Top 3 Cases - December 2022 04 January 2023
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: the scope of the jurisdiction to grant relief from forfeiture; an injunction relating to mooring rights; and the requirement of detrimental reliance in establishing a common intention constructive trust.
1) Hush Brasseries Limited v RLUKREF Nominees (UK) One Limited [2022] EWHC 3018 (Ch)
Summary
The High Court determined that a tenant should be granted unconditional relief from forfeiture in respect of an option to call for a new lease of its premises.
The tenant occupied the landlord’s premises under a lease, which contained a right of forfeiture for non-payment of the rent. The landlord granted the tenant an option to call for a new lease of the premises in the last year of the existing term. The option was subject to the landlord’s right to terminate if, among other matters, any of the circumstances mentioned in the forfeiture clause in the existing lease arose.
During the pandemic, before the final year of the term had begun, the tenant fell into arrears and the landlord served notice to determine the option (but not the lease). The parties subsequently compromised the pandemic arrears, and the tenant paid the agreed amounts. The tenant sought, and was granted, unconditional relief from forfeiture of the option.
Why it’s important
HHJ Klein’s judgment contains a useful synthesis of the authorities relating to relief from forfeiture, and considers the existence and nature of the preconditions which must be met before relief can be granted. In particular, this case establishes that while the party seeking relief from forfeiture must have a proprietary interest in the subject matter, that proprietary interest does not need to be of any particular quality, such as having subsisted for many years or being permanent in nature. In this case, the tenant’s equitable interest under the option was sufficient, notwithstanding that the time when the tenant could call for a new lease had not yet been reached.
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2) The Royal Borough of Kingston-Upon-Thames v Salzer [2022] EWHC 3081 (KB)
Summary
The High Court granted a final injunction prohibiting the defendants, who ran a boat hire business, from mooring on particular stretches of the Thames otherwise than in accordance with the local authority’s mooring policy.
The local authority was entitled to possession of land adjacent to the Thames, as well as the holder of various statutory powers to regulate moorings in the area. It brought proceedings against the defendants to restrain trespass by persistent overstaying on public moorings. It was conceded that one of the boats was the home of one of the defendants for the purposes of article 8 ECHR.
Jeremy Hyam KC, sitting as a Deputy High Court Judge, found that:
- Notwithstanding the relatively complex title position, the local authority had sufficient title to bring a claim in trespass.
- Given that it had been serving enforcement notices for years, there was no sustainable argument that the local authority had acquiesced in the defendant’s conduct such that it would be unconscionable for it to insist on its rights of enforcement.
- Article 8 was not engaged: the defendant was not being deprived of his home in circumstances where he could take the boat with him and moor it (lawfully) elsewhere.
- In any event, it was not disproportionate to require the defendant to conduct himself like any other responsible boater in the area.
Why it’s important
This judgment is a useful reference for the statutory regulation of mooring rights and its interrelationship with private property rights. It is also a helpful illustration of the ways in which the courts can seek to ensure that neither party is unduly prejudiced by reason of the fact that one party is acting in person.
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3) Hudson v Hathway [2022] EWCA Civ 1648
Summary
Overturning a controversial decision of the High Court, the Court of Appeal has reaffirmed that detrimental reliance is a required component of a claim for a common intention constructive trust.
The parties (who had never married) had previously been in a long-term relationship and had owned their home jointly together. They split up and exchanged emails in which they agreed that as part of a division of their assets, the respondent would be entitled to the entire beneficial interest in their former home.. However, subsequently, the appellant brought proceedings seeking an order for sale and asserting an entitlement to half the proceeds. The respondent agreed the property should be sold, but contended that she was entitled to all of the proceeds.
At first instance, the judge held that a common intention could be established from the parties’ agreement that the respondent would hold all of the beneficial interest in the property, and that she had relied on that to her detriment in not making a claim to other property owned by the appellant (but not in other ways she had asserted). On first appeal, Kerr J held that it was unnecessary for the respondent to have shown that she had relied on the agreement to her detriment, but that in any event, she had done so.
Lewison LJ, with whom Andrews and Nugee LJJ agreed, gave permission for a new point to be argued by the respondent on appeal, and held that the email exchange did effect a disposition of the appellant’s beneficial interest in the home, and the statutory formalities in Law of Property Act 1925 s 53(1)(c) were complied with: the emails amounted to writing and typing the sender’s name at the end of the email amounted to a signature. . However, if it were necessary for the respondent to rely on a common intention constructive trust, detrimental reliance on the agreement would be required.
Why it’s important
The judgment below (which we digested in our March 2022 update) provoked considerable discussion among both academics and practitioners regarding the correctness and ramifications of Kerr J’s conclusion that detrimental reliance need not be shown for a common intention constructive trust to arise. Lewison LJ’s leading judgment is a tour de force of the authorities regarding common intention constructive trusts, both before and after the seminal decisions in Stack v Dowden and Jones v Kernott, and is likely to be seen as having restored order in this often troubled area of law.
The conclusion that an email footer can satisfy section 53 will also likely have wide ramifications.
Finally, the judgment contains useful comment on the test to be applied where a respondent wishes to raise a new point on appeal.
STEPHANIE TOZER K.C.
FERN SCHOFIELD
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