Legal News

Re Wotherspoon (in bankruptcy); Hinton (as trustee in bankruptcy of John Wotherspoon) v Gillian Wotherspoon [2022] EWHC 2083 ( Ch), [2022] All ER ( D) 67 ( Aug) What are the practical implications of this case? It is axiomatic that, in nearly every claim, the claimant or applicant bears the burden of proof. That principle equally applies to office-holders pursuing antecedent transaction claims. Pre-bankruptcy dealings between a would-be bankrupt and a spouse or close associate may tempt an office-holder to infer an improper motive and press a claim. This decision squarely reminds insolvency practitioners and lawyers that, even if the recipient’s or bankrupt’s account seems doubtful, there must still be contemporaneous material from which the case can be proved. That is especially significant under IA 1986, s 423, where an improper purpose must be demonstrated and not merely presumed in light of the...

Oceanfill Ltd v Nuffield Health and Cannons Group Ltd [2022] EWHC 2178 ( Ch) What are the practical implications of this case? This decision may offer reassurance to commercial landlords anxious about tenants attempting to cram down landlord claims under the new CA 2006, Pt 26A, especially after the High Court sanctioned the Virgin Active plan. Under Pt 26A—specifically CA 2006, s 901G—the court can approve a plan even where not all creditor classes support it, via a cross-class cram-down, provided at least one class has agreed and that no member would fare worse under the relevant alternative (ie the most likely outcome if the plan were not approved). For landlords holding AGAs—and it is worth reviewing historic title documents, as the AGA here dated back around twenty years—it is reassuring that such guarantees are not automatically stripped of value in exactly the...

Mayor and Burgesses of the Tower Hamlets London Borough Council v Khan [2022] EWCA Civ 831 What are the practical implications of this case? Lease agreements often include provisions enabling landlords to reclaim legal costs incurred ‘in contemplation of’ or ‘incidental to’ forfeiture proceedings. Attempts to recover rent and service charge arrears are frequently brought in forums where costs are generally not recoverable, such as the FTT and the County Court Small Claims Track. Landlords therefore lean on these provisions to assert that costs are contractually recoverable because proceedings to recover rent/service charge arrears were issued ‘in contemplation of’ or ‘incidental to’ prospective forfeiture proceedings. The Court of Appeal’s decision curtails the range of what will be treated as ‘incidental to the preparation and service’ of a section 146 notice, yet gives no guidance on what costs are incurred ‘in...

Armstead v Royal Sun Alliance Insurance Company Ltd [2022] EWCA Civ 497 What are the practical implications of this case? The Court of Appeal considered how far a tortfeasor is responsible in bailment and tort for an owner’s loss of use where hired equipment is damaged, in proceedings brought by the hirer. It ruled that, although a bailee may reclaim the cost of repairing the hired equipment from a negligent tortfeasor, the bailee cannot recover sums fixed by contract with the bailor (the hire company) for the bailor’s loss of use. Because the item involved was a car hired under a credit hire insurance policy, the decision is naturally pertinent to vehicle hire arrangements in general and to credit hire insurance claims in particular. Yet the principles explored, applied and developed in the judgment, particularly on pure economic loss and the scope of the duty of...

Chelfat v Hutchison 3G UK Ltd [2022] EWCA Civ 455 What are the practical implications of this case? On the narrow issue, where a claimant intends to serve out of the jurisdiction without seeking permission, this decision confirms that the court is obliged to issue a claim form submitted without a Form N510 or equivalent notice. Lodging the claim form alone is sufficient, despite text of CPR 6.34(1) stating that ‘the claimant must—(a) file with the claim form a notice containing a statement of the grounds on which the claimant is entitled to serve the claim form out of the jurisdiction’. Turning to the wider point about substitute claim forms, the court adopted a generous interpretation of the phrase ‘as issued’ in CPR PD 7A, para 5.1—‘where the claim form as issued was received in the court office on a date earlier than the date on...

Mars Capital Finance Ltd v Hussain and others [2021] EWHC 2416 ( Ch) What are the practical implications of this case? This ruling underlines that, after a transfer of land has been entered on the register, any prior defects in the enforceability of the underlying contract for that transfer cease to matter. Accordingly, earlier formal shortcomings cannot be used to unsettle a completed, registered disposition. That principle is clear and decisive here. In addition—though not essential to the outcome—the judge endorsed the position that sections 43 and 44 of the Companies Act 2006 permit three mechanisms for a company to enter a written contract (by the company or on its behalf). This contrasts with the interpretation that, for the purposes of the Law of Property ( Miscellaneous Provisions) Act 1989, only two methods exist, and it departs from Lewison J’s approach in Redcard Ltd v...

Jalili v Bury Council 20210617 What are the practical implications of this case? Recent years have seen a sharp rise in tenants pursuing housing disrepair claims against social landlords. How these cases are allocated to a track is somewhat atypical. Under CPR 26.6(b), such proceedings go to the small claims track where there is an application for an order obliging the landlord to carry out remedial works and ‘the cost of the repairs or other work to the premises is estimated to be not more than £1,000’ together with ‘the value of any other claim for damages is not more than £1,000’. Consequently, if specific performance is sought, the case moves to the fast track if either the estimated repair cost or the damages claim exceeds £1,000. Failing that, the fast track only applies where the damages claim exceeds £10,000. The majority of...

ABC v The London Borough of Lambeth [2021] EWHC 2057 ( QB) What are the practical implications of this case? The practical effect of this ruling is that a claim form uploaded on CE-file can be treated as filed at the point of its initial upload and payment of the court fee, even if the document later had to be re-lodged owing to ‘procedural’ defects. The ruling is tightly confined. It applies where the claimant has obtained an anonymity order before filing the claim, and the claim form is not lodged with the application or the sealed order. It remains prudent for any party to file before the end of any limitation period. A claim form affected by ‘procedural’ defects may still be regarded as filed earlier. However, the judgment does not offer (and does not purport to offer) any further steer on which kinds of...

Rock Ferry Waterfront Trust v Pennistone Holdings Ltd [2021] EWCA Civ 1029 What are the practical implications of this case? The circumstances of this case may seem, to some at least, somewhat unusual. Yet they are the kind of facts that are liable to arise in practice more often than might first appear. From the judgment two key principles can be drawn: firstly, where a company not incorporated under the laws of England and Wales is dissolved at a time when it owns property situated in England and Wales, section 1012 of the Companies Act 2006 (the bona vacantia provisions) does not apply. Nonetheless, the company’s incorporation in another jurisdiction does not prevent English law from governing what then happens to the land. Under English law, the land escheats to the Crown and the freehold previously vested in the dissolved company is...

Maypole Dock Ltd v Catalyst Housing Ltd [2021] EWHC 1742 ( TCC) What are the practical implications of this case? This was a relatively unusual application, namely to curtail the continuation of an expert determination. While there are several reported decisions where injunctions were pursued to halt adjudications, and both parties relied on those authorities, the court had no difficulty distinguishing them, finding that different considerations arose here. In this instance, one party sought to uphold what it asserted was a contractual entitlement to an expert’s determination, whereas the other wished to engage the court’s jurisdiction. The suitability of an injunction in such circumstances is highly fact specific, yet ultimately falls to be decided in line with the established American Cyanamid principles... What was the background? The dispute originates from Catalyst Housing Ltd’s 2014 purchase of land and buildings in Southall from Maypole Dock Ltd. On...

Parker v The National Trust [2021] EWHC 1589 ( QB) What are the practical implications of this case? This decision reinforces a risk-led methodology when facing potential dangers that may or may not occur. The key question is the probability of the hazard—in this instance, a tree—inflicting injury or damage. A danger beside a path in a busy urban park carries a wholly different level of risk to one located where people rarely pass, for example within woodland. It was sensible for the defendant to run a regime that checked zones with the greatest footfall, such as the car park and play areas, more often, while quieter locations were inspected less frequently. That approach enabled the defendant to apportion resources efficiently and to prioritise remedial measures according to where risk was judged to be highest. In contrast, the court expressly rejected a...

Sciortino v Beaumont [2021] EWCA Civ 786 What are the practical implications of this case? This ruling is poised to affect practitioners who advise on professional negligence claims, particularly proceedings brought against solicitors and barristers. Although the Court of Appeal reaffirmed that there is no ‘continuing duty’ to revisit or reassess earlier advice, it decided that a fresh breach of duty may arise on every occasion advice is given, even where it concerns the same point. That approach may assist claimants to pursue negligence actions that might otherwise have fallen foul of limitation. The Court of Appeal also confirmed that, subject to the express terms of the retainer, there is no ongoing obligation to scrutinise past advice for latent mistakes. Where negligent advice gives rise to loss occurring outside the limitation period, the claim will, in general, be time-barred. That outcome cannot be...

Linfoot- Smith v Ansari [2021] Lexis Citation 93 What are the practical implications of this case? This decision stands out as an uncommon residential easement dispute concerning drainage rights. Though the claimant did not succeed on the alleged express easement, it is noteworthy that the court was content to read the phrase ‘in through or under’ as extending to a pipe fixed to the front of the property, mirroring the approach to a like clause in Trailfinders Ltd v Razuki [1988] 2 EGLR 46. The state of affairs on the ground as at the date of the 1934 conveyance bore heavily on the court’s conclusion to dismiss the express easement claim. On prescription, the ruling usefully sets out the categories of evidence the court is apt to treat as helpful, and those it is unlikely to consider of value. The judgment also offers...

Lizzium Ltd (a company incorporated in Jersey) and another company v Crown Estate Commissioners [2021] EWHC 941 ( Ch) What are the practical implications of this case? This concise decision confirms that, when pursuing a vesting order under s 181 of the LPA 1925, the applicant must be able to demonstrate that, as at the date of the company’s dissolution, they already held a legal right or entitlement to the land. Such entitlement may arise from a binding, enforceable contract. By contrast, showing only a settled intention to transfer the property to the applicant is inadequate, as intention alone does not establish a legal right. The ruling underscores the need to examine closely the precise nature of the applicant’s relationship with the property at the point of dissolution, and to verify that any claimed entitlement had crystallised into a legal right by that...

Commerz Real Investmentgesellschaft mbh v TFS Stores Ltd [2021] EWHC 863 ( Ch) What are the practical implications of this case? Advisers have long anticipated a defended claim for arrears of commercial rent predicated on the now routine coronavirus arguments that have echoed since the first lockdown in March 2020. Yet, despite the undeniable hardship endured by retail and other business occupiers during the pandemic, the court’s scope to recast the parties’ bargain is minimal. Put shortly, the court is tasked with enforcing, not reshaping, the bargain the parties struck. Sympathy cannot rewrite the parties’ contracts. Two aspects of the ruling stand out. First, implying a term into a meticulously negotiated commercial lease to suspend rent when government measures compel the premises to shut is exceptionally difficult. Those brokering pandemic provisions on renewals under the Landlord and Tenant Act 1954 will recognise the breadth and...

Wood v Commercial First Business Ltd and other companies; Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471 What are the practical implications of this case? The Court of Appeal has reset the approach to secret commissions and bribes by returning to first principles. This judgment reminds practitioners that rescission of the transaction, recovery of the amount paid as a bribe or secret commission, and/or an award of damages are remedies available at common law as well as in equity. As a result, it is no longer necessary to engage in a fine-grained assessment of the precise nature and scope of the relationship between the parties to determine whether, and to what extent, it was fiduciary. The core enquiry is simply whether the recipient of the bribe or secret commission owed a duty to provide neutral and unbiased advice or...

H Stain Ltd v Richmond [2021] UKUT 66 ( LC) What are the practical implications of this case? Courts have frequently grappled with whether notices are valid. On a quick reading, the rulings may appear inconsistent and perplexing. This judgment underlines that the lease’s language usually determines if small mistakes doom a notice. Crucially, were the express pre‑conditions for a valid notice satisfied? If they were not, the Mannai ( Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 749) ‘reasonable recipient’ approach cannot rescue slight defects (in Mannai, a break notice served a day early survived as a reasonable recipient would grasp the intention to end the following day). The outcome matters to landlords, tenants, and those drafting demands or notices. Crisp, unequivocal lease drafting that removes doubt about what must be met before a demand gives rise to...

The UT further examined the significance and effect of fencing and grazing in adverse possession claims ( Chambers v Havering [2011] EWCA Civ 1576; Batt v Adams (2001) 82 P & CR 32; Inglewood Investments Company Ltd [2002] EWCA Civ 1733). On the facts here, those acts were held to be enough to constitute adverse possession in this case. Prepared by James Fryer- Spedding, a barrister at 9 St. John Street Chambers, who represented the respondent. Haandrikman v Heslam [2021] UKUT 56 ( LC) What are the practical implications of this case? This decision concerns the law of adverse possession. The ruling offers a helpful synopsis of the legal principles governing the informal passing of title between successive squatters over time in practice. It also addresses when, and in what situations, acts of fencing and/or the grazing of animals may amount to adverse possession...

The court determined that either or both of the following applied: the signed TR1 functioned as an assignment of the respondent’s equitable interest in the property; and the court would cure the imperfect gift, it being unconscionable for the respondent to retreat from the intended gift. Written by John Aldis, barrister at St Philips Chambers, who appeared for the appellant. Khan v Mahmood [2021] EWHC 597 ( Ch). What are the practical implications of this case? To begin with, this judgment joins the small body of authorities in which the courts have validated an imperfect gift even though the donor had not taken every step within his power to bring the transfer about. The orthodox position in Milroy v Lord [1861–73] All ER Rep 783 is that the settlor must have done all that, given the character of the property in the settlement, needed to be done to pass the...

Morley (trading as Morley Estates) v Royal Bank of Scotland plc [2021] EWCA Civ 338 What are the practical implications of this case? This decision clarifies the boundaries of a bank’s obligations to its client and demonstrates how those responsibilities shift over the course of their dealings. Where a borrower has taken out a secured lending facility, the bank’s duty to deliver banking services with reasonable skill and care ceases when the contractual loan period ends. After that point, the bank is only bound by the express provisions of the mortgage and the equitable duties inherent in that security relationship (for example, the recognised obligation to exercise reasonable care to realise a proper price for the collateral). It is not correct to read into the mortgage an implied contractual duty of reasonable skill and care. In addition, the Court of Appeal endorsed RBS’s...