PROPERTY LAW BULLETIN OCTOBER 2002 Any practitioners dealing with long leaseholds should note the new forms of notices for tenants applying for enfranchisement and extensions set out in the Leasehold Reform (Notices) (Amendment) (England) Regulations 2002 SI 1715 (noted below). In relation to shorter tenancies, Gil v Baygreen Properties Ltd is a reminder of the need for the judge to check that the statutory requirements are fulfilled even where the tenant consents to the making of an order for possession. Since the basis of the decision is that the court must have jurisdiction, this must apply equally where the tenant is absent and the application for an order uncontested. Some parts of the Commonhold and Leasehold Reform Act 2002 and the Homelessness Act 2002 have now been brought into force (see Other Developments, below). JA Pye v Graham has finally reached the House of Lords, where the squatter was successful, in a reversal of the decision in the Court of Appeal. You will find a list of our sources at the end of the bulletin. If you know anyone who would like to receive a copy of this and future bulletins, please contact email@example.com to have them added to our mailing list. Mailings will be by email but hard copies can be provided on request. Chambers also produces an Employment Law Bulletin and if you or your colleagues would like to receive this please contact the clerks as above to be added to the mailing list. CASE LAW UPDATE ADVERSE POSSESSION No inconsistency between squatter being willing to pay owner of paper title if asked yet remaining in possession in the meantime 865; (2002) 3 WLR 221 JA Pye (Oxford) Ltd & anor v Graham & anor (2002) UKHL 30; (2002) 3 All ER The claimant owned the paper title to a plot of land which the defendant had used, with permission, for grazing and grass-cutting until 31st August 1984. After that date the defendant had farmed the land all year round for 14 years, treating it as his own land. The owner did nothing with the land during this time and did not bring proceedings until 30th April 1998. The trial judge held that the defendant had obtained title to the land but the Court of Appeal found that the defendant had lacked an intention to possess the land to the exclusion of the claimant. The House of Lords found that there would be a dispossession of the paper owner of land (for the purposes of para 1 sch 1 Limitation Act 1980) in any case where a squatter assumed possession in the ordinary sense of the word. Possession was single and exclusive, so if the squatter was in possession the owner could not be. Legal possession requires a sufficient degree of physical custody and control (factual possession) and an intention to exercise that custody and control on one’s own behalf and for one’s own benefit (intention to possess). The necessary intent was to possess, not to own, and only to exclude the paper owner so far as was reasonably possible. Evidence of attempts to oust the title of the paper owner was not necessary as the test was not intent to own. There was no inconsistency between a squatter being willing to pay the paper owner if asked and being in possession in the meantime. The defendant had had the necessary factual possession and intention to possess and so had gained title to the land. FIRE Liability for escape of fire arises even where caused by negligence of independent contractor Johnson (trading as Johnson Butchers) v BJW Property Developments Ltd (2002) EWHC 1131 (TCC); (2002) 3 All ER 574 The parties were the owners and occupiers of adjoining premises which were 16th century buildings with timber frames. The defendant engaged a contractor to carry out works to the fireplace and chimney in his premises. The works were carried out negligently and as a result of the condition in which the fireplace was left, a fire broke out which spread through to the claimant’s premises. The defendant was not liable under s.86 Fires Prevention (Metropolis) Act 1774 as that Act does not cover fires spread from a domestic fire started in a grate. However he was liable for the escape of fire resulting from the negligence of an independent contractor. This liability arose under the ancient strict liability for the escape of ignis suus, which has survived the contrary trends in the general development of the law of negligence. The defendant was liable both in negligence and in nuisance, having primary liability for the fire damage and also being vicariously liable for the negligence of his independent contractor. HIGHWAYS Council is liable to maintain footpath under s.36(1) HA 1980 where it has constructed it in capacity other than that of highway authority July 2002) TLR; (2002) 3 WLR 1072 Gulliksen v Pembrokeshire County Council CA (2002) EWCA Civ 968; (22nd The Court of Appeal allowed an appeal against the decision of Neuberger J (noted in the July 2002 bulletin). The claimant had brought a claim for personal injury after tripping over a manhole cover constructed by the council 20 years earlier. The court held that a footpath on a housing estate which had been built by a council acting in its capacity as a housing authority was a highway maintainable at public expense under s.36(1) Highways Act 1980 where it had previously been a highway maintainable at public expense under Highways Act 1959. Neuberger J had considered whether the footpath fell within s.36(2)(a). However he should have looked first at s.36(1), which covered all highways maintainable at public expense which had been so maintainable under the 1959 Act. S.36(2)(a) was a residual set of categories and so was not relevant. There was no defence under s.58 of the 1980 Act and so the claimant was entitled to succeed. HOUSING Legislation does not require that housing benefit review board be composed of councillors who are not impartial so s.6(2)(b) HRA is no defence against existence of such a board Regina (Bono and another) v Harlow District Council (2002) EWHC 423 (Admin); (2002) WLR 2475 Harlow DC set up a housing benefit review body composed of its own councillors. This was challenged under Art 6 as a failure to provide an independent and impartial tribunal. Harlow sought to avail itself of the defence in s.6(2)(b) of the Human Rights Act 1998 (primary legislation incapable of being read in a way that is compatible with ECHR). It argued that sch 7 and reg 81(3) of the Housing Benefit (General) Regulations 1987, made pursuant to the Social Security Administration Act 1992, gave it no discretion as to the composition of the board. Richards J found that the 1992 Act and the Regulations did not require that the board be composed of councillors. S.6(2)(b) therefore provided no defence. The review should be determined by an independent and impartial board constituted under the current revised appeal procedure. LAND REGISTRATION Land Registry must indemnify for loss caused by error in search certificate (2002) EWHC 330; (2002) 3 WLR 1011 Prestige Properties Ltd v Scottish Provident Institution & anor Ch Div Prestige Properties obtained an official search certificate from the Land Registry showing that land actually registered in 3 separate strips was not registered. It did not attempt to register the land, but relied on the search certificate in the sale of the land to Scottish Provident. On a claim by Prestige for an indemnity under s.83 of the Land Registration Act from the Land Registrar, Lightman J found that Prestige had established that the error had caused loss, even though it was not the sole or sole effective cause of loss. A party was not bound to look beyond what a search certificate told him. However Prestige should have applied to register the land and so was partly responsible for its own loss. The Land Registrar was ordered to indemnify Prestige for 90% of its loss. LEASES Improvement reversing works done by a predecessor in title (or current tenant) which had depressed the value of the property is not improvement within 1967 Act Shalson v Keepers and Governors of the Free Grammar School of John Lyon (2002) EWCA Civ 538; (2002) 3 All ER 1119 The school owned a freehold residential property which had been let in 1843 as a single house, then converted into five flats by the lessee under a lease granted in 1947. In 1991 Mr Shalson acquired the lease and converted the property back into a single house at his own expense. He then argued that the conversion was an improvement under s.9(1A)(d) Leasehold Reform Act 1967 and so that it was an expense that went to the diminution of the price to be paid for the freehold. The Lands Tribunal disagreed. The Court of Appeal also disagreed, holding that where the alleged improvement simply reversed works done by a predecessor in title (or by the current tenant) which had depressed the value of the property, the reversal could not be said to be an improvement within the 1967 Act. The Act treated the tenant and his predecessors in title as a single entity, and so it could not be an improvement if that entity corrected something it had done wrong on an earlier occasion. When business tenant vacates before the contractual term date the tenancy ceases on the term date irrespective of s.25 notices and counternotices or s.26 proceedings 367; (2002) 1 WLR 2106; (2002) 4 All ER 143 Surrey County Council v Single Horse Properties Ltd CA (2002) EWCA Civ The landlord served a notice on its business tenant under s.25 Landlord & Tenant Act 1954 to terminate the tenancy on the contractual term date. The tenant served a counter notice and applied to the court to continue the tenancy under s.26. The tenant then vacated the premises before the contractual term date. At first instance DJ Coni struck out the tenant’s application to extend the lease, but ordered that the existing lease should continue under s.64(1)(c) with rent payable for 3 months. On appeal by the tenant the Court of Appeal found that where a tenant had vacated after service of a s.25 notice, the tenancy expired by effluxion of time on the contractual term date. It did not continue under s.64(1)(c). Its expiry was not prevented by service of the counter-notice or the application for a new tenancy. Accordingly the tenant was not liable for any rent referable to the period after the contractual term date. Per curiam Arden LJ observed that had the tenant failed to tell the landlord that he had ceased to occupy the premises, he would have been at risk of a finding that he was estopped from denying he was in occupation at the term date and therefore liable for continuing rent. STANDARD CONDITIONS OF SALE Written consent in condition 8.3 of Standard Conditions of Sale does not mean unconditional or formal consent; consent subject to conditions or "subject to licence" is still a plain indication of consent 177; (2002) 1 WLR 2149 Aubergine Enterprises Ltd v Lakewood International Ltd (2002) EWCA Civ Companies registered in the British Virgin Islands agreed the sale of a leasehold property in London and incorporated the Standard Conditions of Sale (3rd ed). The landlord’s written consent was required for an assignment. By condition 8.3.4 either party might rescind the contract if that consent had not been given 3 days before completion, or if consent was given subject to a condition to which buyer reasonably objected. The landlord agreed consent to assign, "in principle" and "subject to licence" in a series of letters written to the buyer nine days before completion. Three days before completion the buyer sought to rescind. Auld and Robert Walker LJJ found that a plain indication of consent had been conveyed which constituted clear consent in writing within the meaning of the Standard Conditions. Ward LJ dissented. WARRANTS Warrant for possession is a nullity if issued before date on which possession to be given up Bell v Tuohy (2002) EWCA Civ 423; (2002) 3 All ER 975 A possession order was obtained against the applicant Mr Tuohy, by his trustee in bankruptcy (the respondent). Mr Tuohy was to give up possession on or before 11th October. The trustee anticipated that the Mr Tuohy would not leave voluntarily and so applied for a warrant on 14th August. The bailiffs attended on 15th October but Mr Tuohy refused to let them in. The trustee applied to the court to commit Mr Tuohy to prison for contempt of court in refusing to comply with the order for possession and the warrant. The application was defective and the judge adjourned it, warning Mr Tuohy that if he failed to comply with the order for possession he could be sent to prison. At the adjourned hearing Mr Tuohy said he would not leave unless he was thrown out or sent to prison. The judge found that the warrant could have been set aside on an application but was valid until such an application was made. Mr Tuohy was committed to prison for seven days so that possession could be obtained peacefully. The Court of Appeal found that the warrant for possession was a nullity as it had been issued before the date on which possession was to be given up. CCR Ord 26 r17(2) did not confer any right to apply for a warrant until the date on which possession was to be given up had passed. Accordingly Mr Tuohy was not in contempt for obstructing its execution. However the committal order was to stand as Mr Tuohy had said that he would not comply with the order for possession. In brief Easements Mulvaney v Jackson & ors CA (27th August 2002) TLR The owners of various cottages had used a plot of land adjacent to the cottages as a communal garden. The plot had been in the same ownership as the cottages when they were sold off. The Court of Appeal held that the use as a communal garden could and did constitute an easement over the plot of land. Highways TLR Regina (Hargrave & anor) v Stroud District Council CA (5th August 2002) Where a council receives an application for a footpath to be diverted under s.119 Highways Act 1980 and is satisfied that it is expedient to make the order, it is not under a duty to divert it although it has a discretion to do so. Where objections are received it also has a discretion whether to submit the order to the Secretary of State for Environment, Transport and the Regions for consideration but does not have to do so. Housing Gil v Baygreen Properties Ltd CA (17th July 2002) TLR The court cannot make a possession order under s.7 Housing Act 1988 simply because the parties give their consent. The judge must satisfy himself that the statutory requirements are fulfilled – for example the tenant may make an admission as to the alleged rent arrears under grounds 8 or 10. Unless the correct questions were put to the tenant there was a serious risk of a consent order being made without the court having jurisdiction to make it. Howard v Charlton CA (19th August 2002) TLR A caravan does not cease to be a mobile home within the protection of the Mobile Homes Act 1983 simply because it has a porch extension bolted onto it. Nottingham CC v Thames CA (19th August 2002) TLR An application for an injunction to prevent anti-social behaviour under s.152 Housing Act 1996 cannot be used to protect employees in a local authority’s housing office. There is no sufficient nexus between the local authority’s housing office and its residential premises. However protection could be sought under other legislation such as s.1 Crime and Disorder Act 1998. Dunn & anor v Bradford Metropolitan DC; Marston & anor v Leeds CC CA (5th September 2002) TLR Where a secure tenant has voluntarily given up possession without the need for execution of an order for possession, the court has no power to postpone the date of possession under s.85(2) Housing Act 1985. The purpose of the powers in s.85(2) are to allow the court to balance the right of the public sector landlord to possession against the social need to avoid making homeless tenants who rely on public sector housing. This power is not needed where the tenant has given up possession. Yenula Properties Ltd v Naidu Ch Div (29th August 2002) TLR The requirement for service of a notice under s.20 Housing Act 1988 for the creation of an assured shorthold tenancy can be satisfied by service of the notice on the tenant’s agent. Land registration Smith & anor v South Gloucestershire Council CA (30th August 2002) TLR Where a purchaser of property is entitled to compensation from his local council because of loss resulting from a failure to register a charge in the local land charges register the loss is to be assessed as at the date of the compensation hearing. The right to compensation arises under s.10 Local Land Charges Act 1975. Leases Rock Garden Ltd v Covent Garden Market LP Ch Div (3rd October 2002) TLR Where a landlord has breached its obligations under a lease by failing to use his best endeavours to obtain access rights to the demised premises for his tenant it is arguable that the tenant has a right to use an alternative route over the landlord’s own property. Neuberger J felt that this was an adventurous argument but granted an interim injunction preventing the landlord from restricting the tenant’s access route over his property on the basis that the balance of convenience favoured the tenant and that he could not be compensated adequately in damages. Mortgages Bristol & West plc v Bartlett & anor; Paragon Finance plc v Banks; Halifax plc v Grant CA (9th September 2002) TLR Even where a lender has exercised his power of sale before issuing proceedings to recover a mortgage debt, s.20 Limitation Act 1980 still applies. The limitation period in relation to the principal is 12 years from the time the cause of action accrued, and in relation to interest is 6 years (under s.20(5)). Nuisance Calvert v Gardiner & ors QBD (22nd July 2002) TLR The ringing of bells in a parish church which may constitute a private nuisance is not actionable against the bishop of the diocese in which the church is situated. Responsibility for the operation of the bells vests in the vicar and the bishop has no power to discipline the vicar in relation to bell-ringing. OTHER DEVELOPMENTS All of the statutes and statutory instruments referred to can be found on the HMSO website, at www.hmso.gov.uk COMMONHOLD AND LEASEHOLD REFORM ACT 2002 The Commonhold and Leasehold Reform Act 2002 (Commencement No.1, Savings and Transitional Provisions) (England) Order 2002 SI 1912 brought various provisions of the CLRA 2002 into force on 26th July 2002. The provisions brought into force were ss.114120, 125, 127-8 (collective enfranchisement by tenants of flats); ss.129-136 (acquisition of new leases by tenants of flats); ss.137-147 (enfranchisement and lease extension by tenants of houses); ss.160-1 (applications to a leasehold valuation tribunal for the appointment of a manager to a block of flats; and s.162 (grounds for applying to vary a lease). COMMONHOLD LAND REGISTRATION RULES The Land Registry has published a consultation paper containing the draft Commonhold (Land Registration) rules and forms. Responses should be in by 22nd November 2002. The rules relate to the registration process for commonhold documents and freehold estates in commonhold land under the new Act. This consultation is only concerned with the rules under the Act and not the Commonhold Regulations required under it. The consultation paper can be found on the Land Registry website (www.landreg.gov.uk) and hard copies can also be provided (020 7917 8888, ext 4405). HOMELESSNESS ACT 2002 Two recent statutory instruments deal with commencement of HA 2002. The Homelessness Act 2002 (Commencement No.1) (England) Order 2002 SI 1799 brought the following sections into force on 31st July 2002: (a) Ss. 1-4 (homelessness reviews and strategies); (b) Ss. 5-7 and 9-10 (other functions relating to homelessness); (c) s.19 (financial provision); (d) minor and consequential amendments and repeals (part of s.18, and s.19). It also brought s.12 (co-operation in certain cases involving children) into force on 1st October 2002. The explanatory note observes that s.8 and paragraphs 3 and 7 of sch 1 came into force on Royal Assent. The Homelessness Act 2002 (Commencement No.2 and Transitional Provisions) (England) Order 2002 SI 2324 brought s.11 and s.18(1) (so far as it applies to para 17(a) of sch 1) into force on 30th September 2002. S.11 inserts a new s.204A into the Housing Act 1996, conferring a new right on a homelessness applicant to appeal to the county court against a decision of the local housing authority under s.204(4) HA 1996 (power to accommodate pending s.204 appeal to county court). Para 17(a) of sch 1 amends s.204 of HA 1996 to allow the county court to extend the period of 21 days allowed for an appeal under that section against a local housing authority’s decision on a homelessness application. HOMELESSNESS: PRIORITY NEED The Homelessness (Priority Need for Accommodation) (England) Order 2002 SI 2051 came into force on 31st July 2002. Under Part 7 Housing Act 1996 persons who are homeless or threatened with homelessness can apply to their local housing authority for accommodation. This Order extends the descriptions of persons in priority need under s.189(1) HA 1996 to cover the following: (a) young people aged 16 or 17 who are not within the responsibility of social services; (b) under 21s (except students) who were in care when aged 16 to 18 but have since left care; (c) people who are vulnerable because they have been in care when aged over 21, have served in the armed forces or have been in prison; (d) people who are vulnerable because they have left accommodation because of violence or threats of violence which are likely to be carried out. HOUSING BENEFIT (WITHHOLDING OF PAYMENT) BILL This bill envisages the withholding of housing benefit on grounds of anti-social behaviour in certain circumstances. LEASEHOLD REFORM ACT: NEW FORMS The Leasehold Reform (Notices) (Amendment) (England) Regulations 2002 SI 1715 came into force on 26th July 2002. The Regulations provide new forms of notices to be used by tenants applying for enfranchisement and extension of long leaseholds under the Leasehold Reform Act 1967. Forms which are substantially to the same effect as those prescribed may also be used. Most of the amendments follow from the changes made to the 1967 Act by the Commonhold and Leasehold Reform Act 2002 (ch. 4 part 2). These included changes to the qualifying rules for enfranchisement and lease extension as follows: - abolition of the residence test (with some exceptions); - a new requirement that the tenant must have held the lease for at least two years; - abolition of the low rent test; - right to buy the freehold within the term of a lease extension; and - new rights and qualifying rules for personal representatives of a deceased leaseholder. LONG RESIDENTIAL TENANCIES The Long Residential Tenancies (Principal Forms) (Amendment) (England) Regulations 2002 SI 2227 does exactly what you might expect. It came into force on 30th September 2002, and amends two forms prescribed for the purposes of sch 10 Local Government and Housing Act 1989, which deals with security of tenure on the ending of long residential tenancies. Case references Cases mentioned in earlier bulletins which have since been reported elsewhere include Bland v Ingrams Estates Ltd & ors (No 2) (2001) EWCA Civ 1088, (2002) Ch 177, (2002) 1 All ER 244; BHP Petroleum Great Britain Ltd v Chesterfield Properties Ltd & anor (2001) EWCA Civ 1797, (2002) Ch 194, (2002) 1 All ER 821; Malory Enterprises Ltd v Cheshire Homes (UK) Ltd & ors (2002) EWCA Civ 151, (2002) Ch 216, (21st March 2002) TLR; Regina (Beresford) v Sunderland City Council (2001) EWCA Civ 1218, (2002) QBD 874, (29th August 2001) TLR; Marcic v Thames Water (2002) EWCA Civ 64/65?, (2002) QBD 929, (2002) 2 All ER 55; Marcic v Thames Water (No 2) (2001) EWHC Technology 394, (2002) QBD 1003, (2001) 4 All ER 326; Wandsworth LBC v Railtrack plc (2001) EWCA Civ 1236, (2002) QBD 756, (2nd August 2001) TLR; Gulliksen v Pembrokeshire CC (2002) QBD 825, (2002) 2 WLR 1124; Pumperninks of Piccadilly Ltd v Land Securities Plc & ors (2002) EWCA Civ 621, (2002) 3 All ER 609, (30th May 2002) TLR; Starmark Enterprises Ltd v CPL Distribution Ltd (2001) EWCA 1252, (2002) 4 All ER 264. Sources The following sources have been used in the compilation of this bulletin: The Law Reports (QBD parts 5-8, Ch Div parts 6-8, HL parts 6-8); 2002 3 All ER parts 3 to 12 and 2002 4 All ER parts 1 to 3 covering 27.6.02 to 9.10.02; WLR 2002 parts 24 to 36 covering 28.6.02 to 11.10.02; TLR from 19.6.02 to 9.10.02; recent legislation. Disclaimer The information and any commentary on the law contained in this bulletin are provided free of charge for information purposes only. No responsibility for its accuracy and correctness, or for any consequences of relying on it, is assumed by any member of Thomas More Chambers. The information and commentary does not, and is not intended to, amount to legal advice and the writers do not intend that it should be relied upon. You are strongly advised to obtain specific personal advice from a lawyer about any legal proceedings or matters and not to rely on the information or comments in this bulletin.