Moor J. Enforcement proceedings following W’s failure to transfer a ski chalet to H. W previously committed to three months’ imprisonment but has not returned to the UK. H awarded £2.3m on account of lost rental profit and W’s cross application for enforcement of a lump sum dismissed, the court declaring it satisfied as deducted from the total owed to H.

Background

By order of Mostyn J on 12 June 2019, the court found H was the sole beneficial owner of two luxury properties in France, Chalet Pearl, a ski lodge in Courchevel, and Villa Pearl, in St Tropez. H was required to discharge the mortgage on both properties, premised on receiving the rental income from both premises.

In December 2022, H applied for enforcement of the order and for an account of rental monies received by W since the 2019 order. In January 2023, W cross-applied to enforce an unpaid lump sum of £709,707, along with an application for the appointment of an expert to assess Capital Gains Tax payable upon transfer of the property.

The matter came before the court in January 2023, and the court refused H’s application for an immediate order for possession to allow W a chance to respond. W was ordered to provide an account of rental income received once per month, and to deposit the rental income, less costs, into an escrow account.

In February 2023, the court ordered W to transfer the properties to H forthwith upon W being released from the mortgages, and to give vacant possession to H from 7 March 2023. W sought to appeal, and permission was refused on 7 July 2023. W failed to comply with the order.

Thereafter followed contempt proceedings issued by H and W was sentenced to three months’ imprisonment and ordered to pay costs of £30,000.00 which went unpaid. W has not returned to the UK since.

The cross-applications for enforcement were listed to commence on 18 April 2024.

W did not attend the hearing.

H’s Position

H filed a statement on 5 April 2024, claiming:

1. €8,782,540 in lost rental income, having revised his previous rental losses attributing the increase to Courchevel's snow reliability and 18 weeks of potential rental;
2. Less expenses of (€903,997) acknowledging an increased running cost;
3. Lost rent for 2024/2025 of €1,000,000;
4. Lost rent for Villa Pearl of €3,000,000. H claimed W had been denigrating him in such a way that potential renters of Villa Pearl had been put off, such that he was only able to rent the property for €150,000 in summer 2023 and that he has no bookings for summer 2024, when he would usually have bookings of €1 million;
5. Chalet Pearl mortgage interest/penalties €3,943,303;
6. Villa Pearl mortgage interest/penalties €1,337,627.

H claimed a total of €17,169,473 (£14,666,216).

In addition, H sought legal fees of £967,640 (France and England and Wales), £18,277 for website fees, and other amounts in respect of valuation fees, enforcement costs, litigation costs in France, and lost chattels.

Deducting the lump sum owing to W of £709,707.00 H claimed in total: £14,942,426.

Shortly before the hearing on 15 April 2024, H also sought a permanent injunction to prohibit W from denigrating him or any of his properties which had resulted in the losses claimed in respect of Villa Pearl as well as Chalet Pearl.

Held

1. Having already found W in contempt, the court accepted H was entitled to compensation for any losses incurred and was entitled to seek compensation for each of the three seasons 21/22, 22/23, and 23/24, despite not issuing enforcement proceedings until December 2022. Accordingly, the court found the following profits owed to H:
1. Profit to the end of February 2023: €923,607. The court was not prepared to retrospectively calculate the loses and would take the figures provided by W in her February 2023 statement which had been supported with invoices further accepting there were additional costs of getting the Chalet ready post Covid-19, increasing the overall expenses.
2. Profit March/April 2023: €500,000. W’s figures included up to 27 February 2023, although it was known W had at least one additional rental thereafter which she had not disclosed. Accepting H’s evidence that the ski season continued until April, the court inferred further rental income of €750,000, with expenses of €250,000.
3. Profit 2023/2024 ski season: €1,666,670. The court accepted H’s evidence the Chalet was more desirable owing to the lack of snow elsewhere, and accepted a customer was willing to pay €775,000 over Christmas 2023. However, the court did not accept the Chalet would have generated €3.3m in rentals which would have been ‘out of kilter’ with 17/18. The court therefore found with inflation and the location of the chalet the income would have doubled since 17/18 and generated €2.5m in rentals with costs of €833,000.
2. H’s claim for lost rent for 24/25 was refused. The court did not know when H would take possession and could not ascribe any loss at this point, it would ‘be plucking a figure out of the air with no evidence to support it’.
3. H’s claim for rental losses in respect of Villa Pearl was refused. H had not pleaded the same previously and only raised it in his statement of 5 April 2024. The court considered it would have been unreasonable for W to respond to such a claim with evidence given the proximity to the hearing.
4. Late payment surcharges for Chalet Pearl would be the responsibility of W, but the delay in bringing enforcement proceedings until December 2022 would render it unfair to deem W responsible for any charges earlier than the February 2023 order. Further, given H had been awarded the net profits, it would be for H to pay the mortgage instalments to avoid any double accounting. H would therefore be awarded €491,945 in surcharges. However, H was required to undertake to pay this sum to the mortgagee and in the event such surcharges were not payable, the funds should be returned to W.
5. For the same reasons as to lost rents from Villa Pearl, the court was not prepared to widen the scope of the enquiry, and the claim for mortgage interest and penalties in respect of the same was refused.
6. The claim for legal fees was refused and would be dealt with by an order for costs. The costs in respect of the French proceedings would be a matter for the French court.
7. H’s claim for other amounts in respect of website fees, mortgage valuations, and enforcement costs was refused.

Accordingly, H was entitled to £2,353,000.00 after the deduction of the lump sum owed to W. The court declared the lump sum satisfied and dismissed W’s cross-application. H was released from an earlier undertaking not to deal with his London property on account of the satisfaction of the lump sum order.

As to the injunction, the court noted W continued to rent out Chalet Pearl when she had no right to do so by representing herself as the owner, and claiming H was not. The court made the injunction, naming both W and her partner, giving leave to apply to vary or discharge.

H was awarded costs of £80,000 to be paid on account on or before 16 May 2024.