Allyson Colby, James Driscoll and Stuart Pemble are in high spirits at the end of another busy year, drawing on literary inspiration to unleash a Dickens of a Legal Notes Christmas special
It was Christmas Eve and Scrooge lay trembling in his bed. Jacob Marley had been dead these past seven years, but the phantom that had just visited him had had Marley’s bristling pigtail and the same face, the very same face. It had been wearing Marley’s spectacles, his waistcoat, tights and boots – and the chain clasped around the phantom’s middle had clanked hideously as it warned: “You will be haunted by three spirits,” before floating mournfully into the bleak dark night.
Shaken by Marley’s visit, Scrooge was petrified when the bell tolled a deep, dull, hollow, melancholy one and a spectre appeared in front of him.
“Who, and what, are you?” Scrooge demanded.
“I am the Ghost of Christmas Past,” the spectre replied grimly, before whisking Scrooge back through events of the past year.
Christmas past
The spectre showed Scrooge cackling gleefully following the High Court ruling in EMI Group Ltd v O&H Q1 Ltd [2016] EWHC 529 (Ch); [2016] PLSCS 87. The decision that assignments of leases between assignors and their guarantors are void, if the lease in question was made on or after 1 January 1996, had not bothered him at all. As a landlord, what did he care? Never let it be said that Ebenezer Scrooge let anyone off the hook. But the room darkened and Scrooge wailed sorrowfully as he realised that the spectre of nullity threatened the assignment of the lease of Jacob Marley’s counting-house into the joint names of “Scrooge & Marley” as well.
The image faded and was quickly replaced by a happier vision of an excited Scrooge taking advantage of the Supreme Court’s rewriting of the rule against penalties in Cavendish Square Holding BV v El Makdessi; Parkingeye Ltd v Beavis [2015] UKSC 67; [2015] PLSCS 309. By ensuring that all of his contracts contained ridiculously robust damages provisions, expressed as primary obligations, so that he always had the upper hand, Scrooge had rejoiced as he had bankrupted a number of suppliers. But this had caused his fiancée, Belle, to leave him because he loved money more than her. Being reminded of his greed made Scrooge cross and he demanded that the spectre leave him in his bed.
Christmas present
The visit from the Ghost of Christmas Present was even worse. Scrooge had ruthlessly exploited the Supreme Court’s changes to the law regarding illegal contracts in Patel v Mirza [2016] UKSC 42. Scrooge agreed with Lord Sumption’s analysis that the court had simply “substituted a new mess for the old one”. So long as the people he contracted with were too poor or (as in the case of the Cratchits) too poor and infirm to bring proceedings against Scrooge for unjust enrichment (and who but the very rich can afford to bring that sort of claim in 2016?), the new reliance test was sufficiently vague and confusing to enable Scrooge to retain numerous ill-gotten gains.
However, when the spectre showed Scrooge some of his former trading partners, broken and facing a bleak future, his conscience pricked him. And when he looked in on a meeting during which health insurers told the Cratchits that they would not meet the cost of Tiny Tim’s urgent operation in the former American colonies because Scrooge had obtained his employee’s private health policies fraudulently, the heartless employer found tears welling in his eyes.
Cratchit’s undoing
Bob Cratchit had not always been poor. In happier times, he had invested in a buy-to-let property in London. But the property had been “sold” to him by an imposter who had impersonated the real owner and absconded with Bob’s cash. Having handled his own conveyancing, Bob’s only option had been to issue proceedings against the professionals who had acted for the fraudster.
The litigation had dragged on, impoverishing Bob still further, and was eventually stymied by P&P Property Ltd v Owen White & Catlin LLP and another [2016] EWHC 2276 (Ch); [2016] PLSCS 261. In that case, the High Court dismissed claims for breach of warranty of authority and in negligence against selling agents and solicitors who had acted for, and been taken in by, a fraudster, and for breach of trust against the solicitors. Seeing the desperate straits to which the family was now reduced evoked pangs of sympathy in Scrooge’s stony heart.
Ebenezer estates
As the freehold owner of a building containing sub-leasehold flats, Scrooge had been dismayed – to put it mildly – by the Upper Tribunal decision in Leaseholders of Foundling Court and O’Donnell Court v Camden London Borough Council and others [2016] UKHT 366 (LC); [2010] PLSCS 233. It had always been bothersome to have to consult with the head landlord before carrying out works to the building and his reaction to the ruling that freeholders must consult all leaseholders who pay service charges was short and to the point: “Bah! Humbug!”
By contrast, Scrooge had rejoiced in the decision in Francia Properties Ltd v Aristou and others [2016] PLSCS 229. Keen to find new ways to make his investments work harder, it had gladdened his heart when the court decided that tenants who had exercised the statutory right to manage, and the right to manage company that they had formed, were not entitled to thwart their landlord’s plans to implement a planning permission for the construction of another flat on the top of the block of flats in which they lived. Despite the prospects of an appeal in 2017, Scrooge could almost hear the sound of coins chinking in his pockets.
Hard, unfeeling Scrooge had also been heartened by decisions showing that the repairing obligations of landlords of residential properties are far from absolute.
In Lafferty v Newark and Sherwood District Council [2016] EWHC 320 QB: [2016] PLSCS 84, a hole had suddenly appeared in the ground while a tenant was hanging out laundry in the garden. She fell and suffered injuries, but the court dismissed her claim for damages based on section 4 of the Defective Premises Act 1972.
And in Sternbaum v Dhesi [2016] EWCA Civ 155; [2016] PLSCS 91, the Court of Appeal dismissed an occupier’s claim for damages for injuries after she had slipped on some steep stairs. The stairs might have been unsafe (no handrail having been fitted) but, applying the traditional rule that landlords are not required to make premises safe, the landlord was not liable to compensate her for her injuries.
Also, in Edwards v Kumarasamy [2016] UKSC 40, the Supreme Court ruled that a leaseholder who sublet his flat was not liable to his tenant, who suffered injuries after tripping on paving outside. The court decided that the paved area at the front of the building did not form part of its structure. Besides, the leaseholder had not been informed of any defect. Therefore, he was not liable.
The decision in McDonald v McDonald and others [2016] UKSC 28; [2016] PLSCS 169 had been another cause for celebration. Scrooge had been concerned that his assured shorthold tenants might be able to invoke the Human Rights Act 1998, were he to seek to recover possession from them, and require Scrooge to show that his claim was proportionate. However, the Supreme Court decided that, where a private landlord is entitled to recover possession under domestic law, a human rights challenge will almost invariably fail.
Christmas yet to come
Scrooge fully intended to profit from all these decisions. He expected the rigorous attention that he paid to the contents of legal documents, before signing them, to enrich him too. Following Riverside Park Ltd v NHS Property Services Ltd [2016] EWHC 1313 (Ch); [2016] PLSCS 222, he had tightened up the wording in his licences for alterations so that he could take advantage of conditions in break clauses requiring tenants to give vacant possession on break dates. Woe betide those who failed to remove alterations when they should; their leases would live on until the end of the contractual term.
And, after the Court of Appeal decision in Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd [2016] EWCA Civ 160; [2016] PLSCS 89, Scrooge had taken to reminding anyone who tried to hold him to a contractual obligation to act in good faith (which he never accepted without putting his tongue firmly in his cheek first!) that this did not require him to adhere to the spirit of the contract at the expense of the black letter of the agreement.
Covetous old Scrooge had even resolved to use the High Court’s judgment in Burgess and another v Lejonvarn [2016] EWHC 40 (TCC); [2016] PLCSC 21 to his advantage by getting the few friends he had left to do increasingly demanding favours for him and then relying on an implied duty of care in tort to sue them when things went wrong. But a visit from the Ghost of Christmas Yet to Come persuaded Scrooge to break that resolution immediately.
The vision that the spectre forced him to observe – of friends and associates rejoicing at his graveside – was the final straw. Seeing how cheered they were by his death persuaded him to mend his ways and, when the spectre departed, he positively glowed with good intentions as he bade a merry Christmas to one and all.
May that truly be the case for everyone reading this ghostly tale. And, as Tiny Tim observed, “God bless us, every one!”
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Allyson Colby is a property law consultant, James Driscoll is a solicitor and a writer, and Stuart Pemble is a partner at Mills & Reeve LLP
