Ozer Properties Ltd and another v Ghaydi

Rent Act 1977 — Possession action — Defendant’s plea of res judicata — Defendant was in occupation of a room in a rooming house consisting of more than 20 rooms — It had been owned by a succession of landlords and rents had been collected by a succession of persons, some of them authorised agents, but at least one of them a fraudulent person who deceived the present defendant — This person took a deposit of £100 and promised a rent book, but then disappeared — In fact the defendant never had a tenancy and, although she did not realise it, was a trespasser — Subsequently the defendant was locked out of her room but obtained an interim injunction ordering the then landlords (not the present plaintiffs) to allow her to return — In subsequent proceedings as plaintiff against these landlords the present defendant obtained a judgment ‘that the plaintiff do recover against the defendant damages to be assessed and costs’ — This judgment and a subsequent assessment of damages were given in default of service of defence by these landlords — These facts gave rise to the issue in the present appeal by the defendant from the judgment of Judge Hayman granting possession to the present landlords — It was contended that the judgment which the defendant had obtained in the previous proceedings for damages to be assessed created a situation of res judicata, determining in her favour that she was a tenant and, it was suggested, that she had a tenancy protected by the Rent Act — Held, rejecting this submission, that in order for a judgment in default to create such a situation there must be an issue which, when formulated, necessarily and with complete precision determined the rights of the parties — It was not, however, necessary in order to support the judgment to postulate that the present defendant had a tenancy of any kind — She was entitled to damages for eviction although she was not in fact a tenant and had not the benefit of the Rent Act — Appeal dismissed No cases are referred to in this report. This was an appeal by Miss Zara Ghaydi from a decision of Judge Hayman at Bloomsbury County Court granting to the plaintiffs (the present respondents), Ozer Properties Ltd and Esther Halpern, possession of room 17 at 93-95 Moscow Road, London W2. The appellant, Miss Zara Ghaydi, did not attend and was not represented; M G Warwick (instructed by Grangewoods) represented the respondents. Giving the court’s ruling on an application for adjournment, SIR JOHN DONALDSON MR said: This appeal has been listed for hearing today. As I have already indicated, we have received a medical certificate which does not say that Miss Ghaydi is unable to attend — it says that she is suffering from depression and a rheumatological complaint — and a letter from a social worker who says that her depression is made worse by the stress of the court case. It does not seem to me that an adjournment would relieve her depression — it would tend to make it worse. This application for an adjournment has been opposed by the respondents. Undoubtedly it does cause great hardship to the respondents if the appeal is adjourned. In those circumstances our view is that we ought to deal with the matter. We have had the advantage of reading it. I will ask Stocker LJ to deliver the first judgment. Giving judgment, STOCKER LJ said: This is an appeal from a judgment of His Honour Judge Hayman given on December 11 1986 whereby it was ordered that the plaintiffs have possession of room 17 in a building called 93-95 Moscow Road, London W2. The appeal by the appellant is that that order should be set aside. There is also a respondents’ notice justifying the judgment on grounds other than those which appear in it. The short facts are these. The premises in question are a rooming house which contained something in excess of 20 rooms, each having some form of cooking facilities but all sharing bathroom accommodation. Room 17 was occupied by the appellant, Miss Zara Ghaydi. There was a parallel proceedings heard at the same time before the same judge in respect of a claim for possession of room 23 occupied by a man called Sanford. This building was, from early 1980, owned by a company called Gate Investments Ltd. That was a company registered in the Channel Islands, the controlling shareholder apparently being a Libyan resident in Libya. It follows therefore that somebody had to carry on the day-to-day administration of the building and the various occupied rooms in it. That function was carried on by a man called Shahumi until about 1981, when it seems that he was not accounting properly for the rent he collected or producing to anybody the necessary books. Accordingly, on May 12 1981, a letter was written to him by the owners’ solicitors telling him to hand over all books of account and informing him that managing agents would be appointed to take over from him. Until the events of 1984 occurred that was the last contact which it seems Shahumi had with those premises at all. It is quite clear that he ceased to have any authority in the building or to be the landlords’ agent from that time onwards. A letter in May 1981 was sent or handed to all the tenants in the various rooms in the premises in effect informing them of the fact that Shahumi was no longer authorised to collect the rents. The owners then had to make some arrangements for the administration of the building. As an interim matter they appointed their solicitors to do so. In due course two successive firms of estate agents took over the management of the premises and were responsible for the collection of rent. Over that period also one of those managing agents was concerned with trying to negotiate a sale of the freehold. A sale of the freehold was in fact arranged and the contract of sale was entered into on May 25 1984, that being a contract for sale of the premises to a firm called Selous Investments Ltd. By that same contract Selous Investments were authorised by the vendors to collect the rents in the meantime pending completion. In fact there never was a completion to Selous Investments Ltd. The sale was completed on February 12 1985 to the plaintiffs. Though it would seem that it does not bear on the issues to be decided in this court, there was a trust deed regarding the equity which would be resultant upon the contract of sale itself. It is now necessary to deal with the letting to Miss Ghaydi and the circumstances in which this claim for possession comes about. On March 21 1984, according to her affidavit — nearly three years after the man Shahumi ceased to have anything to do with the premises — she was in a cafe with a friend of hers, a Miss Morfid. They were discussing between themselves the difficulties of obtaining accommodation in London. It seems that Shahumi overheard their conversation and indicated that he could perhaps provide rooms for them. He then took them to 93 Moscow Road, having a key to the door, and showed them three rooms. Miss Ghaydi took one of the rooms, which is the room the subject of this claim, no 17, and her friend Miss Morfid took another room. They paid a deposit of £100, rent for the rooms being £20 per week for each room. They were given to understand by this man, who was apparently Shahumi, that he92 would receipt a rent book for them in due course. In fact he never did so and they never saw him again. They each moved into possession on March 22 1984. It may have some bearing on the subsequent events that the defendant in the parallel action, Mr Sanford, had an almost exactly similar experience. He was visiting a friend in the premises of 93 Moscow Road and saw the man who purported to be Shahumi, who let to him three rooms in the premises, one for Mr Sanford himself and two for two of his friends. He also took a deposit of £100. Mr Sanford went out and purchased three rent books and had the appropriate copy keys made, having been told by Shahumi that he would receipt the rent books when they were produced. In fact when he returned 20 minutes later Shahumi had disappeared and was never seen again. Thus the events which have been recited seem to have been a common experience for both the two defendants to the action. I might say at this point that it seems to me perfectly clear that the appellant, and indeed the other persons involved as well, had not got a tenancy at all. Shahumi had no authority whatever to let rooms to them or to take any sums by way of deposit or for any other purpose from them. Accordingly Miss Ghaydi was, though she did not realise it, in my view undoubtedly a trespasser from that moment onwards. It is now necessary to recite shortly the events which gave rise to an action in which she herself was plaintiff. They arise out of a dispossession which occurred in June 1984. On June 12 Miss Ghaydi returned to the premises in the morning with her friend, having been out for a short visit elsewhere, to find that her keys did not fit the locks. She was confronted by a man called Edwards who told her that in future she would have to ring at the front door in order to gain admittance. That happened for a day or two. On June 15, however, when she returned to the premises, she was confronted, without the door even being opened, we understand, by this man Edwards, who told her that ‘they were out’. He refused her admittance and refused her any access to her room where all her personal belongings were stored. She took action very promptly and applied to the court for an injunction. On June 15, the very day of her dispossession, His Honour Judge Curtis-Raleigh made an interim injunction in these terms. He ordered that the defendants, who were then Selous Investments Ltd, should: 1. Allow the Plaintiff forthwith to enter and occupy Room 17, 93 Moscow Road, London W2. 2. Should not interfere in any way with the Plaintiff’s quiet enjoyment thereof. 3. Should give the Plaintiff forthwith a key to the said premises. That was an interim injunction. A return date for an inter partes hearing was fixed for June 21. On June 21 the same judge dealt with the matter. Undertakings were given in these terms: each of the defendants (ie Selous Investments and Mr Edwards) undertook ‘not to interfere in any way with the plaintiff’s quiet enjoyment of her premises at 93 Moscow Road, London W2,’ that is room 17. Having made that order, he adjourned generally Miss Ghaydi’s action with liberty to restore. Miss Ghaydi had undertaken to issue formal proceedings by Monday June 18. She did so. In accordance with that undertaking particulars of claim were filed on her behalf. It is necessary, in the light of the issue which arises on this appeal, to see the form in which that claim was presented. Having set out the facts relating to her alleged tenancy and to the circumstances in which she was dispossessed, she claimed: ‘A Declaration that she holds the premises at Room 17 as a protected tenant under the Rent Act 1977’. ‘An injunction’ in the terms which had already been granted and in respect of which an undertaking was given. She also claimed damages. On June 21, as has been recited, Judge Curtis-Raleigh heard the matter inter partes, when the undertakings were given to which I have referred. Next, on August 16, the registrar gave orders for the hearing of the action, ordered that it should be consolidated with the similar actions by other people and ordered defences to be filed within 28 days. In fact the defendants to that action, Selous Investments and Edwards, did not comply with that order, and no defences were in fact ever filed. On February 12, as has already been indicated, there was a conveyance of the premises to the present plaintiffs. On May 7 1985 the present plaintiffs commenced the action with which this appeal is concerned. The defendants not having filed any defence in accordance with the orders made by the registrar, on May 24 an order was made that they should file their defences within seven days or be disbarred from defending. The solicitors then acting for them applied to come off the record. A date was fixed for an assessment of damages, and on July 24 judgment was given in favour of Miss Ghaydi in her action. It is important to look at the precise terms of that judgment. It is dated July 24 1985 and reads: IT IS ADJUDGED that the plaintiff do recover against the defendant damages to be assessed and costs. In fact there was a hearing in respect of the assessment of damages on August 12 1985 before a different judge, when His Honour Judge Honig assessed the damages at the sum of £525. The defendants did not attend either on the assessment of damages or on the occasion when formal judgment was entered in favour of Miss Ghaydi. Those facts give rise to the issue which arises on this appeal. It was contended before the learned judge that the judgment entered in default of service of the defence created a situation of res judicata on the issue as to whether or not Miss Ghaydi was a tenant protected by the Rent Acts. Before the learned judge extensive argument took place, most of which was concerned with the proposition that the present plaintiffs, who were the people to whom in fact the premises had been conveyed, were not privies to Selous Investments and Edwards, who were the defendants in Miss Ghaydi’s action and against whom the judgment in default had been given. For my part I find it unnecessary to consider that aspect of the matter any further, for it seems to me plain from the terms of the order itself which I have just recited that no case of res judicata could arise. In order for a judgment in default to create such a situation there must be, as it seems to me, an issue which, when formulated, necessarily and with complete precision determined the rights of the parties. In my view it is really not possible to say that that judgment, which was a judgment for damages to be assessed, in any way determines the issue as to whether or not Miss Ghaydi was a tenant and whether or not that tenancy had the protection of the Rent Act 1977. The judgment was a judgment for damages to be assessed, and those damages were in fact assessed. It is not necessary in order to support the judgment to postulate that Miss Ghaydi had a tenancy of any kind. She would have been entitled to damages having regard to the events of her eviction even if she had not been a tenant or had not had the benefit of the Rent Acts. Accordingly, in my view the result of the hearing before the learned judge, His Honour Judge Hayman, could be fully justified on the basis that there was no res judicata in this case at all without embarking upon the rather complicated investigation as to whether or not the plaintiffs in this action were privies to the judgment given against Selous Investments and Edwards. Accordingly, although not raised specifically in her notice of appeal, it seems to me manifest for the reasons that I have already given that Miss Ghaydi was not in fact a tenant, she never had a tenancy and was a trespasser at all times. Accordingly, subject to the plea of res judicata, the judgment to the effect that the plaintiffs should have an order for possession was really incontrovertible. For the reasons which I have shortly endeavoured to give it seems to me that this is not a case in which a plea of res judicata could succeed either. Indeed that is the matter raised by the respondents’ notice in this appeal. One is bound to feel a great deal of sympathy for Miss Ghaydi. She was an entirely innocent dupe of a fraudulent person, who obtained from her a sum of money which I do not doubt she could ill afford to pay. She has been the victim of a mean and dishonest trick. Nobody could blame her in the least for that, and anybody would have the greatest sympathy for her. However, we have gone into this matter with great care, and accordingly, although she is not present to put forward any arguments in support of her appeal, for my part I have not the slightest doubt that her appeal was bound to fail. Accordingly and for these reasons I would dismiss this appeal. SIR JOHN DONALDSON agreed and did not add anything. The appeal was dismissed with costs, costs up until June 19 1987 not to be enforced without the leave of the court.