Monthly Archives: April 2015

Fencing out unlicensed uses did not preclude Asset of Community Value listing

The Localism Act 2011 requires local authorities to list of buildings or other land of community value.

Section 88(1) and (2) of the 2011 Act provides a building or other land is land of community value if in the opinion of the authority:

– in the recent past or currently the non-ancillary use of the building or other land furthers the social wellbeing or social interests of the local community, and

– it is realistic to think that there can continue to be non-ancillary use of the building or other land which will further the social wellbeing or social interests of the local community (whether or not in the same way).

An asset placed on the list, will usually remain on it for five years.

After listing an owner intending to sell must give notice to the local authority.

A community interest group then has six weeks to ask to be treated as a potential bidder.

If it does, the sale cannot take place for six months.

In that “moratorium”, the community group may suggest an alternative plan.

At the end of the moratorium, it’s the owner’s decision whether the sale goes through, to who and for how much.

If an owner loses money in consequence of the asset being listed, there are arrangements for the local authority to pay compensation.

In the First-tier Tribunal (General Regulatory Chamber) case of Banner Homes Ltd v St Albans City and District Council & Anor [2015] a field had been used by local residents for recreational use, such as walking, exercising dogs, informal children’s play and photography of local flora and fauna.

The field was listed by the council as an asset of community value under the Localism Act 2011.

Following the listing, Banner Homes erected a wire fence along the entire length of the on-site footpaths, interspersed with signs stating “private land no unauthorised access”.

Also, Banner Homes unsuccessfully applied to the council for planning permission to change the use of the field to the keeping of horses.

Banner Homes’ solicitors requested a review of the decision to list the field as an asset of community value. That review took place. The council decided to maintain the listing.

Banner Homes appealed that decision to the First-tier Tribunal.

The tribunal said the mere visual observation of things growing or otherwise present on land from across a fence was not what Parliament had in mind, in enacting the 2011 Act. The use of the word “actual” in section 88 “strongly suggests an intention that ‘physical’ use was intended”.

However the phrases “actual current use” and “actual use” in section 88 of the 2011 Act did not necessarily mean actual legal use.

The tribunal said the requirement that the use of the land must further social wellbeing or social interests would rule out many unlawful activities, for the simple reason that unlawful activities are unlikely to satisfy the tests of furthering social wellbeing/interests.

The tribunal said premises used for “raves”, at which illegal substances are consumed, violence is prevalent and noise nuisance frequent, would not satisfy section 88.

But the tribunal declined to interpret section 88 so as to insert the word “lawful” after “actual”. A particular technically unlawful use of land was not of itself outside the section.

So it did not matter that the public’s use of the land might have been technically trespassing.

Whilst Banner Homes had fenced the land in the wake of the listing, the unsuccessful planning application for horses may lead Banner Homes to conclude that their relations with the local community would best be served by restoring the status quo or by entering into some form of licence arrangement with the Residents’ Association or some similar grouping.

So it was not unrealistic to think that there could continue to be non-ancillary use of the building or other land which would further the social wellbeing or social interests of the local community.

The tribunal upheld the listing.

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

Non client customer could not recover VAT on invoices

Section 26 of the Value Added Tax Act 1994 allows a taxable person to reclaim ‘input tax’ attributable to the supplies of taxable services by that person.

Third parties often reimburse costs in property transactions and issues arise as to whether they are entitled to a VAT invoice from the original supplier.

In  the First-Tier Tribunal (Tax Chamber) case A Partnership v HMRC [2015]  D,  a former partner of an accountancy firm was seeking dissolution of the partnership.

One of the 3 continuing partners, C,  was taking independent legal advice about this and was invoiced for this.

The other two continuing partners, A and B had been taking independent legal advice to defend that and a claim of bad faith.

HMRC refused to allow the successor accountancy firm to recover the VAT charged on those invoices,

The tribunal agreed that the recovery of VAT is limited to VAT on supplies “to” the taxpayer seeking repayment.

The taxpayer here was the new partnership, but the services of the solicitors were not supplied to the partnership.

The VAT which the appellants sought to recover was not input tax belonging to the new partnership. It was not incurred on a supply made ‘to’ the new partnership and the new did not hold VAT invoices addressed to it.

It was not enough to show that the successor partnership of Messrs A,B and C benefited from the solicitors’ services. The law required the new partnership to show that that partnership was a party to the contract for solicitors services and particularly that it was liable to the solicitors’ firms to pay for those services.

So the question was whether the partnership was liable to pay. It was not.  A and B were the client of one of the firm of solicitors and C was the client of the other firm of solicitors. So (if unpaid) the first firm could have sued Messrs A and B for payment; and the second firm (if unpaid) could have sued  C for payment. But the neither firm could have sued the new partnership for payment.

In practice the partnership may have paid for the supplies because it reimbursed Messrs A, B and C for the solicitors’ fees. But the key point was that it had not been liable to the solicitors’ firms to pay the solicitors’ firms.

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

Land Registry Compensation applied despite rightful owner’s occupation

Is the proprietor of a forged registered mortgage entitled to an indemnity payment under Schedule 8 to the Land Registration Act 2002 (“LRA 2002”) where the registered proprietor of the property was in actual occupation of it at the date of the mortgage?

That was the issue in the Court of Appeal case of Swift 1st Ltd v The Chief Land Registrar [2015] .

The registered proprietor of the property had the right to seek rectification (now alteration) of the register on the ground that the mortgage was forged.

This was an “overriding interest” by virtue of their occupation and therefore took precedence over the registration of the forged mortgage at the Land Registry.

Paragraph 1(2)(b) of Schedule 8 of LRA 2002 applied where the overriding interest enforced against the registered title consists of a right to seek alteration of the Land Register.

However the fact remained that the registered proprietor of the mortgage would have suffered loss because the Land Register would have been altered to remove the mortgage as an incumbrance against the property.

The court said the fact the mortgage had been registered in the first place had conferred substantive rights on the proprietor of the mortgage although it had been forged.

So it’s loss was to be considered prejudicial despite the fact that the mortgage had of itself been void for forgery.

The court therefore supported the lender’s claim for compensation against the Land Registry.

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