Property Case Updates
September 28, 2016
by David Williams
EDWARDS V KUMARASAMY
[2016] UKSC 40
(Lord Neuberger PSC, Lord Wilson JSC, Lord Sumption JSC, Lord Reed JSC, Lord Carnwath JSC)
K granted E an assured shorthold tenancy (“Sub-tenancy”) of a residential property within a block of flats. The Sub-tenancy included a grant of ‘the right to use, in common with others, any rights of access, stairways, communal parts, paths and drives’ of the building. E was under a parallel obligation to repair the flat, excepting items for which K remained liable. E tripped over an uneven stone on a paved area outside the building and was injured. As a result, E issued proceedings against K on the basis that he had breached covenants implied into the Sub-tenancy under s. 11 of the Landlord and Tenant Act 1985, by failing to keep the paved area in repair. The Court of Appeal had originally held that K was liable because the paved area was part of the front hall of the building, in which he had an ‘estate or interest’ for the purposes of s. 11(1A).
There was force in the argument that the statutory provision should be interpreted broadly, as Parliament would likely have intended all parts of a building outside the individual demise, but nevertheless enjoyed by the tenant, to fall within the repairing covenant. However, given that s. 11 imposed obligations over and above those contractually agreed, the Supreme Court held that it would be inappropriate to give it an unnaturally wide interpretation. Rather, the wording of s. 11 ought to be given its ordinary meaning. Accordingly, an area which was neither part of the building nor within its curtilage could not properly be construed as part of the front hall. Further, the court held that any obligation on K to repair the uneven paving area would only have been triggered once he had notice of the disrepair. Here, K had not been given notice before the accident, so would not have been held liable in any event.
LYNN SHELLFISH LTD AND OTHERS V LOOSE AND ANOTHER
[2016] UKSC 14
(Lord Neuberger PSC, Lord Clarke JSC, Lord Sumption JSC, Lord Carnwath JSC, Lord Hodge JSC)
The appellants operated fishing boats in an area of Norfolk, which the Respondent claimed was part of a private fishery. The Appellants accepted its existence, which had been established by prescription in earlier litigation, but challenged the seaward extent of the fishery. It appeared that the channels between the sandbanks, which had previously been open to the public to fish in, had become silted up, to the extent that they joined the foreshore at low tide. The Court of Appeal held that the sandbanks had, as a result, become part of the fishery. It was suggested that where a notional grant had been established by prescripton that vourt ought then to consider the terms of that notional grant. In this case, the grantor would hae intended that the fishery would expand in accordance with the foreshore. Further, it was held that the sandbanks had become part of the fishery by means of accretion.
In overturning this decision, the Supreme Court held that the correct basis for determining the extent of a prescriptive right is by assessing the actual use of the putative right, rather than the likely terms of a fictional, notional grant. It was also held that the Respondent could not rely on the doctrine of accretion. Accretion relied on the gradual and imperceptible change in a boundary, whereas here, it was possible to identify a specific moment in time when the sandbank became attached to the foreshore.
WINTERBURN V BENNETT
[2016] EWCA Civ 482
(Sharp LJ, David Richards LJ, Moylan J)
The Respondents were the owners of a car park. The Appellants, who owned the adjacent fish and chip shop used the car park, despite notices stating that it was for private use only. The Court of Appeal considered whether the notices were sufficient to prevent the Appellants acquiring a right to park on the land, or whether the Respondents had acquiesced, thereby entitling the Appellants to such a right by prescription.
In upholding the case of Betterment Properties (Weymouth) Ltd v Dorset CC [2012] EWCA Civ 250, the court took the view that a servient owner was not obliged to take physical or legal steps to evidence his objection to unauthorised parking. It was tolerably clear from the signs that parking was not permitted. Accordingly, it should not be open to those who chose to ignore such signs to obtain legal rights over the land. The signs, by themselves, were a proportionate form of protest, and were sufficient.
MARLBRAY LTD V LADITI AND ANOTHER
[2016] EWCA Civ 476
(Jackson LJ, McFarlane LJ, Gloster LJ)
Mr and Mrs Laditi attended a sales fair, at which Mr Laditi entered into a contract with Marlbray for the sale of land. Without his wife’s knowledge or consent, Mr Laditi signed the contract on behalf of him and his wife, as joint purchasers. After paying a deposit, Mr Laditi was unable to raise the balance, prompting Marlbray to forfeit the deposit and rescind the contract.
Citing the case of Suleman v Shahsavari [1988] 1 WLR 1181, Mr Laditi argued that because he had lacked authority to sign on behalf of his wife, the contract could not be enforced. Accordingly, he ought to be entitled to recover the deposit. However, the Court of Appeal held that while no binding agreement had been formed between Marlbray and Mrs Laditi, the contract remained valid and enforceable as between Marlbray and Mr Laditi. Suleman was distinguished on the basis that the parties in that case were not in a position to convey the property individually, whereas in the present case, the contract signed by Mr Laditi provided that the obligations of him and his wife were to be joint and several. Accordingly, Mr Laditi remained contractually bound under his several contract, notwithstanding the fact that no contract ever came into existence between Marlbray and Mrs Laditi.
PURRUNSING V A’COURT & CO (A FIRM) & ANOR
(Judge Pelling QC)
The case concerned the proposed sale of a property by a fraudster (“F”), who falsely claimed to be its registered owner. The fraud was not discovered until after the Claimant had paid the full purchase price, via his conveyancers (“HOC”), to F’s solicitors (“ACC”), who had then paid it into F’s bank account. Both ACC and HOC admitted liability for breach of trust, but sought relief under s. 61 of the Trustee Act 1925, which provides that, where a trustee is or might be personally liable for any breach of trust, but has acted honestly and reasonably and ought fairly to be excused for the breach of the trust, the court may relieve him either wholly or partly from personal liability for the breach. ACC argued that a vendor’s solicitor should be subject to a more favourable reasonableness test than that applied to a purchaser’s solicitor.
HHJ Pelling QC held that the vendor’s solicitor was as much a trustee of the purchase money while it was in his possession, as the purchaser’s solicitor. Accordingly, both were subject to an absolute obligation not to release the money before completion. Having found that ACC was a trustee of the purchase money, there could be no obvious justification for construing s. 61 more leniently than would be the case in respect of a purchaser’s solicitor. Both were subject to the same standard of reasonableness, although what each had to do in order to satisfy that standard would necessarily differ. Criticism was made of both ACC and HOC in failing properly to consider whether F was the true owner of the property. Accordingly, the court found that they had not acted reasonably and were not therefore entitled to the benefit of s. 61 in any event. Ultimately, the Judge concluded that both ACC and HOC were equally blameworthy and ought to bear equal responsibility for the loss.
David is a member of the property, commercial and insolvency teams at Exchange Chambers.
