Mentmore Golf Investments Limited v Michael Gaymer

This is an appeal from a decision of HHJ Murch sitting in the County Court at Luton, in which he struck out a claim for relief from forfeiture made by Mentmore Golf Investments Ltd (“Investments” or “the appellant”), or alternatively granted summary judgment to the defendant/respondent (“Mr Gaymer”). Investments had applied as mortgagee for relief from forfeiture of a lease of a golf course known as Mentmore Golf Course, of which Mr Gaymer (the respondent to this appeal) is the freeholder and lessor. The lessee whose interest was forfeited was vested in Mentmore Greenland Ltd (“Greenland”) - the relationship between those two companies with similar names, such as it is, will become apparent later on. Greenland made its own application for relief from forfeiture as tenant in a separate action which was dealt with by HHJ Murch on the same occasion. He struck out that claim too, on the same basis - abuse of process, alternatively basis defendant’s summary judgment, and that part of his decision has not been appealed. What is therefore before me is an appeal by the mortgagee (Investments) only. Permission to appeal was given by Green J.

This appeal raises the following questions, broadly speaking:

Investments was represented on this appeal by Mr John McGhee KC, and Mr Gaymer by Ms Joanne Wicks KC. Their respective submissions were very helpful and indeed impressive.

The ownership and control of the various entities involved in this case is an important aspect of part of the abuse of process part of this appeal, so it will be useful at this point to identify the persons and controlling interests which are relevant. They were not the subject of findings by the judge below, but as bare facts they are not disputed, at least for present purposes.

Mr Simon Halabi is a central player in this story. He is said by Mr Gaymer, in effect, to be the real principal behind the two claimants for relief and some of their predecessors in the story. As director of Greenland he represented that company at the hearing before HHJ Murch, Greenland’s solicitors having come off the record on the morning of the hearing.

Greenland is a company registered in Jersey. Its directors are Mr Halabi, and a Mr Frederic Deflorenne. The sole member of Greenland is Mentmore Estate Ltd, a company of which Mr Halabi and Mr Deflorenne are again directors. Mentmore Estate Ltd is ultimately beneficially owned by Ironzar VII Trust, constituted under Jersey law, which was settled by Mrs Inistar Nouri, Mr Halabi’s late mother. The beneficiaries under that trust have not been disclosed. Mr McGhee’s supplemental skeleton argument states that “it may be that Mr Halabi is a beneficial object or beneficiary” but other factors “strongly indicate that he is not the only one”.

Investments is another Jersey company. Its directors are a Mr Tobias Reinmann and a Mr Rodney Hodges. The sole shareholder is Athenee Nominees Ltd, a BVI company, of which Mr Reinmann and Mr Hodges are again directors. The sole shareholder of Athenee is Geneva Trust Company (GTC) SA and in evidence Athenee was said to be the nominee of Geneva Trust. The beneficial owner of Investments is said on the Jersey Register of Members to be Ironzar III Trust, and the settlor of that trust was again said to be Mr Halabi’s mother. Again, the beneficial interests have not been disclosed. In his oral submissions for Greenland at the hearing below Mr Halabi said that the beneficiaries were the same under this trust and the Ironzar VII trust, and there was a suggestion (unclear) that the beneficiaries were his children.

Although the technical point which lies at the heart of one of the principal points of this appeal depends on very few dates, the more extensive background to this matter is important to the abuse of process arguments, so it is necessary to set out the chronology in some detail.

The lease in question in this case is dated 15^th March 1995. The tenant was Mentmore Golf and Country Club Ltd. As granted it was a reversionary lease which took effect on the expiry of a 21-year lease to the same tenant. The shares in that company were purchased by Halabi trust interests in 2006. In 2012 the reversionary lease was assigned to Mentmore Leisure Golf and Country Club Ltd (“Leisure”), which was a 100% owned subsidiary of Investments, and in that year the term of the reversionary lease (99 yrs) commenced (on 3^rd June). In addition, Investments took a charge over the lease in the same year.

On 7^th June 2015 (according to Mr Gaymer’s undisputed evidence on the point before the judge) the golf club closed and it has not re-opened since. Mr Gaymer’s case is that it has not been maintained and there has been a very serious shortfall in compliance with the repairing obligations applying to the whole property (the buildings and the whole course). Mr Halabi claims that enough has been done to comply with the repairing obligations in the lease.

On 1^st July 2015 Mentmore Golf Corporate Ltd (“Corporate”) was incorporated as a wholly owned subsidiary of Investments. Mr Halabi was a director of that company. 2 days later administrators were appointed over Leisure. It was apparently a pre-pack administration, because on the same day the lease was assigned to the newly incorporated Corporate, and the lease was once again charged to Investments. I was told, without contradiction, that the lease does not contain any bars on assignment.

In 2017 the saga of the forfeiture claim commenced. On 4^th January Mr Gaymer served a notice under section 146 of the 1925 Act in respect of breaches of repairing obligations and shortly thereafter Corporate served a counter-notice under the Leasehold Property (Repairs) Act 1938. That meant that Mr Gaymer had to seek leave from the court to commence forfeiture proceedings which he did on 11^th February 2019 with Corporate as defendant.

Those proceedings were delayed when Corporate was put into compulsory liquidation on the petition of Aylesbury Vale District Council for non-payment of rates, on 12^th November 2019. On 7^th December 2020 Greenland was incorporated with Mr Halabi as a director, and on 6^th January 2021 Greenland acquired the lease from the liquidator. Again, the lease was charged to Investments, presumably with the purchase price.

All those tenant companies were within the Halabi trust umbrella.

On 20^th July 2021 Greenland was substituted for Corporate as defendant to the 1938 Act proceedings, but those proceedings were never tried because very shortly before the trial Greenland abandoned its opposition and by consent permission was given for the commencement of the forfeiture proceedings. That was via consent order dated 21^st February 2022. It was further ordered by HHJ Bloom, not by consent, that Greenland should pay the costs of those proceedings, to be assessed, and that Greenland should pay £150,000 on account of those costs by 21^st March 2022. Nothing has ever been paid of those costs. (Permission to appeal that costs order was subsequently refused by Bacon J.)

Then on 23 May 2022 Mr Gaymer issued his forfeiture proceedings against Greenland, and served them on 25^th July 2022. A copy of the forfeiture proceedings was sent to Investments’ registered office on 2^nd August 2022. That is said to be a significant event for the purposes of this appeal because it gave Investments notice. On 30^th August 2022 Greenland served a Defence and Counterclaim, the Counterclaim seeking relief from forfeiture in the event that its defences failed.

On 8^th February 2023 DDJ Willink made an unless order to the effect that if the £150,000 ordered to be paid by Greenland (with interest) was not paid by 22^nd February then the Defence and Counterclaim would be struck out and judgment would be entered for the claimant (Mr Gaymer). He also made an order for payment of arrears of rent and/or mesne profits for the period since March 2022 (£276,401.25) , with unless orders for the striking out of the Defence and Counterclaim if they were not paid. Case management directions were given in the event that the sums were paid, and Greenland was ordered to pay £14,000 in respect of some of the costs of the hearing. The mesne profits were eventually paid. The £14,000 was not. Time for compliance with the terms of the unless order was subsequently extended to 25^th April 2023.

At the same hearing Greenland made a last-minute application to amend its Defence and Counterclaim to introduce a claim that Mr Gaymer’s agents’ conduct had caused damage to the property in that they had left the property unsecured and the premises had been vandalised as a result. The deputy district judge refused to consider such a late application. It eventually came on for hearing on 1st August 2023, when it was dismissed with costs assessed at £20,000. Those costs have never been paid.

On 11th July 2023, shortly before a hearing to assess the costs of the 1938 Act proceedings, those costs were agreed at £220,000 (this figure therefore overtaking the on-account figure of £150,000). No part of this greater sum has been paid. The costs of the assessment proceedings, payable to Mr Gaymer, were £27,176.88. They have not been paid either.

Greenland sought to appeal those orders, and permission was given on one ground, namely whether DDJ Willink had jurisdiction to make the unless orders in one set of proceedings in respect of liabilities arising in another. He refused permission to appeal on other grounds, but he extended the time for payment of the other sums until 29th June. On that day Greenland (or someone on its behalf) paid the sums due for rent/mesne profits plus interest.

On 14^th August 2023 HHJ Murch dismissed the outstanding appeal, ordering Greenland to pay costs of £14,877.60, accompanied by an unless order. This time the costs were paid. The time for complying with the unless order in respect of the interim costs order made by DDJ Willink had been extended pending the appeal, and the new final date was 29^th August 2023. It passed without payment.

On 9^th October 2023 Greenland applied for relief from sanctions, and on 13^th October 2023 Mr Gaymer applied for a possession order. Those applications came before HHJ Murch and he refused the application for relief from sanctions and ordered possession to be given on 13^th December 2023. Greenland, but not Investments, applied for a stay of the possession order on 13^th December 2023, but withdrew it before it was heard.

There was then the sequence of events which lies at the heart of one of the principal points on this appeal. On 14^th December 2023, after the possession order was made but before it was executed, Greenland commenced proceedings claiming relief from forfeiture, despite the fact that its Counterclaim claiming the same thing had been struck out. On 22nd December Investments commenced its own proceedings seeking relief from forfeiture as mortgagee. The Particulars of Claim were signed by the same counsel, and verified by the same solicitor, as signed and verified the Particulars of Claim in Greenland’s new action. Then on 2^nd February 2024 High Court Enforcement Officers executed the possession order. The important sequencing of these events is that the application for relief was made after the possession order was made, but before its execution. (The draft claim form seeking relief was dated 21st December 2023, but the actual issue seems to be recorded as being the next day, on 22nd December, in a subsequent order of 13th March 2024. That discrepancy does not matter. What matters is that the application for relief was made before the execution of the order.)

The applications for summary judgment and striking out were issued on 21^st March 2024, resulting in the order appealed from on 31^st May 2024.

The result of all this, and the result of non-payment of some rent/mesne profits since the payment referred to above, is that as at the date of the hearing of this appeal sums totalling £596,873 odd were due and unpaid by Greenland, of which £103,914 odd is due in respect of rent/mesne profits.

It should be remembered that the judge had applications to strike out both Greenland’s claim as tenant and Investments’ claim as mortgagee. He struck out and/or gave defendant’s summary judgment in respect of both. Since this appeal concerns only Investments’ action I will focus on his findings in relation to that.

In the judgment below the judge set out a chronology of the key events including the commencement of proceedings, and at paragraph 10 he noted that there was no application before him to set aside the possession order, which was a key plank of Mr Gaymer’s case. Then he turned to the legal position and set out sections 146(2) and 146(4) of the 1925 Act, relevant to the tenant and the mortgagee respectively. At paragraph 14 he observed:

“I think it has to be accepted in this case the landlord is no longer proceeding by action or otherwise because a possession order has been made and was executed by the High Court Enforcement Officer.”

Having set out passages from Billson v Residential Apartments [1992] AC 494 he concluded that once a possession order has been obtained and enforced a tenant has to apply to set aside the judgment before it can apply for relief under section 146 because “the landlord, as Billson shows, is no longer proceeding for the purposes of section 146.” (para 18). Although he refers there to the tenant, it is apparent from the context that he considered the same applied to a mortgagee. This reasoning flows from the decision in Billson, which decides when a landlord is and is not “proceeding” to enforce a forfeiture - see below.

Having thus concluded, the judge considered that since Investments was not a party to the forfeiture proceedings in which the possession order was made it would have to apply to set aside the possession order under CPR 40.9, which provides:

“A person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside or varied.”

He then dealt with the position of the tenant. He held that it was seeking to re-litigate that which it had previously fought and lost on and that was an abuse. Alternatively he granted defendant’s summary judgment on the footing that the tenant had not applied to set aside the judgment for possession which was required by the authorities and insofar as the tenant was applying for relief from sanctions it had not fulfilled the requirements of CPR 3.9, especially noting the fact that the tenant had not offered unconditionally to pay the moneys it owed.

The judge then turned to the position of Investments (which he described as MGIL) and made his finding in paragraph 48:

“Turning to MGIL, the chargee in this case, its position is different of course because it was not a party to the underlying proceedings, but its difficulty I think is the learning set out in the Rexhaven decision. It on any understanding from a very early stage had notice of the proceedings because the defendant, when he was the claimant in the forfeiture claim, complied with the Civil Procedure Rules and gave notice of the claim. That I think must be a major hurdle in the path of MGIL at this stage seeking to advance a case for relief against forfeiture. To that extent it must be, I think, or can be capable of being analysed as abusive in line with the learning I have set out. If I be wrong though in that analysis, I conclude that summary judgment should be granted for the reasons advanced on behalf of the defendant. There is not an application to set the underlying possession order aside. That necessary prerequisite I think has to be spelled out. I do not think that on even the most benevolent reading of the particulars of claim as advanced by MGIL that I could construe it as bringing any claim for setting aside the underlying possession order. That I am afraid is a second hurdle in place of its application for relief against forfeiture succeeding.”

The Rexhaven decision to which he referred was Rexhaven Ltd v Nurse [1996] 28 HLR 241. The “learning” from Rexhaven which he seemed to apply was set out in paragraph 29 of his judgment where he quoted the following:

“When a mortgagee has promptly been given the copy writ and chooses to ignore it, in my judgment it does so at its peril and will not ordinarily be allowed subsequently to impugn a judgment although a judgment in default has been regularly obtained, otherwise there is not a good deal of point in the rules or not a great deal of efficacy in such a judgment.”

Ground 1 of the grounds of appeal deals with this aspect of the appeal. It alleges the following errors by the judge:

In order to understand the first of those points it is necessary to consider the wording of section 146 and how the relief jurisdiction operates after the decision in Billson. Sections 146(2) and (4) give the court jurisdiction to grant relief in the following terms respectively:

“(2)

Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief …”

(4)

“Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief …”

Both sections apply only “where a lessor is proceeding, by action or otherwise, to enforce [a right of forfeiture]”. Billson provides clarification as to the period during which a landlord is still proceeding and when it is that it is no longer proceeding. In Billson the House of Lords had to consider the application of section 146(2) to the not infrequent case of a landlord effecting a forfeiture by peaceable re-entry rather than by obtaining and executing an order for possession in legal proceedings for possession. The question was when, in those two cases, a landlord was still “proceeding” to enforce its rights. If it was no longer “proceeding” then a claim for relief could not be made under the section. If it was still “proceeding” then a claim could be made. Their Lordships held that where an order (and particularly a regular order) was obtained and executed, thereafter a landlord was not “proceeding” to enforce the forfeiture rights, but where the landlord enforced by re-entry as a self-help measure then even after re-entry the landlord was still “proceeding”. The same logic applies to an application under section 146(4).

As pointed out by the judge below in this case, Lords Templeman and Oliver described the situation where an order was obtained and executed. Lord Templeman said:

“…a tenant cannot apply for relief under section 146(2) after the landlord has forfeited the lease by issuing and serving a writ … has recovered and … entered into possession pursuant to that judgment … If the judgment is set aside or successfully appealed the tenant will be able to apply for relief in the landlord’s action but the court in deciding whether to grant relief will take into account any consequences of the original order and repossession and the delay of the tenant …” (p540E)

Lord Oliver said:

“That position [viz the position of a landlord who re-enters without a court order] is to be contrasted with that of the landlord who adopts the more conventional course of forfeiting by means of an action for possession. Once he has obtained judgment and has been put into possession, any attempt by the tenant to raise the lease against him is met by a simple plea of the judgment. The landlord is no longer proceeding to enforce a right of re-entry, for his possession rests now, not upon the exercise of a right under the lease, but upon a judgment of the court which, as between the parties and their privies, constitutes res judicata. Proceedings for relief under section 146(2) cannot therefore be effective unless and until that position is reversed and the judgment set aside, as it might be, for instance in the case of a default judgment or one obtained without proper service.” (p543)

None of that was controversial on this appeal. Nor was it controversial that if an application for relief had been made after the possession order in this case was executed, then Investments would have had to apply to set aside the order before it could make an application for relief. Successfully setting it aside would mean that the landlord was, after all, still proceeding to enforce the forfeiture rights. That possibility seems to have been countenanced by the House of Lords in Billson and was certainly contemplated by HHJ Colyer QC (sitting as a judge of the High Court) in Rexhaven, albeit that he considered that a successful application by a mortgagee would be difficult to achieve, especially where the mortgagee had been given notice of the proceedings at an early stage and had not sought to intervene.

However, Mr McGhee’s first contention on this appeal is that such a step was not necessary in this case because his client had applied in time. The timetable above shows that the application for relief was made some days before the order was executed. Accordingly, he submitted, it was made in time because the important date for the application was when it was made, and at that time the landlord was still “proceeding” to forfeit. It was thereafter irrelevant to the invoking of the relief jurisdiction that the landlord then executed the possession order – at the time of the application the mortgagee was entitled to apply. Ms Wicks submitted otherwise. She submitted that once the landlord executed the possession order he was no longer “proceeding” so that even if an application for relief was made before that event, that event deprives the court of jurisdiction at that point (unless it is set aside).

I take as a starting point what the judge decided, and he seemed to be dealing with two things. The first part of his reasoning (in paragraph 48 of his judgment) relies on a failure to make an application to set aside the possession order (and, by extension, the execution). That would be a reference to a separate stand-alone application under CPR 40.9. The second part deals with an application to set aside introduced into the proceedings in the pleadings and by amendment - he refers to a “benevolent reading of the particulars of claim” as not leading to an implied application to set aside. Those are two different procedural things leading to the same end. In essence he held that in the absence of either of them the proceedings were bound to fail. It is also likely that in stating that he accepted “the reasons advanced on behalf of the defendant” he was also accepting an argument of Ms Wicks that he recorded at paragraph 41 that “there is no further evidence as to why it is that the application should succeed”.

Mr McGhee’s submission involves his saying that the judge was wrong on both counts - neither a stand-alone application nor an amendment is necessary because he has applied in time - he has applied while the landlord is proceeding and that is sufficient. The mortgagee has its cause of action which is complete at that time and nothing that happens thereafter can deprive it of that. In so saying he relies on the wording of section 146(2), in the light of which subs (4) should be interpreted, and on the decision of North J in Lock v Pearce [1892] 2 Ch 328.

The question can be described in this way. The two subsections of section 146 confer a jurisdiction on the court with a time qualification (couched in terms of conduct) which requires that the landlord is still proceeding to forfeit. The question is - is it sufficient for that time qualification to be fulfilled merely when the application is being made, so that the application is good and has to be dealt with on its merits, or does it also have to be fulfilled at the time the court considers the application because of the reasoning in Billson? If the former is the case then the landlord’s completing the forfeiture by executing the possession order does not destroy the jurisdiction; if the latter then it does and a mortgagee would have to mount a successful application to set aside before it could proceed further with its relief claim.

The wording of subs (2) tends to point to the former. Leaving out irrelevant words for this purpose, subsection (2) provides that “Where the lessor is proceeding … to enforce [a right to forfeit] … the lessee may … apply to the court for relief…”. The provision goes on to provide that the court may grant or refuse it etc. The natural meaning of those quoted words is such as to point to the time of the making of the application, and nothing is said which would indicate that relief cannot be granted if subsequently the landlord completes (is no longer proceeding with) the forfeiture by executing a possession order.

The wording of subs (4) points more to the latter. The relevant words are “Where a lessor is proceeding … to enforce [a right to forfeit] , the court may, on application by any person claiming as under-lessee … make an order vesting [etc]”. That seems to refer to the point of time at which the court is considering the grant of relief rather than the time the application is made.

Both sides before me acknowledged this potential inconsistency. Not surprisingly, each side relied on the interpretation of the subsection which supported its case, and invited me to use that to inform the interpretation of the other. However, both agreed that despite the difference in wording each section should be taken to have the same effect. I am sure they are right about that.

I consider that the interpretation and statutory reconciliation process should start with subsection (2), because of the legislative history.

Subsection (2) has its origins in, and takes its wording from, section 14(2) of the Conveyancing and Law of Property Act 1881. Its natural construction is that which I have referred to above. If that was the sole source of the relief jurisdiction the result would be that an execution after the issue of proceedings would not per se deprive the court of jurisdiction because the application was made in time. That is Mr McGhee’s case.

Subsection (4) has its origins in, and takes its wording from, the Conveyancing and Law of Property Act 1892 section 4. As both parties accepted before me, it is unlikely that Parliament intended the two subsections to have different effects in this context, so section 4 should be taken to reflect the same intention as the earlier section 14(2). That means that under both provisions (and therefore both modern subsections, which should not be taken to change the law) it is sufficient for the landlord to be still proceeding at the date of the issue of proceedings. That is the interpretation I consider to be correct looking at the wording of the statute.

There is some support for this in authority. On the facts of Lock v Pearce [1892] 2 Ch 328 the point arose (albeit that in the end the case went off on a different point). That case was an application for relief made under section 14(2) of the 1881 Act, which as I have pointed out is the predecessor to section 146(2) in effectively the same terms. The sequencing of events was the same as in the present case - orders for possession in the county court on 25th November 1891, with the application for relief by the mortgagee made in the High Court on the same day. On 9th December 1891 the landlord obtained possession under the possession orders, and the mortgagee’s application for relief came before the court on 4th May 1892. The landlord took the point that relief could only be given before possession was given (page 330). On that point North J simply said this:

“Then it is said that this application was too late because possession had already been recovered. In my opinion, that contention is not well founded. I think the application was made when the summons was taken out; and relief can be given on the summons, as far as time is concerned, if in other respects the mode of procedure is right.”

In the end the application for relief failed on the merits (p335). Ms Wicks said the remarks about sequencing were obiter but I am not sure that that is correct. The decision was part of the judge’s reasoning on the way to his final conclusion, which he reached on the facts. At all events, it is a clear decision of a judge of the High Court deserving of appropriate respect.

The case went to the Court of Appeal - [1893] 2 Ch 271. The appeal was dismissed on the technical ground that the application for relief was wrongly brought by originating summons and not by writ, and was therefore faulty. The Court of Appeal did not deal with the question of timing; it decided the appeal on different grounds.

Mr McGhee also relied on Gee v Harwood [1933]Ch 712. The provision in issue in that case was s146(10), relating to forfeiture on the grounds of bankruptcy or execution:

“(10)

Where a condition of forfeiture on the bankruptcy of the lessee or on taking in execution of the lessee's interest is contained in any lease, other than a lease of any of the classes mentioned in the last sub-section, then—

(a)

if the lessee's interest is sold within one year from the bankruptcy or taking in execution, this section applies to the forfeiture condition aforesaid;

(b)

if the lessee's interest is not sold before the expiration of that year, this section only applies to the forfeiture condition aforesaid during the first year from the date of the bankruptcy or taking in execution.”

In Gee the landlord took a point about timing (at 738):

“It is said, however, that the relief must be not only applied for but also granted within the time limit of twelve months. I do not so hold. I think that when once the initial step of commencing the proceedings has been taken, the reasoning which is to be found in Diment v. Roberts in the Court of Appeal, as well as in the judgment delivered by Swift J. on behalf of the Divisional Court, applies in the present case. I quote some words from my own judgment: " It is impossible to suppose that the Legislature intended to leave the tenant to the chance of his right to recover falling within the area of a very busy court, or to be determined by the changes or chances of the court's business. I think the object of the Act was to maintain the right of the tenant or mortgagor, but at the same time to impose some limit on the time for taking proceedings." The same reasoning applies to the present case. All that could be done or ought to be done by the lessee had been done by October 23 within the limit of twelve months.”

Mr McGhee relied on this case as a parallel case in which the important thing was to apply within the one year provided for by paragraph (b), and not to have a result within that period, and also on the policy or practical reasons behind this decision (not leaving timing to the uncertainties of court listing). I do not think that this case helps him that much. Subsection (10) is different in its wording to subsections (2) and (4) and the time limit (1 year) does not depend on an elective act such as enforcing a judgment.

No other useful authority was put before me. Mr McGhee relied on Hammersmith & Fulham LBC v Tops Shop Centres Ltd [1990] Ch 237 as demonstrating that one should not construe section 146 and its rights to relief in a restrictive manner, which he says favours his construction. I do not think that this case helps him. The passage relied on at p251 is in fact a citation from Ewart v Fryer [1901] Ch 499. That passage emphasises the breadth of the discretion of the court when relief is being considered and granted (or not granted), which is a different point to the question of the effect of the two subsections which arises on this appeal.

However, in my view Mr McGhee does not need that case anyway, because I consider that he is correct on the short point of analysis and interpretation that I have set out above. The natural meaning of section 146(2) is that it is sufficient that an application be launched in time, so his application was technically good. That is supported by the High Court authority to which I have referred. The issue of proceedings is the point of time at which the right to apply falls to be tested, and the mortgagee applied in time.

That means that ground 1 of the Grounds of Appeal succeeds. Nonetheless, that does not mean that the execution of the possession order is going to be entirely irrelevant to the relief claim. Its circumstances and effect may well be relevant to the exercise of discretion, and prima facie one would have thought that the same factors would come into play, with the same effect, as if there were a separate set-aside application. In order to get relief the mortgagee is going to have to get the possession order, and the possession, set aside in order to make the relief effective. What my decision does mean is that the execution is not an extra bar which has to be overcome before the proceedings can progress further, with such additional burdens as flow from HHJ Collyer QC’s reasoning in Rexhaven.

In this context I should deal briefly with a submission made by Ms Wicks about the form of proceedings. She submitted that where a landlord was proceeding to forfeit by action, any application by a sub-lessee/mortgagee for relief ought to be made in the landlord’s action. This was a point taken in paragraph 2(iii) of her respondent’s notice. Investments’ application was made in a separate action and, she submitted, was faulty for that reason.

The submission seems to be based on the wording of the two subsections. Taking subsection (2) , Ms Wicks emphasised the following:

“(2)

Where a lessor is proceeding, by action or otherwise, to

enforce such a right of re-entry or forfeiture, the lessee may, in

the lessor’s action, if any, or in any action brought by himself,

apply to the court for relief.”

Similar wording appears in subs (4). That made sense, she said, because it avoided a multiplicity of proceedings and reflected the fact that relief could operate as a defence or counterclaim and a claim for it is therefore inextricably bound up with the landlord’s proceedings. A multiplicity of proceedings would be likely to frustrate the need to achieve a speedy resolution of the proceedings and to lead to sterilisation of land while proceedings remained pending. It is the case that the CPR requires the identification, in the possession proceedings, of those with a right to claim relief from forfeiture, and under the old RSC (RSC 6(2)) notice had to be given to those persons. The purpose of that was to enable that person to apply to be joined into the landlord’s proceedings if it wished to claim relief. Under the CPR (CPR PD55A para 2.1) the name and address of anyone entitled to relief under subsection (2) must be provided in the Particulars of Claim and a copy of the Particulars of Claim must be filed for service by the Court, emphasising the importance of the provision, though now (unlike under the RSC) this obligation for service applies only to residential tenancies and not all tenancies.

I do not consider that Ms Wicks has made out her case in this respect. The true interpretation of the subsections does not point in the direction of a mandatory requirement to apply in the landlord’s proceedings. The wording naturally reads as being permissive. A mortgagee “may” apply in the landlord’s proceedings - a word of permission which in my view allows both the application itself and the forum for the application. The words “if any” reflect the fact that there may be no such proceedings. The following words to not contain or imply the sense that they only apply if there are no landlord’s proceedings. If such a serious procedural requirement were intended one would have expected much clearer words. Nor do Ms Wicks’ policy reasons seem particularly strong. The fact that a separate set of proceedings has been started does not give rise to any particularly serious level of complication or resource use, and in some ways it might make the procedural position neater to cope with. The fact that relatively recent procedural provisions require particulars and notice or service (which are not even consistent over time) does not assist at all in relation to Parliament’s intention in 1925, much less in 1881 where the legislative chain starts.

In fact the background to the source legislation is much more informative and is against Ms Wicks. It was common ground that in 1881 and 1892 the county court had no jurisdiction to grant relief under the provisions of the Acts of those years. Accordingly, if possession proceedings were commenced in the county court then an application for relief under subsection (4) had to be brought in separate proceedings in the High Court. This state of affairs was common ground between the parties, and was in fact what happened in Pearce v Lock. So the predecessors of the two subsections were enacted in circumstances which necessarily contemplated the possibility, indeed necessity, of the relief claim being made in separate proceedings, and there is nothing in the 1925 legislation which suggests that somehow the two later subsections somehow had some different and more restrictive procedural effect.

I therefore find that this averment of Ms Wicks fails. Ms Wicks’ respondent’s notice also averred that Investments was a privy of Greenland and was therefore bound by the order for possession and dismissal of Greenland’s claim for relief, but in her oral argument she did not pursue the claim of privity formulated in that way.

There are two principal abuse points arising on this appeal. The first is one arising out of one of the bases on which the judge seems to have decided the point, namely that the decision in Rexhaven rendered Investments’ proceedings an abuse. The second, which arises more out of the respondent’s notice, is one which arises out of what are said to be close links between Greenland and Investments through the instrumentality of Mr Halabi, and an allegation that it would be wrong to allow Investments to be used as a vehicle for prolonging harassing and oppressive litigation.

In paragraph 48 the judge below seems to have considered that the abuse point arose out of the learning in Rexhaven. It would seem that he considered that what Rexhaven decided rendered MGIL’s claim an abuse. At paragraph 22 HHJ Murch asked the question: “What then is the test when a chargee seeks to set aside an order”, and answered it by considering Rexhaven. His decision was, in effect, that since a mortgagee had to apply to get the possession order set aside, and since it had not done so and would not be able to do so (see Rexhaven), the application was an abuse of process.

In the light of my decision on the summary judgment aspects of the case this point does not arise. Briefly stated, the reasons for that are as follows. Rexhaven was a case in which the relief proceedings did not start until after the landlord had executed a possession order against the tenant, so in order to get a relief claim off the ground the mortgagee had to apply to get the possession order (and thus the execution) set aside. The application failed on the merits and HHJ Colyer QC made remarks as to the difficulty faced by any mortgagee in applying to set aside the possession order after it had been notified of the proceedings earlier. It seems to be that learning that HHJ Murch applied in this case. Since I have decided that technically it was not necessary to undo the possession order (to put the situation back into one in which the landlord is “proceeding”) in this case the point does not arise, though had it been necessary to decide the point I would have considered that the judge’s overall decision on this point was one he was entitled to reach.

The other abuse of process is said to arise from evidence which should have led the court conclude (in the words of the respondent’s notice):

“ … that the Claimant, directed or influenced by Mr Halabi, cynically took the decision not to intervene in the forfeiture proceedings so as:

(i)

to avoid liability for the many adverse costs and mesne profits orders previously made against Mentmore Golf Corporate Ltd and MGL; and

(ii)

to provide Mr Halabi with a second opportunity to claim relief from forfeiture in the event that possession was ordered and relief refused in the forfeiture proceedings, without complying with those costs and mesne profits orders; and

(iii)

the evidence showed that the Defendant was significantly prejudiced by the prolonged uncertainty in relation to the right to possession of the demised land, which was sterilising its beneficial use and causing the Defendant to incur costs.”

The judge below made no detailed actual findings about this in his main judgment (though see below as to his findings on an application for a third party costs order), though he did refer to relevant authorities on the point, but both parties to this appeal agree that he accepted submissions from Ms Wicks which averred that the facts showed a relationship between them to which one could not close one’s eyes (paragraph 41). That seems to be the farthest that he went. The real meat of this part of this appeal is raised by the respondent’s notice and the submissions made under it.

The relevant law on this topic was not in dispute between the parties. The starting point is the speech of Lord Bingham in Johnson v Gore-Wood & Co [2002] 2 AC 1. At page 31 Lord Bingham expressed the broad nature of the consideration as to whether or not conduct was an abuse of process:

“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”

The principle is not confined to a situation where the party against whom abuse is alleged is the same as a party to the preceding litigation, or even that there is some close degree of identity. This was made clear in Aldi Stores Ltd v WSP Group plc [2008] 1 WLR 748 where Thomas LJ rejected a submission (recorded at paragraph 7) that there had to be a “sufficient degree of identity” between the two parties in question.

“10.

I cannot accept this argument. Lord Bingham made clear in his speech that the approach should be a broad merits-based judgment and not formulaic. It is clear he was approving the passage in the judgment of Megarry V-C as the correct approach and not as a statement of rigid application. The fact that the defendants to the original action and to this action are different is a powerful factor in the application of the broad- merits based judgment; it does not operate as a bar to the application of the principle. This was plainly the view of Clarke LJ in Dexter’s case [2003] EWCA Civ 14 at [49]—[53] in the passage I have set out with which I agree.”

From time to time Ms Wicks submitted that the history of this litigation demonstrated what she described as harassment. If true then that would be a relevant factor (if associated with the relevant parties), as is apparent from the Dexter decision cited by Thomas LJ:

“(vi)

The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C.” (para 49).

Ms Wicks also drew attention to the point that it was irrelevant whether the earlier proceedings resulted in a final judgment on the merits - see for example Harbour Castle Ltd v David Wilson Homes Ltd [2019] EWCA 505 where the preceding action was struck out for a failure to provide security for costs which had been ordered. That case also demonstrates that it may be particularly relevant that the first action was struck out for failure to comply with peremptory orders - see paragraph 9, though it should be noted that the second claim in that case was brought by the same claimant as the first (which is not the case here).

Against that background I can now move to consider the alleged abuse in this case.

In my view the facts of this case demonstrate that the case for abuse of process has been made out. I consider that the history and the evidence establishes that there is now a pattern of abusive litigation and as part of that pattern that Investments has essentially sat on the sidelines as a sort of reserve claimant when, if it were a bona fide arms-length claimant, it would have intervened and applied for relief earlier, or at least sought an agreement that it could wait. It has now been used as part of a scheme by Mr Halabi, who controls this whole litigation, to spin out the litigation process, and it would be to allow an abuse to allow Investments to step in and prolong the process.

The evidence demonstrates a close link between Mr Halabi, the tenant companies from time to time (including Greenland), Investments and the Halabi family trusts. This evidence is:

In the light of this evidence, and of Mr Halabi’s various witness statements provided from time to time, it is apparent that the various trusts and companies are all part of one overall structure which is operated as a whole, with companies coming and going, and fulfilling various roles, as and when required, being liquidated or allowed to go into liquidation when it is convenient, and with Mr Halabi apparently sitting at the centre with no real suggestion of separate input from Investments or the trustees.

The involvement of Investments is against that background. It must have been the case that Investments was aware of the trials and tribulations affecting the various leaseholders because it took charges when there were changes of ownership, and presumably was at least partially repaid from loaned moneys when one operating company sold to another. It is to be noted that its loan to Corporate took place while the 1938 Act proceedings were pending. As Ms Wicks submitted, no arms-length lender would be likely to have done that. This shows the close links between the entities and Mr Halabi. There was some sort of determination, which must have been shared by all, to take all steps to keep the golf course and to drag out the process without paying money unless it became absolutely necessary. That is demonstrated by acts in the litigation, such as the amendment application and by the abandonment of opposition to the 1938 Act proceedings at the last minute (without apparently putting in expert evidence in response to the expert evidence of Mr Gaymer which showed serious damage to the value of the reversion), and the winding up of Corporate. Neither the Trust(s) nor Investments was apparently concerned to save Corporate from winding up, presumably on the footing that another company could take its place (which it did). Investments would have to have been part of that strategy. Mr Halabi himself expressed the “Family Trust’s” commitment to keep the leasehold interest at all times.

Investments’ inactivity has not been adequately explained. In response to the application to strike out it filed a witness statement from Mr Baines, its solicitor, and not from a director. The witness statement is a short one, giving some details of the trust structure behind the ownership of Investments as provided to him by the directors in order to demonstrate the difference between the two trusts holding Greenland and Investments respectively. It is said that the trustees of one trust cannot direct the trustees of the other what to do. It goes on:

“From this explanation of the ownership structures, it is clear that Mr Halabi does not own or control [Investments].”

That may well be literally true, but it does not say anything about how the decision-making processes actually worked insofar as they genuinely involved anyone other than Mr Halabi.

The witness statement goes on to say something as to why Investments was applying for relief as late as it did. All it says about that is:

“Mr Hodges [a director of Investments] informs me that he was aware that Mr Gaymer had begun forfeiture proceedings against Mentmore Greenland Limited. Since those proceedings were being defended by Mentmore Greenland Limited, Mr Hodges did not consider it necessary for the Claimant company to take action of its own. However, once an order for possession was made on 29 November 2023, it was necessary for [Investments] to take apply for relief from forfeiture on its own, in order to protect its secured interest under its legal charge of the lease.”

This witness statement was provided in response to one from Mr Gaymer in support of the application to strike out. It was plain enough from that latter witness statement that it was saying that Investments ought to have applied for relief before it did. In effect it required an explanation (though it did not do so in terms). That must have been understood by Mr Baines (and Mr Hodges if he ever informed himself of what was happening) - hence the statement that was made by Mr Baines.

Such a bald explanation may just about suffice in some cases, though one would perhaps expect some elaboration. Where there is a genuine dispute about forfeiture being litigated between landlord and tenant then it may well be understandable that a mortgagee would hang back to see how that dispute was resolved before applying for relief. Otherwise it would be incurring costs which might be unnecessary, and its participation might complicate the proceedings.; its failure to apply at an early stage may therefore be justifiable, and waiting to see if the forfeiture claim was made out could well be a sensible step. To that extent I respectfully disagree with HHJ Collyer in Rexhaven who seemed to consider that a mortgagee ought almost as a matter of course to get involved early. I can envisage some cases in which wait and see is a justifiable course.

However, the present would not appear to be such a case. Investments is not an arm’s-length lender to Greenland. It has been lending to all participants in the dispute successively in a series of loans which would not seem to be purely commercial loans. It knew about the proceedings from the outset, and it must have been aware of their twists and turns. Mr Halabi’s own evidence suggests that it (and the trustees) will have known of the obligations to pay money because Mr Halabi gave evidence of the length of time that it would take the trustees to raise money. Yet it, and its trustees, would seem to have been relaxed about letting the forfeiture proceedings run on until the bitter end, and only apply then. There is no evidence it took any steps to procure payment of the sums owing by to Mr Gaymer even when the main unless order was made.

The directors of Investments have given no evidence as to what their thinking was as the dispute continued. Their security was threatened by a forfeiture action with potentially serious consequences. Their mortgagor was running up significant adverse costs liabilities which would be likely to have to be paid as a condition of getting relief if relief from forfeiture was necessary. The whole defence was threatened by unless orders. An arm’s-length lender would hardly be content to sit back and not intervene at all, and would be likely to have formed some sort of strategy to deal with the situation. There is no evidence that Investments did any of that. It is merely said it was waiting to see. A director has not given any evidence of Investments’ thinking beyond that. In my view that is likely to be because there was no relevant thinking other than that to which I am about to refer.

That is not the conduct of a sensible mortgagee concerned about its security. It is, however, consistent with a mortgagee whose attitude and efforts were in substance being directed by someone else. In my view it has been established that that someone else is likely to be Mr Halabi. He was effectively calling the shots and wanted to keep the mortgagee’s claim to relief in reserve, to be deployed as a further line of defence (or attack) when it became necessary. It amounts to harassment or oppression in this litigation in that it was done to spin matters out. It would seem likely that if the relief claim were allowed to proceed it would become a further vehicle for requiring Mr Gaymer to incur additional costs which would be unlikely to be paid. It is reasonably plain that the costs which were subject to DDJ Willink’s unless order were going to have to be paid by someone, and if Investments were genuine about its need to preserve its security it would have intervened at that stage. But it did not.

Mr McGhee relied on a passage in Chelsea Investments Trust Co Ltd v Marche [1955] Ch 328 as justifying a mortgagee in sitting back and waiting to see what happened to the forfeiture action and the tenant’s claim for relief. At p338 Upjohn J said:

“They have had every opportunity of getting relief from forfeiture, and an order was made in their favour which could not be described in any way as unduly onerous, but they entirely failed to take advantage of that order. The mortgagee only obtained an order vesting the premises in him when the plaintiffs had wholly failed to take advantage of the order which they had obtained and it stood dismissed. It is admitted by the plaintiffs here that there is no question of the mortgagee having in any way abused his position or gone behind their backs. He behaved with perfect propriety and gave every opportunity to the plaintiffs themselves to get relief, and it was only when they failed that he took steps. He was not, of course, at the relevant time in possession of the mortgaged premises.”

That passage does not help him. The facts were obviously rather different. It would seem that no criticism was made of the mortgagee – “It is admitted by the plaintiffs here that there is no question of the mortgagee having in any way abused his position or gone behind their backs. He behaved with perfect propriety …” That may be a different sort of point to the one made in this case, but it shows that there was more to the case than the mortgagee just sitting back and waiting, against the sort of background of extended and extensive litigation which has taken place hitherto. The whole point is that in this case Investments did not behave with perfect propriety in doing what it did.

I therefore find that Investments’ claim for relief from forfeiture is part of a scheme to string out a piece of litigation which Mr Halabi wishes to resist rather than being a genuine claim advanced by an independent mortgagee seeking to protect its own interests. I find it to be oppressive and abusive.

All this has caused prejudice to Mr Gaymer. Back in 2019 his expert’s evidence in the 1938 Act proceedings commented on the deterioration of the golf course, and he put the costs of restoration at £2.5m and the diminution in investment value at £1.76m to £2.2m. Those figures were not challenged in the 1938 Act proceedings, but of course they have not yet been established by judicial decision. Nonetheless, the nature of the evidence supports Mr Gaymer’s case that he is suffering potential prejudice from all the delay that has occurred, because if sums of that order were required back then, then greater sums will be required in due course if there were a prolonged relief application by Investments. I do not assume failure of such an application were it argued out, but it would seem to be very much on the cards.

For the sake of completeness I would add that my findings as to the centrality of Mr Halabi to all this, and what I find to be his control, is consistent with the findings of HHJ Murch on an application for a third party costs order against Mr Halabi, which he granted. In the course of his judgment, and on the basis of some arguments about Mr Halabi’s control which did not appear in his main judgment, he found that Mr Halabi was “the controlling party” who has “clearly exercised control of the various proceedings and has been the real party". Ms Wicks did not rely on those findings (I believe because of the rule in Hollington v Hewthorne), and I have reached my conclusion independently of what HHJ Murch said in this second judgment, but am not surprised to see that our conclusions coincide.

Accordingly I find that the very late application for relief by Investments is an abuse of the process and should be struck out. I would therefore dismiss Ground 2 of the appeal, albeit for reasons differing from those of HHJ Murch.

I would therefore find that the appeal on Ground 1 succeeds, but Ground 2 fails and the conclusion of the judge below on abuse was correct, though for reasons which differ from his. I therefore dismiss the appeal overall.