Latest Chambers News up to 30th September 2015
Christchurch Gardens (Epsom) Ltd v Patrick Brian Matier
Joe Ollech appeared for the successful applicant in respect of disputed service charge payments. The Tribunal had to consider a wide range of issues including: (a) reasonableness of charges under s.19(2) of the LTA 1985; (b) the reasonable standard of external works under s.19(1)(b) of the LTA 1985; (c) whether a management agreement for a term of 12 months that “shall be automatically renewed” unless terminated was a QLTA; (d) two applications for dispensation under s.20(ZA) of the LTA 1985 in respect of major works and a potential QLTA, (e) the jurisdiction of the tribunal to consider issues arising under the Companies Act 2006 and/or whether historic resolutions of the freeholder management company to limit service charge increases to RPI were binding. Following a two day and additional written submissions in closing the First Tier Tribunal Property Chambers (Residential Property) found in the applicant’s favour on all issues.
Breach of contract; Material Breach; Termination of Contracts; Damages
Jonathan Gaunt QC and Oliver Radley-Gardner appeared for the Claimant in West is West Distribution Limited v Icon Film Distribution Limited [2015] EWHC 838 (Comm). The Claimant was the copyright owner of a film, and the Defendant had agreed to distribute it. The Claimant was concerned about the distribution costs incurred, and about the Defendant's non-compliance with its accounting obligations. It sought to terminate the contract for material breach and sought damages for breaches during the lifetime of the contract and of obligations arising upon termination. The Mercantile Court (HHJ Mackie QC) found that the contract had been validly terminated, and considered the financial consequences which flowed from that. The case considers the common issue of the materiality of accounting failures, as well as general damages issues.
Telecommunications and the 1954 Act
Wayne Clark and Stephanie Tozer appeared in Crest Nicholson Operations Limited v Arqiva Services Limited and others, in the Cambridge County Court on 28 April 2015. The case determined, albeit only as part of a strike out application, a long-standing controversy - namely whether a notice under paragraph 21 of the Electronic Communications Code can be served during the contractual term of a tenancy. It was held that, on the true construction of the legislation, it could not be so served (though it was common ground that a para 20 notice could be). The argument that the landowner was able to serve a s.25 notice under Part II of the Landlord and Tenant Act 1954 proposing redevelopment and was accordingly entitled “for the time being” within the terms of para 21 to require removal (as part of the redevelopment), and thus serve a para 21 notice, was rejected. The matter is likely to be the subject of an appeal.
Abuse of process and unilateral notices
Zeckler and Barrymore v (1) Kylun Limited (2) Mr Patrick Hurst, Mr Keith Jeremy Randall Nethercot and Ms Janet Rosemary Lott, as Trustees for Walford Maritime Limited Pension and Life Assurance Plan and others [2015] EWHC 1386 (QB). Janet Bignell QC appeared for the successful Second Defendants (“D2”) striking out the Claimants' Claims against the Trustees for damages against the background of the marketing for sale of their Vauxhall Cross development site. Holgate J held the Claim against the Trustees was unfounded in law and an abuse of process. Janet also secured a separate order to cancel and vacate a Unilateral Notice registered against the Trustees’ Title, and orders for the payment of indemnity costs. The case considers the Court’s jurisdiction to cancel Unilateral Notices under the Land Registration Act 2002, as well as what is, and what is not, a “pending land action”.
Effect of CVAs on Rent; Damages for Breach of Tenant’s Refurbishment Covenant
Anthony Tanney appeared for the applicant tenant in the Technology and Construction Court in Oakrock Ltd v Travelodge Hotels Limited [2015] EWHC 30 (TCC). The landlord, O, had granted the tenant, T, a lease of a hotel for 35 years. T had agreed to refurbish the hotel, O paying the cost. O’s return on its investment was an uplift in the rent otherwise payable for the rest of the term. T took the lease, encountered financial problems and entered into a CVA. T owned many leasehold hotels, which were put in different categories under the CVA. The lease of O’s hotel was categorised as requiring a 25% rent reduction, to continue to be viable. O then sued T for damages, alleging that T should have delivered a better hotel, more cheaply, which would have placed the lease in a CVA category where no rent reduction was required. Alternatively, O alleged that its contribution to the works cost was increased by T’s alleged breaches of the agreement. But for those breaches, O would kept for itself money which was instead rentalised (and therefore subject to the CVA). T’s application to strike out O’s claim succeeded on O’s first alternative claim, but on the second claim, Edwards-Stuart J ruled that the matter would have to proceed to trial (following Tanner v Everitt [2004] EWHC 1130 (Ch)).
Cowan v Coronet Ltd – the next instalment: Denton puts paid to the tenant’s appeal
Joe Ollech appeared for the successful landlord/respondent in the County Court (Reading) on an application by the tenant to for relief from sanctions/re-consideration of the court’s order striking out its application for permission to appeal.
Following the landlord's success defending the tenant’s application for relief from forfeiture/ retrospective variation of a consent order in November 2014, the tenant issued an application for permission to appeal. Its application did not include a transcript of the judgment being appealed. The court gave directions requiring it to lodge a transcript or agreed note by a specified date, which thereafter by agreement and then further order was extended to 20 March 2015. Although the tenant’s solicitor was aware by at least as early as 11 February 2015 that were issues with obtaining a transcript, steps were only taken to agree a note with the landlord’s representatives shortly before the deadline. In the end, an agreed note was filed by the tenant 11 days after the deadline, and the court made an order of its own motion striking out the application for permission to appeal.
On further application for relief from sanctions the court directed that the application be treated as a a re-consideration of its order to strike out. It was submitted on behalf of the landlord that the Denton principles were relevant even if the court treated this as a hearing to re-consider the appropriate sanction, as opposed to relief from sanctions per se – as per the Court of Appeal in Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607. Applying the three stage test the court held that (a) the late filing by 11 days was a serious and significant breach; (b) that it was due to the lack of diligence by the applicant’s solicitor; and (c) that in the circumstances of the case there was real prejudice to the respondent, several months having elapsed since her success at first instance last year. The order striking out the application for permission to appeal was confirmed.
Royal Mail Estates v Maples Teesdale [2015] EWHC 1890 (Ch)
This claim concerns a contract for the sale by Royal Mail of the former sorting office on Kensington High Street for £20 million. The contract described the purchaser as being Kensington Gateway Holdings Ltd, a British Virgin Islands company. The contract was signed on behalf of the purchaser by Maples Teesdale “pp Buyer”. In fact, Kensington Gateway Holdings Ltd was not incorporated until 2 months later. Royal Mail claims that the partners in Maples Teesdale were personally liable on the contract, under s.36C(1) of the Companies Act 1985: “A contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.”
Maples Teesdale dispute the claim on a number of grounds. One is that the contract included an “agreement to the contrary”. They argue that the contract made it clear that only Kensington Gateway Holdings Ltd could enjoy the benefit of the contract. If the contract was treated as one made with Maples Teesdale, then Maples Teesdale would enjoy that benefit. That would be inconsistent with the terms of the contract. Therefore the contract contained an “agreement to the contrary”.
Maples Teesdale applied for summary judgment in their favour on that issue. On 2 July 2015, Mr Jonathan Klein, sitting as a Deputy High Court Judge, dismissed that application. He held that, under s.36C(1), there is only a contrary agreement if it is established that, by the relevant words properly construed, objectively the parties intended that the contract would not take effect as one made with the person purporting to act as agent for the unincorporated company. A provision indicating that the parties intended that only the non-existent company should enjoy the benefit of the contract did not suffice.
Stephen Jourdan QC acted for Royal Mail in successfully resisting the application.
Charles Harpum Speaks At Conference Celebrating 50 Years of the Law Commission
Charles Harpum will be speaking at King’s College London as part of the conference commemorating 50 years of the Law Commission: document can be downloaded below. The conference will take place on Friday 10th and Saturday, 11th July. Charles Harpum was the Law Commissioner for England and Wales, heading the Property and Trusts Team from 1994 – 2001, overseeing the introduction of a number of fundamental pieces of property law legislation, including the Land Registration Act 2002. Charles will be speaking on Saturday, on the question of the use of Law Commission materials before the Courts, a topic which has repeatedly been debated before the Courts. The paper is due to be published, and details of its publication will be provided when they emerge.
Jonathan Gaunt QC one of Three Co-Lecturers at Lincoln’s Inn Lecture on the 800th Anniversary of Magna Carta
Jonathan Gaunt QC, Professor David Carpenter and Sir Nicholas Bratza will be co-delivering a lecture in three parts entitled "He has no sovereign – from the Charter to the Convention: Magna Carta, the Petition of Right 1628 & the European Convention". It will take place at 6pm on 16th July in Lincoln’s Inn. This lecture is free of charge and open to members of all the Inns of Court as well as members of the public but registration is required, which can be done here (with further details of venue)
Contracts conditional on planning permission
Philip Sissons appeared as junior counsel for the Claimant in SAINSBURYS SUPERMARKETS LTD v BRISTOL ROVERS (1883) LTD (2015) [2015] EWHC 2002 (Ch) Ch D (Proudman J) 13/07/2015 more details here
On Monday 13 July, Mrs Justice Proudman handed down judgment in Sainsburys Supermarkets Ltd v Bristol Rovers (1883) Ltd. Phil Sissons (lead by Mark Wonnacott QC) represented Sainsbury's in its successful claim for a declaration that it had lawfully terminated a conditional contract to purchase the ground of Bristol Rovers Football Club, the Memorial Stadium.
Bristol Rovers argued that Sainsbury's had breached the agreement by failing to act in good faith and to use all reasonable endeavors to obtain an acceptable planning permission for a new supermarket on the site of the ground. After a 7 day trial in May, the judge has accepted Sainsbury's case that they had not been obliged to pursue a further appeal against the onerous conditions attached to the planning permission and that, therefore, they were entitled to serve notice of termination.
A2 Dominion Homes v Prince Evans Solicitors (Chancery Division, 15 July 2015)
Adam Rosenthal appeared for the successful defendant solicitors in a trial of a preliminary issue in a professional negligence claim brought against the solicitors. The claim related to the agreement for lease and the grant of long leases of 33 flats to the claimant housing association. The agreement provided for the freeholder and landlord to carry out various works prior to completion, so there was a long period between contract and completion. The solicitors protected the agreement against the freeholder's registered title by entering a unilateral notice. Prior to completion, the freeholder charged the freehold to HSBC bank. That charge was registered before the leases, which were granted pursuant to the earlier agreement. The claimant encountered difficulty when it tried to sell the flats because the leases themselves had not been protected by a separate notice. The claimant argued that as a result, the charges ranked in priority to the leases and deprived them of most if not all of their value, claiming in excess of £3.5 million from the solicitors in damages. The solicitors denied that the charges ranked in priority and this question was ordered to be tried as a preliminary issue. The solicitors were successful. Robert Englehart QC (sitting as a Deputy Judge of the Chancery Division) held that for the purposes of section 29 of the Land Registration Act 2002, the leases retained the priority afforded to the agreement for lease out of which they were created, by the unilateral notice.
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