Property, Chancery and Commercial Group – Autumn Casenote Bulletin

Welcome to 1 Chancery Lane’s Autumn Casenote Bulletin. In this edition:

• Henk Soede explores how the Supreme Court interpreted section 84 of the Law of Property Act 1925 on the first occasion this provision has been considered by our highest appellate court in Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45
• John Bryant reviews how an application for relief from forfeiture for non-payment of rent was dealt with after the landlord and re-let the premises in Keshwala v. Bhalsod [2020] EWHC 2372 (QB)
• Chris Pask looks at the interaction between Part 36 offers and “Subject to Contract” negotiations in the case of Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541
• Conor Kennedy gives us the Court of Appeal’s verdict on whether a landlord’s certificate as to the amount of a service charge can be made conclusive in Sara and Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2020] EWCA Civ 1521
• Zachary Bredemear compares the judicial review of a decision to retro fit sprinklers in a tower bloc (R(Clarke) v Birmingham City Council [2020] EWCA Civ 1466)  with challenges to a landlord’s discretion to carry out work that are funded by a service charge regime

Restrictive Covenants – Supreme Court’s First Consideration of s.84 of the Law of Property Act 1925: Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45

Introduction

In Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45, the Supreme Court was required (for the first time ever) to decide an appeal on section 84(1) of the Law of Property Act 1925 (“LPA 1925”). The provision in question was the public interest limb of section 84(1)(aa) and, in particular, how applications made pursuant to that ground should be analysed.

Legal context

A restrictive covenant affecting freehold land is effectively an agreement in a deed that one party will restrict the use of its land in some way for the benefit of another’s land. As well as being enforceable between the original contracting parties, the restrictive covenant may also be enforceable by one party’s successors in title against the other’s successors in title. It is this latter characteristic that is the predominant source of litigation in this area.

Read the full article by Henk Soede

Well, that’s a relief

When a landlord forfeits a lease of commercial premises for non-payment of rent and does so by peaceable re-entry the tenant can seek relief from the forfeiture by applying either to the County Court under section 139(2) of the County Courts Act 1984 or to the High Court under its inherent jurisdiction.  The county court has unlimited jurisdiction.  The value of the premises does not matter.

There is no time limit for an application to the High Court but the tenant must act with “reasonable promptitude” (Thatcher v C. H. Pearce & Sons (Contractors) Ltd [1968] 1 WLR 748) and the court will use as a guide the 6 month time limit found in section 210 of the Common Law Procedure Act 1852.

Read the full article by John Bryant

The Court Of Appeal Goes Back To Basics – “Subject To Contract” Negotiations: Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541

The issue for the Court of Appeal was whether the parties had entered into a binding contract of compromise contained in written communications passing between their respective solicitors.

Background

The appellant, Joanne Properties Ltd (“Joanne”) owned a building in Wandsworth. It had borrowed money from the Respondent (“Moneything”) secured by a charge over the property. Joanne fell into arrears and Moneything appointed LPA receivers. Joanne sought to challenge appointment of receivers by alleging that the underlying loan document and charge were procured by undue influence. It issued proceedings which included a claim for an injunction to prevent any furthers steps being taken to realise the security.

Read the full article by Christopher Pask

Service Charge certificates

In Sara and Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2020] EWCA Civ 1521, the Court of Appeal considered the question of what was encompassed by a certificate as to the total costs recoverable by way of service charges.

The appeal related to the construction of a service charges clause in a commercial lease. The clause provided that a landlord’s certificate of the service charge payable by a tenant was conclusive. At first instance, the clause had been found conclusive as to the calculation of the cost of providing services, but not as to the broader question of whether services provided fell within the scope of services for which the landlord could charge a tenant.

Read the full article by Conor Kennedy

Fire Safety Improvements and Rationality: R(Clarke) v Birmingham City Council [2020] EWCA Civ 1466

Last week the Grenfell Inquiry heard shocking evidence of the dishonest marketing used to promote the cladding installed at Grenfell Tower. The legal repercussions of the Grenfell fire will be varied and will continue for some time. In R (Clarke) v Birmingham City Council [2020] EWCA Civ 1466 the Court of Appeal was asked to review a decision retro fit sprinkler systems.

Shortly after the Grenfell fire, Birmingham City Council considered a proposal which it eventually approved to retro fit sprinkler systems in its high rise blocks at a cost of £19m. The decision was “called in” by the Scrutiny Committee which requested that the Cabinet review its decision and,  “in particular that Cabinet carefully considers all the information and evidence available to assure itself that this large expenditure is wholly justified. ”

Read the full article by Zachary Bredemear