Monthly Archives: May 2014

Landlord wanted renewal lease use restriction which contravened competition law

As originally enacted the Competition Act 1998 (“the Competition Act”), did not apply to “land agreements”.

Article 3 of the Competition Act 1998 (Land Agreements and Revocation) Order 2004 defines these to include an agreement between undertakings which creates, alters, transfers or terminates an interest in land, or an agreement to enter into such an agreement. Obviously it includes leases. Article 4 of that order provided that “the Chapter I prohibition” was not to apply to such agreements.

That exclusion was removed by Article 2 of the Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010, effective from 6 April 2011.

In the Central London County Court, Chancery List case of Martin Retail Group Limited (claimant) v Crawley Borough Council (defendant) (2014) the preliminary issue in an unopposed application for renewal of a business tenancy under Part II of the Landlord and Tenant Act 1954 (“the ’54 Act”) was whether the use restriction clause of the proposed new lease should expressly exclude the sale of alcohol, grocery, convenience goods and other uses falling within Class A1 of the Town and Country Planning (Use Classes) Order 1987.

The claimant said this was prohibited by competition legislation and would therefore be void under the Competition Act 1998 as amended by the Competition Act 1998 (Land Agreement Exclusion Revocation) Order 2010.

The claimant wanted to be able to sell a wider range of goods from the Premises than the user clause in the existing Lease would permit. In particular it wanted to sell groceries, including fresh foods, beers, wines, spirits and household goods i.e. convenience goods and have the shop as a convenience store.

Where there is no agreement between landlord and tenant as to those terms of a tenancy, section 35 of the ’54 Act provides that those other terms shall be as agreed between the landlord and the tenant or determined by the court, and in determining those terms, the court should have regard to the terms of the current tenancy and to all relevant circumstances.

If the proposed use clause was unlawful, because it breached competition legislation, then, where there was no agreement as to its inclusion, it seemed highly likely that the court would decide that it could not be imposed on the parties under section 35.

However, the judge reached no concluded view on that because it was not fully argued before him.

The relevant market for convenience stores for the purposes of competition law was a radius of ½ mile of the Premises, a distance customers would be prepared to walk to shop at such stores.

The defendant argued it was in the interests of the community to have a range of different traders and retail outlets available to local residents not just a supermarket and that their scheme protected Martins from newsagent competition.

The defendant also said there had been no evidence to show that the effect of the letting scheme had been to increase prices on the parades where it operated and the letting scheme was not financially advantageous to the defendant since its effect was potentially to depress or limit market rents.

The court said the proposed use clause was a breach of the Chapter 1 prohibition because the effect of such a clause, within the letting scheme, would be to restrict competition in the sale of convenience goods on the parade. The defendant accepted that subsection 9(2) of the Competition Act placed the burden on the defendant of proving that the proposed use clause would be an “exempt agreement” within the meaning of subsection 9(1). Quite simply, the clause would be void unless the defendant could satisfy that burden. That burden would be discharged by showing that a disputed fact or matter was more likely than not to be true.

There was no reported decision on the issues here but the court was prepared to base its decision on the guidance issued by the Office of Fair Trading in “Land Agreements. The application of competition law following the revocation of the Land Agreements Exclusion Order” of March 2011. Especially the Chapter 5, headed “Applying the exemption criteria” and its Paragraph 5 which contained a summary of the conditions in subsection 9(1) of the Competition Act. While the OFT document was guidance, and without formal legislative effect, it provided a practical and sensible approach to analysing the conditions contained in subsection 9(1).

The court would consider whether an exemption had been established by reference to the four criteria which the guidance identified in paragraph 5.3.

The defendant had failed to show that the distribution of goods was improved or economic progress was promoted through the existence of a number of different retailers rather than via a supermarket or a number of similar retailers.

The proposed use clause and the other restrictions in the units on the parade fed a model of distribution determined by the defendant rather than by the market.

If the scheme were being set up from scratch and the restrictions imposed to ensure that one of the units was occupied by an anchor tenant until that tenant’s business had stabilised then the court might have come to a different conclusion on that issue.

As to the second criterion, there was unlikely to be a price benefit from the existence of the restrictions and that must be a matter of considerable concern to the community. An increase in the range of goods available and provision of a social hub might be a fair share of the benefits, if the evidence were to show such benefits arising from the restriction on competition. In considering this question the court had to balance the benefits against the negative impact of the restriction on competition and that the greater the restriction the larger the benefit for the consumer there had to be for the share to be considered fair. In fact, the community would not benefit from the restrictions contained in the proposed use clause and letting scheme.

The third criterion was the indispensability of the proposed restrictions to the viability of the Parade. Without them small traders would not come to it, the defendant said. But the court said a mix of retailers could be achieved at a shopping centre by the use of less restrictive covenants not conferring the monopoly that had been created by the defendant’s letting scheme as applied to that Parade. So the third criterion was not satisfied.

The fourth criterion was whether the restriction would allow the claimant and defendant the possibility of eliminating competition in respect of a substantial part of the products which the lease agreement required the claimant to sell and/or those which it prohibited it from selling.

One had to take into account the relevant market and the existing and potential competition in respect of the particular products in that market.

The market for the convenience goods the claimant wanted to sell was within a relatively short walking distance from the Parade. The proposed use clause clearly provided a means of eliminating competition in convenience goods on the Parade and within a relatively short walking distance.

If the relevant market had been geographically bigger so that the other convenience stores in the locality fell within its catchment area then there would be no such possibility of elimination.

The court concluded that that the proposed use clause, within the context of the current letting scheme, would contravene section 2 of the Competition Act 1998 and the defendant had not satisfied it that it would be an “exempt agreement” within section 9(1) of the Competition Act.

This blog has been posted as a matter of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning committee failed to apply local plan policy correctly

Under Section 70(2) of the Town & Country Planning Act 1990 the local planning authority (“LPA”) is required to bear in mind the provisions of its development plan so far as they are material to the application. This requirement cannot be fulfilled unless the LPA has also interpreted it correctly.

In R (on the application of Gibson)-v-Mid Sussex District Council (2014) 26 affordable houses just outside the settlement limit had been granted planning permission.

However under the local plan policy such development was only allowable in exceptional circumstances where there was no other more suitable site to meet local need.

In her report to the planning committee the planning officer mentioned the local plan in general terms but neither carried out an alternative site assessment nor mentioned the need for one to the committee.

The claimant applied for the quashing of the decision on the ground that the planning committee had failed to interpret the planning policy correctly and had failed to have proper regard to it.

The planning officer said she had in fact had regard to the availability of alternative sites but that none had been suitable.

However this only served to dig her into a deeper hole since the local plan required that issue to be put before, and determined by, the planning committee and not just by a planning officer.

The court ruled that the planning committee had been significantly misled by the officer’s report and quashed the planning permission.

The court exercised its discretion to quash the decision because it was not possible to say whether the committee would have reached the same decision had the planning officer advised them properly about the local plan policy requiring them to consider alternative sites.

This blog has been posted as a matter of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Landlord’s earlier structural work wouldn’t have reduced residential service charges

Where a structure for which the Landlord is responsible fails, are residential tenants entitled to deploy the argument that earlier remediation work would have resulted in a reduced cost and that they are only liable to reimburse that reduced cost through the service charge?

In Daejan Properties Ltd v Griffin & Anor [2014] a steel beam which supported a parapet and some residential flats, at Crown Terrace, partially failed with the rest needing replacement before it followed suite.

Were the tenants (the respondents) entitled to run the above argument?

The earliest date that any of the respondents became the registered proprietor of a leasehold interest of a flat at Crown Terrace was in 1983

None of the leaseholders had any entitlement to damages referable to breaches of covenant committed by the appellant landlord between 1973 and the date on which the leaseholder acquired his or her own interest in their lease.

The court said an assignee of a lease granted before 1 January 1996 could not sue for a breach of covenant which occurred before the assignment (Woodfall’s Law of Landlord and Tenant, para. 16.133).

The same was true of a lease granted after that date by virtue of s. 23(1), Landlord and Tenant (Covenants) Act 1995.

The only route by which an allegation of historic neglect might provide a defence to a claim for service charges was if it could be shown that, but for a failure by the landlord to make good a defect at the time required by its covenant, part of the cost eventually incurred in remedying that defect, or the whole of the cost incurred in remedying resultant defects, would have been avoided.

In those circumstances the tenant to whom the repairing obligation was owed would have a claim in damages for breach of covenant, and that claim might be set off against the same tenant’s liability to contribute through the service charge towards the cost of the remedial work.

The damages which the tenant could claim, and the corresponding set off available in such a case, would be made up of two elements:

first, the amount by which the cost of remedial work had been increased as a result of the landlord’s failure to carry out the work at the earliest time it was obliged to do so; and

secondly, any sum which the tenant was entitled to receive as general damages for inconvenience or discomfort if the leased property was itself affected by the landlord’s breach of covenant.

On the first point, substantially the same work would have been required at any time in the 30 years preceding the commencement of the works in 2008.

So, no real savings would have been made had the beams been inspected and work carried out at any relevant earlier time.

The views of the experts did not support the conclusion that a lesser amount of work might have been sufficient had the corrosion of the beams had been addressed at any time after 1980.

That period covered all of the dates when the current leaseholders first became the registered proprietors of their leases.

So the Landlord’s appeal against the findings of the Leasehold Valuation Tribunal was allowed.

This blog has been posted as a matter of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Aged service charge costs only “incurred” when geriatric water bills served on correct landlord

In a large residential complex a large bill for the supply of water to three blocks of flats, builds up, but relates to water supplied to the three blocks between June 2005 and April 2011.

A recent case about this considerably increases the scope for landlords to reopen service charges for costs which, regardless of semantics, relate to many years past and predecessors under leases.

In the Upper Tribunal (Lands Chamber) case of Ground Rents (Regisport) Ltd v Dowlen & Ors [2014] Abbey Mills was a modern development of purpose built flats comprising Vista House (69 flats), Prospect House (55 flats) and Independence House (40 flats) making 164 flats in total.

For many years Thames Water Utilities Ltd had delivered invoices for water consumed at two of the buildings to the original developer while the appellant, which acquired the freehold of Abbey Mills on 1 October 2006, received invoices only for the third building.

In the mistaken belief that the invoices they received related to all three buildings, the appellant’s managing agents, apportioned those sums and collected them through the service charges payable by all 164 leaseholders of flats at Abbey Mills.

The developer had not paid the invoices for the other two buildings, nor did it pass them on to the appellant.

Both the appellant and the individual leaseholders believed that all of the sums due from them in respect of water had been paid.

The mistake was eventually discovered in 2010 and since then Thames Water had sought to recover the arrears from the developer and from the appellant, which in turn had sought to pass them on in full to its 164 leaseholders.

The Leasehold Valuation Tribunal for the London Rent Assessment Panel (“the LVT”) decided that the leaseholders were not liable to contribute to the historic water bill through their service charge to the extent that the water invoices had first been raised before 30 January 2009.

The LVT reached that decision because the appellant had first included the arrears of water charges in the service charges demanded in June 2010, and section 20B(1) of the Landlord and Tenant Act 1985 (“the 1985 Act”) said that if any of the relevant costs taken into account in deciding the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge was served on the tenant, then (subject to sub-section (2)), the tenant should not be liable to pay the service charge to the extent that the costs incurred were that historical.

Many of the original leaseholders who had owned the flats between 2005 and 2010 had sold them. So in many cases the current leaseholders were now being faced with additional charges for water which had not been supplied to them but to their predecessors.

When the appellant appealed from the decision of the LVT to the Upper Tribunal (Lands Chamber) it identified the main issues as:

1. Whether the fourth schedule of the leases permitted the appellant to charge leaseholders for water supplied during a service charge year for which accounts had already been finalised, demands had been issued and payments had been made in full by the leaseholders;

2. Whether, assuming such a charge was permitted by the parties’ lease contract, the leaseholders were entitled to rely on section 20B as a defence against their liability to pay part of those charges.

Paragraph 4 of the fourth schedule of the leases provided for the calculation of a service charge adjustment after each service charge year end.

Paragraph 5 of the fourth schedule was also significant, and provided that (subject to paragraph 3.3 of the Schedule) a certificate signed by the Lessor purporting to show the amount of the service charge adjustment should be conclusive of such amount save as regards manifest errors.

In this case the Tribunal ruled that a certificate given by the appellant purporting to record expenditure on water and sewage charges for the year ending 30 June 2010 might be conclusive of the amounts actually expended in that year (save as regards manifest errors), but that would not prevent the inclusion in a certificate for a future year of expenditure in that future year which related to the water supplied in a previous year or years.

This was because the service charge adjustment to be determined under paragraph 4 and certified under paragraph 5 was the amount by which the estimate of expenditure likely to be incurred in a particular service charge year fell short “of the actual expenditure in the service charge year” in question.

Here before June 2010 there was no “actual expenditure” on the supply of water to Prospect House and Independence House.

Where successive landlords were liable for the same costs, it was the liability of the landlord for the time being which was relevant, since only costs incurred by a person in the capacity of landlord could be included in the service charge.

Neither the appellant nor its predecessor landlords had had a liability to pay for water under Section 142 of the Water Industry Act 1991 until a demand had been received by them. So the appellant had no existing liability to make a payment for the water supplied to Prospect House or Independence House until at least April 2010.

So for the purposes of section 20B no relevant cost was incurred by the appellant for water supplied to Prospect House and Independence House, until it received the first demands for payment in April and June 2010.

As a result, when calculating and certifying the service charge adjustment for the year ending 30 June 2011 and for subsequent years, pararaph 5 of the fourth schedule of the leases did not preclude the appellant from including expenditure, actually incurred in those years, in discharging any liability which the appellant could be shown to have in April and June 2010 when it began to receive demands, in its own right, albeit for water supplied in the period from 1 October 2006 up to then.

This was because paragraph 5 only precluded such service charge demands in relation to historic liabilities incurred, and though the water and its recipients were historic, the liabilities for it were only “incurred” by Thames Water serving the relevant water demands on the appellant in April and June 2010. Though these were only belatedly served on the correct recipient, the appellant’s service charge demands seeking to recoup those extra costs from its 164 tenants were served well within the 18 month period, allowed under section 20B(1) of the 1985 Act, from that liability being incurred.

This blog is posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Planners acted rationally and police had no legitimate expectations for housing Section 106 contribution consultation

Earlier I mentioned that in Police and Crime Commissioner v Blaby District Council (2014) the PCC had taken judicial review proceedings over a planning permission for 4,250-homes.

They had contended that the development would increase the requirement for policing in that area.

The council and developer had agreed that a financial contribution should be made towards policing in Leicestershire, but the planning agreement had postponed the funding for some time. Nor did the agreement contain any definite obligation to contribute towards the buildings needing expansion to accommodate the extra officers and staff required to both maintain current levels of policing elsewhere in the area and police the development.

The challenge has now been rejected by the High Court which also refused leave to appeal to the Court of Appeal. A reduced time was allowed for the PCC to seek leave from the Court of Appeal itself.

The main grounds for the failure were that:

There was no evidence of “irrationality” on the part of the Council Planning Committee.

The court accepted that public opinion might be concerned that the developer contributions to policing were insufficient but that did not make for a strong enough argument to surmount the very high threshold for establishing “irrationality” in the sense required for the challenge to be successful.

The evidence did suggest that the Council had considered the matter properly and had reached a rational and sustainable conclusion even if it was not one with which everyone would agree.

The court also dismissed the argument that the police had a “legitimate expectation” that the Council would consult them on the level of, and timing of the delivery of, the contribution, and that the outcome of those discussions would be represented in the agreement.

A course of dealing between two parties, in that kind of context, could in some circumstances give rise to a “legitimate expectation” that a particular process would be followed by a public authority before a decision was taken.

But here no unequivocal representation was made by the Council that could have created an expectation in the police that they would be consulted about those levels and timings.

However, the Council was clearly aware of the PCC’s view on the timing of the premises contribution. The equipment contribution was also discussed. The police could have given “chapter and verse” on that if they had chosen to do so before the final discussions between the Council and the developers.

But there was no basis for implying any specific obligation on the Council’s part to inquire about that.

This blog has been posted as a matter of general interest. It does not remove need to get bespoke legal advice in individual cases.

Initial toleration of fence placement did not abandon right of way

The courts do not lightly accept that rights have been abandoned through mere disuse. There has to be pretty unequivocal evidence that they have been intentionally and permanently abandoned by the owner and any tenants of the land benefitting from them.

In the Court of Appeal case of Higson & Anor v Guenault & Anor [2014] the appellants, owned a house and garden at Lancaster (“the Higsons’ property”).

The respondents were representative members of the Bowerham Lawn Tennis Club (“the Club”). The Club was accessed by a narrow track which ran alongside the Higsons’ property (“the lane”).

The case centred on a larch lap fence mounted on concrete posts which the Higsons erected in 2004, (“the 2004 fence”).

In 2006, the Club wanted to recover the tennis courts. When the Club contracted to have the courts resurfaced, the drivers of the independent contractor lorries were unable to get down the lane to offload the material.

The issue was whether the Club had a right of way up to the hedge on the south side of the lane or whether the right of way was only up to the 2004 fence.

The court concluded that, as at 1997, the physical extent of the right of way which the Club enjoyed was up to the hedge on the south side of the lane.

The appellants claimed that the physical extent of the right of way might have been reduced by virtue of the 2004 fence. The court did not accept that argument. The mere fact that the owner of land benefitting from a right of way does not use the full extent of his right of way over the land burdened by the right of way all the time does not mean that the right of way is abandoned or modified.

It must be proved that the person having the right intends to abandon it. There was no evidence of that.

So in a victory for the Club, the court concluded that the Club’s right of way over the lane on the south side was, and remained, right up to the hedge, and up to the line of the former hedge where it had been cut down, e.g. to provide access points to the Higsons’ property.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.

No right to further payment clause did not oust adjudication, arbitration or litigation

The ACA Standard Form of Contract for Term Partnering 2005, amended in 2008, was specifically devised for situations where one party is required to carry out a series of relatively minor but repetitive or cyclical tasks over a substantial period.

The contract provided that it would terminate automatically if either party became insolvent or was placed into administration or liquidation.

Is the insolvent Service Provider entitled to any further payment for work carried out, and if so to what extent?

In such cases, clause 13.9 of the contract provides that the Client “… shall not be bound to make any further payment” to the Service Provider.

In Lovell Partnerships Ltd & Anor v Merton Priory Homes [2014] the Claimant was employed to carry out building, repair or related services for a local authority. The Claimant was placed into administration on 8 September 2010.

Merton said that, following a termination caused by insolvency, then provided there was no bad faith, any loss lay where it fell and the Claimant was not entitled to any further payment whatsoever.

However, the court found that the words “any further payment” in clause 13.9 had been a reference to a payment that could arise as of right under the contractual machinery of clause 7 once certain conditions were fulfilled.

It upheld the Claimant’s case, that clause 13.9 suspended the Claimant’s entitlement to any further payment to which they, as Service Provider, would or might otherwise be entitled under that contractual machinery.

So on the insolvency of the Claimant, Merton did not have to make any further payment to the Claimant under clause 7.

However, the clause did not prevent the Service Provider from pursuing separately, by way of adjudication, arbitration or litigation, any rights or obligations that had accrued to it by the date of termination. But, in any such adjudication, arbitration or litigation Merton would be entitled to set off against the Claimant’s claim any cross claim, for example, for damages for defective work.

The explanation for this was that Clauses 13.8 and 13.9 had to be read together. They covered different insolvency situations. Clause 13.8 conferred a right to swift payment under clause 7 where it was the Client, and not the Service Provider, who was insolvent. On the other hand Clause 13.9, was concerned with the Service Provider becoming insolvent.

It provided that the Service Provider should not benefit from the swift payment machinery under clause 7 because that machinery gave the Client no further right of set-off following the prior issue of its valuation.

That would have been very unsatisfactory in circumstances where the other party was insolvent as it would have served only to swell the pot for other unsecured creditors who would thereby be being “preferred” to the Client.

In some cases there may be no commercial objection to a contractual scheme that leaves a loss to lie where it fell in the event of one party’s insolvency.

But it was not obvious that the parties would have intended that approach to apply to accrued rights to sums which had fallen due for payment before the insolvency occurred but which had remained unpaid.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Public authority land allocated for recreational purposes not registrable as village green

Where land is provided and maintained by a local authority under section 12(1) of the Housing Act 1985 (“1985 Act”) or its statutory predecessors, is the use of that land by the public for recreational purposes “as of right” within the meaning of section 15(2)(a) of the Commons Act 2006 (“2006 Act”)?

The meaning of “as of right” is, the opposite of “of right” or “by right”.

If a person uses privately owned land “of right” or “by right”, the use will have been permitted by the landowner – so the use is rightful.

However, if the use of the land is “as of right”, it is without the permission of the landowner, and so is not “of right” or “by right”, but is actually carried on as though it were by right – and therefore “as of right”.

The interpolation of the small word “as” makes “as of right” effectively the opposite of “of right” or “by right”.

The law distinguishes between acquiescence by the owner on the one hand and licence or permission from the owner on the other hand.

Use acquiesced in by the owner is ‘as of right’; acquiescence is the basis of prescription. But, use with the licence or permission of the owner is not ‘as of right.’

Permission involves some positive act or acts on the part of the owner.

On the other hand passive toleration is all that acquiescence requires.

In the recent Supreme Court case of Barkas, R (on the application of ) v North Yorkshire County Council & Anor [2014], Helredale playing field (“the Field”) was in Whitby, and owned by Scarborough Borough Council (“the Council”).

The Council laid out and maintained the Field as “recreation grounds” pursuant to section 80(1) of the Housing Act 1936, with the consent of the Minister as required by that section, the Housing Act 1957, and latterly section 12(1) of the 1985 Act.

Helredale Neighbourhood Council applied to the North Yorkshire County Council to register the Field as a town or village green under section 15 of the 2006 Act.

The Supreme Court said so long as land is held under a provision such as section 12(1) of the 1985 Act, members of the public have a statutory right to use the land for recreational purposes, and so use the land “by right” and not as trespassers, so that no question of them using it “as of right” could arise.

Whether user was “as of right” should be judged by “how the matter would have appeared to the owner of the land”, which must be assessed objectively. Here a reasonable local authority in the position of the Council would have regarded the presence of the public, walking with or without dogs, taking part in sports, or letting their children play, as being an exercise of the public’s statutory right to be on the land and to use it for those activities: since the Field was being held and maintained by the Council for public recreation under section 12(1) of the 1985 Act and the Acts that preceded it.

Where a local, or other public, authority has lawfully allocated its land for public use (whether for a limited period or an indefinitely), it could scarcely be appropriate to infer that members of the public have been using the land “as of right”, simply because the authority had not objected to their using the land. To find the contrary would take very unusual and exceptional facts.

In such a cases, Parliament could hardly have intended that such land would become a village green just because the public had used it for twenty years.

Not only would the local authority not be expected to object to the public use: to have done so would have been positively inconsistent with their allocation decision.

A private owner, on the other hand, would be expected to protect his or her legal rights because he has no legal duty and no statutory power to allocate land for public use, and no ability to allocate land as a village green.

So the Helredale Neighbourhood Council’s appeal failed and the land was not registerable as a Town or Village Green.

This blog has been posted out of general interest It does not replace the need to get bespoke legal advice in individual cases.

Contractor not liable in nuisance for event and type of damage that were not reasonably foreseeable

Three important themes can be gleaned from the decisions in Cambridge Water Co. v Eastern Counties Leather Plc [1994] and Transco Plc v Stockport Metropolitan Borough Council [2003].

1. Though liability in nuisance has traditionally been regarded as strict, i.e. it does not depend on proof of negligence, if the defendant’s use of his land is reasonable, he will not be liable in nuisance for interference with his neighbour’s enjoyment of his land.

2. Unless the case fits within the rule in Rylands v Fletcher, the defendant is not liable for damage caused by an “isolated escape”, i.e., one that is not intended or reasonably foreseeable.

3.Foreseeability of harm of the type suffered by the plaintiff is necessary if the defendant is to be liable in damages for nuisance.

In Northumbrian Water Ltd v McAlpine Ltd [2014] one of Northumbrian Water Ltd (appellant)’s sewers ran under Newgate Street, close to Newcastle city centre. Sir Robert McAlpine Ltd (respondent) was carrying out redevelopment works adjacent to Newgate Street.

The redevelopment required the sinking of a large number of concrete piles. Shafts were drilled using an earth auger and filled with concrete to create piles.

The site had been redeveloped several times before and a significant amount of excavation had been carried out. Before work started ground conditions were extensively investigated. So the respondent believed that there were no unidentified obstructions below ground level that were likely to be affected by, or interfere with, the works.

Unfortunately a private sewer which connected to the public sewer under Newgate Street had been laid under part of the site at a depth of over 3 metres.

It was not shown on the appellant’s current plans of the sewer system, but did appear on a 1908 plan, held in a Newcastle Museum, later found by one of the respondent’s employees who was following up on a private enquiry.

Part of the drain had survived the previous redevelopments and was still connected to the public sewer.

In the course of drilling the shaft to form pile No. 215 an open connection was created with the surviving drain. Whether the auger broke into the drain or simply passed close to an existing fracture (enabling the connection to be made) was not known

So, when concrete was poured to form the pile it was able to escape from the shaft into the drain and then into the appellant’s sewer. There it set and caused a partial blockage.

The appellant sued to recover the major expense it had incurred in clearing the obstruction.

The Court of Appeal held that such redevelopment of land in an urban context could only be regarded as normal and reasonable, save where it involved unusual methods of working.

Constructing concrete piles by the method adopted in this case was not unusual or liable to trouble neighbouring landowners.

The respondent, or the people it was responsible for, knew that concrete can seep out of shafts drilled for piles into surrounding voids in the sub-soil.

But there was no reason to think that the respondent should, because of that, have foreseen the possibility that concrete might escape the confines of the site and find its way into neighbouring land.

Had it not been for the abandoned drain, there was no reason to think that it would have done.

The respondent was not negligent in failing to discover the existence of the drain and so the escape of concrete into the appellant’s sewer was not reasonably foreseeable.

So the respondent was not liable to the appellant in nuisance.

The claim in nuisance failed because the escape of concrete from land occupied by the respondents and the resultant damage to the appellant’s sewer were not foreseeable.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Property buyer bore restrictive covenant losses incurred after ignoring solicitor’s belated advice

In Darby & Darby (A Firm) v Joyce [2014] Mrs Joyce bought a house subject to covenants “Not to make any alteration or addition to the exterior or external appearance of the Property [Tamarisk] or the buildings thereon nor to erect any walls, fences or buildings (whether temporary or otherwise) without first obtaining the written consent of the Transferor [the Hoyles]”

Darby & Darby solicitors did not advise her, during their handling of her purchase, as to the existence of the covenants and she began internal and external alterations. Only when the Hoyles had indicated the imminence of injunction proceedings the following December did Darby and Darby tell Mrs Joyce to stop work.

Mrs Joyce ignored the advice suspending work only on the patio causing further wasted expense and her having to pay the costs of injunction proceedings.

Darby and Darby denied liability for those further expenses and costs.

The Court of Appeal agreed.

Whilst Mr Darby had not previously given comprehensive advice as to the effect of the covenants, she had understood the advice he had given her on 10 January. She was being advised to stop work and settle or else face litigation. Albeit he should have sent her away to get independent advice, the advice was good. She elected to reject it. So she was the cause of the injunction proceedings and, their costs.

So the Court of Appeal upheld the solicitors’ appeal against the lower court’s order that they compensate for those further expenses and additional costs.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.