see per Chadwick LJ at paragraph 26).

In this case the company’s overnight scheme is not said to cut down rates to compete for spaces but to limit overnight parking, which will be available on subscription to all. The company considers that to be to the common good, in the sense of freeing spaces for the morning, albeit that for practical business reasons the vehicle repairers may be the most affected.

The management decisions of a regulator such as a management company on this estate may always affect tenants to a greater or lesser degree.

I repeat that the relevant challenge here is not to complain about the principle of the overnight ban or the number of available overnight bays. In those circumstances, there does not appear to have been open to the claimants or pursued by them a challenge of an improper cutting back of rights such as that which succeeded in Saeed and was distinguished in Montrose. The challenge here relates to the decision that the cost of the overnight scheme and the rates now payable in respect of the car park will be funded simply by the tenants or sub-tenants likely of necessity to subscribe for overnight bays.

It is not on this point contended, and I do not consider it unreasonable, to introduce the overnight ban. A criticism of earlier allocation of bays to, for example, vehicle repairers was that it was not properly policed. The current scheme seeks, by the employment of outside agents, in particular ISTM, such proper policing. In my view, the scheme might not have been unreasonable if the company had considered or researched the proper Barking market value for such overnight spaces, in the circumstances that members have, up to now, never needed to pay for parking on the estate, and, further, the relatively limited margins in a car repair business and the fact that, properly policed, the use of some bays overnight might raise some useful income but does not, in fact, affect the vast majority of unit-holders who do not want to park overnight. In reference to proper demand, it may have been necessary, and in my judgment would have been quite proper, to ration these overnight bays by price.

The exercise under that consideration, including the consideration and research I have mentioned, was not, as I find, carried out. The price was only seized upon, including in its later reductions on offer, by reference to meeting the ISTM costs of the scheme and the annual rates bill for the car park. Those two items are inherently matters to be raised from all tenants or sub-tenants from the service charges, not from particular tenants or a particular group of tenants. It may be, for example, in due course or time of consideration by the company as to daytime policing to properly ensure accessways are kept free of parked cars, that it may decide ultimately, in connection with the proper policing of the area, to raise car parking charges and in consequence to have to employ, either directly or indirectly, the equivalent of parking attendants. It will doubtless seek, by way of service charge, to recover relevant costs from all the tenants. As a matter of principle, in my judgment, the essential approach in relation to the overnight charges of ISTM and the rates should have been to charge all tenants, but that is not to render unreasonable whether, as part of the overnight ban more generally, the charging of a proper price, having regard to the market, the needs and the value of spaces, for use by those who apply to and take the overnight bays now being allocated, which, in all likelihood and probability, are going to be vehicle repairers such as the claimants, since they have the need for the overnight parking.

I should perhaps add that, even on Wednesbury terms, should I have been wrong to reject that as a matter of law as to the test that I should be applying, the decision to adopt by way of regulation a scheme in relation to the exercise of car park rights, to raise the car park rates money and to impose the burden in practical terms on some only of the tenants who have the need to buy the overnight bay spaces, might well, and would in my judgment, have been unreasonable. So on the facts of this case I do not think that the issue of law as to the Wednesbury test in fact makes a difference.

Mr King submitted that the allocation of overnight bays involves other tenants giving up rights to use the bays and that it is right that there should be payment for the privilege of their use. There is some force in that and that should be borne in mind in considering the proper price for the hire of such bays, which would include balancing factors to which I have referred, rather than simply the factors on which the charge rate would appear to have been determined.

A second challenge of the claimants to the scheme is that it would be ineffective for any proper purpose. The company’s witnesses, as well as those of the claimant, largely accepted when cross-examined on behalf of the claimants that parking problems including in relation to the accessways will continue at BIP notwithstanding the introduction of the overnight ban. There will continue to be use of the spaces in the daytime by vehicle repairers of vehicles, including immobile vehicles delivered to the site, by skips, including those of the shopfitters, as well as the general commuting and other traffic of the estate. The car park may well fill relatively early in the morning, despite the spaces that it is hoped will be freed up by the overnight ban.

But on this point Mr Cutting accepted, unsurprisingly, that the overnight ban would have some benefit of freeing some spaces for the morning. His views were that it must be questionable how beneficial that benefit will be in the absence of proper research being carried out as to the user and future likely user of the car park in reference to tenants and sub-tenants and, further, in the absence of daytime policing. It is quite correct that a need has been identified for proper daytime policing which might need, in effect, through dedicated employees or particular agents, to be professionally done. Mr Joseph did not hesitate to say and agree that this “lawless” estate would benefit from proper daytime policing, in regard to which the company would have to consider the relevant costs and indeed any charges it might bring in. However, a benefit is still a benefit, and I do not consider that it can be said to be unreasonable to introduce the overnight ban scheme merely because there is more for the company through its committee to do in reference to the proper policing of this car park.

The company has or had also taken the point that it was unreasonable to charge sub-tenants more than tenants. Had the matter been further explored before me, I would have seen force in the point that the sub-tenants here at any given unit are, in fact, enjoying the unit tenants’ rights under the tenant. It is not obvious, therefore, why a sub-tenant should pay more than the tenant. But in any event, as the claimants were to learn, as I understand it, at trial, that distinction in the scheme has been abandoned or dropped by the company. I need say no more about it.

The companies take the point that the scheme has a 9 p.m. cut-off and submits that that is unreasonably early in that they have, from time to time, to stay at work after nine o’clock. That is a point also taken, for example, by the witness called by the defendant, Miss Jemmett, who currently has to work for her employer at BIP, her employer not being a car repairer, later in the evening than nine o’clock. Having to park off site would be not just inconvenient where she is concerned, but give her grave concerns as to her safety. As a matter of common sense, it would be uneconomic for a given tenant or sub-tenant to hire an overnight bay for a minimum of a quarter or annually against the event of one employee having, on an odd occasion, to stay after nine o’clock. I would have expected the company or its contractor to address problems of that sort, which should be overcome relatively easily. The point appears to me in practical terms one of detail to be dealt with by modification of the scheme, rather than a point that could say that the relevant regulation was unreasonable.

A final point of concern to the claimants is the unfettered discretion of the company to grant the overnight contracts with, as the claimants see it, “life or death” consequences for their businesses. But, with respect, they have no reason to suppose that the company by its current board or otherwise would act discriminatorily or unfavourably or unfairly on the point. The company should, of course, and will have to exercise its powers properly. On this point it appears to me that any challenge to the company should only be made, if at all, based on fact and not on worries as to the future relationship between the individual claimants and officers of the company.

For the reasons and to the extent I have given, I consider the scheme an unreasonable regulation. However, an overnight ban scheme could be reasonably adopted if the points of concern raised in this judgment are properly addressed by the company. I would invite counsel to address me on the declaration I should give in the light of the reasons in this judgment and on other matters that may arise.