You can’t park there!

In its June 2011 Report to Parliament, ‘Making Land Work: Easements, Covenants and Profits A Prendre’, the Law Commission stated the time was ripe for a comprehensive review and reform to this area of law.  On 18 May 2016, following the Queen’s Speech, the Government announced it would bring forward proposals to respond to the Commissioners’ recommendations in a draft Law of Property Bill.  No such Bill is currently before Parliament although the website states that Draft Bills for the new Session of Parliament will be added when confirmed.  We wait with interest.

In the meantime, the courts continue to determine issues arising and one question which has always caused difficulties is the extent of an easement.  It is there to accommodate the dominant tenement but what happens if the dominant tenement is extended?  The point arose in Gore v Naheed and anor [2017] EWCA Civ 369 giving the Court of Appeal an intersting opportunity to review the law as it presently stands.  The dominant land, owned by Mr Gore and known as The Granary, had the benefit, in common with other lands, to a right of way to go with animals, carts and wagons and return over the servient land which connected the site to the public roadway.  It was common ground that Mr Gore could drive a car or other vehicle to the front door of The Granary and to park there for the purposes of loading and unloading the vehicle.  However, land adjoining The Granary was obtained by adverse possession upon which Mr Gore built a garage for his property.  The question before the court was whether or not Mr Gore could obtain direct access to the garage for the purposes of leaving a car parked there for an indefinite period.  Previous cases had determined that an easement cannot be used to increase the overall use of an easement but might be used for an ancillary use of the dominant land.  Considering the facts and terms of the grant, the Court of Appeal agreed with the first instance judge that Mr Gore could park his vehicle in the garage so long as it were not let or used by a third party.

To whom does it belong?

The High Court case of Signature Reality v Fortis Developments [2016] EWHC 3583 (Ch) contains important reminders from the judge re planning matters.  First “Anybody can apply for planning permission to develop any land and any granted permission relates to the land and what may be done with it.  There are no statutory or other intellectual property rights in the planning permission itself; anyone may avail themselves of it so long as they satisfy the conditions.”  Second, “when an architect is engaged by a client to prepare drawings to obtain planning consent for a development, there is an implied licence to the client to use the drawings for all purposes connected with the erection on the site of the development to which the plans relate, and the client can transfer that licence to a purchaser of the site.”  (See Blair v Osborne & Tomkins [1971] 2 QB 78.)  Third, “It is usual that planning permission is granted by reference to drawings which illustrate the existing and proposed development and it is usual for there to be a condition of the grant that the development is carried out in accordance with specified drawings.  In that way the local authority controls any development in its locality.”

It was against that background that the judge had to consider the facts in the Signature case.  Two parties were interested in purchasing two office blocks with the intention of turning the buildings into student accommodation.  One party applied for and obtained planning permission but it was the second party that bought the properties.  In carrying out its development, the purchaser used the other party’s drawings referred to in the planning permission for marketing, development and construction purposes.  The drawings were readily available on the local planning authority’s website.  The unsuccessful proposed purchaser claimed breach of copyright in respect of each document.

The judge examined each allegation and did find breach of copyright.  However, he refused to assess damages (ordering an account) and refused an injunction and additional damages under s97(2) Copyright, Designs and Patents Act, 1988.  Nevertheless, the case stands as a warning not to forget the law relating to copyright even in publicly produced documents.

Punishing the wrong doer?

The general rule of law in England and Wales relating to the assessment of damages for breach of contract or tort is that the injured party should be compensated for its proven loss.  It is not the purpose of an award for damages to punish the wrong doer.

However, in the 1974 case Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 the court, faced with a defendant developer who had built in breach of a restictive covenant and a claimant who had suffered not ‘one farthing’s worth’ of damages, refused an injunction to pull down constructed housing but awarded damages in lieu at a figure which one might reasonably expect to be demanded of the developer for relaxing the covenant.  The sum was assessed as a percentage of the developer’s profit.  The principle became known as ‘Wrotham Park damages’ and has been applied where a defendant is in deliberate breach of a covenant or tort but the claimant cannot identify actual financial loss.

In the recent case Morris-Garner v One Stop (Support) Limited [2016] EWCA Civ 180, the Court of Appeal upheld the first instance decision that the absence of identifiable financial loss as an absolute requirement for an award of ‘Wrotham Park damages’ was in error and upheld an award of damages in order to avoid an obvious injustice.  In that case, a breach of contract concerned the conducting of a competitive business.  The court analysed the Wrotham Park principle which analysis is now to go to the Supreme Court (on a date to be announced).

The courts have long expressed their opposition to a party which deliberately breaches a contract or tort but have applied the Wrotham Park damages principle sparingly.  The Supreme Court judgement is much awaited by many including Hatherleigh Training.

Doing the washing up!

MPs have voted in favour of the PM’s motion that the country should go to the polls meaning the present Parliament will be dissolved 25 working days before the 8th June unless it is prorogued (i.e. suspended) earlier.  At that stage, any legislative issues, be they in public or private bills, before either the House of Commons or Lords, will fall.  Prior to then, the government will attempt to reach agreement with the opposiiton re passing pet pieces of legislation but many controversial proposals will have to be dropped.  This intervening period is commonly known as ‘wash up’.

There are numerous Bills presently before Parliament covering everything from air quality, bats, energy, housing, neighbourhood planning, prisons and courts.  We will have to wait and see which, if any, of these Bills will catch the eye of those deciding which pieces of proposed legislation will be pushed through during the wash up period.

Any which fall could of course be re-introduced by the new government.  There will be many who wish to see more support for, for instance, neighbourhood planning which will build on the reforms introduced by the Housing and Planning Act, 2016 and give local communities ‘real statutory weight in the planning system’ (see the Department for Communities and Local Government fact sheet entitled Neighbourhood Planning).  This fact sheet reports that some ‘2000 groups have started the neighbourhood planning process since 2012′ leading to over 280 successful neighbourhood planning referendums having taken place.  Over 260 community plans have been adopted and are being used as a starting point for determining local planning applications.

Watch this space for more news in due course.

It all turns on the facts of the case

In November 2016 we considered business rates.  We mentioned the awaited Supreme Court judgement in Newbigin v SJ & J Monk.  Published on 1 March ([2017] UKSC 14), the question before the court was in circumstances where premises are stripped out for refurbishment, at what point are they incapable of beneficial occupation and not liable for business rates?

Having accepted a surrender of a lease for a single office suite, the landlord completely stripped out the property with the intention of creating adaptable space either to be used for single occupancy or for three separate suites.  The building works included removal of all internal components excepting enclosures for lift and stairways leading to other floors.  Suspended ceilings, raised floors, masonry walls, partitioning, electrical, sanitary and drainage systems were all removed.  Whilst the works were conducted the landlord’s agents proposed a rateable value reduction for the premises from the previous £102,000 to £1.  The valuation officer refused and an appeal was lodged with the Valuation Tribunal.  The Tribunal held the premises were out of repair but assumed in reasonable repair pursuant to the Rating (Valuation) Act, 1999.  The Upper Tribunal did not agree - the works went beyond those for disrepair and reduced the rateable value to £1.  The Court of Appeal overturned the decision and the case came before the Supreme Court.

Their Lordships concluded the premises were undergoing reconstruction on the material day and that the Upper Tribunal was entitled to alter the rating list as it did (i.e. giving a rateable value of £1) to reflect the reality of the stripped out premises.

Whilst welcomed by all business rate payers, the decision is based on the very particular facts of the case and the works being conducted.  Care should be taken in applying the decision to other facts and circumstances.

Stopped by a great crested newt?

Stories of the great crested newt, a protected species under European and UK law, stopping developers in their tracks, abound.  Disturbance of or damage to newts and their habitat can only take place on the grant of a protected species European licence.  Granted on a site-by-site basis, it can take years to obtain one.  However, in presenting his department’s white paper on housing to the Commons on 7 February 2017, the Rt Hon Sajid Javid said house building will be speeded up and “we will tackle unnecessary delays caused by everything from planning conditions to great crested newts”.  This white paper relates to England alone.

Future protection of the great crested newt is to be conducted on a nationwide and not site-by-site basis and councils will be able to authorize development if outside new national protected areas, even if it affects newts, when granting planning permission.  Natural England stated in a recent press release that the project will remove “the need for expensive surveys prior to building works and individual licences to disturb newts if they are present.”

This is not, however, going to happen tomorrow.  Piloted in Woking, Surrey and envisaged as a three year programme, areas where the great crested newt is most prevalent will be surveyed, mapped and the areas linked across England.  Small, isolated colonies of newts may struggle to survive but if part of a large protected area, they can reportedly thrive.  Developers will be encouraged to develop elsewhere safe in the knowledge that their development will not be delayed by the potential existence of this creature.

Whether or not this proposal will assist development, only time will tell.

All Aboard!

The Equality Act 2010 imposes a duty on any service provider (providing a service to the public or a section of the public whether or not for a fee) to make reasonable adjustments to, inter alia, a provision, criterion or practice which puts a disabled person at a substantial disadvantage in comparison with persons who are not disabled.  In line with its duty, a bus company provided a space (’the space’) on buses for wheelchair users.  A sign read “Please give up this space if needed for a wheelchair user.”  A wheelchair user wished to board a bus but was asked by the driver to wait as the space was occupied by a woman passenger with a pushchair.  Upon being asked by the driver to move, the woman refused and the wheelchair user was left at the bus stop.  He issued proceedings against the bus company and the case proceeded to the Supreme Court (FirstGroup plc v Paulley [2017] UKSC 4).

The bus company’s policy at the time of the incident did not give wheelchairs priority over ‘buggies’.  This was later changed giving wheelchair users priority but the bus company made clear that a driver had no power to compel passengers to vacate the space.  Although conduct regulations authorise a driver to remove a passenger infringing regulations or request assistance from a police constable, the company’s policy was simply to request that the space be vacated if required.  The seven Supreme Court judges hearing the case felt this did not go far enough.  Although the judges could foresee difficulties and potential inconvenience to other passengers, to reasonably require and not simply request a passenger to move would, they felt, be sufficient.  Lady Hale said “With a proper system of notices, making the position plain, backed up with firm statements from the driver, everyone would know where they stood.  The culture would change.  Disruption and confrontation would be unlikely.”  It is hoped they are correct.

Overriding easements

We looked at rights to light two years ago in December 2014.  We still await the Government’s reaction to the Law Commissioners’ draft bill although the chances of MPs taking time with this issue in the present political climate are exceedingly unlikely.  In consequence, developers still face the difficulties presented by rights to light.  Some will have proposed developments redesigned to avoid breach of a neighbour’s rights, others will purchase those rights and a few will fight the matter out in the courts hoping the change in the Shelfer rules will assist them (see our May 2015 newsletter).

On occasions, however, the relevant local planning authority, wishing to see a development go ahead for planning purposes, will exercise their statutory right to override easements by acquiring or appropriating an interest in the property concerned.  Originally, this right was encapsulated in s237 Town and Country Planning Act, 1990.  However, this has now been rescinded and replaced by s203 Housing and Planning Act, 2016.  The sections are similarly worded and many commentators say differ little.  What the new section has done is ‘tidy up’ this law in relation to both local authorities and other statutory authorities.

Local authorities used s237 (and will now use s203) to differing degrees.  The City of London, for instance, will consider its use on a case by case basis and has used it in a few high profile cases e.g. to enable the development of the building now known as the Walkie Talkie building at 20 Fenchurch Street.  It appears, however, that neighbouring Tower Hamlets used the section for the first time in January 2014 to enable the City Point and Island Point development.

Some people have expressed concern that use of this statutory right might breach human rights (in that private rights are overridden by the acquiring local authority).  However, the right can only be exercised for planning purposes which might be said to be for everyone’s benefit.  Time will tell, no doubt.

Business Rates

Business rates are payable on most non-domestic properties.  The rateable values used for these properties in England and Wales have recently been reviewed.  Proposed new rateable values were published in draft by the Government on 30 September 2016 and these figues (based on April 2015 rental values) will form the basis of business rate demands from 1 April 2017.  Press coverage has reported that businesses in London will bear the brunt of the increase.  The Guardian states that, for instance, shops on the Capital’s Regent Street will face an 87% increase whereas those in Northern towns will ‘enjoy a drop of up to 56%’.  In Scotland, too, business rates are to be reviewed in 2017.  The anticipated review in Northern Ireland is yet to be announced.  The multipliers (poundage rate in Scotland) also used in business rate calculation will be reviewed, too.

In addition, an important court case relating to business rates has been heard in the Supreme Court although it is uncertain when judgement will be given.  In Newbegin v SJ & J Monk [2015] EWCA Civ 78 (citation for the appealed Court of Appeal judgement), the Court is to determine the physical state of premises before liability for rates is assumed.  The premises were stripped out for refurbishment.  The question is would the premises be capable of beneficial occupation and hence liable for rates?

Finally, some 57 cases were heard together early in 2016 by the Valuation Tribunal relating to whether or not Automated Teller Machines (ATMs), such as one finds in supermarkets, should be valued as a separate hereditament from its host store or premises for business rate purposes.  If separate, it was feared business rates payable on ATMs would be substantial.  In each case, the Tribunal found ATMs were to be classed as separate hereditaments.  It is understood that Sainsburys and others are appealing these decisions.

Watch this space for further news on these appeals.

As easy as it sounds?

A recent decision of Martin Rodger QC, Deputy President of the Upper Tribunal (Lands Chamber), has highlighted one reason why service charges have proven, over the years, to be so problematic.  The Leaseholders of the Foundling Court and anor v The London Borough of Camden and others [2016] UKUT 366 (LC) concerns substantial works conducted by the freehold owner of “a grade II listed complex of shops, flats, offices, car parks and other premises”.  The London Borough of Camden held a long lease of some residential parts of the Centre.  Pursuant to its lease, it was required to pay, through a service charge, costs incurred by the freehold owner.  In turn, Camden required leaseholders to contribute, again through a service charge, towards certain costs incurred by Camden.

If a landlord of residential premises intends to conduct works, the costs of which are recoverable from tenants pursuant to a service charge, the landlord has to give notice of its intentions to its tenants and to consult with them concerning the works before the works are conducted (see Landlord and Tenant Act 1985 and The Service Charge (Consultation Requirements) (England) Regulations 2003).  As a second stage of the consultation, the landlord must submit to its tenants estimates for carrying out the intended work giving at least 30 days’ notice enabling them to respond to the notices.  If the landlord fails to follow this procedure, it can only recover a maximum of £250 from each of its tenants towards the cost of the works conducted.  The landlord will suffer any shortfall.

The preliminary question before Martin Rodger QC was whether the obligation to consult with the leasehold owners of the flats was imposed on the freehold owner or upon Camden.  He held the statutory obligation to consult fell on the freehold owner as it was conducting the works.  He recognised the practical difficulties of so doing but expressed the view that it could obtain the information required from its tenant (in this case Camden Council) which would co-operate as it would be it (and not the freehold owner) that suffered any shortfall in the service charge.  This sounds easy but it needs little imagination to anticipate the problems that could arise.

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

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