Joshua John Fernie v Burton Waters Management Ltd

This is an ex tempore judgment in the case of Joshua John Fernie v Burton Waters Management Ltd and Banks Long & Co, and Darren Fernie as the third party. Throughout this judgment, I will refer to Mr Darren Fernie as “Mr Fernie” and Mr Joshua Fernie as “Mr Joshua Fernie.”

As long ago as 13 June 2022, I heard the strike-out application made on behalf of the defendants against the claimant, Mr Joshua Fernie, in respect of his claim; (the amended particulars of claim are at page 4 in the main bundle) referred to as “the data claim.”

The order I made is in the main bundle at page 55, and there was a further hearing on 20 July 2022 in which I gave my reasons for the decisions and some further orders and directions, and that is at the main bundle at page 57.

Having made Mr Fernie a third party for the purposes of costs and to oppose, if so advised, the making of a civil restraint order against him, the orders following on in the bundle reflect adjournments by reason of Mr Fernie being taken unwell twice, applying for an adjournment so that I could see a transcript of the decision of Martin Spencer J, and making an application for me to recuse myself which he then appealed unsuccessfully.

It is only, therefore, at this hearing beginning on Monday, 20 January 2025 that I have heard the first defendants’ application for a third-party costs order against Mr Fernie and considered whether or not the Court should, of its own motion, make civil restraint orders against Mr Fernie and/or Mr Joshua Fernie. Pursuant to the original orders, I should also make any further directions needed in what is called “the Beal Developments case,” in which the claimant’s claim is currently stayed pending an application for security for costs by the first defendants.

I ordered the claimant to pay the defendants’ costs on the indemnity basis and by order dated 12 March 2024, I adjusted the figure for costs from £34,200 to £33,000, and I will refer to this “VAT issue” in more detail below. None of those costs have been paid.

The matter was listed for three days in front of me this week. It has taken four, and I am delivering this ex tempore judgment on day five. It is right to say that there were technical difficulties with the CVP on the second day, which was effectively lost. Mr Fernie has appeared via CVP to accommodate his health difficulties.

I have already given a ruling on day one, ordering Mr Fernie to be jointly and severally liable for the first defendants’ costs with Mr Joshua Fernie in the sums identified above. I do not intend to repeat the reasons I gave orally then in full but, in brief, I refer to the findings I made in my judgment given on 20 July 2022 to the effect that Mr Fernie is, as I find, the main driver in this claim and further, that he has been the main driver in the incidental applications and appeals.

Mr Joshua Fernie has mostly not engaged in this litigation since mid-2022. He has not appeared in front of me during this hearing at all. He has had no communication with the Court. He has not contacted the Court. He has made no application for an adjournment, and he has given no reason for his absence. I am, however, satisfied that he was aware of the hearing, and its nature. Mr Fernie confirmed that to me. I am also satisfied, as detailed below, that it is appropriate for me to consider making a civil restraint order against Mr Joshua Fernie in his absence in those circumstances, and his absence reinforces my conclusion that it is Mr Fernie, who has, in fact, been pursuing this claim and those incidental applications and appeals.

After I gave my ruling about the third-party costs order, Mr Fernie made an immediate application for permission to appeal and an application for me to recuse myself. I refused both of those applications. I considered that the application for me to recuse myself (being, I think, the third such application) was made firstly on the basis that I found against Mr Fernie which is no basis for me to recuse myself, and secondly, on the basis that I failed adequately to consider the VAT “fraud” which he alleges against the defendants and their solicitors and counsel. He had also made an application for me to adjourn the hearing to enable him to obtain and put before me copies of the transcripts of the judgments of District Judge Anwar and Bourne J. It is his case that both of those judges expressed what he called “extreme concern” about the VAT issue, indicating that they too considered that there may be fraud and/or dishonesty and/or deliberate misleading of the Court.

I do not consider that Mr Fernie has any prospect of establishing that I should have recused myself because I found against him or (for the reasons set out in more detail below) that it was appealably wrong of me to fail to adjourn this matter yet again or to consider that it was at all likely that the judges referred to had made no reference to fraud or dishonesty on the part of the defendants or their lawyers when making the orders which are in the bundle if they had, in fact, been concerned as he says.

It is not an easy matter either in this ex tempore judgment or even in any longer reserved judgment to make reference to all of the details of the history of this litigation or even a summary reference to the enormous volume of documentation, let alone the related proceedings, applications and appeals. The skeleton argument filed on behalf of the first defendants runs to some 29 pages and is still a brief review. I have a main bundle of documents in two volumes running to 1,615 pages, together with a supplementary bundle of 772 pages and a bundle of authorities. In the course of the hearing, Mr Fernie, in particular, but both sides, in fact, submitted additional quantities of more documents. The witness statements account for 100 pages, and the exhibits thereto some 1,300 pages. In this ex tempore judgment, I do not intend to set out in full details from the evidence, documents and authorities, but where I have referred to them, I confirm I have read them in full.

Costs considerations and applications for civil restraint orders should be summary matters and not the subject of any oral or lengthy witness evidence, but applications of the principles and an exercise of the Court’s discretion.

By way of very limited background, I refer to the judgment that I gave in a separate case, “the moorings claim.” I set out there that the Burton Waters Estate is a luxury, gated 140-acre residential and commercial site which includes or included at the time that I gave my judgment, 361 dwellings, moorings for residents and third parties, a marina, a shop parade, a David Lloyds health club, three restaurants including one over-water restaurant and a pub.

Mr Richard Costall was the original architect and developer of the estate and he went through the process of obtaining planning permission and beginning with works to connect the marina basin to the Foss Dyke Navigational Canal before any development could begin.

There were then 2 ½ years of negotiations before a 60-year licence was agreed, dated 20 June 2002, taking over from British Waterways in 2012.

The first part of the development, to give an idea of its scale, was the excavation of the marina basin at a cost of some £7,500,000. Mr Costall was then operating through Eastman Securities Ltd, who had the Canal & River Trust licence, and that was then sold to Beal Developments. Since 20 March 1990 Eastman has been the freehold proprietor of the estate, and Mr Costall set up the claimant company as a separate entity in terms of the moorings licenses, acquiring the CRT licence from Beals.

I also refer for details of this (although I do not intend to set them out) to paragraphs 28 to 36 of my judgment dated 20 July 2022 which I refer to as “the substantive judgment”, and paragraphs 36 to 40 of my judgment dated 3 April 2024 which I refer to as “the recusal judgment.” I briefly refer, where necessary, later on in this judgment to other proceedings and applications made in the courts and tribunals which are relevant to my decisions in this case as to whether civil restraint orders are necessary. The defendants’ skeleton sets out the procedural history in respect of these matters. It is between paragraphs 8 and 33. It is a lengthy procedural history, although in short form and, again, I do not intend to repeat it in full. I refer to it because it is a useful procedural chronology.

First of all, moving on to more substantive matters, I should set out the relevant law in relation to civil restraint orders. The court’s power to make civil restraint orders (“CROs”) arises primarily pursuant to CPR 3.11. Practice Direction 3C identifies the three forms of CRO which may be made. A Limited CRO may be made by a judge of any court where a party has made two or more applications which are totally without merit. Such an order restrains a party from making further applications within those particular proceedings without judicial permission. It can be made by any judge of any court.

An Extended CRO may be made where a party has persistently issued claims or made applications which are totally without merit. Such an order restrains a party from issuing claims or making applications in relation to particular matters without judicial permission.

A General CRO restrains a person from issuing any proceedings or making any application at all without judicial permission. Such an order can be made where a person persists in issuing claims or making applications which are totally without merit in circumstances where an Extended CRO would not be sufficient or appropriate.

At paragraph 62 of the skeleton argument on behalf of the first defendants, it is set out what is said to be “the need for a General CRO.” That paragraph says:

“The need for a General CRO is succinctly put by the learned authors of
vexatious litigants and civil restraint orders in A Practitioner’s Handbook
2014 at 5.19”, and reads:

“A general civil restraint order is appropriate in circumstances where the claims issued and applications made by the party are so varied and numerous, possibly against multiple defendants relating to different subject matters, that an extended civil restraint order would not be sufficient to restrain them.”

I have transferred this matter to the High Court and am sitting as a Deputy High Court Judge to deal with the consideration of appropriate CROs if I decide to make such.

What is meant by “persistence” in the context of CROs, Extended and General CROs was explained by the Court of Appeal in Bhamjee v Forsdick & Ors (No 2) [2003] EWCA Civ 1113 at paragraph 42, as follows:

“We do not include the word ‘habitual’ among the necessary criteria for an extended civil restraint order, but there has to be an element of persistence in the irrational refusal to take ‘no’ for an answer before an order of this type can be made.”

I also refer to the case of R (Kumar) and the Secretary of State for Constitutional Affairs [2007] at paragraphs 68 to 69:

“68.

But if the earlier order does not speak for itself, a rather more detailed examination of the earlier litigation history must be undertaken than is evident in Moses J’s judgment in this case if a court is to be satisfied that it possesses the requisite jurisdiction. For a limited CRO, the party to be restrained must have made two or more applications which were totally without merit (Practice Direction C, para 2.1). For an extended CRO, he/she must have persistently issued claims or made applications which were totally without merit. In Bhamjee, this Court explained the meaning of persistence in this context at para 42:

‘By the time the order comes to be made, the litigant for whom the further restraint has been adjudged necessary will have exhibited not only the hallmarks of vexatiousness...but also the hallmarks of persistent vexatiousness...We do not include the word ‘habitual’ among the necessary criteria for an extended CRO, but there has to be an element of persistence in the irrational refusal to take “no” for an answer before an order of this type can be made’.

69.

Under the new rule-based regime, however, it is sufficient that the previous claims or applications were totally without merit, and that the litigant persisted in making them. The requirement for ‘vexatiousness’, or its modern equivalent, has gone.”

“Persistence” has also been considered in Re Ludlam (A Bankrupt) [2009] EWHC 2067 (Ch), where it was suggested that a bare minimum of three totally unmeritorious applications were required to constitute persistence.

In Nowak v The Nursing and Midwifery Council [2013] EWHC 1932 (QB), Leggatt J, as he then was, explained the rationale for CROs in the following terms:

“As explained by the Court of Appeal in the leading case of Bhamjee v Forsdick, the rationale for the regime of civil restraint orders is that a litigant who makes claims or applications which have absolutely no merit harms the administration of justice by wasting the limited time and resources of the Court. Such claims and applications consume public funds and divert the Courts from dealing with cases which have real merit. Litigants who repeatedly make hopeless claims or applications impose costs on others for no good purpose and usually at little or no cost to themselves. Typically, such litigants have time on their hands and no means of paying any costs of litigation, so they are entitled to remission of court fees, and the prospect of an order for costs against them is no deterrent. In these circumstances, there is a strong public interest in protecting the court system from abuse by imposing an additional restraint on their use of the Court’s resources.”

The Court may consider the making of a CRO, not only on the application of a party but also of its own volition. Indeed, under CPR 23.12, whenever an application is recorded to be totally without merit, the Court is required to consider whether it is appropriate to make a CRO. I refer to the very recent decision, I think it was published yesterday, of Leech J in Official Receiver v Steve Sanders & Axa Insurance Plc [2024]. That decision in summary is that the Court of its own motion made an Extended CRO against a litigant in person who had made numerous applications and appeals seeking to set aside an order striking out his claim under an insurance policy and a bankruptcy order obtained to enforce that judgment, as he could apply to annul his bankruptcy. There was a risk that he might seek to reopen the issues already dealt with, which included allegations of fraud, collusion and judicial impropriety and bias.

It is also right that the Court has the power to make a CRO against a non-party. Mr Joshua Fernie is the claimant, and Mr Fernie is now a third party but for the purposes of costs only in these proceedings. I need to consider his position in respect of matters generally. Again, I refer to the first defendants’ skeleton at paragraphs 56 and 57 where on behalf of the first defendants, it is set out that the Court has the power to make a CRO against a party who has issued claims or made applications that are totally without merit. “Party” has been held to be wide enough to cover a non-party who is considered to be the real party to the proceedings.

The case of Hurst & Anor v Denton-Cox [2014] EWHC 3948 (Ch) is cited in which Proudman J made an Extended CRO against the claimant’s husband, who had been added to the proceedings for the purpose of considering whether or not to make the order against him. The husband had been the driving force behind his wife’s unmeritorious litigation, and although he, himself, had not instigated a claim against the defendants, it was, in the circumstances, immaterial because there was a risk of further claims being commenced by him or at his behest against the defendant.

Further, in the case of CFC 26 Ltd & Anor v Brown Shipley & Company Ltd [2017] EWHC 1594 (Ch), the court considered an application for an Extended CRO and Newey J held that an Extended CRO could be made against someone who had not issued the requisite wholly unmeritorious claims or applications in his own name but was associated with one or more persons who had issued such claims or applications. He considered that the ability of the courts to make CROs could be seriously undermined if PD 3C were read as focusing exclusively on named claimants and applicants. By analogy with the court’s power to make costs orders against non-parties, references in PD 3C to “a party” who had issued claims or made applications should be read as extending not only to the named claimant or applicant but, in appropriate cases, to the real claimant or applicant.

Of course, it is right and, again, that is referred to at paragraph 63 in the skeleton argument, that the Court has a discretion as to whether to make a CRO and the type, assuming that persistence is made out, for an Extended CRO or a General CRO. The discretion must be exercised in a proportionate manner. The threat-level approach to the question of the exercise of the discretion, applied in Ludlam to which I have already referred and used by the Court in R(C) London Borough of Havering Children Services and Others [2009] EWHC 3587in which HHJ McKenna decided that the threat level of the claimant continuing to issue totally unmeritorious claims or applications was very high given the history. There had been letters before action threatening further judicial review proceedings, and their persistent failure to utilise the defendants’ complaints procedure and the sense of grievance, however misguided, felt by the claimants towards the defendants.

It was further submitted by the defendants that the High Court can make orders restraining proceedings in other tribunals, and that is pursuant to the Court’s inherent jurisdiction rather than to the CPR. I was referred to the case of The Law Society of England and Wales v Otobo [2011] EWHC 2264 (Ch) and, in particular, at paragraph 78, it is set out following the decision in that case, a decision of Proudman J again, by reference to the same publication (Vexatious Litigants and Civil Restraint Orders) that the importance of this decision, the Otobo decision cannot be overstated and how the respondent to unmeritorious claims and applications in the tribunal system can apply to the High Court for an order made pursuant to its inherent jurisdiction restraining the litigant who seeks to make applications. Such an order manifests itself in the form of a civil restraint order as provided for in the Civil Procedure Rules, and the same criteria for the imposition of such an order apply in the same way. The conduct of the litigant in the tribunal proceedings can be taken into account both in considering whether the criteria for the Extended or General CRO are satisfied and in the general discretion of the Court to grant one or other of the available CROs.

Applying the law to this case, I need, of course, to consider the evidence and make any necessary findings based on that evidence before I go on to consider whether or not to make any CROs.

The most significant evidence, of course, comes from the totally without merit markings relating to Mr Joshua Fernie and Mr Fernie. They are conveniently set out in the first defendants’ skeleton argument at page 5, paragraph 7 at 7.1-7.8.

Those orders are: within the Beal claim, the claimant applied for the third party to be granted rights of audience, and that application was dismissed by District Judge Carter on 15 June 2022 as totally without merit; on 20 July 2022, I determined that the entire claim brought by the claimant was totally without merit - that was the data claim; on 20 July 2022, I also dismissed the claimant’s recusal application as totally without merit; on 20 July, I also dismissed the claimant’s application that the third party should be permitted to represent him as being totally without merit; on 21 November 2022, Wall J determined that the claimant’s appeal from the Upper Tribunal was totally without merit (that order was made in the first First-tier Tribunal claim); on 20 February 2023, Eyre J dismissed the third party’s application for permission to appeal the June order as totally without merit - that was in the data claim; on 22 June 2023, the third party’s application for permission to appeal the decision of the Upper Tribunal was refused by May J and again certified it was totally without merit - that was also in the first First-tier Tribunal claim number one; on 6 August 2024, HHJ Sadiq dismissed the claimant’s appellant’s notice, being an application to appeal against an order of District Judge McLlwaine as totally without merit - that was made in what has been described as “the money claim.”

In addition, I have found that Mr Fernie’s application to recuse myself made this week in this hearing is totally without merit.

Thus, there are six totally without merit markings against Mr Joshua Fernie and two against the third party, Mr Fernie, when this hearing began, and now three.

I have been referred to and considered the High Court decision of Sir James Pickering, sitting as a judge of the High Court (Chancery Division) in a case called Crimson Flower Productions Ltd v Glass Slipper Ltd [2020] EWHC 942 (Ch). As set out at paragraphs 26 to 29 of that decision, considering the earlier declarations that the matter was totally without merit, the judge said:

“One novel question which I have had to consider today is whether or not a declaration that an application is totally without merit is conclusive. Is it open for me to go behind any such declaration and consider for myself whether or not the application in question was totally without merit? The applicants say that I should be, at the very least, slow to overturn or ignore declarations by an earlier Court that an application is totally without merit. On the other hand, it is submitted that there are reasons to believe that the declarations have been totally without merit or are unreliable, and, in particular, that at least on one occasion, the Court was misled.”

The judge said at paragraph 27:

“Having considered the matter carefully, it seems to me that I should not go behind an express declaration of an earlier Court that a particular application was totally without merit. It goes further than the suggestion that I should be slow to go behind such orders. I quite simply should not. Such express declarations, it seems to me, should be treated as conclusive…

Indeed, an application to make a litigant subject to a civil restraint order is designed to be a relatively straightforward summary procedure. It is designed ultimately to unclog the Courts from litigation. If I were to go into each of the 11 declarations, it would involve a mini-trial and a rehearing of these matters, which could be extensive. It would involve extensive consideration of evidence and extensive consideration of submissions. It would involve much longer hearings and more detailed evidence and much longer submissions, effectively, reopening matters which have already been heard. It seems to me that not only should I be slow to go behind such findings, but that I quite simply should not do so. An express declaration by an earlier Court of an application being totally without merit is something which, so I hold, a later court hearing application for a CRO simply cannot go behind.

Moreover, I am reinforced indeed by the obvious fact that if an express declaration of being totally without merit is considered by a litigant to be unreliable or wrong, the remedy is to appeal. It is not, on the other hand, appropriate for a litigant to seek, effectively, to reopen the matter on an application which, as I say, is intended to be a straightforward summary procedure designed to unclog rather than clog up the Courts.”

The learned judge, in that case, at paragraphs 21 and 22, also set out the consideration as to who is the offending person when applications have been made; in other words, the courts should consider who is the real party. In the circumstances, having considered the authorities, I agree that I should not go behind an express declaration of an earlier court. The remedy would be to appeal, and this is intended to be a summary procedure.

Apart from the various court orders and judgments which, of themselves, would take too long to set out in full, the written evidence I have is considerable. If I refer simply by reference to the index to the main bundle, which runs to 1,650 pages, the 100 pages or so of witness evidence and 1,300 pages or so of exhibits referred to there. The first defendants submit that the key evidence and the key witness statements are those set out at paragraph 4 of their skeleton argument, and I have read those witness statements and I accept that they are the key evidence.

Although I heard no oral evidence, I gave Mr Fernie a significant amount of court time to put his case and to submit additional documents. He indicated that he wanted to cross-examine the first defendants’ solicitor, Mr Johal. The first defendants opposed that request on the basis to which I have already referred, namely that this hearing is not a trial, CPR 32.6 says that evidence in proceedings other than a trial should be by witness statement, that this is a summary procedure, that Mr Johal’s witness statement is a descriptive document indicating what has happened and that Mr Fernie, given his fixation on fraud, would be opening up other issues than those which the Court should be concentrating on.

Again, as indicated, I agree that this is a summary procedure which would have taken up even more of the Court’s time had I allowed cross-examination or any other oral evidence. I did give Mr Fernie an opportunity to re-read Mr Johal’s statement and to identify to me what he wanted to cross-examine about in the context of my consideration of a CRO, and any points which he could not make by way of submission. His response was that Mr Johal had expressed his view that Mr Fernie was benefiting from his pursuit of the various complaints and claims, but did not say how, and Mr Fernie wanted to ask him how.

Of course, I made it clear that Mr Fernie could rely on that omission in submissions if he considered it relevant rather than getting an elaboration which he might not, in fact, benefit from. However, in any event, I did not consider that the issue of benefit in say financial terms was of any relevance to my consideration of the persistence of abusive or vexatious conduct in the way of repeated claims or applications which were totally without merit.

In terms of submissions, the first defendants submit that Mr Fernie is the driver behind this and other litigation/applications and appeals and, in particular, the eight totally without merit markings, even when he was not a party to them or not a party at the relevant time. Thus, the first defendants say that Mr Fernie has demonstrated the necessary persistence. The gist of those submissions is set out in the skeleton argument at paragraph 65, items 1-4. What is set out there is that Mr Fernie, according to the first defendants, is the controlling mind and primary beneficiary of the proceedings, both these and numerous other proceedings brought by or on behalf of the third party against the defendants. In addition, that there is extensive evidence that he is the real party to them in that they have been brought to vindicate his deeply-held and frequently expressed conspiratorial theories regarding the first defendants and its associated organisations involved in the management of the Burton Waters Estate.

The first defendants submit that the close connection between these proceedings and multiple prior proceedings involving the third party show that this is part of a tapestry of litigation complaints and harassment orchestrated by the third party against the first defendants and its associated organisations and that there is a similarity of approach and arguments.

However, insofar as this litigation is concerned, it is said that it appears to have been prosecuted almost entirely for the purpose of opening yet another front in the third party’s long running series of actions against the first defendants, and that the third party has behaved improperly during the conduct of the litigation on numerous occasions, conducting himself in a manner designed to cause expense, harassment and commercial prejudice.

The first defendants also refer to the evidence in support of that at paragraphs 66 (1)-(9). In brief terms, the first defendants submit that the litigation has been run by Mr Fernie in precisely the same way that he ran a separate application made by Mr Joshua Fernie in the First-tier Tribunal and that Mr Joshua Fernie’s complete disengagement from the process and the litigation is self-evident, and that the First-tier Tribunal produced a 174-page judgment with a number of critical comments as regards Mr Fernie’s conduct. In addition, that the data claim is an extension of that First-tier Tribunal claim with the amended particulars of claim repeating the conspiracy theory, and all the arguments litigated in that earlier claim and even attaching a copy of the claim and various related orders. In addition, that Mr Joshua Fernie was unable to articulate a complaint or submission without the third party’s representation, in stark contrast to Mr Fernie’s own lengthy pleadings, witness statements and communications, the inference being that it is Mr Fernie who has drafted the documents.

They also rely on the repeated requests for the third party to represent Mr Joshua Fernie at various hearings, indicating that he is, in fact, the real party and that Mr Fernie has the propensity to involve himself in all litigation concerning Burton Waters Estate and that that is what is set out by Mr James Hazel in his first witness statement as well as setting out an update regarding Mr Fernie’s involvement in the litigation concerning the Burton Waters Estate.

The first defendants rely on the statements served in advance of the hearing on 13 June, which, it says, according to the metadata, were drafted by Mr Fernie. Similarly, the unsigned witness statement dated 5 February 2020 and that it was Mr Fernie who produced and served Mr Joshua Fernie’s skeleton argument on 31 January. Further, that he served the particulars of claim, and that Mr Fernie has sent dozens of communications from his email address to the defendants in respect of the litigation, the data breach and generally, and that it is Mr Fernie who has liaised directly with the ICO on multiple occasions. They also rely on the updates and his involvement with the Burton Waters Independent Tenants Association.

I agree with the first defendants’ submissions set out above that Mr Fernie is the driver behind the totally without merit applications, in particular, and that persistence is made out as far as he is concerned. I accept the first defendants’ submissions as to the evidence in support, and I also refer to the facts that: in the case of this hearing, Mr Fernie conceded on more than one occasion that he had assisted his son; that he took full responsibility; and that he accepted full liability. His only argument against the third-party costs order being made was his allegation of the VAT conspiracy, that is, a conspiracy to commit fraud by claiming VAT on legal costs where that VAT was recoverable and, therefore, should not be claimed.

Mr Joshua Fernie has clearly not, and as I find has not been the main or even now, any driver behind the litigation either in the data claim or the Beals Development claim, which is currently stayed, or in the First-tier Tribunal claim-the service charge claim. It is Mr Freni’s action that has led to the eight totally without merit findings. On this point, I further find that in the course of the hearing in front of me, it is significant Mr Fernie was happy to waive legal professional privilege, apparently on behalf of others which indicates his role. I also refer to paragraph 76 of my substantive judgment in this claim. I note that in the main bundle at page 471, Mr Fernie, in correspondence, identifies himself not only as “a resident of Burton Waters” but as “a leaseholder.” He has, elsewhere, in denying arguments, particularly to me, made it clear that he is not a leaseholder and that it is only his son, Mr Joshua Fernie, who is. However, nonetheless, he said that he was a leaseholder in that particular document. It is also apparent, for example, looking at page 1 in the supplementary bundle, that it was Mr Fernie who was involved, albeit with others, as the main communicator with Mr Deacon of counsel when advice was sought in respect to alleged libel claims.

The first defendants submit that Mr Fernie’s motivation is clear from the conspiracy report document, which is at page 650 in the supplementary bundle. They refer to the complaints made therein and submit that his motivation has been to change the management at Burton Waters and to oust the Castells. Mr Fernie denies this, saying that he is only trying to right wrongs when he discovers them and to offer assistance to those who seek it from him. In particular, he has repeated that he is only seeking to help his son. I find, on the contrary, that he is obsessed with his pursuit of allegations of wrongdoing and misconduct on the part of the owners and managers and their legal advisors and other agencies. I do not know what benefit he hopes to achieve, and I do not find that that matters.

However, what I do find is that he has progressed throughout the course of these proceedings and the related proceedings from one conspiracy theory to another. I consider that he will not stop unless he is restrained by the Court. I note that when he was making his submissions to me in particular, he referred to the fact that he is gathering information from all the defendants in the moorings cases, the First and Second-tier Tribunal cases, from Mr Connell, himself, his son and Ms Lynn and that he has been liaising with them and creating a report to go to a group of MPs. He referred to Edward Leigh, who would bring it and put it before a relevant body and that he has involved Members of Parliament, newspapers, Action Fraud and the Solicitors Regulation Authority. He says that he is awaiting the transcript of a decision of District Judge Anwar before contacting the Bar Standards Board and that these matters are all already in process.

Mr Fernie himself absolutely refutes the first defendants’ position. He categorically denies that he has this motivation or that he is making unfounded allegations. I dealt with some of these matters at some length in what I have referred to as my “recusal judgment” and, in particular, the essential thrust of Mr Fernie’s allegation of apparent bias on my part was that I had allowed the first defendants to make allegations against him, namely, that he was part of a campaign or conspiracy against the first defendants and their associates, in particular, the Costall family, that he had an agenda in the litigation and that he was abusing the court process by using that litigation to pursue his own ambition of removing the Costall family and their associated companies from the Burton Water Estate.

As I set out there, I accepted that those allegations had been made by the first defendants. What Mr Fernie was saying was that even by listening to them, I was showing apparent bias, such is the extent to which he refutes them. It is important, as I find, to annexe hereto and read the “conspiracy report” which is at page 650 in the supplementary bundle and the list of complaints at page 647 together with page 653, paragraph 2.

Mr Fernie, who compiled this report and indicated to me he did so at the request of Mr Deacon of Counsel, sets out that the common desire of the conspirators (and he has named those conspirators as including Mr Richard Beal, Richard Costall, James Hazel, Andrew Holt, Wilkin Chapman, Beal Developments, Burton Waters Management, Burton Waters Moorings, Banks Long, Slateford Solicitors and the residents group) was to prevent any challenges to the landlord and the management company and the Moorings company and any scrutiny of the moorings fees, service charges, costs incurred within Burton Waters Development and its workings. In addition, he alleges that their desire was to stop any independent tenants’ association which may challenge Mr Costall’s refusal to allow the leaseholders to own and manage the site themselves and to contain the control of Burton Waters Management by discrediting, harassing and intimidating the victims into submission. The report contends that:

“When the conspirators have been challenged by the victims, they have refused to answer the questions raised by Mr Fernie and Mr Joshua Fernie and the Burton Waters Independent Tenants Association.”

Those are his words, and they support my finding in respect of his motivation. I should also refer to my recusal judgment at paragraphs 78 and 79. Also, at paragraphs 135 to 143.

In the circumstances, I agree and I find that the evidence that I have referred to briefly here supports the submission at paragraph 71 of the defendants’ skeleton. Paragraph 71 of the defendants’ skeleton says that:

“The third party is fixated by an irrational belief that the defendants and those associated with them are conspiring against him and his allies. He has persistently refused to accept the Court’s assessment that the underlying cases are hopeless, and with such refusal, absorbed an enormous quantity of court resources.”

I also note that Mr Fernie has alleged corruption in the planning process for Burton Waters. That is referred to in the main bundle at page 457 in the correspondence. I also agree that the first defendants are correct in their submission, and I find that Mr Fernie will not take “no” for an answer and, therefore, will continue to bring claims and make applications. He considers the decisions of some of the judges who have already made decisions I these cases are wrong. Again, he told me when he was making his submissions that he considered that there had been no error on the part of his son in respect of the service charges demands with reference to the correct identity of the landlord, but said that HHJ Sadiq was in error. He asked how May J could ignore the question of the VAT and said that the decision of Mr Martin Rogers KC is inconsistent. He said that the judges were clearly not aware of the law and thought that Mr Martin Rogers KC was wrong, and he said that he did not know the law and that none of those judges knew the law either, and that is what had led them into error.

He is determined to pursue the issue of the alleged VAT fraud, and I have already referred to the steps he is currently taking to bring those matters to the attention of several different authorities. He has already indicated that he will seek to appeal my decision in this case, whatever it is. He has indicated that he will seek further judicial review. The history indicates, and I find, that Mr Fernie moves from one allegation to another and pursues it relentlessly. I refer to the conspiracy document, the ongoing conviction he has that the service charge is subsiding the moorings servicing, the issue of the VAT fraud, and he has now landed upon the need to identify the name of the landlord to validate a service charge.

He told me in his submissions that he has made persistent complaints to professional and regulatory bodies, and that is revealed in the documents I have referred to, and also by reference to the supplementary bundle to the fact that he will not take “no” for an answer in his repeated appeals and applications for a judicial review and his references to being “guided” to seek judicial review. He makes allegations again about people misleading the authorities, and he considers that he is right to do so. Even when findings are made against him, he does not accept that. He has applied for an adjournment in the course of this hearing and again asked me to recuse myself and again applied for permission to appeal.

I agree, of course, that there may be cases where in the exercise of my discretion, I should not make a CRO, even where persistence is shown if, for example, a party honestly believes, for example, in some legal advice which, in fact, is false. However, I agree with the first defendants’ submission in this case that is not the position and that Mr Fernie is not acting in good faith.

The first defendants submit that I can and should consider the findings of the First-tier Tribunal and I agree. Mr Fernie’s conduct was sufficiently unreasonable for the First-tier Tribunal to take the step of ordering that costs should be paid. That is by no means normal within the tribunal. The salient points and comments from the First-tier Tribunal decision in September 2022 are helpfully summarised in the defendants’ skeleton argument at paragraphs 36 to 41 and, again, at paragraphs 42 to 45. I refer to the main bundle at page 680 where the reasons of the Tribunal are set out.

References made to the counter-offer apparently made by Mr Joshua Fernie which indicates, as I find, exactly what Mr Fernie’s motivation is: first of all, that there should be no service charge to be paid for some years and that the legal costs should be paid with no costs being recovered by the management or landlord as a service cost charge; any service charges demanded should be refunded; an administration fee is not charged and that there is a refund or credit; that various named people should resign or terminate their association with the management of the site; that the management company be entirely altered in its setup so that every leaseholder on the site becomes a shareholding member of the management company; that Banks Long employed then as management agents be terminated; a suitable replacement be approved by all leaseholders; and additional terms were sought as a remedy to “overwhelming concerns, irregularities and believed misappropriation of funds and mismanagement thereof”.

The Tribunal considered that the counter offer was unreasonable. They determined that it was unreasonable for the Fernies to have an ulterior motive in bringing the application in respect of the service charges. They said that the service charges case, as presented by the Fernies, contained numerous allegations of fraud and misappropriation of funds against persons involved in the management of the site. The Tribunal determined that there was no accepted supporting evidence in relation to those allegations. The Tribunal set out that those were unwarranted and unsubstantiated allegations made in writing by or on behalf of Mr Joshua Fernie and that the Fernies had been responsible for emailing Ms Lester, saying that she should be suspended and that they had sent an email, also at Banks Long, threatening to bring libel and defamation proceedings.

In addition, the Tribunal found that the making of the suggestions and threats were vexatious and had no place in a service charges case. The Tribunal determined that there was no contempt of the Tribunal and it was wrong of Mr Joshua Fernie to keep repeating that there was a contempt of the Tribunal in this vexatious manner, attempting to put pressure on the respondents and the solicitor acting on their behalf, and the Tribunal, having considered all the factors, determined that on the balance of probability, it was satisfied that Mr Joshua Fernie was not in Vietnam on the day that he said he was and that as a result, Mr Darren Fernie misled Judge Tonge in a very serious way. The Tribunal said that misleading the Tribunal could only have occurred either by Mr Darren Fernie deliberately misleading the Tribunal or by Mr Joshua Fernie deliberately misleading Mr Darren Fernie who then misled the Tribunal.

In contrast, as the Tribunal also set out at paragraph 23, the respondents in that case had made an offer to bring the matter to an end. Of course, as everybody now knows, the net result of that very lengthy hearing and the amounts of costs expended was that the Fernies recovered the sum of £10.44. I conclude that the findings of the Tribunal, which I have summarised only briefly, reinforce the conclusion that I have now reached, which is that CROs are necessary and, moreover, pursuant to the authorities that I have already referred to, such CROs should extend to tribunal proceedings.

Mr Fernie’s submissions are set out in his witness statement, and he has made lengthy oral submissions to me in the course of this hearing. He has previously described himself as “a troubleshooter,” but he tells me that he has only been concerned to assist his son. He denies that there is any benefit to him in these actions or claims and, in particular, denies that these actions could result in the ousting of Mr Costall. He denies any ulterior motive or agenda. He denies that he has not been acting in good faith. He submits that it is important that I should consider matters from the beginning when Mr Joshua Fernie bought the leasehold at Burton Waters.

What he said to me, in particular, was that when Mr Joshua Fernie bought the property it became apparent that there were difficulties in that they had believed the Beals and Wilkin Chapman, the property having been purchased, was purchased on the basis that Mr Joshua Fernie would become a member of the management committee as he had been advised that it was essential. He was asked to prepare the report for Mr Deacon, which included the promises about being made a member of the management company, that many requests were made to establish different various issues; issues that were raised with the management company about defects at the Burton Waters Estate and features such as water features and security and that they never got any answers.

He said that mediation was requested to achieve a resolution and that there were all sorts of issues with the properties. He told me that complaints had been upheld by other agencies. He repeated the query as to why the moorings were a separate company. They were doing service and security patrols, landscaping and so on. He said that Mr Costall had misled the planning officers which was in his report, and he said there were ongoing challenges to these issues as they came up. He said that he did not consider that any claims had been brought which were not on the basis of either allegations which were well-founded or advice received which showed that there was a proper prospect of success. He said that, in effect, he had no choice but to go to the Tribunal, that they were told, ultimately, to go to the Tribunal, but whilst these matters did not affect him, they did affect his son. Given that he was semi-retired at the time, he assisted his son and that he had become some form of spokesman and had been helping people to get matters off the ground.

He said that the First-tier Tribunal proceedings were brought with the benefit of proper advice and he said that it came to a point where they were being stonewalled and sometimes, he said, when that was the position and when he had the benefit of legal advice from Ms Lovegrove, he did what anybody would do and was forced into litigation. He referred to various points, some of which I have already touched on. He said that he did not want the leaseholders to be paying costs, and that was why he, or Mr Joshua Fernie, had not accepted the offer that was made.

He said he was a member of the Burton Waters Independent Tenants Association and they had come to him concerned about the original proceedings, that the committee members of that association had received an onslaught of letters and that there were various claims relating to defamation and slander and that they all felt that they were being harassed and vilified and he still had not had an answer right until the very last minute in the Beal case or in the First-tier Tribunal case as to who was the landlord.

He set out for me the details of the alleged VAT fraud. That was right at the beginning when he was making the application for me to adjourn. What he said was that there are two proven instances of VAT being fraudulently claimed, and it was being “reviewed,” and it was his view that it was more likely that a fraud had been committed. He told me that District Judge Anwar indicated that the court had been misled and there was a suspicion that Mr Johal and his firm are claiming VAT when they are not entitled to it.

He went on to say in respect of the matters generally that apart from the factors identified, when he told me about the judges who he considers to have been in error that it is necessary to look behind the veil and see the truth of the matters. The suspicion was that VAT was being claimed because in an earlier judgment, Mr Connell, who was the secretary of the Burton Waters Independent Tenants Association, applied for the recognition that that application had been withdrawn before Judge Tonge, who said that Mr Connell was at fault. He said that, in particular, given that he says that there have been 33 costs schedules which are in error and the only explanation given is that they are in error, clearly, there is “more to it and there was something else going on”.

He said that proceedings had been a last resort and he had been pushed to it, in particular, because the various defendants “hide the truth.” He considered that in refusing the appeal, Leech J indicated that there was obviously “something going on” and it was necessary to look at the substance of what was “really going on.” He said that all he had done in the moorings case was to provide details about the First-tier Tribunal information, and he said that it was only his son who had benefited or could benefit from the various points of the litigation. He said that everything begins with the fact that it is not possible to trust the defendants’ solicitors or their counsel.

He said that he was raising the VAT issue to try and get the costs judgment overturned. He also indicated that it is apparent that he now has an issue with the enforceability of service charges based on whether or not the correct landlord is named.

I consider it is likely that if unrestrained, Mr Fernie will continue to challenge the service charges afresh. His submissions are primarily based on allegations of fraud, conspiracy and wrongdoing, and it is, as I find, apparent that those allegations began some time ago, albeit framed in different ways. However, I note that in his statement of case, which was one of the documents that he sent to me this week dated 5 April 2024 he says:

“The first defendant seeks a general stay for all defendant parties in the case pending the outcome of the application in the First-Tier Tribunal and the application by the claimant to vary or amend the order for costs as it now admits VAT was wrongly claimed, to set aside the order costs order of Deputy District Judge Williams against the first defendant and to set aside any other costs statements as awarded and filed to date, and to consider the claimant’s and its acting legal team’s alleged dishonesty and/or reckless conduct and/or wilful misconduct to mislead the Courts and the paying parties as to the recovery of VAT, and whether such applications should be considered contempt.”

Mr Fernie said that there should be no further or additional costs incurred and he went on to say, in respect of his reference to the CPR rules, in particular, Rule 44, that it was for the court to consider whether there were any grounds for contempt of court against the claimant and its acting legal representatives by its own volition; in other words, this matter is ongoing and Mr Fernie’s approach has not changed.

Despite Mr Fernie’s submissions, I do not consider that it is likely that the judges in front of whom he has raised the allegations of VAT fraud have considered that they or the Court were being deliberately misled or that there was any inference or fraud or dishonesty in the evidence submitted. It is unlikely, as I find, that if they had done so, they would have nonetheless gone on to make orders ignoring such an inference. I accept the first defendants’ evidence that the VAT issue is perhaps more complex than simply recovery of the usual 20%, and I was referred, as an exhibit to the statement of Mr Hazel, I think it was, to a document from chartered accountants, Forrester Boyd, setting out that the basis upon which VAT was recoverable or payable on previous VAT returns so that the amount of VAT not recoverable is a variable percentage of each year and, for example, is sometimes 74.65% of the VAT.

I also accept that those errors, where they have been made, have been corrected and they have been corrected by those who made the errors. I further accept that the issue of the recoverability of VAT will be dealt with at any detailed assessment of costs and that any amount of VAT included in an interim payment on account of costs will also be accounted for. I refer to that in my recusal judgment at paragraph 7 and it is also referred to in the Upper Tribunal decision of 13 April 2023 at paragraph 14, which says that:

“Mr Fernie’s challenge to the sum awarded in costs and his complaints about the absence of detailed breakdowns of the costs claimed do not provide any arguable ground of appeal, as he will have the opportunity to challenge individual elements when the costs are the subject of the detailed assessments. In proceedings which should never have been brought, the fact that the respondents may not have been successful in their procedural application does not prevent the First-tier Tribunal from ordering payment of their costs to the proceedings as a whole on an indemnity basis. The sum ordered to be paid on account is not exceptional as a proportion of the total sum claimed to have been incurred.”

As far as Mr Joshua Fernie is concerned, he attended the substantive hearing in the data claim in June 2022. I set out the details of Mr Joshua Fernie’s involvement at paragraphs 28 and 29 to 33 of my recusal judgment. I also refer to the substantive judgment at paragraphs 77 and 78 and the recusal judgment at paragraph 76. In the circumstances, without repeating those details, I find that whilst Mr Joshua Fernie has disengaged from this litigation, he has allowed his name and status as a leaseholder to be used in the furtherance of Mr Fernie’s actions in respect of those in the ownership and management of Burton Waters. He has been willing to sign documents, including statements of truth, thus enabling court and tribunal proceedings which have been found on at least six occasions to be totally without merit, to commence or continue.

There is no evidence or witness statement from him to indicate that he will not continue to do so. Mr Fernie continues to refer to the background of ongoing investigations and legal actions in respect of costs. It is necessary therefore, I find, to make Mr Joshua Fernie subject to a CRO in order to prevent that situation from continuing. There has been a point at which Mr Joshua Fernie said that Mr Fernie no longer had any right to act for him and he had revoked the power of attorney, and I note that Mr Fernie says there was a period of time when Mr Joshua Fernie and he were not talking. However, I have no evidence about this except the evidence that Mr Joshua Fernie’s name has been used in the past to bring proceedings which have been driven by Mr Darren Fernie.

Mr Fernie and Mr Joshua Fernie have not paid any of the costs that they have been ordered to, whether with or without the VAT which they dispute. The defendants have corrected VAT errors that I have referred to, and still no costs have been paid. The interim bill in the First-tier Tribunal now is, I think, £75,000, and I have ordered, as I have referred to, that they are jointly and severally liable to pay £33,000 in the data claim. Huge costs have been incurred across the litigation of the claims generally, and in the moorings case, in particular.

Mr Fernie told me in his submissions that he has not paid any costs at all and that he cannot afford to pay any costs. He says that his income is limited to £1,300 a month, that he is subject to a statutory demand and that there is a bankruptcy hearing on 10 February 2025. He said that, in those circumstances, there was no prospect of him paying any costs. Of course, he will also qualify for Help with Fees, and I referred to that in relation to an earlier decision. He can bring claims and applications for free. The defendants, on the other hand, have to pay.

Mr Fernie told me that he had alerted Mr Connell to the issue of VAT. In the moorings hearings, Mr Boyd told me that Mr Fernie was “a friend and advisor.” The defendants in the moorings claims identified some of the documents that were used or created by Mr Fernie. Mr Fernie told me about the ongoing VAT allegations and investigation. Therefore, he intends to pursue those allegations and appeal at least my decisions in this case. He continues to challenge attempts to obtain charging orders against the property he lives in, and others in these failed claims are facing bankruptcy and the loss of their homes.

As set out in the Insight newsletter from Burton Waters Management Ltd, again, which Mr Fernie supplied to me for December 2024, these legal costs are incurred by the management company and recovered from the other leaseholders on the Burton Waters Estate through increased service charges. In other words, other people are paying. Since I am satisfied that Mr Fernie does not intend to cease his complaints and claims or to stop making those in the name of his son, and continues to do so with impunity, these factors are important and significant in leading to my conclusion that it is necessary to make CROs. This is exactly the sort of situation which such orders are intended to address.

Those are the reasons I have for making CROs against Mr Fernie and Mr Joshua Fernie. I have concluded that a General CRO is called for in both Mr Fernie’s and Mr Joshua Fernie’s cases. It is necessary and proportionate that the court system be protected from the abuse which they have demonstrated and threatened and continue to threaten by imposing the restraint which is reflected in a General CRO in terms which are to be drawn up. I conclude that those terms must be per as Form 19B, the General Civil Restraint Order, but with the addition of paragraphs to reflect that those orders extend to cover the tribunal, too, pursuant to the court’s inherent jurisdiction.

I am asked on behalf of the first defendants to extend the term to three years. Given that I am making a General CRO, whilst I have given this point careful thought, it seems to me appropriate at this stage, since the court is required to act incrementally, to limit them to two years. A renewed application can always be made if it is felt necessary at that time.

At paragraphs 80 and 81 of the first defendants’ skeleton argument, there is reference to the further directions needed in the Beal Developments case, and I will hear what Mr Hardman or Mr Johal have to say about that.