The lease stated that a tenant’s break notice shall be of no effect if, inter alia, at the break date any payment under the lease due to have been paid on or before that date had not been paid.  Pursuant to the lease if any payment due was not paid by the date it was due, whether formally demanded or not, the tenant shall pay the landlord interest on the amount to and including the date of payment.

The tenant served a break notice.  The landlord searched its records for the preceding 5 years, identified every single late payment and then calculated interest due throughout that period.  It contended that non-payment of the interest meant the tenant had failed to operate the break clause even if the landlord had not previously demanded payment of the interest.

Mr Justice Morgan considered the fact that the landlord had failed to demand interest as and when it fell due and the law relating to estoppel.  He found as a fact that at the break date, the tenant did owe interest under the lease and as a result fell foul of the lease requirements.  He held the landlord was not estopped from relying on the non-payment and whilst he recognised the result to be a harsh one found the break notice to be of no effect.

If you wish to hear more about break clauses, why not contact Hatherleigh Training?

The landlord spent £5.7m conducting required remedial works to windows - a sum which it then charged to the tenants’ service charge as repairs.  Single glazed windows were replaced with double glazed windows as required by the building regulations.  The tenants claimed the works constituted improvements and not repairs although it was common ground between the parties that, in the absence of intervention by English Heritage (the building was listed), the works were the only lawful way of effecting the remedial works.

The Lands Tribunal found that the landlord was under an obligation to repair the windows and that the necessity for the works, including the standard to which they were carried out, was not disputed.  It further found that the landlord could only lawfully do the works using double glazing.  It had been found as a fact by the lower tribunal (the LVT) that the extra cost between single and double glazing was 13% of the cost of the works.  The Lands Tribunal held this extra expenditure was necessarily incurred and whilst double glazing was an improvement in terms of functional efficiency, the total cost was properly incurred in effecting repairs.  It was therefore properly included in the service charge.  The question of whether the landlord could have recovered 87% of the cost of the works if double glazing had not been necessary was left hanging in the air although the Lands Tribunal said “there was no rule of law that a landlord must always recover all of its expenditure” - an interesting comment.

If you wish to hear more, why not contact Hatherleigh Training?

Part 31 of the CPR says a document is anything in which information of any description is recorded.  It reminds the reader this is a wide definition which extends to, for instance, electronic documents and includes e-mails, word processed documents and databases stored on servers and back-up systems - even electronic documents which have been ‘deleted’.  Practice Direction 31B (’PD 31B’) contains additional provisions relating to disclosure of electronic documents in cases allocated by the courts to the normal, multi-track procedure.  PD 31B reminds legal advisers that the documents disclosed should be managed efficiently to minimise costs and that any document management system utilized should be efficient and effective.  Electronic disclosure should enable the receiving party to have the same ability to access, search, review and display the documents as the party making the disclosure.  Disclosure of electronic documents which are of no relevance to the proceedings may place an excessive burden in time and cost on the party to whom disclosure is given.

So, whilst considerable care and attention is paid to drafting ‘hard copy’ documents, e-mails are often dispatched in the heat of the moment.  These are ‘documents’ too and if you would not want a judge in a case to see them, do not press the ’send’ button!

Contact Hatherleigh Training if you wish to hear more.

Bailiffs may be employed by private companies or by Her Majesty’s Court Service.  National Standards, introduced in 2002 by the Lord Chancellor’s department (now the Ministry of Justice), are for use by all enforcement agents.  Further, the Civil Enforcement Agency, representing private certificated bailiffs, has its own Code of Conduct and Good Practice Guide.  Nevertheless, the intimidating and threatening behaviour of some bailiffs has led to complaints.

The Tribunals, Courts and Enforcement Act 2007 was to abolish the common law right to recover rent arrears and introduce a new system for the recovery of commercial rent arrears (’CRAR’).  However, this section of the Act was never enforced.  Further, the Law Commission advised in its Report, Termination of Tenancies for Tenant Default, upon the abolition of the present law of forfeiture, including the law relating to peaceable re-entry. and the introduction of a new statutory scheme, including a summary termination procedure.  Again this was not implemented.

However, on 13 January 2012, the Justice Minister, Jonathan Djanogly, unveiled updated National Standards outlining minimum standards of behaviour expected of bailiffs.  The Minister said that whilst he knew the majority of bailiffs are responsible “too many are not”.  This is said by the Ministry of Justice to be the first step in Government plans to change regulation of bailiffs.  So, watch this space and to hear more, why not contact Hatherleigh Training?

S69 of the Arbitration Act 1996 states that a party cannot appeal an arbitrator’s decision without the consent of the other party or the leave of the court.  Leave will only be granted it the appealing party can show either that the arbitrator’s decision was obviously wrong or that the question is of general public importance and the decision was open to serious doubt.  Finally, the appealing party must, under s69, show that it is just and proper for the court to determine the issue.

In HMV UK Ltd v Propinvest Friar Ltd Partnership [2011] CofA 1193, a well known and well respected landlord and tenant QC was appointed Arbitrator to determine a legal issue which arose between the parties at rent review.  The Tenant, disappointed  with the decision, applied to the courts for leave to appeal stating that the Arbitrator was ‘obviously wrong’.

The Court of Appeal held rights to appeal under the 1996 Act are severely restricted and it was not sufficient to show that a judge might or even would have come to a different decision.  To be obviously wrong, the Arbitrator’s error should be obvious to the judge on a perusal of the Award itself.  An oral hearing should not generally be necessary.  Further, in an obiter comment, the Court of Appeal stated there was authority for the view that it was not just and proper for the court to determine a question where the parties had chosen it be determined by their own appointee.  The Tenant’s appeal was dismissed.

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The parties selected a QC to act as sole arbitrator.  He had, in the past, been instructed by both parties’ solicitors as, the judge later commented, one would expect of experienced and competent counsel specialising in the relevant field.  In late 2009 he held a procedural hearing and fixed the hearing of the arbitration for September 2010.  Also in late 2009 an issue unexpectedly arose in a case in which he had been instructed previously by one of the firms of solicitors acting in the arbitration.  The arbitrator mentioned this wholly unconnected case after a three day hearing in September 2010.  This did not provoke any adverse response from the other solicitors involved in the arbitration until after he published his award.

The judge, Mr Justice Flaux, reviewed the relevant cases and applied the test suggested by Lord Hope of Craighead in Porter v Magill [2002] 2 AC 357: “The question is whether the fair-minded and informed observer having considered the facts, would conclude that there was a real possibility that the tribunal was biased.”   Although the fair-minded and informed observer is not to be regarded as a lawyer, he or she is expected, Mr Justice Fkayx stated on the authorities, to be aware of the way in which the legal profession in this country operates in practice.  Nevertheless, counsel for the applicant felt the independent observer would be concerned that the arbitrator may have been unconsciously biased in favour of the party whose solicitors were instructing him in another case.  Whilst Mr Justice Flaux found the submissions attractively and beguilingly put, he could not accept them.

If you wish to hear more, why not contact Hatherleigh Training?

Air conditioning has long been a tenant’s market requirement albeit that its existence can lead to higher rentals and the monetary cost of regular servicing and maintenance can be high.  Maintenance often includes topping up the system with a HCFC gas known as ‘R22′, a widely used refrigerant.  However, R22 falls foul of European Regulations and a gradual ban on its use has been in existence since 2004.  A total ban is faced from 1 January 2015.  Until then, maintenance engineers may use a decreasing amount of recycled R22 in existing systems.

And then what happens?  Without R22 some plant and machinery will become un-maintainable and will need to be replaced.  Pursuant to the Regulations, it is the ‘operator’ who is responsible for compliance i.e. the person exercising power over the technical functioning of the equipment and system.  However, it is in the arena of landlords and tenants where problems will really arise.  The answer as to who pays replacement costs will depend on the wording of the particular lease involved.  One of the questions to be asked is whether un-maintainable plant and machinery amounts to it being out of repair?  This has implications for both covenants to repair and service charge payments.  Further, the uncertainty will almost certainly lead to disputes when negotiating a new lease, at lease renewal and at rent review.

If you wish to discuss further, why not contact Hatherleigh Training?

Chattels are personal, moveable items for instance, furniture.  They are not affixed to the property in which they stand and it is important to distinguish between a chattel and a fixture.  Joyce J considered the difference over a hundred years ago in  Lyon v London City & Midland Bank [1903] 2 KB 135 and his words echo down to us today:

“No doubt a chattel on being attached to the soil or to a building prima facie becomes a fixture, but the presumption may be rebutted by showing that the annexation is incomplete, so that the chattel can be easily removed without injury to itself or to the premises to which it is attached, and that the annexation is merely for a temporary purpose and for the more complete enjoyment and use of the chattel as a chattel.”

When yielding up or giving vacant possession of premises, one must identify the ownership of fixtures.  A tenant may, for instance, install trade fixtures which, whilst attached to the property, it will remove at the the lease end.  However, the degree of annexation may be so complete that the fixture becomes part of the very fabric of the premises and fall within the ownership of the landlord.  Of course, a tenant may, in such circumstances, be required to remove its alterations to the demised premises at the lease end but it all depends on the wording of the specific lease.  Read it with care.  Whilst a tenant can remove its own fixtures, it cannot remove those of the landlord unless the lease states otherwise.

If you wish to hear move, do contact Hatherleigh Training.  We would be pleased to assist.

As we see the courts enforcing rights by way of injunction both to prevent development and to demolish that which has been built in breach of a right, developers have found their potential profit diminish.  Additionally, in order to protect their community plans, local authorities have been known to acquire an interest in land thus overriding claims pursuant to s237 Town and Country Planning Act 1990.

As we reported in June 2011, the Law Commission recognized the need to look into this area of law and in its eleventh programme of reform published in July, it confirms that it will investigate whether the current law by which rights to light are acquired and enforced provides an appropriate balance between those benefiting from the rights and those wishing to develop land in the vicinity.

The Commissioners state “We intend to commence this project in early 2012, publishing a consultation paper in early 2013.  We will, in discussion with the Department for Communities and Local Government, review how the project should be taken forward at the time of publishing our preliminary proposals and after analyzing the responses to our consultation.  If both the Commission and Government agree that further work is appropriate, we will aim to produce a final report, with draft bill, late 2014 or early 2015.  If either party decides at an earlier stage that the project should not continue, we will produce a narrative report of our conclusions.”

If you would like to hear more on rights to light, why not contact Hatherleigh Training?

“It means that at the moment that ‘vacant possession’ is required to be given, the property is empty of people and that the purchaser is able to assume and enjoy immediate and exclusive possession, occupation and control of it.  It must also be empty of chattels, although the obligation in this respect is likely only to be breached if any chattels left in the property substantially prevent or interfere with the enjoyment of the right of possession of a substantial part of the property.”

The case concerned a tenant’s option to break its lease conditional upon paying rent due up to and including the termination date and having delivered up vacant possession of its premises.  It served a valid notice and had it complied with the conditions, the lease would have been determined.  However, it was side tracked by service of a schedule of dilapidations with which, where valid, it was determined to comply.  Two days before the termination date, it met wth the landlord’s agent and agreed a few outstanding items required attention.  It failed to finalise them before the termination date and its workmen remained on site.  The property was not therefore empty of people and vacant possession was not delivered up.

If you wish to hear more about vacant possession why not contact Hatherleigh Training?