CH-2024-000151 - [2025] EWHC 2604 (Ch)

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.