Top 3 Cases June 2024
In this series of articles, we aim to highlight 3 of the most interesting cases in our field decided in the past month. This month: signage and prescription; realisation of partnership property; and termination of telecoms rights.
1. Nicholson v Hale [2024] UKUT 00153 (LC)
Summary
The Upper Tribunal determined that the wording of a sign had been sufficient to prevent a right of way having been acquired by prescription.
The Respondents applied for the registration of a right of way over a staircase on the Appellants’ land which led between a garden area on the lower level and a walkway on the upper level. Prior to the staircase having been removed, a sign had been present on a nearby wall which stated ‘THIS STAIRCASE AND FORECOURT IS PRIVATE PROPERTY. NO PUBLIC RIGHT OF WAY’.
At first instance, the judge found that this wording had not prevented a right of way over the staircase being acquired by prescription, because the reference to public rights did not prevent a private right having been acquired.
The Upper Tribunal allowed the appeal. A reasonable user of the staircase would have understood it to mean that the landowner meant to keep people off the land who were not authorized by the landowner to be there, and would not have interpreted the sign in a legalistic way. Accordingly the reference to “private property” had prevented the user having been as of right.
The Tribunal also dismissed a cross appeal relating to the visibility of the sign; this had been a finding of fact which the Tribunal would not interfere with.
Why it’s important
This judgment contains a useful summary and analysis of the authorities relating to signage in the context of prescriptive rights. The test – what would a sign have conveyed to a reasonable user, who would not apply a legalistic analysis – is highly fact specific, and this judgment presents one example. Practitioners considering similar signage should pay close attention both to the various formulations found to be effective and to the characteristics of any given piece of land.
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2. Bahia v Sidhu [2024] EWCA Civ 605
Summary
The Court of Appeal considered when it is permissible to order partnership assets to be realised other than by way of a sale on the open market, on the dissolution of the partnership.
Two partnerships, represented essentially by two families, the Sidhus and the Bahias, were dissolved by court order. Orders were made for payments to be made primarily from the Sidhus to the Bahias. The Sidhus argued they did not have the money to make those payments unless the partnership properties were sold. The matter was listed to consider whether and how the properties should be disposed of.
At the hearing below, submissions focused on how the properties could be fairly disposed, of having regard to the fact that there was potential unfairness to the Bahias, because they were less able to bid on the open market for them owing to a lack of resources arising from the Sidhus’ indebtedness to them. The judge ordered that a number of properties be transferred to the Bahias and be treated as having been ascribed certain values deriving from valuation reports; other properties were to be sold by court-appointed receivers. This was carried out, and equality achieved.
The Court of Appeal allowed the Sidhus’ appeal on the basis that the judge had erred in law in directing the properties to be disposed of other than on the open market: an order for a transfer in “in specie” should only be made in exceptional circumstances There were no exceptional circumstances here.
Why it’s important
The judgment contains a detailed review of earlier cases, and sets out just four categories of case where an order other than for an open market sale would be appropriate:
- One partner has a very small stake and selling the business as a going concern would create disproportionate injury to the majority partner(s) and/or to 3rd parties;
- Where an open market sale of the assets would obviously not maximise the value;
- Where the partnership agreement made provision for a buy-out on termination; or
- If it is established that one partner intends to use the auction process in “bad faith” to drive up the price the other must pay.
These guidelines will make it much easier to predict the outcome of such cases in future.
In addition, the focus on an open market sale as the surest way to establish value may have implications in other areas where there is a dispute as to whether a property should be sold or transferred to one party.
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3. Gravesham Borough Council v On Tower UK Limited [2024] UKUT 151 (LC)
Summary
The Upper Tribunal found that an operator which had a tenancy protected under the Landlord and Tenant Act 1954, but whose claim for a new tenancy was dismissed, could not then seek imposition of new rights pursuant to part 4 of the Code.
The operator had issued proceedings seeking a new tenancy under the 1954 Act, but had failed to serve its claim form in time. It served notices under paragraphs 20 and 27 of the Code seeking a new agreement. At first instance, the judge found that this was permissible as a matter of jurisdiction.
The Upper Tribunal allowed the appeal, finding that on a proper interpretation of the code, an operator which has exhausted its 1954 Act renewal rights has no ability to make a further application under the Code.
Additionally, the Code notices had been served while the 1954 Act lease was still continuing, because the time when the lease determined was calculated by reference to when the application for an extension of time for service of the claim form was rejected.
Why it’s important
The overlap between the Code and the 1954 Act regime has always been complicated. This decision, likely to be received positively by site providers, brings helpful clarity that once an operator’s rights are terminated under the 1954 Act, the site provider will be able to recover possession, without the possibility of having to resist a further application under part 4 of the Code.
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