House of Lords and Privy Council
House of Lords and Privy Council
FBO (Antigua) Ltd v Stanford Development Company [2008] UKPC 51 (Privy Council).
Guy Fetherstonhaugh QC represented the respondent, concerning the extent to which the terms of an agreement for lease of airport land had been sufficiently certain to enable specific performance to be granted.
Earl Cadogan v Sportelli [2008] UKHL 71.
Stephen Jourdan appeared in two of the appeals - for Mr and Mrs Sportelli and for 27/29 Sloane Gardens Limited.
The appeals concerned the question of whether, as a matter of law, a landlord could claim “hope value” as part of the price payable under the Leasehold Reform Act 1967 or the Leasehold Reform, Housing and Urban Development Act 1993.
Where a landlord sells the freehold at a time when the tenant is not in the market, the value of the freehold interest can in some cases be increased because of the hope of a possible future sale of the freehold or an extended lease to the tenant, thereby enabling a release of the marriage value. That increase is known as “hope value”.
The House of Lords held that, as a matter of law:
- No hope value was payable in the case of houses, under the 1967 Act.
- No hope value was payable in the case of a new lease of an individual flat under the 1993 Act.
- No hope value was payable in the case of participating tenants in a collective enfranchisement under the 1993 Act.
- Hope value could be payable in the case of non-participating tenants in a collective enfranchisement under the 1993 Act. The decision on this point was the only one where there was a disagreement. The majority of the House of Lords (Lords Hope, Walker, Mance and Neuberger) held that any additional value attributable to the hope of granting to non-participating tenants new leases of their flats could be reflected in the price. Lord Hoffmann dissented; he agreed with the Lands Tribunal and the Court of Appeal that no hope value was payable in this case.
The result was that all the appeals were dismissed, except the two appeals relating to collective enfranchisements. In those cases, the appeals were allowed, to the extent that it was determined that, as a matter of law, the landlord was entitled to claim hope value under Schedule 6, paragraph 3 of the 1993 Act in relation to non-participating tenants’ flats, albeit not in relation to participating tenants’ flats.
The judgment can be downloaded from the House of Lords website at:
http://www.publications.parliament.uk/pa/ld200809/ldjudgmt/jd081210/earl.pdf
Scottish and Newcastle plc v Raguz [2008] UKHL 65, [2008] 1 WLR 2494
The House of Lords gave judgment on 29 October 2008 in the matter of Scottish and Newcastle plc v Raguz, dismissing Mr Raguz’s appeal against the decision of the Court of Appeal and allowing S&N’s cross-appeal.
Timothy Fancourt QC appeared for S&N and Stephen Jourdan appeared for Mr Raguz.
This decision means that the notices served on S&N by the landlord pursuant to s.17(2) of the Landlord and Tenant (Covenants) Act 1995 for all the “catch up” rent following completion of long outstanding rent reviews were validly served and that S&N was liable to pay the landlord. The Court of Appeal and Hart J had held that, to protect its right to the accrued increased rent after the determination of the rent review, the landlord should have served s.17 notices on S&N, quarter by quarter, saying that “nil” was due but more might become payable later. This decision was criticised in the property press as producing absurd results.
The majority of their Lordships agreed, holding that the passing rent accruing due on each quarter day is a fixed charge and that the catch up rent payable after the determination of the rent review is another, separate fixed charge that requires its own s.17(2) notice. Accordingly, a s.17(2) notice served for the passing rent need not contain a paragraph stating that more could become payable later; and no s.17(4) notice is needed after the rent review has been determined. It is recognised that section 17(4) will therefore only very rarely apply. The same conclusion should logically apply to service charge payable quarterly in advance, followed by an end of year balancing payment.
Despite their decision on the s.17 issue, Hart J and the Court of Appeal had held Raguz liable to indemnify S&N for the payments of rent that S&N had made to the landlord. The House of Lords indicated (Lord Scott of Foscote dubitante) that, had it been necessary to decide the issue, they would have agreed with that decision on the basis that the expense of paying the landlord was fairly and reasonably incurred in the circumstances. It was not necessary, to claim under the indemnity implied by the Land Registration Act, that the money paid out be lawfully due to the landlord.
Yeoman’s Row Management Limited v. Cobbe [2008] UKHL 55
The House of Lords has now given judgment allowing the appeal in Yeoman’s Row Management Limited v. Cobbe [2008] UKHL 55. Nicholas Dowding QC appeared for the successful appellant. This was the first time that the doctrine of proprietary estoppel has been considered by the House of Lords since Ramsden v. Dyson in 1866. The House of Lords allowed the owner’s appeal, holding that the developer was not entitled to relief by way of proprietary estoppel or a constructive trust. It held that the developer was only entitled to a quantum meruit payment for his services in obtaining planning permission.
Majorstake Limited v Curtis [2008] UKHL 10, [2008] 14 EG 102
Derek Wood QC and Emily Windsor appeared in Majorstake Limited v Curtis [2008] UKHL 10, [2008] 14 EG 102, in which the House of Lords considered the meaning of s.47(2)(b) of the Leasehold Reform, Housing and Urban Development Act 1993. This provides that the right to acquire an extended lease is not exercisable if the landlord intends on termination of the existing lease to redevelop premises in which the tenant’s flat is contained. It was held that the words “any premises in which the flat is contained” referred to an objectively recognisable and self-contained physical space, not any part of a building that the landlord chooses to identify for the purpose of redeveloping that part.
Earl Cadogan & Ors v 26 Cadogan Square Ltd; Howard De Walden Estates Ltd v Aggio [2008] UKHL 44; [2008] 3 WLR 244
Anthony Radevsky appeared in Earl Cadogan & Ors v 26 Cadogan Square Ltd; Howard De Walden Estates Ltd v Aggio [2008] UKHL 44; [2008] 3 WLR 244.The issue in these two conjoined cases was whether the head lessee of a building containing residential flats had the right to a lease extension in relation to each of those flats under the Leasehold Reform, Housing and Urban Development Act 1993. The appellant head lessees appealed against the Court of Appeal’s decision that the true interpretation of the Act did not confer on them the right of individual lease extension under that Act. The appellant in the second case was the head lessee of two residential flats in a single building containing five flats. In both cases there were internal common parts and external areas for parking, all of which were included in the head lease.The House of Lords allowed the appeals. They held that a lessee under a long lease of a block of flats, none of which was subject to long underleases, was entitled to claim the benefit of the Leasehold Reform, Housing and Urban Development Act 1993 Part I Chapter II in relation to each of the flats at the same time, irrespective of whether the lessee was a property investor or a resident and irrespective of the nature or extent of other property included in the demise. The recent House of Lords decision in Majorstake Ltd v Curtis [2008] UKHL 10, [2008] 1 AC 787 was discussed and applied. The court also responded to technical arguments led by the respondents concerning access to services, service charges, apportionment of covenants, treatment of common parts, parking rights and anomalies in the application of Chapter I of the Act, giving some conveyancing guidance on these issues.
Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5 [2008] 1 WLR 289
Anthony Radevsky and Mark Sefton appeared in Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5 [2008] 1 WLR 289.The issue in this case was the definition of a "house", under section 2 (1) of the Leasehold Reform Act 1967. The appellant B was the lessee of a terraced property built in the eighteenth century as a single private residence and comprising six floors. Up until 1942 the property was used as a single residence but thereafter the three upper floors were retained for residential use while the lower floors were occupied for business use. By the time the notice under s.1(1) of the Act was served, both the commercial and residential uses had ceased and the property was vacant. The rooms on the three upper floors had been stripped back to their basic structure. Plaster had been hacked off the walls and some ceilings and floorboards had been removed. The Court of Appeal agreed with the judge at first instance that the property was not a house within the meaning of s.2(1) of the Act because it was not, as at the time the notice was served, "designed or adapted for living in". The House of Lords allowed the appeal. They held that the phrase "designed or adapted for living in" in the Leasehold Reform Act 1967 s.2(1) required the court to consider the property as initially built and the purpose for which it was originally designed, and to consider whether any work had subsequently been done so that the original design had been changed. A property which had not been occupied for a number of years and had become internally dilapidated had nevertheless been originally designed for living in, and was thus, in the circumstances, a house within the meaning of the subsection.
Leriche v Cherry [2008] U.K.P.C. 35
Oliver Radley-Gardner appeared in the case Leriche v Cherry [2008] U.K.P.C. 35 on appeal to the Privy Council. The appeal was concerned with whether two pieces of farm land on St. Lucia were held on resulting or constructive trusts by the Appellant for himself and the late Respondent in equal shares or were owned by the Appellant outright. The decision considers the scope of the practice of the Privy Council set out in Devi v Roy [1946] A.C. 508 on concurrent findings of fact in lower courts.
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