Latest Chambers News up to 31st March 2015
Court Powers in relation to Arbitrations – Section 44 of the Arbitration Act 1996
Edward Peters appeared in two further decisions in in the Patley Wood LLP v Brake litigation in the Chancery Division, on 19th December 2015 ([2014] EWHC 4499 (Ch)) and 16th January 2015 (LTL AC9301491). The decisions both concerned the nature of the Court’s jurisdiction under section 44 of the Arbitration Act 1996. Section 44 gives the Court power to make court orders in support of arbitral proceedings in various specified circumstances. In Patley Wood, in the context of a dispute about the dissolution of a partnership with significant property holdings, one of the partners sought an order governing the terms on which the other partners would be allowed to bid for some of the partnership property on its sale, in support of directions which had been given by the arbitrator. At the December hearing [2014] EWHC 4499 (Ch), Sir William Blackburne decided that (i) the court had a wider discretion under section 44 than it did under section 42 of the Arbitration Act (s. 42 concerns peremptory orders), and that the question the court should ask when exercising its discretion under s. 44 was “simply whether in all the circumstances the court considers it appropriate to exercise its powers under the section in support of the arbitral proceedings”. On that basis, he declined to make an order under section 44 at that stage, because he considered that the arbitrator’s directions had not provided the partners with a mechanism which would allow them to bid. In a further hearing in January, following the giving of further directions by the arbitrator, Sir William Blackburne decided that, in an application under section 44, a Court was not limited to merely embodying in an order the directions which had been made by the arbitrator, but could make all such orders which were within the Court’s jurisdiction to make and which the court considered it appropriate to make; and made an order accordingly.
Adverse Possession and Illegality in the Court of Appeal
The Court of Appeal has delivered judgment in the decision of R (on the application of Best) v Chief Land Registrar [2015] EWCA Civ 17. It has upheld the decision of Ousley J ([2014] EWHC 1370 (Admin)). The case concerned a long-term squatter in residential premises, whose conduct had been criminalised by the coming into force of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, section 144, which made the act of residential squatting itself a crime, regardless of how it was initiated. The question was whether the squatter could rely upon that period of his adverse possession which was a criminal offence. The Court of Appeal held that he could. It decided that illegality of itself was not sufficient to deprive a squatter of his entitlement to be registered as proprietor. Instead, an investigation into the policy and purpose of section 144 of the 2012 Act was required, in order to see whether the intention of Parliament was to deprive the squatter of his right. The Court of Appeal decided that section 144 was held not to have this effect. The decision settles and interesting and important point of adverse possession law, but also gives important consideration to the nature and limits of the ex turpi causa principle and its relation to property law, the first time that this has happened in detail since the House of Lords decided Tinsley v Milligan [1994] 1 A.C. 340. Jonathan Karas QC was instructed for the Land Registry. The judgment may be found here
Undoing Unlawful Assignments and the Anti-Avoidance Provisions of the Landlord and Tenant (Covenants) Act 1995
Morgan J has delivered judgment in UK Leasing Brighton Limited v Topland Neptune Limited [2015] EWHC 53 (Ch). This case arose in the aftermath of the Court of Appeal’s decision in Tindall Cobham 1 Limited v Adda Hotels [2015] 1 P&C.R. 5, which has been digested HERE on the Chambers news website. Unlawful assignments of leases had taken place, which had not therefore released the original tenants (“T1”) and guarantors under those leases from their respective covenants under the 1995 Act. As it was not satisfactory to leave matters where they were, the question for the Court to consider was how the unlawful transactions could be unpicked. Morgan J decided that it was permissible, in such a case, for the unlawful assignee (“T2”) to assign its lease back to T1, and for the original guarantor to give a fresh guarantee for T1, without that transaction being caught by the anti-avoidance provisions under section 25 of the 1995 Act. In coming to that conclusion, Morgan J gave detailed consideration to the decisions in K/S Victoria Street v House of Fraser [2012] Ch 497. He decided that the proposed direct assignment back would have the effect of releasing T2 from its obligations (section 5(2)(a)), releasing the T1 from the obligations which remained vested in it by reason of the unlawful assignment (section 11(2)(b)) and releasing the guarantor from the original guarantee it gave on grant of the lease (section 24(2)). Upon the term re-vesting in T1, T1 would become bound by tenant’s covenants as assignee under section 3(2)(a). The issue was whether the guarantor could, at that point, give a fresh guarantee for the fresh liability of T1 qua assignee. He decided that this was permissible because the guarantor’s obligations at all times mirrored those at T1, so that it could be said that the guarantor was released “to the same extent” as the tenant, so that the transaction was sanctioned under section 24 and not invalidated by section 25. Morgan J went on to consider the proposal of the tenants, that the assignment back should be achieved via intermediate assignments. Given what Morgan J concluded, that issue did not arise. As that scheme required the guarantor to bind itself to give guarantees in advance, he decided that this route was likely to fall foul of the anti-avoidance provisions. Kirk Reynolds QC (who acted in Tindall) and Timothy Fancourt QC acted for the landlords in this case.
Adverse possession appeal
Mitchell v Watkinson (19 November 2014) Court of Appeal. Stephen Jourdan QC acted for the successful respondents in this adverse possession appeal, where the Court of Appeal dismissed an appeal from the judgment of Morgan J. Tenants had taken a tenancy as trustees of a cricket club. The Court held that they were not estopped from denying that the tenancy under which the land was held by them had been created by implication, on the terms of a written tenancy agreement, but not by the written tenancy agreement. Therefore there was no “lease in writing” and time ran against the landlord from the last payment of rent under the Limitation Act 1980 Sch 1 para 5. The Court also held that Morgan J had been entitled to find that use of the land by members of the club prior to the death of the tenants had been by virtue of a licence from the tenants, and that the death of the tenants did not affect that. Accordingly, there had been adverse possession from the last payment of rent, and the title of the landlord had been extinguished.”
Professional Negligence; Leasehold Conveyancing; Easements
Oliver Radley-Gardner appeared for the successful Defendant in Balogun v Boyes Sutton & Perry [2015] EWHC 275 (QB). The case concerned the scope of a solicitor’s duty to advise in a commercial leasehold transaction. The Claimant, an experienced restaurateur, had intended to operate a restaurant from the ground floor of a mixed use building and required use of a pre-existing ventilation shaft serving the unit. The Claimant had advised the Defendant solicitor that the ventilation shaft was “good to go”, however this turned out to be incorrect and works outside the envelope of his demise were required. The Court (i) held that, on the facts, there was no duty on the solicitor to go behind his express instructions on factual and technical matters within the Claimant’s direct knowledge and expertise, (ii) considered the cases concerning solicitors’ duties to advise where the terms of a document were unclear were likely to give rise to a dispute in future, (iii) re-stated that the question of what a reasonable solicitor would have done on the facts was a matter for the Court to determine, and not of evidence, and (iv) considered the scope of ancillary rights accompanying the grant of an easement.
Easements by Prescription; Use of Servient Land by Customers of the Dominant Owner; Protest/Nec Vi
Guy Fetherstonhaugh QC and Caroline Shea appeared for the Appellants and the Respondents respectively in this appeal considering the law relating to the prescriptive acquisition of easements. The Appellants appealed against a decision of the First Tier Tribunal that the Respondent fish and chip shop owners had acquired prescriptive rights of pedestrian and vehicular access by use of the Appellant’s land by fish and chip shop customers. The Upper Tribunal (Judge Purle QC) decided that (a) in order for there to be prescriptive acquisition of an easement, it was not necessary to show that the servient owner would have had locus to bring trespass proceedings against the dominant owner, and (b) that signs which had been displayed stating that the servient tenement was a “private car park” were not sufficient so as to render contentious (and hence to prevent the acquisition of) a prescriptive pedestrian easement. In this regard, the case considered Smith v Brudenell-Bruce [2002] 2 P&CR 4 and Betterment Properties (Weymouth) Ltd v Dorset CC [2012] 2 P&CR 3. However the signs were sufficient to prevent acquisition of prescriptive easements by vehicular use. In respect of the latter point, it did not matter when the signs were erected, or that they were not aimed directly at the Respondents.
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