Photos: Dan Burman
Before a packed hall at the Royal College of Surgeons, the President of the Supreme Court, Lord Neuberger, brought to a close the latest series of Blundell Lectures – a legal institution celebrating their 40th birthday this year.
Addressing a 300-strong audience – a Blundell Lecture record – he presented a review of recent decisions that illustrate how the law of property adapts to meet the world around it. In his words, “Property is fundamental to virtually every aspect of human life, and that means that it is inevitable that property law has to engage with most other fields of law, and it also explains why it is important that property law keeps abreast with changes in society and technology.” Estates Gazette presents extracts from his speech: “Property law in a changing world – a view from the Supreme Court.”
Human rights
“The Occupy movement has famously strong objections to the capitalist system in general and financial markets in particular. During 2011, many supporters of the movement occupied St Paul’s Cathedral churchyard to record their objections, and there they remained for many weeks until a claim for possession was brought against them (City of London Corporation v Samede and others [2012] EWCA Civ 160; [2012] PLSCS 40). The movement’s primary argument was based on the proposition that members of Occupy were exercising their human rights of freedom of expression and freedom of assembly.
“In dismissing Occupy’s appeal and holding that their Convention rights could not prevail over the owners’ property rights, the Court of Appeal stated that, following the Human Rights Act, it could no longer be assumed that a property owner’s right to possession is automatically going to defeat the claim of demonstrators to protest. A balance has to be struck between the Convention rights of those who wish to demonstrate and express their views on land and the property rights of the owners of that land.
“However, it is hard to envisage that any sustained period of occupation against the owner’s will could be justified save in the most unusual circumstances. After all, the rights to freedom of expression and freedom of assembly do not inherently carry with them the freedom to exercise those rights in a particular location, particularly if it would involve a serious infringement of a property owner’s rights to enjoy his own property.
“The question which is unresolved so far, at least at Supreme Court level, is whether the same principles would apply where the land is owned by a private person – the question of the so-called horizontal effect of the Convention. This point, in the context of possession actions by private landlords, is due to be considered by the Supreme Court soon (McDonald v McDonald and others [2014] EWCA Civ 1049; [2014] 3 EGLR 30).”
Nuisance
“Coventry v Lawrence (Lawrence and another v Coventry (t/a RDC Promotions) and others [2014] UKSC 13; [2014] 1 EGLR 147) was concerned with nuisance by noise, and raised the interrelationship of nuisance and planning control; in particular, whether the existence of planning permission for the use assists the defendant in arguing that the use is not a nuisance. The perceived state of the law was somewhat unclear, and we tried to clarify the position.
“We held that the existence of planning permission for a particular use was, at least generally, irrelevant to the issue of whether the use amounted to a nuisance. Public planning law control and private property law rights have different aims and involve different principles, and there is no reason in principle why the grant of permission for a use should help establish that the use is not a nuisance.
“Another question which arose was whether a claimant who established that the defendant’s activity constituted a nuisance was normally entitled to an injunction to stop the nuisance. We considered that ‘the court’s power to award damages in lieu of an injunction involves a classic exercise of discretion, which should not, as a matter of principle, be fettered’. Significantly, we suggested that the public interest could often be a relevant factor, and the existence of a planning permission for the use in question could be a factor against granting an injunction.
“There was a degree of difference between some of us as to the weight to be given to the public interest and the existence of planning permission, so this will, I suspect, be a developing area.”
Family law
“When property law collides with family law, the results are not always entirely satisfactory.
“In Stack v Dowden [2007] UKHL 17; [2007] PLSCS 82, an unmarried couple had lived together for many years in a house which had been bought in their joint names, but Ms Dowden had contributed significantly more to the purchase price than Mr Stack. When they split up, the issue to be decided was how the proceeds of sale of the house were to be divided between them. Classic equitable principles and case law would have suggested that, in the absence of any evidence, the proceeds would be held in equal shares, but if there was evidence of the parties’ respective contributions to the acquisition and improving of the property, the shares would be pro rata those contributions – a classic resulting trust analysis.
“Despite this well-established case law, the majority of the House of Lords in Stack decided that the shares should be based on what Lady Hale described as ‘the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it’. Lord Hoffmann with his enviable linguistic elegance referred to such a trust as an ‘ambulatory constructive trust’. Linguistic elegance cannot mask the fact that this approach represented a real defeat for well-established property law principles, and the decision represented something of a takeover by family law.
“Perhaps unsurprisingly, this led to problems, and, four years later, the Supreme Court took the opportunity to clarify and develop the law in Jones v Kernott [2011] UKSC 53; [2011] PLSCS 264.
“Although the Supreme Court largely upheld the approach in Stack, the decision in Jones is to be welcomed for three reasons. First, it disposes of the heresy that imputation of intention was an appropriate exercise for the court to undertake. Secondly, in the judgment of Lord Kerr, the applicable principles to assessing cohabitees’ rights in a jointly owned home were set out for all to apply. Thirdly, Lord Walker and Lady Hale made it clear that the resulting trust analysis could not be invoked in cases of cohabiting jointly registered couples. Accordingly, while inconsistent with traditional property law principles, the applicable approach in cohabitation cases is at least now tolerably clear – in principle at least.
“In Prest v Petrodel Resources Ltd [2013] UKSC 34, the issue was whether the wife could treat houses which had been acquired by, and were still retained by, companies as the property of the husband for the purpose of her ancillary relief claim. We considered that the normal principles of property and title should apply in family cases in the same way as in every other area of law. The fact that a person owns and controls a company does not entitle the court to treat the company’s assets as his property, save perhaps in exceptional cases involving fraud or sham, where one may pierce the corporate veil.
“A win for property law principles over family law fairness it may be said. But that was not the end. The judgment went on to consider and accept the argument that, although the houses were legally owned by the companies, they had been acquired with money provided by the husband. In the circumstances, the company held the houses on resulting trust for the husband. Therefore, we held, on this ground, that the husband and the companies could be required to transfer them to the wife in her ancillary relief proceedings.
“There is an obvious apparent irony here. In Stack, the classic resulting trust analysis was rejected as it was inconsistent with family law fairness, whereas in Prest the classic resulting trust analysis was eagerly grasped because it was the only way of achieving family law fairness. Irony but, at least arguably, no inconsistency.”
Contract
“It is much more frequent for property law to run up against the law of contract. In the recent case of Arnold v Britton and others [2015] UKSC 36; [2015] PLSCS 177, the Supreme Court had to interpret a clause in a 99-year lease of a chalet in a Welsh caravan park, which appeared to suggest that the service charge was £90 for the first year, and increased at 10% per annum compounded every year thereafter. If that was indeed what the clause meant, it would result in the service charge being over £500,000 in the last year of the term. The majority of us reluctantly held that, applying well established rules of contractual interpretation, the clause was clear and that it had that meaning.
“The case illustrates that, while the court will try to avoid a commercially unattractive interpretation of a contract (including a lease), commercial reality must be assessed at the date of the contract rather than with wisdom of hindsight, and in any event a judge should not rewrite a contract simply because he or she does not think that one or both of the parties were well-advised to enter into a contract on the terms in question.”
Change vs. certainty
“Another difficult issue which a court sometimes has to face is whether to modernise the law. On the one hand, the law should keep pace with social and technological changes; on the other hand, every time the law changes, a degree of certainty is lost. So there is a tension between the need for contemporaneity and the need for certainty. That tension was apparent in relation to property law in Berrisford v Mexfield Housing Co-operative Ltd [2011] UKSC 52; [2011] 3 EGLR 115.
“A housing association argued that it could determine Ms Berrisford’s tenancy on one month’s notice, as the contractual fetter on its right to determine meant that, according to the common law, the contract was invalid. The notion that a periodic tenancy was invalid if the landlord or the tenant was not free to determine it was based on a case I managed to lose in the House of Lords in 1992 (Prudential Assurance Co Ltd v London Residuary Body and others [1992] 2 AC 386; [1992] 1 EGLR 47) which had applied a number of old cases going back to the 13th century.
“It was highly tempting to say that the old law should now be rejected as obsolete, but we did not do so. One should be careful before interfering with a well-established principle, however archaic it may seem in modern eyes, particularly where the principle had been confirmed by the House of Lords fairly recently.
“While we therefore held the ring so far as the traditional, if arcane and archaic, common law approach was concerned, we left open the possibility that we would overrule the principle which invalidated a fetter on determining a periodic tenancy in a case where it might be necessary to do so to avoid injustice.
“Many may think that we should have been bolder, but there is much force in the notion that the genius of the common law is that it develops when it has to do so, but not until it has to do so.”
