CFC 26 Ltd v Brown Shipley & Co Ltd & Ors

This case arises out of the sale of an underlease (“the Underlease”) of Sofia House, 204 Great Portland Street, London W1W 5NP (“Sofia House”). In broad terms, the Underlease is said to have been sold for very much less than its full market value as a result of a “corrupt agreement” between four of the defendants and negligence and/or negligent misstatement and malicious prosecution on the part of the fifth. The defendants, however, seek to have the proceedings dismissed summarily or struck out (as well as other relief in the alternative).

Before the events relevant to the proceedings, Sofia House was the subject of a long lease (999 years from 6 July 1916) held by the third and fourth defendants, respectively Concord W1 204 GPS Limited and Concord 204 GPS Limited (together, “Concord”), and the Underlease (for 125 years from 12 December 1985). It had also been the subject of a grant of planning permission for redevelopment dated 31 August 2006.

Just short of three years later, in a letter dated 27 August 2009, a Mr Ryan Fitzgerald expressed the view that works at Sofia House had commenced. Mr Fitzgerald is described in the particulars of claim as the “Building Control Surveyor” of the fifth defendant, Westminster City Council (“the Council”). The Council’s defence speaks of Mr Fitzgerald having been employed by Shore Engineering Limited.

In the following year, in an email of 12 August 2010, a Ms Kirsten Chohan, a solicitor employed by the Council, said that she accepted that development at Sofia House had begun within the statutory period. According to the Council, however, Ms Chohan’s email did not amount to a Certificate of Lawfulness of Existing Use or Development (or “CLEUD”) within the meaning of the Town and Country Planning Act 1990 and had no formal or binding status.

On 20 August 2012, the Underlease was acquired by SHG-SH20 Limited (“SHG”), which had been incorporated for the purpose of buying and developing the property. In August 2012 and January 2013, SHG entered into loan facilities with KBL European Private Bankers SA (“KBL”, which has been treated as the second defendant), and a subsidiary of KBL, Brown Shipley & Co Limited (“Brown Shipley”), which is the first defendant. Mr Din Hessam (“Sam”) Yeganeh (“Mr Yeganeh”), who is the ultimate beneficial owner of SHG, guaranteed at least some of the lending.

On 3 June 2013, the Council presented a winding-up petition against SHG based on alleged non-payment of business rates in the sum of £177,953.86. On 18 July, the Council served an enforcement notice for the removal of hoardings outside Sofia House. According to the particulars of claim, the notice stated:

On 2 October 2013, Concord forfeited the Underlease and brought possession proceedings. Later that month, KBL and Brown Shipley (together, “the Banks”) served demands on both SHG and Mr Yeganeh. Brown Shipley also, on 25 October, appointed two individuals from Colliers International, Mr Ross Freese and Mr Jonathan Cookson (“the Receivers”), as Law of Property Act 1925 receivers.

In February 2014, the Receivers agreed a consent order to secure relief from forfeiture and dispose of the possession proceedings. The winding-up petition against SHG had already been dismissed, in December 2013, following a payment into Court pending resolution of planning and rating disputes.

SHG apparently submitted an application for a CLEUD during 2014. The particulars of claim say this on the subject:

In June 2014, the Receivers placed Sofia House on the market. On 7 October, the Receivers informed Concord and Longridge Developments Limited (“Longridge”), each of which had expressed interest in buying Sofia House, that they were imposing a deadline of 12 noon on 13 October for confirmation that they were ready to exchange contracts. The letter stated that the Receivers would exchange with whichever purchaser gave its confirmation by the deadline and that, if more than one did, they would accept the highest offer.

On 10 October 2014, Mr Yeganeh applied for an injunction to restrain the Receivers from selling Sofia House. A witness statement that Mr Yeganeh made on 10 October in support of the application explained that he was making the application “for myself and on behalf of [SHG]” and contained this:

The application came before Sales J on 13 October 2014 and again on 15 October, when he dismissed it. Mr Yeganeh was represented by Mr Michael Booth QC.

In the course of his judgment, Sales J said (in paragraph 8):

The order made by Sales J provided for SHG to be joined as the Second Applicant, for the application to be dismissed, and for Mr Yeganeh to pay £21,949.50 in respect of the Receivers’ costs and £17,918 in respect of the costs of the Banks, which were named as the Third and Fourth Respondents. Nothing has in fact been paid.

The claim form formally initiating the proceedings (“the 2014 Claim”) had been issued on 14 October 2014. This specified Mr Yeganeh as the claimant and gave the Receivers and Banks as the defendants. The claim form stated:

On 13 October 2014, the Council presented a further petition for the winding-up of SHG. This petition is still extant. I was told that it has recently been adjourned to April of next year.

On 21 October 2014, the Receivers exchanged contracts for the sale of the Underlease to Concord for £15 million. Completion took place on 21 November.

On 14 November 2014, pursuant to an order giving them permission to do so, the Banks served a counterclaim even though no particulars of claim had been served on them. At the beginning of December, the defendants to the 2014 Claim issued an application for the claim to be struck out by reason of failure to serve particulars of claim, for judgment in default on the Banks’ counterclaim and for security for costs.

In response to this application, Mr Yeganeh produced drafts of an amended claim form and particulars of claim. As revised, the claim form included this:

Mr Yeganeh made a witness statement dated 4 December 2014 in support of an intended application for permission to amend the claim form. This included the following:

The defendants’ application came before Birss J on 19 January 2015. Mr Yeganeh was initially represented by Ms Chaffin-Laird, but she had withdrawn by the time the hearing resumed after lunch. That left Mr Yeganeh, who was not himself present, without any formal representation, but a Mr Michael Dalton, a “solicitor/consultant” who assisted Mr Yeganeh, remained in Court and handed up Mr Yeganeh’s 19 January witness statement.

The order Birss J made provided for the claim form to be struck out, for judgment for KBL on the counterclaim to be entered against Mr Yeganeh for sums totalling £1,071,094.61, for Mr Yeganeh to pay the defendants’ costs of the claim and counterclaim and, more specifically, for Mr Yeganeh to pay the defendants’ costs of their application by 2 February 2015, assessed in the case of the Receivers at £12,000 and in the case of the Banks at £16,000. Mr Yeganeh has, however, made no payment in respect of either the judgment debt or costs.

In the course of his judgment, Birss J said this:

By an application notice dated 10 February 2015, Mr Yeganeh sought an order for the applications that had been before Birss J to be re-listed and relief from sanctions. Two days later, SHG issued proceedings of its own against the Receivers and Banks (“the 2015 Claim”). The brief details of claim given in the claim form included:

On 6 March 2015, Master Teverson heard an application by the Receivers and Banks for an extension of time in which to serve defences to the 2015 Claim. Master Teverson acceded to the application and ordered SHG to pay 50% of the defendants’ costs of the application and to make a payment on account of £2,000 (which was done).

In May 2015, the Receivers and Banks issued applications in the 2015 Claim for security for costs. The applications came before Mr David Halpern QC, sitting as a Deputy High Court Judge, on 7 July, together with the application in the 2014 Claim for the matters dealt with by Birss J to be reopened. On 15 July, Mr Halpern dismissed the latter application, ordered Mr Yeganeh to pay the defendants’ costs on the indemnity basis (summarily assessed at £20,000 in the case of the Receivers and £25,000 in the case of the Banks) and recorded that he considered the application to be totally without merit. As regards the 2015 Claim, Mr Halpern ordered SHG to give security of £174,500 to the Receivers and £225,000 to the Banks. If the sums in question were not paid by 14 September, the proceedings were to be struck out with costs. Further, SHG was required to pay £5,000 to the Receivers and £4,000 to the Banks in respect of the costs of the security applications.

In the course of his judgment, Mr Halpern said the following about the application for the matters before Birss J to be re-listed:

When considering the applications for security for costs, Mr Halpern said this:

Earlier in his judgment, Mr Halpern had said this:

Mr Yeganeh and SHG sought to appeal Mr Halpern’s orders, but without success. On 26 November 2015, Patten LJ refused to grant permission to appeal and characterised the applications for permission as totally without merit.

The costs orders that Mr Halpern made remain unsatisfied and SHG also failed to provide the security for costs that Mr Halpern had directed. The 2015 Claim was therefore struck out.

The present proceedings (“the 2016 Claim”) were issued on 25 February 2016 on the footing that SHG and Mr Yeganeh had on 15 February assigned their claims against the defendants to the existing claimant, CFC 26 Limited (“CFC”), another company ultimately owned by Mr Yeganeh. CFC is said to have acquired SHG’s single issued share from a further associated company, York Properties Holdings Limited, in August 2015. The defendants comprise the Banks, Concord and the Council. The Receivers are not parties.

When the claim was issued, CFC had Imran Khan & Partners as its solicitors. By the end of April 2016, however, Imran Khan & Partners had been succeeded by Gordon Dadds LLP.

As served, the particulars of claim include the following as regards the Banks and Concord:

As for the Council, it is alleged to be liable for malicious prosecution and negligence and/or negligent misstatement. The allegations are explained further in paragraph 49 below.

In April 2016, the Banks issued an application for the claim against them to be struck out and/or for summary judgment to be given in their favour. The Banks further asked for security for costs and for the claim to be stayed pending “payment of previous Costs Orders and Judgment and security for costs”. In the following month, Concord and the Council issued applications seeking similar relief in their favour, save that there is no request for a stay pending compliance with orders in the earlier proceedings, to which Concord and the Council were not parties.

The defendants each put in evidence in support of their applications. The Council also served a defence, which, however, was stated to be without prejudice to the Council’s entitlement to have the claim struck out.

On 29 July 2016, Deputy Master Lloyd made an order which required CFC to file and serve any evidence in response by 12 September. No evidence having been forthcoming, on 21 September Master Bowles debarred CFC from serving evidence unless it did so by 4 pm on 23 September. Shortly before 4 pm on 23 September, Mr Yeganeh sent the other parties’ solicitors an email containing a link to a Microsoft Cloud file where there were to be found witness statements of a Mr Masood Rashid (a director of CFC), a Mr Maximilian Blackburne (the other director of CFC and the director of SHG), and a Mr Arnold Anandan (a partner in CFC’s accountants). During the evening of 10 October, the defendants were supplied with witness statements of Mr Yeganeh dated 23 September (a version of which had apparently been placed on the Microsoft Cloud file by 26 September, but which none of the parties had been able to open), 7 October and 10 October. I ruled against admitting these three witness statements.

It is to be noted that:

Mr Blackburne says in his witness statement that the “crux of the matter starts with an unfortunate error on the part of Westminster City Council planning department”; and

Mr Rashid speaks in his statement of “negligence of Westminster council” and of the Banks having been “negligent”.

At the hearing before me, the defendants maintained that the assignment to CFC by SHG and Mr Yeganeh of their claims was invalid. On the morning of the second day of the hearing, Mr Hugo Page QC, who appeared for CFC and SHG with Mr Adam Chichester-Clark, told me that it was no longer contended that the assignment was effective but that SHG was applying to be joined to the proceedings as claimant. I must therefore approach the applications made by the defendants on the assumption that SHG would be the claimant in the proceedings.

I was supplied with draft amended particulars of claim in which SHG was shown as claimant. The draft also provided for the words “and also email correspondence” to be inserted after “number of discussions” in paragraph 13 and for the addition of a new paragraph 13A in these terms:

By email dated 23^rd December 2013 Mr Sidhoo informed Mr Yeganeh ‘I am concerned with people in the Bank re Concord. There are direct contacts! Meet you tonight’;

Mr Yeganeh retains a transcript of a telephone conversation with Mr Sidhoo which took place on 25^th October 2014. In that conversation Mr Yeganeh referred to collusion between ‘Concord and this lot’ (ie the bank) and Mr Sidhoo replied that he did not want to talk about that, and that ‘We know what happened. You know what happened. I know what happened. So we know it. What’s the point of discussing it again and again’ Mr Yeganeh said ‘I made you a promise I would not bring anything up. It’s now a year. I want you to be out of the bank. … Mr Sidhoo said ‘I didn’t keep my mouth shut did I? I didn’t keep my mouth shut. … If I had kept my mouth shut I wouldn’t have been in any problems … I have said something: I have to stand by it. My decision to inform you… it was my personal decision’.”

Mr Christopher Boardman, who appeared for the Banks, argued that the claim against them should be struck out, or that summary judgment should be given in their favour, on more than one basis. In particular, he submitted that (a) the claim is barred by the principle of res judicata, (b) the claim discloses no reasonable cause of action and has no real prospect of success, (c) the claim is to be seen as an abuse of process and (d) there has been repeated disregard of Court rules and orders.

Concord not having been involved in the 2014 Claim or the 2015 Claim, some of the contentions developed by Mr Boardman (for example, the res judicata point) are not available to it. Like, however, Mr Boardman, Mr Tony Beswetherick, who appeared for Concord, argued that the claim against his clients discloses no reasonable cause of action and has no real prospect of success.

Does then the claim disclose a reasonable cause of action with a real prospect of success against the Banks and/or Concord? This must turn on the viability of the allegations of a “corrupt agreement” between the Banks and Concord. That apart, there could be no sufficient basis for complaint against the Banks, let alone Concord. On the basis of the evidence before him, Sales J found that the Underlease was marketed “at a price and on terms which the receivers were perfectly entitled to adopt” and that there was “no serious issue to be tried that the receivers [were] acting in breach of duty in seeking to press on with their marketing campaign”. For his part, Mr Halpern, having been referred to additional materials, considered that the evidence “amply justified Sales J’s conclusion that there was no real prospect of challenging the sale for £15 million” and said that he could not imagine any judge reaching a different view on the evidence. According to Mr Page, the introduction of the “corrupt agreement” allegations means that the claim now being put forward is quite different from that with which Sales J was concerned. Mr Page did not, however, attempt to suggest that Sales J and Mr Halpern were wrong to form the opinions they did on the basis of the evidence before them or, to put matters differently, that there would be a sufficient basis for SHG to pursue a claim against the Banks and Concord but for the “corrupt agreement” allegations.

Mr Page stressed that, when considering whether a claim should be left to proceed to trial, the Court should not attempt to conduct a “mini-trial” (see Swain v Hillman [2001] 1 All ER 91, at 95). The Court ought not, he said, to discount Mr Yeganeh’s account of what he was told by Mr Sidhoo unless it is to be regarded as wholly incredible (compare Long v Farrer & Co [2004] EWHC 1774 (Ch), at paragraphs 57-61) and should recognise that, provided that there are proper grounds for pleading it, SHG is entitled to try to prove its case by cross-examination of the defendants’ witnesses (compare Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1, especially at paragraphs 136 and 145-148).

In contrast, Mr Boardman and Mr Beswetherick pointed out that the Court need not “take at face value and without analysis everything that a claimant says in his statements before the court” and that it can sometimes “be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents” (see Mellor v Partridge [2013] EWCA Civ 477, at paragraph 3). They also referred to the need for allegations of dishonesty to be properly particularised.

In the end, I have concluded that SHG has no real prospect of succeeding on the claim it wishes to pursue against the Banks and Concord. My reasons include these:

The case against the Banks and Concord depends on the allegation (in paragraph 9 of the particulars of claim) that “KBL and/or [Brown Shipley] entered into a corrupt agreement with Concord under which they would procure a sale of Sofia House to Concord at a price as low as possible consistent with recovery of their investment, in return for payment of a secret commission by Concord to KBL and/or [Brown Shipley] and/or individual members of staff at those banks”;

Since this amounts to an allegation of fraud, the particulars of claim should contain “full particulars” of the allegation and the facts on the basis of which any inference of fraud or dishonesty is alleged (see paragraph 10.1 of the Chancery Guide). As they stand, however, the particulars of claim provide very little detail. There is, for example, no account of which individuals are said to have spoken to whom or when, nor of who was to receive what as “secret commission”. Paragraph 13 of the particulars of claim states that Mr Sidhoo informed Mr Yeganeh that he “believed there was collusion between individuals at [Brown Shipley] and Concord, that certain individuals at Brown Shipley stood to gain directly from a swift sale of Sofia House to Concord and that those individuals intended to ensure sale of the property to Concord quickly and at any price”, but the particulars of claim do not say quite when Mr Yeganeh spoke to Mr Sidhoo or explain the basis of Mr Sidhoo’s apparent belief;

The draft amended particulars of claim are designed to improve the position. The new paragraph 13A would provide information about an email from Mr Sidhoo of 23 December 2013 and a telephone conversation on 25 October 2014. However, what is said in the paragraph, even assuming it to be accurate, does not seem to me to sustain the “corrupt agreement” allegation. The fact (if it be one) that there were “direct contacts” between the Banks and Concord in December 2013 does not appear to me to lend any significant support to SHG’s case. At the time, Concord had claimed to forfeit the Underlease over which the Banks had security and had brought possession proceedings. In the circumstances, it would not be surprising if Concord and the Banks had, quite properly, been in contact about how matters could be resolved. As for the telephone conversation of 25 October 2014, it is Mr Yeganeh (and not Mr Sidhoo) who is said to have used the word “collusion” and it is not evident what even he meant by it. Further, the quotations suggest that Mr Yeganeh and Mr Sidhoo were referring to something that had happened a year earlier (i.e. about the time that Concord sought to forfeit and the Banks appointed the Receivers), whereas Sofia House was not placed on the market until June 2014. It is, in short, impossible to infer the “corrupt agreement” that SHG alleges from the new paragraph 13A;

It is, moreover, implicit in the draft amended particulars of claim that SHG and Mr Yeganeh cannot supply any more compelling particulars. Paragraph 13A is stated to contain the “best particulars of conversations between Mr Yeganeh and Mr Sidhoo that SHG is currently able to provide”;

Further, it is a striking fact that the witness statements of Mr Rashid, Mr Blackburne and Mr Anandan (in other words, those made available to the Banks and Concord in purported compliance with the unless order that Master Bowles had made) provide no evidence of the alleged “corrupt agreement”. In fact, far from demonstrating fraud, Mr Rashid accuses the Banks of having been “negligent” (see paragraph 39(ii) above). The deficiencies in SHG’s evidence are the more significant because more than seven months had passed since the proceedings had been issued, upwards of four months had elapsed since the Banks and Concord had served their applications and evidence and it was nearly two months since Deputy Master Lloyd had required SHG to file and serve any evidence in response by 12 September;

Another (and important) point is that, supposing Mr Sidhoo were to have said or written anything lending any real support to the “corrupt agreement” allegation by October 2014 (as the particulars of claim suggest), Mr Yeganeh could have been expected to have relied on it when applying for injunctive relief (between 10 and 15 October) or, failing that, at least to have referred to it in the draft particulars of claim mentioned in paragraph 19 above and his witness statements of 4 December 2014 and 19 January 2015 (as to which, see paragraph 20 above) or to have caused SHG to do so in the particulars of claim served in the 2015 Claim. He did none of these things;

The “corrupt agreement” alleged by SHG is not even consistent with the terms on which the Underlease was in fact sold to Concord. The agreement was supposedly to sell “at a price as low as possible consistent with recovery of [the Banks’] investment”, but the Banks were in fact left out of pocket;

For good measure, Mr Ritchie Irvine of DWF LLP, who represent the Banks, has explained in a witness statement that Mr Sidhoo has stated that what SHG alleges is “utter rubbish” and that individuals with the Banks have described it as totally untrue and Mr Nicholas Pike of Pinsent Masons LLP, who act for Concord, has confirmed that the alleged “corrupt agreement” has been denied by individuals at Concord.

In all the circumstances, I shall dismiss the claim as against the Banks and Concord.

SHG’s case against the Council has two elements. The Council is said to be liable, first, for malicious prosecution of the enforcement notice that the Council served on 18 July 2013 (see paragraph 6 above) and, secondly, for negligence and/or negligent misstatement in connection with the issue of the enforcement notice and the Council’s refusal “until January 2015 … to acknowledge the validity of the 2006 planning permission”. With regard to the former, the particulars of claim state (in paragraph 26):

Taking first the allegation of negligence and/or negligent misstatement, Mr Andrew Warnock QC, who appeared for the Council, submitted that the Council did not owe a relevant duty of care and, hence, that the claim is hopeless. Enforcement notices and CLEUDs are provided for by Part VII of the Town and Country Planning Act 1990. Part VII is concerned, Mr Warnock said, with the enforcement of planning requirements for the benefit of the public at large. The legislation gives someone who objects to the service of an enforcement notice a remedy by way of an appeal pursuant to section 174 of the 1990 Act, and planning authorities are also susceptible to judicial review. It is not possible, according to Mr Warnock, for anyone to bring a claim for either breach of statutory duty or common law negligence.

The sheet-anchor of Mr Warnock’s case is the decision of the Court of Appeal in Lam v Brennan and Borough of Torbay [1997] PIQR P488. In that case, the claimants complained that a local authority had been negligent in granting the planning permission that had led to certain harmful processes being carried out on premises nearby and then in failing to take enforcement proceedings. The claim was struck out. Potter LJ, giving the judgment of the Court, observed (at P502) that counsel for the claimants had been “right to abandon any averment of breach of statutory duty as giving rise to a cause of action in the [claimants]” and also “right to abandon the contention that any breach of common law duty could be demonstrated in relation to the original grant of planning permission”. The Court further considered (at P502) that counsel for the claimants “was right not to press his argument that the [local authority] were in breach of a parallel common law duty in granting planning permission … without proper inquiry”. Having noted the policy and functions of the planning system, Potter LJ said (at P503):

Potter LJ went on to say (at P503) that the position was the same as regards “the enforcement functions of the local authority in respect of statutory nuisances”. The relevant statutory provisions were “plainly … for the benefit of the public at large living within the area of the local authority” and there was “neither reason nor necessity in relation to … a landowner aggrieved by the failure of a local authority to take action in respect of a nuisance, to create a right of action in damages based on such failure” (see P504).

Potter LJ further said (at P504-505):

Potter LJ concluded (at P506-507):

Mr Warnock submitted that the decision in Lam provides binding authority that a local authority does not owe a duty of care in relation to matters such as those of which SHG complains. That conclusion is further, he said, supported by Harris v Evans [1998] 1 WLR 1285. There, the claimant alleged that negligent advice from an inspector of the Health and Safety Executive had led a local authority to serve improvement notices and, subsequently, a prohibition notice on the claimant in connection with his bungee-jumping business. A claim against the inspector and the Executive was struck out. Scott V-C, with whom Auld and Schiemann LJJ agreed, said (at 1301-1302):

One of Mr Page’s responses to Mr Warnock’s submissions was to argue that, in Lam, the Court of Appeal did not decide that a local authority could not be sued for negligence but merely that the legislation in question did not create a new duty. I do not, however, read the Court of Appeal’s judgment in so restricted a way. The Court seems to me to have considered that a local authority did not owe any duty of care in relation to either the grant or refusal of planning permission or performance of its enforcement functions. It agreed with Collins J that a local authority’s carrying out of its responsibilities would probably be adversely affected if it could be liable to actions in negligence and said that the position was the same as regards the authority’s enforcement functions. It concluded by rejecting the existence of a “common law duty of care” not to cause damage as a result of a negligent failure by the authority “to exercise their discretionary powers, and/or to carry out their duties as to prevent the creation of a nuisance by an adjoining landowner”.

Mr Page also relied on developments in the law since Lam and Harris v Evans were decided (in 1997 and 1998 respectively). In this connection, he took me to Barrett v Enfield LBC [2001] 2 AC 550, a 1999 decision in which the House of Lords declined to strike out a claim against a local authority. Lord Hutton took the view that “the fact that the decision which is challenged was made within the ambit of a statutory discretion and is capable of being described as a policy decision is not in itself a reason why it should be held that no claim for negligence can be brought in respect of it” and that it is “only where the decision involves the weighing of competing public interests or is dictated by considerations which the courts are not fitted to assess that the courts will hold that the issue is non-justiciable on the ground that the decision was made in the exercise of a statutory discretion” (see 583). Lord Slynn said (at 571-572):

The Barrett case can be said to have signalled a somewhat greater willingness to entertain the possibility of a duty of care being owed. In Connor v Surrey County Council [2010] EWCA Civ 286, [2011] QB 429, Laws LJ referred (at paragraph 96) to the “more flexible, pragmatic approach which was prominent in Barrett’s case” and remarked (at paragraph 95) that the approach “is more nuanced, less rigid, than that in [X (Minors) v Bedfordshire County Council [1995] 2 AC 633]”.

On the other hand, Lord Scott evidently regarded Harris v Evans as still good law in Jain v Trent Strategic Health Authority [2009] UKHL 4, [2009] 1 AC 853, where, giving a judgment with which Lord Rodger, Baroness Hale, Lord Carswell and Lord Neuberger agreed, he cited the decision (at paragraph 26). Lord Scott took Harris v Evans and other cases in the same line of authority as demonstrating that:

The more recent decision of the Supreme Court in Michael v Chief Constable of South Wales Police [2015] UKSC 2, [2015] AC 1732 is also noteworthy. In that case, the Supreme Court, by a majority, adhered to the “refusal of the courts to impose a private law duty on the police to exercise reasonable care to safeguard victims or potential victims of crime, except in cases where there has been a representation and reliance”. In the course of his judgment, Lord Toulson, with whom Lords Neuberger, Mance, Reed and Hodge agreed, explained:

Mr Page suggested that the Jain and Michael cases were dealing with a different type of situation to the present case. Unlike this case, Jain and Michael were both, he said, concerned with “statutory powers designed for the benefit or protection of a particular class of persons”.

It seems to me, however, that I should treat the Lam case as determinative and so strike out the allegation of negligence and/or negligent misstatement. There is no question of the decision having been expressly overruled, and I do not think that I could be justified in taking it to have been overruled impliedly, either. While a “more flexible, pragmatic approach” may have been adopted to questions of negligence in Barrett, it is by no means evident that either Lam or Harris v Evans is inconsistent with subsequent authority. As I have said, the House of Lords appears to have seen Harris v Evans as good law as recently as 2009, and reasoning by which the Court of Appeal explained its views in Lam chimes with that adopted in Jain. Further, the conduct for which the Council is said to be liable for negligence and/or negligent misstatement was of a public (or, to adopt the word Lord Toulson used in paragraph 113 of his judgment in Michael, governmental) nature rather than involving the provision of “services which involve relationships with individual members of the public giving rise to a recognised duty of care no different from that which would be owed by any other entity providing the same service” (to quote from paragraph 112 of Lord Toulson’s judgment). It might also be said that the relevant planning legislation is “designed for the benefit or protection of a particular class of persons” (to quote from Mr Page): as noted above (paragraph 52 above), in Lam Potter LJ said that the provisions in question were “plainly … for the benefit of the public at large living within the area of the local authority”.

I shall, accordingly, strike out the claim for negligence and/or negligent misstatement.

Turning to the allegation of malicious prosecution, the 21^st edition of Clerk & Lindsell on Torts summarised the essentials of the tort of malicious prosecution in these terms (at paragraph 16-09):

The Supreme Court has since decided, by a majority, that the tort extends to civil as well as criminal proceedings: see Willers v Joyce [2016] UKSC 43, [2016] 3 WLR 477. It is the Council’s case, however, that the tort still cannot apply in relation to the mere service of an enforcement notice.

Mr Warnock relied in support of the Council’s case on paragraph 16-11 of Clerk & Lindsell, which states:

Mr Page countered that Clerk & Lindsell pre-dates Willers v Joyce and drew my attention to passages in the judgments of Lords Toulson and Clarke in that case which, he contended, indicate that the tort can apply in relation to any kind of legal process. By way of example, he relied on the following quotation from the judgment of the Court in Churchill v Siggers (1854) 3 E & B 929 which Lord Clarke cited in paragraph 64 of Willers:

In my view, Mr Warnock is right on this point. While it is now clear that the tort of malicious prosecution can apply without a criminal prosecution, there remains a requirement that the law has been “set in motion by an appeal to some person clothed with judicial authority” and service of an enforcement notice cannot, as it seems to me, suffice for this purpose. I do not see Churchill v Siggers as providing authority to the contrary.

That conclusion is sufficient to dispose of SHG’s claim for malicious prosecution. It is also convenient, however, to address another of Mr Warnock’s submissions: that, on the facts, there is no sufficient basis for the allegation of malice.

Malice, like fraud, must be particularised: see paragraph 10.1 of the Chancery Guide. It has also been said that there should be “anxious scrutiny” of claims for malicious prosecution before they are allowed to proceed. In Carter v Chief Constable of the Cumbria Police [2008] EWHC 1072 (QB), Tugendhat J cited (and applied) a passage from Thacker v Crown Prosecution Service (Court of Appeal, 29 December 1997) in which Judge LJ said:

In the present case, as can be seen from paragraph 49 above, the particulars of claim explain that the claimant relies in support of the allegation of malice on “the fact that the Council was aware that the planning permission had been implemented and so was aware that there was no reasonable or probable cause for the Notice”. Amplifying the basis for this pleading in his skeleton argument, Mr Page said that the claimant relies on these matters in support of its claim that the Council acted maliciously:

In its defence, the Council pleads, among other things, that Westminster Magistrates Court had adjudged SHG liable for rates due in the sum of £177,953.86 on 6 March 2013; that the hoardings in respect of which the enforcement notice was served “had been in place for at least three years yet there was no evidence of any works taking place at the site”; and that the notice was served following an investigation by the Council’s enforcement team into complaints about the hoardings from the freehold owner of Sofia House and the Portland Village Association.

As mentioned above (paragraph 39), Mr Blackburne and Mr Rashid refer in their witness statements, not to the Council having been malicious, but to “an unfortunate error on the part of Westminster City Council” and “negligence of Westminster council”. In my view, Mr Blackburne and Mr Rashid were right not to allege malice. The case against the Council is in reality founded on little more than that (according to SHG) the Council served an enforcement notice on the footing that there appeared to be “no current or imminent works on site which have the benefit of planning permission” although (a) (nearly four years earlier) someone working for the Council had expressed the view that works at Sofia House had commenced and (b) (nearly three years earlier) someone else working for the Council had accepted that development at Sofia House had begun within the statutory period. Neither taken individually nor together, even having regard to the contextual matters mentioned by Mr Page, do these alleged facts seem to me to provide a real basis for inferring or alleging malice. They might possibly suggest carelessness on the part of the Council, but no more than that.

In the circumstances, I would have acceded to the Council’s application and struck out the claim for malicious prosecution (as well as that for negligence and/or negligent misrepresentation) even if I had not concluded (as I have) that service of an enforcement notice cannot of itself give rise to such a claim.

Various other issues were addressed during the hearing. In the light, however, of the conclusions I have arrived at above, I do not think I need deal with them.

In my opinion, the claims that SHG wishes to pursue are fatally flawed. I shall dismiss the proceedings as against the Banks and Concord and strike them out as against the Council.