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12. Moto Hospitality Ltd v Secretary of State for Transport

Citation: [2007] EWCA Civ 764
Hearing date: 26 July 2007
Court: Court of Appeal, Civil Division
Judge: Lord Phillips of Worth Matravers CJ, Tuckey and Carnwath LJJ
Relevant legislation: Compulsory Purchase Act 1965 section 10
Summary: compulsory purchase � compensation � injurious affection

The claimant operated a motorway service area (MSA), which it occupied under a sublease. The MSA lay close to junction 10 on the M40. During 2001 and 2002, alterations were carried out to the junction, involving general improvements and the stopping up and realignment of various sections of highway (the scheme). Authorisation of the scheme required a package of statutory orders, which included compulsory powers. The claimant claimed that the new arrangement substantially diminished the value of its site as a service station, principally because the routes to it were longer and less direct. It sought compensation under section 10 of the Compulsory Purchase Act 1965 for the diminution in value of its leasehold interest. The claim was based on both temporary and permanent loss. The Lands Tribunal ordered the trial of a preliminary issue, namely whether, if the claimant had suffered loss through the diminution in value of its leasehold interest in the premises due to the carrying out of the works, it was entitled to compensation under section 10 of the Compulsory Purchase Act 1965. The tribunal answered the question in the affirmative, and the Secretary of State appealed.

The appeal would be allowed. The inclusion of compulsory powers in the package of orders for the scheme, for at least part of the land required, was enough to trigger the application of section 10 to the works as a whole. While it was true that in the instant case the obstructions were sufficiently local, and the relationship between the MSA and the motorway sufficiently special to provide at least the starting point for a claim to particular damage, the damage was not sufficiently direct, at least in respect of the permanent stopping up orders, to establish a claim for compensation under section 10.
The immediate accesses to the MSA remained substantially unaffected. The loss resulted not from any direct obstructions to those accesses, but from the rearrangement of the judgment as a whole. That left open the question whether a claim might be made for the effect of temporary closures during the works, on which the tribunal had made no findings. Accordingly, the matter would be remitted to the tribunal to consider and determine that issue.

Jolliffe v Exeter Corporation [1967] 2 All ER 1099, Wildtree Hotels Ltd v Harrow London BC [2000] 3 All ER 289 considered.

Case annotations in other services: Moto Hospitality Ltd v Secretary of State for Transport [2007] All ER (D) 430 (July); Jolliffe v Exeter Corporation [1967] 2 All ER 1099; Wildtree Hotels Ltd v Harrow London BC [2000] 3 All ER 289

13. Lewisham London Borough Council v Malcolm

Citation: [2007] EWCA Civ 763
Hearing date: 25 July 2007
Court: Court of Appeal, Civil Division
Judges: Arden, Longmore and Toulson LJJ
Relevant legislation: Housing Act 1985 section 93; Disability Discrimination Act 1995 section 22(3)
Summary: housing � local authority houses � possession � disability discrimination

The defendant was diagnosed with schizophrenia in 1985. By 1990 his condition had stabilised on medication, given by injections in a form that permitted gradual absorption of the drug injected over a long period. In 2002 he was granted a secure tenancy of a flat by the claimant local housing authority, which meant, pursuant to section 93(2) of the Housing Act 1985, that he could not sublet the flat without the consent of the authority. In October 2003, the defendant's medication was changed from injections to oral medication. In April 2004, those treating the defendant discovered that he had not been taking his oral medication, probably since the latter part of 2003. In June 2004, the defendant sublet his flat without the authority's consent. His tenancy, accordingly, ceased to be a secure tenancy, and he could not thereafter regain that privileged status. The authority discovered in July 2004 that the flat had been sublet and gave the defendant notice to quit. In December 2004, it issued proceedings for possession. At the hearing, the defendant contended that his condition amounted to a disability within the terms of the Disability Discrimination Act 1995 and that the changes in his treatment had led him to make irrational decisions. The judge held, inter alia, that the 1995 Act did not apply because the defendant had lost his security of tenure, and that, in any event, the defendant was not a �disabled person� for the purposes of section 1 of the 1995 Act.

He appealed. The principal issue on the appeal was whether the defendant could rely on section 22(3)(c) of the 1995 Act in answer to the authority's claim to possession, given that the authority had an immediate right to possession under section 93(2) of the 1985 Act, and the court had no discretion to withhold the possession order.

The appeal would be allowed.

The tenant could rely on section 22(3)(c) in the possession proceedings brought by the authority, even though he had no security of tenure, and the court had no discretion not to make a possession order. The court should dismiss the proceedings if it was satisfied that their pursuit was unlawful under section 22(3)(c). While it was true that section 93(2) was totally unqualified, and no exception was made for the case when the tenant parted possession because he was acting under a disability, by the same token section 93 did not deal with the right to possession. That was left to be governed by the general law. Accordingly, there was no reason why Parliament should, when enacting the 1995 Act, have qualified section 93(2). Section 22(3)(c) was also unqualified. It did not say that it was unlawful for a landlord to discriminate against a disabled person by evicting him only if the tenant had security of tenure. On the contrary, the provision was totally unqualified, and it was expressed in the powerful language of unlawfulness. Moreover, it was difficult to see what policy reason there could be for Parliament restricting section 22(3)(c) to cases where the tenant had security of tenure. Section 93 evidenced a clear statutory intention that subletting should lead to loss of a secure tenancy, but it was not clear that Parliament intended that policy to prevail over the policy behind the 1995 Act that landlords should make adjustments for actions by disabled people by reason of their disability and should not evict tenants with a disability without justification. Manchester City Council v Romano; Manchester City Council v Samari [2004] 4 All ER 21 considered.

Case annotations in other services: Lewisham London Borough Council v Malcolm [2007] All ER (D) 401 (July); Manchester City Council v Romano; Manchester City Council v Samari [2004] 4 All ER 21

14. Ashwell Property Group Plc & another v Cambridge City Council

Citation: [2007] EWHC 1753 (Admin)
Hearing date: 20 July 2007
Court: Queen's Bench Division (Administrative Court)
Judge: Forbes J
Relevant legislation: Town & Country Planning Act 1990 section 287; Planning & Compulsory Purchase Act 2004 schedule 8, paragraph 10(5)
Summary: town and country planning � development � local plan

The first claimant, A, had an interest in a parcel of land situated to the west of Cambridge, known as the Barton Road North site (the site). The site was situated on the edge of Cambridge and was located within the Cambridge green belt (CGB), according to the extant local plan. Therefore, the presumption against development on it applied. Then, as a result of a new regional planning guidance, A sought a strategic scale development for approximately 3,500 dwellings on the site. The defendant local planning authority, together with another authority, undertook a review of the plan. The proposed development was rejected on location and sustainability grounds. In light of that, the authority published a revised draft of the plan, and placed it on deposit. Thereafter, A raised objections to the draft. A recognised that the draft was looking at smaller releases from the CGB, and so it accordingly submitted a significantly smaller site, proposing the development of 350 to 400 units for inclusion into the �allocated sites for development in the CGB� in any subsequently adopted plan. An inspector was appointed to hold an inquiry into the matter. In his final report, he recommended that the site should not be allocated for housing, and that there were no exceptional grounds for altering the CGB boundary where the site was located. By reason of paragraph 10(5) of schedule 8 to the Planning & Compulsory Purchase Act 2004, that recommendation was binding on the authority, who later resolved to adopt the plan. A challenged the validity of the adopted plan under section 287 of the Town & Country Planning Act 1990. An issue arose as to whether the inspector had applied the correct test in the relevant planning policy, which referred to the release of the CGB on the periphery of Cambridge.

The application would be dismissed.

In the instant case, the inspector had applied the correct test. The policy in question had required a single act of review; it was not prescriptive as to how that review should have been taken. In those circumstances, and given the fact that A had not demonstrated that it had had an exceptional case for the proposed development on the CGB, in accordance with the relevant policy, there could be no challenge to the validity of the adopted plan.

Case annotations in other services: Ashwell Property Group Plc & another v Cambridge City Council [2007] All ER (D) 338 (July)

Statutory Instruments

1. Housing Act 2004 (Commencement No 8) (England and Wales) Order 2007

Number: 2007/1668
Enabling power: Housing Act 2004
Commencement: 1 August 2007
Summary: This SI brings part 5 (and schedule 8) of the Housing Act 2004 into force in England and Wales. These provisions relate to home information packs. They are being brought into force only in relation to residential properties with four bedrooms or more, other than properties to which regulation 17C of the Building Regulations 2000 (which imposes minimum energy performance requirements) applies. Once in force, the provisions will apply to a residential property unless it is an exception under part 6 of the Home Information Pack (No 2) Regulations 2007.

2. Consumers, Estate Agents & Redress Act 2007

Royal Assent: 19 July 2007
Relevant legislation: Estate Agents Act 1979
Summary: an Act to make provision for the establishment of the National Consumer Council and its functions; to make provision for the abolition of other consumer bodies; to make provision about the handling of consumer complaints by certain providers; to make provision requiring certain providers to be members of redress schemes in respect of consumer complaints; to amend the Estate Agents Act 1979; to make provision about the cancellation of certain contracts concluded away from business premises; and for connected purposes

Please note subscribers can go to LexisNexis Butterworths for further details about all the above SI. Non-subscribers can sign up for a free trial of the online service.

Features

1. Land Registry to move in to new territory with e-conveyancing

Land Registry is proposing to introduce electronic legal charges, expand its existing range of facilities for lodging applications electronically and enhance its Chain Matrix facility for the electronic exchange of paper contracts. These would form part of the Land Registry Network that the Chief Land Register hopes to establish next year. The proposals are outlined in the Registry�s second consultation on e-conveyancing, launched on 10 August and due to end on 16 November. The new rules are expected to come into force next year.

Land Registry, which holds a property database of more than 21 million titles, hopes to modernise the current paper-based conveyancing system into electronic documents and electronic signatures. Its aim is to make conveyancing easier and less stressful for the public, conveyancing professionals and others involved. The proposals would be introduced via the Land Registry (Electronic Conveyancing) Rules 2008.

Electronic legal charges would include electronic legal signatures and would be the first kind of electronic disposition of registered land in England and Wales. Once a charge has been created, a customer will be able to apply, using the Land Registry Network, for it to be registered. At least in the early stages of e-conveyancing, these would only be used for re-mortgages and second or subsequent mortgages, rather than for the purchase of registered land.

The Chain Matrix, currently being piloted in Portsmouth, Fareham and Bristol until 29 September 2007, is an information tool that allows conveyancers and others to view the status of linked conveyancing transactions. The Registry proposes to expand the service, allowing conveyancers to exchange documents. The Law Society is currently developing an electronic exchange protocol to govern this process.

Once completed, the idea is that all vendors and buyers in a chain would be able to see what stage each was at and that, once ready, money would drop automatically from bottom to top, and all documentation would be done electronically. Land Registry intends to consult further at a later stage on a fee structure required to bring electronic conveyancing into operation.

Richard Barnett, Chair of the Law Society's Conveyancing and Land Law Committee said: "The principle of e-conveyancing is excellent, and everybody agrees on that, but it�s how you get there that's at stake, and that�s why the Land Registry is having so many consultations. E-signatures, the transmission of funds electronically, and fraud and identity theft are big issues, and the Land Registry has already put back its proposed date for compulsory e-conveyancing from 2012 to 2015. There are questions that need to be answered, such as confidentiality. If I want to sell a piece of land to you should I be compelled to use the Chain Matrix?"

He added: "We are working with the Land Registry to make this a success. Once e-conveyancing is up and running, I estimate it would take me three minutes, in the best-case scenario, to complete a re-mortgage from offer, whereas it currently takes me about three days."

(16/08/07)

2. Construction unions issue warning over London Olympics

Construction unions have reached deadlock in their talks with the Olympic Delivery Authority (ODA) about a memorandum of agreement on the construction practices for the Olympics. The major sticking point is the employment model the ODA will use.

The unions, the largest of which is the Union of Construction, Allied Trades and Technicians (UCATT), support a 100 per cent direct employment model. This would mean that anyone working for a contractor or a sub-contractor on the site to be used for the Olympics would be directly employed by those people. However, the ODA, the body responsible for ensuring the delivery of venues and infrastructure for the Games, wants to use a more flexible approach.

�UCATT is not opposed to people being genuinely self-employed,� said UCATT�s director of communications, Barckley Sumner. �If people have their own digger and arrive to do their own work, for example, we do not have a problem with that. Our problem is bogus self-employment, a situation that is all too prevalent in the construction industry. It refers to people employed under HMRC�s Construction Industry Scheme (CIS4) who are considered to be self-employed for legal reasons, even though all employment tests show that they are directly employed. They have to obey orders; they have set hours; they cannot turn down work, and they have materials and tools supplied to them. But as they are considered self-employed, they do not have any employment rights.�

There are many drawbacks for employees, Mr Sumner said. �Safety is usually very badly reduced in bogus self-employed sites. In addition, companies using bogus self-employment do not provide training and so add to the industry�s huge skills shortage. Nor do they pay national insurance, holiday or sick pay or pension contributions.� Bogus self-employment costs the Exchequer at least �2.5 billion a year, the union said.

�The ODA should be following the example of Heathrow Terminal Five, where an overwhelming number of workers are directly employed. There have been few cost fluctuations, as the workforce was secured for the whole project. As a result, it is going to come in on time and on budget. Under CIS4, workers can walk away from a job at a day�s notice. There are no controls. While some people might work for a particular employer for a long time, they are also free to go if someone offers a better job or more money. The classic examples of projects where bogus self-employment has not worked out include Wembley Stadium and Holyrood, the building for the new Scottish Parliament.

�Two weeks ago we wrote to Paul Gray, the chair of HMRC, and to Jane Kennedy, the new Financial Secretary to the Treasury, to explain the situation. There are clear Treasury rules about being directly employed or registering for CIS4. This is a flagship project, which will come under global scrutiny and has to be delivered on time. We want to know how they are going to make sure that tax avoidance does not end up being a major problem.�

(19/07/07)

3. Why vendors should be wary of estate agent commission rules

Vendors who switch estate agents will have to think twice before selling the property privately or through another agent to a person introduced by the first agent, following the case of Dashwood v Fleurets Ltd.

Alison Hancock of Sprecher Grier Halberstam LLP acted for Fleurets, who had sole selling rights under an agreement entitling them to commission where unconditional contracts for sale of the property were exchanged after the contract had ended, but to a purchaser who was introduced during the sole selling rights period. A sale board had been erected by Fleurets, and several people saw the property, but no offer resulted. Mrs Dashwood later instructed another estate agent � Christie, and a purchaser who had previously expressed interest in the property to Fleurets but not viewed it through them, saw it on Christie's website, then made an offer, which resulted in a completed sale. Fleurets learned of the sale and sought their commission.

An agent with sole selling rights is not generally entitled to commission unless his services were the effective cause of the transaction. Mrs Dashwood argued that the onus was on the claimant to show it was. The judge agreed but concluded that Fleurets had discharged the onus. On appeal, Mrs Dashwood argued that the judge was wrong. Fleurets cross-appealed, submitting that, while the judge's finding as to effective cause was correct, he was wrong to find that effective cause was implied into the sole selling rights agreement.

The appeal was dismissed and the cross appeal allowed. An estate agent was not generally entitled to commission unless his services were the effective cause of the transaction. When there was no such requirement on the agent, the effective cause term would only be implied if it was necessary to give business efficacy to the contract. An agent did not have to introduce and negotiate to be entitled to commission under the agreement. In the circumstances, the effective cause term was not an implied term of the contract, and there was no business reason to imply it into such a contract. It was inconsistent with the clear wording of the terms of the contract. The claimant had undoubtedly introduced the purchaser to the defendant during the period of their sole selling rights. The fact that there had been no negotiations did not alter that conclusion. The judge had been right to conclude that the claimant had been entitled to commission.

How important is the case? Alison Hancock commented: �It means you do not have to be the effective cause of sale to be entitled to commission, nor will a court imply a term unless it is necessary to do so. A well worded contract will ensure that the agent is paid, even after they have been dis-instructed, if the sale is to a purchaser who had been introduced during the sole selling rights period. Although there were several cases on commission, the law was uncertain in that there was no judicial decision on the meaning of effective cause of sale. Most cases turn on their facts, as did this, but in the end it all came down to the terms and conditions, and it was important that they were clear.�

Relevant cases: Dashwood v Fleurets Ltd [2007] All ER (D) 67

(11/07/07)

Articles

1. REITs � the M&A perspective

Journal: Tax Journal
Citation: Issue 899, 15
Issue date: 20 August 2007
Author: Charles Beer
Summary: This article considers whether REITs will be involved in bids and corporate acquisitions and the related tax consequences.
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2. Back to basics � property: treatment of leases

Journal: Tax Journal
Citation: Issue 899, 19
Issue date: 20 August 2007
Author: Jane Feeney
Summary: In a continuing series, Jane Feeney, solicitor, Mayer Brown, writes about the tax treatment for landlords and tenants when they enter into a lease.
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3. HIPs � what next?

Journal: New Law Journal
Citation: 157 NLJ 1183
Issue date: 17 August 2007
Author: Peter Ambrose
Summary: This article discusses why doing nothing about HIPs is not an option.
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4. A way to obtain some certainty

Journal: Estates Gazette
Citation: 11 August 2007, 82
Issue date: 11 August 2007
Author: Emma Humphreys and Malcolm Dowden
Summary: This article examines what happens if a subtenant is in occupation of a property.
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5. Shedding some light

Journal: Estates Gazette
Citation: 4 August 2007, 76
Issue date: 4 August 2007
Author: Andrew Francis
Relevant cases: Regan v Paul Properties Ltd & others [2006] All ER (D) 327 (October), [2006] EWCA Civ 1319
Summary: This article explains why rights to light have been hitting the headlines in the property press in recent months. It focuses on the decision in Regan v Paul Properties Ltd & others, which shows that developers that ignore this area of law do so at their peril.
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6. Beware the borrowers

Journal: Legal Week
Citation: 2 August 2007, 30
Issue date: 2 August 2007
Author: Sarah Clover and Marianne Robson
Summary: This article argues that property lawyers� insurance premiums may increase due to mortgage fraud and changing economic conditions. Insurers have reported that they are seeing an increase in the number of claims arising from mortgage fraud. It considers how lawyers can identify the warning signs of such fraud and the consequences of failing to do so.
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7. Mortgage fraud: safe as houses?

Journal: Law Society Gazette
Citation: (2007) LS Gaz, 26 July, 26
Issue date: 26 July 2007
Author: Grania Langdon-Down
Summary: This article examines why mortgage fraud involving solicitors is on the increase, and why there are fears that the painful lessons of the 1990s have been forgotten.

8. Building an alternative to HIPs

Journal: Law Society Gazette
Citation: (2007) LS Gaz, 12 Jul, 14
Issue date: 12 July 2007
Author: Paul Marsh
Summary: This article explains why the Law Society is eager to see some real improvements in the government's conveyancing procedures.