The last three months have seen reports on several eagerly awaited rulings. In EMI, the property industry held its breath for a crucial interpretation of the Landlord and Tenant (Covenants) Act 1995; the Supreme Court grappled with the enforceability of penalties; and the Court of Appeal considered the age-old question of “what is a house?”.
Also reported in EGLR, the courts have been looking high and low while reviewing kinks in vertical boundaries between properties, along with issues in developing below residential space.
New reports continue to be added to EGi every week.
Jewelcraft Ltd v Pressland and another [2015] EWCA Civ 1111; [2016] EGLR 10
The continuing saga of “what is a house?” in leasehold enfranchisement – nowadays a topic of immense commercial importance following the questionable removal of the residence qualification. The Court of Appeal has held that “reasonably so called” is now a matter of pure law in this context – with a result that ordinary folk might be forgiven for thinking bizarre.
Moorjani v Durban Estates Ltd [2015] EWCA Civ 1252; [2016] EGLR 13
At last – an authoritative case examining the principles for assessment of a tenant’s damages for breach of a landlord’s repairing covenant under a long lease where the tenant is not in occupation of the property through choice or habit, rather than compulsion from the state of the premises.
Cavendish Square Holding BV v El Madkessi; Parkingeye Ltd v Beavis [2015] UKSC 67 [2016] EGLR 15
The principle that contractual “penalties” are not enforceable crops up quite often in a property context. The Supreme Court here reviews the relevant law in the context of two commercial situations: a sale of shares and parking charges. Modern-day sensitivity on the latter subject is perhaps underlined by the fact that it produced a dissenting opinion.
West End Investments (Cowell Group) Ltd v Birchlea Ltd [2016] EWHC 3381 (Ch); [2016] EGLR 21
Residential leasehold enfranchisement is now an industry, and large sums can turn on fine definitions and distinctions. This decision concerns the common case of terraced properties of different heights divided by a shared party wall, and shows that there does come a point at which
a kink in a vertical boundary will be
regarded as immaterial for enfranchisement purposes.
Geyfords Ltd v O’Sullivan and others [2015] UKUT 683 (LC); [2016] EGLR 22
The costs of legal proceedings are significant, and the question of whether a landlord can recover them under a service charge provision now arises quite often. This case shows that clear words are required for this, and that costs incurred in legal proceedings against leaseholders are not comprehended within general words such as costs of “management and running” of the estate.
EMI Group Ltd v O&H Q1 Ltd [2016] EWHC 529 (Ch); [2016] EGLR 26
The Landlord and Tenant (Covenants) Act 1995 was introduced to protect tenants and their guarantors from being fixed, often unexpectedly, with liability on historic leasehold covenants long after they had assigned the premises and moved on. Was it really necessary for this protection that a tenant should be prohibited from assigning its lease to its guarantor? Apparently it was.
Chaturachanda and another v Fairholme and Fairholme [2016] EGLR 27
As the value of urban residential space increases, more and more basement excavation projects are proposed. Where party walls are concerned, the ability of the neighbours to object may turn on whether the design incorporates “special foundations”. This case examines the meaning of that phrase, and gives a practical illustration of why, and where, they will (or will not) be held to exist.
Other recent reports
The following cases have been reported in the EGLR in the last few weeks, and are available on EGi:
• Fairbairn v Etal Court Maintenance Ltd [2015] UKUT 639 (LC); [2016] EGLR 16: are legal costs incurred through breach of covenant recoverable from other leaseholders through service charge?
• Samuel Smith Old Brewery (Tadcaster) v Selby District Council [2015] EWCA Civ 1107; [2016] EGLR 17: was a plan-making process unlawful and did a duty of co-operation apply at the modifications to the draft stage?
• Re Black Ant Company Ltd (in administration) and another; Urban Ventures Ltd v Thomas and others [2016] EWCA Civ 30; [2016] EGLR 18: whether additions of interest and fees to a first mortgage can take priority over subsequent mortgages
• Wonder Investments Ltd v Jackson (VO) [2015] UKUT 649 (LC); [2016] EGLR 19: clarification about the nature of appeals from rating and other First-tier Tribunals to the Upper Tribunal
• Suh and another v Mace (UK) Ltd [2016] EWCA Civ 4; [2016] EGLR 24: an example of the higher courts’ zeal to support the “without prejudice” privilege
• Miaris v Secretary of State for Communities and Local Government [2016] EWCA Civ 75; [2016] EGLR 25: what is the relationship between sub-paragraphs (a) and (f) of section 174(2)
of the Town and Country Planning Act 1990 in an appeal against an enforcement notice?
HH Hazel Marshall QC practised at the Chancery Bar as Hazel Williamson QC, becoming one of the foremost real property silks specialising in commercial leaseholds. She became Senior Chancery Judge at the Central London Civil Justice Centre until retiring to Guernsey in 2013, where she sits part-time as a Lt-Bailiff of the Royal Court
