Private Client Titles – Autumn 2009


Avoiding Payment by Bankruptcy Plan Fails
A husband who had himself declared bankrupt in order to avoid making a financial settlement to his ex-wife recently found his plan stymied by the court.
The man had many business interests and had purchased a substantial house through an Isle of Man company. When his wife issued a petition for divorce proceedings in 2006, she obtained freezing orders to prevent him from dissipating his assets. He then petitioned to be made bankrupt, claiming debts of £191,000. A few days before the bankruptcy petition was lodged with the court, he transferred the only issued share in the company to a third party, in breach of the freezing order. He was subsequently made bankrupt, but the order was not ‘sealed’.
The bankruptcy order was opposed by his ex-wife on two grounds. Firstly, that the judge could change his mind about granting the bankruptcy petition before it was sealed and secondly that a bankruptcy order can be annulled on the petition of a debtor.
The house was sold, yielding a surplus of £1 million which was paid into court. The company which had owned the property was then put into liquidation, with an alleged debt due to another company exceeding £1 million. The ex-wife claimed that the debt due to the second company was a sham and that her ex-husband had organised his affairs to ensure there was no money with which to make a financial settlement.
The ability of the ex-wife to obtain a settlement depended on getting her ex-husband’s bankruptcy order annulled. In order to do that, it had to be shown that he was capable of paying his debts at the time the order was made.
The application to annul the order was successful. Inevitably, the matter ended up in the Court of Appeal, which, after lengthy consideration, concluded that the husband was able to pay his debts when he was made bankrupt.
By this decision, the Court has sent out a warning to those who seek to avoid their liabilities through financial manipulations.
Partner Note
Paulin v Paulin and Cativo Limited (In Liquidation) [2009] EWCA Civ 221. See
Couple Awarded Legitimate Damages Despite Fraudulent Claim
In a unanimous decision, the Court of Appeal has ruled that a couple who were injured in a road traffic accident were entitled to compensation for their injuries even though it had been fraudulently claimed that a third person was also injured in the crash.
Wasim Ul-Haq and his wife, Zahida Parveen, made a claim for damages after suffering minor whiplash injuries when Mr Ul-Haq’s car, which was stopped at traffic lights, was hit from behind by a car driven by the defendant, Anita Shah. Mr Ul-Haq’s mother, Samara Khatoon, also claimed compensation for whiplash injuries.
In the original case, heard at Birmingham County Court, Mrs Shah admitted liability for the accident but made a counterclaim on the grounds that Mrs Khatoon had not been in the car at the time of the accident. Mrs Shah claimed damages for deceit and sought to have Mr Ul-Haq’s and Mrs Parveen’s claims struck out due to their involvement in Mrs Khatoon’s fraudulent claim. The court found that Mrs Khatoon was not in the car when the accident occurred. However, Mrs Shah’s claim for damages was denied as she had not suffered any loss as a result of the attempted fraud. The judge also refused to strike out Mr Ul-Haq’s and Mrs Parveen’s claims, as they had genuinely been injured in the accident. Mrs Shah appealed the decision, first to the High Court and then, when the judge upheld the original decision, to the Court of Appeal.
The Court of Appeal dismissed the appeal. In giving judgment, Lady Justice Smith said that for the judge to have struck out the claims of the first and third claimants would have been ‘depriving those parties of their legal right to damages by way of punishment for their complicity in the second claimant’s fraudulent claim, which in my judgment he had no power to do’. LJ Smith also said that criminal prosecutions may be necessary to deter fraudulent claims.
Fraudulent claims, though criminal, are on the increase and the number of prosecutions for fraudulent claims may therefore be expected to rise.
Partner Note
Ul-Haq and others v Shah [2009] EWCA Civ 542.
Some reports spell Mrs Khatoon’s name as ‘Khartoon’.
Court Finds Hole in Polo Argument
Ownership of land is often fettered with obligations and, in some circumstances, the obligation can be to permit someone else to extract something from the land. In legal terminology, this is called a profit-à-prendre and one of the most common of these is the right to graze animals.
Where such a right exists, the owner of the land cannot prevent it being exercised. Recently, the High Court had to consider such a case. A farm which reared polo ponies sought to re-establish the right to graze them over a piece of adjacent land owned by someone else. The right was to graze the ponies from evening until morning for eight months of the year. The farm sought to register the right at the Land Registry. The application was opposed by the landowners.
The landowners had fenced off a part of the land which was being used to keep chickens and a pig. A deputy adjudicator at the Land Registry ruled that the farm had no right to graze its ponies on the land. The owners of the farm appealed against the decision, which led to the matter being heard in the High Court.
After complex arguments, the judge decided that the initial decision had been made on the wrong grounds and that, in principle, a right to profit-à-prendre had been established. The case was remitted back to the adjudicator for reconsideration.
The issue arose initially because the owners of the land, which they had bought in 1994, appeared not to be aware of the existence of the legal right to graze the ponies. The result was a court case over a right that, in financial terms, is almost valueless.
It is important when buying any property to ensure that rights others may have over the land are fully explored and their implications considered. Our property professionals can help you ensure you do not have any nasty surprises after you have purchased a property.
Partner Note
Polo Woods Foundation v Shelton-Agar [2009] EWHC 1361 (Ch). See
Court Must Hear Evidence Before Deciding
Cases involving the custody of children are often very contentious and need to be approached with sensitivity and care. Recently, the Court of Appeal was called upon to rule in a case in which the critical issue was whether the judge in the family court should have taken account of the wishes of the child involved.
The circumstances were that the child, a boy of 10, had lived with his mother following the separation of his parents. When he was nine, she suffered from exhaustion to the extent that she could no longer look after him, so he went to live with his father. The mother subsequently became pregnant and the boy’s father sought a residence order.
A Children and Family Court Advisory Support Service (CAFCASS) officer prepared a report on the case and recommended that the boy should return to live with his mother. This was also the preferred course of action of the boy himself. However, when the father’s application for custody was heard, the views of neither the CAFCASS officer nor the boy were heard by the court. The judge ruled that the boy was settled with his father and ordered that he should remain with him.
The mother appealed, arguing that the judge should have heard evidence from the boy and the CAFCASS officer.
The Court of Appeal agreed, holding that the judge had erred in not taking account of this evidence. He had been too heavily influenced by the fact that the boy had settled well with his father.
Says <<CONTACT DETAILS>>, “Sometimes, as in this case, the judge just gets it wrong and an appeal is necessary to rectify the decision. If you are having problems over any family law issue, contact us for advice.”
Partner Note
Re R [A Child] [2009] EWCA Civ 445.
Court Rescinds Agreement Resulting From Misrepresentation
Where an agreement is entered into as a result of a misrepresentation, the court can order the agreement to be set aside. This recently benefited a wife who entered into an agreement which meant that her sole beneficial interest in the family home was surrendered. The wife did so based on a misunderstanding following an innocent misrepresentation by her husband.
The circumstances were that the husband had lived and worked abroad and purchased the property for his wife to live in. In 1991, he created a deed which provided that the property was held in trust for his wife absolutely.
In 2004, legal proceedings against the husband led to a freezing injunction against his assets to protect the sum claimed. The husband incorrectly assumed that he had to demonstrate that he had free assets in excess of the amount of the limit of the freezing order, so he and his wife agreed that he should be released from his obligation to hold the house in trust for her. She then borrowed money secured on her share of the property to fund his defence.
The couple then discovered that they had misunderstood the situation and sought to restore the pre-2004 position. In the meantime, the claimant against the husband sought and obtained a legal charge over the property and sought an order for its sale.
In court, the judge ruled that the husband and wife were joint beneficial owners of the property and issued the order for sale. The wife appealed, arguing that the 2004 agreement was procured by the husband’s innocent misrepresentation, so she could not be bound by it and the property remained held by her husband in trust for her as previously.
The Court of Appeal upheld the appeal. The husband’s innocent misrepresentation of the effect of the freezing order had induced his wife to participate in the 2004 agreement. Had she understood the true position, she would not have entered into it. It would therefore be unfair for her to be bound by it.
Partner Note
Qayyum v Hameed and Qayyum [2009] EWCA Civ 352.
Deskbound Worker Wins Compensation For Blood Clot
An office worker who suffered a blood clot after spending long hours sitting at her desk has received an undisclosed sum in compensation.
Angela Lamberton, 53, worked for HM Revenue and Customs (HMRC) in Leicester. She had suffered a previous blood clot for which she had been prescribed medication and the treatment was successful. Nevertheless, she had been advised by her doctor not to sit at her desk for longer than 15 minutes without getting up and moving about.
When new working practices were introduced, however, Ms Lamberton was prevented from following her doctor’s advice. Targets were established so that a certain amount of work had to be completed and under the new system staff no longer had to leave their desks in the course of their work.
Ms Lamberton complained to her supervisor that the new system of working was damaging her health, but was ignored. Within weeks, she had begun to experience pain in her legs. Her GP found she had developed a potentially fatal blood clot and she had to have emergency treatment to disperse it.
The episode has had a huge impact on Ms Lamberton’s life. She now has to take blood thinning medication and wear specialist stockings. Her legs are often painful and tired and she is fearful of flying in case she develops another blood clot.
A case was brought against HMRC, which admitted liability and settled the claim out of court.
If you have suffered ill health through no fault of your own but as a result of poor workplace practices and would like expert advice, contact <<CONTACT DETAILS>>.
Divorce – Future Pension Not Taken Into Account
A recent, bitterly contested ‘big money’ divorce case shows how reluctant the courts are to upset financial settlements on the basis of contingencies and reinforces the point that bad behaviour is not a basis for changing the division of the assets.
It involved, as do so many high profile cases, a man who was successful in the City and his wife. The couple had lived together for five years before they married in 2003, but the marriage broke down in 2005. The couple had one child.
Both parties tried to keep secrets from the other. The husband failed to disclose that he would be the beneficiary of a ‘lucrative’ pension plan in 2023 and the wife failed to disclose that she had become pregnant by another man, with whom she had a relationship that could be described as cohabiting.
In late 2006, the husband was ordered to pay his wife £7,500 per month in maintenance and the family assets were apportioned. When she discovered that her husband was to benefit from the pension, the wife sought to obtain an increase in the maintenance payable for her and their child. The husband sought to resist her sharing in any wealth which he had created after their separation.
The outcome of the case was that the judge ordered some changes to the maintenance payments and the division of assets. However, the important points relate to the changes he could have made and did not.
With regard to the pension, he concluded that since it could not be touched before 2023, it would not in his view be fair to require the husband to share, in whatever proportion, the value of this fund with his ex-wife.
On the matter of the wife being deprived of a share in the post-separation earnings, the judge concluded that, ‘I do not accept that such contributions by a wife to the family after the end of the marital partnership can generally be said to warrant a conclusion that a proportion of the husband’s future income continues to be attributable to the wife’s domestic contribution and thus a fruit of the marital partnership’. He therefore denied the claim that she shouldshare in the increase in assets between their separation and divorce. Interestingly, he remitted for negotiation whether the revised maintenance payments should be set in Pounds Sterling or (as the wife now lives in Ireland) in Euros. 
Neither was the judge swayed by the wife’s commencement of a new relationship nor was the possibility of financial support from her family, who are wealthy, a factor which affected his decision.
In reaching this decision, the judge commented, ‘Sadly this has been an application, both during its gestation in documentation and its investigation in oral evidence, where both … have undoubtedly (and sometimes deliberately) reprocessed elements of the history for perceived tactical advantage’.
Says <<CONTACT DETAILS>>, “Financial settlements on divorce depend on many factors, but the bad behaviour of one or both of the parties is seldom if ever one of them.”
Partner Note
G V G [2009] EWHC 494 (Fam).
Don’t Get Angry With the Council!
A woman who became so incensed by the response of an anti-social behaviour coordinator working for Slough Council that she slammed her own phone down so hard that she broke it found herself on the Council’s ‘violent persons register’.
Jane Clift had seen a toddler, who was with a group of adults drinking in public, pulling up plants in a flowerbed. When she remonstrated with them, she was threatened. After telephoning the Council, she wrote a letter of complaint in which she admitted to being ‘filled with anger’, unwisely adding that she would have ‘physically attacked’ the Council employee if she had been close to her.
The result was that her name was emailed to more than 60 Council workers and community wardens as someone on the ‘violent persons register’. The same email was sent to another hundred people working in council-related organisations.
Ms Clift sued the Council for libel and claimed that the person circulating the email had acted maliciously. The Council argued that the email warning it had circulated was ‘substantially true’. The jury did not accept the Council’s argument as regards the libel, but accepted that the circulation of the email was not done maliciously. The Council’s argument that the email was covered by ‘qualified privilege’ (a defence which can apply when a person has a public or private legal, social or moral duty to circulate information to another individual with a duty to receive it) was also rejected – the email had been too widely circulated for this to apply.
Ms Clift was awarded £12,000 in damages.
Partner Note
Clift v Slough Borough Council [2009] EWHC 1550 (QB).
Electric Shock For Developer   
When a developer bought a piece of land, intending to build an office block, it was in for a shock. The land benefited from an easement granting access over adjacent land (the garden of a house). This allowed the right of passage of utility companies over and through the adjacent land.
The developer applied to electricity company EDF to put in an electricity supply to its land, which required EDF to lay cables through the adjacent land. EDF refused to do so unless the owners of that land signed a deed granting it the right to lay the cables. The landowners refused.
The developer went to court, claiming that the landowners were obliged to give the grant to EDF. The claim failed. The landowners could not stop EDF from laying the cables but an easement cannot compel the person(s) granting it to do something – in this case, it could not compel the landowners to give EDF the deed it demanded.
Interestingly, what appears to have started this off was the failure of anyone to discuss the proposed digging of cable trenches with the owners of the garden prior to their receipt of a notice that work was intended. One cannot help but wonder if the issue could have been avoided altogether had a more considerate approach been taken.
Contact <<CONTACT DETAILS>> for advice on any property matter.
Partner Note
William Old International Ltd. v Arya [2009] EWHC 599 (Ch).
Failed Property ‘Try On’ May Be a Crime
An appearance in the criminal court may await a property owner who tried to be too clever with his local planning department.
The property owner submitted a planning application to build a barn to store hay. This was granted on the condition that use was limited to the storage of hay or some other agricultural purpose. When the building was constructed, it looked, from the outside, like a hay barn. However, internally it was fitted out as a house. The owner moved into the property, using it as a home from August 2002 onwards. In 2006, he applied for a certificate of lawful use on the ground that the property had been used for four years as a dwelling. Such applications can be made when the owner can show that the property has been occupied in breach of planning control for the required period of time. The appropriate time limit is four years where there is a breach of operational development or change of use of a building to use as a single dwelling.
The council refused to grant the certificate of lawful use. The property owner appealed the decision and the building inspector upheld the appeal. The council then appealed that decision.
In court, it was accepted that the property owner had intended to deceive the council from the outset regarding the true use of the building. This, as it turned out, may have been an unwise admission, as the court suggested that the property owner might have committed a criminal offence by obtaining planning permission by deception. If the offence of deception were proved, then the profit from the crime could be subject to confiscation under the Proceeds of Crime Act 2002.
The court ruled that the certificate should not be granted. Firstly, the construction of the building was not unlawful. It had planning permission and was capable of being used for the allowed purpose. There was therefore no breach of operational development. Secondly, there was no change of use to a dwelling. It has always been used as a dwelling. Accordingly a certificate of lawful use could only be correctly applied for after ten years and the council has until August 2012 to issue an enforcement notice. In the circumstances, the council is unlikely to miss the opportunity to make an example of the property owner.
Says <<CONTACT DETAILS>>, “In this case, the property owner was well and truly ‘hoist with his own petard’. Had he remained in residence beyond August 2012, he would most likely have succeeded, although the question of unpaid council tax on the property would have caused disquiet to the council. Any resolution of the situation is likely to prove expensive. It is always better to get it right first time and be safe rather than sorry.”
Partner Note
R (on the application of Welwyn Hatfield Council) v Secretary of State for Communities and Local Government and another.
Family Court Protects Children From Media Intrusion
The children of celebrities have the same right to anonymity in court proceedings as any other children, following a ruling of the High Court.
The press have only been allowed into the family courts since April 2009 and can be excluded by the court when matters sensitive to a child are involved. However, the level of press interest is not by any means the same in all cases and the court recently had to decide whether or not to exclude the press when faced with a ‘media circus’ surrounding the child of a celebrity couple.
Sir Mark Potter, president of the family division, stated that ‘in considering whether to exclude the press…the focus is on the interests of the child…’ and that courts should ‘have regard to the nature and sensitivities of the evidence’. Judges should ask themselves whether the press interest represents public curiosity or legitimate public interest.
In the case in point, reporting the evidence given during the proceedings would be distressing to the child and the interest of the press only arose because of the celebrity of the parents.
It will come as a relief to many parents that at what is normally a distressing time for all, the courts will act to protect children where media intrusion would be against their best interests.
Partner Note
Re Child X [2009] EWHC 1728 (Fam).
Family Overturns Will That Benefits Carer
Elderly people can become suggestible and it is, regrettably, not uncommon for avaricious people to attempt to influence them for personal gain.
In a recent case in point, an elderly and wheelchair-bound lady altered her will a few months before she died so as to bequeath her £400,000 estate to the son of her carer. Her previous will had left her entire estate to her family.
The family contested the new will, claiming that the woman had fallen under the influence of her carer and was too mentally infirm to resist her.
In addition, more than £400,000 had been withdrawn from the woman’s bank account in the three years prior to her death. The evidence of undue influence was sufficient for the judge to rule that the woman’s earlier will, made in 2002, should stand. In addition, it is understood that following a police investigation into the depletion of the woman’s assets in the final few years of her life, papers have been passed to the Crown Prosecution Service.
Says <<CONTACT DETAILS>>, “This sort of circumstance is a nightmare for the family involved. If you are concerned about the possibility of people abusing the trust of your elderly relations, contact us for assistance. It is always better to avoid problems than to deal with the aftermath.”
Partner Note
Reported in the STEP News Digest, 3 August 2009.
Financial Provision – Same Address Not Necessary
When a person dies without making reasonable financial provision for someone who is dependent on them, the court may make an award to the dependent person. For a claim by the partner of the deceased to be successful, the claimant has to have lived with the deceased ‘as the husband or wife’ for at least two years prior to the death.
Normally, such cases are straightforward – the dependant lives in the same property and has been maintained by the deceased. However, this is not always the case. Recently, a woman was allowed to bring a claim for financial provision despite the fact that her postal address had never been changed from her previous residence (which she retained) and that this was also shown as her address on the electoral roll.
After her partner died in 2007, she successfully argued that they had cohabited since 2002 and she had ‘gradually moved in with him’. The man’s family contested her claim. The case led to a great deal of detailed factual evidence being presented, but the decision seems to have been swayed in no small part by evidence of the couple’s domestic arrangements, for which there were several witnesses whose testimony supported the claimant. The man’s family were unable to produce evidence to rebut the assertion that the couple were living together as man and wife.
Says <<CONTACT DETAILS>>, “This case was unusual as normally such cases are about the extent to which one partner has provided for the other.”
Partner Note
Lindop v Agus and others [2009] EWHC 1795 (Ch). See
Homelessness Continues If Accommodation Not Reasonable
Temporary hostel or refuge housing does not constitute suitable accommodation for determining whether a person is homeless, if the homeless person is expected to occupy it for a longer period than is reasonable. This decision was taken recently by the House of Lords, which had to rule on whether six families who occupied overcrowded short-term accommodation and a woman who was provided with long-term accommodation in a women’s refuge were still homeless for the purposes of being allocated social housing.
The appeal dealt with the housing policies of Birmingham and Manchester Councils. In the case of the Birmingham families, it was accepted that they were unintentionally homeless and a priority housing need. However, the Council had left them in unsuitable accommodation for months or years. The key issue was that the accommodation provided was accommodation which it would not be reasonable for them to continue to occupy. Therefore, the families remained homeless for the purpose of assessing their housing need.
In the Manchester case, a woman and her two children were given accommodation in a women’s refuge, from which she was evicted because of her behaviour towards the staff. She was rehoused in temporary accommodation. The Council ruled that she had become intentionally homeless.
In both cases, the nub of the Councils’ arguments was that their duty to provide housing was discharged if they left the families in the housing provided until suitable permanent housing could be found.
In the view of the House of Lords, there would inevitably come a time when it was no longer reasonable for the families to remain in the temporary accommodation. What constituted a ‘reasonable time’ for a family to occupy temporary accommodation was a matter of fact in each case.
Partner Note
Regina (Aweys and others) v Birmingham City Council, Moran v Manchester City Council, HoL, 1 July 2009.
Reported in the Times, 7 July 2009.
Ignoring Court Demands is Costly
In litigation, it is common for the court to order the production of documents from the parties to the case. Failing to comply with such orders is unwise, as the court has the power to strike out (i.e. refuse to hear) a case unless the documents are produced. It will issue an ‘unless order’, which in simple terms states that unless the requested material is produced, the case will be struck out.
There are several criteria the court will apply when considering an application for relief against an unless order. These include considering whether the administration of justice will be served, whether the failure to supply the requested information is intentional and the extent to which the person has complied with other requests, orders etc.
In a recent case, the ex-husband of a woman failed to comply with an order of the court to produce documents and information relating to a property dispute. He applied for relief against the unless order and the case reached the Court of Appeal. One of the arguments employed was that striking out his claim because of non-compliance with the order would breach his human rights under Article 6 of the European Convention on Human Rights. His appeal was rejected.
Says <<CONTACT DETAILS>>, “When disclosure of documents is required by the court, the demand must be treated seriously. Ultimately, failing to comply with the court’s rulings can result in your case simply being rejected.”
Partner Note
Momson v Azeez [2009] EWCA Civ 202.
In Brief
Trial by Judge
The Criminal Justice Act 2003 provides that in certain circumstances a criminal trial can be held without a jury. One of the main reasons for doing so is when there is a clear risk of jury tampering.
In December 2008, a trial collapsed for the fourth time, following allegations of attempted jury tampering. The Lord Chief Justice has now ruled that the trial (which is alleged to have already cost more than £22 million) may be heard by a judge sitting without a jury.
This is the first time the legislation has been used to remove the need for trial by jury and comes after a period of increasing disquiet about intimidation and attempted bribery of jurors.
Partner Note
Reported in the Solicitors Journal.
Incarceration Does Not Bring Compensation
In an unusual case, the House of Lords has confirmed that a person cannot benefit from their own wrongdoing.
The case concerned a man who had been a passenger involved in the Southall train disaster, in which 31 people were killed and more then 500 injured. It was later ruled that the cause of the accident was the negligence of employees of Thames Trains Ltd.
The man suffered from post-traumatic stress disorder. Whilst undergoing treatment for the condition, he had an altercation with a pedestrian, following which he drove home, picked up a knife and returned to find the pedestrian, whom he murdered. He was detained at Her Majesty’s pleasure for an indefinite period after the court accepted a plea of manslaughter on the grounds of diminished responsibility.
The man then sued Thames Trains, claiming damages mainly for loss of earnings incurred as a result of his detention and arguing that its negligence was the cause of his action. There is precedent for this argument. In 2008, an employer was found to be liable for the suicide of one of its employees because the employer’s negligence had been the cause of post-traumatic stress disorder, which was found to be the cause of the suicide. In the Court of Appeal, this argument had been partially successful, the Court ruling that the claimant was entitled to compensation for loss of earnings for the period after his arrest and prior to his conviction because that period was not inextricably linked with the criminal act.
In the House of Lords, the claim failed altogether because of a rule which prohibits a person from obtaining recovery for damages which occur as a result of a sentence imposed for a criminal act. Other claims for loss of reputation, feelings of guilt and remorse and so on were also rejected.
Partner Note
Gray v Thames Trains Ltd. and another [2009] UKHL 33. See
See also Corr v IBC Vehicles Ltd. [2008] AC 884.
Letting Agent’s Commission Terms Unfair
Unclear language in a letting agent’s standard terms and conditions has led to a contract being set aside by the High Court.
The case concerned the estate agent Foxtons, which provides a lettings service to private landlords under a standard form of agreement. The Office of Fair Trading (OFT) had applied to the Court for orders against Foxtons for what the OFT deemed to be unfair terms in agreements between the estate agents and various landlords. The terms in question related to renewal commissions.
Foxtons hoped to rely on regulations passed in 1999 relating to unfair terms in consumer contracts. These stipulate that where a term is in ‘plain intelligible language’, the assessment of fairness of a term shall not relate to the price or remuneration as against the goods or services supplied in exchange.
The Court held, however, that the relevant terms for renewal commission within the old version of Foxtons’ contract had not been drafted in plain and intelligible language and so the obligation to pay renewal commission under the relevant terms of the agreement did not escape a fairness test under the regulations.
As far as the actual fairness of the terms was concerned, the Court considered it unlikely that the typical private landlord would expect a repeat bill in year two of a letting and beyond unless the point was spelled out in some way. It was felt that Foxtons had not used a fair and adequate method of bringing the renewal commission clause to the attention of the landlords.
Under the circumstances, the renewal commission clauses of Foxtons’ old standard terms and conditions were held to be unfair.
“This case illustrates the importance of drafting agreements in clear and precise terms,” says <<CONTACT DETAILS>>. “We can advise you on any property or contract matter.”
Partner Note
Office of Fair Trading v Foxtons Ltd. [2009] EWHC 1681 (Ch). See
The Unfair Terms in Consumer Contracts Regulations 1999 can be found at
Mind Your River Frontage
If you own river frontage and allow someone else to moor a boat there, you should be aware of a recent case.
The High Court had to determine whether the owner of a boat that had been moored for many years on the Thames had acquired title to the river bed by adverse possession (squatter’s rights).
Mr Ashmore owned a sailing barge, which he kept tied to mooring rings in the bank of the river Thames near Battersea Bridge for more than 12 years. At all times he lived on the vessel and had never paid anything to the Port of London Authority. The Authority claimed that he was a trespasser on its property and attempted to register title to the river bed, which was unregistered. (There is a different system for claiming title to land that is registered, which makes this in practice much harder to do). Mr Ashmore objected to the application.
Twice daily, at low tide, Mr Ashmore’s boat rested on the river bed. He claimed that he had demonstrated physical custody and control over the land and an intention to exercise custody and control over it for his own benefit – these being sufficient to justify a claim to have the title in the land registered in his name.
He succeeded. One interesting point was the area of land he therefore acquired. The boat would move on its moorings. The Court’s ruling here was that Mr Ashmore acquired, in effect, all the area the boat could come into contact with on the river bed as it drifted on its moorings and the area of river bed between the boat and the river bank.
It was important in this case that the Thames is tidal at the part of the river where the boat was moored. However, owners of river bank who allow others to moor their boats adjacent to their land for long periods should consider taking steps to ensure that they can demonstrate that they are not giving the boat owner sufficient grounds to claim title to the river bed.
If you are concerned about the possible implications of this case, contact <<CONTACT DETAILS>>.
Partner Note
Port of London Authority v Ashmore [2009] EWHC 954 (Ch).
Nightjack ‘Outing’ Bodes Ill for Bloggers
Online bloggers cannot rely on their anonymity being protected, following a recent landmark ruling in the High Court.
‘Blog’ is the popular term derived from ‘web log’ and is a kind of online diary, often published under an assumed name. When the cult-status blogger known as Nightjack was identified by a Times journalist as Detective Constable Richard Horton, he applied for an injunction to prevent publication of his name.
After a temporary injunction had been granted, a full hearing was held, during which DC Horton argued that revealing his identity would render him liable to disciplinary action by his employers.
The Nightjack blog gave a behind-the-scenes view of modern policing, as well as criticising the legal system and many politicians. It also advised readers who found themselves the subject of a police investigation to complain about every officer and to show no respect for the legal system nor anyone working in it.
Last April, DC Horton was awarded the Orwell Prize for political writing. However, the judges were not then aware that details published in the Nightjack blog could be traced back to actual cases.
During the Court hearing, the judge stated that DC Horton had no reasonable expectation of anonymity because blogging is essentially a public, rather than a private, activity. The judge also stated that he did not accept the view that the Court had any duty to protect the anonymity of a serving police officer who was clearly in breach of police disciplinary rules.
“This ruling has profound implications for anyone currently engaged in creating or contributing to any kind of anonymous online publication,” says <<CONTACT DETAILS>>. “Great care should be taken when publishing content that is controversial, might be seen to be in breach of an employment contract or might be libellous. As with all such matters, there is a clear case for seeking legal advice before proceeding.”
Partner Note
Reported at
Non-Disclosure Does Affect Settlement
The Court of Appeal has taken the unusual step of considering an appeal in a matrimonial case which was settled by agreement before the appeal was heard.
In the High Court, the ex-wife of a wealthy man had failed to obtain an ‘uplift’ to her original settlement. She based her argument on the fact that at the time the settlement was being negotiated, her husband had not disclosed that he was in negotiation for a new position that would make him materially better off. Had he done so, she would not have agreed to the financial settlement. The District Judge had ruled that disclosure of the husband’s true expected future income would not have affected the settlement awarded.
The Court of Appeal decided to examine the facts of the case because it considered that the original judgment raised difficulties for practitioners. It concluded that had there been full and frank disclosure of the imminence of the new contract of employment, it was inconceivable that the wife would not have raised her sights. In the Court’s view, it was also inconceivable that, had it been disclosed, the District Judge would have rejected the information as irrelevant.
Accordingly, the District Judge was wrong to conclude that a full and frank disclosure would have made no difference to the settlement.
Says <<CONTACT DETAILS>>, “It is a relief that the Court of Appeal has reversed the earlier decision as the principle that both sides must make a full and frank disclosure of their financial positions when making a settlement on divorce must be right and had the decision of the District Judge been left to stand, it would have encouraged a culture of non-disclosure.”
Partner Note
Bokor-Ingram v Bokor-Ingram [2009] EWCA Civ 412. See
Planning Error Proves Costly
Adding facilities to one’s home may raise the prospect of a more congenial lifestyle, but care must be taken when dealing with planning applications.
In a recent case, the owner of a dwelling built in 1995 decided, in 1998, to add a garage and a dormer window. The planning application was accompanied by a new (extended) site plan. Planning permission was granted but because there was no request for a change of use of the land, the planning approval did not, in law, increase the curtilege of the property.
Everything passed without comment until some time later, when a swimming pool and tennis court were built outside the original curtilege of the land. Unfortunately for the owner, the land outside the curtilege of the property was agricultural land and no application for change of use of the land had been granted. The council issued an enforcement notice, requiring the owner to return the land to use as agricultural land.
The owner of the house argued that the 1998 plan had increased the curtilege of the property, so use of land shown on the plan as being for residential purposes did not require permission for change of use.
The matter reached the Court of Appeal. The Court considered that planning permission for a new dwelling would contain an implied permission for a change of use if required. However, an extension to a dwelling does not necessarily do so. In this case, the 1998 permission related to a development which was shown to be within the plans contained with the original planning application. The swimming pool and tennis court, however, were outside the original curtilege of the land. The 1998 permission had not extended that and had not created any permission for change of use of the land.
Partner Note
Barnett v Secretary of State for Communities and Local Government [2009] WLR(D) 107.
Pre-Nups – Not Quite There Yet
The recent case in which the Court of Appeal ruled that a German heiress was able to rely on a pre-nuptial agreement made with her husband was widely reported as meaning that the traditional view of the courts, that ‘pre-nups’ are little more than persuasive, was shattered.
However, the circumstances of that case were somewhat unusual and the comments of LJ Thorpe, the judge who issued the leading opinion, make interesting reading.
Firstly, he was at pains to make it clear that the law regarding pre-nups needs to be brought into line with that of most other countries, where they are enforceable as contracts and ‘autonomous adults’ have the right to ‘govern their future financial relationship by agreement’. He also commented that the presence of a pre-nup would assist in avoiding the stress, anxieties and expense which often accompany the negotiation of financial settlements on divorce.
Looking at the circumstances, however, the main issue was that both of the parties to the pre-nup were financially astute people (the husband had been a successful banker) and although the husband did not take professional advice before entering into the agreement, he had every opportunity to do so. He fully understood its effect. He had not asked his ex-wife for details of her finances. Crucially, it was the husband’s choice to accept the pre-nup he was offered rather than negotiate. 
Says <<CONTACT DETAILS>>, “We may expect legislation in due course to make indisputable the validity of pre-nups that are properly entered into, but there is no indication when such legislation is likely to be enacted. This ruling is a big step towards legitimising pre-nups, but we are not quite there yet. Meanwhile, it is essential that a pre-nup is entered into with full disclosure and with the benefit of professional advice on both sides.”
We can advise you on any family law or wealth protection matter.
Partner Note
Radmacher v Granatino [2009] All ER (D) 31.
Supervision Failure Costs Council
A county council was found negligent when a pupil was injured during a break at school when he was hit by a rock thrown by another pupil.
The case turned on a simple point – was it sufficient (as was the case in this instance) to have only one supervisor overseeing 150 children?
The Court of Appeal found the council negligent, especially as one of the prime purposes of having the children supervised was to prevent dangerous activities or stop them if they occurred.
A recent survey of local councils revealed that in the year 2008-2009 almost £3 million was paid out in compensation to children hurt in accidents at school. This figure represents an increase of £1 million on the previous year.
Parents have a legitimate expectation that the schools their children attend will be safe places and if the school fails to take reasonable precautions to ensure this is so, they have the right to hold the council (or other body responsible) liable.
If your child is injured at school or elsewhere due to the neglect of another, contact us for advice.
Partner Note
Palmer v Cornwall County Council [2009] EWCA Civ 456.
Use of Bank Account Amounts to Criminal Conversion
A man who allowed his bank account to be used to lodge funds that amounted to criminal property was guilty of the crime of converting criminal property.
So held the Court of Appeal, dismissing Mohammed Fazal’s appeal against convictions at Reading Crown Court for seven offences under Section 327 (which deals with the concealing or transferring of criminal property generally) of the Proceeds of Crime Act 2002(POCA).
Mr Fazal’s account had been used to deposit and withdraw the proceeds of fraudulent transactions. The money had been taken from the victims of an online fraud, whereby goods had been paid for but not delivered. Mr Fazal had denied knowledge of the fraud.
The appeal was lodged on the grounds that there had been no act of ‘conversion’ by Mr Fazal, only by others. It was accepted that there might have been an offence under Section 328 (which deals with facilitating arrangements for someone else without informing the authorities) of the POCA but no such charge had been made.
It was the judgment of the Court of Appeal that conduct amounting to an offence under Section 328 of the POCA also amounted to an offence under Section 327. It was further held that where funds were credited to a defendant’s account, retained and withdrawn from it with the approval, authority and cooperation of the defendant, those acts amounted to successive acts of converting criminal property.
For these reasons the appeal was dismissed.
“This case gives a clear indication that great care must be taken when handling third party funds, particularly when the sums are large and the provenance questionable,” says <<CONTACT DETAILS>>.
Partner Note
Court of Appeal: R v Fazal [2009] WLR(D) 175. See
Website Disclaimers – Beware the Small Print
In a recent case in the Court of Appeal, the Court ruled that information on a web page under the heading ‘about us’, that contained advice to users to obtain further information, was sufficient to absolve a trade organisation from its ‘guarantee’ responsibilities.
Customers who use members of the Swimming Pool and Allied Trades Association (SPATA) can claim redress in the event that a member becomes insolvent. However, the redress applies only where the membership is a full membership, not an associate membership.
A couple sought redress in these circumstances, having lost more than £40,000 due to the insolvency of their swimming pool contractor. They then discovered that the insolvent swimming pool contractor was a SPATA affiliate member, not a full member, and SPATA refused compensation. The couple sued SPATA.
SPATA defended the claim on the basis that prospective purchasers were advised on the ‘about us’ page of their website to obtain an information pack before entering into a contract for a pool and the information pack contained the necessary information about SPATA’s insolvency guarantee.
The Court ruled that SPATA was not liable to the couple. The advice to obtain the information leaflet before entering into a contract was considered to be a sufficient disclaimer.
SPATA now appears to approach the issue in a different way. The limitation of the guarantee is alluded to in the small print at the bottom of the SPATA ‘about us’ page and reads ‘Spatashield. This bond and warranty scheme protects customers holding a valid scheme certificate against the unforeseen business failure of a member. It can only be offered by full SPATA contractor members’.
The list of members on the ‘Find a SPATA member’ page clearly identifies those firms that are associate members, not full members.
What is important for users of websites is to make sure you review the whole website for disclaimers and so on before placing a significant order or relying on any third-party guarantee. It makes sense to read the whole website and make a contemporaneous date-stamped copy of any web-based information on which you are relying. It is clear that such disclaimers do not have to be highly visible to be effective. Where you are not absolutely sure of the position, get a written confirmation that your understanding is correct. We can help you make sure you reduce your risk in similar circumstances.
Partner Note
On a standard screen the disclaimer wording is quite small – see
Patchett v Swimming Pool & Allied Trades Association Ltd. [2009] EWCA Civ 717.
When Equal Shares Change
It may be assumed that when a couple purchase a property in equal shares, that is how ownership remains, but it isn’t necessarily so.
In a recent case, the High Court had to rule on the ownership of a house, which had been bought for £30,000 by a cohabiting man and woman who lived in it between 1985 and 1993. When the relationship broke up, the man moved out and ceased to contribute to the mortgage and running expenses of the property and made no contribution towards maintenance of the couple’s children. He bought another property and moved there. The couple cashed in a joint insurance policy to assist him to finance his new home.
The question of the respective shares of ownership of the property had to be decided in 2008, by which time the property’s value had risen to £245,000. The County Court ruled that the share of the remaining former partner should be 90 per cent. On appeal, the High Court upheld this decision.
One interesting aspect of such cases is that the Court is primarily concerned with the intention of the two parties with regard to their beneficial interests, given the change in their circumstances. In the absence of any indication by words or conduct as to how the beneficial interests should be altered, the appropriate criterion is what the Court considers to be fair and just. 
Partner Note
Jones v Kernott [2009] EWHC 1713 (Ch).

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