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Adverse possession of residential property: all for the best 29 January 2015

When Parliament made trespassing in residential property a criminal offence under section 144 Legal Aid, Sentencing and Punishment of Offenders Act 2012, did it follow that it intended that obtaining adverse possession of residential property (which invariably involves trespassing in it) should no longer be possible?

No, said the High Court last year in Best v Chief Land Registrar [2014] EWHC 1370 (Admin).  The issue is discussed in my article on that case from May 2014 “Adverse possession of residential property“.  Parliament was silent on the issue and therefore cannot have intended to change the law in this way.

This conclusion has now been confirmed by a unanimous Court of Appeal in a careful and surprisingly lengthy judgment in R (on the application of Best) v Chief Land Registrar [2015] EWCA Civ 17.

This does not mean that Mr Best has “won”.  It means that he can now start the process of trying to persuade the Land Registry that he is entitled to be registered as proprietor.  Originally the Land Registry threw out his application claiming it was defective.  At least he is over the first hurdle.

For those wanting to know what happens next, have a look at Land Registry Practice Guide 4.  The process is labyrinthine – deliberately so, as the policy behind the changes introduced in 2003 by the Land Registration Act 2002 was to make it possible for a squatter (I am using the word in a neutral, not a pejorative, sense) to be able to obtain title to registered land only on very rare occasions.  This is part of the Government’s attempt to persuade landowners to register their properties voluntarily.  Registered property is safer as you won’t lose it to a squatter, says the Land Registry.  That’s true, but it is much easier for a fraudster to “steal” title to property that is registered, as opposed to unregistered.  Fortunately the Law Commission will be taking a look at how the Land Registration Act 2002 is operating in a project that is about to kick off, and I’m sure that this will be on its radar.

 

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Gordon Ramsay’s case turns on whether his CEO had authority to apply a signature 26 January 2015

Last week, celebrity chef Gordon Ramsay failed in an attempt to escape from a lease guarantee (Ramsay v Love [2015] EWHC 65 (Ch)).  Mr Ramsay had claimed that the guarantee in his name had been arranged without his authority by his father-in-law, Christopher Hutcheson, who had arranged for his (Mr Ramsay’s) signature to be applied to the lease using a signature-writing machine called a “Ghostwriter”.

This appears to be the machine in question.  The website claims that it is “a workhorse machine that will sign all day long and never get writer’s cramp while providing state-of-the-art signature reproduction on all your letters, certificates, diplomas, photographs, cards, … the list is endless.”

The Ghostwriter: A Workhorse That Never Sleeps

Gordon Ramsay lost the case, because the judge, Morgan J, held that Mr Hutcheson, who was CEO of Mr Ramsay’s company at the time, had had Mr Ramsay’s authority to commit him to the guarantee on his behalf.

From the property lawyer’s point of view, which is how we tend to look at cases on this website, the case initially appeared to be of interest because of the legal effectiveness (or otherwise) of a machine-made signature.  Unfortunately, it turns out that the case is less exciting than it appears, mainly because the parties were not arguing over that issue.  The case revolves around Mr Hutcheson’s authority to commit Mr Ramsay, and was decided principally on the evidence before the court.

Machine-written signatures

This is what the judge, Morgan J, had to say about the legal issues around the machine-written signature (at [7]).  I have split one very long paragraph into a number of sections for convenience, and added my comments beneath each section.

For the avoidance of doubt, I will refer to certain matters which were not argued in this case. It was accepted that for the purpose of signing a document (and, in particular, a deed) creating a guarantee, it was not necessary that the guarantor should sign the document with a pen held in his own hand. It was accepted that if Mr Ramsay had himself operated the signature writing machine to place his signature on the deed, then the deed would have been effectively signed by him.

This is a very effective argument.  A signature is merely an indication that a person intends to be bound.  It is not necessary for a signature to be written in “wet-ink”: there has been a recent case (Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd [2012] EWCA Civ 265) in which a name typed in an e-mail was held to be a signature for the purpose of section 4 Statute of Frauds 1677.  If a typed name can be an effective signature, so can a machine-written signature.  (As an aside, I always type my name, “Peter”, at the end of my e-mails, to indicate that is the end of the e-mail.  I consider that to be my “signature”.)

Similarly, it was accepted that if Mr Ramsay had expressly authorised another person to operate the signature writing machine to place Mr Ramsay’s signature on the deed, then the deed would have been effectively signed by Mr Ramsay.

This was the key to the landlord’s argument that Mr Ramsay was bound by the guarantee: he had authorised Mr Hutcheson to place his signature on the lease.

Section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 states that a deed must be “signed” by an executing party. There are statements in the authorities which suggest that a document is only “signed” by an executing party when he signs it with a pen in his own hand: see Firstpost Homes Ltd v Johnson [1995] 1 WLR 1567 at 1575 and 1577, citing Goodman v J Eban Ltd [1954] 1 QB 550 at 555 and 561. However, those statements were not designed to distinguish between signing by use of a pen held in the executing party’s hand as distinct from the use of a signature writing machine.

Further, no point was taken as to the requirement in section 1(3) of the 1989 Act that the deed be signed by the executing party in the presence of an attesting witness. In any case, a guarantee can be entered into otherwise than by deed. Initially, counsel for Mr Ramsay did refer to section 4 of the Statute of Frauds Act 1677, which states that a guarantee must be evidenced in writing by a document which is “signed” by or on behalf of the guarantor and some point was sought to be made about the application of section 4. However, it was pointed out that the disputed “guarantee” in this case was a guarantee and indemnity and that it has long been established that section 4 did not apply to a contract of indemnity (see Chitty on Contracts, 31st ed., paragraph 44-043), so any possible point under section 4 fell away. At this point, I should explain that I will for convenience in this judgment refer to the disputed obligation in this case as “a guarantee” even though, more technically, it is a contract of indemnity.

The issue concerning the Statute of Frauds is interesting.  Nowadays virtually every professionally drafted guarantee is drafted as a combined guarantee and indemnity, so it seems that section 4 will now only be relevant for informal guarantees.  They do exist – a guarantee was given within one sentence in a letter in Associated British Ports v Ferryways NV [2009] EWCA Civ 189 – but it would be very unusual for them not to be given in writing.  They are also likely to bear a signature, even if it is only a typewritten signature in an e-mail (as in the Golden Ocean Group case mentioned above).

Unanswered questions

So even after this case, we are left with a list of unanswered questions about what constitutes “signing” a document in the context of section 2 Law of Property (Miscellaneous Provisions) Act 1989.  These include:

1.  Will a machine-written signature suffice for section 2? Presumably yes (but to be honest this wasn’t a question that had ever occurred to me before this case).

2.  Will a typewritten signature suffice for section 2? It was sufficient to constitute signature of a guarantee in the Golden Ocean Group case, so presumably it would suffice for section 2.

3.  Can a contract be created by e-mail, if there is a chain of e-mails each of which incorporates a typed signature? Logically this should not be possible.  Only the sender’s original e-mail is the one in which the “signature” was typed.  All the other occasions are copies of the signature.  But no-one yet knows the answer.

4.  Most importantly (as this procedure is apparently in everyday use already), can a contract under section 2 be created by exchanging e-mails to which are attached scanned copies of contracts, each of which bears a “wet-ink” signature on the original?  Following the case of R (on the application of Mercury Tax Group) v HMRC [2008] WHC 2721, the Law Society issued advice on whether this (and other methods of signing documents) would be legally effective.  The counsel who advised on this were of the opinion that this procedure (if done in a particular manner) would result in a binding contract that complies with section 2.  I still have doubts about whether this is correct.  We urgently need the question to be considered by the courts.

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Government withdraws amendment to revise the Electronic Communications Code 23 January 2015

Just ten days ago, I reported in my article “Sudden reform of the Electronic Communications Code” on 13 January 2015 that the Government had, out of the blue, proposed a 59-page amendment to the current Infrastructure Bill, to incorporate an entirely new schedule containing a revised Electronic Communications Code.

The idea was generally welcomed but the timetable was not.  The Government appears to have been taken by surprise by the suggestion that stakeholders – including the property industry and the telecoms companies, to name but two – might have their own ideas of what a revised code might contain.  In any case, the devil is in the detail as usual.

So apparently the amendment has been withdrawn, as suddenly as it was tabled.

The normally unflappable BPF issued a press release about the debacle yesterday.  Ian Fletcher, the BPF’s Director of Policy (Real Estate), is quoted as saying: “Introducing a fifty-nine page amendment into a Bill so late in the day is almost unheard off and was always likely to raise a few eyebrows.  No doubt the government’s intentions were well-meaning, and with a little bit of forewarning and consultation with Parliament and stakeholders today’s withdrawal could have been avoided.  We hope to see government begin a full consultation period for the ECC soon, and to work with them to ensure that this much improved version of the Code is debated fully and turned into law in the correct way.”

So it ain’t what you do but the way that you do it, if you’ll pardon the expression.

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Landlord’s refusal to grant consent to assignment costs him £183,000 22 January 2015

The Court of Appeal’s decision in Singh v Dhanji [2014] EWCA Civ 414 was handed down in March 2014, but it appears not to have come to the profession’s attention until much later in the year, for some reason.

It is an interesting case in which the Court of Appeal awarded damages amounting to some £183,000 (plus interest of £30,000) to the tenant, as a result of the landlord’s failure to comply with the requirement in section 1 Landlord and Tenant Act 1988 to give consent to an assignment where it was reasonable to do so.  The tenant claimed damages on the basis of the difference between the price she would have received on a sale of her business (a dental practice) and assignment of the lease in 2007 and the price she could realise at the date of assessment in December 2011.

I was planning to write a blog article on the case but then I discovered that my friend Tarnya Pilgrim at Penningtons Manches had beaten me to it – and written a better article than I could have done.   She has kindly permitted me to reproduce her article below.

The article was first published in Landlord and Tenant Review (on the editorial board of which Tarnya and I both sit) and it is also available on her firm’s website.

The transcript of the case is available on BAILII here.


 

Landlords tread carefully when dealing with tenant alienation applications

by Tarnya Pilgrim, Pennington Manches

The recent Court of Appeal decision in Singh v Dhanji [2014] EWCA Civ 414 highlights that it may not be reasonable to ask a tenant to remedy breaches as a condition of giving consent to an assignment.  The nature and gravity of the breach must be considered.  Breaches that can be easily remedied at the end of the term, or which can be taken up with the incoming tenant, are unlikely to be serious enough to justify refusal of consent.

It is particularly important to deal with consent applications carefully; specifying unreasonable conditions or unreasonably withholding consent can leave landlords open to a damages claim for breach of the statutory duties imposed by the Landlord and Tenant Act 1988.

KEY POINTS

  • Not all breaches entitle the landlord to withhold consent.  It is essential that the nature and gravity of the breach is considered.  Ask the following key questions:

•    Are the landlord’s contractual rights under the lease prejudiced?
•    Is the value of the reversion affected?
•    Can the breaches be remedied easily?

  • Each case will turn on its own particular facts
  • A landlord does not need to show that his conclusions are right or justifiable; he just needs to show that they are conclusions which a reasonable person might reach in the circumstances (Ashworth Frazer Ltd v Gloucester City Council [2001] UKHL 59).
  • The burden of showing that 1988 Act duties have been met falls upon the landlord. It is essential, therefore, that consent applications are dealt with in a considered and timely fashion.

 

COMMENTARY

Despite the 1988 Act having been around for over 25 years, time and money is still wasted where consent applications are not handled correctly.  Both landlords and tenants might like to consider the recently published Protocol for Applications for Consent to Assign or Sublet.  It has British Property Federation endorsement and aims to avoid disputes (suggesting that the parties consider ADR instead of litigation) and improve communication.  Anything that streamlines the process and helps the parties avoid the traps associated with consent applications should be welcomed.

FACTS

The landlord let a dental surgery to the tenant.  Like many leases, there was the usual covenant requiring the tenant to obtain landlord’s consent to an assignment, such consent not to be unreasonably withheld.

The tenant spent £140,000 modifying the premises.  The works included moving two partition walls and replacing dental chairs, sinks and flooring.  The tenant did not inform the landlord of the alterations.

In 2007, the tenant wrote to the landlord seeking consent to an assignment of the lease.  The landlord wrote back consenting to the assignment subject to conditions, the relevant one being that the tenant rectify a number of breaches relating to the tenant’s modifications to the premises (including breaches of fire precautions, decorating covenants and signage restrictions).  Such breaches were specified in a number of s.146 notices served by the landlord.  The landlord then sought possession of the premises, based on the s.146 notices, and the tenant applied to the court for a declaration that she was entitled to damages for unreasonable refusal of consent.

The tenant denied the breaches.  She also argued that, even if the breaches complained of were genuine, they were of such a minor nature that they would not adversely affect the value of the landlord’s reversion.  Accordingly, the landlord’s condition requiring the breaches to be remedied prior to the assignment was unreasonable.

DECISION

The judge at first instance agreed with the tenant.  He declared that the condition was unreasonable and awarded the tenant damages of £183,000 plus interest of £31,000.  The Court of Appeal agreed and dismissed the landlord’s appeal.  Two questions had to be answered:

(1) In the light of the circumstances known to the landlord when he gave conditional consent, did the landlord have reasonable grounds to believe that the tenant was in breach of the lease covenants; and
(2) Were the breaches so serious or so grave that a reasonable landlord could refuse consent to the assignment on the basis of them?

As the statutory duties in the 1988 Act applied, it was for the landlord to show that the condition was reasonable.  The judge at first instance had concluded that the landlord had “completely failed to prove the breaches on which he relied”.  He went on to say that, even if the breaches had been proved they “were not serious enough to have provided [the landlord] with a reasonable ground for imposing a condition”.  Whether a breach is serious enough or not is a question of fact.  The Court of Appeal was not willing to interfere with the lower court’s finding in this regard.  The Court of Appeal held that “the breaches were of a minor nature and were of a kind which would not prejudice the landlord if not remedied until the end of the term … Most of the alleged breaches were ones which, even if they were proved, a landlord could take up with the new tenant if concerned to do so.  Other breaches were of a trivial and minor nature”.

THE LAW

Section 1 of the 1988 Act imposes additional duties upon landlords where the lease contains a qualified alienation covenant:

  • it requires the tenant to obtain landlord’s consent (or the consent of another person) to assign, underlet, part with possession or charge the premises; and
  • it states that the landlord cannot unreasonably withhold that consent.

 

It is noteworthy, however, that the 1988 Act duties do not apply to applications for consent to change use or to carry out works.

In addition, the 1988 Act duties are only triggered where the tenant’s request for consent is in the correct form.  In this connection, the request must be in writing and must be correctly served in accordance with the service provisions in the lease.  The 1988 Act duties include:

Duty to give consent – a landlord must give consent

  • except where it is reasonable not to do so; and
  • within a reasonable time.  It is a question of fact what amounts to a “reasonable” period of time, but it is likely to be measured in “weeks rather than months”  (Go West Ltd v Spigarolo [2003] 1 EGLR 133).

 

Duty to give written notice of decision – Landlords must respond to written requests for consent to assign, etc, in writing and within a reasonable time.  The response must do one of the following:

  • give unconditional consent;
  • give conditional consent, in which case the conditions themselves must be reasonable and must be specified; or
  • refuse consent, in which case the reasons for refusal must be specified.

 

Failure to comply with the 1988 Act may result in damages being awarded: see section 4 of the 1988 Act.

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The danger posed by geometric progressions 20 January 2015

We were taught about progressions, or series of numbers, at school.  They come in two varieties – arithmetic progressions and geometric progressions.  An example of an arithmetic progression is 3, 6, 9, 12, where the next number is obtained by adding a number (or subtracting it).  These are benign.  An example of a geometric progression is 4, 16, 64, 256, where the next number is obtained by multiplying by a number (or dividing by it).  In the context of real life, these are anything but benign.

You can see why by playing with a calculator (type CALC into the search box on your PC).  Key 3, +, +, =, =, = … to show the arithmetic progression above.  Each time you press the equals sign, you move one stage – but even after ten repetitions you have only reached 33.

Now try the geometric progression, by keying 4, x, x, =, =, = …  After ten repetitions you are at a figure that exceeds 4 million (technically it’s 411 (4 to the power of 11).

You can see a geometric progression at work by folding a piece of paper.  After the first fold there are 2 layers, then 4, 8, 16, 32.  You soon have so many layers that folding becomes first difficult, and then impossible.  The story of grains of rice on chessboard squares is another example of a geometric progression.

Wikipedia says that the formula for calculating the n-th term of a geometric sequence with initial value a and ratio r is

a_n = a\,r^{n-1}.

 

Why is this important?

Why is this important?  Two reasons really.  First, it’s really important when drafting an index-linked rent review provision that you don’t end up with a geometric progression, otherwise the rent will go through the roof (once inflation returns, which I’m sure it will do).  Important from the tenant’s point of view, anyway.

Secondly, it is key to understanding the problem in the many leases that feature in the case of Arnold v Britton, which is to be heard by the Supreme Court on 26 January 2015.  The leases – of chalets in a holiday park in the Gower in South Wales – contained a provision in this (or very similar) terms:

“To pay to the Lessors without any deductions in addition to the said rent as a proportionate part of the expenses and outgoings incurred by the Lessors in the repair maintenance and renewal of the facilities of the Estate and the provision of services hereinafter set out the yearly sum of Ninety Pounds and value added tax (if any) for the first year of the term hereby granted increasing thereafter by Ten Pounds per Hundred for every subsequent year or part thereof.”

It isn’t immediately obvious, but the phrase in italics constitutes a geometric progression, with the figure rising by a multiple of 1.1 every year.  The annual increase is not £10 but 10%, which makes all the difference in the world.

A typical lease, for a term of 99 years, was granted in 1977 when the service charge cost was £90.  It is now in the region of £3,000.  By the time the lease expires, it will be over £1 million [£90 x 1.198, using the formula above, which equates to just over £1,025,000] .  The tenants are saying that cannot be what the parties intended, but both Morgan J and the Court of Appeal have (without enthusiasm) found for the landlord.  The clause requires the tenants to pay a sum unrelated to the landlord’s actual costs of providing the services.  Worse, the tenants do not have the protection of section 19 Landlord and Tenant Act 1985 (which requires service charge costs to be reasonably incurred), because that applies only to a charge that “… varies or may vary according to the relevant costs.”

Davis LJ in the Court of Appeal sympathised with the tenants, saying (at [56]):

“Any conclusion that means the holders of these particular leases are (currently) required to pay over £3,000 per annum for the relatively limited services provided for these holiday chalets, and with potential remorseless compounded increases thereafter, is not at all attractive.  I am well aware of that.  But, as I have sought to show, it is the result of the bargain made: and the court cannot properly, under the guise of a process of interpretation, introduce new and other terms to mend a bad bargain: which is, in reality, what the court is being asked to do.  To do so would involve distortion of all correct legal principles. Whatever the hopes and aspirations of these lessees, understandable though they may be, the court cannot simply come up with some “fair” result irrespective of the terms of the contract and in the absence of any claim for rectification.  Moreover, Mr Daiches [counsel for the landlord] was entitled to point out that the “merits” may have looked very different had inflation continued in the interim at rates corresponding to those experienced in the late 1970s: and do in fact look very different in the version of the lease containing the triennial increase.”

The reference to inflation rates may puzzle younger readers but in the 1970s inflation rose to frightening levels, caused initially by a huge increase in the cost of oil in 1973.  This website (chosen at random) says that inflation in 1974 was 16%, rising to over 24% in 1975.  Except for one year, it did not fall below double figures until 1982.  So any suggestion that the parties to leases granted in the 1970s cannot have intended an increase of 10% in the costs every year is not sustainable.  (Other leases were granted in later decades, and the same argument does not apply to those, so some form of rectification may still be sought.)

It seems to me that the Supreme Court has to reverse the Court of Appeal’s decision.  It is clearly inequitable that the tenants are having to pay the landlord increasing sums for providing the same services, with no correspondence between the amount being paid and the cost of the services being provided.

I think the tenants’ best hope is that the Supreme Court interprets the offending clause as an agreement to repay the landlord what it actually costs the landlord to provide the services.  The clause itself is strange: if the amount that is to be paid by the tenant is not related to the costs incurred by the landlord, why include the phrase “a proportionate part of the expenses and outgoings incurred by the Lessors in the repair maintenance renewal and the provision of services hereinafter set out” ?  Morgan J in the High Court puzzled over the same question – but it is clear that half of the clause is redundant, and the two halves are mutually exclusive.  Either the reference to the services or the calculation of the sum is inappropriate.  Morgan J decided that the clause made no sense if the reference to the sum of £90 (and increasing) is ignored, and the Court of Appeal agreed (on principles of interpretation, if not the parties’ merits).  This helpful article by Nikolas Ireland of Forsters summarises the first instance decision well.

So we now need the good sense of the Supreme Court to end the tenants’ misery by interpreting this provision as a covenant to repay the landlord the costs of providing services, while ignoring the pernicious geometric progression contained in the second part of the clause.  Lord Neuberger is part of the five-justice court that will hear the case, so I am confident that a way will be found for justice to be done.  Fiat justitia ruat caelum, I say.

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The pantomime of the Landlord and Tenant (Covenants) Act 1995 19 January 2015

Appropriately for the time of year, the Landlord and Tenant (Covenants) Act 1995 is turning into a pantomime.  Oh no it isn’t.  Oh yes it is.

On Friday the High Court handed down its decision in the two cases of Zinc Cobham Ltd v Adda Hotels (an unlimited company) and UK Leasing Brighton Ltd v Topland Neptune Ltd [2015] EWHC 53 (Ch).

As a result of the complexities of the Landlord and Tenant (Covenants) Act 1995, the two parties to a series of leases (each party comprising many different people, I suspect, with all the complications that brings) were unable to agree how to document a simple re-assignment of a lease in such a way that a parent company guarantee would not be lost, so they turned to the court for guidance.  I wrote in a recent editorial in the Conveyancer “… in everyday life, practitioners do not have the luxury of asking the courts for guidance every time a new problem is identified.”  However, here they were doing just that.

The case concerned a number of leases of hotels, let by L to T1 and guaranteed by G (which provided the investment value).  T1 had unlawfully assigned the leases to T2. The Court of Appeal has already considered the wording of the leases in Tindall Cobham 1 Ltd v Adda Hotels (an unlimited company) [2014] EWCA Civ 1215 (see my blog article “Reminder: no court has yet decided that a guarantee of an AGA is valid” on 8 September 2014).  Now it has been agreed that T2 will re-assign the leases back to T1.  The difficulty is: how to do this while retaining the guarantee from G.

The legal position is that this has been one of those rare creatures much discussed but seldom seen, an “unlawful assignment”.  Section 11 of the 1995 Act provides that in such a case, the assignor is not released under section 5 of the 1995 Act until there is an assignment that is not an unlawful assignment.  So, in this case, the assignment from T2 back to T1 will be a lawful assignment.  That will release both T1 and T2 (although T1 will then be “back on the hook” as the new assignee – subject to another possible problem that is mentioned below).  But G will be released by the release of T1 and T2.  If G gives a new guarantee, will that fall foul of the anti-avoidance provision in section 25?

Oh yes it will, said the tenant (and came up with its own proposal).  Oh no it won’t, said the landlord.  The two parties, unable to agree, asked the court for guidance.  It was provided by the ever-reliable Morgan J, in the form of a judgment that looks astonishingly like a counsel’s opinion.  In fact, to all intents and purposes it is a counsel’s opinion – given by a counsel who now happens to be a judge and therefore whose opinion counts for even more now than it used to when he was a silk.

So what did Morgan J decide?  In short, he decided that the landlord’s proposal works, and the tenant’s proposal (see below) does not.  His reasoning is ingenious, making use of an obiter comment from Lord Neuberger in K/S Victoria Street v House of Fraser Management Ltd [2011] EWCA Civ 904.

Remember that Lord Neuberger had opined, albeit obiter (see my blog article “Reminder: no court has yet decided that a guarantee of an AGA is valid” on 8 September 2014), that a guarantee of an AGA should be valid on the basis that (using the wording in section 24(2) of the 1995 Act) the guarantor is released from the guarantee “… to the same extent as the tenant is released …”.  When the tenant is released, but then gives an AGA, he remains liable, to a certain extent.  So (said Lord N) it is permissible for the guarantor to guarantee the tenant’s AGA, and remain liable, as this is remaining liable “to the same extent as the tenant”.

Morgan J used the same approach.  In this case, G, T1 and T2 are all released by the assignment by T2 to T1.  But T1 becomes liable once again, and “to the same extent” G can therefore become liable again.  Simples.

The tenant’s approach

The tenant’s proposal was more complex.  The tenant suggested that the leases should be assigned to “newco”, a new subsidiary company (with no parent company guarantee), and then later assigned to T1 with G giving a new guarantee.  We know that will be valid (although that view too from Lord N was also obiter).  However, L would only have been willing to permit that route if there was an agreement in advance binding newco to make the second assignment and procure the new guarantee from G.  L was concerned that that agreement would be ineffective as a result of the anti-avoidance provision.  Morgan J agreed (in case his decision in favour of the landlord was incorrect) with that concern.  The tenant’s proposal would not be effective.  Agreeing to carry out the series of transactions in that manner would frustrate the operation of the 1995 Act and therefore would be void.  This is a very useful piece of guidance from the court.

An awkward inconsistency

This whole area of law still has an awkward inconsistency about it, as a result of two of Lord N’s obiter comments in the House of Fraser case (and, it has to be said, the breadth of the anti-avoidance provision in the 1995 Act).  I am sure that Lord N was only trying to help to resolve uncertainty in the profession (indeed, he said as much), but it is not in the court’s gift to provide such reassurance until a relevant case is before them.  Obiter comments can be helpful in some circumstances, but I am not sure that this is the case here.

The first of those two comments is that a guarantee of an AGA is valid on the basis of the “to the same extent” phrase.  If that is correct, it means that G can become liable for the liabilities of T2 indirectly by means of guaranteeing an AGA when it cannot be liable directly by providing a guarantee of T2’s liabilities (as occurred in Good Harvest Partnership LLP v Centaur Services Ltd [2010] EWHC 330 (Ch)).  This seems a very odd result.  No one wants guarantees of AGAs to be caught by the anti-avoidance provision, but the interpretation that Lord N used to reach his (obiter) conclusion may not stand up to scrutiny when a case on the point reaches the Supreme Court, as it will doubtless do one day.  (There is an alternative interpretation of the phrase “to the same extent” that appears in section 24(2) – that it mirrors the phrase where it appears in section 5(3), relating to the release of a tenant from the lease covenants on an assignment of part.)

Morgan J was happy, or at least willing, to follow this obiter comment from Lord N when deciding this case and finding in favour of the landlord’s proposal.

However, he was not so happy to follow a second obiter comment in the House of Fraser case.  This was where Lord N said at ([37]):

“It would also appear to mean that the lease could not be assigned to the guarantor, even where both the tenant and the guarantor wanted it.”

Morgan J said in this case (at [29]):

“What Lord Neuberger was referring to in this statement was the possible conflict between a release of a guarantor under section 24 and the re-imposition of liability on the former guarantor as assignee.  The statement is obiter and somewhat tentative.  For present purposes, I do not need to consider whether I should follow that statement in a case to which it applies.  In the present case, there is no suggestion of an assignment to G so the statement is not directly applicable.”

However, it is not that easy, as the landlord’s solution that Morgan J was prepared to bless in this case entailed T1 being released by the assignment by T2, but immediately re-assuming liability by accepting the assignment from T2.  To me, that looks indistinguishable from the position to which Lord N was alluding in his obiter comment that a lease could not be assigned from the tenant to the guarantor, even where both parties wanted to achieve that outcome.  Morgan J was unconcerned.  He continued robustly (in [29]):

“In the present case, there is no suggestion of an assignment to G so the statement is not directly applicable.  I am not prepared to extrapolate from that statement about a guarantor so as to reach the result that it is not possible in the present case for T2 to reassign to T1.  As explained in paragraph 21 above, the position of T1 is governed by two provisions, first section 11(2)(b) and, secondly, section 3(2)(a).  I am not prepared to hold that the release under section 11(2)(b) means that section 3(2)(a) cannot take effect.  I consider that both provisions take effect.”

I agree with that interpretation (should I say “with respect” there?  Probably).  Lord N’s obiter comment that it is apparently not possible for the lease to be assigned by the tenant to the guarantor – which has never gathered support within the conveyancing profession – does not take into account the point that the guarantor is released by reason of section 24(2) but assumes the new liability by section 3(2) – as explained by Morgan J.  There is no inconsistency between the two.

However, this does not resolve Lord N’s comment in the context of guarantees.  For a reason that is not clear but which probably arose as a result of discussions between him and the counsel in the case, Morgan J suggests (in [41]) a third possible option to resolving the assignment conundrum.  This comprises an assignment by T2 to G followed by an assignment by G to T1, guaranteed by a fresh guarantee from G.  The second guarantee would not cause any difficulty, as G was released from the first guarantee by an earlier transaction.  However, it would bring into play the situation posited by Lord N – an assignment of the lease from the tenant to the guarantor.  Morgan J said:

“Lord Neuberger’s] statement is obiter and somewhat tentative.  A question was raised in the course of argument as to whether this statement was really correct. However, I was not asked to rule on that point.  If I had been asked to hold that the statement was incorrect, I would have required further argument before being persuaded not to follow this dictum of the Court of Appeal.”

This obiter statement from Lord N in House of Fraser has been causing concern for a number of years, as instinctively it feels incorrect, for a number of reasons.  It is helpful to see Morgan J taking such a sensible approach in this case.

 

 

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Friday round-up (16 January 2015) 16 January 2015

Sometimes there are interesting pieces of information to share that are not substantial enough to warrant an article to themselves, but worth disseminating nonetheless.  So every couple of weeks or so I will write a Friday round-up article – when I have time and there is enough to say, anyway.

This week’s round-up:

Janet Bignell QC

Janet Bignell from Falcon Chambers has been appointed a Queen’s Counsel this week. Everyone who knows her will agree that it is well-deserved.

Supreme Court refuses to hear “magic words” break clause case

The Supreme Court has agreed to hear an appeal in the Marks & Spencer break clause case (Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd). That is not news, as it occurred on 11 November last year (although it is the first time I have mentioned it in this blog).  What is news, however, is that on Wednesday this week the Supreme Court refused leave to appeal in the Siemens break clause case (Friends Life Ltd v Siemens Hearing Instruments Ltd).  This is the case in which the break clause required the “magic words” to be included to say that the notice was being given under section 24(2) Landlord and Tenant Act 1954 – for a reason that made sense when the lease was granted but made no sense when the tenant served its break notice.  I wrote about the case in my article “Just say the magic words” on 3 April 2014.  This looks seriously like a large pay-out by the tenant’s solicitors’ insurers, as all avenues of appeal have now been exhausted.

In passing, I looked back just now at last spring’s article and I see with immense satisfaction that I had written the following final paragraph:

“What happens next?  The Court of Appeal refused the tenant permission to appeal to the Supreme Court.  The tenant could in theory ask for leave to appeal from the Supreme Court itself.  However, given the simplicity of the blue paper/pink paper dictum from Lord Hoffmann set out above, it seems to me virtually unthinkable that the Supreme Court would agree to hear a further appeal.”

Green Agenda conference

I will be presenting a session on the CRC Energy Efficiency Scheme and the forthcoming Minimum Energy Efficiency Standard Regulations at an all-day conference entitled “Occupying and Owning Commercial Property; and the Green Agenda” being presented by CPT Events on Wednesday next week (21 January 2015).  Other speakers include Tim Beresford (CA4 Partnership), John Lelliot (Crown Estate) and John Staheli (Nabarro).  The conference takes place at Nabarro’s new offices in London Wall.  A few places are still available.

New photograph of Usain our peregrine falcon

Finally, a new photograph has been added to this website.  We visited our sponsored peregrine falcon, Usain (also known as Bolt), at the Hawk Conservancy in Andover over the Christmas period and took a new photograph of him.  You can see him in his adult plumage in the photograph at the top of this page.  Click on the smaller photograph at the bottom right of this page for an unpublicised link to more wildlife photographs.

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Clarification of earlier article about release of records relating to EPC data 15 January 2015

My article “Act immediately if you don’t want your non-domestic EPC rating released to the world” on 9 January 2015 contained a couple of errors.

First, I said that domestic EPCs are not publicly available.  This was the case once, but is no longer right. Domestic EPCs, like non-domestic EPCs, are publicly available at www.epcregister.com.  You can search by EPC reference number or by postcode.  (I have just looked at the EPC for the house across the road, which has just changed hands.  The EPC describes it as a bungalow when it’s a two-storey house.  Does this matter?  I have no idea.)

Secondly, I confused EPCs with the data that is used to produce them.  This underlying data is not normally available publicly, but it is this data that the Government is proposing to release following a request under the Environmental Information Regulations 2004.

Fieldfisher have kindly allowed me to reproduce the text of their briefing note about the distinction below, for which I am most grateful.



Deadline for commercial property owners to opt out of energy performance data being publicly disclosed

John Bowman
Head of the Planning and Environmental team, Fieldfisher

The Government has issued a notice of its intention to release approximately 723,000 records comprised of data from non-domestic Energy Performance Certificates (EPCs) and Display Energy Certificates.  The disclosure is in response to a request made under the Environmental Information Regulations 2004.

The records will be published online by property address. This means that the energy performance data for a particular commercial property or portfolio of properties can be easily accessed provided the address is known.

Whilst non-domestic EPCs are already publicly available, the data used to produce and register the certificates is not.  Currently only authorised organisations (such as government departments, local authorities, climate change charities and the holders of electricity supply licences) can apply for access to the data but only for a prescribed purpose and subject to various conditions (including payment of a fee).

Whilst the Government is planning to make energy performance data more accessible, the publication of these records will be subject to conditions (for example prohibiting the use of addresses for commercial purposes).

Holders of non-domestic EPCs can opt out of having any data revealing the address or postcode of their property being made publicly available.  A commercial property owner will need to think carefully about whether it will benefit from the disclosure of the energy performance data of its property, particularly in light of any renewable energy or carbon reduction commitments it has publicly made.  However, it is likely that companies that highlight their green credentials will be criticised for opting out.

Applications to opt out must be made online before Friday 16 January 2015.

This e-mail/publication is provided for information purposes only and is not a substitute for detailed advice on specific transactions and should not be taken as providing legal advice on any of the topics discussed, nor should it be taken as creating a solicitor-client relationship between the reader and Field Fisher Waterhouse LLP.
Please note that where this email/publication contains links to pages/items on third party websites, while such information may be available to be viewed and downloaded, this is subject always to the terms and conditions applicable to the particular website(s). Field Fisher Waterhouse LLP is not responsible for the content or operation of third party websites.
Copyright Field Fisher Waterhouse LLP 2014. All rights reserved.
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Sudden reform of the Electronic Communications Code 13 January 2015

The Law Commission published its recommendations for reform of the Electronic Communications Code (aka the Telecommunications Code) in February 2013.

Not a peep since then from the Government, except in the Ministry of Justice’s report that the Lord Chancellor is required to compile annually under the Law Commission Act 2009, reporting to Parliament on the extent to which Law Commission proposals have been implemented by the Government.  The report for 2013, published in May 2014, stated that the Government “aims to provide a detailed response to the Commission’s report by the end of 2014″.

Suddenly, with apparently no warning, an amendment has appeared to the current Infrastructure Bill, proposing the incorporation of an entirely new schedule containing a revised Electronic Communications Code.  You can see a copy of the amendment here.  Don’t print it out without thinking.  It’s 59 pages long.

Presumably this follows the Law Commission’s recommendations for a new version of the Electronic Communications Code, although I haven’t checked.  It’s written in ultra-modern language.  For example, some of the headings to sections are in the form of questions, like a law firm’s briefing on a new area of law.  Fine for a law firm but it comes as a bit of a shock in an Act of Parliament.

Parliamentary procedure is complex, so I am not sure what opportunity there is going to be for Parliament to debate (or industry to influence) the content of this vast last-minute addition to the Bill.  The Bill has already passed through the House of Lords and is now being considered by the Public Bill Committee in the House of Commons.  The only reference to the amendment that I have found is in this set of minutes of the Public Bill Committee’s sitting on 6 January 2015.  Presumably the Bill, amended with the addition of the new Code, and possibly amended in other ways as well, will need to return to the House of Lords for approval – but even so there seems little opportunity for anyone to comment on the proposal.  Parliament ends on 30 March in readiness for the General Election on 7 May, so that is another time constraint.

Three steps

Some people – and fortunately I am not one of them –  now need to move pretty fast

The first step is to find out more about the Government’s proposals.  The second step is to compare the text of the amendment to the Law Commission’s recommendations.  The third step – not for property lawyers, in the main – is to read the amendment in order to comment upon it.

From memory, the major property-law-related issue in the revised Code was the suggestion that Part 2 of the Landlord and Tenant Act 1954 should not apply to code agreements.  A provision along those line is contained in the amendment.  Is it effective or will it cause uncertainty ?  Property lawyers need to address this aspect pretty swiftly.

What happens with any comments is a mystery.  Presumably now this provision is in an Amendment to a Bill, any changes also have to be dealt with by an Amendment.  This really doesn’t sound like a very sensible way of changing such an important area of law.

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Light at the end of the tunnel? 12 January 2015

Doesn’t time fly.  It’s now over a month since the Law Commission published its recommendations on reform of the law relating to rights to light (I am now officially giving up my fight to retain the term rights of light, even though that is the phrase used in Megarry and Wade’s The Law of Real Property (8th edition).  I will however reserve the right to whinge about it).

This article contains a summary of the Law Commission’s proposals, on the “better late than never” principle.

Here is the link to the Law Commission’s report.  It is a typically thorough piece of work from the Law Commission – and contains a first-rate summary of the law relating to rights of to light, as one would expect.

The temptation at this point with any Law Commission report is always to rush in and explain the Law Commission’s proposals, ignoring the fact that the Government is inevitably going to sit on the report for months, and possibly for longer.  I will give in to that temptation, and then consider what is likely to happen next

RECOMMENDATIONS

This is a summary of the Law Commission’s recommendations.

Acquisition by prescription: The retention of the current law that allows rights of light to be acquired by prescription.  This is a major change from the earlier consultation paper, in which the Law Commission provisionally recommended that prescription should be abolished as a means of acquiring rights to light.  This, says the Law Commission, is a result of responses that it received during the consultation process.  It considered whether rights of to light should be abolished prospectively (ie existing rights of to light would remain in place but no new ones would arise), but concluded that this would create considerable uncertainty and even unfairness, and the idea was not pursued.

“Put up or shut up” procedure: A statutory notice procedure which would allow landowners to require their neighbours to tell them within a specified time if they intend to seek an injunction to protect their right to light, or to lose the possibility of that remedy being granted.  This is intended to address the difficulty of the developer in HKRUK II (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch) in 2010.  Mr Heaney delayed seeking an injunction for breach of his rights of to light until the new building next door had been completed and even let, as he was entitled to do.  Everyone expected that he would be awarded damages for the undoubted loss of light that he had suffered, but the court ordered an injunction, to general astonishment (Mr Heaney settled before any appeal was heard, so the injunction was never implemented).

Damages or injunction: A statutory test to clarify when courts may order damages to be paid rather than halting development or ordering demolition – again intended to resolve the uncertainty caused by the Heaney case.  These recommendations take account of the Supreme Court’s decision in Coventry v Lawrence [2014] UKSC 13, which was handed down between the date when the consultation ended and the final report being published.  Effectively the test would be that the court should not grant an injunction if, in all the circumstances of the case, an injunction would be a disproportionate means of enforcing the claimant’s right of to light.

Modernising “light obstruction notices”: An updated version is proposed of the procedure that allows landowners to prevent their neighbours from acquiring rights of to light by prescription.  The current procedure in the Rights of Light Act 1959 [of, note, not to] is difficult to operate and rarely used.  It also creates litigation where none is really needed, as it effectively requires the dominant owner (the one enjoying a right of to light) to start proceedings to prove the existence of the right, or lose it.  The recommended new procedure, applying for registration of a “certificate of light interruption” on the local land charges register, would allow the neighbour to prevent a right of to light arising (through prescription) in the first place, but would have no impact on any rights of to light that already exist at that time.

Tidying up abandonment: Amendment of the law governing where an unused right of to light is treated as abandoned.  Currently it is difficult to demonstrate that this has happened.  Now there will be a rebuttable presumption of abandonment if a right has not been used for five years.

New power for the Lands Chamber: A power for the Lands Chamber of the Upper Tribunal to discharge or modify obsolete or unused rights of to light.  This will be similar to the current power to modify restrictive covenants.

No recommendations: No recommendations were made about changing certain areas of law, including:

  • the appropriate measure of damages to be awarded for obstruction of a right of to light, in a case where damages are appropriate.
  • reform of the test for whether a right of to light has been infringed (leaving in place Colls v Home and Colonial Stores Ltd [1904] AC 179 as the leading authority)
  • amending section 237 Town and Country Planning Act 1990, which allows local authorities to override rights of to light (in exchange for paying compensation).
  • how this area of law affects solar panels.  The Law Commission’s assessment is that solar panels do not currently benefit from the law relating to rights of to light, not being “apertures”.  This is almost certainly correct, but may come as a shock to those householders who have paid large sums of money to install solar panels on their rooves (roofs?).**

 

WHAT HAPPENS NEXT?

Typically the Government ignores Law Commission reports, although this is no longer so simple now that the Lord Chancellor has to report to Parliament each year on the extent to which Law Commission proposals have been implemented (see my article “Update from the Law Commission” dated 21 July 2014 for more on this requirement, and details of stalled Law Commission reports relating to property issues).

If the Law Commission’s proposals relating to rights of to light are to be implemented, it will be necessary for its proposals on easements in its 2011 report on easements, covenants and profits à prendre to be implemented at the same time.  That report itself is in two parts, one dealing with easements and the other with covenants.  Implementation of the whole lot would be desirable, as the covenants part proposed the introduction of “land obligations”, which would allow positive covenants to run with land at last.  But if that is thought a step too far, the easements part could be implemented on its own.

One of the key proposals in that report was the adoption of just one (statutory) method of acquisition of easements by prescription, replacing the tortuous Prescription Act 1832 and the concept of lost modern grant (prospectively only, of course).  No-one would miss them.  The Law Commission also proposed giving jurisdiction to the Lands Chamber of the Upper Tribunal to discharge or modify obsolete or unused easements, in the same way as it currently has jurisdiction to discharge or modify restrictive covenants.

The Law Commission’s rights of to light report therefore contains some provisions to be inserted into its earlier Easements Bill, as well as the text of a proposed Rights to Light (Injunctions) Bill (to, not of (sigh)), which would implement the recommendations as to when an injunction should be awarded.

Realistically what will happen next?  With an election looming in May 2015, this definitely is not going to be at the top of any politician’s list, particularly as the expectation is that no party will gain an overall majority after the election and there will have to be some form of coalition once again.

But (cue music), on the other hand, we have been wrong-footed before.  The Land Registration Bill (also a recommendation from the Law Commission) was not expected to proceed, and yet very shortly after the election in June 2001 it was introduced into the House of Lords, and became law on 26 February 2002.  So these proposals might possibly see the light of day†† earlier than generally expected.

 

** I find there is considerable uncertainty as to which word is correct here.  I was definitely taught “rooves” at school (a mere 45 years or so), but the word is undoubtedly ugly and it seems to upset people.  Think “elves”, “wolves” or “halves” and it begins to make sense.

†† Did you see what I did there (and in the title of this article)?  I am not the only writer on this topic to succumb to the temptation of including a pun in the title.

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Act immediately if you don’t want your non-domestic EPC rating released to the world 9 January 2015

This article contains errors.  Please read this clarification in conjunction with it.

The Department for Communities and Local Government (DCLG) has announced this week that it intends to publish approximately 723,000 records relating to the energy performance of non-domestic buildings in response to a request for information under the Environmental Information Regulations 2004.

More information is available here.

Information about individual EPCs relating to non-domestic properties is already publicly available from the EPC register, unless owners  have taken the option of opting out of having the information publicly available.  The last FAQ in the DCLG’s Guide to energy performance certificates for the construction, sale and let of non-dwellings says:

Q. Who has access to the EPCs for non-dwellings on the central register?
A. Data held on the central register is publicly available. It is possible to search
for an EPC on the register by entering either the certificate’s report reference
number or the building post code. The building owner with an EPC can ‘opt out’
of having their data made publicly available.

(EPCs relating to domestic properties are not publicly available, for fear that owners of low-rated properties will become the targets of double-glazing and other salespeople.)

On this occasion the department will be releasing a vast batch of non-domestic EPCs in response to a request for information.  It is therefore giving the holders of non-domestic Energy Performance Certificates the opportunity to decide whether to opt out before the records are released.  Regulation 30 of the Energy Performance of Buildings (England and Wales) Regulations 2012 permits holders of Energy Performance Certificates to opt out of having the data from their certificates disclosed publicly in a manner which may identify them.

When released, these records will be published at individual address level.  It is not the purpose of this article to consider whether or not opting-out is appropriate. Sharing information is now all the rage, whether it is what you ate on your last restaurant visit or the price you paid for your house.  Personally, I am more keen on the former than the latter, but I am aware that the Government does not share my discomfort in making other people’s private information publicly available to all.

How to opt out

Holders of non-domestic Energy Performance Certificates may opt out by visiting www.epcregister.com/opt-out before Friday 16 January 2015.  (Even after that date, the option of opting out will remain, but the information may already have been released in response to this specific request for information, of course.)

The option of opting-out is not available to holders of Display Energy Certificates.

Talking of DECs, could there be a worse one than this, which I found in the basement of a car park beneath Kensington Town Hall ?  I’m not even sure that an underground car park needs a DEC.  Views, anyone ?

DEC photo

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The doctrine of interesse termini is hereby abolished 7 January 2015

1 January 2015 was the 89th anniversary of the coming into force (on 1 January 1926) of the Law of Property Act 1925, an important anniversary missed by (so far as I can tell) every one of the newspapers.

So let’s examine a change made by that Act – by way of an article written by this website’s first guest blogger.  We are going to look at section 149.

Section 149(3) is relatively well known.  It starts off:

“A term, at a rent or granted in consideration of a fine, limited after the commencement of this Act to take effect more than twenty-one years from the date of the instrument purporting to create it, shall be void …”

In other words, if the term of a reversionary lease is expressed to start more than 21 years after the date of grant, it is void.  You may not remember this, but the Land Registry certainly will if you try to register one.

But if you have ever looked at the LPA 1925 itself, your eye might have been caught by section 149(1), which reads simply:

“The doctrine of interesse termini is hereby abolished.”

I have always wondered what interesse termini was, and why anyone should be so concerned about it that it needed to be abolished.  I am delighted that a great (and extremely learned) friend from my Eversheds days, John Anderson, still a consultant there, has agreed to write a short article about interesse termini for this blog.

And here it is.


The Interesse Termini and its demise

At common law, the grant of a lease for a term of years had to be completed by the tenant’s actual entry onto the demised land.

“A bare lease does not vest any estate in the tenant, but only gives him a right of entry on the tenement (which is called an interest in the term, or ‘interesse termini’). But once he has entered, he acquires the estate”: Blackstone’s ‘Commentaries on the Laws of England’ Book II 144 (eleventh edition (1791)).

This was broadly equivalent to the common law’s requirement for ‘livery of seisin’ in respect of freehold land, by which doctrine in order to pass title to land (on ‘feoffment’) the parties (or their attorneys) had to enter the land and the vendor declare (while holding a symbol of the land, such as a door-ring or a twig) to the purchaser that ‘seisin’ (broadly, possession) of the land was delivered to him.  (This requirement was largely avoided after the Statute of Uses (1535) through the ‘bargain and sale’, whereby a ‘use’ (or trust) of the land arose in favour of the purchaser which the Statute ‘executed’ and converted into a legal estate: the bargain vested the use, and the Statute the possession, in the purchaser, who thereby acquired the freehold.)

The ‘interesse termini’ was an assignable legal interest in land, binding on its grantor’s successors in title, operating as a future term, coupled with a right to take possession (and thereby complete the lease). Amongst its difficulties was that the tenant could not sue third parties in trespass and indeed had less than full rights against the landlord.

Although the mechanism of the ‘bargain and sale’ under the Statute of Uses could be adopted to grant a lease (by the use of a deed and only out of a freehold) without the formality of entry (by the same mechanism of creating and executing a use to the grantee), the tenant still had incomplete rights before entry.

As recently as 1893, Chitty J held in Wallis v Hands [1893] 2 Ch 75  that although “the law provides a person having an ‘interesse termini’ with an adequate remedy against the grantor of the term … [because] he can bring an action against the grantor … for not putting him in possession [in accordance with an implied covenant to do so], … [no authorities] can be produced to shew that a person having a mere ‘interesse termini’ can maintain an action on a covenant for quiet enjoyment [and] … it is settled law, that a person having a mere ‘interesse termini’ cannot bring an action of trespass.”

It was not until 1 January 1926 (the date of the coming into force of section 149 Law of Property Act 1925) that the ‘interesse termini’ was abolished.  Since that date, all terms of years absolute (whenever created) take effect at law and in equity, according to the grantor’s estate, interest or powers, from the date fixed for the commencement of the term, without actual entry.

However, as pointed out in Mark Wonnacott QC’s ‘History of the Law of Landlord and Tenant in England and Wales’ (2012), something similar to the ‘interesse termini’ doctrine is preserved in the operation of the Land Registration Act 2002 (albeit with reference to registration rather than entry).  Under that Act, registrable leases take effect in equity only between grant and registration, which is retrospective to the date of the application for registration, rather than to that of grant.

 

Additional comment provided by Michael Callaghan in relation to the article above

An interesting footnote on the delivery of seisin is that remnants of the delivery of possession still exist (even if in symbolic form) in the process of inducting a priest to the title to a church.  Where the priest becomes the corporation sole and has title to the church vested in him, he will still take hold of the handle to the door to the church and symbolically, the title to the church will be vested in him and the priest rings the church bell to signify taking possession.  Similarly, he takes hold of a chalice and the chattels of the church are vested in him and the keys to the vicarage likewise.

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One week left to reply to the consultation on the proposed Competence Statement for solicitors 4 January 2015

The title says it all.

There is just one week left to reply to the SRA’s consultation on the proposed Competence Statement for solicitors.

I have prepared my response this afternoon.  Here is a copy of my response.

Why does this matter so much?

As I explained in my articles last month

The proposed Competence Statement for solicitors – Part 1 and

The proposed Competence Statement for solicitors – Part 2

I believe that the SRA’s proposal that all solicitors, however long ago they qualified, should have a broad background knowledge of all areas of law is misguided.

I suspect that when this concept was first discussed within the SRA, and with focus groups, it made some sort of sense, but now it just seems dangerous.  I have tried hard to give the SRA the benefit of the doubt – but failed.

The issue is this.  The current proposal is that solicitors are intended to be able to “draw on a sufficient detailed knowledge and understanding of their field(s) of work and role in order to practise effectively, including …”

“spotting relevant issues that are outside their expertise and taking appropriate action, using both an awareness of a broad base of legal knowledge [FN] and detailed knowledge of their practice area.”

The FN is a reference to a footnote that lists the relevant areas of law.  They are

“Legal System of England and Wales, constitutional law and EU law (including human rights), contract law, torts, ethics, professional conduct and regulation, including money laundering and solicitors accounts, criminal law and evidence, criminal litigation, civil litigation, property law, wills and administration of estates, trusts and equitable wrongs, business law and practice (including company/commercial law) and taxation”

It is unclear how much knowledge of these topics the SRA is expecting, but even expecting a solicitor to know enough to be able to advise merely in broad terms on all these areas of law is unrealistic.

I have a number of objections to this proposal, which I have covered in my blog articles and which can be summarised as:

  • no-one can realistically be familiar with this much law, even at a general level
  • clients do not really want solicitors who are generalists, even if the SRA says they do
  • most importantly, this is a dangerous proposal, as the SRA says in the consultation document that there will be no requirement to keep oneself up to date in relation to these broad areas.

 

How can one advise on areas of law last thought about at the time of qualification – which in my case was over 30 years ago – when one has not kept oneself up to date on those areas of law?  The idea simply does not make sense.

Last date for responding is Monday 12 January 2015

The last date for responding to this consultation is Monday 12 January 2015, which is only a week away.

Please do respond.  You are welcome to refer to my response, or to copy and paste text from it.

The consultation document is here, and instructions for how to respond are at the very end of that page.  You can respond online, or print out a questionnaire (Word document) and attach it to an e-mail, as I will be doing when I submit my response during the coming week.

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