Roseoak Investments Ltd & Anor v Network Rail Infrastructure Ltd & Anor

A recipient who has unsuccessfully challenged a statutory demand cannot ordinarily reopen the same issues through separate proceedings, absent a material change of circumstances. Proceedings brought for that purpose may constitute an abuse of process, including where brought through a closely connected company. A competing business carried on by a neighbouring tenant is not, without more, a derogation from grant. An alleged oral assurance concerning land must comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. A landlord is not liable for activities on adjoining premises without evidence that it caused or authorised them, and contractual provisions may exclude an implied protection.

Roseoak Investments Ltd held two leases of premises adjoining land let by Network Rail Infrastructure Ltd. Andrew Bacon was a property manager. After a statutory demand against Mr Davey as guarantor was unsuccessfully challenged before a deputy district judge, and permission to appeal was refused by Lewison J, Mr Davey commenced fresh proceedings in his own name and Roseoak’s name against Network and Mr Bacon.

Mr Davey obtained an irregular default judgment for more than £1.5 million. The application concerned setting that judgment aside, striking out the proceedings, and dismissing claims based on derogation from grant, quiet enjoyment, nuisance, misrepresentation, fraud and human rights. The central issues were whether the proceedings were abusive and whether any pleaded claim had a sustainable legal basis.

1. Abuse of process. The default judgment was set aside. The proceedings sought to reopen matters already determined on the statutory-demand and permission applications, without a genuine change of circumstances. The proceedings were therefore an abuse of process. The same conclusion applied to Roseoak, whose connection with Mr Davey was sufficiently close for its claim to be treated as a collateral attempt to reopen those issues.
2. Claims by Mr Davey. Mr Davey had no direct interest in the leased land. His alleged financial loss mirrored Roseoak’s loss and disclosed no recognisable cause of action, including because of the principle against reflective loss. The unsupported suggestion that Mr Bacon was involved in fraud should never have been made.
3. Derogation from grant. Carrying on or permitting a competing business was not a derogation from grant. The alleged oral assurance that no cafeteria business would operate next door would contravene section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and was void. Oceanic Village Ltd v Shirayama Shokusan Co Ltd and others, reported at [2001] L&TR 35, was distinguished because clause 4.2.6 of Roseoak’s leases negated any implied exclusive-business protection.
4. Landlord liability. There was no evidence that Network caused or authorised the damage, parking, sewage, oil, rubbish or criminal activities complained of. The leases permitted Network’s relevant parking activities. The circumstances were materially different from Chartered Trust v Davis [1998] 76 P&CR 396, where the landlord possessed detailed management and rule-making powers. The claims for quiet enjoyment and nuisance therefore failed.
5. The Points of Claim were struck out and judgment was entered for both defendants, dismissing all claims. The alleged retained deposit did not prevent the bankruptcy process, given the substantial rent debt previously identified.

The judgment describes earlier decisions concerning the statutory demand: the deputy district judge refused to set it aside on 6 May 2008, and Lewison J refused permission to appeal on 17 February 2009. The present High Court proceedings were struck out, the default judgment was set aside, and judgment was entered for the defendants.