Forbo-Nairn Ltd v Murrayfield Properties Ltd
Citation: 2009 Scot (D) 15/4
Alternative citations: [2009] CSOH 47
Hearing date: 26 March 2009
Court: Outer House, Court of Session
Judge: Lord Hodge
Representation: Bartos (instructed by MBM Commercial) for the pursuers. Davies (instructed by Archibald Campbell & Harley WS) for the defenders.
Abstract: Contract Sale of land. Court of Session: In an action which concerned the meaning and scope of a restriction on the use of land to be sold which the pursuers and defenders had agreed in missives of sale, the court concluded that the pursuers' construction of the relevant clause was correct and that the missives created an obligation to restrict the use of the subjects and any adjoining land the owner of the subjects acquired, whoever he might be.
Keywords: Contract Sale of land Construction Restriction on use of land - Pursuers selling surplus land and seeking to restrict use to which purchasers could put that land and adjoining land they might acquire Meaning and scope of restriction on use which pursuers and defenders agreed in missives of sale.
Summary: In 2003 the pursuers decided to sell off surplus land (the subjects) which was separated from their factory in Kirkcaldy by a railway line. To protect their prospects of obtaining planning permission for residential development on land they retained, they sought in the missives of sale to restrict the use to which the purchasers could put the land to be sold and also adjoining land which the purchasers might acquire.
The questions which arose for debate were the meaning and scope of the restriction on use which the pursuers and the defenders agreed in the missives of sale. By letter of offer and letter of acceptance, both dated 24 April 2003, the pursuers agreed to sell the subjects to the defenders in a conditional sale. The defenders, in return for certain option payments, acquired the right to purchase the subjects for £1m and were protected by a suspensive condition that planning permission be obtained for a supermarket development.
The site for the supermarket development included both the subjects and all or part of the adjoining land which Fife Enterprise owned and which parties described in the missives as 'the Adjoining Subjects (FE)'. The missives expressly prohibited residential development on the subjects and on the Adjoining Subjects (FE). That prohibition and clause 9.2.1, which obliged the purchasers to submit a draft planning application to the sellers, were intended to protect the development potential and value of adjoining land which the sellers retained and which was referred to in the missives as 'the Adjoining Subjects (Sellers)'. Clause 9.7.2 prohibited the purchasers from pursuing a planning application in respect of the Adjoining Subjects (FE) either on their own or with any land other than the subjects of sale, both before and after settlement. It also contained an extended definition of 'the Purchasers'. Clause 9.3 gave the purchasers the right to waive the suspensive condition in clause 9.1 that they obtain planning permission for a supermarket development.
The date of entry was defined in clause 1.1 to be 28 days after the purification or waiver of the suspensive condition. Clause 9.2.3 empowered either party to resile from the missives if the suspensive condition had not been purified or waived by the long stop date of 1 April 2008. The principal issue between the parties was the construction of the restriction in clause 10 of the missives. That clause provided: '10.1. The Purchasers shall be prohibited in all time coming from developing the Subjects and/or the Adjoining Subjects (FE) for residential purposes. At settlement, the Purchasers and the Sellers shall execute and register . . . a Deed of Conditions in terms to be agreed . . . which has the effect of validly inserting this restriction on use into the title of the Subjects and such part of the Adjoining Subjects (FE) as shall have been acquired by the Purchasers on or prior to such date and which shall include the Adjoining Subjects (Sellers) within its scope as the dominant tenement.
Thereafter the Purchasers shall be prohibited from acquiring any part of the Adjoining Subjects (FE) as have not been acquired by such date without first agreeing and effecting an extension of such Deed of Conditions so as to validly insert the aforesaid restriction on use within the title to such part of the Adjoining Subjects (FE) as is then to be acquired in a manner as is enforceable by the proprietors from time to time of the Adjoining Subjects (Sellers) . . . In the context of this Clause 10.1 the term "the Purchasers" shall have the meaning given it in the context of Clause 9.7.2. 10.2 The Purchasers shall [..] indemnify the Sellers in respect of all losses, costs and expenses . . .
arising out of any breach of the undertakings contained in Clause 10.1 by any party, including any economic losses sustained as a result of any resultant failure to receive any desired planning permission to carry out works on any part of the Adjoining Subjects (Sellers).' Clause 9.7.2 provided: '. . . in the context of this Clause 9.7.2, the term "the Purchasers" shall apply not only to the Purchasers as designed herein [that is, the defenders] but also to their nominees, any subsidiary or holding company of the Purchasers, designed as aforesaid, or any subsidiary or such holding company. . . to any company or organisation that [M] . . . has an interest in equating to greater than 5% of the issued share capital and also to the said [M] as an individual and his spouse, partner or any child (on whose behalf you shall be deemed to act) . . .' (The court referred to those persons, other than the defenders, as 'the connected persons').
The defenders waived the suspensive condition in clause 9.1 on 28 March 2008. As a result, the date of entry under clause 1.1 was 25 April 2008. Nonetheless, the parties did not settle the transaction because they were unable to agree the terms of the deed of conditions envisaged in clause 10.1. The pursuers prepared a draft deed in which the real burdens were (a) that the subjects should not in all time coming be developed for residential purposes and (b) that the proprietors of the subjects should not be entitled to acquire any part of the Adjoining Subjects (FE) without executing a further deed of conditions in similar terms in respect of that property. The defenders did not accept that that was the obligation they had undertaken and amended the draft deed to restrict the prohibition to themselves and the connected persons. In short, the pursuers argued that the missives created an obligation to restrict the use of the subjects and also any part of the Adjoining Subjects (FE) acquired by the owner of the subjects, whoever he might be. The defenders contended that only they and the connected persons were to be so restricted, so as to allow them to sell the subjects to a third party, who would not be affected by the prohibition.
Counsel for the defenders submitted that the restriction was set out in all of the words of the first sentence of c 10.1. If the pursuers' interpretation of the restriction were correct, the restriction on 'the Purchasers' in first sentence of clause 10.1 was otiose, because the deed of conditions would come into effect on settlement. The only purpose of the sentence taken as a whole was to define the restriction to be set out in the deed, including the parties to whom the restriction applied. The pursuers' interpretation involved re-writing the contract as the burden would have to extend not just to the purchasers as defined but also to their successors. Counsel for the pursuers, submitted that the first sentence of clause 10.1 had the purpose of imposing a personal obligation on the defenders in relation to their actings and also the actings of the connected persons. If the defenders or one of the connected persons breached the restriction, the defenders were obliged to indemnify the pursuers under clause 10.2.
It was the only restriction on them in relation to the subjects which would have effect after the waiver of the suspensive condition in clause 9.1 and before the deed of conditions created a real burden on the subjects. The second sentence was intended to create a prohibition of the development of the subjects for residential use, whoever was their owner. The words in that sentence, 'this restriction on use', referred to the prohibition of residential development and not the parties prohibited. The third sentence of the clause was designed to bring about a similar restriction in relation to any other part of the adjoining land owned by Fife Enterprise which was acquired at a later date. Counsel also called into question the validity of the real burden which the defenders proposed. It purported to restrict not only the owners of the relevant land but also the connected persons whether or not they were owners. Even if the burden were valid, it was highly unusual. By contrast the burden to be imposed on the pursuers' construction of the clause was a common one.
The court ruled:
The pursuers' construction of clause 10 was correct.
First, it was a commercially sensible construction which would appeal to the reasonable man who was aware of the relevant background facts. While the purchaser had a clear interest in limiting the scope of the restriction on use of the purchased land, the defenders' construction would give the sellers very little protection. If it were correct, the purchasers could waive the suspensive condition in clause 9.1, settle the transaction 28 days later and immediately sell on to an unrestricted third party. Secondly, the language used supported the view that parties had in mind a longer term restriction.
The prohibition in the first sentence was expressed as being 'in all time coming'. Thirdly, the construction which the court favoured did not involve re-writing the contract. There was no need to insert the words 'and their successors' after the words 'the Purchasers' in the first sentence of clause 10.1 if the phrase in the second sentence, 'this restriction on use', was construed as a reference to the prohibition itself and not to the parties prohibited. Fourthly, the first sentence was not otiose on the pursuers' construction. It bound the defenders and made them liable under clause 10.2 for any actings of the connected persons which breached the prohibition.
That contractual provision would cover the period between the settlement of the transaction and the registration of the deed of conditions. Fifthly, the extended definition of 'the Purchasers' in clause 10.1, on which the defenders relied in support of their construction, had a commercial rationale on the construction which the court favoured. The defenders were not able to assign or dispose of their interest in the missives (clause 11.1), but the connected persons could have purchased all or part of the adjoining subjects owned by Fife Enterprise. Clauses 9.7.2 and 10.1 sought to restrict their use of the Adjoining Subjects (FE), whenever they acquired those subjects, and to require that that prohibition against residential use be made a real burden in favour of the adjoining subjects which the sellers retained.
Finally, the real burden which the defenders proposed in their revisals of the deed of conditions was a very unusual one. It might be very difficult for the owner of the dominant tenement to ascertain at some date in the future whether the owner of the servient tenement was a connected person. It was not necessary for the court to determine whether it was a valid real burden. But if it were, it would be a very unusual one in preventing only certain parties in all time coming from using the subjects for residential development while leaving everyone else free to do so.
Emcor Drake & Scull Ltd v Edinburgh Royal Joint Venture 2005 SLT 1233 and Credential Bath Street Ltd v Venture Investment Placement Ltd [2007] CSOH 208 considered.
Gordon McBain MA, Solicitor
Published date: 26/03/2009
Putnam & Sons v Taylor and another
Citation: [2009] All ER (D) 242 (Mar)
Alternative citations: [2009] EWHC 317 (Ch)
Hearing date: 29 January 2009
Court: Chancery Division, Birmingham District Registry
Judge: Judge Purle QC sitting as a judge of the high court
Representation: Serena Gowling (instructed by FBC Manby Bowdler LLP) for the claimant. The first and second defendants appeared in person.
Abstract: Execution Charging order. Chancery Division: The claimant firm's application for the enforcement by sale of a final charging order over the first defendant husband's interest in a family home was allowed where there was no evidence that the second defendant wife had become the sole beneficial owner of the property before the charging order was made and it was not right to keep the claimant out of its money indefinitely with no prospect of any recovery in the near future.
Keywords: Execution Charging order Land Claimant having charging order over first defendant husband's beneficial interest in property Defendants holding land as joint tenants at time charging order made Second defendant wife subsequently becoming sole beneficial owner Whether agreement existing to alter beneficial interests before charging order made Whether charging order should be enforced.
Summary: The first and second defendants were husband and wife. They bought their family home (the property) in 1979 for £45,000 and were registered as joint proprietors. There was originally a mortgage of £17,000 on the property and, in 1995, a further mortgage was taken out to support the first defendant's business. Both mortgages were paid off in 2000. In 2002, there was a mortgage in favour of the H bank for approximately £60,000. Until 1987, the needs of the family, including mortgage and endowment payments, were paid out of both defendants' salaries.
After 1987, the second defendant paid for almost everything, including mortgage and endowment payments, with the first defendant only paying for the telephone and petrol bills. In 2002, the first defendant became involved in a business deal with the claimant firm. The result of the work done by the claimant led to an adjudication in November 2003 which went against the first defendant. That led to a judgment against him in January 2004 in the sum of £47,675 and, in the event, a charging order, dated 10 February 2005, for the sum owing under the judgment, in respect of the first defendant's interest in the property. By the time of the instant proceedings, the debt owed to the claimant was close to £60,000. By a letter of 16 January 2006, the defendants agreed that, in order to reflect the respective contributions that they had made to the property and consequential outgoings, the second defendant should become the sole beneficial owner of the property. In February 2006, the claimant sought to enforce the final charging order by an order for possession and sale of the property.
The second defendant contended that the charging order should not be enforced as (i) she was the sole beneficial owner of the property; and (ii) it would be very unfair to her to sell the property, which was her home, over her head to satisfy her husband's private debts for which she had no responsibility whatsoever.
The application would be allowed.
Though parties intentions as to their beneficial interests in a property might change post-acquisition, a court would be slow to infer from conduct alone that parties intended to vary beneficial interests established at the time of acquisition of a property.
On the evidence, before 16 January 2006, there had not been an inferred or imputed intention of the kind necessary to alter the beneficial interests in the property. Accordingly, at the time of the charging order, the defendants each had a joint beneficial interest in the property which, as a result of the charging order, had been severed so that the shares were now held equally as tenants in common (see [19], [20] of the judgment).
James v Thomas [2007] All ER (D) 373 (Nov) applied; Morris v Morris [2008] All ER (D) 333 (Feb) applied; Stack v Dowden [2007] 2 AC 432 considered.
In considering whether to exercise its discretion as to the enforcement of a charging order, the court had to strike a balance between various competing interests. A powerful consideration was whether the creditor was receiving proper recompense for being kept out of his money, repayment of which was overdue (see [29], [33] of the judgment).
In the light of all the circumstances of the instant case, it was not right to keep the claimant out of its money indefinitely with no prospect of any recovery in the near future. If an order for the sale of the property was refused, the claimant would be condemned to wait for its money with no prospect of obtaining it from any other source and with the debt increasing all the time. Accordingly, a proper exercise of the court's discretion required an order for sale (see [36], [38] of the judgment).
A sale of the property would be ordered but the defendants would not be required to give up possession of it to the claimant until 15 June 2009.
Bank of Ireland Home Mortgages Ltd v Bell [2000] All ER (D) 2105 applied.
Alison Blood, Barrister
Published date: 25/03/2009
Nissim and others v Ablethird Ltd
Citation: [2009] All ER (D) 243 (Mar)
Alternative citations: [2009] EWHC 585 (Ch)
Hearing date: 20 February 2009
Court: Chancery Division
Judge: Morgan J
Representation: Mark Loveday (instructed by Butcher Burns) for the landlords. Adam Rosenthal (instructed by the legal department, Ablethird Ltd) for the tenants.
Abstract: Landlord and tenant Rent. Chancery Division: In proceedings brought pursuant to section 45 of the Arbitration Act 1996, a rent review clause (in a lease under which business premises were let to the defendant tenant), which referred to a hypothetical lease in calculating the rent due, was to be construed according to the claimant landlords' contended construction, as its interpretation advanced the commercial common sense of the matter.
Keywords: Landlord and tenant Rent Review Review clause Claimant landlords letting business premises to defendant tenant Lease providing for rent reviews Rent payable to be determined by reference to hypothetical letting Parties in dispute as to amount of rent payable pursuant to rent review - Whether hypothetical lease containing same terms as to rent review as actual lease Arbitration Act 1996, section 45.
Summary: The claimants were the landlords of premises let to the defendant tenant under a lease dated 4 July 1991 (the lease). The premises were used as an amusement arcade. Clause 6 of the lease contained the rent review provisions. Clause 6.1 provided that the rent was to be reviewed every four years. Clause 6.2 identified the way in which the relevant amount of rent was to be determined and provided either for agreement or determination by an arbitrator of 'the open market yearly rent'. A proviso at clause 6.3.16 stated that ' [..] once the open market yearly rent has been agreed or determined [..] there shall then be added to it a further sum which represents 25% thereof so that the Reserved Yearly Rent then payable for the relevant review period shall be 125% of the open market yearly rent agreed or determined'.
The determination of the open market yearly rent assumed a hypothetical letting in the open market at the rent review date. By clause 6.3 of the lease, the hypothetical lease was on the terms of the actual lease, including the provisions for rent review. Clause 6.3of the lease also referred to a number of matters to be disregarded in the hypothetical lease. Clause 6.3.9 stated: 'But disregarding the proviso contained at the end of clause 6.3 hereof [..] and any increase in rent made or to be made pursuant thereto'. A dispute arose as to the amount of rent payable with effect from the rent review date of 4 December 2005. In the course of an arbitral proceedings between the parties, the landlord sought an order pursuant to section 45 of the Arbitration Act 1996 as to whether, on the true construction of clause 6.3 of the lease, the open market yearly rent to be determined was to have regard to or disregard the proviso to clause 6.3.
The landlords submitted that the rent review provisions in the hypothetical lease did not contain the proviso which appeared in the actual lease, which referred to an uplift of 25 per cent. Accordingly, at the valuation stage, the open market rental figure of shop premises at the address in question on the lease terms, was obtained. The proviso then provided for a further calculation which resulted in the rent payable by the tenant under the actual lease. The tenant contended that, following the express direction in clause 6.3 that the hypothetical lease had the same terms for rent review as the actual lease, the rent review provisions in the hypothetical lease contained the proviso, and therefore the calculation of the open market rent took account of a 25 per cent uplift.
The court ruled:
The words used in clause 6.3.9 meant that when the proviso contained at the end of clause 6.3 was disregarded, it was disregarded not only for the purpose of disregarding the effect of it in 2005 but it was disregarded as a term appearing in the hypothetical lease. Further, clause 6.3.9 directed one to disregard any increase in rent made or to be made pursuant to the proviso; that directed a disregard of the operation of the proviso. There was no warrant for confining the words to one occasion only, namely, the occasion of the current review, as the words naturally applied also to the future occasions when an increase might fall to be made. Furthermore, an interpretation of the words of clause 6.3.9 which disregarded the proviso advanced the commercial common sense of the matter. Accordingly, the rent review provisions in the hypothetical lease did not contain the proviso which appeared in the actual lease referring to an uplift of 25 per cent (see [18]-[20] of the judgment).
A declaration would be granted which gave effect to that construction.
Alison Blood, Barrister
Published date: 25/03/2009
Hall v Moore and another
Citation: [2009] All ER (D) 235 (Mar)
Alternative citations: [2009] EWCA Civ 201
Hearing date: 18 March 2009
Court: Court of Appeal, Civil Division
Judge: Rix, Toulson and Rimer LJJ
Representation: The appellant appeared in person. Giles Harrison-Hall (instructed by Masefield Solicitors LLP) for the respondents.
Abstract: Land - Interest in land. Court of Appeal, Civil Division: On the facts, a judge had been wrong to hold that a claimant's rights of common had not passed with the tenancy, pursuant to section 62 of the Law of Property Act 1925. Further, a committee which had purported to waive or suspend commoners' proprietary rights over the land in question had had no authority to do so, on the evidence which had been before the judge.
Keywords: Land Interest in land Rights in respect of land Claimant asserting right of common implied into tenancy agreement Claimant issuing proceedings in nuisance on grounds defendants obstructing access to and enjoyment of common land Judge finding claimant not having rights in respect of common land Whether judge erring Law of Property Act 1925, section 62.
Summary: The proceedings concerned the rights of common of pasture (the rights of common) over common land (the land). The rights of common belonged, inter alia, to the trustees of a local abbey (the trustees) and were registered as attached to, amongst other parcels of land, a farm (the farm). The claimant entered into a tenancy agreement with the trustees in respect of the farm in 1998 (the tenancy agreement). The second schedule to the tenancy agreement provided, at paragraph 4, that: 'The benefit of all existing and future wayleaves, easements and rights affecting the farm and all rents and moneys payable in respect thereof' were reserved to the trustees.
The claimant also frequently obtained annual grazing licences in respect of the land. The two respondents each bought parts of the land in 2005.
The claimant alleged that they had obstructed his access to the land and his enjoyment of his rights as a commoner, asserting that his tenancy agreement had impliedly granted him the trustees' rights of common attached to the farm, pursuant to section 62 of the Law of Property Act 1925. He subsequently issued proceedings in nuisance, seeking injunctive relief. In the course of those proceedings, it transpired, inter alia, that a commons committee existed (the committee) which, in November 1984, had purported to make an agreement on behalf of the commoners with the freeholders of the land and on whereby, in consideration for a sum paid annually by the freeholders, the commoners waived their rights of common over the land (the 1984 agreement).
The defendants submitted, inter alia, that the claimant had not exercised any right of common over the land or claimed any right to do so prior to instigating the instant proceedings. At the conclusion of the hearing, the judge found that the rights of common attached to the farm had not passed to the claimant, under section 62 of the Law of Property Act 1925, as the claimant had submitted, but had in fact been reserved to the trustees. He further found that, on the balance of probability, there had to have been an express, or at least an implied, agreement between all the commoners and the committee that it would act on their behalf and therefore held that it had to be presumed that the agreements purporting to waive the commoners' rights were entered into with the proper authority of the commoners and amounted to an effective waiver of their rights for the duration of the agreements. On that basis no common rights could impliedly have passed to the claimant by the 1998 tenancy because the right to exercise them had been waived by the November agreement. Accordingly, the judge declared that the claimant had no common rights by virtue of his tenancy of the farm in respect of the common land. The claimant appealed.
The first issue which arose was whether the judge had been wrong to interpret paragraph 4 as in fact reserving the rights of common to the trustees. The claimant submitted, inter alia, that there was no basis for regarding the reference to 'easements' in paragraph 4 as a reference to rights burdening the farm yet for regarding the 'rights' referred to as a reference to those that benefited it. The second issue which arose was whether the judge had been correct to conclude that, since 1984 all rights of common over the land had been waived and therefore could not have passed to the claimant under the tenancy agreement.
The appeal would be allowed.
(1) The natural sense of the reference to 'rights' in paragraph 4 was that it was referring to rights of a like kind as those to which it had just referred, namely, rights burdening the farm. On that basis, it was not referring to the rights of common over the land that were attached, or appurtenant, to the farm and in respect of which the farm was therefore the dominant tenement. Accordingly, the judge ought to have held that the rights of common over the land that were attached to the farm had passed to the claimant with his tenancy of the farm and that in principle the claimant was entitled to exercise them (see [15] and [20] of the judgment).
(2) In the absence of evidence of how a committee could claim to bind those who disagreed with, or simply declined to assent to, or take part in, the association's activities, the inference had to be that ordinarily such a committee could not so bind such people. Further, non-use of a right of common would not, without more, amount to an abandonment or surrender of such right (see [30] and [34] of the judgment).
In the instant case, there had been no evidence before the judge that had entitled him to conclude that the committee had the authority to waive or suspend any and every commoner's proprietary rights, that there was an implied agreement between all the commoners conferring such authority, or that it was held by them as having such authority. The evidence before the judge had gone no further than showing that the committee had held itself out as having the requisite authority. That did not suffice. In addition, the taking of the grazing licences was not inconsistent with the right of common. In all the circumstances, therefore, the judge had been wrong to conclude that the committee had had the authority which it claimed to deal with the claimant's rights (see [31] and [34] of the judgment).
Alison Pryor, Barrister.
Published date: 24/03/2009
R (on the application of Mabanaft Ltd) v Secretary of State for Trade and IndustrySub nom R (on the application of Mabanaft Ltd) v Secretary of State for Energy and Climate Change
Citation: [2009] All ER (D) 233 (Mar)
Alternative citations: [2009] EWCA Civ 224
Hearing date: 24 March 2009
Court: Court of Appeal, Civil Division
Judge: Arden, Hallett LJJ and Blackburne J
Representation: Hugh Mercer QC (instructed by Holman Fenwick Willan) for the claimant. Sarah Lee (instructed by the Treasury Solicitor) for the Secretary of State.
Abstract: European Community Oil stocks. Court of Appeal, Civil Division: In the instant case, the Secretary of State's decision in relation to compulsory stocking obligations in respect to petroleum and oil stocks in the United Kingdom was within the range of options open to him in the light of Council Directive (EC) 2006/67 and could not be set aside.
Keywords: European Community Oil stocks Compulsory stocking obligation Secretary of state introducing new system of stocking obligations Obligations imposed on importers Claimant seeking review of Secretary of State's decision to implement new system Non-discrimination Proportionality Whether decision unlawful Council Directive 2006/67/EC, art 3(2).
Summary: Most member states of the European Union were dependent upon imports of crude oil and petroleum products to meet demand. Since 1973, the European Union had imposed obligations on member states to guard against the risk of disruption in supply for political or economic reasons by maintaining emergency national stocks of crude oil and petroleum products. In the United Kingdom, such compulsory stocking obligations (CSOs) were passed on to businesses in the private sector.
The Community law requirements were consolidated in Council Directive (EC) 2006/67 (the 2006 Directive) (for the material provisions, see the appendix to the judgment). Under the UK scheme implementing predecessor directives, refiners were obliged to hold 67.5 days' stock of oil; and retailers 48.5 days' stock. Following public consultation and the obtaining of a report from oil and energy consultants, Energy Market Consultants (UK) Ltd (EMC), the relevant Secretary of State decided to implement the 2006 Directive by adopting, as from 1 April 2008 (and subject to transitional arrangements), a new regime.
That would, for the first time, apply to importers as well as refiners, exclude retailers, and create a differential of only 9.5 days between refiners and importers. The differential was arrived at using methodology adopted by the International Energy Agency (IEA). Refiners were thus required to hold 67.5 day's supply and importers 58 days' supply. That decision was implemented by a direction under section 6 of the Energy Act 1976. It had important cost consequences for importers, which might undermine their ability to compete with refiners and to operate in the oil market. The claimant was a substantial importer of crude oil and petroleum products. It applied for judicial review of the Secretary of State's decision, submitting that the Secretary of State had not allocated the cost burden of the new regime in accordance with the 2006 Directive. The judge dismissed its claim. The claimant appealed.
It contended that art 3(2) of the 2006 Directive required a fair and non-discriminatory sharing of the cost burden of the stockholding obligation and that that requirement could only be met once the actual cost burden had been identified in a transparent way. Accordingly, it was not lawful for the Secretary of State to make his decision without assessing those costs and taking them into account. The judge had erred in concluding that the member state's option to adopt measures to obtain appropriate information regarding the cost of stockholding applied primarily to central stockholding bodies. The purpose of art 3(2) was to ensure equalisation of the financial burden by reference to actual costs.
The Secretary of State could not rely upon the margin of appreciation without having an assessment of the proportion of stocks carried by refiners for export of commercial purposes which might fairly be taken into account. The Secretary of State submitted that it was open to member states to decide how to implement the 2006 Directive; and that the only relevant restriction was that in art 3(2). He submitted that the judge had correctly identified the issue as being whether the arrangements, based on an assessment of the differences between refiners and importers using minimum operating requirements (MOR), were fair and non-discriminatory.
The Secretary of State further submitted that the judge had correctly held that in reviewing his decision, the court afforded a broad margin of appreciation and that his assessment of the differences between refiners and importers was fair and non-discriminatory, and fell within the margin of appreciation afforded to the decision-maker.
The appeal would be dismissed.
(1) While Community law guaranteed various fundamental freedoms, such as freedom of movement and freedom from discrimination, and provided for the protection of free competition within the Community, Strasbourg jurisprudence recognised that it was possible to restrict those freedoms for the purpose of ensuring some objective of the Community or of protecting the essential powers of the member states within the technical or economic field. The terms of the 2006 Directive showed that the overriding concern of the Community legislature in enacting that directive was the desire to have a high level of security in the supply of oil and oil products within the member states.
The policy goal in the 2006 Directive was thus one established in the public interest, and it was inherent in that policy goal that private interests might have to give way to the public interest.
The policy goal had to be achieved in accordance with principles of Community law, such as non-discrimination, proportionality and effectiveness. The obligation imposed by art 3(2) conferred freedom on the member states to choose the method by which they would comply with their obligations under the 2006 Directive.
It followed under Community law that the court had to allow the Secretary of State a large measure of discretion in choosing an appropriate method. In reviewing the legality of the exercise of such discretion, the court had to limit itself to examining whether the decision of the Secretary of State disclosed a manifest error or constituted the misuse of powers or there had been a clear disregard of the limits of his discretion. That was because under Community law, where the decision-maker in the member state was required to evaluate a complex economic situation, the intensity of the review was low. The decision-maker would enjoy a large measure of discretion and the court would limit itself to asking whether the assessment was manifestly unreasonable. The court would not substitute its judgment for that of the decision-maker (see [26]-[33] of the judgment).
Campus Oil Ltd v Minister for Industry and Energy: 72/83 [1984] ECR 2727 considered; Upjohn Ltd v Licensing Authority established under the Medicines Act 1968: C-120/97 [1999] ECR I-223 considered.
(2) The fundamental thrust of art 3 was to give the member state the freedom to decide how to implement CSOs. It was inconsistent with that freedom to hold that the member state could in fact only exercise that option one way. Article 3(2) provided that the cost burden resulting from the maintenance of stocks in accordance with art 1 'shall' be identified by transparent arrangements. That obligation was not limited in time and so applied when the form of the stockholding regime was under consideration.
The obligation was to be interpreted as complementing the principal obligation that member states had to ensure that fair and non-discriminatory conditions applied in their stockholding arrangements. It made it clear that the member state had to publish information to identify the cost burden resulting from stockholding arrangements introduced pursuant to the first sentence; however, if there was no obligation to introduce a system based on actual cost in the first place, the second sentence could not create one. Moreover, the word 'identified' made it clear that only summary information was required. The third sentence of art 3(2) supported that conclusion and reflected the freedom given to the member state by art 3(2) since it was permissive and not mandatory (see [36]-[38] of the judgment).
In the instant case, the decision of the Secretary of State to allocate the cost burden of CSOs costs by reference to MOR was accordingly not precluded by the 2006 Directive. He was not obliged to obtain actual costs. The Secretary of State's decision was therefore within the range of policy options lawfully available to him under the 2006 Directive. However, it had also to comply with the principles of non-discrimination and proportionality (see [39]-[40] of the judgment).
Arcor AG & Co KG v Germany (Deutsche Telekom AG, intervening): C-152/07 to C-154/07 [2008] All ER (D) 246 (Jul) considered.
(3) Under the principle of non-discrimination, the decision-maker had, so far as possible, to ensure equal competitive conditions between different market operators. Any difference in treatment had in general to be capable of objective justification. However, the content of the obligation not to discriminate with respect to competitive conditions depended upon there being a verifiable means of ensuring equal competitive conditions. Proportionality in the context of the instant case also involved judging the appropriateness of the national measure in order to meet the objective required by the 2006 Directive and had to be assessed by reference to whether the member state was seeking to obtain some other objective, apart from that required by Community law. It also required that the court should consider whether there was any less restrictive means of effectively achieving the objective required by Community law.
In any assessment of proportionality in a technical field, the court had to allow a proper margin of discretion to the decision-maker because of the complexity of the assessment he was called upon to make in the field. It was a specific function of government to take such decisions for ensuring the supply of essential products in an emergency. Restraint would therefore be exercised by the courts in reviewing any decision of the type in the instant case and it had to be shown that the new regime was a manifestly disproportionate means of achieving the end of allocating the burden of CSO (see [41] and [46]-[48] of the judgment).
In the circumstances of the instant case, the differential adopted by the Secretary of State was in fact a means of reflecting the cost burden between refiners and importers. The Secretary of State had not been required by the 2006 Directive to investigate actual costs. The decision of the Secretary of State had been within the range of options open to him and could not be set aside (see [42]-[51] of the judgment).
Royal Scholten-Honig (Holdings) Ltd v Intervention Board for Agricultural Produce: 103/77 and 145/77 [1978] ECR 2037 considered.
Decision of Beatson J [2008] All ER (D) 178 (May); affirmed.
Vanessa Higgins, Barrister
Published date: 24/03/2009
Statutory instruments
Distress for Rent (Amendment) Rules 2009
LNB News 09/04/2009 5
Published date: 9 April 2009
Jurisdiction: England; Wales
Enactment citation: SI 2009/873
Commencement date: 30 April 2009
Legislation affected: SI 1988/2050 amended
Enabling power: Law of Distress Amendment Act 1888, section 8(3)
Abstract: SI 2009/873: Bailiff list to be published on Courts Service website.
Summary: Amend the Distress for Rent Rules 1988 to: require each county court that issues bailiffs' certificates to publish a list of bailiffs carrying on business within that court's issuing area on the website of Her Majesty's Courts Service (www.hmcourts-service.gov.uk) (in addition to the existing requirement for the list to be exhibited in the public area of the court office of each county court in the issuing area);require an applicant for a bailiff's certificate to exhibit with his or her application a certified copy of a criminal conviction certificate, a criminal record certificate or an enhanced criminal record certificate issued pursuant to the Police Act 1997, part V;
amend
Form 3 (application for certificate to levy distress) in Appendix 2 to the 1988 Rules to (i) clarify that an applicant for a bailiff's certificate is not required to disclose spent convictions in accordance with the Rehabilitation of Offenders Act 1974, and (ii) require an applicant for a bailiff's certificate to exhibit with his or her application a certified copy of a criminal conviction certificate, a criminal record certificate or an enhanced criminal record certificate issued pursuant to Part V of the Police Act 1997 (in accordance with an amendment made by these Rules to rule 4(4) of the 1988 Rules), and (iii) amend references to the Register of County Court Judgments to reflect the replacement of that Register with the Register of judgments, orders, fines and tribunal decisions; and
in the table of issuing county courts in Appendix 3 to the 1988 Rules-- (i) amend references to Clerkenwell county court and Shoreditch county court to reflect the merging of these two courts to form Clerkenwell and Shoreditch county court, (ii) change the issuing county court for Mold county court and Wrexham county court (currently Chester county court) to Wrexham county court, and (iii) change the issuing county court for Uxbridge county court (currently Uxbridge county court) and Wandsworth county court (currently Lambeth county court) to Wandsworth county court.
Land Registration Fee Order 2009
LNB News 07/04/2009 2
Published date: 7 April 2009
Jurisdiction: England; Wales
Enactment citation: SI 2009/845
Commencement date: 6 July 2009
Legislation affected: SI 2006/1332 revoked
Enabling power: Land Registration Act 2002, sections 102, 128(1)
Abstract: SI 2009/845: Application fees fixed for land registration
Summary: Replaces the Land Registration Fee Order 2006, making changes to land registration fees. The main changes made by the Order are: There are increases in fees payable under Scale 1 and Scale 2; fixed fee applications; fees for inspection and copying; search and other information services; the minimum fee for the registration of title to a lease or for the registration of the grant of a lease; the fee for an application for the first registration of a rentcharge; fees for large scale applications, and the fee for an application where no other fee is prescribed.
Planning (Consequential Provisions) Act 1990 (Appointed Day No 2 and Transitional Provision) (England) Order 2009
LNB News 07/04/2009 27
Published date: 7 April 2009
Jurisdiction: England
Enactment citation: SI 2009/849
Enabling power: Planning (Consequential Provisions) Act 1990, schedule 4, paragraph 1(3), (4)
Abstract: SI 2009/849: Inspectors have the same power to award costs as the Secretary of State from 6 April 2009.
Summary: Appoints 6 April 2009 as the day on which the Planning (Consequential Provisions) Act 1990, schedule 4, paragraphs 3-16, partially cease to have effect. Those paragraphs made transitory modifications to various provisions of the principal planning legislation. The effect is that on the appointed day, the Town and Country Planning Act 1990, section 322, schedule 6, paragraph 6 (orders as to costs of parties where no local inquiry held), come further partially into force. The latter provision gives inspectors the same power to award costs as the Secretary of State has under section 322. The provisions are specifically commenced in this Order for the purposes of awards of costs by the Secretary of State or inspectors in relation to proceedings which are dealt with on the basis of representations in writing.
Also makes corresponding provision in relation to the equivalent powers to award costs in the Planning (Listed Buildings and Conservation Areas) Act 1990 and in the Planning (Hazardous Substances) Act 1990.
The commencement does not apply where proceedings under the Town and Country Planning Act 1990, section 259, are dealt with on the basis of representations in writing.
Ensure that the new power to award costs in a case where the matter is dealt with on the basis of representations in writing is not available where the matter which gave rise to the proceedings was initiated before 6 April 2009, or in the case of a referred application, was not called in before that date.
Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009
LNB News 24/03/2009 21
Published date: 24 March 2009
Jurisdiction: England
Enactment citation: SI 2009/Draft
Legislation affected: Housing and Regeneration Act 2008 modified
Enabling power: Housing and Regeneration Act 2008, schedule 11, paragraph 24
Abstract: SI 2009/Draft: Provision extended to successor landlord cases to ensure equal treatment of all tolerated trespassers regardless of whether their landlord has changed.
Summary: Modifies the Housing and Regeneration Act 2008, schedule 11, part 2. Applies to an occupant of a residential property who is subject to a possession order and whose landlord has changed since that order was made. If such an occupant ceased to be a tenant and instead became a "tolerated trespasser" under the original landlord, ensures that on the commencement date a new tenancy will arise
.
Provide, as far as possible, that both landlord and tenant are in the same position as they would have been had the tenant not become a tolerated trespasser, and that neither is disadvantaged by the changes; and ensure that the provisions in relation to successor landlord cases are kept as close as possible to the provisions for other existing tolerated trespassers in schedule 11, part 2.
Where the property transfers between registered social landlords (RSLs) and the original tenancy was a full assured tenancy, the new tenancy will also be a full assured tenancy. Where the property transfers between RSLs and the original tenancy was an assured shorthold tenancy, the replacement tenancy will also be an assured shorthold tenancy. Where the original tenancy was a secure tenancy (mostly given by local authorities), the replacement tenancy will be a secure tenancy, if the new landlord is a local authority, and a full assured tenancy, if the new landlord is an RSL (since RSLs cannot now grant secure tenancies).
Where the original tenancy was a local authority introductory tenancy, the replacement tenancy will be an introductory tenancy, if the new landlord is a local authority, unless the local authority does not operate an introductory tenancy regime. In that case, the replacement tenancy will be a secure tenancy. If the new landlord is an RSL, the replacement tenancy will be an assured shorthold tenancy. This is because neither RSLs nor local authorities which do not operate an introductory tenancy regime can grant introductory tenancies. Where the original tenancy was a demoted tenancy, the replacement tenancy will usually also be a demoted tenancy. This will be the case even where the property has transferred from a local authority to an RSL, although different statutory provisions will apply to the new demoted tenancy.
In exceptional circumstances, although the original tenancy was a demoted tenancy the new landlord will not be one which is able to apply for a demoted tenancy, for example, where a property has been transferred to a housing association which is not an RSL, or to a landlord which can grant secure tenancies but cannot apply for demotion orders. The new tenancy will be an assured shorthold in the first case, and a secure tenancy in the second case.
Features
Refusal to guarantee tenant liability
LNB News 17/04/2009 18
Published date: 17 April 2009
Jurisdiction: UK
Related legislation: Landlord and Tenant Act 1988
Related cases: Landlord Protect Ltd v St Anselm Development Company Ltd [2009] EWCA Civ 99, [2009] All ER (D) 216 (Feb)
Relevant companies: St Anselm Development Company Limited
Abstract: Robert Ashworth tells Debbie Legall that a recent case involving a refusal to guarantee tenant liability, serves to strengthen tenants' hands.
Analysis: Two parties--Landlord Protect Limited v St Anselm Development Company Limited have recently had their case decided by a Court of Appeal. The case sought to establish whether a landlord had imposed an unreasonable condition for a consent to assign on St Anselm Development Company Limited, the existing tenant.
The relevant covenant in the lease, which includes the words: 'not to assign part or parts only of the demised premises [..] without the consent in writing of the landlord first and obtained, but such consent shall not be unreasonably withheld in the case of a respectable and responsible assignee or sub-tenant being offered', appeared to allow the landlord to unreasonably refuse consent in cases where no respectable and responsible sub-tenant was offered. The proposed assignee was a company with no assets and the landlord therefore requested that someone guarantee the rent and so demanded (as a condition of assignment) that a director of the assignee provide a personal guarantee.
The Court of Appeal found that where the landlord's consent was required to an assignment of a lease, the landlord could not reasonably impose a condition that was designed to increase the rights he already enjoyed under the head lease. The judge held that a requirement that the guarantee provided by the landlord's sole director should be released on any future assignment of the head lease only if "reasonable alternative security" was provided by the future assignee was reasonable, and dismissed the claim.
Robert Ashworth, partner at Pannone LLP believes that the outcome of this case "strengthens the tenant's hands in old-style, long-term leases and includes privity of contract", which confers rights and imposes liabilities on its contracting partners and means that they (and not any third parties) can sue each other under the terms of the contract. He adds that while there is a tendency to put clauses of this nature into tenancy agreements, an eminent solicitor would say tenants are not liable, but, he concedes, often "the only way forward for tenants in such disputes, is to go to court". He adds that with this case, tenants "now have case law to back up their arguments".
Ashworth believes that the main danger with this case would have been that "it would be a step back in the direction of privity of contract where the landlord gathers a basket of indemnities if the rent is not paid". But, he believes, the Landlord and Tenant Act 1988 "has ameliorated the position" and according to the wording of the Act, it makes 'new provision for imposing statutory duties in connection with covenants in tenancies against assigning, underletting, charging or parting with the possession of premises without consent.'
Continue reading
Citation: 2009 Scot (D) 15/4
Alternative citations: [2009] CSOH 47
Hearing date: 26 March 2009
Court: Outer House, Court of Session
Judge: Lord Hodge
Representation: Bartos (instructed by MBM Commercial) for the pursuers. Davies (instructed by Archibald Campbell & Harley WS) for the defenders.
Abstract: Contract Sale of land. Court of Session: In an action which concerned the meaning and scope of a restriction on the use of land to be sold which the pursuers and defenders had agreed in missives of sale, the court concluded that the pursuers' construction of the relevant clause was correct and that the missives created an obligation to restrict the use of the subjects and any adjoining land the owner of the subjects acquired, whoever he might be.
Keywords: Contract Sale of land Construction Restriction on use of land - Pursuers selling surplus land and seeking to restrict use to which purchasers could put that land and adjoining land they might acquire Meaning and scope of restriction on use which pursuers and defenders agreed in missives of sale.
Summary: In 2003 the pursuers decided to sell off surplus land (the subjects) which was separated from their factory in Kirkcaldy by a railway line. To protect their prospects of obtaining planning permission for residential development on land they retained, they sought in the missives of sale to restrict the use to which the purchasers could put the land to be sold and also adjoining land which the purchasers might acquire.
The questions which arose for debate were the meaning and scope of the restriction on use which the pursuers and the defenders agreed in the missives of sale. By letter of offer and letter of acceptance, both dated 24 April 2003, the pursuers agreed to sell the subjects to the defenders in a conditional sale. The defenders, in return for certain option payments, acquired the right to purchase the subjects for £1m and were protected by a suspensive condition that planning permission be obtained for a supermarket development.
The site for the supermarket development included both the subjects and all or part of the adjoining land which Fife Enterprise owned and which parties described in the missives as 'the Adjoining Subjects (FE)'. The missives expressly prohibited residential development on the subjects and on the Adjoining Subjects (FE). That prohibition and clause 9.2.1, which obliged the purchasers to submit a draft planning application to the sellers, were intended to protect the development potential and value of adjoining land which the sellers retained and which was referred to in the missives as 'the Adjoining Subjects (Sellers)'. Clause 9.7.2 prohibited the purchasers from pursuing a planning application in respect of the Adjoining Subjects (FE) either on their own or with any land other than the subjects of sale, both before and after settlement. It also contained an extended definition of 'the Purchasers'. Clause 9.3 gave the purchasers the right to waive the suspensive condition in clause 9.1 that they obtain planning permission for a supermarket development.
The date of entry was defined in clause 1.1 to be 28 days after the purification or waiver of the suspensive condition. Clause 9.2.3 empowered either party to resile from the missives if the suspensive condition had not been purified or waived by the long stop date of 1 April 2008. The principal issue between the parties was the construction of the restriction in clause 10 of the missives. That clause provided: '10.1. The Purchasers shall be prohibited in all time coming from developing the Subjects and/or the Adjoining Subjects (FE) for residential purposes. At settlement, the Purchasers and the Sellers shall execute and register . . . a Deed of Conditions in terms to be agreed . . . which has the effect of validly inserting this restriction on use into the title of the Subjects and such part of the Adjoining Subjects (FE) as shall have been acquired by the Purchasers on or prior to such date and which shall include the Adjoining Subjects (Sellers) within its scope as the dominant tenement.
Thereafter the Purchasers shall be prohibited from acquiring any part of the Adjoining Subjects (FE) as have not been acquired by such date without first agreeing and effecting an extension of such Deed of Conditions so as to validly insert the aforesaid restriction on use within the title to such part of the Adjoining Subjects (FE) as is then to be acquired in a manner as is enforceable by the proprietors from time to time of the Adjoining Subjects (Sellers) . . . In the context of this Clause 10.1 the term "the Purchasers" shall have the meaning given it in the context of Clause 9.7.2. 10.2 The Purchasers shall [..] indemnify the Sellers in respect of all losses, costs and expenses . . .
arising out of any breach of the undertakings contained in Clause 10.1 by any party, including any economic losses sustained as a result of any resultant failure to receive any desired planning permission to carry out works on any part of the Adjoining Subjects (Sellers).' Clause 9.7.2 provided: '. . . in the context of this Clause 9.7.2, the term "the Purchasers" shall apply not only to the Purchasers as designed herein [that is, the defenders] but also to their nominees, any subsidiary or holding company of the Purchasers, designed as aforesaid, or any subsidiary or such holding company. . . to any company or organisation that [M] . . . has an interest in equating to greater than 5% of the issued share capital and also to the said [M] as an individual and his spouse, partner or any child (on whose behalf you shall be deemed to act) . . .' (The court referred to those persons, other than the defenders, as 'the connected persons').
The defenders waived the suspensive condition in clause 9.1 on 28 March 2008. As a result, the date of entry under clause 1.1 was 25 April 2008. Nonetheless, the parties did not settle the transaction because they were unable to agree the terms of the deed of conditions envisaged in clause 10.1. The pursuers prepared a draft deed in which the real burdens were (a) that the subjects should not in all time coming be developed for residential purposes and (b) that the proprietors of the subjects should not be entitled to acquire any part of the Adjoining Subjects (FE) without executing a further deed of conditions in similar terms in respect of that property. The defenders did not accept that that was the obligation they had undertaken and amended the draft deed to restrict the prohibition to themselves and the connected persons. In short, the pursuers argued that the missives created an obligation to restrict the use of the subjects and also any part of the Adjoining Subjects (FE) acquired by the owner of the subjects, whoever he might be. The defenders contended that only they and the connected persons were to be so restricted, so as to allow them to sell the subjects to a third party, who would not be affected by the prohibition.
Counsel for the defenders submitted that the restriction was set out in all of the words of the first sentence of c 10.1. If the pursuers' interpretation of the restriction were correct, the restriction on 'the Purchasers' in first sentence of clause 10.1 was otiose, because the deed of conditions would come into effect on settlement. The only purpose of the sentence taken as a whole was to define the restriction to be set out in the deed, including the parties to whom the restriction applied. The pursuers' interpretation involved re-writing the contract as the burden would have to extend not just to the purchasers as defined but also to their successors. Counsel for the pursuers, submitted that the first sentence of clause 10.1 had the purpose of imposing a personal obligation on the defenders in relation to their actings and also the actings of the connected persons. If the defenders or one of the connected persons breached the restriction, the defenders were obliged to indemnify the pursuers under clause 10.2.
It was the only restriction on them in relation to the subjects which would have effect after the waiver of the suspensive condition in clause 9.1 and before the deed of conditions created a real burden on the subjects. The second sentence was intended to create a prohibition of the development of the subjects for residential use, whoever was their owner. The words in that sentence, 'this restriction on use', referred to the prohibition of residential development and not the parties prohibited. The third sentence of the clause was designed to bring about a similar restriction in relation to any other part of the adjoining land owned by Fife Enterprise which was acquired at a later date. Counsel also called into question the validity of the real burden which the defenders proposed. It purported to restrict not only the owners of the relevant land but also the connected persons whether or not they were owners. Even if the burden were valid, it was highly unusual. By contrast the burden to be imposed on the pursuers' construction of the clause was a common one.
The court ruled:
The pursuers' construction of clause 10 was correct.
First, it was a commercially sensible construction which would appeal to the reasonable man who was aware of the relevant background facts. While the purchaser had a clear interest in limiting the scope of the restriction on use of the purchased land, the defenders' construction would give the sellers very little protection. If it were correct, the purchasers could waive the suspensive condition in clause 9.1, settle the transaction 28 days later and immediately sell on to an unrestricted third party. Secondly, the language used supported the view that parties had in mind a longer term restriction.
The prohibition in the first sentence was expressed as being 'in all time coming'. Thirdly, the construction which the court favoured did not involve re-writing the contract. There was no need to insert the words 'and their successors' after the words 'the Purchasers' in the first sentence of clause 10.1 if the phrase in the second sentence, 'this restriction on use', was construed as a reference to the prohibition itself and not to the parties prohibited. Fourthly, the first sentence was not otiose on the pursuers' construction. It bound the defenders and made them liable under clause 10.2 for any actings of the connected persons which breached the prohibition.
That contractual provision would cover the period between the settlement of the transaction and the registration of the deed of conditions. Fifthly, the extended definition of 'the Purchasers' in clause 10.1, on which the defenders relied in support of their construction, had a commercial rationale on the construction which the court favoured. The defenders were not able to assign or dispose of their interest in the missives (clause 11.1), but the connected persons could have purchased all or part of the adjoining subjects owned by Fife Enterprise. Clauses 9.7.2 and 10.1 sought to restrict their use of the Adjoining Subjects (FE), whenever they acquired those subjects, and to require that that prohibition against residential use be made a real burden in favour of the adjoining subjects which the sellers retained.
Finally, the real burden which the defenders proposed in their revisals of the deed of conditions was a very unusual one. It might be very difficult for the owner of the dominant tenement to ascertain at some date in the future whether the owner of the servient tenement was a connected person. It was not necessary for the court to determine whether it was a valid real burden. But if it were, it would be a very unusual one in preventing only certain parties in all time coming from using the subjects for residential development while leaving everyone else free to do so.
Emcor Drake & Scull Ltd v Edinburgh Royal Joint Venture 2005 SLT 1233 and Credential Bath Street Ltd v Venture Investment Placement Ltd [2007] CSOH 208 considered.
Gordon McBain MA, Solicitor
Published date: 26/03/2009
Putnam & Sons v Taylor and another
Citation: [2009] All ER (D) 242 (Mar)
Alternative citations: [2009] EWHC 317 (Ch)
Hearing date: 29 January 2009
Court: Chancery Division, Birmingham District Registry
Judge: Judge Purle QC sitting as a judge of the high court
Representation: Serena Gowling (instructed by FBC Manby Bowdler LLP) for the claimant. The first and second defendants appeared in person.
Abstract: Execution Charging order. Chancery Division: The claimant firm's application for the enforcement by sale of a final charging order over the first defendant husband's interest in a family home was allowed where there was no evidence that the second defendant wife had become the sole beneficial owner of the property before the charging order was made and it was not right to keep the claimant out of its money indefinitely with no prospect of any recovery in the near future.
Keywords: Execution Charging order Land Claimant having charging order over first defendant husband's beneficial interest in property Defendants holding land as joint tenants at time charging order made Second defendant wife subsequently becoming sole beneficial owner Whether agreement existing to alter beneficial interests before charging order made Whether charging order should be enforced.
Summary: The first and second defendants were husband and wife. They bought their family home (the property) in 1979 for £45,000 and were registered as joint proprietors. There was originally a mortgage of £17,000 on the property and, in 1995, a further mortgage was taken out to support the first defendant's business. Both mortgages were paid off in 2000. In 2002, there was a mortgage in favour of the H bank for approximately £60,000. Until 1987, the needs of the family, including mortgage and endowment payments, were paid out of both defendants' salaries.
After 1987, the second defendant paid for almost everything, including mortgage and endowment payments, with the first defendant only paying for the telephone and petrol bills. In 2002, the first defendant became involved in a business deal with the claimant firm. The result of the work done by the claimant led to an adjudication in November 2003 which went against the first defendant. That led to a judgment against him in January 2004 in the sum of £47,675 and, in the event, a charging order, dated 10 February 2005, for the sum owing under the judgment, in respect of the first defendant's interest in the property. By the time of the instant proceedings, the debt owed to the claimant was close to £60,000. By a letter of 16 January 2006, the defendants agreed that, in order to reflect the respective contributions that they had made to the property and consequential outgoings, the second defendant should become the sole beneficial owner of the property. In February 2006, the claimant sought to enforce the final charging order by an order for possession and sale of the property.
The second defendant contended that the charging order should not be enforced as (i) she was the sole beneficial owner of the property; and (ii) it would be very unfair to her to sell the property, which was her home, over her head to satisfy her husband's private debts for which she had no responsibility whatsoever.
The application would be allowed.
Though parties intentions as to their beneficial interests in a property might change post-acquisition, a court would be slow to infer from conduct alone that parties intended to vary beneficial interests established at the time of acquisition of a property.
On the evidence, before 16 January 2006, there had not been an inferred or imputed intention of the kind necessary to alter the beneficial interests in the property. Accordingly, at the time of the charging order, the defendants each had a joint beneficial interest in the property which, as a result of the charging order, had been severed so that the shares were now held equally as tenants in common (see [19], [20] of the judgment).
James v Thomas [2007] All ER (D) 373 (Nov) applied; Morris v Morris [2008] All ER (D) 333 (Feb) applied; Stack v Dowden [2007] 2 AC 432 considered.
In considering whether to exercise its discretion as to the enforcement of a charging order, the court had to strike a balance between various competing interests. A powerful consideration was whether the creditor was receiving proper recompense for being kept out of his money, repayment of which was overdue (see [29], [33] of the judgment).
In the light of all the circumstances of the instant case, it was not right to keep the claimant out of its money indefinitely with no prospect of any recovery in the near future. If an order for the sale of the property was refused, the claimant would be condemned to wait for its money with no prospect of obtaining it from any other source and with the debt increasing all the time. Accordingly, a proper exercise of the court's discretion required an order for sale (see [36], [38] of the judgment).
A sale of the property would be ordered but the defendants would not be required to give up possession of it to the claimant until 15 June 2009.
Bank of Ireland Home Mortgages Ltd v Bell [2000] All ER (D) 2105 applied.
Alison Blood, Barrister
Published date: 25/03/2009
Nissim and others v Ablethird Ltd
Citation: [2009] All ER (D) 243 (Mar)
Alternative citations: [2009] EWHC 585 (Ch)
Hearing date: 20 February 2009
Court: Chancery Division
Judge: Morgan J
Representation: Mark Loveday (instructed by Butcher Burns) for the landlords. Adam Rosenthal (instructed by the legal department, Ablethird Ltd) for the tenants.
Abstract: Landlord and tenant Rent. Chancery Division: In proceedings brought pursuant to section 45 of the Arbitration Act 1996, a rent review clause (in a lease under which business premises were let to the defendant tenant), which referred to a hypothetical lease in calculating the rent due, was to be construed according to the claimant landlords' contended construction, as its interpretation advanced the commercial common sense of the matter.
Keywords: Landlord and tenant Rent Review Review clause Claimant landlords letting business premises to defendant tenant Lease providing for rent reviews Rent payable to be determined by reference to hypothetical letting Parties in dispute as to amount of rent payable pursuant to rent review - Whether hypothetical lease containing same terms as to rent review as actual lease Arbitration Act 1996, section 45.
Summary: The claimants were the landlords of premises let to the defendant tenant under a lease dated 4 July 1991 (the lease). The premises were used as an amusement arcade. Clause 6 of the lease contained the rent review provisions. Clause 6.1 provided that the rent was to be reviewed every four years. Clause 6.2 identified the way in which the relevant amount of rent was to be determined and provided either for agreement or determination by an arbitrator of 'the open market yearly rent'. A proviso at clause 6.3.16 stated that ' [..] once the open market yearly rent has been agreed or determined [..] there shall then be added to it a further sum which represents 25% thereof so that the Reserved Yearly Rent then payable for the relevant review period shall be 125% of the open market yearly rent agreed or determined'.
The determination of the open market yearly rent assumed a hypothetical letting in the open market at the rent review date. By clause 6.3 of the lease, the hypothetical lease was on the terms of the actual lease, including the provisions for rent review. Clause 6.3of the lease also referred to a number of matters to be disregarded in the hypothetical lease. Clause 6.3.9 stated: 'But disregarding the proviso contained at the end of clause 6.3 hereof [..] and any increase in rent made or to be made pursuant thereto'. A dispute arose as to the amount of rent payable with effect from the rent review date of 4 December 2005. In the course of an arbitral proceedings between the parties, the landlord sought an order pursuant to section 45 of the Arbitration Act 1996 as to whether, on the true construction of clause 6.3 of the lease, the open market yearly rent to be determined was to have regard to or disregard the proviso to clause 6.3.
The landlords submitted that the rent review provisions in the hypothetical lease did not contain the proviso which appeared in the actual lease, which referred to an uplift of 25 per cent. Accordingly, at the valuation stage, the open market rental figure of shop premises at the address in question on the lease terms, was obtained. The proviso then provided for a further calculation which resulted in the rent payable by the tenant under the actual lease. The tenant contended that, following the express direction in clause 6.3 that the hypothetical lease had the same terms for rent review as the actual lease, the rent review provisions in the hypothetical lease contained the proviso, and therefore the calculation of the open market rent took account of a 25 per cent uplift.
The court ruled:
The words used in clause 6.3.9 meant that when the proviso contained at the end of clause 6.3 was disregarded, it was disregarded not only for the purpose of disregarding the effect of it in 2005 but it was disregarded as a term appearing in the hypothetical lease. Further, clause 6.3.9 directed one to disregard any increase in rent made or to be made pursuant to the proviso; that directed a disregard of the operation of the proviso. There was no warrant for confining the words to one occasion only, namely, the occasion of the current review, as the words naturally applied also to the future occasions when an increase might fall to be made. Furthermore, an interpretation of the words of clause 6.3.9 which disregarded the proviso advanced the commercial common sense of the matter. Accordingly, the rent review provisions in the hypothetical lease did not contain the proviso which appeared in the actual lease referring to an uplift of 25 per cent (see [18]-[20] of the judgment).
A declaration would be granted which gave effect to that construction.
Alison Blood, Barrister
Published date: 25/03/2009
Hall v Moore and another
Citation: [2009] All ER (D) 235 (Mar)
Alternative citations: [2009] EWCA Civ 201
Hearing date: 18 March 2009
Court: Court of Appeal, Civil Division
Judge: Rix, Toulson and Rimer LJJ
Representation: The appellant appeared in person. Giles Harrison-Hall (instructed by Masefield Solicitors LLP) for the respondents.
Abstract: Land - Interest in land. Court of Appeal, Civil Division: On the facts, a judge had been wrong to hold that a claimant's rights of common had not passed with the tenancy, pursuant to section 62 of the Law of Property Act 1925. Further, a committee which had purported to waive or suspend commoners' proprietary rights over the land in question had had no authority to do so, on the evidence which had been before the judge.
Keywords: Land Interest in land Rights in respect of land Claimant asserting right of common implied into tenancy agreement Claimant issuing proceedings in nuisance on grounds defendants obstructing access to and enjoyment of common land Judge finding claimant not having rights in respect of common land Whether judge erring Law of Property Act 1925, section 62.
Summary: The proceedings concerned the rights of common of pasture (the rights of common) over common land (the land). The rights of common belonged, inter alia, to the trustees of a local abbey (the trustees) and were registered as attached to, amongst other parcels of land, a farm (the farm). The claimant entered into a tenancy agreement with the trustees in respect of the farm in 1998 (the tenancy agreement). The second schedule to the tenancy agreement provided, at paragraph 4, that: 'The benefit of all existing and future wayleaves, easements and rights affecting the farm and all rents and moneys payable in respect thereof' were reserved to the trustees.
The claimant also frequently obtained annual grazing licences in respect of the land. The two respondents each bought parts of the land in 2005.
The claimant alleged that they had obstructed his access to the land and his enjoyment of his rights as a commoner, asserting that his tenancy agreement had impliedly granted him the trustees' rights of common attached to the farm, pursuant to section 62 of the Law of Property Act 1925. He subsequently issued proceedings in nuisance, seeking injunctive relief. In the course of those proceedings, it transpired, inter alia, that a commons committee existed (the committee) which, in November 1984, had purported to make an agreement on behalf of the commoners with the freeholders of the land and on whereby, in consideration for a sum paid annually by the freeholders, the commoners waived their rights of common over the land (the 1984 agreement).
The defendants submitted, inter alia, that the claimant had not exercised any right of common over the land or claimed any right to do so prior to instigating the instant proceedings. At the conclusion of the hearing, the judge found that the rights of common attached to the farm had not passed to the claimant, under section 62 of the Law of Property Act 1925, as the claimant had submitted, but had in fact been reserved to the trustees. He further found that, on the balance of probability, there had to have been an express, or at least an implied, agreement between all the commoners and the committee that it would act on their behalf and therefore held that it had to be presumed that the agreements purporting to waive the commoners' rights were entered into with the proper authority of the commoners and amounted to an effective waiver of their rights for the duration of the agreements. On that basis no common rights could impliedly have passed to the claimant by the 1998 tenancy because the right to exercise them had been waived by the November agreement. Accordingly, the judge declared that the claimant had no common rights by virtue of his tenancy of the farm in respect of the common land. The claimant appealed.
The first issue which arose was whether the judge had been wrong to interpret paragraph 4 as in fact reserving the rights of common to the trustees. The claimant submitted, inter alia, that there was no basis for regarding the reference to 'easements' in paragraph 4 as a reference to rights burdening the farm yet for regarding the 'rights' referred to as a reference to those that benefited it. The second issue which arose was whether the judge had been correct to conclude that, since 1984 all rights of common over the land had been waived and therefore could not have passed to the claimant under the tenancy agreement.
The appeal would be allowed.
(1) The natural sense of the reference to 'rights' in paragraph 4 was that it was referring to rights of a like kind as those to which it had just referred, namely, rights burdening the farm. On that basis, it was not referring to the rights of common over the land that were attached, or appurtenant, to the farm and in respect of which the farm was therefore the dominant tenement. Accordingly, the judge ought to have held that the rights of common over the land that were attached to the farm had passed to the claimant with his tenancy of the farm and that in principle the claimant was entitled to exercise them (see [15] and [20] of the judgment).
(2) In the absence of evidence of how a committee could claim to bind those who disagreed with, or simply declined to assent to, or take part in, the association's activities, the inference had to be that ordinarily such a committee could not so bind such people. Further, non-use of a right of common would not, without more, amount to an abandonment or surrender of such right (see [30] and [34] of the judgment).
In the instant case, there had been no evidence before the judge that had entitled him to conclude that the committee had the authority to waive or suspend any and every commoner's proprietary rights, that there was an implied agreement between all the commoners conferring such authority, or that it was held by them as having such authority. The evidence before the judge had gone no further than showing that the committee had held itself out as having the requisite authority. That did not suffice. In addition, the taking of the grazing licences was not inconsistent with the right of common. In all the circumstances, therefore, the judge had been wrong to conclude that the committee had had the authority which it claimed to deal with the claimant's rights (see [31] and [34] of the judgment).
Alison Pryor, Barrister.
Published date: 24/03/2009
R (on the application of Mabanaft Ltd) v Secretary of State for Trade and IndustrySub nom R (on the application of Mabanaft Ltd) v Secretary of State for Energy and Climate Change
Citation: [2009] All ER (D) 233 (Mar)
Alternative citations: [2009] EWCA Civ 224
Hearing date: 24 March 2009
Court: Court of Appeal, Civil Division
Judge: Arden, Hallett LJJ and Blackburne J
Representation: Hugh Mercer QC (instructed by Holman Fenwick Willan) for the claimant. Sarah Lee (instructed by the Treasury Solicitor) for the Secretary of State.
Abstract: European Community Oil stocks. Court of Appeal, Civil Division: In the instant case, the Secretary of State's decision in relation to compulsory stocking obligations in respect to petroleum and oil stocks in the United Kingdom was within the range of options open to him in the light of Council Directive (EC) 2006/67 and could not be set aside.
Keywords: European Community Oil stocks Compulsory stocking obligation Secretary of state introducing new system of stocking obligations Obligations imposed on importers Claimant seeking review of Secretary of State's decision to implement new system Non-discrimination Proportionality Whether decision unlawful Council Directive 2006/67/EC, art 3(2).
Summary: Most member states of the European Union were dependent upon imports of crude oil and petroleum products to meet demand. Since 1973, the European Union had imposed obligations on member states to guard against the risk of disruption in supply for political or economic reasons by maintaining emergency national stocks of crude oil and petroleum products. In the United Kingdom, such compulsory stocking obligations (CSOs) were passed on to businesses in the private sector.
The Community law requirements were consolidated in Council Directive (EC) 2006/67 (the 2006 Directive) (for the material provisions, see the appendix to the judgment). Under the UK scheme implementing predecessor directives, refiners were obliged to hold 67.5 days' stock of oil; and retailers 48.5 days' stock. Following public consultation and the obtaining of a report from oil and energy consultants, Energy Market Consultants (UK) Ltd (EMC), the relevant Secretary of State decided to implement the 2006 Directive by adopting, as from 1 April 2008 (and subject to transitional arrangements), a new regime.
That would, for the first time, apply to importers as well as refiners, exclude retailers, and create a differential of only 9.5 days between refiners and importers. The differential was arrived at using methodology adopted by the International Energy Agency (IEA). Refiners were thus required to hold 67.5 day's supply and importers 58 days' supply. That decision was implemented by a direction under section 6 of the Energy Act 1976. It had important cost consequences for importers, which might undermine their ability to compete with refiners and to operate in the oil market. The claimant was a substantial importer of crude oil and petroleum products. It applied for judicial review of the Secretary of State's decision, submitting that the Secretary of State had not allocated the cost burden of the new regime in accordance with the 2006 Directive. The judge dismissed its claim. The claimant appealed.
It contended that art 3(2) of the 2006 Directive required a fair and non-discriminatory sharing of the cost burden of the stockholding obligation and that that requirement could only be met once the actual cost burden had been identified in a transparent way. Accordingly, it was not lawful for the Secretary of State to make his decision without assessing those costs and taking them into account. The judge had erred in concluding that the member state's option to adopt measures to obtain appropriate information regarding the cost of stockholding applied primarily to central stockholding bodies. The purpose of art 3(2) was to ensure equalisation of the financial burden by reference to actual costs.
The Secretary of State could not rely upon the margin of appreciation without having an assessment of the proportion of stocks carried by refiners for export of commercial purposes which might fairly be taken into account. The Secretary of State submitted that it was open to member states to decide how to implement the 2006 Directive; and that the only relevant restriction was that in art 3(2). He submitted that the judge had correctly identified the issue as being whether the arrangements, based on an assessment of the differences between refiners and importers using minimum operating requirements (MOR), were fair and non-discriminatory.
The Secretary of State further submitted that the judge had correctly held that in reviewing his decision, the court afforded a broad margin of appreciation and that his assessment of the differences between refiners and importers was fair and non-discriminatory, and fell within the margin of appreciation afforded to the decision-maker.
The appeal would be dismissed.
(1) While Community law guaranteed various fundamental freedoms, such as freedom of movement and freedom from discrimination, and provided for the protection of free competition within the Community, Strasbourg jurisprudence recognised that it was possible to restrict those freedoms for the purpose of ensuring some objective of the Community or of protecting the essential powers of the member states within the technical or economic field. The terms of the 2006 Directive showed that the overriding concern of the Community legislature in enacting that directive was the desire to have a high level of security in the supply of oil and oil products within the member states.
The policy goal in the 2006 Directive was thus one established in the public interest, and it was inherent in that policy goal that private interests might have to give way to the public interest.
The policy goal had to be achieved in accordance with principles of Community law, such as non-discrimination, proportionality and effectiveness. The obligation imposed by art 3(2) conferred freedom on the member states to choose the method by which they would comply with their obligations under the 2006 Directive.
It followed under Community law that the court had to allow the Secretary of State a large measure of discretion in choosing an appropriate method. In reviewing the legality of the exercise of such discretion, the court had to limit itself to examining whether the decision of the Secretary of State disclosed a manifest error or constituted the misuse of powers or there had been a clear disregard of the limits of his discretion. That was because under Community law, where the decision-maker in the member state was required to evaluate a complex economic situation, the intensity of the review was low. The decision-maker would enjoy a large measure of discretion and the court would limit itself to asking whether the assessment was manifestly unreasonable. The court would not substitute its judgment for that of the decision-maker (see [26]-[33] of the judgment).
Campus Oil Ltd v Minister for Industry and Energy: 72/83 [1984] ECR 2727 considered; Upjohn Ltd v Licensing Authority established under the Medicines Act 1968: C-120/97 [1999] ECR I-223 considered.
(2) The fundamental thrust of art 3 was to give the member state the freedom to decide how to implement CSOs. It was inconsistent with that freedom to hold that the member state could in fact only exercise that option one way. Article 3(2) provided that the cost burden resulting from the maintenance of stocks in accordance with art 1 'shall' be identified by transparent arrangements. That obligation was not limited in time and so applied when the form of the stockholding regime was under consideration.
The obligation was to be interpreted as complementing the principal obligation that member states had to ensure that fair and non-discriminatory conditions applied in their stockholding arrangements. It made it clear that the member state had to publish information to identify the cost burden resulting from stockholding arrangements introduced pursuant to the first sentence; however, if there was no obligation to introduce a system based on actual cost in the first place, the second sentence could not create one. Moreover, the word 'identified' made it clear that only summary information was required. The third sentence of art 3(2) supported that conclusion and reflected the freedom given to the member state by art 3(2) since it was permissive and not mandatory (see [36]-[38] of the judgment).
In the instant case, the decision of the Secretary of State to allocate the cost burden of CSOs costs by reference to MOR was accordingly not precluded by the 2006 Directive. He was not obliged to obtain actual costs. The Secretary of State's decision was therefore within the range of policy options lawfully available to him under the 2006 Directive. However, it had also to comply with the principles of non-discrimination and proportionality (see [39]-[40] of the judgment).
Arcor AG & Co KG v Germany (Deutsche Telekom AG, intervening): C-152/07 to C-154/07 [2008] All ER (D) 246 (Jul) considered.
(3) Under the principle of non-discrimination, the decision-maker had, so far as possible, to ensure equal competitive conditions between different market operators. Any difference in treatment had in general to be capable of objective justification. However, the content of the obligation not to discriminate with respect to competitive conditions depended upon there being a verifiable means of ensuring equal competitive conditions. Proportionality in the context of the instant case also involved judging the appropriateness of the national measure in order to meet the objective required by the 2006 Directive and had to be assessed by reference to whether the member state was seeking to obtain some other objective, apart from that required by Community law. It also required that the court should consider whether there was any less restrictive means of effectively achieving the objective required by Community law.
In any assessment of proportionality in a technical field, the court had to allow a proper margin of discretion to the decision-maker because of the complexity of the assessment he was called upon to make in the field. It was a specific function of government to take such decisions for ensuring the supply of essential products in an emergency. Restraint would therefore be exercised by the courts in reviewing any decision of the type in the instant case and it had to be shown that the new regime was a manifestly disproportionate means of achieving the end of allocating the burden of CSO (see [41] and [46]-[48] of the judgment).
In the circumstances of the instant case, the differential adopted by the Secretary of State was in fact a means of reflecting the cost burden between refiners and importers. The Secretary of State had not been required by the 2006 Directive to investigate actual costs. The decision of the Secretary of State had been within the range of options open to him and could not be set aside (see [42]-[51] of the judgment).
Royal Scholten-Honig (Holdings) Ltd v Intervention Board for Agricultural Produce: 103/77 and 145/77 [1978] ECR 2037 considered.
Decision of Beatson J [2008] All ER (D) 178 (May); affirmed.
Vanessa Higgins, Barrister
Published date: 24/03/2009
Statutory instruments
Distress for Rent (Amendment) Rules 2009
LNB News 09/04/2009 5
Published date: 9 April 2009
Jurisdiction: England; Wales
Enactment citation: SI 2009/873
Commencement date: 30 April 2009
Legislation affected: SI 1988/2050 amended
Enabling power: Law of Distress Amendment Act 1888, section 8(3)
Abstract: SI 2009/873: Bailiff list to be published on Courts Service website.
Summary: Amend the Distress for Rent Rules 1988 to: require each county court that issues bailiffs' certificates to publish a list of bailiffs carrying on business within that court's issuing area on the website of Her Majesty's Courts Service (www.hmcourts-service.gov.uk) (in addition to the existing requirement for the list to be exhibited in the public area of the court office of each county court in the issuing area);require an applicant for a bailiff's certificate to exhibit with his or her application a certified copy of a criminal conviction certificate, a criminal record certificate or an enhanced criminal record certificate issued pursuant to the Police Act 1997, part V;
amend
Form 3 (application for certificate to levy distress) in Appendix 2 to the 1988 Rules to (i) clarify that an applicant for a bailiff's certificate is not required to disclose spent convictions in accordance with the Rehabilitation of Offenders Act 1974, and (ii) require an applicant for a bailiff's certificate to exhibit with his or her application a certified copy of a criminal conviction certificate, a criminal record certificate or an enhanced criminal record certificate issued pursuant to Part V of the Police Act 1997 (in accordance with an amendment made by these Rules to rule 4(4) of the 1988 Rules), and (iii) amend references to the Register of County Court Judgments to reflect the replacement of that Register with the Register of judgments, orders, fines and tribunal decisions; and
in the table of issuing county courts in Appendix 3 to the 1988 Rules-- (i) amend references to Clerkenwell county court and Shoreditch county court to reflect the merging of these two courts to form Clerkenwell and Shoreditch county court, (ii) change the issuing county court for Mold county court and Wrexham county court (currently Chester county court) to Wrexham county court, and (iii) change the issuing county court for Uxbridge county court (currently Uxbridge county court) and Wandsworth county court (currently Lambeth county court) to Wandsworth county court.
Land Registration Fee Order 2009
LNB News 07/04/2009 2
Published date: 7 April 2009
Jurisdiction: England; Wales
Enactment citation: SI 2009/845
Commencement date: 6 July 2009
Legislation affected: SI 2006/1332 revoked
Enabling power: Land Registration Act 2002, sections 102, 128(1)
Abstract: SI 2009/845: Application fees fixed for land registration
Summary: Replaces the Land Registration Fee Order 2006, making changes to land registration fees. The main changes made by the Order are: There are increases in fees payable under Scale 1 and Scale 2; fixed fee applications; fees for inspection and copying; search and other information services; the minimum fee for the registration of title to a lease or for the registration of the grant of a lease; the fee for an application for the first registration of a rentcharge; fees for large scale applications, and the fee for an application where no other fee is prescribed.
Planning (Consequential Provisions) Act 1990 (Appointed Day No 2 and Transitional Provision) (England) Order 2009
LNB News 07/04/2009 27
Published date: 7 April 2009
Jurisdiction: England
Enactment citation: SI 2009/849
Enabling power: Planning (Consequential Provisions) Act 1990, schedule 4, paragraph 1(3), (4)
Abstract: SI 2009/849: Inspectors have the same power to award costs as the Secretary of State from 6 April 2009.
Summary: Appoints 6 April 2009 as the day on which the Planning (Consequential Provisions) Act 1990, schedule 4, paragraphs 3-16, partially cease to have effect. Those paragraphs made transitory modifications to various provisions of the principal planning legislation. The effect is that on the appointed day, the Town and Country Planning Act 1990, section 322, schedule 6, paragraph 6 (orders as to costs of parties where no local inquiry held), come further partially into force. The latter provision gives inspectors the same power to award costs as the Secretary of State has under section 322. The provisions are specifically commenced in this Order for the purposes of awards of costs by the Secretary of State or inspectors in relation to proceedings which are dealt with on the basis of representations in writing.
Also makes corresponding provision in relation to the equivalent powers to award costs in the Planning (Listed Buildings and Conservation Areas) Act 1990 and in the Planning (Hazardous Substances) Act 1990.
The commencement does not apply where proceedings under the Town and Country Planning Act 1990, section 259, are dealt with on the basis of representations in writing.
Ensure that the new power to award costs in a case where the matter is dealt with on the basis of representations in writing is not available where the matter which gave rise to the proceedings was initiated before 6 April 2009, or in the case of a referred application, was not called in before that date.
Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009
LNB News 24/03/2009 21
Published date: 24 March 2009
Jurisdiction: England
Enactment citation: SI 2009/Draft
Legislation affected: Housing and Regeneration Act 2008 modified
Enabling power: Housing and Regeneration Act 2008, schedule 11, paragraph 24
Abstract: SI 2009/Draft: Provision extended to successor landlord cases to ensure equal treatment of all tolerated trespassers regardless of whether their landlord has changed.
Summary: Modifies the Housing and Regeneration Act 2008, schedule 11, part 2. Applies to an occupant of a residential property who is subject to a possession order and whose landlord has changed since that order was made. If such an occupant ceased to be a tenant and instead became a "tolerated trespasser" under the original landlord, ensures that on the commencement date a new tenancy will arise
.
Provide, as far as possible, that both landlord and tenant are in the same position as they would have been had the tenant not become a tolerated trespasser, and that neither is disadvantaged by the changes; and ensure that the provisions in relation to successor landlord cases are kept as close as possible to the provisions for other existing tolerated trespassers in schedule 11, part 2.
Where the property transfers between registered social landlords (RSLs) and the original tenancy was a full assured tenancy, the new tenancy will also be a full assured tenancy. Where the property transfers between RSLs and the original tenancy was an assured shorthold tenancy, the replacement tenancy will also be an assured shorthold tenancy. Where the original tenancy was a secure tenancy (mostly given by local authorities), the replacement tenancy will be a secure tenancy, if the new landlord is a local authority, and a full assured tenancy, if the new landlord is an RSL (since RSLs cannot now grant secure tenancies).
Where the original tenancy was a local authority introductory tenancy, the replacement tenancy will be an introductory tenancy, if the new landlord is a local authority, unless the local authority does not operate an introductory tenancy regime. In that case, the replacement tenancy will be a secure tenancy. If the new landlord is an RSL, the replacement tenancy will be an assured shorthold tenancy. This is because neither RSLs nor local authorities which do not operate an introductory tenancy regime can grant introductory tenancies. Where the original tenancy was a demoted tenancy, the replacement tenancy will usually also be a demoted tenancy. This will be the case even where the property has transferred from a local authority to an RSL, although different statutory provisions will apply to the new demoted tenancy.
In exceptional circumstances, although the original tenancy was a demoted tenancy the new landlord will not be one which is able to apply for a demoted tenancy, for example, where a property has been transferred to a housing association which is not an RSL, or to a landlord which can grant secure tenancies but cannot apply for demotion orders. The new tenancy will be an assured shorthold in the first case, and a secure tenancy in the second case.
Features
Refusal to guarantee tenant liability
LNB News 17/04/2009 18
Published date: 17 April 2009
Jurisdiction: UK
Related legislation: Landlord and Tenant Act 1988
Related cases: Landlord Protect Ltd v St Anselm Development Company Ltd [2009] EWCA Civ 99, [2009] All ER (D) 216 (Feb)
Relevant companies: St Anselm Development Company Limited
Abstract: Robert Ashworth tells Debbie Legall that a recent case involving a refusal to guarantee tenant liability, serves to strengthen tenants' hands.
Analysis: Two parties--Landlord Protect Limited v St Anselm Development Company Limited have recently had their case decided by a Court of Appeal. The case sought to establish whether a landlord had imposed an unreasonable condition for a consent to assign on St Anselm Development Company Limited, the existing tenant.
The relevant covenant in the lease, which includes the words: 'not to assign part or parts only of the demised premises [..] without the consent in writing of the landlord first and obtained, but such consent shall not be unreasonably withheld in the case of a respectable and responsible assignee or sub-tenant being offered', appeared to allow the landlord to unreasonably refuse consent in cases where no respectable and responsible sub-tenant was offered. The proposed assignee was a company with no assets and the landlord therefore requested that someone guarantee the rent and so demanded (as a condition of assignment) that a director of the assignee provide a personal guarantee.
The Court of Appeal found that where the landlord's consent was required to an assignment of a lease, the landlord could not reasonably impose a condition that was designed to increase the rights he already enjoyed under the head lease. The judge held that a requirement that the guarantee provided by the landlord's sole director should be released on any future assignment of the head lease only if "reasonable alternative security" was provided by the future assignee was reasonable, and dismissed the claim.
Robert Ashworth, partner at Pannone LLP believes that the outcome of this case "strengthens the tenant's hands in old-style, long-term leases and includes privity of contract", which confers rights and imposes liabilities on its contracting partners and means that they (and not any third parties) can sue each other under the terms of the contract. He adds that while there is a tendency to put clauses of this nature into tenancy agreements, an eminent solicitor would say tenants are not liable, but, he concedes, often "the only way forward for tenants in such disputes, is to go to court". He adds that with this case, tenants "now have case law to back up their arguments".
Ashworth believes that the main danger with this case would have been that "it would be a step back in the direction of privity of contract where the landlord gathers a basket of indemnities if the rent is not paid". But, he believes, the Landlord and Tenant Act 1988 "has ameliorated the position" and according to the wording of the Act, it makes 'new provision for imposing statutory duties in connection with covenants in tenancies against assigning, underletting, charging or parting with the possession of premises without consent.'
Continue reading