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Issue 58 – November 2008

Contents

Cases

Statutory instruments

Features
Articles

News


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  • client due diligence and risk assessment procedures to comply with the revised Money Laundering Regulations;
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  • introduction of sustainability certificates and CML Disclosure of Incentives form.
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Cases

1. Fowles v Heathrow Airport Ltd and others 

Citation: [2008] All ER (D) 166 (Oct)
Hearing date: 16 October 2008
Court: Court of Appeal, Civil Division
Judge: Keene, Lawrence Collins LJJ and Hedley J
Summary: Landlord and tenant – Opposition to grant of new tenancy of business premises - Notice of opposition.

The defendant was the landlord of land occupied by the claimant. On 15 February 2008, the court held that, in the circumstances of the instant case the local planning authority had been entitled to serve on the claimant a breach of condition notice, dated December 2006, and his failure to comply with it meant that he had been committing, and would continue to commit, a criminal offence by continuing his concrete crushing operations on the site. Furthermore, the effect of an enforcement notice, that had been issued in May 1988, was that the claimant could not legally carry on his haulage business at the site. Since the vast majority of the claimant's activities had been illegal and would remain so, the defendant had made out its ground of opposition. Accordingly the court determined that the claimant ought not to be granted a tenancy because of reasons connected with his use and management of the holding, and granted an order for possession to the defendant (see [2008] All ER (D) 226 (Feb)). The claimant appealed.

He relied on an intention to apply to use the land lawfully as a demolition contractor, and contended, inter alia, that the judge had erred in exercising his discretion, under the Landlord and Tenant Act 1954, to grant the defendant possession of the land.

The appeal would be dismissed. It was clear that the judge had formed the firm view that the claimant would not stop his unlawful conduct if the new tenancy was granted. There was ample evidence on which he could have arrived at that conclusion. Further, no flaw in the exercise of the judge's discretion could be demonstrated. 

2. Surrey County Council v Secretary of State for Communities and Local Government

Citation: [2008] All ER (D) 148 (Oct)
Hearing date: 16 October 2008
Court: Queen’s Bench Division, Administrative Court
Judges: Mitting J
Summary: Town and country planning – Development – Permission

In June 2005, the interested party applied for planning permission to use a 'green belt' site for waste transfer and recycling activities. In August, the claimant local planning authority refused the application. That determination then became the subject of an appeal before the defendant Secretary of State. Following an inquiry and site visit, an inspector, acting on behalf of the Secretary of State, resolved to grant permission subject to conditions. The authority consequently applied under s 288 of the Town and Country Planning Act 1990 for an order quashing that decision.
It submitted, inter alia, that the inspector had failed to take into consideration 'Planning Policy Guidance 2' (PPG 2); in particular, para 3.2 which stated 'very special circumstances to justify inappropriate development will not exist unless the harm by reason of inappropriateness, and any other harm, is clearly outweighed by other considerations'.

The application would be dismissed.

The authority's submission in the instant case was simply untenable. PPG 2 was probably the most well-known, at least in planning circles, of the government's planning guidances. It had been the subject of scores of planning inquiries and a significant number of judicial decisions over the years. The relevant test in para 3.2 of PPG 2 could not have been overlooked by the inspector, even though he had not referred specifically to its terms.

Accordingly, the decision under challenge would stand.

3. Enodis Plc v Secretary of State for Communities and Local Government

Citation: [2008] All ER (D) 122 (Oct)
Hearing date: 14 October 2008
Court: Queen's Bench Division, Administrative Court
Judge: Mitting J
Summary: Town and country planning – Permission for development – Material consideration

On 14 April 1998, the claimants were granted planning permission by the Secretary of State in respect of 650 residential dwellings and related shopping, employment, school and recreational facilities (the 1998 permission). Condition 5 to the 1998 permission required development to be carried out in accordance with a masterplan setting out a comprehensive scheme to be approved by the local planning authority. The masterplan restricted all built development, other than employment development, to land beyond the cordon sanitaire and outside the buffer zone adjacent to the sewage treatment works.

On 26 June 2004, the authority granted permission for a net additional 160 dwellings (the 2004 permission). Condition C.90A to the 2004 permission required development to take place in accordance with a revised masterplan to be approved by the authority. On 23 September, a revised masterplan was approved by the authority. Thereafter, the effect of land values, remediation costs and sewage treatment works renewal costs rendered completion of the development pursuant to the 2004 permission in accordance with the 2004 revised masterplan not viable. The claimants applied for planning permission for an additional 85 residential homes. The inspector refused planning permission on the basis that there was an alternative scheme to the additional development. The claimants applied under s 288 of the Town and Country Planning Act 1990 for an order quashing the inspector's decision.

The application would be dismissed.

In all the circumstances, the inspector had not erred in her decision to refuse planning permission. The inspector's decision had been unimpeaceable and commensurate.

4. Colpy Ltd and Another v McFeely

Citation: [2008] All ER (D) 70 (Oct)
Hearing date: 8 October 2008
Court: Chancery Division
Judge: Lewison J
Summary: Sale of land – Notice to complete – Unilateral notice

Since about 2000, the claimants had been the registered proprietors of two adjoining areas of development land (the site). The make-up of the site was relatively complicated and the claimants had been in negotiations to allow a company, R Ltd, to take up leases in respect of certain parts of it. On 10 August 2007, the defendant contracted to purchase the site from the claimants for £38m (the first agreement). The negotiations with R Ltd were reflected in cl 4 which permitted the claimants, prior to completion, to grant certain leases to R Ltd with the consent of the defendant, that consent not to be unreasonably withheld. In October 2007, the defendant received emails from the claimants and from R Ltd, effectively informing him that a provisional planning application had been lodged by them and that they hoped that a commercially credible agreement between themselves was imminent.

A copy of the draft heads of terms between the claimants and R Ltd was also included. The defendant asserted that that amounted to a breach of cl 4 of the first agreement and served unilateral notices to complete. Those notices were not complied with. On 12 February 2008, the parties entered into an option agreement (the second agreement). By cl 6, the defendant agreed not to procure the registration of any land charges or notices against the title of the site. By cl 12, he agreed to remove the unilateral notices described as 'relating to the rescinded sale contract [the first agreement]).

The second agreement contained a whole agreement clause and was expressly stated to supersede all previous agreements between the parties. Having initially complied with the obligation to remove the unilateral notices, the defendant entered further notices to complete in relation to the first agreement in April 2008. By the instant proceedings, the claimants sought summary judgment on their application to have the notices removed.
The application would be allowed.
 
On the evidence, it was wholly unarguable that the first agreement was still in existence. The defendant was estopped from relying upon the first 'rescinded' agreement by the express provisions of the second agreement. Moreover, the express obligation upon the defendant to remove the original notice to complete contained an implicit obligation not to enter any further notices. In those circumstances, there were no issues suitable for determination at trial
Accordingly, summary judgment would be entered on the claim for the removal of the unilateral notices to complete entered by the defendant.

5. Horsham Properties Group Ltd v Clark and Another

Citation: [2008] All ER (D) 58 (Oct)
Hearing date: 8 October 2008
Court: Chancery Division
Judge: Briggs J
Summary: Mortgage – Sale – Exercise of power of sale by mortgagee

Section 101 of the Law of Property Act 1925, so far as material, provides: '(1) A mortgagee, where the mortgage is made by deed, shall, by virtue of this Act, have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further (namely):-- (i) A power, when the mortgage money has become due, to sell, or to concur with any other person in selling, the mortgaged property, or any part thereof...(iii) A power, when the mortgage money has become due, to appoint a receiver of the income of the mortgaged property, or any part thereof...(3) The provisions of this Act relating to the foregoing powers, comprised either in this section, or in any other section regulating the exercise of those powers, may be varied or extended by the mortgage deed, and, as so varied or extended, shall, as far as may be, operate in the like manner and with all the like incidents, effects, and consequences, as if such variations or extensions were contained in this Act. (4) This section applies only if and as far as a contrary intention is not expressed in the mortgage deed, and has effect subject to the terms of the mortgage deed and to the provisions therein contained...'

Article 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms provides: 'Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.'

The exercise of a statutory power of sale under s 101 of the Law of Property Act 1925, after a relevant default by the mortgagor, is not a deprivation of possessions within the meaning of art 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Section 101 serves to implement rather than override the private bargain between mortgagor and mortgagee. It supplies a convenient power of sale out of court to mortgagees in substitution for the parties having to spell out such a power in every legal mortgage. It is in substance a form of conveyancing shorthand designed to implement the ordinary expectations of mortgagors and mortgagees while reducing the costs and delays of conveyancing. Far from overriding the parties' private bargain, it implements and gives effect to it. Furthermore, all the statutory powers in s 101 are expressed to be subject to contrary intention. It is as far removed from the concept of state intervention into private rights through overriding legislation which lies behind art 1 of the First Protocol as it is possible for legislation to get.

It is neither rigid, arbitrary or discriminatory. It therefore has none of the relevant features to characterise the relevant statutory provisions as giving rise to a deprivation of possessions within the meaning of art 1 of the First Protocol; a fortiori, the exercise by receivers appointed and acting under purely contractual powers in overriding a mortgagor's equity of redemption by contracting to sell the property cannot be either.

6. O’Donoghue v Enterprise Inns Plc

Citation: [2008] All ER (D) 43 (Oct)
Hearing date: 6 October 2008
Court: Chancery Division, Leeds District Registry
Judge: Judge Behrens (sitting as a judge of the High Court)
Summary: Landlord and tenant – Rent – Review

The lease of a public house dated 12 April 2000, for a term of 30 years from 22 December 1999, was assigned to the claimant tenant in February 2005. The freehold reversionary interest was vested in the defendant landlord. The initial rent was for £34,000 pa with a concessionary rent for three months. The lease provided for rent reviews every five years, with the first rent review on 22 December 2004. The relevant provisions for the rent review were contained in the Seventh Schedule. The lease provided for upward only rent reviews to the open market rent (as defined).
There were three procedural methods by which the open market rent could be determined, which were set out in para 3 of the Schedule. The only relevant method was that provided by para 3(2) and (3). If no agreement was reached before the relevant review date, the rent was to be determined by an independent surveyor acting as an arbitrator.

The arbitrator was required to act in accordance with the Arbitration Act 1996 and his decision, including his decision as to costs, was binding on the parties. On 31 October 2006, an arbitrator was appointed in relation to a dispute over the rent review. On 18 May 2007, the arbitrator re-issued directions setting out a revised timetable for submissions and counter submissions. On 15 June, the arbitrator gave the parties liberty to apply for an oral hearing.

Following lengthy correspondence between the parties and the arbitrator in respect of whether an oral hearing should be held and the manner in which such a hearing would be conducted, on 8 January 2008, the arbitrator wrote to the parties enclosing his decision that nothing further could be achieved by holding such a hearing. On 27 February, the arbitrator's award was issued. In arriving at the award the arbitrator analysed the various comparables that had been put before him.
He accepted that the profits method was appropriate for valuing the public house. He further made the point that the defendant's expert witness, O, had extensive experience and had produced evidence of actual transactions of similar types of public house. He assessed the fair maintainable trade (the FMT) at £450,000, being £225,000 for catering and £225,000 for wet sales. That gave a gross profit of £245,250. After capping wages at 20 per cent, he assessed the expenses at £143,500. After deducting expenses of £143,500 and £12,000 return on capital he arrived at a divisible balance of £89,750. After dividing that by two, he assessed the rent at £45,000.
 
As a cross check he took the FMT and multiplied it by 10.5 per cent to arrive at a figure of £47,500. The figure of 10.5 per cent was derived from his analysis of the comparables. Section 73 of the Act provided that if a party to arbitral proceedings took part, or continued to take part, in the proceedings without making, either forthwith or within such time as was allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection, inter alia, that the proceedings had been improperly conducted or that there had been any other irregularity affecting the tribunal or the proceedings, he might not raise that objection later, before the tribunal or the court, unless he showed that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.

The claimant subsequently commenced proceedings pursuant to s 68(2) of the Arbitration Act 1996, seeking an order setting the award aside, or a remittance of the rent review to the arbitrator for reconsideration after an oral hearing, during which the claimant should be able to cross-examine O. The claimant subsequently sought to amend the claim to make a number of criticisms of the award, in particular, he complained about the figures used by the arbitrator in his calculation.
The claimant's case was that the award was affected by a serious irregularity by reason of the arbitrator's failure to hold an oral hearing and to allow cross-examination of O. The claimant further submitted that a substantial injustice had arisen because of the possibility that the arbitrator would have reached a different result if there had been an oral hearing.

The claim would be dismissed.

(1) For an application under s 68 to succeed there had to be a serious irregularity. Serious irregularity should fall within one of the classes set out in s 68(2). Further, it had to be such that it would cause or had caused substantial injustice to the applicant.

The decision that the arbitrator had made not to hold an oral hearing had been one that had been open to him on the material before him. He had given both sides the opportunity to make submissions before he had made it. He had given reasons for the exercise of his discretion. In those circumstances it was difficult to see that there had been any irregularity at all in the failure to hold an oral hearing. Whilst it was true that the figure for wet sales adopted by the arbitrator had been above that suggested by either O or the defendant, the overall figure for FMT had been well within the range suggested and in line with the comparable evidence before him. It might have been that the split adopted by the arbitrator as between wet and dry sales could be criticised, but it was not a fair criticism to assert that the figure for FMT had been outside the bracket suggested by the parties or justified by the comparables.

Similarly, in looking at the expenses one had to remember that some at least of the expenses would be dependent on the FMT. In that case, the arbitrator had adopted a figure for FMT of £450,000 some £100,000 less than the figure suggested by O. It was thus not surprising that his figure for expenses had been less than that suggested by O. In any event those sort of criticisms did not constitute material irregularities within s 68 of the Act. Given that the arbitrator's conclusions had been based on the evidence submitted to him, that was not a case where he had gone outside the evidence and sought evidence of his own without informing the parties (see [48], [49], and [50]).
There had been no serious irregularity on either the original or the amended basis of the claim.
Sinclair v Woods of Winchester Ltd [2005] All ER (D) 194 (Jul) applied.

(2) It was always necessary for an applicant in the position of the claimant to show substantial injustice as a result of the alleged serious irregularity. Substantial injustice could only be demonstrated where what had happened simply could not on any view be defined as an acceptable consequence of the choice that the parties made to arbitrate.
 
While it was possible that there might have been a different result if there had been an oral hearing, it could not be accepted that a substantial injustice had arisen because of the possibility that the arbitrator would have reached a different result if there had been an oral hearing. In particular, it could not be accepted that the possibility of a different result amounted to substantial injustice within s 68. Adopting the test formulated in established authority, it could not be said that in all the circumstances of the instant case, on any view, the arbitrator's decision not to hold an oral hearing had been an unacceptable consequence of the parties' decision to arbitrate the rent review (see [53]).

(3) An aggrieved party in an arbitration had to raise its objections to the arbitration or the award forthwith or lose its right to object. 'Forthwith' meant as soon as reasonably possible. That clearly involved raising an objection immediately following the arbitrator's procedural ruling.
It was plain that the claimant had not objected to the decision made on January 8 2008, not to hold an oral hearing. Whilst it was true that he had taken no active steps thereafter, he had permitted the arbitrator to deliberate and to make the award, only objecting after it had been published and he had known its contents (see [55]).

The claimant had lost the right to object within s 73 of the Act and the claim would fail on those grounds as well.

7. Rodrigues v Sokal

Citation: [2008] EWHC 2005 (TCC), [2008] All ER (D) 149 (Oct)
Hearing date: 30 July 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: Judge Toulmin QC
Summary: Boundary – Party wall – Difference between building owner and adjoining owner

The claimant owned a semi-detached property (No.1). The defendant purchased the other half of the property in December 2003 (No.3). He began to develop No.1 into flats and on 15 May 2004 he served a notice on the claimant that he intended to exercise various rights under the Party Wall etc Act 1996. Shortly before that, the claimant alleged that the defendant started a programme to convert No.3 into four self-contained flats and to erect a coach-house in the grounds. The claimant further alleged that the programme involved very substantial structural works which had started before 15 May 2004.
Following the commencement of Party Wall procedure, the parties concurred in the appointment of an agreed surveyor (the surveyor) pursuant to s 10(2) of the Act.

The last of a series of awards was made by the surveyor on 1 June 2007 (the award). The surveyor found, inter alia, that the defendant had not caused damage to the party wall, either before or after the commencement of Party Wall procedure, and that the claimant had no basis for demanding of the defendant that he should modify the building in No.3. After a further period, during which the parties attempted to resolve their differences in relation to the effect of the award, the claimant commenced proceedings. By their claims, they sought, inter alia, a mandatory order that the defendant carry out necessary remedial works, damages for interference with their right of support and a claim for the costs of putting right the structural damage to No.1 (the various claims).
A preliminary issue arose as to whether, given the terms of the award and the provisions of s 10(16) of the 1996 Act, the claimants were entitled to pursue the various claims.
 
The claimant contended, inter alia, that the fact that there had been no challenge to the award on appeal to the county court had meant that a court was not precluded in other proceedings from deciding the same point in issue on other evidence. The claimant submitted that the surveyors opinions were cautiously expressed and had not amounted to conclusive findings.

The court ruled: In the instant case, the surveyor's findings had been conclusive. They had related to buildings works carried out both before and after the referral date, namely, 15 May 2004. Furthermore, any argument that, because there had been no challenge to the award by way of appeal to the county court, a court was not precluded in other proceedings from deciding the same point in issue on other evidence was simply unsustainable (see paras [61], [62] and [65] of the judgment).

Accordingly, the claimant was not entitled to pursue the various claims.

8. West Midlands International Airport v Secretary of State for Communities and Local Government

Citation: [2008] All ER (D) 42 (Oct), [2008] EWHC 2309 (Admin)
Hearing date: 6 October 2008
Court: Queen's Bench Division, Administrative Court
Judge: Forbes J
Summary: Town and country planning – Permission for development – Refusal

The claimant was the owner and operator of Coventry Airport. It applied for planning permission for the construction of a new passenger terminal to cater for up to 2 million passengers per annum together with associated parking spaces, expansion of the aircraft apron and improvements to the existing access. The third defendant local authority failed, within the prescribed period, to determine the application. The claimant appealed, pursuant to s 78 of the Town and Country Planning Act 1990, against that failure. The first and second defendants jointly dismissed the planning appeal and refused planning permission.

The decision letter was issued pursuant to and following the defendant Secretaries of States' consideration of a report by their duly appointed inspector, following the public local inquiry he had conducted in connection with the appeal. The claimant appealed to the High Court pursuant to s 288 of the Town and Country Planning Act 1990 to quash the joint decision.

The claimant's challenge to the defendant Secretaries of States' decision was founded on the proposition that the inspector's report contained many manifest errors and was characterised by repeated and "countless failures to deal properly or at all with the extensive evidence that was heard at the Inquiry".

It contended that the errors were fundamental and went to the very root of his 'flawed consideration of the appeal proposals' and, thus, 'inevitably, infect and fatally undermine the consideration by the Secretaries of State of the appeal in reliance upon [the report]'. Specifically, the claimant contended, inter alia, that the defendant Secretaries of State had erred in finding that the proposed development was in conflict with sustainability objectives because of errors in their treatment of and/or in the way in which they had assessed issues including the proposed terminal building and the 'modal shift targets'.

The appeal would be dismissed.
 
It was settled law that an application under s 288 of the Act was not an opportunity to re-argue the merits of a failed planning appeal. Matters of judgment were for the decision-maker, unless the judgment reached was indefensible. In order to have regard to a policy, the decision-maker had to have interpreted it properly. If the decision-maker failed properly to understand the policy, then the decision was as defective as if no regard had been paid to the policy. Reasons given for planning decision had to be understood in the context of a decision written for knowledgeable parties and should enable the reader to know what conclusions the decision-maker had reached on the principal controversial issues in dispute (see paras [8] to [11] of the judgment).

On the evidence in the instant case, the claimant's challenge would fail. The inspector had not been required to deal with every argument and every point made by or on behalf of the claimant at the inquiry. The inspector had set out his reasons clearly on the main point in issue, as had the Secretaries of State. The decision-making could not be stigmatised as irrational or Wednesbury unreasonable (see paras [59] to [61] and [80] of the judgment).

9. South Cambridgeshire District Council v Gamell and Others

Citation: [2008] All ER (D) 239 (Oct), [2008] EWCA Civ 1159
Hearing date: 24 October 2008
Court: Court of Appeal, Civil Division
Judge: Keene, Carnwath and Maurice Kay LJJ
Summary: Town and country planning – Enforcement of planning control – Unauthorised development

The defendants were six travellers of Gypsy ethnicity. In 2003, they arrived to some land in the local authority (the land). They occupied mobile homes on plots on the land in breach of planning control. An enforcement notice was issued against the defendants, which was the subjected of an unsuccessful appeal. The enforcement notice was not complied with and the authority issued an application for an injunction under s 187B of the Town and Country Planning Act 1990. Before doing so, the authority had considered two reports of its officers on the options available to it and it gave further consideration to the matter following the issue of the application.

The issue arose as to whether s 71 of the Race Relations Act 1976 and the Code of Practice issued pursuant to s 71C(1) of the 1976 Act applied to enforcement actions of the kind in the instant proceedings. The judge concluded that those provisions did not apply. In the event, the judge granted an injunction requiring, inter alios, the defendants to cease using the land for the sitting of residential mobile homes and/or caravans. The defendants appealed.

The issue arose, inter alia, as to whether the council had an obligation to consider the making and/or to make another site available before seeking injunctive relief, by virtue of s 71 of the Race Relations Act 1976. The defendants submitted that the authority had failed to take account of the  statutory provision and that in consequence its decision to apply to the court for an injunction under s 187B of the 1990 Act had been ultra vires, with the result that the court had had no power to grant an injunction. Alternatively, it contended that, if the application had been properly before the court, the failings on the part of the authority should have led the judge to exercise his discretion so as to refuse the injunction. In both forms of the argument, the failing on the part of the authority was said to be the failure to consider making another site available as a gypsy caravan site or the failure to make such a site available.

The appeal would be dismissed.
 

(1) In the circumstances of the case, the authority had not failed in its statutory duties under s 71 of the 1976 Act and the Code of Practice, nor had it left out of account any relevant consideration (see [41] of the judgment).

(2) That was not the end of the matter because the discretion to grant or refuse an injunction was the court's, not the local planning authority's, but it meant that the defendants' argument that the application for an injunction was invalid also had to fail on the facts. In addition, authority established that the legitimacy of the authority's decision was relevant to the court's exercise of discretion. In the instant case, considerable weight would be attached to the authority's decision because it had taken into account all material considerations and because it approached the issue in a balanced and proportionate way. 

That did not relieve the court of its own duty to consider those matters, but it was nonetheless a relevant factor. In the instant case, the judge had given detailed consideration to the personal circumstances of the appellants. The only error into which he had fallen was to regard the need to carry out a race impact assessment as not applying to the authority's decision to apply under s 187B of the 1990 Act, but the approach adopted by the authority had in substance amounted to such an assessment, even if not produced in such form. That error did not vitiate the conclusion to which the judge had come. His own exercise of discretion had fully taken account of the ethnic considerations relevant in the instant case, as it did of the impact of an injunction on the defendants. In any event, had the court been called upon to exercise its own discretion in place of that of the judge, it would have exercised it in favour of the grant of the injunction (see [41] and [42] of the judgment).

10. Truro Diocesan Board of Finance Ltd v Foley

Citation: [2008] EWCA Civ 1162, [2008] All ER (D) 208 (Oct)
Hearing date: 22 October 2008
Court: Court of Appeal, Civil Division
Judge: May, Moore-Bick LJJ and Sir John Chadwick
Summary: Landlord and tenant – Tenancy – Shorthold tenancy

Section 34 of the Housing Act 1988, so far as is material, provides: '(1) A tenancy which is entered into on or after the commencement of this Act cannot be a protected tenancy, unless -- ... (b) it is granted to a person (alone or jointly with others) who, immediately before the tenancy was granted, was a protected or statutory tenant and is so granted by the person who at that time was the landlord (or one of the joint landlords) under the protected or statutory tenancy ...'.

In 1987, the defendant was granted a tenancy of a property owned by the claimant. The claimant considered that the defendant held the property under a protected shorthold tenancy, and in May 2000 commenced possession proceedings pursuant to the Rent Act 1977. On 20 September 2001, the parties compromised their dispute on terms contained in a schedule to a consent order, which provided, inter alia, that the claimant's claim for possession be stayed (para 1A); that there be a declaration that the defendant was a tenant of the premises under a protected shorthold tenancy (para 1B); that the defendant's existing tenancy of the property had to be determined by his delivering up possession of the property to the claimant on or before 26 September for a minimum period of 24 hours; and that on 27 September, the claimant would grant to the defendant an assured shorthold tenancy of the property.

The terms of the shorthold was to include, a fixed term of five years. The parties signed and delivered the document as a deed. The defendant duly handed the keys to the claimant and collected them over 24 hours later. Following that, he continued in occupation of the property but no formal grant of tenancy was made. 

In April 2006, the claimant gave notice to the defendant under s 21 of the Housing Act 1988 to surrender possession of the property. The defendant declined to do so. The claimant commenced proceedings seeking an order for possession. The preliminary issues that arose were: first, whether the declaration contained in para 1B of the consent order was binding on the defendant, and second, whether, if the defendant was a protected or statutory tenant immediately following that order, he continued to have that status immediately before the tenancy was granted within the meaning of s 34(1)(b) of the 1988 Act. The judge found, inter alia, that, with regard to s 34(1)(b) of the 1988 Act, the defendant could not bring himself within the scope of the section, and answered the preliminary issues in the negative. The defendant appealed against that decision.

He submitted that in the light of s 3 of the Human Rights Act 1998, s 34(1)(b) of the 1988 Act should be construed in a way that would not expose him to the risk of eviction from his home without having an opportunity to persuade a court that it would amount to a disproportionate interference with his rights under art 8 of the European Convention on Human Rights; and that  the word 'tenancy' in s 34(1)(b) included an agreement for a tenancy and that therefore he was a fully protected tenant immediately before the parties had entered into the agreement of 20 September 2001. He further submitted that the agreement was capable of taking effect as a tenancy in accordance with authority.

The appeal would be dismissed (Sir John Chadwick dissenting).

(1) The word 'tenancy' in s 34(1) of the 1988 Act did not include an agreement for a tenancy. The expression 'immediately before the tenancy was granted' contained in s 34(1)(b) should be given its ordinary and natural meaning as being restricted to those cases in which the new tenancy took effect immediately on the expiry of the old tenancy. It did not matter when the instrument granting the tenancy was executed; what mattered was when it was effective to entitle the tenant to possession. A new tenancy in favour of a protected tenant created by an instrument executed during the currency of the existing tenancy, but expressed to take effect immediately on its expiry, caused no difficulty; the tenant was a protected tenant both when the document was executed and immediately before he became entitled to possession under the new tenancy (see [17], [28] of the judgment).

The clauses contained in the consent order evidenced an intention to make a grant on a future date of a tenancy to commence on that date. They were not consistent with an intention to make an immediate grant of a tenancy to commence on a later date. The clauses which referred, inter alia, to the shorthold tenancy were not of sufficient weight to displace the clear words of the operative clauses. Although the agreement of 20 September 2001 was embodied in a deed, it was not intended to, nor, on its true construction, did, take effect as a present grant, or meant that the defendant was to take possession under it. A new tenancy had been granted to the defendant within the meaning of s 34(1)(b) of the 1988 Act at noon on 27 September 2001, and not before. Since he had surrendered his former tenancy the previous day, he had not been a protected tenant immediately before the new tenancy had been granted to him and accordingly the new tenancy was not a protected tenancy (see [24], [25], [29] of the judgment).

(2) There was nothing in the Convention which prevented a person of his own choice from entering into a tenancy for a defined term subject to an obligation to give up possession on its expiry (see [35] of the judgment).

The eviction of the defendant from the property would, on the face of it, involve an interference with his right to respect for his home under art 8(1) of the Convention if carried out by a public authority. However, there were two obstacles that had to be surmounted which would require the words 'immediately before' to be read as if they were 'a reasonable time before' which was not possible since it would fundamentally alter the nature of the subsection. 

Section 34(1)(b) of the 1988 Act could not, if interpreted in accordance with the natural meaning of words used, give rise to an infringement of the tenant's rights under art 8 of the Convention. It's effect in the instant case was that the defendant's new tenancy had not benefited from protection under the Rent Act. Accordingly, s 3 of the 1998 Act did not require s 34(1)(b) of the 1988 Act to be given a meaning other than that which it naturally bore (see [35], [36] of the judgment).

11. Multiplex Constructions (UK) Ltd v Cleveland Bridge Uk Ltd and Another (No 6)
 
Citation: [2008] All ER (D) 04 (Oct), [2008] EWHC 2220 (TCC)
Hearing date: 29 September 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: Jackson J
Summary: Building contract – Damages – Liability for damages

The claimant was the main contractor for the new national stadium at Wembley. The first defendant was the steelwork subcontractor. Matters did not proceed smoothly and each party lost confidence in the other. By agreement, the first defendant's role under the contract was substantially reduced in July 2004, and was further substantially reduced in July 2004. On 2 August (by which time the first defendant's obligations were limited to a fraction of their original scope), the parties parted company in acrimonious circumstances. It was subsequently determined that the first defendant had repudiated the subcontract (see [2006] All ER (D) 167 (Jun); [2007] All ER (D) 264 (Apr); [2007] All ER (D) 288 (Jan); and [2007] All ER (D) 358 (Dec)). After 2 August 2004, the claimant employed a third party subcontractor to perform the first defendant's repudiated obligations. The instant proceedings were instituted essentially to draw up a final account as between the parties: an assessment of the total sums owed by the claimant to the first defendant for work done and materials supplied, and an assessment of damages owed by the first defendant to the claimant for defects and for repudiation.

A number of issues fell to be determined, including: (i) whether the opinion evidence of an engineer called as a factual witness was admissible; (ii) whether the court was to disregard the first defendant's failure to perform obligations which had already been removed by agreement and subcontracted out to a third party as at the date of repudiation; and (iii) the amounts due to be paid as between the parties.

The court ruled: 1) An engineer giving factual evidence in construction litigation was also permitted to proffer: (a) statements of opinion which were reasonably related to the facts within his knowledge, and (b) relevant comments based upon his own experience. By way of example, an engineer after describing the foundation system which he had designed could (and in practice frequently would) go on to explain why he believed that that was appropriate to the known ground conditions (see [672]). DN v Greenwich London Borough Council [2004] All ER (D) 106 (Dec) considered.

(2) Where a contractor repudiated at a time when the employer had resolved to remove certain of its obligations, and had already engaged a third party to perform those obligations, the court in assessing damages was to disregard the contractor's failure to perform those particular obligations. That proposition applied as between employer and main contractor and as between main contractor and subcontractor (see [1550]).
 
On the evidence, the first defendant was liable to pay the total sum of £6,154,246.79 to the claimant in respect of: (a) overpayments previously made by the claimant, (b) damages for breach of contract, and (c) interest thereon.

Maredelanto Cia Naviera SA v Bergbau-Handel GmbH, The Mihalis Angelos [1970] 3 All ER 125 considered; Golden Strait Corpn v Nippon Yusen Kubishika Kaisha [2007] 3 All ER 1 considered.
Per curiam: The Technology and Construction Court exists to provide a dispute resolution service to the business community and pre-eminently to the construction industry.  In many cases, of which the present is typical, both parties are members of the construction industry; they have a dispute about a final account and usually a cross claim for damages.  The normal and sensible way of resolving such matters is for the court to decide questions of principle and for the parties then to sort out the financial consequences. 

This approach generally leads to the resolution of multi-million pound disputes at proportionate cost, and enables the parties to get back to their real business. The lesson for the future which may be drawn from this litigation is that parties would be well advised to use the dispute resolution service offered by the Technology and Construction Court in a more conventional and commercial manner than has been adopted in this case.  Once this court has decided questions of principle, the parties can save themselves and their shareholders many millions of pounds by instructing their advisors to agree reasonable figures for quantum, if necessary with the assistance of a mediator unconnected with the court.  If one party is not prepared to negotiate, then the other party can protect its position by making a timely and realistic offer under Part 36 of the Civil Procedure Rules 1998, SI 1998/3132.  The court's decision on preliminary issues should be used by both parties as a basis for sensible discussion or at least as a basis for sensible assessment.  It should not be used as a platform from which the victor on the preliminary issues launches new and ill thought out claims in order to transform its case on quantum.

Statutory instruments

1. Housing and Regeneration Act 2008 (Consequential Provisions) Order 2008

Number: 2008/Draft
Enabling power: Housing and Regeneration Act 2008, ss 320, 321
Commencement: Not yet specified
Summary: Makes amendments and modifications to, and repeals of, certain provisions in primary legislation that make reference to the Urban Regeneration Agency, the Commission for the New Towns, English Partnerships (the name of organisation formed from the administrative merger of the Urban Regeneration Agency and the Commission for the New Towns) and the Housing Corporation. These amendments, modifications and repeals are consequential on the coming into force of provisions of the Housing and Regeneration Act 2008 related to the establishment of the Homes and Communities Agency. The amendments, modifications and repeals are subject to transitional and savings provisions. 

 
2. Town and Country Planning (Environmental Impact Assessment (Amendment) (Wales) Regulations 2008

Number: 2008/2335
Enabling power: European Communities Act 1972, s 2(2)
Commencement: 6 October 2008
Summary: Implement Council Directive 85/337/EEC in respect of applications for approval of reserved matters and applications for approval of similar conditions attached to the grant of planning permissions. That Directive assessed the affect of certain projects on the environment - now consideration must be given to future projects at planning stage.


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