Cases (continued)
10. Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd
Citation: [2008] EWHC 1301 (TCC)
Hearing date: 13 June 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: Coulson J
Summary: Building contract – Construction – Express term
The defendant subcontractor placed a tender for certain work with the claimant contractor. The proposed subcontract was to be on the Civil Engineering Contractors Association (CECA) form of subcontract. After several meetings, the claimant wrote to the defendant on 7 May 2002, awarding it the work in question and stating that formal subcontract documents would be sent. A list of proposed amendments to the CECA form was sent, and concerns were expressed over the wording of clause 3(4). Clause 3(4), in its unamended form, provides that “the subcontractor hereby acknowledges that any breach by him of the subcontract may result in the contractor's committing breaches of and becoming liable in damages under the main contract and other contracts made by him in connection with the main works and may occasion further loss or expense to the contractor in connection with the main works, and all such damages loss and expense are hereby agreed to be within the contemplation of the parties as being probable results of any such breach by the subcontractor”. A further meeting between the parties took place on 19 June, and a completed subcontract form was circulated the following day. That version of the subcontract included an amendment to clause 3(4) in which the following words were added to the end of the original: “[...] up to a maximum of 25 per cent of the subcontract value (exclusive of such figures contemplated) [...]“. Neither the subcontract documentation, nor the letter of 7 May, were signed by the defendant. Disputes arose in relation to its work, and the claimant brought proceedings.
Preliminary issues arose as to the extent of any subcontract entered into by the parties. The defendant accepted that some agreement had been reached on 7 May 2002, but maintained, inter alia, that it had later been agreed that its tender documentation would take priority over the employer's requirements and that the amendment to clause 3(4) operated generally to cap its liability to the claimant to 25 per cent.
The court ruled:
On its true construction, the unamended form of clause 3(4) was designed to widen a subcontractor's liability by preventing him from arguing that a breach by him of the subcontract, which gave rise to a liability on the part of the main contractor to a third party, was a loss that was not recoverable because it was not within the contemplation of the parties at the time of entering into the subcontract. The reference to “further loss and expense to the contractor” was intended to cover the situation in which the main contractor incurred a loss of his own that was parasitic or consequential upon the liability he had occurred to the third party; “loss or expense” in the context of a construction or engineering contract naturally meant a delay-related loss rather than anything else.
On the evidence, a basic agreement had been reached on 7 May 2002, which was varied on 19 June. Pursuant to that contract, the employer's requirements were to take precedence over everything else. Furthermore, the amended form of clause 3(4) applied to all claims against the defendant in which the claimant sought to pass on their liability to the employer or to any other subcontractor when such liability had been caused by the defendant's breach of its subcontract. It did not apply to claims by the claimant against the defendant for damages arising out of the failure of the latter to perform its subcontract. The imposition of the quantum cap did not alter the original limitation on the application of the unamended form of clause 3(4), which was concerned solely with the claimant's liabilities to third parties and was the complete opposite of a provision seeking to limit the subcontractor's liability to the main contractor.
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; Martin v David Wilson Homes Ltd [2004] All ER (D) 332 (Jun) applied.
Case annotations in other services: Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd [2008] All ER (D) 218 (Jun);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; Martin v David Wilson Homes Ltd [2004] All ER (D) 332 (Jun)
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11. Hanoman v Southwark London Borough Council
Citation: [2008] EWCA Civ 624
Hearing date: 12 June 2008
Court: Court of Appeal, Civil Division
Judges: Sir Anthony Clarke MR, Arden and Jacob LJJ
Relevant legislation: Housing Act 1985, sections 153A(5), 153B; Law of Property (Miscellaneous Provisions) Act 1989, section 2
Summary: Housing – Local authority houses – Tenant's right to buy
The claimant had been a secure tenant of a property owned by the defendant local housing authority since 1977. At all material times he was in receipt of housing benefit, so that the rent was in whole or substantial part paid out of housing benefit and not by him personally. He was notified of his entitlement to buy the lease of his flat pursuant to part V of the Housing Act 1985, which in due course he decided to exercise. The authority did not initially accept that the claimant duly exercised his right to buy, and that dispute led to litigation in which it was held by the High Court that his notice was valid, and the authority was under a duty to deal with the application (see [2005] 1 All ER 795). The claimant lodged several notices of delay. He alleged that the premium payable on grant of the lease should be reduced to nil under sections 153A(5) and 153B of the 1985 Act. He wanted to proceed to completion provided that he could reach a satisfactory position with the authority about taking any dispute to the county court thereafter. Correspondence between the claimant and the authority ensued, which resulted in completion of the purchase of the lease by the claimant on the basis that he preserved any rights he had to take up matters with the authority at a later date. The claimant subsequently brought proceedings in the county court. There was a dispute about whether the price of the lease fell to be reduced by reference to housing benefit used to pay off the rent in the same way as the reduction the claimant would have received if he paid rent out of his own money.
The judge rejected the claim for three reasons. First, the collateral contract the claimant alleged arose out of the correspondence between him and the authority went no further than to elicit the authority's agreement to his initiating proceedings in the county court, and it had not prevented him from doing that. Second, the collateral contract was rendered unenforceable because it would contradict the provision in the lease for the payment of the premium. Third, a reduction in the premium could in any event not be obtained where the rent was paid by way of housing benefit. The judge held that the purpose of sections 153A(5) and 153B of the 1985 Act was to prevent a tenant being prejudiced by the payment of rent because of the local authority's delay, and that prejudice could not apply when the rent had been paid by housing benefit.
The claimant appealed.
The issues on the appeal included (i) whether the payment of housing benefit counted as the payment of rent by the tenant for the purposes of section 153A(5) of the 1985 Act; (ii) whether there was a collateral contract between the parties in the terms pleaded; (iii) whether the collateral contract was unenforceable by reason of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989; (iv) whether, if the collateral contract was not rendered unenforceable by section 2 of the 1989 Act, the claimant gave consideration for any promise on the part of the authority; and (v) whether the dispute between the claimant and the authority was within the jurisdiction of the county court under section 181 of the 1985 Act once the lease had been executed.
The appeal would be allowed.
(1) On the true interpretation of the 1985 Act, section 153A(5), section 153B and section 155(3A) thereof applied to rent paid by way of housing benefit on behalf of a tenant in the same way they applied to rent actually paid by him.
The wording of section 153A(5) did not exclude the payment of rent by third parties on behalf of the tenant, and there was nothing to suggest that the purpose of sections 153A and 153B could only sensibly be achieved by restricting the payment of rent to payment by the tenant otherwise than with housing benefit.
Movitex Ltd v Bulfield [1988] BCLC 104 applied.
(2) Subject to issues (iii) and (iv), there was a contract between the claimant and the authority, collateral to the execution of the lease, that, notwithstanding completion, the claimant would be able to enforce any rights he might have to have any outstanding dispute about the exercise of his right to buy determined by the county court.
Inntrepreneur Pub Co v East Crown Ltd [2000] All ER (D) 1100 applied.
(3) On its true interpretation, the collateral contract did not come within section 2 of the 1989 Act.
The collateral contract meant, notwithstanding completion, that the claimant would be free to seek any appropriate remedy thereafter if he was right about the premium. He now proposed to abandon his claim for rectification and sought only damages or restitution. That remedy does not involve rewriting the terms of the lease but the giving of a personal remedy against the authority in consequence of what the lease wrongly contained. As long as rectification was not sought when an order was made in the proceedings, the collateral contract was not rendered unenforceable by section 2 of the 1989 Act. The collateral contract was not an agreement as to the terms on which the lease would be granted. It operated in parallel with the lease.
Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] All ER (D) 317 (Jun) considered.
(4) The claimant provided consideration for the collateral contract by agreeing to proceed to completion without first making an application to the county court for the determination of the outstanding disputes between him and the authority arising out of his exercise of the right to buy.
The claimant clearly suffered a detriment by entering into the lease. On the law as he genuinely understood it to be, he would have ceased to have a right to apply to the county court under section 181 of the 1985 Act without that promise. The authority obtained the benefit of his proceeding to completion earlier than he would otherwise have. It was no answer to say that the claimant was granted substantial rights under the lease: he should have received a better benefit.
(5) Having regard to the terms of the collateral contract, the county court had jurisdiction to hear the outstanding dispute between the parties as to the size of the premium payable by the claimant in accordance with the 1985 Act, which was outstanding at the date of completion, notwithstanding that completion of the lease had taken place.
The object of section 181 of the 1985 Act was to allocate jurisdiction to the county court and not take away rights or confer new rights.
The claimant, by virtue of the collateral contract, reserved the right to ask the court to determine a point of law, namely the housing benefit point, even after completion. There was no agreement between him and the authority on the answer to the housing benefit point, but the parties agreed that the claimant should be free to have it determined by the court even after completion.
Sheffield City Council v Jackson [1998] 3 All ER 260 considered.
Case annotations in other services: Hanoman v Southwark London Borough Council [2008] All ER (D) 146 (Jun), [2005] 1 All ER 795); Movitex Ltd v Bulfield [1988] BCLC 104; Inntrepreneur Pub Co v East Crown Ltd [2000] All ER (D) 1100; Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] All ER (D) 317 (Jun); Sheffield City Council v Jackson [1998] 3 All ER 260
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12. Francis v First Secretary of State and another
Citation: [2008] All ER (D) 140 (Jun)
Hearing date: 11 June 2008
Court: Court of Appeal, Civil Division
Judge: Pill, Keene and Toulson LJJ
Relevant legislation: Town and Country Planning Act 1990, sections 78, 288
Summary: Town and country planning – Enforcement notice – Appeal against notice
In 1987, the claimant obtained planning permission (the 1987 permission) from the second defendant local planning authority for the use of the ground floor of a three-storey brick and timber building, as a tearoom and coffee shop (the premises). The building was located in the West Greenwich conservation area, and listed as a building of architectural and historical interest. The premises were also located near a shopping parade. The 1987 permission was subject to five conditions, all of which were subsequently removed or discharged with the exception of condition three, which provided that “no cooking shall be carried out on the premises at any time without prior approval of the authority”. In February 2004, the claimant applied for planning permission for the erection of a single-storey extension at the rear of the premises. The authority granted conditional permission in October (the 2004 permission). In the meantime, the authority served an enforcement notice upon the claimant requiring compliance with condition three of the 1987 permission. Thereafter, the claimant applied to the authority for removal of that condition.
By a decision notice, the authority refused the application, stating, inter alia that (i) the removal of condition three would alter the use of the premises to a use prohibited by the 2004 permission (the prohibited use); (ii) the establishment of the prohibited use without suitable odour and noise control would have a detrimental impact on the amenities of neighbouring residents and the locality generally; and (iii) the establishment of a ventilation system to control odours would have a deleterious impact on the visual and acoustic amenities on the locality, affecting the amenity of neighbouring residents and the conservation area generally.
The claimant appealed to the first defendant Secretary of State under section 78 of the Town and Country Planning Act 1990 (the Act), seeking either (a) a variation of the words in condition three so that the preparation of certain types of hot and cold food for sale on the premises could be permitted; or (b) the removal of condition three. At the hearing, the claimant was professionally represented by a chartered town planner. The inspector appointed by the Secretary of State identified the issues as being (i) the effect of varying or removing the condition on the living conditions of nearby occupiers, in terms of odours, noise and disturbance; (ii) whether the proposals preserved or enhanced the character or appearance of the West Greenwich Conservation Area; and (iii) the effect of varying or removing the condition on the vitality and viability of the shopping parade. In dismissing the appeal, the inspector concluded that condition three was reasonable and enforceable and served a useful planning purpose. In relation to the submissions made on an amended condition, the inspector considered that it would be ineffective to control the smells that would emanate from the premises. The inspector further stated that the claimant, at the time of the applications, suggested that the authority could impose a suitable condition requiring prior approval of an extract system, but that no information was provided to show how the scheme could be installed. The inspector took the view that the potential impact of ductwork and grilles on the character or appearance of the conservation area and the property, given the lack of any information, could reasonably be considered to be potentially harmful, particularly as the Public Services division advised that a high-level duct was necessary. He further concluded that noise attenuation measures in respect of any such ventilation system had not been adequately addressed.
The claimant challenged those findings and the decision refusing her appeal, pursuant to section 288 of the Act. She contended that the inspector reached a decision in a manner that was procedurally unfair. Her principal challenges in that respect included that (i) at no point prior to or at the hearing of her section 78 appeal had the authority put in issue the submission upon which she had relied, namely, that the proposed ventilation system was not in any way inadequate or ineffective in eliminating or reducing cooking odours to acceptable levels; and (ii) the authority had not referred, either before or at the hearing, to there being an ongoing requirement for a high-level ventilation duct.
The judge dismissed the application holding that the inspector had not dealt with the matter in a manner that was procedurally unfair, and the suitability of a ventilation system had clearly been in issue. In relation to the second challenge, the judge concluded that there was no reasonable basis upon which the claimant could have concluded that the requirement for a high-level ventilation duct was not an ongoing requirement.
The claimant appealed against that decision. The issue arose as to whether the inspector had been in breach of duty. The claimant submitted that it had been her and her advisers’ perception that the issue of ventilation had fallen away and that her appeal had been conducted, on her behalf, on that basis. She further submitted that if the high-level duct had been in issue, the inspector ought to have raised it at the hearing.
The appeal would be dismissed.
In the instant case, there was no basis on which the claimant and her advisers could have said that they were unaware of authority's position. The claimant ought to have been aware of the issues and that the authority had been insisting high-level duct. When a claimant was professionally represented an inspector was entitled to expect that the claimant's case was adequately put forward. It was not for an inspector to rout out a case that a claimant failed to put. In the circumstances, the inspector had been entitled to conclude that the claimant knew of the issues in relation to the high-level duct.
Decision of Lloyd Jones J [2007] All ER (D) 463 (Nov) affirmed.
Case annotations in other services: Francis v First Secretary of State and another [2008] All ER (D) 140 (Jun); Lloyd Jones J [2007] All ER (D) 463 (Nov)
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13. R (on the application of Cathco Property Holdings Ltd) v Gwynedd Council
Citation: [2008] All ER (D) 75 (Jun)
Hearing date: 6 June 2008
Court: Queen's Bench Division, Administrative Court
Judge: Collins J
Summary: Town and country planning – Permission for development – Material consideration
The claimant owned a retail site within the centre of the defendant local authority's area. The interested party also occupied a site within the area of the authority. The site was approximately 0.68 hectares in size and located on the south-western edge, outside the town centre. The claimant applied for planning permission for the demolition of one retail building and the refurbishment and extension to a remaining building to provide three retail units, together with alterations to an existing vehicular access and car parking area. The current retail use of the site was authorised by previous planning permission. The authority's planning officer recommended approval to the committee. The committee resolved to grant the application. Subsequently, the committee requested that there be a reconsideration of its decision on the basis of a recent policy change (the policy), which took place shortly before the resolution to approve was made. Further representations were made in respect of the policy. The reconsideration meeting led to the second resolution to grant planning permission. The claimant challenged the decision by way of judicial review. It was common ground that the planning officer in his report to the committee stated, inter alia, that “where no objections have been received to an individual policy [...] then considerable weight may be attached to it or where an objection had been received to an individual policy [...] then the weight that may be attached to it as material planning consideration is less.”
The claimant contended, inter alia, that the defendant had regard to immaterial considerations in giving weight to its assessments.
The application would be allowed.
If a planning judgment was to be reached, it had to be based on proper evidence and proper material. It was insufficient to rely upon the planning officer's own personal judgment.
In the instant case, the committee had been misled as to accuracy and how they could depend on the view formed by the planning officer on the basis of a lack of material evidence. The planning officer relied on immaterial consideration, and the reality was that the evidence was not properly reliant. In all the circumstances, the decision of the committee could not stand.
Accordingly, the planning permission would be quashed.
Case annotations in other services: R (on the application of Cathco Property Holdings Ltd) v Gwynedd Council [2008] All ER (D) 75 (Jun)
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14. Genesis Housing Group Ltd v McKibbin and others
Citation: [2008] All ER (D) 51 (Jun)
Hearing date: 5 June 2008
Court: Chancery Division
Judge: Briggs J
Summary: Practice – Pre-trial or post-judgment relief – Freezing order
The first claimant company operated as a housing association and registered social landlord and was the parent company of a group of undertakings. The second claimant company was a property developer. The claimants entered into a joint venture to purchase and develop a piece of land for residential use (the first property). To that end, B LLP, owned in equal shares by the second claimant and a wholly owned subsidiary of the first claimant, was created. B LLP purchased the first property for £25.3 million. On 7 November 2006, the first defendant, an estate agent, sent an invoice to the second claimant for a finder's fee in relation to the first property. The invoice was addressed to B LLP and was in the sum of £445,912.50. The invoice was paid by the second claimant, which in turn recouped half of that amount from a subsidiary of the first claimant. In December 2006, a further subsidiary of the first claimant, P, contracted to purchase a development site for £1.9 million (the second property). In January 2007, the first claimant paid a similar invoice in the sum of £45,560 in relation to the second property.
Following an investigation, the first claimant began to suspect that the properties had not been found by the first defendant and that it had been the victim of a fraudulent conspiracy involving the first through fourth defendants. The second and third defendants were employees of the first claimants' group of companies. The first and second defendants were cohabitees, and the third and fourth defendants were husband and wife. On 5 September 2007, following disclosures made as a result of an order under the Bankers' Books Evidence Act 1879, the claimants obtained a without notice freezing order against the defendants. In obtaining that order, the claimants made neither mention of B LLP, nor the various subsidiaries of the first claimant. The evidence in support of the application also contained inaccuracies relating to the identity of the entity that repaid half of the finder's fee to the second claimant in relation to the first property and the exact nature of the employment of the second and third defendants. In October 2007, the defendants first raised the issue that it had, in fact, been B LLP who purchased the first property. At a case management conference on 14 February 2008, directions were given to trial, a window for which had been obtained. On 6 March 2008, the action against the third and fourth defendants was settled. Subsequently, the claimants sought to amend the particulars of claim, inter alia, adding B LLP and the relevant subsidiaries of the first claimant as additional claimants. That application was made three days outside the deadline given in the case management directions. The defendants sought, inter alia, to have the freezing injunction discharged.
The defendants submitted, inter alia, that the application to amend fell to be dismissed on the bases of delay and the fact that the prayer for relief, as proposed to be amended, stated the causes of action too widely among the defendants. They submitted that the freezing order fell to be discharged on the grounds of material nondisclosure, delay in rectifying the inaccuracies and prejudice.
The court ruled:
(1) In the instant case, the claimants substantially complied with the case management directions, albeit that the application was made three days late. The application to join the additional claimants posed no real difficulties for the defendants; their complaints arose out of essentially the same facts, and there was a degree of overlap between the cases of all current and proposed claimants, and there was no danger that the trial window would be lost. Furthermore, the claims were not too widely distributed between the claimants, and there was no real risk of prejudice being caused to the defendants. Accordingly, the application to amend would be allowed.
(2) Although there had been culpable material nondisclosure, it was not appropriate for the court to exercise the discretion to discharge the freezing order in the instant case. The delay in rectifying the error had been contributed by the late service of the defence, and moreover, the defendants had only made the application several months after having been made aware of the fact of the nondisclosure. Any prejudice subsequently found to have occasioned the defendants could properly be addressed by an order to costs. Accordingly, the application to discharge the freezing order would be dismissed.
Brink's Mat Ltd v Elcombe [1988] 3 All ER 188 applied.
Case annotations in other services: Genesis Housing Group Ltd v McKibbin and others [2008] All ER (D) 51 (Jun); Brink's Mat Ltd v Elcombe [1988] 3 All ER 188
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15. South Cambridgeshire District Council v Price and others
Citation: [2008] All ER (D) 34 (Jun)
Hearing date: 5 June 2008
Court: Queen's Bench Division
Judge: Plender J
Relevant legislation: Town and Country Planning Act 1990, section 187B; Caravan Sites and Control of Development Act 1960, section 24; Race Relations Act 1976, section 71
Summary: Town and country planning – Enforcement of planning control – Unauthorised development
The defendants were all gypsies. They occupied about 10 pitches (the site) used as a gypsy caravan site. Shortly after their arrival, the claimant local planning authority obtained an injunction, later stayed, and served an enforcement notice requiring the defendants to leave the site. That was followed by a public inquiry held between August 2004 and April 2005 and a decision of the Secretary of State to uphold the enforcement notice and give the defendants until November 2005 to leave. It was common ground that their presence at the site thereafter was a criminal offence, but it was also common ground that the claimant was unable to identify an alternative site to which the defendants could go.
The defendants applied for planning permission to use the site as a caravan site. That application was refused. The claimant subsequently applied for a final injunction to evict the defendants pursuant to section 187B of the Town and Country Planning Act 1990. The defendants contended, inter alia, that they had a real chance of success in an appeal against dismissal of their planning application and that, accordingly, they should not be forced to leave the site while the appeal was pending. They argued that the claimant's decision to seek a final injunction was unlawful because it had failed to comply with the race equality duty imposed by section 71 of the Race Relations Act 1976, bearing in mind that the claimant had failed to exercise its power to provide a site for gypsies pursuant to section 24 of the Caravan Sites and Control of Development Act 1960.
The court ruled:
In all the circumstances, it would be disproportionate to grant an injunction in the instant case while there had remained a real prospect that an appeal against an enforcement notice or a fresh application by the defendants for the requisite planning permission might succeed. There was a prospect of the application for temporary planning permission, which was to be the subject of an inquiry. It would be disproportionate to grant an injunction at the instant stage, the effect of which would be to require the defendants to leave the site in absence of any alternative site provision. However, an application for an injunction to evict the respondents from the site was not itself in violation of section 71 of the 1976 Act.
Accordingly, the application would be dismissed.
Case annotations in other services: South Cambridgeshire District Council v Price and others [2008] All ER (D) 34 (Jun)
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16. Transview Properties Ltd v City Site Properties Ltd
Citation: [2008] EWHC 1221 (Ch)
Hearing date: 3 June 2008
Court: Chancery Division
Judge: Briggs J
Summary: Mistake – Rectification – Unilateral mistake
In 1989, the defendant company acquired the freehold title of a substantial 13-storey office block comprising some 13,000 square foot of office space. The main operating company of a trust, HMV, took a business tenancy of part of the second floor of the property in 1992, thereafter expanding its occupied rented space over the next eight years. In March 2001, HMV took a 25-year head lease of the whole of the property from the defendant. Although, by then, the property's largest single occupant in terms of space, it became the intermediate landlord of a considerable number of other occupying business tenants. Subsequently, the defendant and HMV entered into negotiation in relation to the latter's purchase of the property. The claimant company was incorporated by HMV as a special purpose vehicle. The purchase by the claimant was completed on 1 December 2004, pursuant to a sale agreement bearing the same date. The purchase price was £13.5 million. £2.5 million of that amount was provided to the claimant on completion by the defendant's parent company, W Ltd, and secured by a second charge of the property (the financial charge) ranking behind a first change to a mortgagee bank, the lender of substantially the remainder of the purchase money to the claimant. The sale agreement also contained provisions for payment of overage to the defendant upon either or both of the resale of the property by the claimant at a profit or the obtaining of planning permission for the residential development of the property. In each case, the defendant was to be entitled to 50 per cent of the increase in value obtained by the disposal or attributable to the grant of planning permission. Subsequently, a dispute arose in relation to an overage abatement provision (see [4]) alleged by the claimant to have been contained in paragraph 2.3 of schedule 3 to the sale agreement.
The claimant submitted, inter alia, that paragraph 2.3, having been specifically included by the defendant's solicitors in a travelling draft of the sale agreement on 29 November 2004, was thereafter removed by the defendant by means of conduct amounting to sharp practice, without the claimant becoming aware of its removal. The sale agreement therefore fell to be rectified on the grounds of unilateral mistake. The defendant submitted, inter alia, that paragraph 2.3 had been deliberately removed from the sale agreement by mutual consent, upon the basis that an overage abatement provision was to have been made the subject of a side letter.
The claim would be dismissed.
On the evidence, it had been the common intention of the parties that the provision for the abatement of overage was to be dealt with not in the sale agreement, but in a side letter. The sale agreement, absent paragraph 2.3, was executed precisely in accordance with the parties' intentions as to its form. In those circumstances, the central plank of the claimant's case, that the removal of paragraph 2.3 from the sale agreement had been achieved by some form of trick or by anything approaching sharp practice, fell to be rejected. On the contrary, its removal had been both requested by the claimant and communicated by the defendant, both directly and through its solicitors, in a conspicuous and conscientious manner.
Case annotations in other services: Transview Properties Ltd v City Site Properties Ltd [2008] All ER (D) 08 (Jun)
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Enabling power: Planning and Compulsory Purchase Act 2004
Commencement: 27 June 2008
Summary: This SI amends the Town and Country Planning (Local Development) (England) Regulations 2004, which make provision in connection with the system of local development planning established by part 2 of the Planning and Compulsory Purchase Act 2004.
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Enabling power: Town and Country Planning Act 1990
Commencement: 22 July 2008
Summary: This SI applies the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999, with modifications, to review of old mineral permissions (ROMP) applications made before 15 November 2000 that are undetermined on 22 July 2008.
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Solicitor Malcolm Dowden, a member of the UK Sustainable Development Panel, says: "The requirement to order and commit to paying for a HIP before putting a house up for sale was onerous enough when the market was active. Now that the market has stalled and as long as potential buyers have difficulty securing mortgage offers, the requirement may well act as a significant disincentive to those thinking about a sale."
He adds: "Remember that the requirement to order and commit to paying for a HIP is a concession – the original requirement was that a HIP should actually be in place before going to market. The concession still requires a ‘reasonable expectation’ that the HIP will be available within 28 days. Extending a largely meaningless concession is not particularly helpful and will do nothing to free up the market.
"As implemented, HIPs are of very limited use. The inclusion of an energy performance certificate [EPC] gives some potentially useful information, but it is highly unlikely that energy performance is a significant factor in determining whether a particular house will sell. The omission of home condition reports [surveys] has been described as a major shortcoming of HIPs, but even if they were included, there would be difficult issues of reliability and liability to resolve before reports produced for a seller would be readily accepted by a lender or a buyer. Including the lease in the HIP for leasehold property is sensible enough, but where the property is registered, that information is increasingly likely to be available quickly and online from the Land Registry. In many cases, therefore, including the lease in a HIP will not materially speed up the process."
The government is to develop a new set of standards for industry involving bodies such as the Royal Institution of Chartered Surveyors (RICS), the National Association of Estate Agents (NAEA) and the Law Society. It said that the aim is to bring together best practice within the industry into a single set of standards that all consumers can expect from property professionals in the home buying and selling process, including redress arrangements, the provision of HIPs and delivery of local searches.
"Working with the RICS, NAEA and the Law Society to produce industry standards is a long overdue step," says Mr Dowden.
He adds: "In both the residential and the commercial sectors, the government pushed HIPs and EPC through with scant regard to the advice and warnings offered by industry groups. In the case of EPC, the RICS secured a more or less meaningful consultation process only after going to the High Court to challenge the government’s implementation of HIPs. It is absurd that industry experts found that they had to resort to judicial review before the government would listen to reasoned concerns and practical advice."
The government is also to develop, in partnership with the property professionals, the means for capturing consumer-friendly information for inclusion within the HIPs, such as property fixtures and fittings, access and boundaries.
"Sellers’ property information forms already include information about fixtures and chattels. If that information can be captured in a more useful format, then reporting processes might be speeded up,” says Mr Dowden, who is also the author of Climate Change and Sustainable Development: Law, Policy and Practice (EG Books, 2008).
He adds: "More difficult issues arise when it comes to providing information about boundaries. In 2002, when the law relating to land registration was completely overhauled, the ‘general boundaries’ rule was retained, so that for most properties the boundaries on the title plan show only their general position. It is possible to go through a process to ‘fix’ or ‘determine’ the precise position of a boundary, but that process requires the involvement of a surveyor and payment of additional fees.
"The ‘general boundaries’ rule was the fruit of bitter experience. When the first land registration regime was introduced in 1862, it required the precise position of boundaries to be fixed. That requirement achieved little – it merely provoked a number of boundary disputes."
(11/6/08)
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Jon Golding, of Golding Taxation Services, says "Conacre, a derivation from ‘corn acre’, is a specifically Irish tradition of letting small parcels land for a single crop. It is part and parcel of the business of small farming there, and it is temporary by its very nature, as lettings are always limited to 11 months. The rents the lets earn are very low returns, and it is essentially a way of maintaining land for which a farming family has no plans in a particular season.
"However, following PN McCall & BJA Keenan (Personal Representatives of Mrs E McClean) v HMRC, that business may now consist of mainly of making or holding investments where farmland has development potential but is still farmed by letting in conacre. In a claim for BPR [business property relief] a widow inherited 33 acres of farmland on the death of her husband. She did not farm the land herself but let it to local farmers under conacre agreements. She died in 1999. HMRC then issued a notice of determination charging IHT on her estate. Her personal representatives appealed, contending that the farmland qualified for BPR. The Special Commissioner rejected this contention and dismissed the appeal, holding that although the widow was carrying on a business on the land, that business consisted mainly of making or holding investments, within IHTA [Inheritance Tax Act] 1984, section 105(3), so that the land was not ‘relevant business property’. The Commissioner observed that ‘the activities of the business consisted of the making available of its major asset to other persons for payment without the separate provision of any substantial other goods or services’."
It seems now where farmland has development potential but is still farmed by letting in conacre, it had seemed to attract a second relief – business property relief – also at 100 per cent on that additional development value, but following the above case, that business may now consist of mainly of making or holding investments within IHTA 1984, section 105(3). There has also been the suggestion that such similar situations in England may also now be subject to similar treatment.
Mr Golding says, "I would have thought that the small ‘lifestyle farming’ enterprises used as an IHT avoidance scheme with latent development value are already under threat anyway so that the land is not ‘relevant business property’, however, while land let out in England is attributable to the lessor in Northern Ireland land let out under the conacre scheme is attributable to the lessee. This, along with the conditions for APR [agricultural property relief], that farmland is owned by the transferor for the period of seven years ending with the date of transfer and has been occupied throughout that period (by him or another person) for the purposes of agriculture within IHTA 1984, section 117, will still attract relief. This is a case that will develop already complicated rules on APR or BPR where small farms with potential development value are reviewed by HMRC [HM Revenue & Customs]."
Relevant legislation: Inheritance Tax Act 1984 sections 105(3), 117
Case annotations in other services: PN McCall & BJA Keenan (Personal Representatives of Mrs E McClean) v HMRC [2008] Sp C
(5/6/08)
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10. Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd
Citation: [2008] EWHC 1301 (TCC)
Hearing date: 13 June 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: Coulson J
Summary: Building contract – Construction – Express term
The defendant subcontractor placed a tender for certain work with the claimant contractor. The proposed subcontract was to be on the Civil Engineering Contractors Association (CECA) form of subcontract. After several meetings, the claimant wrote to the defendant on 7 May 2002, awarding it the work in question and stating that formal subcontract documents would be sent. A list of proposed amendments to the CECA form was sent, and concerns were expressed over the wording of clause 3(4). Clause 3(4), in its unamended form, provides that “the subcontractor hereby acknowledges that any breach by him of the subcontract may result in the contractor's committing breaches of and becoming liable in damages under the main contract and other contracts made by him in connection with the main works and may occasion further loss or expense to the contractor in connection with the main works, and all such damages loss and expense are hereby agreed to be within the contemplation of the parties as being probable results of any such breach by the subcontractor”. A further meeting between the parties took place on 19 June, and a completed subcontract form was circulated the following day. That version of the subcontract included an amendment to clause 3(4) in which the following words were added to the end of the original: “[...] up to a maximum of 25 per cent of the subcontract value (exclusive of such figures contemplated) [...]“. Neither the subcontract documentation, nor the letter of 7 May, were signed by the defendant. Disputes arose in relation to its work, and the claimant brought proceedings.
Preliminary issues arose as to the extent of any subcontract entered into by the parties. The defendant accepted that some agreement had been reached on 7 May 2002, but maintained, inter alia, that it had later been agreed that its tender documentation would take priority over the employer's requirements and that the amendment to clause 3(4) operated generally to cap its liability to the claimant to 25 per cent.
The court ruled:
On its true construction, the unamended form of clause 3(4) was designed to widen a subcontractor's liability by preventing him from arguing that a breach by him of the subcontract, which gave rise to a liability on the part of the main contractor to a third party, was a loss that was not recoverable because it was not within the contemplation of the parties at the time of entering into the subcontract. The reference to “further loss and expense to the contractor” was intended to cover the situation in which the main contractor incurred a loss of his own that was parasitic or consequential upon the liability he had occurred to the third party; “loss or expense” in the context of a construction or engineering contract naturally meant a delay-related loss rather than anything else.
On the evidence, a basic agreement had been reached on 7 May 2002, which was varied on 19 June. Pursuant to that contract, the employer's requirements were to take precedence over everything else. Furthermore, the amended form of clause 3(4) applied to all claims against the defendant in which the claimant sought to pass on their liability to the employer or to any other subcontractor when such liability had been caused by the defendant's breach of its subcontract. It did not apply to claims by the claimant against the defendant for damages arising out of the failure of the latter to perform its subcontract. The imposition of the quantum cap did not alter the original limitation on the application of the unamended form of clause 3(4), which was concerned solely with the claimant's liabilities to third parties and was the complete opposite of a provision seeking to limit the subcontractor's liability to the main contractor.
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; Martin v David Wilson Homes Ltd [2004] All ER (D) 332 (Jun) applied.
Case annotations in other services: Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd [2008] All ER (D) 218 (Jun);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; Martin v David Wilson Homes Ltd [2004] All ER (D) 332 (Jun)
Back to top11. Hanoman v Southwark London Borough Council
Citation: [2008] EWCA Civ 624
Hearing date: 12 June 2008
Court: Court of Appeal, Civil Division
Judges: Sir Anthony Clarke MR, Arden and Jacob LJJ
Relevant legislation: Housing Act 1985, sections 153A(5), 153B; Law of Property (Miscellaneous Provisions) Act 1989, section 2
Summary: Housing – Local authority houses – Tenant's right to buy
The claimant had been a secure tenant of a property owned by the defendant local housing authority since 1977. At all material times he was in receipt of housing benefit, so that the rent was in whole or substantial part paid out of housing benefit and not by him personally. He was notified of his entitlement to buy the lease of his flat pursuant to part V of the Housing Act 1985, which in due course he decided to exercise. The authority did not initially accept that the claimant duly exercised his right to buy, and that dispute led to litigation in which it was held by the High Court that his notice was valid, and the authority was under a duty to deal with the application (see [2005] 1 All ER 795). The claimant lodged several notices of delay. He alleged that the premium payable on grant of the lease should be reduced to nil under sections 153A(5) and 153B of the 1985 Act. He wanted to proceed to completion provided that he could reach a satisfactory position with the authority about taking any dispute to the county court thereafter. Correspondence between the claimant and the authority ensued, which resulted in completion of the purchase of the lease by the claimant on the basis that he preserved any rights he had to take up matters with the authority at a later date. The claimant subsequently brought proceedings in the county court. There was a dispute about whether the price of the lease fell to be reduced by reference to housing benefit used to pay off the rent in the same way as the reduction the claimant would have received if he paid rent out of his own money.
The judge rejected the claim for three reasons. First, the collateral contract the claimant alleged arose out of the correspondence between him and the authority went no further than to elicit the authority's agreement to his initiating proceedings in the county court, and it had not prevented him from doing that. Second, the collateral contract was rendered unenforceable because it would contradict the provision in the lease for the payment of the premium. Third, a reduction in the premium could in any event not be obtained where the rent was paid by way of housing benefit. The judge held that the purpose of sections 153A(5) and 153B of the 1985 Act was to prevent a tenant being prejudiced by the payment of rent because of the local authority's delay, and that prejudice could not apply when the rent had been paid by housing benefit.
The claimant appealed.
The issues on the appeal included (i) whether the payment of housing benefit counted as the payment of rent by the tenant for the purposes of section 153A(5) of the 1985 Act; (ii) whether there was a collateral contract between the parties in the terms pleaded; (iii) whether the collateral contract was unenforceable by reason of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989; (iv) whether, if the collateral contract was not rendered unenforceable by section 2 of the 1989 Act, the claimant gave consideration for any promise on the part of the authority; and (v) whether the dispute between the claimant and the authority was within the jurisdiction of the county court under section 181 of the 1985 Act once the lease had been executed.
The appeal would be allowed.
(1) On the true interpretation of the 1985 Act, section 153A(5), section 153B and section 155(3A) thereof applied to rent paid by way of housing benefit on behalf of a tenant in the same way they applied to rent actually paid by him.
The wording of section 153A(5) did not exclude the payment of rent by third parties on behalf of the tenant, and there was nothing to suggest that the purpose of sections 153A and 153B could only sensibly be achieved by restricting the payment of rent to payment by the tenant otherwise than with housing benefit.
Movitex Ltd v Bulfield [1988] BCLC 104 applied.
(2) Subject to issues (iii) and (iv), there was a contract between the claimant and the authority, collateral to the execution of the lease, that, notwithstanding completion, the claimant would be able to enforce any rights he might have to have any outstanding dispute about the exercise of his right to buy determined by the county court.
Inntrepreneur Pub Co v East Crown Ltd [2000] All ER (D) 1100 applied.
(3) On its true interpretation, the collateral contract did not come within section 2 of the 1989 Act.
The collateral contract meant, notwithstanding completion, that the claimant would be free to seek any appropriate remedy thereafter if he was right about the premium. He now proposed to abandon his claim for rectification and sought only damages or restitution. That remedy does not involve rewriting the terms of the lease but the giving of a personal remedy against the authority in consequence of what the lease wrongly contained. As long as rectification was not sought when an order was made in the proceedings, the collateral contract was not rendered unenforceable by section 2 of the 1989 Act. The collateral contract was not an agreement as to the terms on which the lease would be granted. It operated in parallel with the lease.
Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] All ER (D) 317 (Jun) considered.
(4) The claimant provided consideration for the collateral contract by agreeing to proceed to completion without first making an application to the county court for the determination of the outstanding disputes between him and the authority arising out of his exercise of the right to buy.
The claimant clearly suffered a detriment by entering into the lease. On the law as he genuinely understood it to be, he would have ceased to have a right to apply to the county court under section 181 of the 1985 Act without that promise. The authority obtained the benefit of his proceeding to completion earlier than he would otherwise have. It was no answer to say that the claimant was granted substantial rights under the lease: he should have received a better benefit.
(5) Having regard to the terms of the collateral contract, the county court had jurisdiction to hear the outstanding dispute between the parties as to the size of the premium payable by the claimant in accordance with the 1985 Act, which was outstanding at the date of completion, notwithstanding that completion of the lease had taken place.
The object of section 181 of the 1985 Act was to allocate jurisdiction to the county court and not take away rights or confer new rights.
The claimant, by virtue of the collateral contract, reserved the right to ask the court to determine a point of law, namely the housing benefit point, even after completion. There was no agreement between him and the authority on the answer to the housing benefit point, but the parties agreed that the claimant should be free to have it determined by the court even after completion.
Sheffield City Council v Jackson [1998] 3 All ER 260 considered.
Case annotations in other services: Hanoman v Southwark London Borough Council [2008] All ER (D) 146 (Jun), [2005] 1 All ER 795); Movitex Ltd v Bulfield [1988] BCLC 104; Inntrepreneur Pub Co v East Crown Ltd [2000] All ER (D) 1100; Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] All ER (D) 317 (Jun); Sheffield City Council v Jackson [1998] 3 All ER 260
Back to top12. Francis v First Secretary of State and another
Citation: [2008] All ER (D) 140 (Jun)
Hearing date: 11 June 2008
Court: Court of Appeal, Civil Division
Judge: Pill, Keene and Toulson LJJ
Relevant legislation: Town and Country Planning Act 1990, sections 78, 288
Summary: Town and country planning – Enforcement notice – Appeal against notice
In 1987, the claimant obtained planning permission (the 1987 permission) from the second defendant local planning authority for the use of the ground floor of a three-storey brick and timber building, as a tearoom and coffee shop (the premises). The building was located in the West Greenwich conservation area, and listed as a building of architectural and historical interest. The premises were also located near a shopping parade. The 1987 permission was subject to five conditions, all of which were subsequently removed or discharged with the exception of condition three, which provided that “no cooking shall be carried out on the premises at any time without prior approval of the authority”. In February 2004, the claimant applied for planning permission for the erection of a single-storey extension at the rear of the premises. The authority granted conditional permission in October (the 2004 permission). In the meantime, the authority served an enforcement notice upon the claimant requiring compliance with condition three of the 1987 permission. Thereafter, the claimant applied to the authority for removal of that condition.
By a decision notice, the authority refused the application, stating, inter alia that (i) the removal of condition three would alter the use of the premises to a use prohibited by the 2004 permission (the prohibited use); (ii) the establishment of the prohibited use without suitable odour and noise control would have a detrimental impact on the amenities of neighbouring residents and the locality generally; and (iii) the establishment of a ventilation system to control odours would have a deleterious impact on the visual and acoustic amenities on the locality, affecting the amenity of neighbouring residents and the conservation area generally.
The claimant appealed to the first defendant Secretary of State under section 78 of the Town and Country Planning Act 1990 (the Act), seeking either (a) a variation of the words in condition three so that the preparation of certain types of hot and cold food for sale on the premises could be permitted; or (b) the removal of condition three. At the hearing, the claimant was professionally represented by a chartered town planner. The inspector appointed by the Secretary of State identified the issues as being (i) the effect of varying or removing the condition on the living conditions of nearby occupiers, in terms of odours, noise and disturbance; (ii) whether the proposals preserved or enhanced the character or appearance of the West Greenwich Conservation Area; and (iii) the effect of varying or removing the condition on the vitality and viability of the shopping parade. In dismissing the appeal, the inspector concluded that condition three was reasonable and enforceable and served a useful planning purpose. In relation to the submissions made on an amended condition, the inspector considered that it would be ineffective to control the smells that would emanate from the premises. The inspector further stated that the claimant, at the time of the applications, suggested that the authority could impose a suitable condition requiring prior approval of an extract system, but that no information was provided to show how the scheme could be installed. The inspector took the view that the potential impact of ductwork and grilles on the character or appearance of the conservation area and the property, given the lack of any information, could reasonably be considered to be potentially harmful, particularly as the Public Services division advised that a high-level duct was necessary. He further concluded that noise attenuation measures in respect of any such ventilation system had not been adequately addressed.
The claimant challenged those findings and the decision refusing her appeal, pursuant to section 288 of the Act. She contended that the inspector reached a decision in a manner that was procedurally unfair. Her principal challenges in that respect included that (i) at no point prior to or at the hearing of her section 78 appeal had the authority put in issue the submission upon which she had relied, namely, that the proposed ventilation system was not in any way inadequate or ineffective in eliminating or reducing cooking odours to acceptable levels; and (ii) the authority had not referred, either before or at the hearing, to there being an ongoing requirement for a high-level ventilation duct.
The judge dismissed the application holding that the inspector had not dealt with the matter in a manner that was procedurally unfair, and the suitability of a ventilation system had clearly been in issue. In relation to the second challenge, the judge concluded that there was no reasonable basis upon which the claimant could have concluded that the requirement for a high-level ventilation duct was not an ongoing requirement.
The claimant appealed against that decision. The issue arose as to whether the inspector had been in breach of duty. The claimant submitted that it had been her and her advisers’ perception that the issue of ventilation had fallen away and that her appeal had been conducted, on her behalf, on that basis. She further submitted that if the high-level duct had been in issue, the inspector ought to have raised it at the hearing.
The appeal would be dismissed.
In the instant case, there was no basis on which the claimant and her advisers could have said that they were unaware of authority's position. The claimant ought to have been aware of the issues and that the authority had been insisting high-level duct. When a claimant was professionally represented an inspector was entitled to expect that the claimant's case was adequately put forward. It was not for an inspector to rout out a case that a claimant failed to put. In the circumstances, the inspector had been entitled to conclude that the claimant knew of the issues in relation to the high-level duct.
Decision of Lloyd Jones J [2007] All ER (D) 463 (Nov) affirmed.
Case annotations in other services: Francis v First Secretary of State and another [2008] All ER (D) 140 (Jun); Lloyd Jones J [2007] All ER (D) 463 (Nov)
Back to top13. R (on the application of Cathco Property Holdings Ltd) v Gwynedd Council
Citation: [2008] All ER (D) 75 (Jun)
Hearing date: 6 June 2008
Court: Queen's Bench Division, Administrative Court
Judge: Collins J
Summary: Town and country planning – Permission for development – Material consideration
The claimant owned a retail site within the centre of the defendant local authority's area. The interested party also occupied a site within the area of the authority. The site was approximately 0.68 hectares in size and located on the south-western edge, outside the town centre. The claimant applied for planning permission for the demolition of one retail building and the refurbishment and extension to a remaining building to provide three retail units, together with alterations to an existing vehicular access and car parking area. The current retail use of the site was authorised by previous planning permission. The authority's planning officer recommended approval to the committee. The committee resolved to grant the application. Subsequently, the committee requested that there be a reconsideration of its decision on the basis of a recent policy change (the policy), which took place shortly before the resolution to approve was made. Further representations were made in respect of the policy. The reconsideration meeting led to the second resolution to grant planning permission. The claimant challenged the decision by way of judicial review. It was common ground that the planning officer in his report to the committee stated, inter alia, that “where no objections have been received to an individual policy [...] then considerable weight may be attached to it or where an objection had been received to an individual policy [...] then the weight that may be attached to it as material planning consideration is less.”
The claimant contended, inter alia, that the defendant had regard to immaterial considerations in giving weight to its assessments.
The application would be allowed.
If a planning judgment was to be reached, it had to be based on proper evidence and proper material. It was insufficient to rely upon the planning officer's own personal judgment.
In the instant case, the committee had been misled as to accuracy and how they could depend on the view formed by the planning officer on the basis of a lack of material evidence. The planning officer relied on immaterial consideration, and the reality was that the evidence was not properly reliant. In all the circumstances, the decision of the committee could not stand.
Accordingly, the planning permission would be quashed.
Case annotations in other services: R (on the application of Cathco Property Holdings Ltd) v Gwynedd Council [2008] All ER (D) 75 (Jun)
Back to top14. Genesis Housing Group Ltd v McKibbin and others
Citation: [2008] All ER (D) 51 (Jun)
Hearing date: 5 June 2008
Court: Chancery Division
Judge: Briggs J
Summary: Practice – Pre-trial or post-judgment relief – Freezing order
The first claimant company operated as a housing association and registered social landlord and was the parent company of a group of undertakings. The second claimant company was a property developer. The claimants entered into a joint venture to purchase and develop a piece of land for residential use (the first property). To that end, B LLP, owned in equal shares by the second claimant and a wholly owned subsidiary of the first claimant, was created. B LLP purchased the first property for £25.3 million. On 7 November 2006, the first defendant, an estate agent, sent an invoice to the second claimant for a finder's fee in relation to the first property. The invoice was addressed to B LLP and was in the sum of £445,912.50. The invoice was paid by the second claimant, which in turn recouped half of that amount from a subsidiary of the first claimant. In December 2006, a further subsidiary of the first claimant, P, contracted to purchase a development site for £1.9 million (the second property). In January 2007, the first claimant paid a similar invoice in the sum of £45,560 in relation to the second property.
Following an investigation, the first claimant began to suspect that the properties had not been found by the first defendant and that it had been the victim of a fraudulent conspiracy involving the first through fourth defendants. The second and third defendants were employees of the first claimants' group of companies. The first and second defendants were cohabitees, and the third and fourth defendants were husband and wife. On 5 September 2007, following disclosures made as a result of an order under the Bankers' Books Evidence Act 1879, the claimants obtained a without notice freezing order against the defendants. In obtaining that order, the claimants made neither mention of B LLP, nor the various subsidiaries of the first claimant. The evidence in support of the application also contained inaccuracies relating to the identity of the entity that repaid half of the finder's fee to the second claimant in relation to the first property and the exact nature of the employment of the second and third defendants. In October 2007, the defendants first raised the issue that it had, in fact, been B LLP who purchased the first property. At a case management conference on 14 February 2008, directions were given to trial, a window for which had been obtained. On 6 March 2008, the action against the third and fourth defendants was settled. Subsequently, the claimants sought to amend the particulars of claim, inter alia, adding B LLP and the relevant subsidiaries of the first claimant as additional claimants. That application was made three days outside the deadline given in the case management directions. The defendants sought, inter alia, to have the freezing injunction discharged.
The defendants submitted, inter alia, that the application to amend fell to be dismissed on the bases of delay and the fact that the prayer for relief, as proposed to be amended, stated the causes of action too widely among the defendants. They submitted that the freezing order fell to be discharged on the grounds of material nondisclosure, delay in rectifying the inaccuracies and prejudice.
The court ruled:
(1) In the instant case, the claimants substantially complied with the case management directions, albeit that the application was made three days late. The application to join the additional claimants posed no real difficulties for the defendants; their complaints arose out of essentially the same facts, and there was a degree of overlap between the cases of all current and proposed claimants, and there was no danger that the trial window would be lost. Furthermore, the claims were not too widely distributed between the claimants, and there was no real risk of prejudice being caused to the defendants. Accordingly, the application to amend would be allowed.
(2) Although there had been culpable material nondisclosure, it was not appropriate for the court to exercise the discretion to discharge the freezing order in the instant case. The delay in rectifying the error had been contributed by the late service of the defence, and moreover, the defendants had only made the application several months after having been made aware of the fact of the nondisclosure. Any prejudice subsequently found to have occasioned the defendants could properly be addressed by an order to costs. Accordingly, the application to discharge the freezing order would be dismissed.
Brink's Mat Ltd v Elcombe [1988] 3 All ER 188 applied.
Case annotations in other services: Genesis Housing Group Ltd v McKibbin and others [2008] All ER (D) 51 (Jun); Brink's Mat Ltd v Elcombe [1988] 3 All ER 188
Back to top15. South Cambridgeshire District Council v Price and others
Citation: [2008] All ER (D) 34 (Jun)
Hearing date: 5 June 2008
Court: Queen's Bench Division
Judge: Plender J
Relevant legislation: Town and Country Planning Act 1990, section 187B; Caravan Sites and Control of Development Act 1960, section 24; Race Relations Act 1976, section 71
Summary: Town and country planning – Enforcement of planning control – Unauthorised development
The defendants were all gypsies. They occupied about 10 pitches (the site) used as a gypsy caravan site. Shortly after their arrival, the claimant local planning authority obtained an injunction, later stayed, and served an enforcement notice requiring the defendants to leave the site. That was followed by a public inquiry held between August 2004 and April 2005 and a decision of the Secretary of State to uphold the enforcement notice and give the defendants until November 2005 to leave. It was common ground that their presence at the site thereafter was a criminal offence, but it was also common ground that the claimant was unable to identify an alternative site to which the defendants could go.
The defendants applied for planning permission to use the site as a caravan site. That application was refused. The claimant subsequently applied for a final injunction to evict the defendants pursuant to section 187B of the Town and Country Planning Act 1990. The defendants contended, inter alia, that they had a real chance of success in an appeal against dismissal of their planning application and that, accordingly, they should not be forced to leave the site while the appeal was pending. They argued that the claimant's decision to seek a final injunction was unlawful because it had failed to comply with the race equality duty imposed by section 71 of the Race Relations Act 1976, bearing in mind that the claimant had failed to exercise its power to provide a site for gypsies pursuant to section 24 of the Caravan Sites and Control of Development Act 1960.
The court ruled:
In all the circumstances, it would be disproportionate to grant an injunction in the instant case while there had remained a real prospect that an appeal against an enforcement notice or a fresh application by the defendants for the requisite planning permission might succeed. There was a prospect of the application for temporary planning permission, which was to be the subject of an inquiry. It would be disproportionate to grant an injunction at the instant stage, the effect of which would be to require the defendants to leave the site in absence of any alternative site provision. However, an application for an injunction to evict the respondents from the site was not itself in violation of section 71 of the 1976 Act.
Accordingly, the application would be dismissed.
Case annotations in other services: South Cambridgeshire District Council v Price and others [2008] All ER (D) 34 (Jun)
Back to top16. Transview Properties Ltd v City Site Properties Ltd
Citation: [2008] EWHC 1221 (Ch)
Hearing date: 3 June 2008
Court: Chancery Division
Judge: Briggs J
Summary: Mistake – Rectification – Unilateral mistake
In 1989, the defendant company acquired the freehold title of a substantial 13-storey office block comprising some 13,000 square foot of office space. The main operating company of a trust, HMV, took a business tenancy of part of the second floor of the property in 1992, thereafter expanding its occupied rented space over the next eight years. In March 2001, HMV took a 25-year head lease of the whole of the property from the defendant. Although, by then, the property's largest single occupant in terms of space, it became the intermediate landlord of a considerable number of other occupying business tenants. Subsequently, the defendant and HMV entered into negotiation in relation to the latter's purchase of the property. The claimant company was incorporated by HMV as a special purpose vehicle. The purchase by the claimant was completed on 1 December 2004, pursuant to a sale agreement bearing the same date. The purchase price was £13.5 million. £2.5 million of that amount was provided to the claimant on completion by the defendant's parent company, W Ltd, and secured by a second charge of the property (the financial charge) ranking behind a first change to a mortgagee bank, the lender of substantially the remainder of the purchase money to the claimant. The sale agreement also contained provisions for payment of overage to the defendant upon either or both of the resale of the property by the claimant at a profit or the obtaining of planning permission for the residential development of the property. In each case, the defendant was to be entitled to 50 per cent of the increase in value obtained by the disposal or attributable to the grant of planning permission. Subsequently, a dispute arose in relation to an overage abatement provision (see [4]) alleged by the claimant to have been contained in paragraph 2.3 of schedule 3 to the sale agreement.
The claimant submitted, inter alia, that paragraph 2.3, having been specifically included by the defendant's solicitors in a travelling draft of the sale agreement on 29 November 2004, was thereafter removed by the defendant by means of conduct amounting to sharp practice, without the claimant becoming aware of its removal. The sale agreement therefore fell to be rectified on the grounds of unilateral mistake. The defendant submitted, inter alia, that paragraph 2.3 had been deliberately removed from the sale agreement by mutual consent, upon the basis that an overage abatement provision was to have been made the subject of a side letter.
The claim would be dismissed.
On the evidence, it had been the common intention of the parties that the provision for the abatement of overage was to be dealt with not in the sale agreement, but in a side letter. The sale agreement, absent paragraph 2.3, was executed precisely in accordance with the parties' intentions as to its form. In those circumstances, the central plank of the claimant's case, that the removal of paragraph 2.3 from the sale agreement had been achieved by some form of trick or by anything approaching sharp practice, fell to be rejected. On the contrary, its removal had been both requested by the claimant and communicated by the defendant, both directly and through its solicitors, in a conspicuous and conscientious manner.
Case annotations in other services: Transview Properties Ltd v City Site Properties Ltd [2008] All ER (D) 08 (Jun)
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Statutory Instruments
1. Town and Country Planning (Local Development) (England) (Amendment) Regulations 2008
Number: 2008/1371Enabling power: Planning and Compulsory Purchase Act 2004
Commencement: 27 June 2008
Summary: This SI amends the Town and Country Planning (Local Development) (England) Regulations 2004, which make provision in connection with the system of local development planning established by part 2 of the Planning and Compulsory Purchase Act 2004.
Back to top2. Town and Country Planning (Environmental Impact Assessment) (Mineral Permissions and Amendment) (England) Regulations 2008
Number: 2008/1556Enabling power: Town and Country Planning Act 1990
Commencement: 22 July 2008
Summary: This SI applies the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999, with modifications, to review of old mineral permissions (ROMP) applications made before 15 November 2000 that are undetermined on 22 July 2008.
Back to top
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Features
1. Will improvements to HIPs benefit consumers?
The government is committed to ensuring that consumers see vital information in home information packs (HIPs). As a result, a package of new measures has been introduced. These include extending, until the end of the year, the provisions enabling consumers to market their home as long as they have ordered and committed to pay for a HIP and the provision requiring the lease to be included in the HIP for leasehold properties.Solicitor Malcolm Dowden, a member of the UK Sustainable Development Panel, says: "The requirement to order and commit to paying for a HIP before putting a house up for sale was onerous enough when the market was active. Now that the market has stalled and as long as potential buyers have difficulty securing mortgage offers, the requirement may well act as a significant disincentive to those thinking about a sale."
He adds: "Remember that the requirement to order and commit to paying for a HIP is a concession – the original requirement was that a HIP should actually be in place before going to market. The concession still requires a ‘reasonable expectation’ that the HIP will be available within 28 days. Extending a largely meaningless concession is not particularly helpful and will do nothing to free up the market.
"As implemented, HIPs are of very limited use. The inclusion of an energy performance certificate [EPC] gives some potentially useful information, but it is highly unlikely that energy performance is a significant factor in determining whether a particular house will sell. The omission of home condition reports [surveys] has been described as a major shortcoming of HIPs, but even if they were included, there would be difficult issues of reliability and liability to resolve before reports produced for a seller would be readily accepted by a lender or a buyer. Including the lease in the HIP for leasehold property is sensible enough, but where the property is registered, that information is increasingly likely to be available quickly and online from the Land Registry. In many cases, therefore, including the lease in a HIP will not materially speed up the process."
The government is to develop a new set of standards for industry involving bodies such as the Royal Institution of Chartered Surveyors (RICS), the National Association of Estate Agents (NAEA) and the Law Society. It said that the aim is to bring together best practice within the industry into a single set of standards that all consumers can expect from property professionals in the home buying and selling process, including redress arrangements, the provision of HIPs and delivery of local searches.
"Working with the RICS, NAEA and the Law Society to produce industry standards is a long overdue step," says Mr Dowden.
He adds: "In both the residential and the commercial sectors, the government pushed HIPs and EPC through with scant regard to the advice and warnings offered by industry groups. In the case of EPC, the RICS secured a more or less meaningful consultation process only after going to the High Court to challenge the government’s implementation of HIPs. It is absurd that industry experts found that they had to resort to judicial review before the government would listen to reasoned concerns and practical advice."
The government is also to develop, in partnership with the property professionals, the means for capturing consumer-friendly information for inclusion within the HIPs, such as property fixtures and fittings, access and boundaries.
"Sellers’ property information forms already include information about fixtures and chattels. If that information can be captured in a more useful format, then reporting processes might be speeded up,” says Mr Dowden, who is also the author of Climate Change and Sustainable Development: Law, Policy and Practice (EG Books, 2008).
He adds: "More difficult issues arise when it comes to providing information about boundaries. In 2002, when the law relating to land registration was completely overhauled, the ‘general boundaries’ rule was retained, so that for most properties the boundaries on the title plan show only their general position. It is possible to go through a process to ‘fix’ or ‘determine’ the precise position of a boundary, but that process requires the involvement of a surveyor and payment of additional fees.
"The ‘general boundaries’ rule was the fruit of bitter experience. When the first land registration regime was introduced in 1862, it required the precise position of boundaries to be fixed. That requirement achieved little – it merely provoked a number of boundary disputes."
(11/6/08)
Back to top 2. How ruling affects farmland conacre agreements
A recent ruling over the treatment of farmland let out through conacre or agistment agreements means that business may now consist mainly of making or holding investments so that the land is not “relevant business property” for inheritance tax (IHT) purposes.Jon Golding, of Golding Taxation Services, says "Conacre, a derivation from ‘corn acre’, is a specifically Irish tradition of letting small parcels land for a single crop. It is part and parcel of the business of small farming there, and it is temporary by its very nature, as lettings are always limited to 11 months. The rents the lets earn are very low returns, and it is essentially a way of maintaining land for which a farming family has no plans in a particular season.
"However, following PN McCall & BJA Keenan (Personal Representatives of Mrs E McClean) v HMRC, that business may now consist of mainly of making or holding investments where farmland has development potential but is still farmed by letting in conacre. In a claim for BPR [business property relief] a widow inherited 33 acres of farmland on the death of her husband. She did not farm the land herself but let it to local farmers under conacre agreements. She died in 1999. HMRC then issued a notice of determination charging IHT on her estate. Her personal representatives appealed, contending that the farmland qualified for BPR. The Special Commissioner rejected this contention and dismissed the appeal, holding that although the widow was carrying on a business on the land, that business consisted mainly of making or holding investments, within IHTA [Inheritance Tax Act] 1984, section 105(3), so that the land was not ‘relevant business property’. The Commissioner observed that ‘the activities of the business consisted of the making available of its major asset to other persons for payment without the separate provision of any substantial other goods or services’."
It seems now where farmland has development potential but is still farmed by letting in conacre, it had seemed to attract a second relief – business property relief – also at 100 per cent on that additional development value, but following the above case, that business may now consist of mainly of making or holding investments within IHTA 1984, section 105(3). There has also been the suggestion that such similar situations in England may also now be subject to similar treatment.
Mr Golding says, "I would have thought that the small ‘lifestyle farming’ enterprises used as an IHT avoidance scheme with latent development value are already under threat anyway so that the land is not ‘relevant business property’, however, while land let out in England is attributable to the lessor in Northern Ireland land let out under the conacre scheme is attributable to the lessee. This, along with the conditions for APR [agricultural property relief], that farmland is owned by the transferor for the period of seven years ending with the date of transfer and has been occupied throughout that period (by him or another person) for the purposes of agriculture within IHTA 1984, section 117, will still attract relief. This is a case that will develop already complicated rules on APR or BPR where small farms with potential development value are reviewed by HMRC [HM Revenue & Customs]."
Relevant legislation: Inheritance Tax Act 1984 sections 105(3), 117
Case annotations in other services: PN McCall & BJA Keenan (Personal Representatives of Mrs E McClean) v HMRC [2008] Sp C
(5/6/08)
Back to topArticles
1. Bursting the mortgage bubble
Journal: New Law Journal
Citation: 158 NLJ 882
Issue date: 20 June 2008
Authors: Dr Nicholas Ryder & Dr Clare Chambers
Summary: This article discusses how to best tackle mortgage fraud.
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2. PAIFing the way
Journal: Taxation
Citation: 19 June 2008, 662
Issue date: 19 June 2008
Author: Camilla Spielman
Summary: This article asks whether property authorised investment funds (PAIFs) are the new real estate investment trusts.
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3. Getting it back!
Journal: New Law Journal
Citation: 158 NLJ 845
Issue date: 13 June 2008
Author: Kate Chambers
Summary: This article discusses the case of Aribisala v St James' Homes (Grosvenor Dock) Ltd, which considers the importance of deposits in conveyancing transactions and highlights the significance of the Law of Property Act 1925.
Relevant legislation: Law of Property Act 1925
Case annotations in other services: Aribisala v St James' Homes (Grosvenor Dock) Ltd [2008] EWHC 456 (Ch), [2008] All ER (D) 201 (Mar)
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4. Call of (lease) duty
Journal: Taxation
Citation: 12 June 2008, 635
Issue date: 12 June 2008
Author: Sean Randall
Summary: This article considers the impact of re-notifying HM Revenue & Customs in respect of lease grants and rent increases.
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5. Gimme a break
Journal: Building
Citation: 6 June 2008, 59
Issue date: 6 June 2008
Author: Tony Blackler
Summary: This article argues, with margins being squeezed in the current economic climate, that developers cannot afford to ignore valuable tax breaks.
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This e-alert is not intended to provide comprehensive records of information concerning the property sector. If you have any feedback or suggestions, please email propertysection@lawsociety.org.uk. This e-alert was created in conjunction with LexisNexis UK Legal Updater Service. For further information about any of the articles, please contact claire.melvin@lexisnexis.co.uk. The views expressed by the Legal Analysis interviewees are not necessarily those of the proprietor.