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Issue 53 – May 2008

Contents

Cases
Statutory Instruments

Features
Articles
News

Events
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Cases

1. Islington London Borough Council v Honeygan-Green

Citation: [2008] EWCA Civ 363
Hearing date: 22 April 2008
Court: Court of Appeal, Civil Division
Judges: Pill, Keene and Maurice Kay LJJ
Relevant legislation: Housing Act 1985, section 121(1)
Summary: housing – local authority houses – tenant's right to buy

The defendant was a secure tenant of a flat owned by the claimant local housing authority. She made a claim under section 122 in part V of the Housing Act 1985, claiming to exercise the right to buy a lease of the flat. The authority admitted her right to buy, and in February 2001, the price was fixed at £137,000 for a 125-year lease. Completion was delayed. The defendant was in arrears with her rent, and the authority issued possession proceedings. It obtained a suspended possession order, but that order was discharged in May 2008 on the defendant's application. In February 2005 the authority again sought possession of the flat in the county court for arrears of rent, and the defendant counterclaimed for, among other things, a mandatory injunction ordering the respondent to convey the long lease of the flat to her in accordance with her application in 2000 asserting her right to buy. She then applied for summary judgment on her counterclaim. The judge found in the defendant's favour, concluding that a tenant's previously accrued right to buy had to be deemed retrospectively to have continued throughout the limbo period (when, pursuant to section 121 of the 1985 Act, the right to buy could not be exercised) before the revival of the tenancy with the discharge of the possession order. The authority's appeal to the High Court was allowed. The defendant appealed against that decision.

On the appeal the following issue, inter alia, arose: whether, on such a revival of a tenancy, the tenant had to begin the process of exercising the right to buy afresh, with a new notice under section 122, or whether the stages previously accomplished before the possession order had temporarily terminated the tenancy, such as the ascertainment of the purchase price, revived along with the tenancy and its covenants.

The appeal would be allowed.

The prohibition contained in section 121(1) of the 1985 Act related only to the taking of a step exercising the right to buy while a possession order meeting the terms of that sub-section was in existence. No step or further step in the part V process could be taken during that time. However, if the secure tenancy was revived by a court order before possession was given up, the accrued steps taken before the limbo period ensued revived with the tenancy, subject to any contrary decision of the court. The tenant did not need to begin the process under part V again by serving a fresh section 122 notice.

The starting point for consideration of the issue in the instant case was that, when dealing with the revival of a secure tenancy, upon revival the tenancy should be regarded as never having undergone a limbo period.

Greenwich London Borough Council v Regan 28 HLR 469 applied. Decision of Nelson J [2007] 4 All ER 818 affirmed.

Case annotations in other services: Islington London Borough Council v Honeygan-Green [2008] All ER (D) 293 (Apr); Greenwich London Borough Council v Regan 28 HLR 469; Decision of Nelson J [2007] 4 All ER 818
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2. Lexi Holdings v Pooni and another

Citation: [2008] All ER (D) 292 (Apr)
Hearing date: 21 April 2008
Court: Chancery Division
Judge: Briggs J
Summary: mortgage – possession of mortgaged property – action by mortgagee for possession

On 16 April 2004, the claimant company offered a bridging loan to the second defendant company for £6.5 million to purchase No Man’s Land Fort, one of four large structures built in the Solent to repel French attacks in the nineteenth century. Prior to 2004, the fort had been developed into a hotel / conference centre with a three bedroom residence for the hotel manager to live in. The first defendant was a director of the second defendant and had provided a personal guarantee to repay the loan. The second company defaulted in its repayments, the claimant's application for the appointment of receivers was granted and judgment was given in its favour holding the first defendant liable to repay the debt pursuant to his guarantee. Subsequently, the first defendant was made bankrupt and the second defendant was struck off the companies' register and dissolved. In February 2006, the claimant purported to transfer the fort to a third party in return for £500,000. Following the administration of the claimant, that transaction was set aside as being a fraudulent transaction at an undervalue. In December 2006, the second defendant was restored to the companies' register and challenged the claimant's registration as proprietor of the fort. The first defendant occupied the fort and frustrated the claimant's agents' attempts at gaining possession. The claimant issued possession proceedings and sought an order for sale of the fort. It subsequently applied for summary judgment on its claim.

The claim would be allowed.

On the facts, the second defendant was plainly entitled to be registered as proprietor of the fort once the fraudulent sale by the claimant to the third party had been set aside. Accordingly, the claimant was reregistered as the legal mortgagee and, in light of the second defendant's default in repaying the loan, was entitled to possession, and the enforcement of the sale of, the Fort.

Case annotations in other services: Lexi Holdings v Pooni and another [2008] All ER (D) 292 (Apr)
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3. Micro Design Group Ltd and another v BDW Trading Ltd

Citation: [2008] All ER (D) 286 (Apr)
Hearing date: 21 April 2008
Court: Court of Appeal, Civil Division
Judges: Thomas, Jacob and Wall LJJ
Summary: contract – construction – contractual term

The claimant was the owner of a property development site (the land), which had planning permission (base planning permission) for the construction of 42 residential units in two blocks. The defendant was a nation-wide developer of houses and apartments. On 26 September 2005, the claimant sold the land to the defendant for the purchase price of £4.5 million. The parties entered into a deed of overage on the same day. By clause 2.1 of the deed, the defendant covenanted that every time a “trigger event” occurred in relation to the land it would pay the claimant a further payment. A “trigger event” was defined in clause 1.1 as the date of grant of an improved planning permission. An “improved planning permission” was defined in clause 1.1.1(f) as a planning permission (including any variation) for development of the land that had the effect of authorising a higher “net sales area” on the land than authorised by the base planning permission. Thereafter, planning permission (the second permission), for which the claimant had applied in 2004, was granted. The claimant contended that the grant of the second permission was a “trigger event” and sought payment. The defendant refused to pay on the ground that they were not liable. The claimant brought proceedings. A preliminary issue arose as to whether, on a true construction of the deed, the provisions in respect of further payments had applied, when an “improved planning permission” as defined in clause 1.1.1(f), was obtained by the claimants. The judge found that those provisions applied and accordingly allowed the claim. The defendant appealed against that decision.

The defendant contended that, as a matter of construction, the question raised in the preliminary issue ought to have been answered in the negative. It argued that there was implied into the deed a term that an “improved planning permission” meant an “improved planning permission” obtained by the defendant.

The appeal would be allowed.

On the true construction of the deed, the relevant clauses applied only to the right of the defendant in obtaining planning permission. The definition of a “trigger event” had provided that payment would only become due if planning permission had been obtained by the defendant. There was no provision that enabled the payment mechanism to operate if the claimant had obtained planning permission. That conclusion made more commercial sense.

Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229 applied.

Case annotations in other services: Micro Design Group Ltd and another v BDW Trading Ltd [2008] All ER (D) 286 (Apr); Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229
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4. Brentwood Borough Council v Secretary of State for Communities and Local Government and another

Citation: [2008] All ER (D) 289 (Apr)
Hearing date: 21 April 2008
Court: Queen's Bench Division, Administrative Court
Judge: Cranston J
Relevant legislation: Town and Country Planning Act 1990, section 288
Summary: town and country planning – permission for development – refusal

The second defendant was a gypsy. In June 2003, she moved with her family, together with numerous others, onto a site in the green belt. In August, the claimant local planning authority issued enforcement notices requiring the residents to leave the site. Her subsequent appeal against that decision to the first defendant Secretary of State was unsuccessful. Thereafter, the second defendant applied for planning permission, inter alia, for the site to be used for residential purposes. As the authority had not issued a decision by March 2007, the second defendant appealed to the Secretary of State. An inspector held an inquiry and a site visit. In April, he reached the conclusion, having regard to national planning policy guidance, namely paragraphs 3.1 and 3.2 of PPG2 on green belts, and Circular 01/2006 entitled “Planning for Gypsy and Traveller Caravan Sites”, that the lack of alternative sites, the wider landscape setting, the educational needs of the children who lived on the site, and the potential loss of medical services, taken together, amounted to the “very special circumstances”, which were required in order for development to take place on the green belt. Accordingly, planning permission was granted for five mobile homes on the site, for a period of five years. The authority applied under section 288 of the Town and Country Planning Act 1990 for an order quashing the inspector's decision. The Secretary of State subsequently conceded that she had adopted an erroneous approach in law in determining whether there were very special circumstances. The second defendant on behalf of herself and the rest of the residents on the site argued that the inspector had not erred in law.

The application would be allowed.

In the circumstances, the inspector had fallen into error by treating the variety of factors, which she had identified, as amounting to very special circumstances. That was an approach that had to be avoided. The correct approach would have been to consider each factor separately and ask whether it could, in itself, reasonably be described as a very special circumstance to justify development on the green belt.

Accordingly, the inspector's decision would be quashed, and a fresh inquiry by an inspector would be held.

Doncaster Metropolitan Borough Council v Secretary of State for Transport, Local Government and the Regions [2002] All ER (D) 17 (Apr) applied; Chelmsford Borough Council v First Secretary of State [2003] All ER (D) 343 (Nov) applied; South Bucks District Council v Secretary of State for Transport, Local Government and the Regions [2004] 4 All ER 775 applied.

Case annotations in other services: Brentwood Borough Council v Secretary of State for Communities and Local Government and another [2008] All ER (D) 289 (Apr); Doncaster Metropolitan Borough Council v Secretary of State for Transport, Local Government and the Regions [2002] All ER (D) 17 (Apr); Chelmsford Borough Council v First Secretary of State [2003] All ER (D) 343 (Nov); South Bucks District Council v Secretary of State for Transport, Local Government and the Regions [2004] 4 All ER 775
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5. Strachey v Ramage

Citation: [2008] EWCA Civ 384
Hearing date: 18 April 2008
Court: Court of Appeal, Civil Division
Judges: Sedley, Rimer LJJ and Sir Paul Kennedy
Summary: sale of land – conveyance – parcels

In 1987, P decided to sell a block of land in two separate parcels – the fields and the buildings. By the end of 1987, he had agreed in principle to sell the fields to E, a neighbour, who was already occupying them under a tenancy or licence. P had by then also decided to erect a boundary fence between the two parcels. His main consideration upon deciding its line was to ensure that E would have access to two barns in the north-east corner of the fields. P and E marked out the line of the proposed boundary fence, and it was erected by 14 January 1988. By a conveyance dated 26 February 1988 (the February conveyance), the buildings were conveyed to S. It was accepted that the line of the fence would mark the boundary between the buildings and the field. The parcels clause described the property conveyed (see [6]). The land was said to be “edged red” on the plan “for the purpose of identification only”. Clause 4 referred to the “boundary fence” between the buildings and the fields. E purchased the fields from P by a conveyance dated 19 August 1988. On 25 November 1996, the respondent became the registered proprietor of the buildings. The appellant became the registered proprietor of the fields on 13 September 2001. A dispute arose as to the proper boundary between the properties. The appellant sought a declaration that the disputed boundary was marked by the fence. She submitted, inter alia, that her case was supported by the true interpretation of the February conveyance. The judge rejected her claim. He found that the parcels clause in the February conveyance, and the plan referred to therein, provided a clear answer in favour of the respondent: the relevant boundary was not marked by the fence but by an imaginary line unrepresented by any physical feature on the ground, and fell mainly on the appellant's side of the fence. The appellant challenged that decision.

The issue that fell to be decided was whether the judge had erred in concluding that the fence did not mark the boundary between the fields and the buildings.

The appeal would be allowed.

It was fundamental that the parcels clause in a conveyance was not to be considered in isolation from the remainder of the document. It was a general, and basic, principle of the construction of documents that questions of interpretation were to be answered by considering the document as a whole, since only then could the provision giving rise to the issue in question be seen in its proper context. There was no reason for that principle not to be equally applicable in relation to the interpretation of a conveyance for the purpose of identifying the limits of the land conveyed by it.

In the instant case, the judge had erred in failing to construe the parcels clause in the context of the February conveyance as a whole. The parcels clause had been insufficient to identify the relevant boundary and, accordingly, he had been wrong to use the plan, expressed to be “for the purpose of identification only” in that identification. The answer to the issue in the instant case lay in clause 4 of the conveyance. That clause referred to the “boundary fence”, that fence being the one erected by E and P in 1988. That reference was not capable of being trumped by an insufficient parcels clause and a reference to a plan expressed to be “for the purpose of identification only”.

Accordingly, a declaration as to the line of the disputed boundary would be made. Furthermore, alterations to the Register would be directed to correct the designation of the relevant part of the boundary as shown on the plans filed in the registered titles of the fields and the buildings.

Wigginton & Milner Ltd v Winster Engineering Ltd [1978] 3 All ER 436 considered.

Case annotations in other services: Strachey v Ramage [2008] All ER (D) 267 (Apr); Wigginton & Milner Ltd v Winster Engineering Ltd [1978] 3 All ER 436
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6. Barclays Bank plc and others v Gatpaham Properties Ltd and others

Citation: [2008] EWHC 721 (Ch)
Hearing date: 18 April 2008
Court: Chancery Division
Judge: Philip Sales QC sitting as a deputy judge of the High Court
Summary: mortgage – repayment – demand

The first defendant was a property management company linked with the second defendant and effectively under his control. The third and fourth defendant companies were incorporated in the British Virgin Islands, under the ownership or control of the second defendant's brother. The second defendant acted as a UK representative of the third and fourth defendants at all material times. In January 2005, the second defendant made contact with the first claimant bank concerning the possibility of his re-mortgaging certain residential properties owned by him that were let out to tenants on assured shorthold tenancies. Following negotiation between the parties, Flexible Business Loans (FBLs) were entered into in respect of two properties on 17 and 18 January, respectively. Both FBLs contained requirements that the second defendant provide information about his business and the conditions concerning the letting arrangements and payment of rental income in respect of the properties. The first claimant reserved the right to call for immediate repayment of the loans in the event of a breach of any term or condition on the part of the second defendant (see [12]). Under the terms of the legal charges duly executed by the second defendant, the first claimant was entitled to appoint receivers and managers in relation to the properties at any time after it had made a valid demand for repayment of the monies lent under the facilities that had not been satisfied. On 15 February 2005, the second defendant entered into a further refinancing facility in relation to other properties by way of a Flexible Property Investment Loan (FPIL). The FPIL contained requirements for the provision of information regarding the second defendant's business and a power for the first claimant to demand immediate repayment of the loan similar in terms to those contained in the FBLs. The legal charge executed by the second defendant gave the first claimant the right to appoint receivers and managers in the event of a default in respect of payment. Thereafter, the first claimant entered into further FPILs with the second, third and fourth defendants, the material terms of each being the same as those in the FPIL of 25 February 2005. Subsequently, the first claimant became concerned about its exposure under the refinancing agreements. The fourth defendant failed to make one of its quarterly interest payments, albeit that that payment was made by way of an unauthorised overdraft on an account held with the first claimant. Extensive negotiations ensued between the first claimant and the second defendant. Following his failure to comply with requests to supply information regarding the rental incomes and details concerning the shorthold tenancies of the properties, the first claimant made a demand for full repayment of both FBLs and all four FPILs in March 2006. The second defendant failed to make those repayments. The first claimant appointed the second and third claimants as receivers of the relevant properties, pursuant to the terms of the legal charges executed as security for the loans. A dispute arose between the parties, and the claimants issued the instant proceedings whereby they sought, inter alia, declarations that the first claimant had been entitled to appoint the receivers on 6 March 2006.

The issue that fell to be determined was whether any terms of the respective loan agreements had been breached, thereby giving rise to the first claimant's right to demand the immediate repayment of the loans.

The claim would be allowed.

On the evidence, the defendants had breached the terms of each of the loan agreements, inter alia, by having failed to provide the necessary information in relation to their rental businesses. In those circumstances, the first claimant had been entitled to call for immediate repayment of each of the loans and, upon the failure of the defendants to make those repayments, to appoint the second and third claimants as receivers in accordance with the terms of the legal charges executed as security for the loans.

Case annotations in other services: Barclays Bank plc and others v Gatpaham Properties Ltd and others [2008] All ER (D) 262 (Apr)
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7. Lettings International Ltd v Newham Borough Council

Citation: [2008] All ER (D) 260 (Apr)
Hearing date: 18 April 2008
Court: Queen's Bench Division
Judge: McCombe J
Summary: disclosure and inspection of documents – relevance of documents – documents necessary for fair disposal of action

The claimant was a property management company. It tendered applications to the defendant local authority for contracts for procurement, maintenance and management of private sector leased accommodation. The local authority announced its intention to enter into contracts with five tenderers other than the claimant. The claimant alleged that the local authority had acted unfairly and without the requisite transparency in failing to disclose contract award criteria in advance, made a number of errors when marking the tenders and did not treat the claimant's tender fairly and objectively. The claimant commenced proceedings against the local authority. It subsequently applied for an injunction preventing the local authority from entering into contracts consequent upon the tender process pending a trial of its claim. A judge acceded to the application and granted the injunction pending trial of the claim. The claimant contended that its complaints about the marking of the tenders could only fairly be determined in the light of the tenders themselves and that it should be entitled to inspect the documents. It applied for specific disclosure of tenders.

The court ruled:
In the instant case, it was clear that the defendant had put in issue the various aspects of the relevant marks of the tenders. It was important that the judge at trial was equipped to have access to all the documents and to have full knowledge of all the facts. In those circumstances, it would be appropriate to order that there be disclosure of the documents.

Accordingly, an order for specific disclosure would be made.

Case annotations in other services: Lettings International Ltd v Newham Borough Council [2008] All ER (D) 260 (Apr)
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8. Dolphin Quays Developments Ltd v Mills and others

Citation: [2008] EWCA Civ 385
Hearing date: 18 April 2008
Court: Court of Appeal, Civil Division
Judges: Mummery, Lawrence Collins LJJ and Munby J
Relevant legislation: Law of Property Act 1925, section 109(2); Supreme Court Act 1981 s51(3); Law of Property (Miscellaneous Provisions) Act 1982, s2; Companies Act 1985, s726(1)
Summary: costs – order for costs – payment of costs by non-party

In 2001, O plc agreed to sell to M a long lease of a flat in Dolphin Quays, then in course of development for £650,000. It had also been agreed between them that the purchase price should be paid by set-off against the debt of £1.85 million due by O plc to M, but that was not recorded in the written agreement. In August 2002, O plc sold its interest in Dolphin Quays, together with the benefit of the agreement with M, to the company, and 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. In June 2003, the bank appointed B and G (the receivers) as Law of Property Act 1925 receivers of the property subject to the charge and B and L as joint administrative receivers under a debenture given by the company to the bank. M was the sole director of the company, had executed the charge and the debenture on its behalf and sworn the affidavit verifying the statement of affairs as at the date of the appointment of the administrative receivers. In November 2004, the company, by the receivers, instituted proceedings in the High Court against M for specific performance of the contract for the sale of the long lease of the flat. The judge rejected the claim, having concluded that the set-off agreement had been an integral part of the contract for the sale of the lease and, not having been included in that document, the contract was unenforceable under section 2 of the Law of Property (Miscellaneous Provisions) Act 1982. No application had been made by M for security for costs. While he knew that the company was insolvent, he also knew that substantial sums had been realised in the receivership. His evidence was that he believed throughout that, if his defence succeeded, his costs would be paid from realisations held by the receivers. It did not occur to his solicitor or to counsel to advise M to make such an application because they believed throughout that the real parties were the receivers who would honour any order for costs made against the company from funds in the receivership. It was not until 13 June 2006 that the company's solicitors wrote, on the instructions of the receivers, stating that M was only an unsecured creditor of the company for his costs and making clear that the receivers would not pay them. Ample funds were available to pay M's costs. M applied to the High Court under section 51(3) of the Supreme Court Act 1981 for an order that receivers should pay his costs. The Chancellor exercised his discretion against the application because, first, the making of a third party costs order required some “exceptional” circumstance, and the instant case was an entirely normal case of receivers seeking to enforce a contractual right forming part of the security; second, there was no allegation of impropriety or unreasonableness in the initiation and prosecution of the claim, which confirmed that the case was in no sense exceptional; third, it was not a case in which a non-party had funded and substantially controlled the proceedings or was to benefit from them; fourth, in the absence of any winding up of the company, section 109(2) of the Law of Property Act 1925 and the charge both provided that the receivers were the agents of the company and that the company was solely responsible for their acts or defaults, and consequently, it was not possible to identify the receivers or the bank as the real party; and fifth, the hardship caused to M by his inability to recover his costs from the company could have been avoided if he had pursued his remedy of security for costs from the company promptly or at all. M appealed.

The appeal would be dismissed.

There was no justification in authority for the judicial creation of a substantive rule that receivers (and such a rule would apply equally to receivers who bona fide defended a claim against a company) should be personally responsible for the costs of a successful party.

If an order were made in the instant case, it would be made in virtually all such cases. The normal expectation in a case such as the instant case was that someone in M's position would and normally should seek security for costs. In the instant case, the Chancellor had properly applied the “exceptional circumstance” test by considering whether the action was out of the ordinary run of cases and, ultimately (in conjunction with the other factors), whether it was just to make the order. He was correct in finding that the case was an entirely normal case of receivers seeking to enforce a contractual right forming part of the security, and that the lack of impropriety or unreasonableness confirmed that. He had also correctly considered the “real party” factor. The receivers had directed the proceedings on behalf of the company without any direction or interference by the bank and the funding of the proceedings by the company was derived from the realisations in the receivership. They did not fund the claim, nor did the receivers have any interest in the monies from which the claim was funded or in the outcome of the claim. Receivers could not be regarded as the real party (or at any rate one of the real parties) simply because receivers always benefitted directly or indirectly from successful litigation, in terms of the fees charged for running it and the prospect of further work from the bank if the recovery was successful. Nor was the bank the “real party”. It did not fund the claim in the sense of granting further facilities for that purpose, nor did it control or direct them, nor had there been any conduct by the bank which was a cause of M's costs. The Chancellor had properly taken into account the question of agency of the receivers. By virtue of the charge under which they had been appointed and section 109(2) of the 1925 Act, the company was solely responsible for the receivers' acts and defaults. The position of receivers as agents was analogous to the position of directors and liquidators. In an ordinary case in which a director or liquidator caused a company to bring proceedings which were unsuccessful, a personal costs order would not be made. Some additional element had to be present.

Aiden Shipping Co Ltd v Interbulk Ltd, The Vimeira (No 2) [1986] 2 All ER 409 considered; Anderson v Hyde (t/a Hyde Property Services) [1996] 2 BCLC 144 considered; Bacal Contracting Ltd v Modern Engineering (Bristol) Ltd [1980] 2 All ER 655 applied; Metalloy Supplies Ltd (in liquidation) v MA (UK) Ltd [1997] 1 All ER 418 applied; B E Studios Ltd v Smith & Williamson Ltd [2006] 2 All ER 811 considered; Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] All ER (D) 420 (Jul) considered.

When the application for security for costs is made on the basis that the claimant is a company that will be unable to pay the defendant's costs (CPR 25.13(2)(c); Companies Act 1985, section 726(1)), and when the receiver is in a position to provide security from realisations or from funds provided by the secured creditor, [there is] no reason why the court should not take fully into account the need to ensure that the defendant is adequately protected from incurring irrecoverable costs if the action fails. The amount the court orders by way of security is, of course, within the discretion of the court. However, in such a case the court should be robust in its assessment of the amount of the security, amounting in appropriate cases to the full amount of the estimated standard costs. To order adequate security in this type of case could not possibly run the risk of depriving the claimant company of its right to access to the courts.

Decision of Sir Andrew Morritt C [2007] 4 All ER 503 affirmed.

Case annotations in other services: Dolphin Quays Developments Ltd v Mills and others [2008] All ER (D) 257 (Apr); [2007] 4 All ER 503; Aiden Shipping Co Ltd v Interbulk Ltd, The Vimeira (No 2) [1986] 2 All ER 409; Anderson v Hyde (t/a Hyde Property Services) [1996] 2 BCLC 144; Bacal Contracting Ltd v Modern Engineering (Bristol) Ltd [1980] 2 All ER 655; Metalloy Supplies Ltd (in liquidation) v MA (UK) Ltd [1997] 1 All ER 418; B E Studios Ltd v Smith & Williamson Ltd [2006] 2 All ER 811; Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] All ER (D) 420 (Jul)
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9. East Riding of Yorkshire Council v Hobson

Citation: [2008] All ER (D) 265 (Apr)
Hearing date: 18 April 2008
Court: Queen's Bench Division, Divisional Court
Judges: Keene LJ and Treacy J
Relevant legislation: Planning (Listed Buildings and Conservation Areas) Act 1990, sections 7, 9
Summary: town and country planning – building of special architectural or historical interest – listed building

In June 2005, the respondent, an architect, was engaged to make certain renovations to a site that had Grade II listed status, pursuant to a listed building consent, which had been granted by the appellant local authority. The renovations were to take place in two stages: the first involved the dismantling of, inter alia, a roof to a particular building, and the second required a certain degree of “re-building” to be done to that building. By January 2006, the building had been largely dismantled and, in the months that followed, it was wholly dismantled, contrary to the terms of the consent. The renovation works were completed later that year. At no point had the authority intervened to put a stop to the works. Instead, following the completion of the renovation, the authority laid an information charging the respondent with an offence under section 9 of the Planning (Listed Buildings and Conservation Areas) Act 1990, contending that he had acted contrary to section 7 thereof. The respondent pleaded not guilty to the offence arguing that the character of the building had not been affected by the works. At trial, the judge came to the conclusion that, having regard to both stages to the works, the character of the building had been affected; however, not to the extent that the criminal standard was proved. Accordingly, the respondent was acquitted. The authority appealed by way of case stated.

It submitted that the judge had erred in his approach to the statutory scheme. In particular, it argued that, in the light of the words of section 7 of the 1990 Act itself, and the purposes for which the statutory scheme as a whole was based, the judge should have limited himself to those works that had formed the basis of the charge, namely, those that related to the dismantling stage, rather than to have had considered the entirety of the works, in assessing their impact on the character of the listed building. It was further argued that, if the judge's approach to the statutory scheme was correct, that would, in effect, inhibit an authority from serving an enforcement notice or applying for an injunction to put a stop to any unauthorised works.

The appeal would be dismissed.

To determine whether works of alteration on a listed building, which involved a stage of dismantling followed by a stage of rebuilding, contravened section 7 of the 1990 Act, and consequently section 9 thereof, it would not be right for a planning authority to cease their assessment of those works, in the artificial sense, part of the way through. In cases, however, where the stages could be regarded as separate and distinct, perhaps by reason of the gap in time between them, the authority could decide not to follow that approach.

Despite the fact that listed buildings, by their very nature, were entities intended to endure for a long time, a realistic and practical approach had to be taken to the words of the statute. It was clear that Parliament had deliberately chosen not to criminalise all works of alteration on a listed building. Only those that affected or “would affect” the character of a listed building, as a building of special architectural or historic interest, were to be caught by the 1990 Act. Further, that construction of the statutory scheme did not have the effect of inhibiting an authority from serving an enforcement notice or applying for an injunction to put a stop to any unauthorised works.

In the instant case, the judge had not erred in his approach to the statutory scheme.
Accordingly, the acquittal would stand.

Shimizu (UK) Ltd v Westminster City Council [1997] 1 All ER 481 considered.

Case annotations in other services: East Riding of Yorkshire Council v Hobson [2008] All ER (D) 265 (Apr); Shimizu (UK) Ltd v Westminster City Council [1997] 1 All ER 481
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10. Duffield and another v Gandy

Citation: [2008] EWCA Civ 379
Hearing date: 17 April 2008
Court: Court of Appeal, Civil Division
Judges: Mummery, Toulson LJJ and Patten J
Relevant legislation: Law of property Act 1925, section 84(1)(aa), (1A)
Summary: restrictive covenant affecting land – discharge or modification – conditions to be satisfied

Mr and Mrs D applied to the Lands Tribunal to modify or discharge a restrictive covenant binding on their property, the benefit of which was annexed to neighbouring properties. The covenant provided: “For the benefit of the land hereby conveyed and so as to bind the Vendor’s adjoining land on the South East thereof the Vendor hereby covenants with the Purchaser and the persons deriving title under him that the Vendor will not at any time hereafter erect or allow to be erected any residence or manufactory on the Vendor's said adjoining land on the South East, but this shall not preclude the erection of a private garage, hen houses or other erections of a similar character.” Mr and Mrs D had obtained planning permission to build a bungalow on the north east corner of their property (the property), but G, the owner of one of the neighbouring properties, objected. Mr and Mrs D's application was made under section 84(1)(aa) of the Law of Property Act 1925 on the ground that the restriction, in impeding reasonable use of the land, “does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them”. It was common ground that the proposed user was reasonable, that the covenant restricted that user and that the restriction secured some practical benefits to G. The issue was whether the practical benefits thereby secured were of “substantial value or advantage” to her. G's case was that the restriction protected the privacy of her property. It was not overlooked or disturbed by the presence of a close neighbour. In particular, if the restriction were modified or discharged, the privacy of her principal garden to the rear of her property would be disturbed by the proximity of an adjoining rear garden used by the occupants of the proposed bungalow. The tribunal upheld G's objections, and Mr and Mrs D appealed.

They submitted that the tribunal had misconstrued the covenant and that, as a result of that error of law, he had taken an immaterial factor into account in arriving at his decision, namely his conclusion that the restrictive covenant afforded practical benefits of substantial value or advantage in relation to garden use of the property; he had failed to consider the application by reference only to such practical benefits as would accrue from the restriction on erecting a residence; and that the reasons for his decision were legally flawed. The central issue on the appeal was whether the tribunal had misconstrued the covenant by reading the restriction as preventing garden use of the property. It was submitted that on a correct construction the covenant only prevented development of the property by erecting a “residence or manufactury” on it.

The appeal would be dismissed.

While it was true that the covenant did not specifically restrict the use of the property as a garden, the tribunal had not proceeded on an erroneous basis in reaching the conclusion that retention of the covenant would secure to G practical benefits of substantial value or advantage. The tribunal had correctly construed the covenant as securing a practical benefit of substantial value to G by enabling her to prevent the development of the property by the erection of a residence, which would also involve ancillary use of a garden adjoining her property. It had compared the difference between the use or potential use of the property by Mr and Mrs D, which had no real impact on G's privacy, and the use of a rear garden on the part of the property very close to hers that would be made by the occupants of the proposed bungalow. On making the comparison of the two types of garden use, the tribunal had been entitled in law to conclude that the practical benefits of the restriction were of substantial value or advantage to G.

Case annotations in other services: Duffield and another v Gandy [2008] All ER (D) 239 (Apr)
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11. Antler Homes Wessex Ltd v Secretary of State for Communities and Local Government and another

Citation: [2008] All ER (D) 220 (Apr)
Hearing date: 16 April 2008
Court: Queen's Bench Division, Administrative Court
Judge: Collins J
Relevant legislation: Town and Country Planning Act 1990, section 78
Summary: town and country planning – permission for development – refusal

The claimant applied for planning permission for residential housing on a site located within an identified “settlement policy boundary” (SPB). The detailed plans indicated that two dwelling houses, which had substantially sized gardens, would have to be demolished, and that use would have to be made of the rear garden to a third property. The second defendant local authority rejected the application, and the claimant appealed under section 78 of the Town and Country Planning Act 1990, to the first defendant Secretary of State. An inspector was subsequently appointed to consider the matter on behalf of the Secretary of State. He recognised that, as a matter of principle, the SPB did not require the proposed development to be limited to the frontage of the extant dwellings (“ribbon development”), as one objector had argued; but that it could extend to the garden areas (“backland development”). Notwithstanding that, the inspector was of the view that the proposed development, whether it was to be ribbon or backland, would have an intrusive impact on the character and appearance of the surrounding area. Accordingly, planning permission was refused. The claimant applied under section 288 of the 1990 Act questioning the validity of the inspector's decision.

It submitted, inter alia, that the inspector had erred in refusing to grant planning permission after he had accepted that backland development was permissible for the proposed development at the site in question.

The application would be dismissed.

In the circumstances, the inspector had not erred. He had exercised his planning judgment to resolve the essential issues pertaining to the appeal, in particular, whether the SPB had limited the proposed development to ribbon development, or whether it could have had extended to backland development.

Accordingly, the decision not to grant planning permission would be upheld.

Case annotations in other services: Antler Homes Wessex Ltd v Secretary of State for Communities and Local Government and another [2008] All ER (D) 220 (Apr)
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12. BSF Consulting Engineers Ltd v MacDonald Crosbie

Citation: [2008] All ER (D) 171 (Apr)
Hearing date: 14 April 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: David Wilcox
Relevant legislation: Supply of Goods and Services Act 1982, section 15; Housing Grants, Construction and Regeneration Act 1996, sections 107, 108
Summary: building contract – adjudication – award

The claimant was a firm of civil and structural engineers that rendered certain services to the defendant contractor on certain works. A dispute arose as to the claimant's entitlement to be paid, and it referred the matter to adjudication. The adjudicator made an award in the claimant's favour, which the defendant failed to pay. The claimant brought proceedings under Civil Procedure Rules (CPR) part 8 to enforce the award, and applied for summary judgment under part 24.

The defendant maintained that the scope of work to be carried by the claimant and the claimant's charges had not been agreed, and that there was, accordingly, no contract in writing for the purposes of section 107 of the Housing Grants, Construction and Regeneration Act 1996. It followed, so it was said, that the statutory scheme for adjudication could not be implied into the contract between the parties and thus that the adjudicator had no jurisdiction. The claimant relied, inter alia, on section 15 of the Supply of Goods and Services Act 1982 as implying a term that a reasonable charge would be paid for the services that it rendered and argued that, in those circumstances, the contract met the requirements of section 107 of the 1996 Act.

The court ruled:
While there might be circumstances in which a term might be implied under section 15 of the 1982 Act as to the payment of a reasonable charge for services provided, those circumstances did not arise in cases such as the present where it was sought to rely on the statutory adjudication scheme being implied into the contract, rather than adjudication provisions in the contract itself.

The statutory scheme could only be implied into contracts in writing within the meaning of section 107 of the 1996 Act, and, to come within that provision, all express terms had to be recorded in writing.

In the instant case, there was no written evidence as to any agreed scope of works or charges so as to render the contract compliant with section 107 of the 1996 Act. Conflicts of evidence could only be resolved at a hearing. It followed that it was arguable that the adjudicator had no jurisdiction.

Accordingly, leave to defend would be granted.

RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] All ER (D) 108 (Mar) applied.

Case annotations in other services: BSF Consulting Engineers Ltd v MacDonald Crosbie [2008] All ER (D) 171 (Apr); RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] All ER (D) 108 (Mar)
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13. Ezekiel and another v Kohali and another

Citation: [2008] EWHC 734 (Ch)
Hearing date: 11 April 2008
Court: Chancery Division
Judge: Sarah Asplin QC sitting as a deputy judge of the High Court
Summary: agreement – sale, purchase or exchange of property – abatement

The claimants were property developers who contacted the defendant in relation to certain plots of land the defendants owned in Barnet. The registered titles did not include the entirety of the site or, in particular, a piece of the land that comprised an access strip to the plots the claimants were interested in purchasing. The claimants conducted title investigations and had received detailed plans of the area in question from the defendants that conflicted with their assertions that they owned the whole of the site in question. After entering an agreement to purchase the land a dispute arose in relation to the plots of land.

The claimants contended that the defendants were unable to show good title for the land they had contracted to sell, contrary to their representations, and sought specific performance of the agreement with an abatement of price, or, in the alternative, damages for breach of contract and / or misrepresentation. The defendants argued that the claimants had been fully aware of the limitations of the registered titles in respect of the land in dispute and thus knew what they were buying. Accordingly, the defendants sought specific performance of the agreement but without the abatement.

The court ruled:
It was settled law that the obligation to show good title was the central term of a contract for the sale of land. To show good title one had either to be the registered proprietor of the freehold estate with an absolute title or, if the land was unregistered, be seized of the fee simple and be in a position to convey it without the possibility of dispute or litigation. Further, to be able to grant the rights of way and easements agreed, it was necessary to be able to show good title to all of the land over which they were to be granted. However, the obligation to show good title in every respect was rebuttable by proving that the purchaser had entered into a contract with knowledge of particular defects in the title.

In the instant case, the evidence supported the fact that the defendants had orally represented to the claimants that they owned the whole of the land in issue, including the entirety of the access strip. However, it was more likely than not that the claimants had been aware of the extent of the defendants' title before the agreement was executed. Further, there could be no question of the claimants relying upon the representations made by the defendants.

The claimants' application for specific performance with the related abatement of price was dismissed, but the application for the same relief by the defendants was granted.

Lysaght v Edwards (1876) 2 Ch D 499 applied; Timmins v Moreland Street Property Co Ltd [1957] 3 All ER 265 applied; Re Stirrup's Contract [1961] 1 All ER 805 applied; Re Stone and Saville's Contract [1963] 1 All ER 353 applied.

Case annotations in other services: Ezekiel and another v Kohali and another [2008] All ER (D) 165 (Apr); Lysaght v Edwards (1876) 2 Ch D 499; Timmins v Moreland Street Property Co Ltd [1957] 3 All ER 265; Re Stirrup's Contract [1961] 1 All ER 805; Re Stone and Saville's Contract [1963] 1 All ER 353
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Continue to Property e-alert issue 53 (page 2)