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Issue 44 – June 2007

Contents

Cases

Statutory Instruments

Features

Articles

News

Events

Discounts (how to book and claim discounts)

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Cases

1. Lay and others v Drexler and others (trading as Littlestone Martin Glenton)

Citation: [2007] EWCA Civ 464
Hearing date: 18 May 2007
Court: Court of Appeal, Civil Division
Judges: Chadwick, Laws LJJ and Evans-Lombe J
Relevant legislation: Landlord and Tenant Act 1954 section 24(1)
Summary: costs – order for costs – discretion – landlord's application for grant of new tenancy

The defendants held certain premises pursuant to a lease granted by the claimants. The lease was due to expire in March 2005. In August 2004 the defendants informed the claimants that they were considering renewing the lease for three years, and asked the claimants whether that would be acceptable, and at what level of rent. The claimants commenced proceedings in April 2005 for the grant of a new tenancy under section 24(1) of the Landlord and Tenant Act 1954, which was amended to enable a landlord to apply for the grant of a new tenancy by articless 2 and 3(1) of the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. In November 2005 the defendants' solicitors wrote to the claimants' solicitors indicating that the defendants had located new premises into which they were considering moving. In April 2006 they gave notice to the court that they no longer wanted a new lease of the premises.

The claim was accordingly dismissed by a recorder pursuant to section 29(5) of the Act. The recorder ordered that the proceedings should continue for the purpose of concluding the amount of the interim rent payable from the date that the claimants' notice under section 25 had terminated the tenancy until they gave up possession of the premises, and for the purpose of determining the issue of costs. In fact the parties had already agreed a formula for the determination of the interim rent, and the matter returned to court before a circuit judge to determine the issue of costs. The judge made no order as to costs, concluding that the case was governed by a decision of the Court of Appeal in which the view of the court was that where parties had settled a claim on all issues save costs before a trial or where the trial was incomplete, the court should not, save in a reasonably obvious case, embark on making an order for costs; rather the parties should be put to their election to proceed with the trial or accept no order for costs. The claimants appealed.

The appeal would be allowed.

Where a landlord applied for the grant of a new tenancy under section 24(1), and the tenant, having entered an acknowledgement of service assenting to such grant, subsequently terminated the proceedings by service of a notice under section 25(9), the normal rule as to costs in Civil Procedure Rule (CPR) 38.6(1) applied.

Case annotations in other services: Lay and others v Drexler and others (trading as Littlestone Martin Glenton) [2007] All ER (D) 318 (May)
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2. Housden and another v Conservators of Wimbledon and Putney Commons

Citation: [2007] All ER (D) 291 (May)
Hearing date: 17 May 2007
Court: Chancery Division
Judge: Roger Kaye QC sitting as a judge of the High Court
Relevant legislation: Prescription Act 1832 section two; Wimbledon and Putney Commons Act 1871 sections 8, 35
Summary: easement – right of way – prescription

The applicants applied to register the benefit of a private right of way over an access way leading to their house; they were the registered proprietors of that property. The access way led from a public road to the applicants' house across a small strip or verge of land, which formed part of Wimbledon Common. Their claim to the right of way was based upon prescription under section two of the Prescription Act 1832. The conservators objected to the application, contending that on the true construction of the terms of the Wimbledon and Putney Commons Act 1871, under which the commons became vested in the conservators, they had no power to grant the right of way claimed. Accordingly, the applicants could not acquire a prescriptive right since there had been and was no capable grantor of the right they claimed. The Land Registry adjudicator dismissed the application and the applicants appealed to the High Court.

In order to determine the issue as to whether the claimed right of way could be acquired by prescription under section two of the 1832 Act, the questions arose whether the conservators were capable grantors under the 1871 Act and, if not, whether the applicants had, nevertheless, acquired prescriptive rights under the 1832 Act based on 40 years' user under the second part of section two.

The appeal would be dismissed.

(1) The conservators could not lawfully grant a private right of way of the kind contended for and never could have been capable or “lawful” grantors of a private way over or across any part of the commons.

Section eight of the 1871 Act was an enabling provision akin to a company's memorandum of association setting out the basic powers of the conservators as a body corporate. Thus they might acquire and hold land and dispose of it. That basis or core power was, however, cut down by section 35, which defined how the powers conferred by section eight might be exercised and prevented the conservators from disposing “in any manner […] any part of the commons,” which included preventing them from granting any easements over any land forming part of the commons.
 
(2) On the true construction of the 1832 Act and the 1871 Act, where the capacity or power of the alleged servient owner was shown to derive from a statute, which would render it unlawful for the owner to grant an easement of the nature claimed that would at least prevent a right being acquired by prescription under the second part of section two of the 1832 Act. The basis of that was a presumption, assumption or acknowledgement that the fictional basis of the long user, a presumed grant, could not have been lawfully granted by reason of a parliamentary statute. Therefore, the fact that the conservators could not lawfully grant an easement prevented the applicants acquiring a prescriptive right based on 40 years' user under section two of the 1832 Act.

Case annotations in other services: Housden and another v Conservators of Wimbledon and Putney Commons [2007] EWHC 1171 (Ch) 
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3. Wall v Collins and another

Citation: [2007] All ER (D) 278 (May)
Hearing date: 17 May 2007
Court: Court of Appeal, Civil Division
Judge: Mummery, Carnwath and Hooper LJJ
Summary: easement – right of way – extinguishment

The claimant was the registered freehold owner of a semi-detached house. He was also the registered owner of a leasehold interest in land to the rear of his property (the back land). The defendants were the registered freehold owners of the semi-detached house next door. A dispute arose concerning the claimant's assertion of a right of way over a passageway running along the south side of the defendants' property. The right of way had been granted in 1911, when a leasehold interest for a term of 999 years in the claimant's house had been assigned to M. Subsequently, the leasehold had been assigned again, and the new lessees had later acquired the freehold. They had been registered as the freehold proprietors, but expressly subject to the lease. At the same time, they had acquired a leasehold interest in the back land. In 1999, the claimant had acquired the registered freehold interest in the house and the registered leasehold title to the back land, on which he built a garage. The freehold interest was not expressed to be subject to the lease, and the leasehold interest in the house was not separately registered.

The following issues, inter alia, fell to be determined: (i) whether the leasehold interest had merged into the registered freehold estate; (ii) if so, whether the right of way granted by the 1911 assignment had been lost on the extinguishment of the leasehold interest by merger; (iii) whether section 62(2) of the Law of Property operated to attach the right to the freehold; and (iv) if there was an extant right of way, whether it could be used to benefit the back land. The judge held that if a leasehold estate was merged with a freehold estate, any easements or covenants attached to the leasehold interest were extinguished. He found that the right of way granted by the 1911 assignment could only attach to the leasehold interest, which was what was being assigned. He accepted that merger was not automatic but was dependent on intention, but found that on the evidence the leasehold interest had in fact ceased to exist by merger, with the consequential effect that the easement had been extinguished. He rejected the argument that the right had become attached to the freehold by the operation of section 62. The claimant appealed.

The appeal would be allowed.

(1) Merger of a lease into a larger interest in the dominant tenement was not in itself fatal to the continued existence of an easement granted by a clause in the lease, for the period for which it was granted. The dominant tenement remained unchanged and there was no legal impediment to the continued enjoyment of the easement by the occupier for the time being of that tenement.

An easement should be appurtenant to a dominant tenement, but not necessarily to any particular interest for the time being. There was nothing to suggest that an easement for a term of years had to be attached to a leasehold interest of equivalent duration. All that mattered was that the grantee had an interest at least co-extensive with the period of the easement. In respect of the servient tenement, as a matter of common sense, the merger of the leasehold with the freehold would not remove the burden of the easement, at least for the period of the original lease. The owner of a servient tenement should not be able to escape the burden of an easement by dealings to which those interested in the dominant tenement were not parties. Equally, as a matter of common sense, it was difficult to see why a lessee should be worse off, so far as concerned an easement annexed to the land, merely because he had acquired a larger interest in the dominant tenement.

It followed that in the instant case the premise of the judge's reasoning was wrong. The merger of the lease did not destroy the easement, at least to the extent of the 1911 grant.

Remer v McElroy [1897] 1 Ch 528. 528 considered. Golden Lion Hotel (Hunstanton) Ltd v Carter [1965] 3 All ER 506 distinguished. Kent v Cavanaugh [2006] 2 All ER 645 considered.

(2) According to settled authority, where the original dominant tenement was extended, the enjoyment of the easement might continue for the benefit of the enlarged property, if the additional use was merely ancillary. In the instant case, there was no reason for holding that the use of the garage on the back land was other than ancillary to (or an adjunct to) the ordinary residential use of the claimant's house. Accordingly, the claimant, as the owner of his house and of the back land, enjoyed a right of way over the passageway, to the extent that it was reasonably required for the convenient enjoyment of his dwelling house.

Massey v Bolden [2003] 2 All ER 87 considered.

Case annotations in other services: Wall v Collins and another [2007] EWCA Civ 444 
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4. Dolphin Quays Developments Ltd v Mills and others

Citation: [2007] All ER (D) 270 (May)
Hearing date: 17 May 2007
Court: Chancery Division
Judge: Sir Andrew Morritt C
Relevant legislation: Supreme Court Act 1981 section 51
Summary: costs – order for costs – payment of costs by non-party

By an agreement in writing made between O plc and the first defendant, the former agreed to sell to the latter a long lease of a flat at a site, then in course of development, for £650,000. It was also agreed between them that the purchase price should be paid by set-off against a debt due by O plc to the first defendant, but that was not recorded in the written agreement. O plc sold its interest in the site, together with the benefit of the agreement, to the claimant (the company). The first defendant was the sole director of the company. On the same day the company charged all the property so acquired to the bank as security for all liabilities of any kind and in any currency due by the company to the bank. The charge provided that the bank might, in certain events, appoint a receiver of the charged property. The bank subsequently appointed the second and third defendants (the receivers) as receivers of the property.

The company, by its receivers, instituted proceedings for specific performance of the contract for the sale of the long lease of the flat. The first defendant was prepared to complete on the basis of the agreement as to payment of the price by set-off, but that was not acceptable to the receivers. In due course the receivers sold the flat for £495,000. Accordingly, the claim, when it came before the trial judge, was for damages for breach of contract equal to the balance of the purchase price, namely £155,000. The judge dismissed the claim. The first defendant applied for an order that the receivers pay him his costs of the unsuccessful claim brought against him by the company pursuant to section 51 of the Supreme Court Act 1981 on the grounds that the receivers brought the claim at the request of the bank, the bank alone had any financial interest in the claim, the bank had funded and directed the proceedings throughout and it would be a grave injustice to the first defendant if he had to bear his own costs, especially as he was a substantial creditor of O plc, the parent of the company.

The application would be dismissed.

It was established that the making of a third party costs order required some “exceptional” circumstance. What was “exceptional” had to be ascertained by reference to the ordinary range of litigation that came before the courts. The instant case was an entirely normal case of receivers seeking to enforce a contractual right forming part of the security. There was nothing speculative about it; the fact that the claim failed might be unusual but could not be classified as “exceptional.” If an order was made in the instant case, then it should be made in all such cases. It was not alleged that there was any element of impropriety or unreasonableness in the initiation and prosecution of the claim. Not only did such absence conform that the claim was in no sense “exceptional,” but it underlined the fact that that was not an alternative justification for making the order sought.

In the absence of any winding up of the company, the charge provided that the receivers were solely responsible for their acts or defaults. In those circumstances it was not possible to identify either the receivers or the bank as the “real” party. The party was the company. The proceedings were commenced and prosecuted by its agents on its behalf for the benefit and at the expense of those claiming under it by virtue of the charge or the equity of redemption. Given the absence of any exceptional features or of any impropriety or unreasonableness on the part of the receivers or the bank justice did not require that an order in the first defendant's favour should be made against the receivers.

Case annotations in other services: Dolphin Quays Developments Ltd v Mills and others [2007] EWHC 1180 (Ch)
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5. Birmingham City Council v Walker

Citation: [2007] All ER (D) 237 (May)
Hearing date: 16 May 2007
Court: House of Lords
Judge: Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe and Lord Mance
Relevant legislation: Housing Act 1980; Housing Act 1985 sections 87, 88
Summary: housing – local authority houses – security of tenure

In 1965, the defendant's parents, Mr and Mrs W, were granted a joint tenancy of a house belonging to the claimant local housing authority. On Mr W's death in 1969, Mrs W became the sole tenant. When the Housing Act 1980 came into force, her tenancy became a secure tenancy. She died in 2004. At that time the defendant was living with her in the house. The authority served notice to quit on Mrs W's personal representatives, and issued proceedings claiming possession of the property. The defendant argued that he was entitled to succeed to the tenancy under section 87 of the Housing Act 1985.

The authority submitted that Mrs W had been a joint tenant; that she had become the sole tenant; and that she herself was, therefore, a successor within the terms of section 88 of the Act, so that the defendant was not qualified to succeed to the tenancy. The dispute was resolved in favour of the authority by a deputy district judge on a preliminary issue. The defendant's appeal was dismissed by a circuit judge. On a second appeal, the Court of Appeal found for the defendant, and the authority appealed against that decision.

The issue was whether the words “has become the sole tenant” in section 88(1)(b) referred to any time in the past, or was limited to a case in which the tenant had become the sole tenant under a secure tenancy, i.e. after the 1980 came into force.

The appeal would be dismissed.

The words “he was a joint tenant and has become the sole tenant” in section 88(1)(b) meant that he was a joint tenant under a secure tenancy and had become the sole tenant under a secure tenancy. The events to which section 88(1) referred were events in relation to tenancies that had become secure tenancies, and not to events that had happened earlier. One did not expect rights conferred by the statute to be destroyed by events that had taken place before it was passed. Further, the word “successor” most naturally meant successor to a secure tenancy. Although “successor” was a defined expression, the ordinary meaning of the word was part of the material that could be used to construe the definition. Moreover, there was no rational purpose in giving the definitions a retrospective effect.

When Mrs W became sole tenant, it was not of a secure tenancy and she was not, therefore, a successor.

Decision of the Court of Appeal [2006] 2 FCR 623 affirmed.

Case annotations in other services: Birmingham City Council v Walker [2007] UKHL 22; [2006] 2 FCR 623 
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6. Mawle v West Oxfordshire District Council

Citation: [2007] All ER (D) 217 (May)
Hearing date: 15 May 2007
Court: Queen's Bench Division (Administrative Court)
Judge: Rabinder Singh QC
Relevant legislation: Town and Country Planning Act 1990 section 287
Summary: town and country planning – development – local plan
 
The claimant was one of many trustees (which were part of a consortium) who owned land that was subject to proposals for development. The defendant local planning authority was responsible for drawing up a local plan to give effect to those proposals. In September 2001, a plan was placed on first deposit. In 2003, a revised plan was published. Two years later, an independent inspector held an inquiry. He considered two matters, namely, the construction of: (i) a one-mile through road known as “Cogges Link” (CLR); and (ii) a major housing development known as “North Curbridge” (NC).

In relation to (i), he recommended a review. He stated that other highway schemes were available and could be pursued to meet the twin objectives of reducing traffic congestion and avoiding negative environmental impacts on the area.

In relation to (ii), the inspector also recommended a review. He suggested that the best course would be to defer the development on the basis that alternative sites had to be reconsidered first, and the fact that there was no real need to allocate the land in question to the development which had been proposed. Thereafter, the authority considered the inspector's recommendations and published its proposed modifications to the draft plan.

The authority rejected recommendation (i), deciding that the CLR was a viable option. They partially accepted (ii), deciding that an absolute embargo should not be imposed on development, rather that NC had to be released should an overriding need for housing allocation arise. The consortium objected to those proposed modifications, however, the authority maintained its position. The authority stated that the CLR represented the best solution to the traffic problem. In respect of NC, the authority stated that a flexible approach was required to ensure that there would be no delay of necessary housing and supporting infrastructure. The authority consequently adopted the plan with the proposed modifications. The claimant applied under section 287 of the Town and Country Planning Act 1990 to quash parts of the adopted local plan which related to CLR and NC.

An issue arose as to whether the authority had erred in law by failing to provide adequate reasons in adopting the plan, against the recommendations made by the inspector.

The application would be dismissed.

On the evidence, the authority had adequately explained its reasons for departing from the recommendations made by the inspector in relation to the CLR and from partially departing from the recommendations of the inspector in relation to the NC development. Accordingly, the plan adopted by the authority would stand in its entirety.

Case annotations in other services: Mawle v West Oxfordshire District Council [2007] All ER (D) 217 (May)  
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7. Gurhy v Oliver & Saunders (Developments) Ltd

Citation: [2007] All ER (D) 201 (May)
Hearing date: 14 May 2007
Court: Chancery Division
Judge: Briggs J
Summary: injunction – interlocutory – balance of convenience

The claimant and the defendant developer owned neighbouring plots of land. The two plots had previously formed part of an estate and had been sold along with six other parcels of land disposed of by the original vendor. Various restrictive covenants, dating back to a conveyance of 1924, and placing restrictions upon the nature and execution of the development of the plots of land, attached to the properties. A dispute arose between the parties concerning the defendant's proposed development of its property, that development consisting of the demolition of the existing dwelling house on the site and the construction of a replacement.

The claimant alleged, inter alia, that that development would put the defendant in breach of a number of the restrictive covenants, including, inter alia, a requirement for the defendant to have acquired consent for the development from the claimant's surveyor; a restriction on the erection of huts for the purposes of building works with particular reference to the fact that the defendant had already placed Portakabins on the development site; a restriction on the usage of a private road servicing the front of the properties for the vehicular carriage of building materials to the development site; the use of the same road for the vehicular carriage of machinery and plant; and the restriction that the property was only to have been used as a dwelling house and, therefore not as a demolition and construction site.

Notwithstanding the fact that the claimant was not ordinarily resident at her property, she sought to prevent the defendant from continuing the development in alleged breach of the restrictive covenants, and, accordingly, proceedings were issued. The claimant subsequently obtained interlocutory injunctions preventing the alleged threatened or actual breaches of covenant pending determination of the issues at trial. At the return hearing of the claimant's injunction application, an issue arose in relation to the proper construction of the covenants in issue. That construction was determined as a preliminary issue, and, consequently, the only actual or threatened breaches of covenant that remained in issue between the parties concerned the placement of the portakabins on the development site, and the threatened use of the private road for the vehicular carriage of building materials onto the site. Accordingly, the question of whether continuing restraint should be granted in relation to those remaining issues fell to be determined.

The court ruled:

In relation to damages, while the actual and threatened breaches of the remaining covenants would not have caused any significant loss to the claimant, the likely effects of the injunctions being discharged would have been difficult to quantify and compensate in damages. Conversely, the potential losses that would be caused to the defendant were the injunctions to be continued, while greater than those potentially sufferable by the claimant, were readily quantifiable and capable of being compensated in damages.

In light of the relatively short time between the instant hearing and the expected trial date, the delays to the defendant's development were likely to be minimal, and, on the time scale provided by the defendant, were not likely to be in excess of two weeks. Moreover, there was a risk that, if the claimant were to be denied interim relief, the defendant would convey, by vehicle along the private road, as much of the building materials as possible onto the development site before the trial of the action, thereby effectively rendering the covenant completely spent before the issue could be determined by the court. In those circumstances, the balance of convenience fell in favour of the claimant.

Accordingly, the defendant would be restrained from using the private road for the vehicular carriage of building materials to the site pending the outcome at trial. In relation to the Portakabins, they would be allowed to remain on the development site on the provision that the defendant extended an existing corrugated hoarding to hide them from the view of the neighbouring properties.

American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 applied; Shelfer v City of London Electric Lighting Co; Meux's Brewery Co v City of London Electric Lighting Co [1895] 1 chapter 287 and Regan v Paul Properties Ltd and others [2006] All ER (D) 327 (Oct) considered.

Case annotations in other services: Gurhy v Oliver & Saunders (Developments) Ltd [2007] All ER (D) 201 (May)
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8. Seventh Earl of Malmesbury and others v Strutt & Parker (a partnership) and another

Citation: [2007] All ER (D) 181 (May)
Hearing date: 11 May 2007
Court: Queen's Bench Division
Judge: Jack J
Summary: negligence – surveyor – duty to take care

The action was for negligence in connection with the negotiation of leases of land to Bournemouth International Airport Ltd (BIA) for car parking. The freehold of the land in question was part of an estate, the tenant for life of which was the first claimant. The first defendant was a well-known firm of surveyors, property consultants, managers and estate agents. A partner in the firm, who later became a consultant, A, had conduct of the negotiations on behalf of the estate. He negotiated the terms of, inter alia, three leases in 2000, 2002 and 2003.

It was alleged that he was negligent and in breach of his duty in that he should have negotiated the leases with rents which reflected the earnings of the car park and provided for the estate to receive the greater part of those earnings. The 2003 lease was supplementary to the 2002 lease and brought in some more land. The leases were to run until 13 August 2026. The initial rent under the 2002 lease was £9,000. Following a review under the terms of the lease it became £30,051 as from 8 July, 2005. There was evidence that the earnings of BIA from the car parks in 2005 was £854,000 and in 2006 £1,804,000, the majority of which came from the car park on the leased land.

The first defendant issued an application to join the second defendant, who was a firm of solicitors and, F, a partner in that firm as part 20 defendants. F acted as solicitor to the estate. The first defendant claimed that if A had failed in his duty so to had F.  It was agreed that the main points of principle as to liability and date for assessment of damages, should liability be established, would be decided leaving the consequences to a further hearing if they could not be agreed.

The court ruled:

On the evidence, A had been in breach of his duty to the estate in respect of the negotiation of the 2002 and 2003 leases. If he had fulfilled his duty the most likely outcome would have been that the estate would have agreed with BIA a rent of 10 per cent of the turnover on top of a base rent of £9,000 in respect of Field A. However, A was not in breach of his duty in respect of the 2000 lease, nor was there any contributory negligence on the part of the estate. F was not in duty to the estate and the claims against him and the second defendant would fail. The claimants' damages were to be assessed on the basis of valuations carried out as at the transaction dates.

County Personnel (Employment Agency) Ltd v Alan R Pulver & Co (a firm) [1987] 1 All ER 289 applied.

Case annotations in other services: Seventh Earl of Malmesbury and others v Strutt & Parker (a partnership) and another [2007] EWHC 999 (Admin)
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9. McLaren v Kubiak

Citation: [2007] All ER (D) 191 (May)
Hearing: 11 May 2007
Court: Chancery Division
Judge: Judge Pelling QC sitting as a judge of the High Court
Relevant legislation: Commons Registration Act 1965 section13; Countryside and Rights of Way Act 2000 section 98
Summary: commons – registration – town or village green

The claimant entered into a contract to purchase a plot of land (the site). On 6 May, 2006, he arranged for a number of trees on the site to be felled and caused the site to be fenced off with hoarding panels. Some of the panels were torn down or knocked down. The panels were re-erected on 8 May, and again were knocked down. The land was transferred to the claimant on 10 May. On 28 June, the defendant applied to the local authority to register the site as a new town or village green under section 13 of the Commons Registration Act 1965, as amended by section 98 of the Countryside and Rights of Way Act 2000.

The regulations referred to in section 13 were the Commons Registration (New Land) Regulations 1969, statutory instrument 1843 and provided by regulation three for an application to be made subject to and in accordance with the Regulations. The claimant subsequently removed what remained of the fencing and signs, asserting that the site was private property, were erected in place of the fencing. He commenced proceedings seeking a declaration that the site was not registerable as a new green for the purposes of section 13 of the 1965 Act and applied for summary judgment on his claim. The defendant applied for an order that the proceedings be struck out alternatively stayed pending the outcome of the application for registration; alternatively for a protection from costs order. On 6 April, 2007, section 15 of the Commons Act 2006 came into force, replacing the previous legislation and providing a period of grace of five years after the use of land by local people as of right had been ended by the landowner during which an application to register land as a town or village green was made.

The defendant then applied under section 15 of the 2006 Act for registration of the site as a town or village green. The claimant contended that in order to succeed in an application under the 1965 Act the defendant had to prove that the land had been used as of right by local people for recreation throughout a period of 20 years immediately preceding the date when the application for registration was made, 28 June, 2006, and that the defendant was unable to satisfy that requirement by reason of the erection of the fencing. He contended that as a matter of general principle the right to apply to the courts for determination of his rights was not to be treated as being excluded by statute save where clear words were used and that no such conclusion arose from the 1965 Act as amended; in those circumstances it could not be suggested that the proceedings constituted an abuse of process and therefore could not be struck out. The defendant contended that a piece of land could not become a green unless it was registered as such, registration could only occur following an application in accordance with the applicable regulations and it was not open to a court to decide the question.

The claim would be dismissed.

The question whether a given piece of land was or was not a town or village green depended upon registration not upon proving the constituent elements on an application for a declaration. After the expiry of the statutory cut off date, land could only become a town or village green if it was registered as such and the only way that could occur was pursuant to the Regulations, as provided for by 13(b) of the 1965 Act. Regulation 3 and section 13(b), when read in combination, meant that after 2 January, 1970, land could only become a town or village green if it was registered as such, and it could only be registered as such following an application in accordance with regulation three. Accordingly, the attempt to obtain a declaration that the site was not registerable as a new town or village green was objectionable.

Any decision reached by the court would not be binding on the authority or any other local inhabitants other then the defendant; the process which had developed in relation to contested applications to registration authorities was flexible and relatively cheap; no question of excluding a party from access to the courts arose since any party who was dissatisfied with the decision of the registration authority potentially had two routes available to him in which to attack that decision. The proceedings should be struck out as an abuse of process.

Oxfordshire County Council v Oxfordshire City Council [2006] 4 All ER 817 applied.

Case annotations in other services: McLaren v Kubiak [2007] EWHC 1065 (Ch)  
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10. Khan & Partners Ltd v Clemments and others

Citation: [2007] All ER (D) 138 (May)
Hearing date: 9 May 2007
Court: Chancery Division
Judge: Lindsay J
Relevant legislation: Law of Property (Miscellaneous Provisions) Act 1989 section two
Summary: sale of land – contract – exchange of contracts

The claimant had agreed to purchase an area of land (the property) from the defendants. On 1 August, 2006, the defendants' solicitor sent copies of the draft contract and transfer to the claimant's solicitor. The draft transfer was on the standard TR1 form (the transfer). Under the heading “additional provisions” various definitions and terms had been added to box 12 of the transfer by the defendants' solicitor. On 14 September, the parties' solicitors exchanged contracts by telephone, in accordance with the Law Society's telephone / telex exchange formula B. The resulting memoranda, properly detailed by each side, did not record any amendments to box 12 of the transfer. Subsequently, the claimant's solicitors sent its signed part of the contract to the defendants' solicitors; however, the provisions of box 12 of the transfer had been deleted.

A dispute arose between the parties concerning the contents of the contract and the transfer, each relying upon a different version as being the contract into which they had entered. Subsequently, the defendant served a notice to complete, and the claimant obtained a without notice freezing order preventing the defendants from disposing of the property, and preventing the forfeiture of its deposit pending the resolution of the dispute. The claimant issued proceedings by which it sought, inter alia, specific performance of the version of the contract for sale for which it contended, and a declaration that the notice to quit, served by the defendants was invalid. The defendant applied for summary judgment on the claim.

The primary issue that fell to be determined was whether the parties had concluded a valid contract for the sale of the property pursuant to section two of the Law of Property (Miscellaneous Provisions) Act 1989.

The application would be allowed.

In the instant case, the defendants had agreed a contract for sale including the additional provisions added to box 12 of the transfer. The claimant had agreed a contract for sale excluding those additional provisions. In those circumstances, there had been no contract capable of satisfying the requirements of section two of the 1989 Act. Accordingly, the claimant had no prospect of succeeding in a claim for specific performance of a contract where the contract in suit had never existed. Similarly, the notice to quit served by the defendants was invalid on the basis that it had been served pursuant to a contract for sale which had not existed.

Case annotations in other services: Khan & Partners Ltd v Clemments and others [2007] All ER (D) 138 (May) 
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11. White v Knowsley Housing Trust

Citation: [2007] All ER (D) 38 (May)
Hearing date: 2 May 2007
Court: Court of Appeal, Civil Division
Judges: Buxton, Longmore and Sir Martin Nourse
Relevant legislation: Housing Act 1988 section nine
Summary: landlord and tenant – recovery of possession – order for possession

The tenant became an assured tenant of the claimant, which was a registered social landlord, under the terms of the Housing Act 1988. She fell into arrears and the landlord sought possession of the premises. On 8 June, 2004, the district judge in the county court postponed the date of possession pursuant to section 9(2) of the 1988 Act. He made an order that “(1) The defendant give the claimant possession of [the premises] on or before 6 July, 2004 [a money judgment for (£2,250) for rent arrears and costs]; […] (5) This order is not to be enforced so long as the defendant pays the claimant the rent arrears and the amount for use and occupation and costs totalling £2250 by the payments set out below in addition to the current rent. Payments required: £5.00 per week, the first payment being made on or before 14 June, 2004.”

The tenant remained in the premises. She decided that she would like to exercise her right to buy the premises under part V of the Housing Act 1985. The landlord took the position that because the tenant had failed to comply with the terms of the order she was no longer a tenant of the premises, but only a trespasser and thus was ineligible for the right to buy. The court ordered that the tenant apply for a declaration that she was still an assured tenant. On 14 September, 2006, the judge dismissed the application, but granted leave to appeal to the Court of Appeal. The tenant sought and was granted permission to appeal out of time against the original order of the district judge.

The appeals would be dismissed.

(1) A periodic assured tenancy did not come to an end only upon actual delivery up of possession. The answer to when the tenancy came to an end had to be found in the construction of the order made by the court. That was particularly so when the court exercised its wide powers under section 9(2–4) of the 1988 Act to suspend execution or postpone the date of possession.

Where an order was made that the tenant had to give the landlord possession of the premises on or before a specific date, such an order not to be enforced so long as the tenant paid the landlord the rent arrears and the amount for use and occupation by payments in addition, the only right that the tenant retained after the making of the order was a right to remain on the premises provided he or she observed the terms on which enforcement was suspended. That was significantly different from the right to possession of the premises that was the essence of a tenancy.

Moreover, having regard to the ability of the court to impose conditions on making an order for suspension under section 9(2) of the 1988 Act, if the tenancy could not end until possession was actually given up, there could be no case in which a former tenant could be in occupation after the termination of the tenancy. There were also policy considerations, namely that a tenant who had defaulted on his or her obligations as a tenant should not retain his or her right to buy the premises at a substantial discount.

Looking at the terms of the order made in the instant case, the assured tenancy expired on the last date for giving possession, 6 July, 2004. In those circumstances there could be no argument that the order made by the district judge should be amended so as to make clear that the tenant was not deprived of the benefits of the tenancy. In any event the appeal would be dismissed on the basis of delay alone as the fact that the time for applying for permission appeal against the decision of the district judge was extended, did not prevent the court, on the hearing of the appeal, from reverting to the effect of delay.

Street v Mountford [1985] 2 All ER 289, Thompson v Elmbridge BC [1987] 1 WLR 1425, Artesian Residential Investments v Beck [1999] 3 All ER 113, Bristol CC v Hassan [2006] 4 All ER 420 and Harlow DC v Hall [2006] 1 WLR 2582; [2006] All ER (D) 393 (Feb) considered.

Case annotations in other services: White v Knowsley Housing Trust [2007] EWCA Civ 404
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12. Prudential Assurance Co Ltd and others v PRG Powerhouse Ltd and others

Citation: [2007] All ER (D) 21 (May)
Hearing date: 1 May 2007
Court: Chancery Division
Judge: Etherton J
Relevant legislation: Insolvency Act 1986 5(2), 6(1)
Summary: insolvency – voluntary arrangement – company
 
PRG Powerhouse Ltd (Powerhouse) was a subsidiary of PRG Group Ltd (PRG), registered in New Zealand. In September 2003 it acquired the assets of the Powerhouse business including 24 high street stores and 110 superstores. A number of the landlords of those stores, including the claimants, took parent company guarantees or indemnities from PRG in respect of Powerhouse's obligations under the leases. Powerhouse got into financial difficulties and its directors informed its creditors that it needed to close 35 underperforming stores and to retain 53 stores which they hoped would enable it to trade profitably.

The directors of Powerhouse proposed a company voluntary arrangement (CVA) which was approved at a meeting of Powerhouse's creditors on 17 February, 2006. In two sets of proceedings the claimants (the Luctor applicants and the Prudential applicants), challenged the validity of the CVA. They claimed against the respondents a declaration that the CVA was ineffective and/or invalid in so far as it purported to affect their rights against persons other than Powerhouse, or alternatively in so far as the CVA purported to constitute an express release by the claimants of their rights against persons other than Powerhouse. They also claimed an order that the creditors' approval of the CVA be revoked pursuant to section six of the Insolvency Act 1986 because the CVA was unfairly prejudicial to the claimants as creditors of Powerhouse.

At the trial of preliminary issues the issues arose (i) whether or not on the correct interpretation of section 5(2) of the 1986 Act and on the true construction of the CVA and of the guarantees the CVA was effective to release PRG from liability in respect of the guarantees and (ii) whether the CVA unfairly prejudiced the interests of the claimants within the meaning of section 6(1)(a) of the 1986 Act.

The court ruled:

(1) Each creditor was a party to the arrangement by virtue of being, and in the capacity of, a creditor of the company. It was the company, and not any third party, which had the benefit of and could enforce the rights and obligations conferred by the CVA. The hypothetical agreement resulting from approval of a CVA was not, therefore, one between creditors as to rights and obligations between themselves in a capacity other than as creditors of the company. An arrangement would not cease to be an arrangement between a company and its relevant creditors or members merely because the scheme was part of a wider scheme involving outsiders.

On the true construction of the CVA and of the guarantees, the claimants were obliged to Powerhouse (by clause 3.14 of the CVA), to treat the guarantees as having been released and there was nothing to preclude Powerhouse from enforcing that obligation.

Shaw v Royce [1911] Ch 138 and Re Primlaks (UK) Ltd (No 2) [1990] BCLC 234 considered.

(2) There was no single and universal test for judging unfairness in the context of section six of the 1986 Act. It was necessary to consider all the circumstances, including in particular, the alternatives available and the practical consequences of a decision to confirm or reject the arrangement. Unfairness might be assessed by a comparative analysis from a number of different angles. They included vertical comparison with the position on winding up, or, in the case of individuals, bankruptcy and horizontal comparison with other creditors or classes of creditors.

In that context another guide, in the case of a CVA, was comparison with the position if, instead of a CVA, there had been a formal scheme of arrangement under section 425 of the Companies Act 1985 on which different classes of creditors would have been required to meet and vote separately. Depending on the circumstances, differential treatment might be necessary to ensure fairness. If a reasonable and honest man in the same position as the claimants might reasonably have approved the CVA, that would be a powerful and probably conclusive, factor against the issue of fair prejudice, however the fact that no reasonable and honest man in the same position as the claimants would have approved the CVA was not necessarily conclusive in favour of the claimants.

Applying those principles, in the circumstances the CVA unfairly prejudiced the interest of the claimants as creditors of Powerhouse within the meaning of section 6(1)(a) of the 1986 Act. The CVA left the guaranteed landlords in a worse position than without the CVA, having regarded both the present and also future liabilities.

Re T&N Ltd [2005] 2 BCLC 488 and Sisu Capital Fund Ltd v Tucker [2005] All ER (D) 200 (Oct) applied.

Case annotations in other services: Prudential Assurance Co Ltd and others v PRG Powerhouse Ltd and others [2007] EWHC 1002 (Ch)

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