Latest Chambers News up to 31st December 2015.
Latest Chambers News up to 31st December 2015.
The Tactical Use of Applications in Enfranchisement Under Section 48 of the Leasehold Reform, Housing and Urban Development Act 1993
In 36 Harrington Gardens Headlease Ltd v Cadogan Holdings Ltd, Mark Sefton appeared for the landlord and Stephen Jourdan QC for the tenant in a dispute arising under s.48(3) of the Leasehold Reform, Housing and Urban Development Act 1993. Judgment was delivered on 23 October 2015 by Mr Recorder Murray Rosen QC.
Under the 1993 Act, once the terms of the new lease and the premium have been agreed or determined, there is an “appropriate period” of 2 months followed by a further period of 2 months, making 4 months in all. If, by the end of those 4 months, the new lease has not been granted and no application to the court under s.48(3) has been made, the s.42 notice of claim is deemed withdrawn. If such an application is made before the end of the 4 months, the court may: “make such order as it thinks fit with respect to the performance or discharge of any obligations arising out of that notice.”
In this case, the landlord was ready to complete within a month of the terms and price being agreed, and asked the tenant to propose a completion date, but got no response. The tenant then made a s.48(3) application. Initially the landlord was willing to complete, but then changed its position, and argued that it was an abuse of the process of the court for a tenant to seek an order from the court compelling the landlord to grant a new lease, when the landlord was perfectly willing to do so without a court order. Alternatively, in those circumstances, the court should order the obligations created by the notice to be discharged. The tenant argued that it was legitimate for a tenant to apply under s.48(3) when the tenant wanted more time to complete the new lease.
The Judge held that it was not an abuse for a tenant to apply to the Court in these circumstances. However, once a reasonable period for completion had passed, the tenant should pay interest, and should in any event pay the landlord’s costs, as a condition of the new lease being granted. The Judge held that, in this case, 2 months after the end of the 4 month period was as long as was reasonable to allow for completion. The tenant had arranged a commercial loan to pay part of the premium, at an interest rate of 8%, compounded monthly, so that was the appropriate rate of interest for the tenant to pay.
The Judge therefore made an order that:
• if within 21 days the tenant paid the landlord the agreed premium and statutory costs, that interest, and the landlord’s costs of the claim, the new lease was to be completed at the end of the 21 days;
• if the tenant failed to pay that money within those 21 days, but paid it within the following 28 days with additional interest at 10% per annum for any further period of delay after the end of the 21 days, the new lease was to be completed when the money was paid;
• otherwise, the obligations under the notice would be discharged at the end of the 28 day period, and the notice would be deemed withdrawn at the end of the “appropriate period.
Proprietary estoppel and wills – context is all: a salutary warning.
A claimant will need very convincing facts in order to establish an estoppel against the estate of a deceased based on promises allegedly made more than twenty years earlier. In Rawlings v Chapman & Others [2015] EWHC 3160 (Ch), the claimant and her family asserted that the deceased had on many occasions made promises to the effect that “all this is/will be yours” during the building of what was intended to be a marital home. The claimant alleged that in context this meant that the deceased would leave the claimant the house, worth more than £450,000, in his will. HHJ Cooke QC, sitting as a Deputy Judge of the Chancery Division, agreed with the Defendants, represented by Caroline Shea, that in context this was more likely to have meant that the house was intended to the claimant’s domain from which she would run a bed and breakfast business, in which the deceased himself showed little interest. Further, had liability been established, the anticipated bargain would not have been given effect to, when the relationship had broken up soon after the claimant moved in, and the claimant and deceased had lived apart for 15 years before he died. The most that conscience demanded would have been a repayment of the £20,000 contributed by the claimant. The judgment can be seen here
New Decision on Trusts of Land, Occupation Rents and Informed Consent
Wayne Clark successfully brought a claim on behalf of a claimant beneficial co-owner of a property against her co-beneficiary for an occupational rent, where the defendant had ousted the claimant from the property. The judge also upheld a claim by the claimant against the trustee of the property who had also occupied the property without the informed consent of all beneficiaries, following the Hong Kong High Court case of Kong Wing Hong v Wing On 2015. A compromise agreement with respect to earlier proceedings relating to the property, which was prayed in aid by the defendant, was held, on its true construction, not to preclude the claim for the occupational rent, as the agreement drew a clear distinction between current claims, which were the subject of the compromise and potential claims, which were not. The occupational rent claim was a potential claim. Young v Sing 2015
Material Overhang and Enfranchisement
Anthony Radevsky appeared in the appeal in West End investments (Cowell Group) Limited -v- Birchlea Ltd (transcript [here]) relating to material overhangs under the Leasehold Reform Act 1967. The case usefully summarised the applicable principles as follows:
(i) s.2(2) is concerned with cases where there is a “kink” or “dog-leg” in the dividing line in units of a building. Potentially, such an overhang or underhang may exclude a house from enfranchisement;
(ii) However, this will not be the case if only a trivial or unimportant part of the house overhangs or underhangs the structure to which it is attached, which would be an absurd consequence;
(iii) if the underlying or overhanging part of the house is immaterial, then the landlord's interests, if any, in the adjoining property are protected by section 2(5), not by exclusion of the whole house from enfranchisement. This is because the landlord may give notice under section 2(5), the effect of which may be to exclude such part from the house and premises which is enfranchised by the tenant.
The case considered the impact of the fact that a wall between two properties was designated a party wall under the relevant leases, and that this meant that there was an overhang of a width of one brick between the relevant premises. The judgment can be found here
The Status of Non-Guidance Upper Tribunal Decisions, and Non-PCL Deferment Rates
The Court of Appeal has today decided that non-guidance decisions of the Upper Tribunal can be admitted as evidence. In Sinclair Gardens Investments (Kensington) Limited v Ray [2015] EWCA Civ 1231, the First Tier Tribunal and the Upper Tribunal had both adjusted the default Sportelli deferment rate due to the location of the properties, by taking into account the decision in Zuckerman v Trustees of the Calthorpe Estate [2009] UKUT 235 (LC), no other evidence being called by the tenant’s valuer. The landlord argued that this was impermissible, and that the proper approach under Sportelli was to start with the default deferment rate, which was based on national average house prices, and then to consider whether there was evidence justifying a departure from that rate. A single decision of the Upper Tribunal which was not guidance was not, the landlord argued, evidence. The Court of Appeal disagreed, and found that such decisions could be taken into account. A transcript of the judgment may be found here . Oliver Radley-Gardner appeared for the appellant landlord.
Janet Bignell QC
Falcon Chambers is delighted to announce that Janet Bignell QC has been elected a Bencher of Lincoln's Inn.
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