Private Client Titles ~ Spring 2009


Accessing Common Land
Under the Countryside and Rights of Way Act 2000, there is a general right of access to ‘access land’. Access land is land that is specifically accessible to the public under an enactment or land which is not ‘excepted land’.
The main categories of excepted land are:
·        land used for a park, aerodrome or golf course;
·        land used as a park or garden;
·        land within 20 metres of a dwelling or a permanent building used for housing livestock;
·        land used for livestock or for training racehorses;
·        land covered by pens for the temporary detention of livestock; and
·        land covered by buildings or the curtilage of such land.
The concept of curtilage is one which can prove difficult. It can be defined as the enclosed land around a house or other building and this is normally taken to include the enclosed area (e.g. by a fence) which is appropriate for the building.
The main problem with the legislation is that the maps showing access land (which are being developed and posted on the website of the Countryside Agency) will not identify excepted land, so the exception to the right of access by the public must be enforced by the landowner.
If you need to address the question of rights of access to land, we will be pleased to advise you.
Adoption – No Going Back
In a decision which Lord Justice Wilson said made him ‘profoundly uncomfortable’, the Court of Appeal has ruled that the adoption process is final. This means that children who are adopted after they have been removed from their biological parents cannot be returned to them, even if it is subsequently discovered that the parents were incorrectly accused of harming them.
The case concerned a couple with four children. Three of the children were taken into care after suffering what were considered to be ‘non-accidental’ injuries. The children were adopted in 2004. Evidence produced after this date indicated that the injuries sustained by the children were accidental, being consistent with the sort of injuries that would occur through normal parental handling of children suffering deficiencies of vitamin C and iron due to a diet based on soya milk rather than cow’s milk.
Appeals to set aside the adoption orders, made several years after the adoptions took place, failed, even though the Court was of the view that the original orders placing the children in council care would be unlikely to succeed were the case to be heard again.
The adoption process is final. Once legal adoption has taken place, the child is, in law, the child of the new parents. For this reason, giving up a child for adoption or adopting a child is a decision which has to be given thorough consideration.
Contact <<CONTACT DETAILS>> for advice on any aspect of family law.
Partner Note
W (Children) [2009] EWCA Civ 59.
Charities – Changes Ahead
There are changes ahead for charities as the second wave of measures introduced under the Charities Act 2006 comes into force in October 2009.
One important change is the creation of ‘exempt’ charities, which will not be registered with or governed by the Charity Commission. These will be larger public institutions with charitable ends, such as museums and universities.
The biggest change, however, will be the ability for a charity to become a Charitable Incorporated Organisation (CIO), which will permit limitation of liability for the charity’s officers and members in a simpler structure than is now possible. In principle, this would seem to be an excellent idea, but there is a potential downside, which is that suppliers and others might be more cautious in their approach to the charity as they could perceive the new structure as representing a greater commercial risk than was the case when the charity was an ‘unlimited’ organisation.
The Charity Commission is to undertake a consultation on the implementation of CIOs and this should shortly be published on its website at
Partner Note
There is a summary of the changes in the Solicitors Journal Charity and Appeals Supplement, winter 2008/2009, pages 18-19.
Charity Donations Through the Tax Return
Since 2004, it has been possible for individuals to donate some or all of any tax repayment to a chosen charity.
Participating charities have signed up with HM Revenue and Customs (HMRC) and been allocated a unique code, which is then entered in the relevant box on the tax return. A list of these charities is available on the HMRC website at or by telephoning the Tax Office or the Self-Assessment Helpline on 08459 000 444.
When completing their Self-Assessment Return, many taxpayers will not know the exact amount of the tax repayment due to them. However, when giving to charity by this method, there is no obligation to donate the whole repayment. The return allows the option to specify a maximum donation. If the repayment is less than this amount, the total repayment will go to the charity. If the repayment is more than the specified maximum amount, then the balance will be repaid to the taxpayer.
The unique code allocated to charities that have signed up for the scheme has built in checks to ensure that typing errors do not result in the repayment going to the wrong charity. If the code is not recognised, the repayment will be made to the taxpayer who can still make a tax efficient donation to the charity.
If a repayment is donated to charity and it then transpires that the repayment occurred owing to an error on the part of the taxpayer, HMRC will recover monies due to them from the taxpayer. If a repayment is sent to a charity by mistake by HMRC, then it is down to them to recover the payment.
Charitable donations made through the tax return can be made under the Gift Aid scheme, whereby the charity can claim basic rate tax on the gift, provided the individual pays at least as much Income Tax or Capital Gains Tax as is reclaimed by the charity. The donor’s details will only be given if permission is granted, on the return, by the taxpayer.
Gifts to charities made in this way will be treated as made when the donation is passed to the charity by HMRC. In most cases, the payment will be made during the tax year following the one to which the return relates.
With charities suffering heavily in the economic downturn, the ability to donate through one’s tax return is an efficient and straightforward way of supporting good causes.
Child Maintenance Rule Changes
In spite of reforms introduced in 2003, the Child Support Agency (CSA) was heavily criticised for failing to meet its objectives. With nearly £4 billion worth of unpaid child maintenance estimated to be outstanding, clearly something had to be done. To this end, in July 2008 the Child Maintenance and Enforcement Commission (CMEC) – a statutory non-departmental public body – was established to take on the work of the CSA.
Also in July 2008, the Child Maintenance and Other Payments Act (CMOPA) removed the obligation for new claimants who are on benefits to use the CSA. Unsurprisingly, statistics based on the first quarterly figures since this change was made show that the number of new cases being brought to the CSA has declined.
In October 2008, the obligation for existing CSA clients claiming benefits to continue to use the Agency was removed. All parents can now choose the child maintenance arrangements that best suit their individual circumstances. This could be a private arrangement or the statutory maintenance arrangements. A new Child Maintenance Options service (see has been established to provide information and support to help parents reach a decision.
Since October 2008, the benefit disregard level has been increased. Parents who are claiming benefits who have primary responsibility for the day-to-day care of a child can now keep up to £20 per week of any child maintenance receipts before their benefits are affected. The Government’s stated intention is that from April 2010, child maintenance will be fully disregarded when calculating out-of-work benefits.
In November 2008, the CMEC took over responsibility for the work of the CSA.
During 2009/2010, new enforcement powers will be introduced under the CMOPA to ensure that parents meet their child maintenance responsibilities. These will include allowing the CMEC to seize the passport and/or driving licence of parents who fail to pay, without the need to involve the courts as is currently the case. Work and Pensions Secretary James Purnell says that the Government is keen to support parents in these tough times, but for those who choose not to support their own children, “we will not stand by and do nothing. If a parent refuses to pay up then we will stop them travelling abroad or even using their car.” The Commission will also be able to seize money from bank accounts, where a parent has failed in their financial obligations toward their child, without having to go through the courts. Furthermore, the CMEC will also be able to apply for a curfew or to recover money from a dead person’s estate.
If the timetable goes according to plan, in 2011 a new ‘gross income’ scheme will be established. This is intended to reduce the time taken to calculate child maintenance by basing the amount a parent pays on gross income as per the latest available tax information held by HM Revenue and Customs. At this stage, parents still using the statutory scheme will be encouraged either to make their own arrangements or to move to the gross income scheme.
It is hoped that by 2013/2014, a single system of child maintenance will be in operation.
If you would like advice on child maintenance or any other family issue, please contact <<CONTACT DETAILS>>.
Collector’s Piece Need Not be High Value
Those wishing to import collector’s items from abroad will be heartened by a recent decision of the High Court.
When items are imported, there is usually a requirement to pay VAT on them and, where applicable, duty. One exemption from the charge to duty is when the item imported is a ‘collector’s piece’. It is established case law that to qualify as a collector’s piece an item must be:
  • relatively rare;
  • not used for its original purpose;
  • the subject of special transactions outside the normal trade in similar items; and
  • of high value.
With regard to value, HM Revenue and Customs (HMRC) operate a rule of thumb definition that this means the item is worth more than £20,000.
Recently, a taxpayer imported a Ford Zephyr car, which was valued at much less than £20,000, and claimed that the collector’s piece exemption applied. HMRC disagreed and the matter came to court. The taxpayer won. The court held that an arbitrary value could not be applied to determine whether or not an item was a collector’s piece. The essential test is whether the item has a high value relative to that which it would have were it not a collector’s piece.
Partner Note
Reported in Indirect Tax Voice, November 2008.
Credit Crunch – Divorce Settlements in the Spotlight
A city tycoon has failed in his attempt to reduce the divorce settlement agreed with his wife in 2008.
Investor Brian Myerson and his wife Ingrid divorced at the peak of the recent boom. The settlement involved him giving his ex-wife a lump sum of £9.5 million and a property in South Africa worth £1.5 million. Although he has mortgages and other liabilities of £2.5 million, this still left Mr Myerson with a considerable fortune, his investment company being then valued at more than £15 million. At the time, the settlement left Mr Myerson with 57 per cent of the couple’s total assets.
Then came the credit crunch. Mr Myerson’s shareholding in his company is now valued at less than £2 million, meaning he has a negative net worth in the region of £500,000. £2.5 million of the original sum due to Mrs Myerson is still unpaid.
Mr Myerson went to the Court of Appeal in a bid to have the settlement overturned but the Court rejected his argument. In its view, the ‘natural process of price fluctuation, however dramatic’, did not satisfy the legal test for a change in a settlement.
The ruling will come as a blow to many wealthy divorcees who were hoping to renegotiate their settlements. However, Mr Myerson has said that he will now take his appeal to the House of Lords.
Cyclist Riding Without Helmet Awarded Full Compensation
A cyclist who had chosen not to wear a safety helmet and who was injured in a collision with a motorcycle has been awarded the full amount of compensation in the High Court. However, the judge warned other cyclists that compensation may be reduced if not wearing a helmet is considered to be a factor in the seriousness of an injury.
Robert Smith was severely injured when he was knocked off his bicycle as the motorcyclist tried to overtake him. The Court found the motorcyclist liable as he had been travelling at over the 30mph speed limit and there was insufficient room for the manoeuvre.
The motorcyclist’s insurers argued that Mr Smith’s compensation payment should be reduced by 25 per cent because he had contributed to his injuries through not wearing a helmet. However, there is no legal obligation for a cyclist to wear a protective helmet. The Highway Code only recommends that one is worn.
On this point, the court found that it was possible for cyclists to place themselves at a greater risk by not wearing a helmet. In this case, however, the insurers failed to provide evidence that Mr Smith would have suffered less severe injuries if he had been wearing a helmet. It was found that he had hit the ground at a speed at which a helmet would probably not have made any difference to the injuries he sustained. As a result, Mr Smith was awarded the full (undisclosed) amount in compensation.
Whether or not cyclists should be obliged to wear protective headgear remains a controversial issue. Medical opinion is still unclear on whether helmet use will always reduce or eliminate injuries.
If you have been injured in a bicycle accident or any other road traffic accident, caused by the negligence of another road user, contact us to discuss a compensation claim.
Delayed Lump Sum Payments on Divorce
With property prices decreasing, delayed lump sum payments in divorce settlements must be dealt with particularly carefully.
The problem occurs when the net value of a property is decided during ancillary relief proceedings but subsequently changes as a result of fluctuations in the economy. When a couple divorce, it is commonly agreed that one party will remain in the matrimonial home and the other will receive half the value of the property over a given period of time, with the outstanding monies due being subject to interest. If the house subsequently changes in value during the payment period, there can be unfairness for one party or the other.
In general, this is the risk one takes when a sum is agreed by way of settlement. However, this risk can be controlled. If the payment of a lump sum is as a share of more widely ranging assets, then it should be subject to interest. If the payment is to compensate for a share of a property, then it should be linked in some way to property prices. This may seem complicated, but it promotes fairness for both parties. It is desirable to use an index of property prices in your area and to set the amount to be paid based on prices at the date of the agreement. The base amount is then fixed by the order and can be varied to take account of any fluctuations in the property’s value.
If this precaution is taken, once an order has been made, the effects of inflation or deflation will not normally be a justification for an application to alter it. This, in any event, is difficult to persuade the court to do. In one case, in which a wife was to receive a lump sum for her share in the house, the payment was not made for a long time because her husband intentionally delayed the sale of the property during a period of rising house prices. In this instance, the wife succeeded in obtaining a revised settlement. However, the reason for this was the deliberate obstruction by the husband of the sale of the property, not the effect that the increase in house prices had on the wife.
Having expert legal representation will enable you to achieve the best result from your ancillary relief proceedings. Contact <<CONTACT DETAILS>> for advice on any family law matter.
Partner Note
Hope-Smith v Hope-Smith [1989] 2 FLR 56.
Duty of Health Authorities to Protect Suicidal Patients
A recent judgment of the House of Lords (Savage v South Essex Partnership NHS Foundation Trust) has clarified the obligations imposed on health authorities by Article 2 of the European Convention of Human Rights, which protects the right to life.
Where members of staff know, or ought reasonably to know, that a patient detained in a mental hospital presents a ‘real and immediate’ risk of suicide, Article 2 imposes an operational obligation on the authority to do all that can reasonably be expected to prevent the patient from taking his or her own life.
The case concerned a patient, Carol Savage, who had for some years suffered from paranoid schizophrenia. She had been compulsorily detained, under Section 3 of the Mental Health Act 1983 (MHA), for three months when she absconded from the hospital and committed suicide by jumping in front of a train. Her daughter, Anna Savage, brought a claim against the NHS Trust on the basis that it was a Public Authority and therefore liable for a breach of her mother’s right to life.
The Trust had argued that Miss Savage would have to demonstrate that it had been guilty of at least gross negligence sufficient to sustain a charge of manslaughter to establish her claim.
In reaching their decision, the Law Lords referred to two earlier decisions of the European Court of Human Rights that dealt with complementary aspects of the Article 2 obligations on health authorities. Under Powell v United Kingdom, health authorities were ruled to have a duty to follow procedures that will protect the lives of patients in their care and to ensure that hospitals employ competent staff who are trained to a high professional standard. A failure to comply with these general obligations could be deemed a breach of Article 2. If, on the other hand, a health authority fulfils these obligations and a doctor negligently treats a patient who subsequently dies, the doctor would be personally liable in damages and the health authority would be vicariously liable for his or her negligence. There would not, however, have been a breach of Article 2.
The other case referred to, Osman v United Kingdom, dealt with the situation where, in addition to these general obligations, Article 2 imposes a further operational obligation on health authorities and their staff. This arises when staff know, or ought to know, that a patient in their care poses a real and immediate suicide risk. In such circumstances, there is an obligation to do all that can reasonably be expected to prevent the suicide. Failure to do so would not only render the authority and the culpable staff member liable in negligence but would also be a breach of the operational obligation to protect the patient’s life.
Patients detained under Section 3 of the MHA are similar to prisoners in that they are under the control of the state. They thus have similar protection under the Human Rights Act.
Says <<CONTACT DETAILS>>, “The patient in this case was akin to a prisoner in that she had been detained in the hospital under the MHA. Also, there had previously been fears for her safety. Whether the same test would be applied in the case of a voluntary patient known to be a suicide risk is not yet clear.”
Partner Note
Savage v South Essex Partnership NHS Foundation Trust [2008] UKHL 74.
Powell v United Kingdom (2000) 30 EHRR CD 362.
Osman v United Kingdom (1998) 29 EHRR 245.
Easements – What They Mean at the Time
One of the problems with easements is that their meaning may not always be obvious.
An easement is the right to use someone else’s land for a purpose. For example, an easement might allow a person access to their neighbour’s land in order to undertake repairs to their property.
In a recent case, the owners of a property in St Ives faced difficulties because of the nuisance caused by the behaviour of customers of a nearby beer garden. This could be reached via a rear entrance by way of a passageway across the property owner’s land. An easement over the passageway was contained in a 1921 conveyance and it provided that the passageway could be used to go to and from the property now being used as a beer garden, stipulating that the right existed ‘as now used by the vendor’.
The owner of the passageway sought to prevent drinkers from using it because of the nuisance they created. He relied on the terms of the easement, arguing that it was not applicable to the current use being made of the neighbouring property. In 1921, the premises had been a fishmonger’s shop – a very different use from running licensed premises.
The judge held that at the time the easement was created, the use of the passage would have been limited to suppliers, the fishmonger’s staff and trade customers. Accordingly, a ‘general’ right of access did not apply. This view was supported by the Court of Appeal.
In this case, the argument was successful because the use for which the easement was originally granted no longer prevailed. It is important to remember that where an easement exists that was granted many years ago, the right may or may not still exist. The easement has to be considered in context.
If you are experiencing problems caused by other people using your land, we may be able to help. Contact <<CONTACT DETAILS>>.
Partner Note
Greatorex v Newman [2008] EWCA Civ 1318.
E-Conveyancing – Where Are We Now?
Anyone who has bought or sold a residential property has probably wondered why the conveyancing process takes so long. Surely, in this digital age something could be done to ‘speed up the searches’ and generally make the whole experience easier and less stressful?
Plans to transform the paper-based conveyancing process in England and Wales were first mooted in 1998. Land Registry was subsequently given the task of developing a system whereby all those involved could deal with each other electronically and, to this end, the Land Registration Act 2002 established laws to enable this.
The aim was to set up a central e-conveyancing service allowing linked participants to use electronic documents, requisitions and signatures and co-ordinating the key milestones of exchange, completion and updating the title register. The problem of delays in payments was to be solved by setting up an Agent Bank into which each party to the transaction would deposit the necessary funds for simultaneous release. There was to be a Chain Matrix – a web-based notice board showing the status of buyers and sellers in dependent ‘chains’.
Over 10 years later and after several consultation exercises, where are we now?
The conveyancing system in England and Wales is the most complex in Europe, so to make electronic conveyancing secure was never going to be easy.
Some services which will eventually form part of the comprehensive e-conveyancing system are now available. For example, professional users can gain instant access to information on more than 20 million registers of title covering the majority of properties in England and Wales. Some simple applications can now be made online for the same fee as a paper application. For a fee, members of the public can also download copies of entries or a title plan for a particular property. Electronic Discharges enable very high volume lenders to remove legal charges from the land register. Following redemption of a legal charge affecting registered land, a lender’s computer updates the Land Register automatically.
The idea of an Agent Bank has been scrapped, however, and Land Registry’s development of a Chain Matrix prototype was ‘seeding the market’ for a private investor to ‘grow the project’.
In early 2008, Land Registry and PISCES, a not-for-profit organisation set up to promote the rapid take-up of e-commerce for the benefit of the property industry and its customers, began collaborating on the best way forward. The intention is to introduce new services in stages. 2009 should see electronic transfers between banks and Land Registry, with conveyancers following in 2010.
A burning issue is whether or not the e-security issues can be overcome so as to minimise the risk of fraud, so electronic change of ownership is likely to be a long way off.
If it materialises, a swifter conveyancing system will take some of the stress out of moving house. We can help you ensure your property sale or purchase runs as smoothly as possible. Contact <<CONTACT DETAILS>>.
Executors be Warned
HM Revenue and Customs (HMRC) have quietly made a change to their policy regarding Inheritance Tax (IHT) that could leave executors of estates facing unexpected IHT liabilities.
The new risk results from the way HMRC intend to deal with estates in which gifts (‘gifts inter vivos’ in the parlance) are made in the seven years prior to death. Such gifts are called ‘potentially exempt transfers’ in IHT terminology, because they affect the IHT position unless the donor survives seven years after making the gift.
HMRC have previously raised any enquiries about gifts inter vivos within 60 days after the papers relating to the estate have been filed. The new policy abolishes this time limit, meaning that HMRC could potentially instigate an investigation into the gifts made prior to death several years after the estate tax returns are filed. If they find undeclared gifts, IHT may be payable on them.
This has potentially very serious implications for executors as not only may they be personally liable for any IHT that subsequently becomes payable, but also penalties can be levied. This could all take place years after the estate has been wound up and the assets distributed to the beneficiaries.
Furthermore, it makes it wise to conduct a proper review of the deceased’s financial records relating to the seven years prior to the death and to retain the records in case there is an enquiry.
Partner Note
STEP UK News Digest, 3 February 2009.
Immigration – A New Approach to British Citizenship
The Government has now published its Borders, Citizenship and Immigration Bill, which contains measures to make migrants who wish to stay in the UK prove their commitment to the country and earn that right. The Bill is intended to provide what the Government calls a ‘firm but fair’ immigration system.
The Bill lays down a new approach to British Citizenship. If implemented, indefinite leave to remain applications will no longer be available. Instead, a migrant who has spent five years in the UK in a qualifying immigration category will have to decide whether they wish to become a British Citizen or a permanent resident. To qualify, he or she must be able to speak English and be law abiding. If these criteria are not met, residency in the UK can be denied.
The next step is that the applicant will be granted the status of ‘probationary citizen’, which will enable them to apply for citizenship or the right to stay permanently. If a migrant is an active citizen and can show that they have contributed to the community, the process for becoming a permanent citizen will be carried out more swiftly. The Government is keen to encourage migrants to become naturalized British Citizens, so the route to citizenship is faster than the route to acquiring the right to stay permanently.
Under the new system, full access to benefits and social housing will only be available to migrants who are citizens or permanent residents.
As the law stands at the moment, foreign nationals already face possible deportation if they commit a serious offence. However, the earned citizenship proposals go further. Under the new Bill, anyone sent to prison will face removal and even those who have only committed a minor offence will have to wait until their conviction is spent before they can become citizens.
This Bill is intended to work alongside the Points-Based System (PBS) of immigration to ensure that only the workers the country needs can come to and remain in the UK. The PBS awards points according to a worker’s skills, aptitude, age, experience and the level of demand for those particular skills. It enables potential migrants to assess the likelihood that their application will be successful and it is hoped that it will reduce the number of failed applications.
For further information on immigration to the UK, see the website of the UK Border Agency at
Partner Note
The Borders, Citizenship and Immigration Bill can be found at
Making the Boundaries Clear
Boundary disputes may often seem trivial – unless, that is, you become embroiled in one yourself, in which case they tend to assume gargantuan proportions. Unfortunately, they are also depressingly common. This is due to the fact that boundaries in England have not always been precisely defined.
Since mid-October 2003, it has been possible to file a precise plan (on payment of a small fee) with the Land Registry, to show exactly where your boundary lies. Unless you have obtained the agreement of the adjacent landowners in advance, you also normally have to serve a notice on them that this has been done. If they do not object, within twenty days, the application to register the boundary will usually succeed and the plan will be accepted as showing the true boundary, with your title documents amended accordingly if necessary.
Needless to say, there are limitations on this. For example, third party rights must not be infringed. There is also a right for the owners of adjoining land to object to the plan.
For more information on boundary registration, see the Land Registry website at or contact us. In particular, if you receive a notice that one of your neighbours is intending to register their boundary, do not delay in checking the notice and, if necessary, take advice as soon as possible.
Misled Customer Cannot Make Client Account Claim
When a customer paid a cheque to a firm, on the assurance that the money was to be held in a separate client account, it expected that it would be safe – but the Court of Appeal has confirmed that where the money was not paid into the client account, the subsequent insolvency of the company concerned meant that the customer became an unsecured creditor, in spite of the clear breach of trust.
It is common practice in many circumstances (e.g. when buying a property) for sums to be paid into client accounts and, when this is done, the money is held on trust for the depositor. In such circumstances, if the business becomes insolvent, the client account monies are normally secure. Professional firms such as solicitors have such accounts and the security is enhanced by tight regulations governing use of client account money and by insurance arrangements.
In the case in question, a firm of boat brokers received £97,500, which was to be banked in its client account on behalf of a client. Virtually the entire sum was instead paid into the firm’s general account, which meant it was mixed with other funds that were used to pay off the company’s debts.
The company went into liquidation and the customer claimed that its money should have been dealt with as part of the balance on the client account.
Whilst there was no doubt that the money should have gone into the client account, it had not, as a matter of fact, done so. The Court of Appeal ruled that there was a clear claim against the company for breach of trust, but that did not mean that the customer had a right over monies that were held in the client account.
The lessons to be learned are clear. It is unwise to hand over a sum on the mere promise that it will be paid into an account held in trust for clients unless you are absolutely sure that the promise will be fulfilled and that the account is safe. In some cases, it would be advisable to pay money into a client account directly, after confirming the account details. An alternative is to set up an escrow arrangement whereby the funds are held by a trusted third party with appropriate insurance (a bank or your solicitor).
Paying deposits can be risky, especially in these troubled times. A deposit paid or a prepayment for goods or services not yet delivered is normally at risk until the goods or services have been supplied, although a deposit paid by credit card (not debit card) is normally safe. For advice on minimising your financial risks in such circumstances, contact <<CONTACT DETAILS>>.
Partner Note
Moriarty and anor v Atkinson and others [2008] WLR (D) 395. See
OFT to Act on ‘Sale and Rent’ Schemes
Householders in difficulties with their mortgages may be tempted by the prospect of having their borrowing taken over by a company which promises that they can stay in the property, paying rent, with the option of buying it back at a later date – but beware!
The Office of Fair Trading (OFT) has decided to act following numerous complaints against firms which made such promises and then evicted the previous owners. Further complaints have been made regarding the length of leases subsequently offered and the prices paid for the properties by the companies involved.
While the OFT decides what action to take, if any, homeowners who are in arrears with their mortgages should be aware of the risks of accepting from a lender an offer that appears to be an easy way out of their problems. Never act without the benefit of independent legal advice. Indeed, obtaining appropriate professional advice should always be your first step if you are in financial difficulties.
Partner Note
Reported in the Times, 3 February 2009.
Planning Permission is Only Part of the Story
If you are considering building an extension to your property, you may think that it is simply a matter of getting planning permission and finding a builder. A recent case shows, however, how important covenants affecting property can be in determining whether developments of any kind can go ahead.
The case involved an upmarket housing estate called Heron Island, which is near Reading. The estate is adjacent to the Thames. One of the homeowners wanted to build a three storey extension to his property that would have partially obscured the view of the river for some of his neighbours. The neighbours objected to the planning application. The planning inspector’s opinion was that whilst there would be some loss of view for one household, this did not result in a material diminution in living standards. There is no general right in law to a view. The planning application was granted on appeal.
The objectors then used a different line of attack. The properties were conveyed with a covenant prohibiting owners from doing anything which would constitute a ‘nuisance or annoyance’ to the other owners on the estate. One owner in particular argued that he put great store on his river views, which would be greatly curtailed by the extension. Also, the windows in one aspect of the development would interfere with his privacy. Other owners gave evidence that their views of the river would be partially obscured.
One of the more interesting aspects of this case was that the obstruction of the view was minor. However, the judge, who visited the estate and had the benefit of seeing computer-generated evidence, had to decide the question ‘would reasonable people, having regard to the ordinary use of their houses for pleasurable enjoyment, be annoyed and aggrieved by the extension?’ On that basis, he concluded, “In my view the three storey red brick extension would trouble the minds of the ordinary sensible English inhabitant of any of those three houses and in those circumstances it does constitute an annoyance within the meaning of the covenant.
If you are concerned about the effect that a planned development in your neighbourhood may have on you, contact us for advice.
Partner Note
Dennis and others v Davies [2008] EWHC B20 (Ch). See
Pre-Nuptial Agreements – Parliament Must Act if Law to Change
Pre-nuptial agreements are persuasive, not binding, in English Law and look set to remain that way for the foreseeable future, following a decision by the Privy Council, which stated that ‘the validity and effect of ante-nuptial agreements is more appropriate to legislative rather than judicial development’.
The decision not to enforce a pre-nuptial agreement was taken by the Privy Council in a hearing involving two US Citizens who are resident in the Isle of Man. The case was the first substantial one following the referral of the law on pre-nuptial agreements to the Law Commission last year.
Accordingly, any alteration in the law relating to pre-nuptial agreements will have to await a change in the law by Parliament.
However, the Law Lords agreed that an agreement entered into after a marriage is contracted (a ‘post-nuptial’ agreement) would generally be enforceable, provided there was no exploitation of a dominant position by one of the parties to it. Such an agreement should always be made with the benefit of independent legal advice on both sides.
The position remains, therefore, that a pre-nuptial agreement which has been properly drafted with legal advice taken on both sides, whilst not binding, is persuasive to the court regarding a couple’s intentions for the distribution of their assets should their marriage fail. Accordingly, a ‘pre-nup’ will, in many cases, be worth consideration, especially where the family assets are very substantial.
If a pre-nuptial agreement is not made, it is sensible for married couples who are able to do so to consider making a post-nuptial agreement, which will normally be effective if the appropriate conditions are met.
Says <<CONTACT DETAILS>>, “Putting in writing how family assets should be distributed in the event that a marriage fails may sound unromantic, but it can save much bitterness as well as money if the worst does come to the worst. We can advise you on the creation and negotiation of pre- and post-nuptial agreements.”
Partner Note
MacLeod v MacLeod [2008] UKPC 64.
Pyramid Selling Schemes – OFT Gets Tough
Ask most people to name any of the organisations to which the Government has given the power to enforce the law by raiding premises and the Office of Fair Trading (OFT) is not likely to be mentioned, let alone near the top of the list. However, the OFT does have such powers, granted under the Consumer Protection from Unfair Trading Regulations 2008, and used them for the first time recently.
OFT officers raided businesses in the Bristol area in connection with a suspected ‘pyramid selling’ scheme. Broadly speaking, these are schemes whereby money is made primarily from recruiting other people to take part, rather than from the sale of goods and services.
“Pyramid selling schemes, such as chain-gifting schemes, are always in the ascendant when times are hard,” says <<CONTACT DETAILS>>. “They operate by persuading people to take part with the promise of making easy money. Typically, a potential member is asked to pay a joining fee and rewards are based on recruiting new members to the scheme. In reality, there would need to be an endless supply of new members in order for every participant in the scheme to make money.”
Since the introduction of the Gambling Act 2005, it is an offence for a person to invite someone to join a chain-gift scheme or for them knowingly to participate in the promotion, administration or management of a chain-gift scheme. If you are offered membership of such a scheme, do not be tempted to accept. Only the people at the very beginning of the ‘chain’ make money.
For more information on pyramid selling schemes, see
Partner Note
See the Office of Fair Trading press release of 21 February 2009 at
Repossession Protocol Changes – More Spin Than Substance
Although the Government claims to be committed to helping hard-pressed homeowners who face problems with their mortgages, the recent and much-trumpeted pre-action protocol, which aims to encourage compromise between lenders and those at risk of repossession, is proving to be less effective than hoped.
Lenders who do not follow the protocol face no sanction and there is no requirement for a lender to explain why it has rejected a borrower’s offer to restructure their mortgage payments.
Worse still, the Government has failed to close a loophole in the law that allows lenders to obtain repossession of a property without having to go to court for a court order. If the lender appoints a receiver over the property, with instructions to sell it, this technically makes the original borrower who occupies it a trespasser. A recent case has determined that this course of action does not breach the borrower’s rights under the Human Rights Act.
Says <<CONTACT DETAILS>>, “If you become aware that you may have problems meeting your obligation to repay loans of any sort, the earlier you take professional advice the better.”
Partner Note
Horsham Properties v Clark and Beech [2008] EWHC 2327 (Ch).
See comment in The Solicitors Journal, 9 December 2008, p5.
Risk Minimisation Necessary, Says Court
A recent decision has underlined that it is important for employers to operate risk minimisation strategies when mechanical handling equipment is being used: the mere assessment of potential risks is not enough. If an employee is injured, the burden is on the employer to prove that it has taken appropriate steps to reduce the risk to the lowest practicable level when facing a manual handling injury claim.
The case concerned a hospital worker, Donna Egan, who sustained a back injury when the wheels of a hoist she was using to transport a disabled patient failed to work. She claimed that the defective operation of the hoist was responsible for her injury. Her employer,Central Manchester and Manchester Children’s University Hospitals NHS Trust, claimed that her injury was due to her own negligence.
In the lower court, it was agreed that no risk assessment had been carried out in this case. However, the judge accepted the employer’s argument that the injury was due to Ms Egan’s negligence and that the failure to carry out a risk assessment was not a causative factor in the injury. Her claim was dismissed.
On appeal, the Court of Appeal took a different view. The Court accepted the argument that the Manual Handling Operations Regulations 1992 impose a duty on an employer to take all appropriate steps, once it has been shown that a mechanical handling operation carries some risk of injury, to reduce that risk to the lowest reasonably practicable level and that this duty is in addition to any other duty. Accordingly, the employer had been in breach of its duty under the Regulations and was primarily responsible for Ms Egan’s injury. However, on the question of contributory negligence, the Court was of the view that if either the employer or the employee had taken proper care, the accident would probably have been avoided and thus awarded 50 per cent compensation to Ms Egan.
Advice on manual handling can be found on the website of the Health and Safety Executive at
If you suffer an injury at work as a result of carrying out a mechanical handling operation or from an accident which was not your fault, consult us for advice.
Partner Note
Egan v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2008] EWCA Civ 1424. See
Serial Litigators – What Can Be Done?
For most people who have obsessive interests, these run to no more than compulsive DIY, recording the numbers of railway engines, collecting stamps or similar harmless pastimes.
Unfortunately, the compulsion of some people is not so benign, even if their behaviour is legal. For lawyers and their clients, few can cause such disruption as the serial litigator or ‘vexatious litigant’.
A vexatious litigant is someone who becomes convinced about the rightness of their cause as regards some legal matter and determines to pursue it through the courts no matter what the cost to them or the hapless subject of their suit.
Despite rebuff after rebuff in the courts, they will seek to renew their action or start new actions to prove the correctness of their position, no matter how frequently they are advised that their case has no merit. They will normally claim that ‘it is a matter of principle’ or that they must take action to prevent their being victimised in some way by the unfortunate target of their misguided ire.
Frequently, the vexatious litigant will start many actions against a variety of people, making numerous allegations and causing considerable unnecessary distress and expense.
Fortunately, in the UK, the Attorney General has the right to petition for an order banning the vexatious litigant from carrying out litigation and from acting as a ‘litigation friend’ for others. A litigation friend is a person who acts for someone else (a child or someone who lacks mental capacity to act for himself). If the petition is granted, an order will be made banning the person from issuing proceedings in the courts in England and Wales without the permission of the court.
Don’t put up with anyone pursuing a legal vendetta against you: contact us for advice.
Shared Residence Does Not Create Priority Housing Need
When the court makes a shared residence order relating to the children of a divorced couple and one of the couple is homeless, does that then make that parent a ‘priority need’ case for social housing?
The House of Lords recently considered this question and concluded that, in such circumstances, the answer is ‘no’.
The case arose when a father was ordered to leave the family home but a shared residence order was made in respect of three of the couple’s children. The order stipulated that the children should spend alternate weekends and half of their school holidays with each parent.
The father, who was homeless, argued that this made him a priority case for social housing on the ground that he was a person ‘with whom dependent children…might reasonably be expected to reside’.
In the view of the Council, it could not be expected to provide a second home for the family, despite the expressed view of the court that it was in the interests of the children to have two homes. There was a wider social policy issue and it could not allocate its housing resources on the basis of the decisions of the family court.
The Lords concluded that to determine the allocation of a scarce resource such as housing on the basis proposed would not be a rational social policy and that Parliament could not have intended such an approach when framing the legislation.
Custody of children and the need to have a family home are major issues on family break-up. Whether you live in owned or rented housing, good legal advice is essential.
Partner Note
Holmes-Moorhouse v Richmond-on-Thames London Borough Council [2009] UKHL 7. See
Stay Where You Are!
The Court of Appeal has issued a ruling relating to residence orders that will have implications for a number of divorced couples.
The case dealt with a child whose divorced parents had a shared residence order over her.
The girl’s mother wished to move from London to Chew Magna, near Bristol, where she had been offered a job. The girl’s father, a Serb, claimed the move would seriously interfere with his role in her upbringing and that it was part of a plan by the mother to disrupt his relationship with his daughter.
Hearing an appeal against the original decision, Lord Justice Wall said, “In each case what the court has to do is to examine the underlying factual matrix, and to decide in all the circumstances of the case whether or not it is in the child’s interest to relocate with the parent who wishes to move.”
In the view of the Court, the father had played a substantial role in his daughter’s life and the move was not in the girl’s best interests. The fact that the residence order was a shared one as opposed to a sole residence order did not alter the way the Court had to consider the issues.
Family breakdown always presents practical, as well as emotional, problems. <<CONTACT DETAILS>> can advise you on dealing with the legal issues and help you negotiate a fair settlement.
Partner Note
ETS v BT [2009] EWCA Civ 20.
Tenancy Deposit Scheme – Court Opts for Leniency
The Housing Act 2004 contains provisions for the protection of tenants’ deposits in England and Wales.
Tenancy deposit protection schemes were introduced in 2007 to protect residential tenants from unscrupulous landlords who would retain their deposits without good reason. In theory, the penalties for landlords who do not comply are severe and can include paying the tenant three times the amount of the deposit in dispute. Since its introduction, the arbitration scheme set up to deal with disputes arising between landlords and tenants has dealt with the small number of disputes arising so effectively that as yet the courts have been little troubled with disputes concerning residential deposits.
Recently, a case was heard that involved a landlord who had failed to comply with the time limits for the provision of information as laid down in the legislation. The landlord had complied with the tenancy deposit scheme in all other respects.
The court judged that leniency was warranted and the ‘three times deposit’ penalty was not levied.
It will have to be seen whether this decision serves as a template for future decisions or not. In the meantime, landlords are reminded of the potential dangers of failing to comply with the law.
Partner Note
Harvey v Bamforth [2008] 46 EG 119.
Thousands Face Driving Bans Under New Totting-Up Proposals
Practically everyone moans about the standard of driving seen on the roads, but few drivers will welcome a proposal, contained in a recent Department for Transport consultation paper, which would allow the police to levy ‘on the spot’ penalties on drivers, without court proceedings, for an increased range of motoring infractions.
Under the proposals, which are designed to reduce the paperwork burden on the law enforcement agencies, all that would be necessary for a driver to be given a fixed three-point penalty notice is the say-so of a police officer. What is different about the proposed regime, compared with the current one, is that such penalties will be able to be levied for offences that may not be clear-cut, such as failing to give a signal or careless driving.
This raises the spectre that a driver could be banned from driving without ever appearing in court and on the basis of evidence which might not be sustainable were the case to be brought to trial. A fixed penalty notice can be contested in court but, if this is done, the penalties are more severe if a conviction is obtained, as is likely in most cases.
In practice, drivers with few points on their licence are unlikely to contest even a contentious penalty – a decision they may come to regret under the new scheme. It is thought that the new proposals, if implemented, could lead to thousands more drivers being given driving bans.
Partner Note
Reported in The Times and The Times Online, 20 February 2009.
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