Legal News

Original news Crown Estate Commissioners v Wakley and another [2016] Lexis Citation 697, [2016] All ER ( D) 132 ( Dec). The Chancery Division fixed damages on the defendants’ counterclaim at £1,586,366.60 for misrepresentations and breaches of contract. It was further determined that the defendants could apply that sum by way of set-off against what they owed the claimant in unpaid rent, reducing their liability for arrears accordingly. Why is this decision of importance? The significant level of damages awarded to the tenant (£1.75m) is a clear warning to property professionals: information supplied by sellers and landlords to buyers and tenants must be carefully researched, so they do not expose themselves to claims for negligent misrepresentation. The ruling also underscores that the quantum of damages can be substantial even in the absence of any deliberate intention to defraud or deceive, highlighting the risk where...

Original news Fast Drinks Ltd v Cetyl International Group Inc [2016] EWHC 3501 ( QB). The newly released transcript of this notable ex tempore ruling has now appeared. On appeal, the question was whether the sub‑tenant, Fast Drinks, could properly make a section 26 request for a new tenancy naming 1 July 2015 as the start date, even though the contractual term would otherwise have ended on 15 January 2016. The dispute centred on timing under section 26, given a later contractual expiry in mid‑ January 2016 instead. What are the practical implications of this case? The decision cautions landlords holding break options that a break operated lawfully brings only the contractual term of the headlease and any sub‑leases to an end. But any statutory continuation tenancy or tenancies persist unless and until a Landlord and Tenant Act 1954 section 25 notice is served, citing one of the...

Original news Newman v Clarke [2016] EWHC 2959 ( Ch) In December 1996 Mr Clarke established an accumulation and maintenance settlement. Mrs Newman and Mrs Clarke were two of the three initial trustees. In April 1997, Mrs Newman and her husband granted a lease of a residential property to Mr Clarke. That lease qualified for enfranchisement under the Leasehold Reform Act 1967 ( LRA 1967). On 19 June 1997, Mr and Mrs Newman sold their freehold reversion in the property to the original trustees of the settlement. On 25 June 1997, Mr Clarke took the place of the third of the original trustees as a trustee of the settlement. On 12 September 1997, the original trustees conveyed the freehold reversion in the property to Mrs Newman, Mrs Marks and Mr Clarke to hold upon the terms of the settlement. On 7 January 1998, they were...

Original news Baker and another v Craggs [2016] EWHC 3250 ( Ch) The proprietors of a parcel of land (servient land) first conveyed it to Mr Craggs, and later purported to bestow a right of way over it in the Bakers’ favour within a transfer to them of different land (dominant land). Registration of the servient land was materially delayed because the plan was defective, ultimately with the consequence that the right of way was entered on the register before the transfer to Mr Craggs was registered. The central question was whether the grant of the right of way was effective. In short, the timing of registration determined priority between the competing interests. What are the practical implications of this case? The court considered that the grant appeared to result from conveyancing slips. Nevertheless, had the transfer of the servient land been registered within the...

The UK remains the global frontrunner in offshore wind, with 5GW already operating and a goal of 10GW of installed capacity by 2020. The scale of schemes is growing steadily, helping to capture significant economies of scale. For example, in February 2016 DONG Energy announced plans to proceed with construction of the 1.2GW Hornsea Project One offshore wind farm, set to become the world’s largest offshore wind farm (and expected to use Siemens 7MW turbines). The UK’s referendum decision to leave the EU has sent shockwaves through political and investment communities. Regarding offshore wind, ministers rapidly signalled after the vote their intention to maintain investment in clean energy, including offshore wind. For instance, on 29 June 2016 Amber Rudd, then Secretary of State for Energy and Climate Change, stressed the ongoing intention to bring forward more offshore wind, subject to further cost...

Original news Dorinda Irene Holland v Oxford City Council [2016] EWHC 2545 ( Ch) Mrs Holland, a fairground ride operator, had for many years been permitted to use two pitches at an annual two-day fair. Each year she applied to Oxford City Council (the Council) and was allocated the same two sites. After a disagreement about the pitch measurements and a neighbouring operator’s complaint that she was encroaching onto his plot, Mrs Holland commenced proceedings asserting that she held a periodic tenancy of the two pitches. What are the practical implications of this case? As a matter of principle, a ‘tenant’ can acquire an annual periodic tenancy even if the occupation spans only a few days each year. The judgment further indicates that the court will prioritise the substance of the arrangement over any wording the parties have adopted. What was the issue...

Original news Grant and another v Baker and another [2016] EWHC 1782 ( Ch), [2016] All ER ( D) 108 ( Jul) The Chancery Division upheld an appeal by the trustees in bankruptcy, setting aside an order that would have delayed the sale of the bankrupt’s property for as long as his adult daughter, who suffered from global developmental delay, dyspraxia and obsessive compulsive disorder ( OCD), continued to live there. The court agreed that the district judge had been right to find exceptional circumstances within section 335A of the Insolvency Act 1986 ( IA 1986), recognising that such circumstances can include a situation where a bankrupt’s child has medical or mental health conditions and would be adversely affected by moving due to a sale. Nevertheless, it concluded that the judge had materially erred in discretion by imposing an open-ended...

Original news Hall and another v Elia and another [2016] EWHC 1697 ( Ch), [2016] All ER ( D) 63 ( Jul) The Chancery Division refused a mother’s application for permission to appeal a registrar’s ruling that a deed, by which her son purported to assign his property interest to her, was a sham, or else should be set aside under sections 339, 340 or 423 of the Insolvency Act 1986 ( IA 1986). A Chancery judge held that, as the registrar had already debarred the mother from defending the claim, permission to challenge his decision on the assignment should be refused. What was the background to the appeal? The mother and son said a deed of assignment transferred his share to her before the bankruptcy order against him. His trustee in bankruptcy asserted a beneficial interest, as did his company’s...

Original news Marlbray Ltd v Laditi and another [2016] EWCA Civ 476, [2016] All ER ( D) 202 ( May). The Court of Appeal ( Civil Division) partly upheld a property developer’s appeal against a Chancery Division ruling. The Chancery Division had found that the developer’s contract for the sale of a lease to a husband and wife, signed by the husband for himself and, purportedly, on his wife’s behalf, was invalid. What was the factual background to the appeal? The developer had sold units off-plan in an “apart-hotel” being developed. The husband executed what appeared to be an agreement conferring on him and his wife a 999-year lease of one unit. The document identified the husband and wife as joint purchasers. He paid a 25% deposit and the parties exchanged contracts. When the couple failed to secure a mortgage, the developer served notice...

Original news Banwaitt v Dewji and another [2015] EWHC 3441 ( Ch) What issues did this case raise? This decision will interest practitioners advising judgment creditors with a charging order against a debtor’s share in jointly owned property, and anyone dealing with security over beneficial interests in land more generally. The central issue was whether a married couple, as co-owners, could have a charging order removed from the title by the wife buying the husband’s stake. The claimant had secured a substantial judgment which the debtor failed to satisfy. A charging order was then obtained over the debtor’s beneficial interest in the family home. Thereafter, the debtor and his wife transferred the property into her sole name for a modest sum. She argued the order no longer bound the title—maintaining it had been ‘overreached’ under sections 2 and 27 of the Law of...

Practical implications This ruling is notable for its observations on the need for dishonesty under LA 1980, s 21(1). It is settled that dishonesty is required for LA 1980, s 21(1)(a)—no limitation where a trustee commits a fraudulent breach of trust. Yet, although the court appeared to imply that dishonesty is also demanded for LA 1980, s 21(1)(b)—no limitation on recovering trust property from a trustee who holds it or has converted it to his own use— Smith J nevertheless concluded that LA 1980, s 21(1)(b) was satisfied, notwithstanding the absence of dishonesty on the evidence. The decision likewise indicates that, where there is a single active director who has committed undisclosed breaches of fiduciary duty, they owe a continuing obligation to disclose those breaches while they remain a director; and whilst the non-disclosure persists, those breaches are likely to be regarded as...

Original news Avon Ground Rents v 51 Earls Court Square RTM Company [2016] UKUT 0022 ( LC) What was the issue involved? The dispute centred solely on whether 51 Earls Court Square RTM Company Limited (the company) qualified as an RTM company within the meaning of the Commonhold and Leasehold Reform Act 2002 ( CLRA 2002) for these purposes. If so, all parties accepted that it could obtain the right to manage the building at 51 Earls Court Square (the building), the property that gives the company its name. If not, the notice seeking the right to manage, served by the company on 8 January 2015, would be ineffective and of no legal consequence. The question hinged exclusively on construing the company’s articles of association, namely what the incorporators precisely intended and understood by defining 'the premises' as ' Flat 1–13, 51 Earls Court...

Original news Chesterton Commercial ( Oxon) Limited v Oxfordshire County Council [2015] EWHC 2020 ( Ch) What was the background to the case? Chesterton, a property developer, bought three sites that included parking bays. A local authority search indicated the bays were not within the public highway. Yet the council omitted to disclose it had long been examining whether the land was in truth highway. It later concluded the land was highway and updated its records to reflect that. By then, relying on the search outcome, Chesterton had already exchanged contracts to acquire the property. Once completion had taken place, it transpired the search was wrong. The council contended the claim must fail as the search was accurate when issued. Chesterton went on to develop and sell the......

Practical implications Although no witnesses were cross-examined in this matter, the court was able to dispose of it summarily, given the procedural steps already taken and the case management directions both in place, under which the appellants had repeated opportunities to advance their position. Disclosure had also occurred, and the court could rely upon witness material filed in earlier, related proceedings that had failed. While the appellants invoked comparisons with decisions discussed in the Tomlinson Report concerning banks’ lending behaviour, it was not the court’s role to permit a trial merely to ventilate issues of public interest where the underlying claims lacked viability. Accordingly, a summary determination was appropriate notwithstanding the absence of oral testing of the evidence. The court’s task is to assess viability, not to convene a forum for broader debate where the pleaded causes cannot...

Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd [2015] EWHC 2002 ( Ch), [2015] All ER ( D) 145 ( Jul) The Chancery Division determined that Sainsbury’s was entitled to terminate a conditional contract to purchase the defendant’s stadium, as a condition precedent—requiring Sainsbury’s to obtain an acceptable planning permission for a store to redevelop the ground as a supermarket—had not been satisfied. What was the background to the case? In March 2011, Sainsbury’s entered into a conditional agreement to acquire the Memorial Stadium, Bristol, from Bristol Rovers Football Club for £30m. At the same time, the club concluded an agreement with the University of the West of England ( UWE) to develop a new stadium. The intention was for Sainsbury’s to build a new supermarket on the Memorial Stadium site. The club would apply the purchase price to finance the new stadium project with UWE, to which it...

Original news Trustees of the Alice Ellen Cooper- Dean Charitable Foundation v Greensleeves Owners Limited [2015] UKUT 0320 ( LC). The UT affirmed the Leasehold Valuation Tribunal ( LVT) decision that a ‘two-stage’ enfranchisement resulted in no payment being due to the freeholder. What were the facts? The position can be broken down into three stages. Stage one The property was split into eight residential flats. Each flat lease provided for an initial ground rent of £300, with a review scheduled for late 2015. At the same time, a headlease was granted to a third party management company unconnected with the landlord. Under that headlease, the freeholder’s initial ground rent was £2,400, also subject to review in late 2015. Stage two In 2011, six of the flat tenants sought and obtained lease extensions under the Leasehold Reform, Housing and Urban Development Act 1993 ( LRHUDA 1993). As a...

Original news Wood v Waddington [2015] EWCA Civ 538 The core question was whether Mr and Mrs Wood possessed rights of way over land owned by Mr Waddington. The Woods relied on four alternative grounds: that the rights were conferred by an express grant that they passed by virtue of s 62 of the Law of Property Act 1925 that they arose under the rule in Wheeldon v Burrows (1879) 12 Ch D 31, [1874–80] All ER Rep 669 that they were implied from the parties’ common intention that the conveyed land would be used in a definite and particular manner The High Court had earlier found the Woods were not entitled to any of the rights claimed. They appealed to the Court of Appeal. What were the facts of the case? As successors in title to the previous proprietors, the Woods asserted two rights: to go across a parcel of land to reach a...

Original news MT Højgaard a/s v EON Climate and Renewables UK Robin Rigg East Ltd and another [2015] EWCA Civ 407 The parties entered into a contract for the design and installation of offshore wind turbines. Defects arose in the foundations, prompting a dispute over who should bear the cost of remedial works. At first instance, the judge decided the claimant contractor had breached a warranty that the foundations would provide a 20‑year service life, but had not breached other clauses alleged by the defendant employers. The Court of Appeal, Civil Division, allowed the claimant’s appeal, finding there was no such warranty. The defendants’ cross‑appeal also succeeded, as the claimant had failed to comply with a provision concerning testing of the designs. What was this case about? The dispute centres on a specific design issue of fundamental concern to the various...

Original news Hastings Borough Council v Braear Developments [2015] UKUT 0145 ( LC) The property was a five-storey Victorian mid-terrace house, converted into five self-contained flats held on long leases. The right to manage was taken over by an RTM company, which then applied to the local housing authority for a grant to fund repairs to the common parts of the building. Approval was granted on the basis that the works would be completed within 12 months; however, the RTM company did not finish within the permitted 12-month period, so the grant was cancelled. The grant application brought the poor condition of the external staircase to the authority’s attention, and the authority served an emergency prohibition order, preventing any use of the staircase. In answer to that notice, the owner of the only two occupied flats on the upper floors carried out limited...

Original news Windemere Marina Village v Wild [2014] UKUT 0163 ( LC) The landlord of a marina development – a mixed scheme on the banks of Windermere – appealed an LVT determination that replaced the apportionment of service costs payable by tenants of 26 dwellings with the tribunal’s own division, displacing the split previously set by the landlord’s appointed surveyor. Permission to appeal was granted because the question raised a point of principle with potentially wide reach. Under the lease of a dwelling at the marina, the tenant is required to contribute a fair share of service expenses, that share to be fixed by the Lessor’s surveyor for the time being, whose decision is stated to be final and binding. The central issue was whether statute renders void an agreement making the landlord’s surveyor’s assessment of the service charge...