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Issue 61 – April 2009

Cases

Statutory instruments 

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Cases

Smith and another v Muller and others

Citation: [2008] All ER (D) 188 (Dec)
Alternative citations: [2008] EWCA Civ 1425
Hearing date: 17 December 2008
Court: Court of Appeal, Civil Division
Judge: Tuckey, Wall and Rimer LLJ
Representation: George Laurence QC (instructed by Denison Till) for the defendants. Stephen Howd (instructed by Chattertons) for the claimants.

Abstract: Easement - Right of way. The Court of Appeal, Civil Division dismissed the defendants' appeal against a declaration that, inter alia, the first claimant was entitled to a right by prescription for the benefit of the whole of C farm to pass and repass with or without vehicles of any description over a track running across the defendants' farm.

Keywords: Easement – Right of way – Prescription – Lost modern grant – Claimants claiming right of way over defendants' land – Defendants contending no right of way could be created because it depended on breach of statutory fencing obligation – Judge rejecting argument and finding for claimants – Whether judge erring.

Summary: The first claimant was the registered freehold proprietor of C farm. The second and third claimants were the parents of the fourth and fifth claimants. The second claimant was formerly the agricultural tenant of C farm, and his tenancy was, at the time of the instant proceedings, vested in the fourth claimant. The claimants brought proceedings against the defendants claiming a right of way appurtenant to C farm, over a track running across an adjoining property, P farm, of which the defendants were the registered freehold proprietors.

The part of P farm relevant to the claim comprised an approximately rectangular area of land abutting the southern (east/west) boundary of C farm and lying between that boundary and B road to the south, an area referred to as 'the blue land'. The central issue before the judge was whether the claimed right of way was one whose purported creation was prevented by an Inclosure Award made in December 1804 (the Award) under the Messingham Inclosure Act 1798. The defendants' essential point was that the Award required the east/west boundary between C farm and the blue land to be permanently fenced.

They submitted that it followed that no right of way over the track could be created by grant because no lawful grant could be made if its enjoyment depended on a breach of a statutory fencing obligation such as that imposed by the Award. The defendants submitted that it followed that the claim to a prescriptive right of way under the Prescription Act 1832 or the doctrine of lost modern grant could not succeed because the establishment of such a claim was based on the fiction of there having once been a lawful grant of the right.

The judge disagreed with that submission and held that the fencing obligation imposed by the Award posed no obstacle to the claimed right. He held in the alternative that that obligation would anyway be satisfied by the inclusion of a gate where the track met the boundary. Accordingly, the judge upheld the claimants' claim and declared, inter alia, that the first claimant was entitled to a right by prescription for the benefit of the whole of C farm to pass and repass with or without vehicles of any description over the track. The defendants appealed against that decision.

The defendants submitted that no such right as the judge had found established could have been acquired by prescription or under the doctrine of lost modern grant.
The appeal would be dismissed.

On the evidence, the argument that the 1798 Act and the Award permanently prevented the grant of an easement over the track appurtenant to C farm was wrong. Accordingly, the judge had been right to uphold the claimants' claim to an easement so appurtenant.

Marie-Therese Groarke, Barrister
Published Date
18/03/2009
 
 
St Pancras & Humanist Housing Association Ltd v Leonard

Citation: [2008] All ER (D) 196 (Dec)
Alternative citations: [2008] EWCA Civ 1442
Hearing date: 17 December 2008
Court: Court of Appeal, Civil Division
Judge: Lawrence Collins, Goldring LJJ and Sir William Aldous
Representation: Nicholas Grundy (instructed by Batchelors) for the claimant. Stephen Jourdan (instructed by Dewar Hogan) for the defendant.

Abstract: Estoppel – Conduct. Court of Appeal, Civil Division: In the instant case, the judge had been entitled to find that, although the defendant had established adverse possession of a garage for 12 years, he was estopped from denying the claimant possession of it as he had given the impression that he had accepted the garage was communal property.

Keywords: Estoppel – Conduct – Defendant claiming adverse possession of garage – Defendant previously giving impression that aware that garage communal property – Judge concluding defendant estopped from denying claimant possession of garage – Whether judge in error.

Summary: The claimant housing association sought possession from the defendant of a garage to the rear of a residential property (the property). The defendant alleged that it had a least 12 years' adverse possession. The claimant submitted that even if there was adverse possession, then the defendant was estopped from contending that he was entitled to possession. The proceedings came before the county court.

The facts were that in 1975, the defendant had broken into the garage and attached a padlock on the entrance gates. It subsequently became apparent that the local authority had plans to demolish the houses and build a block of flats on the land. When that became generally known, the residents, the squatters and people living in the area organised resistance to those plans.

As a result, an association was founded. In 1983, the local authority granted to the association a long lease of the houses and some 25 ft of land behind them for a premium of £100,000. The remaining 100ft of garden, which included the garage, remained in the ownership of the local authority. The residents were removed. In 1985, a long lease of the back part of the gardens, including the garage, was granted by the local authority to the association for a premium of £85,000. On that date, the association became, on paper, entitled to possession of the garage. In 1999, the association transferred its engagements to the claimant housing association, which became concerned about the state of repair of the garage. It decided to demolish it and, in 2006, sought to implement that plan.

To prevent demolition, the defendant barricaded himself into the garage and then sought an injunction to prevent the claimant from demolishing it. The claimant issued proceedings. By February 2006, the defendant had become aware that ownership could be acquired by 12 years' adverse possession. The judge held that the defendant had established 12 years' adverse possession, but upheld the claimant's case on estoppel. She ruled that the defendant's initial acts had established him as being in the position of possessor from at least mid-1975 and therefore he had become the person with a better right to possession than anybody who had gained access to the property without his authority after that time; and that there was nothing sufficient from 1975 to 1987 to break the defendant's assertion of possession.

However, the basis for the estoppel was the defendant's behaviour as evidenced by the minutes of the association's management committee, of which the defendant was a member. The judge held that the impression the defendant had given at those meetings had created the impression that he accepted that the garage was communal property. The defendant appealed. The claimant cross-appealed.

The appeal would be dismissed.

It was pure common sense that in the ordinary course of events, it would not be unconscionable for a person to deny that which he had knowingly or unknowingly allowed another to assume, if the person did not believe he had any right to the other's action. In such a case, there was no reason why, in the ordinary course of events, a court should prevent him asserting his rights once he had knowledge of them, although that was qualified as there might be circumstances such as when a person would have known of his rights if he had not shut his eyes or where delay in asserting his rights was so extensive that an estoppel might arise (see [24] of the judgment).

In the instant case, there was cogent evidence to support the judge's conclusion on representation and detriment. No appeal against those conclusions could succeed. The judge had reached the right decision for the right reasons (see [27]-[31] of the judgment).

Yeoman's Row Management Ltd v Cobbe [2008] 4 All ER 713 distinguished; Willmott v Barber 15 Ch D 96 considered; Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd, Old and Campbell Ltd v Liverpool Victoria Friendly Society [1981] 1 All ER 897 considered; Habib Bank Ltd v Habib Bank AG Zurich [1981] 2 All ER 650 considered.

Vanessa Higgins, Barrister
Published Date
18/03/2009
 
Piper and another v Wakeford and another

Citation: [2008] All ER (D) 197 (Dec)
Alternative citations: [2008] EWCA Civ 1378
Hearing date: 17 December 2008
Court: Court of Appeal, Civil Division
Judge: Ward, Lloyd and Rimer LJJ
Representation: Philip Glen (instructed by Coffin Mew LLP) for the appellants. Daniel Bromilow (instructed by Preston Redman) for the respondents.

Abstract: Boundary - Conveyance. Court of Appeal, Civil Division: The defendants' appeal against a declaration by the judge as to the position of the claimants' boundary was dismissed. In construing the original conveyance of the land, the judge had been entitled to take into account subsequent conduct, namely the planting of a row of trees and the erection of a fence, as that evidence was probative in determining what the parties to the conveyance intended.

Keywords: Boundary – Conveyance – Conveyance of plot of land – Land being conveyed in 1908 – Claimants' property being built on land conveyed – Trees planted on southern boundary of claimants' property at some time before 1926 – Dispute arising as to position of claimants' boundary – Defendants' maintaining respondents' boundary lying to north of row of trees – Judge finding in favour of claimants – Whether judge entitled to take into account subsequent conduct in construing conveyance.

Summary: The claimants were the owners of a house (P) with a substantial area of garden. On, or a little way across, the southern boundary of the property was the defendants' property, one of two semi-detached houses. On the southern boundary of P was a row of pine trees. The claimants contended that the trees were comprised within their property and that therefore the defendants' northern boundary lay to the south of the trees. By a conveyance dated 2 July 1908 (the 1908 conveyance), land had been conveyed from T to M. M had built one house on the land at some time before 1926 and called it P.

The row of pine trees along the southern boundary of P was also planted before 1926 but it was not known by whom. There were similar pine trees along the other boundaries of P. At some point between 1908 and 1926, T had erected a fence which defined part of the boundary between T's retained land and that sold to M. On the basis of the position of that fence, the southern boundary of P would lie south of the line of trees. The claimants sought a declaration as to their southern boundary. The judge found that the trees were comprised within their property and, accordingly, that the defendants' northern boundary lay to the south of the trees and the claimants' boundary lay to the north of the trees. The defendants appealed against the part of the decision which determined the claimants' boundary, though not the decision as to where their boundary lay.

The issue was whether the claimants' boundary lay to the north of the row of trees, as contended by the defendants, or to the south of the row of trees.

The appeal would be dismissed.

Authority supported the admissibility of subsequent conduct in relation to the construction of a conveyance of land, subject to that evidence being of probative value in determining what the parties to the conveyance intended (see [30]-[32] of the judgment).

In the instant case, the right inference as to the planting of the pine trees by the original owner of P was that they were planted as an act of ownership to run along his boundary, just as he had planted other trees along the boundaries of his land. At the time the trees were planted, the owner of the land on the far side of the southern boundary from P, was T, the other party to the 1908 conveyance.

The judge had been entitled to treat that fact as evidence that the boundary was intended by the parties to the conveyance to lie to the south of the position in which the pine trees were planted. There was no evidence that the act of planting the trees had been challenged by T. Similarly, the erection of the fence by T was an admissible indication of his intention as it had been in 1908 and defined part of the boundary of P (see [37]-[40] of the judgment).

Ali v Lane [2006] EWCA Civ 1532 applied.
Alison Blood, Barrister
Published Date
18/03/2009
 
*Ofulue v Bossert

Citation: [2009] All ER (D) 119 (Mar)
Alternative citations: [2009] UKHL 16
Hearing date: 11 March 2009
Court: House of Lords
Judge: Lord Hope of Craighead, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Lord Neuberger of Abbotsbury.
Representation: Richard Wilson QC and Christopher Jacobs (instructed by Hodge Jones & Allen) for the claimants. Peter Crampin QC and Simon Williams (instructed by RFB solicitors) for the defendant.
Abstract: Limitation of action - Land. House of Lords: As a result of the application ofsection15 of the Limitation Act 1980, the claimant's title to the property in issue was barred by the time of the issue of the 2003 proceedings. The proprietorship register of the property would be amended to show the defendant as the registered proprietor.

Keywords: Limitation of action – Land – Adverse possession – Right to property – Claimant bringing possession proceedings against defendant – Whether defendant's father's previous allegation that they had entitlement to possession of property on basis of lease defeating requisite intention for adverse possession - Whether claimants entitled to rely on without prejudice offer of defendant to buy property as demonstrating acknowledgement of claimant's title.

Summary: Section 15 of the Limitation Act 1980, so far as material, provides: '(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.'

Section 29 of the Limitation Act 1980, so far as material, provides: '(1) Subsections (2) and (3) below apply where any right of action (including a foreclosure action) to recover land or an advowson or any right of a mortgagee of personal property to bring a foreclosure action in respect of the property has accrued. (2) If the person in possession of the land, benefice or personal property in question acknowledges the title of the person to whom the right of action has accrued-(a) the right shall be treated as having accrued on and not before the date of the acknowledgment; and (b) in the case of a right of action to recover land which has accrued to a person entitled to an estate or interest taking effect on the determination of an entailed interest against whom time is running under section 27 of this Act, section 27 shall thereupon cease to apply to the land [...]  (7) Subject to subsection (6) above, a current period of limitation may be repeatedly extended under this section by further acknowledgments or payments, but a right of action, once barred by this Act, shall not be revived by any subsequent acknowledgment or payment.'

Section 30 of the Limitation Act 1980, so far as material, provides: '(1) To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it. (2) For the purposes of section 29, any acknowledgment or payment--(a) may be made by the agent of the person by whom it is required to be made under that section; and (b) shall be made to the person, or to an agent of the person, whose title or claim is being acknowledged or, as the case may be, in respect of whose claim the payment is being made'.

From 1976, the claimant and her husband had been the registered proprietors of the property. They had not, however, at least since 1981, been in actual possession of the property. In 1981 or 1982, the defendant and her father had been allowed into occupation of the property by a former tenant of the claimant. From that date forward, the defendant, together with her father, until his death in 1996, occupied the property. The claimant launched possession proceedings in 1989, contending that the defendant and her father had wrongfully taken possession of the property and were wrongfully retaining possession.

On 18 July 1990, in their defence, it was submitted that the defendant's father had become, in equity, the tenant of the property, or, alternatively had had an entitlement to remain in possession pursuant to an oral agreement with the claimant's husband for the grant of a fourteen year lease. No adverse possession claim was made. On 12 August 1991, solicitors for the defendant and her father wrote to the solicitors for the claimant and her husband communicating an offer by their clients to purchase the freehold of the property for £20,000. The letter was headed 'Without Prejudice'. On 14 January 1992, a further letter was sent by solicitors acting for the defendant and her father, also headed 'Without Prejudice', increasing the offer to £35,000. Neither offer was accepted. On 30 September 2003, the claimant and her husband issued fresh proceedings seeking possession of the property.

In order to defeat the claim, the defendant relied on section 15 of the Limitation Act 1980, and argued that she had been in adverse possession of the property for a period in excess of twelve years. The claimant and her husband relied on the defence to the earlier 1989 proceedings and the letter of the 14 January 1992 as 29 acknowledgements, satisfying the requirements of section 30 of the 1980 Act. In October 2005, a judge accepted the defendant's contention that she had been in adverse possession of the property for the requisite period, and rejected the claimants' contention that the running of time had been interrupted by any acknowledgment.

The claimant and her husband unsuccessfully appealed to the Court of Appeal. In dismissing the appeal that court held, inter alia (i) that the admission of title in the defence in the 1990 proceedings had not constituted an acknowledgement for the purposes of section 29 of the 1980 Act; (ii) that if that admission had been an acknowledgment, it had not continued beyond the date of the defence, so it was more than twelve years before the 2003 claim was brought; and (iii) the 14 January 1992 letter could not be relied on as an acknowledgment as it had been written without prejudice with a view to settling the earlier proceedings (see [2008] All ER (D) 236 (Jan)). The claimant appealed.

The principal issue on the appeal concerned the extent to which it was permissible for a party to rely on a statement made by another party in 'without prejudice' correspondence written with a view to settling earlier proceedings between the same parties. The claimant argued that the 14 January 1992 letter could be invoked as an acknowledgment under section 29 on the basis, inter alia, that; (i) the admission of title did not go to any issue in the earlier proceedings; (ii) the admission of title was sought to be invoked as a fact, rather than for the truth of its contents; and (iii) an acknowledgment that satisfied the requirements of section 29 was an exception to the normal without prejudice rule.
A secondary issue for determination was whether an admission of the claimant's title in a defence in the 1990 proceedings operated as a continuing acknowledgment for the purpose of the 1980 Act.

The claimant contended that the admission in the earlier defence had constituted an effective acknowledgment that prevented time running for the period up to the time the proceedings in which it had been served were dismissed as, by maintaining her case in the defence from the date it was served until the proceedings were dismissed, the defendant had been affirming her acknowledgment of the claimant's title to the property for the purpose of section 29(2).

The appeal would be dismissed (Lord Scott of Foscote dissenting).

(1) The conclusion that section 29 of the 1980 Act required an acknowledgment of a right to immediate possession, as opposed to an acknowledgment of title, was wrong; it was not only inconsistent with the wording of section 29(2), that referred in clear terms to acknowledging 'the title' of the person whose claim was said to be time-barred, but, in any event, the concept of 'possession' was more subtle than the reasoning of the Court of Appeal assumed. The effect of the defence in the earlier proceedings was to acknowledge the claimant's right to possession, albeit subject to the defendant and her father's rights as tenants (in law or equity).

Such an analysis accorded with common sense. To find to the contrary would mean a plain acknowledgment by the defendant of the claimant's interest in the property was not a sufficient acknowledgment for the purposes of section 29. It followed that the admission of title in the defence and the offer in the 14 January 1992 letter were both capable of amounting to acknowledgments for the purpose of section 29 (see [74], [75] and [77] of the judgment).

Edginton v Clark [1963] 3 All ER 468 considered.

(2) The effect of section 15 of the 1980 Act was that a formal record, such as a conveyance or entry on the register, that appeared to establish the paper title owner's title against the world, could not be relied on after twelve years of adverse possession had passed (see [81] of the judgment).
There was no reason why a statement in a pleading or statement of case, or in any other court document, could not amount to an acknowledgment for the purposes of section 29. Accordingly, the admission in the defence operated as such as an acknowledgment as at 18 July 1990, the date on which it was served. However, the argument that the admission continued to operate as such an acknowledgment beyond 18 July 1990 was inconsistent both with the language of the relevant provisions, and with the policy, of the 1980 Act. It would be similarly inconsistent if an informal written acknowledgment could be relied on under section 29, where the adverse possession had extinguished a claim under a conveyance or entry on the register.

The more natural meaning of the word 'acknowledgment' suggested that it arose as at the date of the document. The requirement in section 30(1) that an acknowledgment had to be in writing and signed was no doubt intended to minimise the room for argument as to whether and when it was made.

While it would be wrong to attempt to set out an exhaustive test as to what could or could not constitute a sufficient affirmation of a previous acknowledgement in a defence to amount to a fresh acknowledgment, it would, at least normally, require a fresh written and signed document (including an amended defence) or, quite possibly, an act such as reservice of the original defence. Merely taking steps in the action, even though it could be said that such steps affirmed the defendant's reliance on the contents of her defence, would not do for the purposes of section 29, particularly as section 30 required any acknowledgment to be in writing and signed (see [79], [80], [81] and [84] of the judgment).

(3) The normal rule, founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish, was that statements made in negotiations entered into between parties to litigation with a view to settling that litigation were inadmissible and therefore could not be given in evidence. That rule rested on the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence (see [85] of the judgment).

Where two sets of proceedings involved the same parties and very closely connected issues, it was strongly arguable that the principles that governed the admissibility in subsequent proceedings of a statement made in without prejudice negotiations to settle earlier proceedings, should be the same as those that would govern its admissibility in the earlier proceedings (see [87] of the judgment).

There was no basis for arguing the 14 January 1992 letter could be invoked as an acknowledgment under section 29. An unfortunate precedent would be set if, on the facts of the instant case, it was to be held that an admission of the claimant's title in a without prejudice letter was sufficiently remote from the issues in a possession action relating to the same land as to be outside the normal rule. The distinction that the offer in the 14 January 1992 letter was admissible because it was being relied on to establish that an admission had been made as a matter of fact, as opposed to the truth of the admission, was a distinction that was too subtle to apply in practice; its application would often risk not only the creation of huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties to speak freely about all issues in the litigation.

In any event, the observation appeared to be limited to the public policy reason for the rule, and said nothing about the contractual reason that plainly applied in the instant case. In any event, even if the distinction was valid in principle, it would not have assisted the claimant in the context of identifying exceptions to the without prejudice rule. Finally, no significant public policy element in the acknowledgment provisions of the 1980 Act existed, save in so far as it could be said that any statutory provision carried with it an element of public policy. The policy underlying the without prejudice rule outweighed the countervailing policy reason for lengthening the period of limitation through a written acknowledgment (see [89], [91], [95], and [101] of the judgment).

The claimant's title to the property was barred by the time of the issue of the 2003 proceedings, and the proprietorship register of the property should be amended to show the defendant as the registered proprietor (see [104] of the judgment).

Rush & Tompkins Ltd v Greater London Council [1988] 3 All ER 737 applied; Unilever plc v Procter & Gamble Co [2001] 1 All ER 783 applied; Bradford & Bingley plc v Rashid [2006] UKHL 37 considered; Daintrey, Re, ex p Holt [1893] 2 QB 116 distinguished.
Court of Appeal [2008] All ER (D) 236 (Jan) reversed in part.

Gareth Williams, Barrister
Published Date
11/03/2009
 
Heronslea (Mill Hill) Ltd v Kwik-Fit Properties Ltd

Citation: [2009] All ER (D) 75 (Mar)
Alternative citations: [2009] EWHC 295 (QB)
Hearing date: 20 February 2009
Court: Queen's Bench Division
Judge: Sharp J
Representation: Edward Denehan (instructed by CKFT Solicitors) for the landlord. Timothy Dutton (instructed by Halliwells LLP) for the tenant.

Abstract: Landlord and tenant – Lease. Queen's Bench Division: The judge had been entitled to dismiss the landlord's claim for a declaration that it was permitted to enter upon the premises occupied by the tenant for the purpose of drilling boreholes and taking samples.

Keywords: Landlord and tenant – Lease – Construction – Landlord allowed access to make surveys or drawings of premises – Landlord seeking access to premises for the purpose of drilling boreholes and taking samples – Judge finding that employer not having right of access to carry out its objectives – Whether judge erring.

Summary: The lease in issue demised commercial premises for a term of 30 years, beginning on 28 December 2000. The premises had formerly been used as a petrol station. The respondent tenant carried on business at the premises as a fast fit motorist centre. The material part of the lease provided, so far as relevant, : '[u]pon reasonable prior written notice (except in an emergency when no notice need be given) the tenant shall permit the landlord and those authorised by it at all times to enter (and remain unobstructed on) the premises for the purpose of: [...]  making surveys or drawings of the premises [...]  '. On 28 May 2008, solicitors acting on behalf of the appellant landlord sent an email to solicitors acting on behalf of the tenant stating that the landlord wished to carry out an environmental investigation survey, on 2 June 2008, for geo-environmental assessments.


The landlord wished to drill 13 boreholes to a depth below ground of 5 metres and one 20 metre borehole. The tenant refused to consent. On 7 July, the landlord issued CPR part 8 proceedings seeking the determination of: 'whether it is entitled to enter upon [the premises] [...] for the purpose of carrying out an environmental survey, which survey involves the drilling of 14 boreholes pursuant to the [...]  lease'. On 9 September, the judge dismissed the landlord's claim and made a declaration that it was not permitted to enter upon the premises for the purpose sought. The landlord appealed.
It contended that the judge had taken into account irrelevant matters in construing the meaning of the word 'survey' in the lease and, in particular, that he took into account various dictionary definitions of the word 'survey' to ascertain the normal meaning of that word, which was a wrong approach as a matter of law.

The appeal would be dismissed.
 
It was established that the Court was entitled to have regard dictionary definitions as an aid to construction to ascertain the natural and ordinary meaning of the words in their relevant context. It was also clear that words were to be interpreted in the way in which a reasonable commercial person would construe them; and the standard of the reasonable commercial person was hostile to technical interpretations, undue emphasis on niceties of language or literalism (see [19] of the judgment).

On the construction of the lease, a reasonable person, having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time the lease was executed, would not have thought that the lease entitled the landlord to enter the premises for the purpose of drilling boreholes and taking samples. Accordingly, the judge had not erred in coming to his conclusion (see [48] and [51] of the judgment).

Investors Compensation Scheme Ltd v West Bromwich Building Society [1999] All ER (D) 23 applied; Paterson v Crystal Palace FC (2000) Ltd [2005] EWCA Civ 180 applied.

Gareth Williams, Barrister
Published Date
06/03/2009
 
*Brighton & Hove City Council v Audus

Citation: [2009] All ER (D) 25 (Mar)
Alternative citations: [2009] EWHC 340 (Ch)
Hearing date: 26 February 2009
Court: Chancery Division
Judge: Morgan J
Representation: Anthony Tanney (instructed by Legal Services Brighton & Hove City Council) for the claimant. Clive Pithers (instructed by Hall Ennion & Young) for the defendant.
Abstract: Land – Interest in land. Chancery Court: The court ruled against the claimant local authority in a claim that raised the issue of when an arrangement between parties in relation to the purchase of land amounted to a mortgage or security interest. 
Keywords: Land – Interest in land – Creation – Claimant local authority owning property rented to third party tenants – Defendant entering into agreement with tenants enabling them to purchase property under relevant 'right to buy' provisions – First and second charges against property registered in defendant's name – Third charge registered in claimant's name – Claimant asserting third charge constituting mortgage or security transaction – Whether claimant's assertion correct – Health and Social Services and Social Security Adjudications Act 1983, section 22.

Summary: In December 1988, the claimant local authority granted a lease to the defendant's uncle and aunt (Mr and Mrs B). The lease was granted pursuant the right to buy provisions in part V of the Housing Act 1985. On 19 December 1988, the claimant granted the long lease of the flat to Mr and Mrs B in return for a premium. The defendant had provided the whole purchase money for the transaction on the basis that there would be a legal charge in his favour both in respect of the money he had provided and any increase in the value of the property. As a result of that, two documents were entered into by Mr and Mrs B on that date, the first being a legal charge, and the second a supplemental deed. In both charges (the deeds) Mr and Mrs B were described as the beneficial owners of the flat. Mr B died in November 1991, and the official copy of the register of title showed Mrs B as the sole registered proprietor.

The third registered charge was dated 29 January 2008 and was pursuant to section 22 of the Health and Social Services and Social Security Adjudications Act 1983 (the Act). The proprietor of that third charge was the claimant. Mrs B continued to reside in the property until April 2007 when she moved to a residential care home. Pursuant to section 22 of the Act, where a person availed him or herself of accommodation under part III of the Act provided by a local authority and failed to pay any sum assessed as due to be paid by him or her for the accommodation and had a beneficial interest in the land, the local authority might create a charge in its favour on that person's interest in the land. By section 22(8), any such charge, in the case of registered land, was a registrable charge taking effect as a charge by way of legal mortgage.


In January 2008, the claimant executed a declaration under the Act, reciting that its entitlement to a charge had arisen by clause 1 of the declaration, and Mrs B's interest in the property was charged in favour of the claimant in respect of the outstanding amounts due to the claimant. The claimant commenced proceedings, seeking a declaration that the charge registered at the Land Registry as the second charge on Mr B's title was void, insofar as it purported to charge the lease of the flat and, secondly, an order for rectification which removed the second charge from the charges register.

The main issue for determination was the nature of the arrangement made between Mr and Mrs B on the one hand, and the defendant on the other in 1988.

The claim would be dismissed.

Where there was a composite transaction, which included as one of its elements a genuine mortgage, it was open to the court to assess the overall character of the composite transaction and identified the character as being other than that of a mortgage. The court could, and should, proceed in that way even when it had been admitted that one element in the transaction was a genuine mortgage.

In the light of established authority, the substance of the composite transaction in the instant case went beyond a security transaction, and was not in substance a loan nor a security for a loan. It had been a transaction whereby the defendant would buy the flat and have ownership of the flat but his rights were to be postponed to the rights of Mr and Mrs B to live in the flat for their lives. Although the transaction included the grant of a charge or charges the substance of the transaction was wider than that and differed from a security transaction. The transaction had been something more complex than a mortgage.

Accordingly, the equitable rules relied upon by the claimant did not apply, and there was no basis upon which it could have disregarded the defendant's rights under the supplemental deed. It followed that the defendant's rights under the supplemental deed had priority over the claimant's rights under the statutory charge. Under section 22 of the Act, the claimant's charge was on Mrs B's interest in the land. At the relevant time Mrs B's interest in the land was subject to two charges in favour of the defendant. The instant case was not a case where the statute gave the claimant a right to charge 'the land' or 'the property' so that the charge was an effective charge in all interests in the land and had priority to other pre-existing charges. Furthermore, even if Mrs B had had some claim in equity to set aside one or both of the charges the claimant had accepted that such a claim was vested in Mrs B alone and the statutory charge did not entitle the claimant to bring its own claim of that kind (see [55], [65] - [70] of judgment).

The claimant was not entitled to the relief sought.

Warnborough Ltd v Garmite Ltd [2003] All ER (D) 52 (Nov) applied; Kreglinger v S Samuel and Rosenfeld, Re Merten's Patents [1914-15] All ER Rep 918 considered; Welsh Development Agency v Export Finance Co Ltd [1992] BCLC 148 considered.

Benjamin Weaver, Barrister
Published Date
03/03/2009
 
Artworld Financial Corporation v Safaran and others
Citation: [2009] All ER (D) 02 (Mar)
Hearing date: 27 February 2009
Court: Court of Appeal, Civil Division
Judge: Sedley, Dyson and Jacob LJJ (judgment delivered extempore)
Representation: Michael Driscoll QC (instructed by Dylan Nair Solicitors) for the claimant. Nicholas Dowding QC and Philip Kremen (instructed by Laurence Graham) for the defendant.

Abstract: Landlord and tenant – Lease. Court of Appeal, Civil Division: The court held that a lease had been surrendered by operation of law where, inter alia, after the defendant tenants had left the property a member of the claimant landlord's family had moved possessions into and stayed in the property.

Keywords: Landlord and tenant – Lease – Surrender of tenancy – Surrender by operation of law – Defendant tenants renting property from claimant landlord – Tenants leaving property with 15 months remaining on lease – Landlord seeking to recover rent due on remainder of tenancy – Judge holding landlord accepting surrender of lease – Whether lease surrendered by operation of law.

Summary: In September 2004, the defendant tenants took out a three-year lease on a property owned by the claimant landlord. The annual rent of £390,000 was payable in three-monthly instalments in advance. In 2006, having encountered a number of maintenance problems with the property which the landlord had failed to fix as required under the lease, the tenants decided to leave the property. There were 15 months remaining on the lease.
The landlord issued proceedings against the tenants, claiming the rent for the remaining period of the tenancy, plus interest.

At the hearing, the judge made the following findings of fact, inter alia, concerning the tenants' departure and the period thereafter: (i) the landlord had accepted back the keys to the property; (ii) the landlord had redecorated the property in his family's taste; and (iv) the landlord had rehung curtains and reinstated certain items of furniture which had been removed at the tenants' request when they had moved in. The judge further found that a member of the landlord's family had moved possessions into and stayed in the property and that he had done so for his own benefit and not, as the landlord contended, as a caretaker of the property. Holding that the landlord's actions had gone beyond anything which was consistent with the continued existence of the lease, the judge found that the lease had been surrendered by operation of law. The landlord appealed.

The issue for consideration was whether the judge had been correct to find that the lease had been surrendered by operation of law.

The appeal would be dismissed.

In the instant case, the judge had been entitled, from the material before her, to reach the finding that the lease had been surrendered. By entering and living in the house, the landlord had, in effect, taken over and treated it as his own. That was inconsistent with the continuance of the lease.
Although the other findings of fact which the judge had made might not, on their own, have constituted unequivocal acts of surrender, they cast a clear evidential light on the nature of the key act of taking possession, namely, the landlord's occupation of the property.

Oastler v Henderson [1874-80] All ER Rep Ext 1738 considered; McDougalls Catering Foods Ltd v BSE Trading Ltd [1997] EGCS 70 considered; Belcourt Estates Ltd v Adesina [2005] All ER (D) 293 (Feb) considered.

Alison Pryor, Barrister
Published Date
02/03/2009
 
Waterman and another v Boyle and another

Citation: [2009] All ER (D) 285 (Feb)
Alternative citations: [2009] EWCA Civ 115
Hearing date: 27 February 2009
Court: Court of Appeal, Civil Division
Judge: Waller, Arden and Moore-Bick LJJ
Representation: Philip Jones (instructed by Debenhams Ottaway) for the claimants. Duncan Kynoch (instructed by Austins LLP) for the defendants.

Abstract: Easement – Right to park cars. Court of Appeal, Civil Division: In allowing the appeal of the defendants in relation to a neighbourly dispute, the court distinguished recent authority of the House of Lords as to parking rights, and considered the circumstances in which an act on adjacent land would be actionable in nuisance.

Keywords: Easement – Right to park cars – Boundary dispute – Dispute between neighbouring properties.

Summary: Three adjacent properties, namely, 1, 2, and 3, had previously been known as 'Hog Lane Farm' and had all been owned by the defendants. The defendants developed the property and divided it into the three dwellings. They retained number 1, but sold on numbers 2 and 3. The claimants owned number 2. When selling the properties, the defendants had wished to limit the access and parking rights of numbers 2 and 3.

Thus, when they sold number 2, the transfer gave number 2 a shared right of access and egress with or without vehicles at the north end of the property via part only of the entrance drive to numbers 1 and 2. In addition, the transfer gave number 2 the right to park private cars on two designated parking spaces to the left of the front door; and gave number 2 a shared right of access to and egress from, with or without vehicles, that part of the rear of number 2 upon which a double garage stood (but not the adjacent concrete hard standing which was rendered landlocked by the construction of the garage by the original purchaser of number 2).

The defendants provided the plans used in the transfers of numbers 2 and 3. Initially there was little difficulty in practice over parking between the parties. The defendants gave permission for temporary parking on their land; however, in 2003, disputes arose over parking. At around that time, the defendants altered the layout of the traffic island in the northern drive and, in 2004, they built or permitted the building of a wall near the southern boundary of the lane, which made it impossible for the claimants to continue to turn their cars from the lane into the garage.


The defendants also prohibited parking by visitors to number 2 in the northern entrance drive, unless they were simply loading or unloading or parked in one of the two parking spaces to which number 2 was entitled. The claimants brought proceedings in order to determine disputes between them and the defendants as to the location of the southern boundary of number 2, the rights of access to the claimants' garage from the lane and parking rights over the defendants' drive. The defendants sought declarations confirming their contentions about the claimants' parking rights. The judge determined the principal areas of dispute in favour of the claimants. The defendants appealed.
Consideration was given to recent authority of the House of Lords as to parking rights.

The appeal would be allowed.

(1) For an act to be actionable in nuisance, the act had to constitute a substantial interference with the right of access and had to interfere with the reasonable use of the right. The circumstances would have to be quite exceptional (see [20]-[21] of the judgment).

In the instant case, the defendants were obviously entitled to sell the land south of the lane and, in the absence of some special circumstances, it was reasonable for them to have a wall built on that land to mark the boundary with that lane. Building a boundary wall was an ordinary and reasonable use of land. While it was wholly regrettable that the defendants should have built the cottages wall when they were aware that it would make it difficult or impossible for the neighbours to enter their garage, without having the courtesy to consult or warn them in advance, and while it was not unreasonable in the abstract for the claimants to want to use larger cars that their predecessor, those facts were nowhere near sufficient to render actionable what the defendants had done on land beyond the lane (see [21] of the judgment).

(2) In relation to parking rights, the test to be applied was whether, having regard to the circumstances at the time of the transfer, it would be a reasonable use, in the sense of a reasonably necessary use, of the green land to use it for stationing vehicles for the duration of the user's visit to the property. The right to pass and re-pass to get access to business premises included the right to stop to unload and load. It was not enough that the use was merely desirable. Where there was an express right attaching to the same property of a similar character to the right which was sought to be implied, it was most unlikely that the further right would arise by implication. The circumstances would have to be quite exceptional. A right to park might be capable of being implied into a right of vehicular access if the right to park was reasonably necessary for the exercise or enjoyment of that right (see [29] and [34] of the judgment).

In the instant case, if the parties had intended any further right of parking there would have been an indication to that effect in the transfer. Nothing in the surrounding circumstances at the time of the transfer supported the implication of any further right. While there would sometimes be visitors with more cars than available parking spaces, there was nothing to stop the claimants from asking the defendants for permission for their guests to park. Moreover, it would have been obvious to them when they had bought the property that there were no rights for visitors to park on the defendants' land. It was impossible to imply a right to park commercial, rather than private, vehicles on the green land in any event. The instant case did not meet the test for the implication of the right to park (see [31]-[34] of the judgment).

Moncrieff v Jamieson [2008] 4 All ER 752 distinguished.

Per curiam: (1) It is not the function of the Court of Appeal to determine which of the parties has been the more un-neighbourly. Its function is sensibly to determine the parties' rights and to enforce them (see [8] of the judgment).

 Per curiam: (2) There is a common misunderstanding that an Englishman's home is his castle in the sense that he can build walls, put up gates and do other acts on his land whenever he chooses, and without regard for his neighbours. While it is often true that a person can do what he wants on his own land, it is not always so. The law expects neighbours to show some give and take towards each other. Parties to boundary disputes and their advisors should, at all times, have this point firmly at the forefront of their minds, and seek to resolve their disputes accordingly, and without resort to complex and expensive litigation (see [40] of the judgment).

Vanessa Higgins, Barrister
Published Date
27/02/2009
 

Guignabaudet v Scott-Moncrieff

Citation: [2009] All ER (D) 239 (Feb)
Hearing date: 24 February 2009
Court: Court of Appeal, Civil Division
Judge: Lloyd, Wilson LJJ and Sir John Chadwick (judgment delivered extempore)
Representation: Robert Pearce QC (instructed by Graham Harvey) for the claimant. Peter Crampin QC (instructed by Oliver Fisher) for the defendant.
Abstract: Landlord and tenant - Covenant. Court of Appeal, Civil Division: The claimant freeholder's appeal against the rejection of her claim that the lessee was in breach of a restrictive covenant in the lease between them, in constructing a swimming pond, was allowed where the creation of the pond had constituted an alteration in the arrangements of the demised premises, which was prohibited by the covenant.

Keywords: Landlord and tenant – Covenant – Alterations – Restrictive covenant within lease prohibiting any alteration in construction or arrangements of demised premises – Defendant lessee constructing swimming pond in garden of flat – Whether works in breach of covenant.

Summary: The instant proceedings concerned two adjoining semi-detached houses, Nos 25 and 27, each of which was divided into flats. The claimant was the freeholder owner of No. 25. In 1998, the defendant purchased the basement flat at No. 25. The following year, she purchased the basement flat at No. 27. She converted the two basement flats at Nos 25 and 27 into a single unit which, at the time of the instant proceedings, she occupied. The lease between the claimant and the defendant, in respect of the basement flat at No. 25, contained clause 2.4 by which the lessee covenanted 'Not without previous consent in writing of the Lessor (such consent not to be unreasonably withheld) to make or permit or suffer to be made any alteration in the construction or arrangements of the demised premises'. In 2001, the claimant granted the defendant a licence to create an opening in the fence between the rear gardens of Nos 25 and 27 and to pass and re-pass through the opening.
 
In October 2006, the defendant obtained planning permission to build a swimming pond, part of which would be in the rear garden of No. 25 and part of which would be in the rear garden of No. 27, and in December she started constructing it. In January 2007, the claimant commenced proceedings against the defendant. She contended that the construction of the swimming pond without her consent was in breach of clause 2.4. The defendant issued a counterclaim which contended that the claimant's consent was not required under the terms of the lease and that, if it was, it had been unreasonably withheld. At the hearing, the judge determined as a preliminary issue, that the works did not fall within clause 2.4 of the lease because (i) it was impossible to say that the works were an alteration in the construction of the demised premises as the garden was not a construction; and (ii) an alteration in the arrangements of the demised premises required either that the physical arrangement of the garden would be altered or that the use of the garden would be altered, and neither had occurred. The claimant appealed.

She submitted that the works constituted an alteration in the construction and in the arrangements of the demised premises within clause 2.4 of the lease.

The appeal would be allowed.

It was impossible to conclude that the digging of a large hole, the removal of substantial quantities of earth and the re-distribution of that earth did not come within the meaning of the phrase 'alteration in the [...]  arrangements of the demised premises'. Further, there had been an alteration to the physical features of the common boundary in that the boundary that had been formed by earth was now formed by water. Accordingly, the creation of that part of the swimming pond which lay within the curtilage of No. 25 constituted an alteration in the arrangements of the demised premises with the effect that the covenant in the lease had been breached.

A declaration would be granted that the defendant's works fell within clause 2.4 of the lease. The case would be remitted to the county court for the determination of the matters outstanding on the counterclaim.

Alison Blood, Barrister
Published Date
25/02/2009



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