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Issue 52 – April 2008

Contents

Cases
Statutory Instruments

Features
Articles
News

Events
Discounts (how to book and claim discounts)

CLSL


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Cases

1. Volta Developments Ltd and another v Waltham Forest Friendly Society

Citation: [2008] All ER (D) 306 (Mar)
Hearing date: 20 March 2008
Court: Chancery Division
Judge: Paul Chaisty QC sitting as a deputy judge of the High Court
Summary: easement – right of way – reservation in conveyance – construction of reservation

The claimant companies were the owners of three adjoining properties (the properties). To the rear of those properties was an open area of land (the open land), owned by the defendant friendly society, which itself was adjacent to a disused public house. The open land had once been used as the car park to the public house. By a transfer dated 1961, a right of way measuring 12 feet had been reserved over part of the open land. By a further transfer dated 1963, that right of way was extinguished and replaced with a right of way over part of the open land to allow access to land that included the properties (see [6]). In June 2007, having purchased the open land, the defendant erected posts and hoardings, which restricted the line of access to the properties, permitting direct access to only one of them. Until that time, access had been gained freely across the whole of the open land to the rear of each of the three properties. Subsequently, a dispute arose as to the nature of the right of access.

The claimants submitted, inter alia, that the wording of the 1963 transfer made it absolutely clear that each of the properties was to enjoy, distinctly and separately from the others, its own right of access across the open land. The defendant submitted, inter alia, that, on its true construction, the 1963 transfer provided for one point of access along part of the open land, which internally between the three properties could serve as access to each.

The court ruled:
To determine the true nature of the right of access expressed in the 1963 transfer, it was necessary to look at the transfer within the context of the surrounding circumstances prevailing at the material time. The wording of the transfer itself and the fact that previous arrangements and transfers in relation to the land in issue led to the conclusion that the defendant was correct in its contention that the properties were together entitled to only one means of access from a single strip of land across the open land.

Investors' Compensation Scheme Ltd v West Bromwich Building Society, Investors' Compensation Scheme Ltd v Hopkin & Sons (a firm), Alford v West Bromwich Building Society, Armitage v West Bromwich Building Society [1998] 1 All ER 98 applied.

Case annotations in other services: Volta Developments Ltd and another v Waltham Forest Friendly Society [2008] All ER (D) 306 (Mar); Investors' Compensation Scheme Ltd v West Bromwich Building Society, Investors' Compensation Scheme Ltd v Hopkin & Sons (a firm), Alford v West Bromwich Building Society, Armitage v West Bromwich Building Society [1998] 1 All ER 98
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2. Mckay v Renlon Ltd

Citation: [2008] EWHC 533 (QB)
Hearing date: 19 March 2008
Court: Queen's Bench Division
Judge: Judge Seymour QC
Summary: contract – breach – causation

The claimant carried on business as a lessor of high quality residential accommodation under the style “NW3 Developments”. His practice was to purchase an appropriate flat, invariably in the NW3 postcode of London, and then to refurbish it to his standards. The defendant carried on business in the provision of damp-proof coating for properties. The claimant engaged the defendant to commence work in relation to damp-proofing at the flat. In February 2004, the claimant discovered that water had penetrated the flat. He reported the matter to the defendant and, in due course, undertook work after which there was no further water penetration into the flat. He brought proceedings against the defendant. He contended that the defendant had been in breach of contract in failing to apply the damp-proof coating to the party wall properly. He argued that he was put to expense in dealing with the consequences of the water penetration and that he was unable to let the flat during the period of the breach. He sought damages for those losses.

The court ruled:
On the evidence, if the work the defendant had been contracted to carry out in relation to the party wall had been carried out properly, water in the section in question would not have been penetrated into the interior of the flat. Accordingly, the claimant's losses had been caused by the breach of contract of the defendant in not applying a damp-proof coating to the party wall properly.

Case annotations in other services: Mckay v Renlon Ltd [2008] All ER (D) 295 (Mar)
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3. Oun v Ahmad

Citation: [2008] EWHC 545 (Ch)
Hearing date: 19 March 2008
Court: Chancery Division
Judge: Morgan J
Relevant legislation: Law of Property (Miscellaneous Provisions) Act 1989, section 2; Land Registration Act 2002, section 73
Summary: sale of land – contract – form of contract

The respondent was the owner of a long lease of a property. An off licence business was operated from the lower part of the property, and the upper part was used for residential purposes. In December 2004, the appellant and respondent came to an arrangement that provided for the sale of the lease to the appellant. On 10 December 2004, two documents were brought into existence to reflect that arrangement. The first document was headed “CONTRACT TO SELL” and provided, inter alia, for a sale price of £75,000; £5,000 by way of deposit, the balance to be paid upon completion (see [4]). The second document was handwritten on a single sheet of paper. The second document described the manner in which the sale price was to be apportioned. Both documents were signed by the parties, the first document also being signed by a witness. Subsequently, the parties disagreed as to the completion of the sale. The appellant registered a unilateral notice in respect of the purported contract of sale against the respondent's registered title. The respondent applied to cancel that unilateral notice. The dispute came before an adjudicator pursuant to s 73 of the Land Registration Act 2002. He held that the arrangements made between the parties in December 2004 had not complied with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, that the non-compliance could not be cured by an order for rectification of documents and that, accordingly, the appellant did not have the benefit of a contract binding the respondent with the result that the unilateral notice against the respondent's title was cancelled. The appellant challenged that decision. The principal issue that fell to be determined was whether the adjudicator had erred in concluding that the appellant's unilateral notice against title fell to be cancelled.

The appeal would be dismissed.

An express agreement to omit a term from the written record of a transaction meant that there was no defect or mistake in the recording of, or the expression of, the arrangement and was, therefore, beyond the ambit of rectification to write into the written agreement a term the parties had expressly agreed should not be so recorded.

That conclusion was reached applying conventional principles as to the availability of rectification and not some special set of rules as to rectification for the purposes of section 2(4) of the 1989 Act. That approach properly served the legislative objective of section 2 of the 1989 Act.

On the evidence, the first document had not incorporated all the terms expressly agreed between the parties. The parties had expressly agreed not to record the terms as to apportionment in the first document. In those circumstances, it was beyond the ambit of the court's powers to rectify to write in terms to which the parties had agreed were not to be recorded in the first document. In the absence of rectification, the first document failed to comply with section 2 of the 1989 Act, and, accordingly, the appellant had not had the benefit of a binding contract to buy the property for the purposes of the unilateral notice entered against the respondent's registered title.

Wills v Gibbs [2007] All ER (D) 509 (Jul) distinguished; Allnutt v Wilding [2007] All ER (D) 41 (Apr) considered.

Case annotations in other services: Oun v Ahmad [2008] All ER (D) 270 (Mar); Wills v Gibbs [2007] All ER (D) 509 (Jul); Allnutt v Wilding [2007] All ER (D) 41 (Apr)
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4. R (Heath & Hampstead Society) v Vlachos – town and country planning

Citation: [2008] EWCA Civ 193
Hearing date: 19 March 2008
Court: Court of Appeal, Civil Division
Judges: Waller, Sedley and Carnwath LJJ
Summary: town and country planning – planning permission – metropolitan open land

The existing dwelling-house was located on land designated as metropolitan open land (MOL). On such land new development was strictly limited, but less restrictive policies applied to “appropriate development”, which included limited extension, alteration or replacement of existing dwellings subject to paragraph 3.6 of Planning Policy Guidance 2 (PPG2), the relevant green belt policy. Paragraph 3.6 stated: “Provided that it does not result in disproportionate additions over and above the size of the original building, the extension or alteration of dwellings is not inappropriate in green belts. The replacement of existing dwellings need not be inappropriate, providing the new dwelling is not materially larger than the dwelling it replaces […]”. The local planning authority granted planning permission for a building that had a substantially larger volume and footprint than the existing building, although no higher because much of the increase would be below ground level. The authority determined that the building would not be “materially larger” and that it would have minimal impact on the character and setting of the MOL. The claimant contended that the decision reflected a misinterpretation of the applicable policy. The first and second defendants submitted that in the context of policies designed to protect the MOL, the development could not be said to be “materially larger”, if the increase had no “material” impact on the objectives of the MOL; or at least the authority could reasonably take that view. The judge thought that the exercise was primarily an objective one by reference to size and quashed the permission. The defendants appealed.

The appeal would be dismissed.

The “materially larger” test in paragraph 3.6 of PPG2, read in context, did not import, solely or primarily, a simple comparison of the size of the existing and proposed buildings; it required a broad planning judgment as to whether the new building would have a materially greater impact than the existing building on the interests which MOL policy was designed to protect. The phrase “materially larger” in paragraph 3.6 was concerned with categorisation rather than individual assessment, namely, the definition of “appropriate development” as contrasted with inappropriate development, which was, by definition, harmful to the Green Belt. The second aspect of context was that of paragraph 3.6. It was part of the test for a category that covered “limited extension, alteration or replacement”. The word “limited” implied a limitation of size. Paragraph 3.6 dealt with both extension and replacement. An extension had to be “proportionate” to the size of “the original building”, which showed how tightly that was intended to be drawn, in order presumably to avoid a gradual accretion of extensions, each arguably proportionate. It would be impossible to argue that “proportionate” in that context was unrelated to relative size. Furthermore, the words “replacement” and not “materially larger” had to be read together and in the same context. Size was the primary test, and the general intention was that the new building should be similar in scale to the one it replaced. In the instant case, the authority misunderstood and misapplied MOL policy. Had they properly understood the policy, they could not reasonably have concluded that a building more than twice as large as the original, in terms of floor space, volume and footprint, was not “materially larger”.

Decision of Sullivan J [2007] All ER (D) 47 (Apr); affirmed.

Case annotations in other services: R (Heath & Hampstead Society) v Vlachos [2008] All ER (D) 271 (Mar), [2007] All ER (D) 47 (Apr)
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5. Housden and another v Conservators of Wimbledon and Putney Commons

Citation: [2008] EWCA Civ 200
Hearing date: 18 March 2008
Court: Court of Appeal, Civil Division
Judges: Mummery, Carnwath and Richards LJJ
Relevant legislation: Prescription Act 1832, section 2; Wimbledon and Putney Commons Act 1871, sections 8, 35
Summary: easement – right of way – prescription

The claimants were the registered proprietors of a house they claimed enjoyed the benefit of a prescriptive right of way to and from the public highway on foot and with vehicles over a strip of land forming part of Wimbledon and Putney Commons (the access way). They sought to register an easement over the access way. The application was opposed by the defendants, the conservators of the commons, incorporated pursuant to the Wimbledon and Putney Commons Act 1871, and was referred to the adjudicator to Land Registry. He dismissed the application. The claimants' appeal to the High Court was dismissed. The judge held, in agreement with the adjudicator, that on the true construction of the 1871 Act, in particular sections 8 and 35, the conservators had no power to grant an easement over part of the commons and that, on the true construction of the Prescription Act 1832, in particular section 2, the conservators' inability to grant an easement was a bar to the acquisition of a prescriptive right of way.

The claimants appealed.

The issues on the appeal were (i) whether the conservators had power to grant an easement under the 1871 Act; and, if not, (ii) whether absence of a power to grant an easement was fatal to the claimants' claim under the 1832 Act.

The appeal would be allowed.

On reading section 35 in the context of the 1871 Act as a whole, its apparent aim and its general scheme, it should not be construed as preventing the conservators from lawfully granting an easement over the access way.

The social value reflected in the 1871 Act was conservation of the natural environment in an urban locality for the benefit of an expanding local population. A scheme was established “with a view to preservation” of the commons as “open spaces of large extent, unenclosed and unbuilt on” for “great local and public advantage” by vesting them in an incorporated body of appointed and elected conservators, on whom duties were imposed and powers conferred. That environmental purpose could be protected and promoted without adopting a narrow, literal interpretation of the 1871 Act. The legislative text should be read sensibly in context. In that way, full effect could be given, so far as a fair and reasonable reading of the statutory language allowed, to the stated purpose and the scheme devised to attain it. Looking at the aim of the 1871 Act broadly, the grant would not be incompatible with the conservators' overriding duty to conserve the commons as an unenclosed, unbuilt on, open space. The access way would not cease to be an open space if the claimants were granted an easement over it. The grant of an easement would not entitle them to enclose or build on the access way. The easement would not interfere with the ability of members of the public to continue enjoy the part of the commons across which the access way ran.

Moreover, looking at the detail of the matter, the wording of section 35 was reasonably open to an interpretation enabling the conservators to grant easements in circumstances consistent with the conservation of the commons in their existing state as an open space. A grant would entitle the claimants to pass and re-pass over only a narrow strip of the commons running along side the verge of the highway. It would not give them exclusive possession of any part of the surface of the commons or detract from the openness of the space of the access way. Section 35 made it unlawful for the conservators to “dispose” of any part of “the commons” by sale, lease, grant and so on. A number of points arose on the language in which the prohibition was expressed. It was of some significance that the restriction related to “the commons” rather than to “land” or to an “estate, interest or right in land”. The latter were the expressions apt to include rights in or over land and incorporeal hereditaments, such as a right of way. “The commons'” referred, not so much to the land itself or to the rights and interests in the land, as to the physical area of open space, which was to remain unenclosed and unbuilt on. The grant of a right of way to the claimants over the small defined access way would impose a legal burden on the land, but not one that would diminish the area of the commons as a physical area of open space or result in any physical enclosure of it or building on it.

In those circumstances, it was unnecessary for the second issue to be decided.

Decision of Roger Kaye QC [2007] All ER (D) 291 (May) reversed in part.

Case annotations in other services: Housden and another v Conservators of Wimbledon and Putney Commons [2008] All ER (D) 266 (Mar), [2007] All ER (D) 291 (May)
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6. Floyd v S

Citation: [2008] EWCA Civ 201
Hearing date: 18 March 2008
Court: Court of Appeal, Civil Division
Judges: Mummery, Lawrence Collins LJJ and Munby J
Relevant legislation: Housing Act 1988 s 8; Disability Discrimination Act 1995
Summary: landlord and tenant – assured tenancy – recovery of possession

The defendant had been an assured tenant of a property since May 1996. The defendant fell into arrears. In March 2006, the claimant, who was the landlord of the property, gave notice that she intended to apply to the court for a possession order pursuant to section 8 of the Housing Act 1988. She relied on grounds 8, 10 and 11 in schedule 2 of the 1988 Act. In his defence, the defendant submitted that the claim should be dismissed on the basis, inter alia, of his disability and health issues. On the day of the hearing, the defendant was represented by L, who was a housing adviser for a housing trust. L applied for an adjournment on the defendant's behalf because he had concerns about his mental capacity. L also referred to disability but did not invite the district judge to adjourn the proceedings on the grounds that they constituted or involved unlawful disability discrimination. The district judge said that the difficulty in granting an adjournment was that the defendant had admitted arrears of more than eight weeks' rent. The judge accordingly dismissed the application for an adjournment and made a possession order. The defendant appealed against that order on the basis, inter alia, that (i) the district judge had been unreasonable in concluding that an adjournment to investigate the defendant's mental capacity had not been warranted; and (ii) the district judge had erred in law in concluding that there was no ability to resist the possession proceedings on the basis of disability discrimination under the Disability Discrimination Act 1995 that warranted an adjournment. The judge had before him a report from a cognitive behavioural psychotherapist stating that the defendant's presentation could best be viewed as coming under the general heading of obsessive compulsive personality disorder. However, the report did not assert that the defendant lacked capacity or that he lacked capacity at the time of hearing before the district judge. The judge held that there had been insufficient material before the district judge to enable a serious submission that she had been wrong in exercising her discretion not to grant an adjournment on the basis of mental capacity. He further concluded that there was no ability to resist the possession proceedings on the basis of disability discrimination that warranted an adjournment. The defendant appealed. Because of the general importance of the ground relating to the 1995 Act, the Equality and Human Rights Commission was granted permission to intervene.

The defendant submitted, inter alia, that: (i) the district judge should have realised that the question of his capacity required further investigation, and that in all the circumstances, and in light of the overriding objective, an adjournment should have been allowed; and (ii) the judge's conclusion in respect of disability discrimination had been wrong because he had proceeded on the erroneous premise that the 1995 Act could never provide a defence to a claim for possession. In relation to the second submission the defendant relied on sections 22(3) and 24 of the 1995 Act and a number of authorities which included the case of Lewisham London Borough Council v Malcolm [2007] All ER (D) 401 (Jul).

The appeal would be dismissed.

(1) Settled law established that the test of capacity was issue specific. It was not a question of whether the litigant had the capacity to manage and administer his affairs generally, but whether he had the capacity to conduct the particular legal proceedings he was concerned with. In the circumstances of the case, the district judge had been entitled to proceed as she had, in respect of the first issue. There had been nothing before the district judge to suggest that the defendant did not or might not understand the comparatively simple and straightforward issues that had been raised in the proceedings.

(2) There had been no reason for the district judge to treat the instant case other than as one in which the reason for the landlord's claim for possession was the pleaded ground of non-payment of rent. No question of unlawful discrimination contrary to the 1995 Act could have arisen so as to require the landlady to justify her claim to a possession order or to disentitle her to such an order under the 1988 Act. Although neither judge had had the benefit of the guidance in Malcolm, as it had been decided subsequent to their decisions, the circumstances of the instant case meant that Malcolm did not govern the instant case. That was because the court in Malcolm had found that the reason for the landlord's possession proceedings related to the tenant's disability. A finding that the reason for the proceedings related to the disability of the defendant was impossible in the instant case. The defendant had never suggested that his disability was a reason for the landlord's possession proceedings or that his non-payment of the rent related to a disability from which he suffered.

Masterman-Lister v Brutton & Co [2003] All ER (D) 59 (Jan) applied; Wright v Croydon London Borough Council [2007] All ER (D) 95 (Dec) considered; Lewisham London Borough Council v Malcolm [2007] All ER (D) 401 (Jul) distinguished; Manchester City Council v Romano; Manchester City Council v Samari [2004] 4 All ER 21 distinguished.

Case annotations in other services: Floyd v S [2008] All ER (D) 264 (Mar); Masterman-Lister v Brutton & Co [2003] All ER (D) 59 (Jan); Wright v Croydon London Borough Council [2007] All ER (D) 95 (Dec); Lewisham London Borough Council v Malcolm [2007] All ER (D) 401 (Jul); Manchester City Council v Romano; Manchester City Council v Samari [2004] 4 All ER 21
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7. Shah and others v Colvia Management Company Ltd

Citation: [2008] EWCA Civ 195
Hearing date: 18 March 2008
Court: Court of Appeal, Civil Division
Judges: Pill, Maurice Kay and Lloyd LJJ
Summary: landlord and tenant – lease – construction

The claimants ran six car repair businesses and occupied units on an industrial park in respect of those businesses. The claimants, therefore, needed space to park cars awaiting inspection and repair, and some of the cars needed to be parked overnight. The defendant was the management company for the industrial park and, therefore, owned the parking spaces and access ways at the industrial park. The claimants occupied their units on the basis that they would be allowed to, under a clause in the lease, use the car parks and amenity land “subject to such reasonable rules and regulations for the common enjoyment thereof as [the defendant] may from time to time prescribe”. The industrial park suffered from problems in relation to a lack car parking space. Systems of control were introduced, but none worked well enough to deal with the problem of the shortage of spaces. In 2006, the defendant received a demand for payment of business rates from the local authority in respect of the car park. The management of the defendant held meetings to discuss the recent rates bill. In the course of the meetings, a proposal was developed for the banning of overnight parking with limited exceptions for which payment would have to be made. The defendant reached an arrangement with a company called ITSM Ltd for the management of the car parking scheme that would charge those tenants who wanted to park cars overnight. The defendant and ITSM gave notice of the scheme to the lessees. The claimants issued proceedings on the basis that the scheme was not reasonable, inter alia, because the principal motivation in introducing the scheme had been to raise revenue; and that the scheme would affect their business disproportionately. The defendant deferred the introduction of the scheme. By an open offer made before the trial, the claimants offered to agree to a scheme along broadly the same lines, if the controlled period were reduced so as to last only from midnight to 2am, and if all 70 overnight spaces were allocated to them, at a rental of £300 per annum per space. Each party adduced expert, as well as factual, evidence. The judge found that it was not unreasonable to introduce the overnight parking ban and rationing by price. However, he declared that the scheme was unreasonable on the ground that the defendant had not researched or considered the proper local market rate for overnight parking spaces, and that though it would be proper to ration the use of overnight bays by price, inherently the rates bill for the parking area should be borne by the lessees as a whole. Accordingly, he found that since the lessees were only bound to comply with reasonable rules and regulations the scheme was not valid or effective. The defendant appealed against that decision.

It submitted that the judge had erred by relying on its failure to research the local rates of charge, there having been no evidence that the rates charged were unreasonable; and that he had erred in rejecting the scheme despite having accepted that, in its main features, it was reasonable.

The appeal would be allowed.

The onus of proving that consent had been unreasonably withheld was on the tenant. It was not necessary for the landlord to prove that the conclusions that led him to refuse consent were justified, if they were conclusions that might be reached by a reasonable man in the circumstances. It was for those who asserted that the scheme was unreasonable to prove that it was. To prove that, it had to be shown that the basis on which the decision to promulgate the scheme was founded was not one a reasonable landlord (or management company) could have adopted in the circumstances. A scheme of regulation was either reasonable or it was not, and that would depend on its terms, not on how those terms were arrived at by the party putting forward the scheme.

In the instant case, neither of the two different points on which the judge had relied for striking down the scheme provided a justification for doing so. An overnight ban could not be regarded as reasonable in principle, but that one starting at 9pm rather than at midnight was unreasonable. The failure of the defendant to investigate local rates of charging for overnight parking was irrelevant by itself. Nor did it follow, from the fact that the rates liability in respect of the car park was part of the expenditure that fell to be passed on to lessees by way of service charge, that it was not legitimate for the defendant to recover parking charges for overnight parking, or charges at a rate exceeding that required to cover the direct costs of running the scheme itself. The scheme could not be regarded as unreasonable, and therefore not binding on lessees, because the charges were unreasonable, without evidence to that effect, which was conspicuously absent in the instant case. The precise timing of the overnight ban could not be regarded as unreasonable. The claimants had failed to show that the scheme was not a reasonable regulation and therefore binding on them.

The judge's declaration that the scheme was unreasonable would be set aside.

Shanley v Ward (1913) 29 TLR 714 considered; Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 All ER 145 considered. Decision of Anthony Elleray QC [2007] All ER (D) 217 (Dec) reversed.

Case annotations in other services: Shah and others v Colvia Management Company Ltd [2008] All ER (D) 256 (Mar), [2007] All ER (D) 217 (Dec); Shanley v Ward (1913) 29 TLR 714; Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 All ER 145
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8. Bank of Scotland v Hussain and another

Citation: [2008] All ER (D) 235 (Mar)
Hearing date: 14 March 2008
Court: Chancery Division
Judge: Geoffrey Vos QC sitting as a deputy judge of the High Court
Relevant legislation: Land Registration Act 1925, section 70(1)(g)
Summary: land registration – charge – possession

On 25 February 2005, the second defendant succeeded in obtaining the rectification of the land register in respect of the property in issue as a result of the undue influence on the part of the first defendant. She did not, however, obtain such relief against the claimant bank. The court ordered that the property be re-registered in the first defendant's name subject to the bank's charge (See [2005] All ER (D) 379 (Apr)). The bank had issued possession proceedings in respect of the property in March 2002; however, the issue was not tried at the same time as the earlier undue influence proceedings. The bank applied for summary judgment in its claim for possession of the property and relied on the second defendant's answers to the property information questionnaire and her replies to requisitions on title that stated that nobody other than she lived at the property and that vacant possession would be provided. In November 2007, the bank succeeded in obtaining summary judgment against the first defendant on the issue of whether she had had an overriding interest in the property, under section 70(1)(g) of the Land Registration Act 1925. The second defendant appealed.

The issue on appeal was whether the bank had made any adequate enquiry within the meaning of section 70(1)(g), such as to trigger the proviso to that subsection. The bank further submitted that it was an abuse of process for the second defendant to raise a claim to an overriding interest as a defence to the possession action.

The appeal would be allowed.

On the true construction of section 70(1)(g), the overriding interest in question was the “rights of every person in actual occupation of the land”. The proviso to that section abrogated the overriding interest of “every person in actual occupation” if “enquiry is made of such person and the rights are not disclosed”. Thus, to be protected, a bank's first task was to enquire whether there would be persons in actual occupation. If the bank failed to establish that a person was in actual occupation and made the enquiry in the section, it would be bound by that person's rights. The proviso came at a second stage, once the bank had ascertained that a person would be in actual occupation. Section 70(1)(g) provided that, at that stage, the overriding interest would not prevail if “enquiry is made of such person, and the rights are not disclosed”. The enquiry then envisaged was an enquiry as to the rights that were claimed in the property or an entitlement to occupy the property, such as a tenancy or a right to avoid a contract of sale. It was a mechanical enquiry, but the question had to be directed so as to obtain an answer that did or did not disclose the rights that the person in actual occupation claimed.

In the instant case, the bank had failed to make the necessary enquiry of the second defendant, pursuant to section 70(1)(g). Further, though the second defendant's overriding interest could have been raised in the previous proceedings, and taking into account the public interest in the finality of litigation and the interests of the parties, it could not be said that the second defendant was misusing or abusing the process of the court by seeking to raise her alleged overriding interest as a defence to the possession action.

The bank's application for summary judgment would be dismissed.

Johnson v Gore Wood & Co (a firm) [2001] 1 All ER 481 applied; UCB Bank v Beasley and France [1995] NPC 144 considered; Winkworth v Edward Baron Development Co Ltd 52 P & CR 67 considered.

Case annotations in other services: Bank of Scotland v Hussain and another [2008] All ER (D) 235 (Mar), [2005] All ER (D) 379 (Apr); Johnson v Gore Wood & Co (a firm) [2001] 1 All ER 481; UCB Bank v Beasley and France [1995] NPC 144; Winkworth v Edward Baron Development Co Ltd 52 P & CR 67
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9. R (on the application of Samuel Smith Old Brewery (Tadcaster)) v Selby District Council

Citation: [2008] EWHC 494 (Admin)
Hearing date: 14 March 2008
Court: Queen's Bench Division, Administrative Court
Judge: Michael Supperstone QC sitting as a deputy judge of the High Court
Summary: town and country planning – permission for development – material consideration

The interested parties were owners of an equestrian centre located on the Green Belt. In 1998, they applied for planning permission to construct a building for use as an indoor riding school. A planning committee of the defendant local authority considered that the building was “substantial” in size, however, resolved to grant permission on the basis that the “need” for development outweighed the harm that would be caused to the Green Belt. Shortly thereafter, the claimant, an owner of land in the vicinity, challenged the grant of permission by judicial review. By a decision of the High Court (unreported, 17 July 2000), the permission was quashed and a re-determination was ordered. In December 2001, the authority granted permission on the ground that there were “very special circumstances” that supported the case for development. The claimant subsequently applied for judicial review against that decision. Permission for the case to proceed was granted, but prior to a substantive hearing, a consent order was made by which the authority agreed to quash the permission. When the matter came back for re-determination, the authority again resolved to grant permission. That decision was later quashed on a judicial review (see [2003] All ER (D) 288 (Apr)). Enforcement notices were then issued against the interested parties as, by that stage, the proposed building had been constructed. In October 2003, a planning committee granted retrospective permission and, in November, the enforcement notices were revoked. Proceedings against both those decisions were subsequently commenced, but before any judicial action was taken, the authority agreed to quash its previous decisions. In March 2004, the authority decided to serve a second set of enforcement notices. The interested parties lodged an appeal against that decision, however, prior to a hearing, the authority granted retrospective permission. In June 2005, that decision was reconsidered alongside the appeal against the enforcement notices. A planning officer was instructed to investigate and to produce a report on the matter. In the event, he referred, inter alia, to the interested parties' personal circumstances, and to the fact that the proposed building had already been erected. In his conclusions, he recommended the grant of personal planning permission and a revocation of the second set of enforcement notices. The planning committee agreed with those views and the claimant applied for judicial review.

Issues arose as to whether the planning committee of June 2005 had (i) failed to take into account a material consideration, namely, Circular 11/95, which contained guidance on the conditions to be attached to grants of personal planning permission; and (ii) acted unlawfully in reaching the conclusion that the personal circumstances of the interested parties amounted to “very special circumstances'” within the meaning of paragraph 3.2 of Planning Policy Guidance 2 (PPG2), the Secretary of State's planning policy on Green Belt development.

The application would be allowed.

In the circumstances, the decisions of the planning committee in question had been infected by material misdirection in law. In the first instance, the planning officer who had advised the June 2005 committee had failed to state that Circular 11/95 applied not only to the erection of a building, but also to the retention of it. Further, the planning officer failed to direct that a condition would “scarcely ever” be justified in the case of a planning permission for the erection of a permanent building, as stipulated in the circular. In respect of the relevant planning policy guidance, the committee failed to adopt the proper approach to the issue of determining whether personal circumstances amounted to “very special circumstances” justifying development on Green Belt land, as required by authority, and as required by the judgment given in the third judicial review. In accordance with the latter, it was incumbent on the committee to have had considered whether there was persuasive evidence of personal hardship and unrequited need. The committee's failure to do so, and its decision, which had been based entirely on the planning officer's report, had bordered on the perverse.

In those circumstances, the decisions to grant retrospective personal planning permission and the revocation of the second set of enforcement notices would be quashed, and the matter would be remitted for a re-determination.

Case annotations in other services: R (on the application of Samuel Smith Old Brewery (Tadcaster)) v Selby District Council [2008] All ER (D) 219 (Mar), [2003] All ER (D) 288 (Apr)
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10. Aribisala v St James Homes (Grosvenor Dock) Ltd

Citation: [2008] EWHC 456 (Ch)
Hearing date: 14 March 2008
Court: Chancery Division
Judge: Floyd J
Relevant legislation: Law of Property Act 1925, section 49(2)
Summary: sale of land – deposit – forfeiture

The claimant purchaser entered into two identical contracts for the sale of two leasehold properties with the defendant vendor. Clause 1.2 of the contract purported to exclude section 49(2) of the Law of Property Act 1925. In accordance with the contract, the claimant paid a 10 per cent deposit of the purchase price of the property. The claimant did not complete the sale by the date specified in the contract. The defendant gave notice to the claimant to complete within ten days, but the claimant did not do so because he had not been able to obtain the finance to enable him to complete. The defendant elected to rescind the contract and forfeit the claimant's deposit. The defendant eventually sold the properties for a larger sum than the sale price originally agreed with the claimant and thus making a profit of £366,000 as a result of the claimant's breach. The claimant brought an action against the defendant seeking, inter alia, a return of the deposit under section 49(2) of the Act. The defendant applied for summary judgment on the ground that the claim had no real prospect of success. The judge dismissed the application and held that section 49(2) did apply. There was no appeal from that decision, and the claimant abandoned his other claims leaving the claim for the return of the deposits under section 49(2). The defendant counterclaimed in respect of, inter alia, certain expenditure on furniture and furnishings.

The claimant relied upon a number of factors to support the exercise of the court's discretion to order the return of the deposit, namely, inter alia, (i) the size of the deposit and the fact that it amounted to a significant proportion of his assets; (ii) his unfamiliarity with English conveyancing practice; (iii) the fact that he had been willing to complete; (iv) the fact that one of the properties was intended for his family; and (v) the fact that the defendant had made a profit from the claimant's breach.

The claim and counterclaim would be dismissed.
(1) The only real scope for the operation of section 49(2) of Act was when the purchaser was the party unable to perform the contract: when the vendor was unable to perform the contract, the purchaser would have a legal right to the return of the deposit. What needed to be looked at was how close the purchaser had come to performing the contract, what alternatives he was able to propose to the vendor and how advantageous they would be compared with actual performance of the contractual terms. When the purchaser simply could not perform the contract or offer any such alternative, then it would be exceptional for the deposit to be returned.

In the circumstances of the case, the deposit was not refundable. The factors relied on by the claimant did not take the case out of the ordinary run of cases in which the claimant could not come up with the money. It was true that the defendant had made a significant profit out of the breach of contract. That factor, alone or with all the other matters relied upon by the claimant, did not mean that it would be just in all the circumstances to return the deposit.

(2) In the circumstances of the case, the defendant's counterclaim in respect of furniture and furnishings would be dismissed on the basis that the defendant had not suffered any loss.

Linggi Plantations Ltd v Jagatheesan [1972] 1 MLJ 89 considered; Universal Corpn v Five Ways Properties Ltd [1979] 1 All ER 552 considered; Omar v El-Wakil [2001] All ER (D) 131 (Jul) considered; Tennaro v Majorach Properties [2003] EWHC 2601 (Ch) considered.

Case annotations in other services: Aribisala v St James Homes (Grosvenor Dock) Ltd [2008] All ER (D) 201 (Mar); Linggi Plantations Ltd v Jagatheesan [1972] 1 MLJ 89 considered; Universal Corpn v Five Ways Properties Ltd [1979] 1 All ER 552 considered; Omar v El-Wakil [2001] All ER (D) 131 (Jul) considered; Tennaro v Majorach Properties [2003] EWHC 2601 (Ch)
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