Legal News

Secretary of State for Business, Energy and Industrial Strategy v Rajgor [2021] EWHC 1239 ( Ch), [2021] All ER ( D) 51 ( May) What are the practical implications of this case? The Companies Act 2006 ( CA 2006), section 386, sets out in detailed terms a company’s obligation to maintain sufficient accounting records, and nature of what must be retained. This judgment serves as a stark caution to directors (and their advisers) that avoiding a misconduct finding under section 6 of the Company Directors Disqualification Act 1986 will be challenging where any of the following are relied upon: asserting that records existed but were not handed over to the liquidator (or another insolvency office-holder) or to the Insolvency Service attempting to shift responsibility onto individuals engaged by the company (be they an accountant, bookkeeper, or similar member of...

Choiceplace Properties Ltd v Secretary of State for Housing, Communities and Local Government [2021] EWHC 1070 ( Admin) What are the practical implications of this case? This judgment powerfully underlines the importance of precision in the plans submitted with a planning application, especially where a condition requires the development to be delivered in accordance with the plan. That obligation extends to how the proposal relates to its immediate surroundings. Those seeking planning permission should, therefore, undertake a careful audit of the accuracy of all drawings and plans accompanying the application and satisfy themselves that the stated details are practicable and capable of being complied with. What was the background? Choiceplace Properties secured planning permission for the demolition of two two-storey semi-detached houses and the construction of a three-storey block to provide six self-contained flats, subject to a condition that the development should be carried out in...

Kang and another v Pattar [2021] EWHC 1101 ( TCC) What are the practical implications of this case? The outcome was fact-specific, resting largely on the judge’s consistent preference for the defendant’s testimony and the ensuing conclusions about what had been agreed. Even so, the decision offers clear warnings for parties who arrange and run building contracts by word of mouth and only later commit their arrangements to paper: These observations are directed at parties who agree and perform their building contracts orally, and only afterwards put those contracts into writing. where instructions are routinely delivered to a contractor orally and clash with later written terms or design drawings, the contractor is not automatically in breach for following spoken directions rather than subsequent contract documents. If the later documents are meant to oblige the contractor to remove and remake existing work that conflicts with them, the...

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...

R (on the application of Swainsthorpe Parish Council) v Norfolk County Council [2021] EWHC 1014 ( Admin) What are the practical implication of this case? For clarity, it is helpful to identify the parties and their respective roles: Swainsthorpe Parish Council, the Claimant Norfolk County Council ( NCC), the Defendant, Highway Authority South Norfolk District Council ( SNDC), Interested Party, Local Planning Authority ( LPA) The court determined that NCC acted unlawfully by considering economic benefits when replying to the statutory consultation in its capacity as highway authority. Mrs Justice Lang DBE concluded that, under the legislation, the statutory consultation scheme for planning applications required: the LPA ( SNDC) to consult the local highway authority ( NCC) on the relevant categories, and nothing beyond that the NCC, as local highway authority, to provide a substantive reply to the LPA ( SNDC)...

Re TMG Brokers Ltd (in liquidation); Baker v Staines [2021] EWHC 1006 ( Ch) — What are the practical implications of this case? Company payments treated as shareholder distributions that ignore the statutory framework in Part 23 of the Companies Act 2006 ( CA 2006) are ultra vires, and consequently amount to a breach of the director’s duty under CA 2006, s 171 (among other duties)... Directors must be able to explain and justify sums leaving the company’s bank account ( Re Idessa ( UK) Ltd [2012] 1 BCLC 80), and where the company’s books and records are not produced, the court may draw adverse inferences ( Re Mumtaz Properties Ltd [2011] EWCA Civ 610)... For relief under CA 2006, s 1157, honesty on its own is not enough—the director must also establish that the belief relied upon was...

Goshawk Aviation Ltd and other companies v Terra Aviation Network SAS and other companies [2021] EWHC 1029 ( Comm) What are the practical implications of this case? This decision provides a concise survey of the key principles governing applications to serve proceedings outside the jurisdiction and, more generally, by alternative methods. The first question is whether the state in which service is to be effected is a contracting party to the Hague Service Convention or to any bilateral instrument. If no such convention or treaty is engaged, an order permitting alternative service does not threaten to circumvent the terms of any international arrangement. In those circumstances, the court’s task is simply to determine, in light of all the facts of the particular matter, whether there is a sound basis for granting the relief sought. The court ought not to devote...

Allen v Ealing London Borough Council [2021] EWHC 948 ( Admin) What are the practical implications of this case? This judgment brings long-awaited clarity to a point that has caused uncertainty for some thirty years, because no appellate court had previously ruled squarely upon it. A series of earlier cases— Hewlings v Mc Lean Homes East Anglia Ltd [2001] 2 All ER 281; Hall v Kingston upon Hull City Council; Ireland v Birmingham City Council; Baker v Birmingham City Council [1999] 2 All ER 609; Leeds v Islington London Borough [1998] Lexis Citation 2551—considered comparable questions and made obiter comments, yet the central issue persisted unresolved. The outcome is welcomed by those affected by statutory nuisances, as it confirms Parliament’s intention that the procedure for obtaining abatement should be easy for lay persons to use and understand in practice and in...

The coronavirus pandemic sharpened awareness of personal freedom. For many adults, this was the first occasion they could not act as they wished or make independent choices. Yet a significant share of the population faces this reality every day, irrespective of the pandemic: people subject to a DOLS... A DOLS safeguards those who cannot consent to their care arrangements in a community or institutional setting when those arrangements deprive them of liberty. The most effective protection is achieved through regular assessments to confirm the measures are necessary and in the person’s best interests. Although, during the pandemic, curbs on freedom were considered to be in the general public’s best interests, the crucial distinction for people with DOLS is that they are under continuous supervision and control, are not free to leave their residence, and lack capacity to consent to these...

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...

Biscoe and another (as joint liquidators of Equitable Law Capital Ltd) v Milner and others [2021] EWHC 763 ( Ch), [2021] All ER ( D) 26 ( Apr) What are the practical implications of this case? Although a large portion of the decision focuses on assessing the evidence, it also contains sections capturing the legal principles accepted by the parties (and rulings on disputed points where pertinent). Because multiple issues were in play, the judgment effectively distils the key statutory provisions and recent authorities on wrongful trading, fraudulent trading, transactions at an undervalue, and misfeasance. As such, it serves as a valuable recent authority for an overview of these areas. Moreover, beginning at para [400], there is a thorough legal examination of the impact of a settlement between a claimant and one of several joint and/or concurrent tortfeasors. The court then...

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...

Newman v Southampton City Council and others [2021] EWCA Civ 437 What are the practical implications of this case? This ruling reinforces that, as the Supreme Court confirmed in PJS v News Group Newspapers Ltd [2016] AC 1081, appeal courts are slow to disturb a trial judge’s evaluation of the balance between the competing rights under Article 8 and Article 10 of the European Convention on Human Rights, provided the judge has conducted the exercise correctly. The dispute centred on how the principle of open justice operates where privacy and freedom of expression are finely balanced. It offers a practical illustration—against particularly delicate facts—of the degree to which written material placed before the court in proceedings should be available to non-parties, and the form in which such access ought to be granted. More broadly, the case exemplifies the ongoing tension in the family courts between...

Avery- Gee and others v Sibley and others [2021] EWHC 798 ( Ch), [2021] All ER ( D) 24 ( Apr) What are the practical implications of this case? Although the principles governing contractual construction are now considered settled (see Teesside Gas Transportation Ltd v Cats North Sea Ltd and others [2020] EWCA Civ 503, para [55] per Lord Justice Males), disagreements about what contracts mean will not disappear. So long as drafting is ambiguous, the courts—and, as here, administrators appointed over distressed companies—must work out, long after the event, what particular words were intended to signify. Administrators should likewise beware of preferring a company charge-holder’s interpretation over that advanced by an unsecured creditor where their financial interests pull in different directions. The decision provides salient guidance for contract drafters and for those presenting these disputes in court. First, it underscores the need for lucid...

Lin v Gudmundsson concerned a husband adjudged bankrupt on a creditor’s petition. The wife sought to have the bankruptcy annulled, but the court declined. The decision matters for two principal reasons: it underlines that, for insolvency in this setting, the spotlight is on the bankrupt’s cashflow rather than on their assets it clarifies the distinct evidential burdens on creditor-initiated petitions and debtor-made applications Written by Steven Fennell, barrister at Exchange Chambers. Lin v Gudmundsson (a bankrupt) and others [2021] EWHC 820 ( Ch), [2021] All ER ( D) 29 ( Apr) What are the practical implications of this case? Advisers assisting a spouse contesting the other’s bankruptcy must concentrate squarely on the bankrupt’s liquidity on the date of the order. Demonstrating that assets exceeded debts by a wide margin will not suffice. The issue is whether those assets were readily realisable so that the...

Government backs Law Commission’s charity law reform proposals, LNB News 22/03/2021 98 What are the Law Commission's proposals, and which have the government accepted? The government has agreed to almost all of the Law Commission’s suggestions. Although many appear, at first glance, to be highly technical (and some certainly are), taken one by one and, more importantly, in combination, they are expected to be of real, practical value to charity trustees and their lawyers. Section 5 of the government’s reply deals with the Commission’s recommendations on buying and selling (including specified leases) and on securing mortgages over charity land. The existing framework sits mainly in Part 7 of the Charities Act 2011 ( CA 2011). As the Commission’s report explains, elements of the present regime have drawn criticism for complexity, impracticality, and for adding needless expense and delay. The most notable...

Balfour Beatty Regional Construction Ltd v Van Elle Ltd [2021] EWHC 794 ( TCC) What are the practical implications of this case? This ruling illustrates the problems that can emerge when a sub-contractor (or indeed a consultant or surveyor) issues its own terms and conditions with an initial quotation for works or services, and the later agreement does not contain an effective entire agreement clause and/or leaves scope to argue that the contractual scope does not cover every aspect of the works actually undertaken on the project. The judge found—by reference to the wording of an LOI entered into after the original quotation, the terms of the sub-contract when concluded, and the parties’ conduct in invoicing—that there was a single contract. Nonetheless, practitioners should ensure inclusion of a clear entire agreement clause that expressly states previous agreements are superseded (see Practice Note: Entire...

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...