Archive for July 2008
Birmingham City Council v Lee  EWCA Civ 891 concerns claimant’s costs incurred while following the disrepair pre-action protocol.
It is not uncommon for a landlord to do repairs after an early notification letter, or letter of claim, but pre issue (not that common, but not uncommon). This leaves the claim as for damages only. Where [...]
So, Doherty (FC) (Appellant) and others v Birmingham City Council (Respondent)  UK HL 57
Well, well, and once more for effect, well. This is a very interesting result indeed, although I use the word result in a non-definite kind of way.
The headline is simple enough, the case was remitted to the High Court for determination of [...]
The essence of the problem to be resolved in this case is – A (in this case the appellant, Yeoman’s Row, with Mrs Lisle-Mainwaring as a director and shareholder) is the owner of land with potential for residential development and enters into negotiations with B (in this case the respondent, Mr Cobbe) for the sale of the land to B. They reach an oral “agreement in principle” on the core terms of the sale but no written contract, or even a draft contract for discussion, is produced. There remain some terms still to be agreed. The structure of the agreement in principle that A and B have reached is that B, at his own expense, will make and prosecute an application for the desired residential development and that, if the desired planning permission is obtained, A will sell the land to B, or more probably to a company nominated by B, for an agreed up-front price, £x. B will then, again at his own expense, develop the land in accordance with the planning permission, sell off the residential units, and, when the gross proceeds of sale received by B equals £2x, any further gross proceeds of sale will be divided equally between A and B.
Pursuant to this agreement in principle B makes and prosecutes an application for planning permission for the residential development that A and he have agreed upon. B is encouraged by A to do so. In doing so B spends a considerable sum of money as well, of course, as a considerable amount of time. The application is successful and the desired planning permission is obtained. A then seeks to re-negotiate the core financial terms of the sale, asking, in particular, for a substantial increase in the sum of money that would represent £x. B is unwilling to commit himself to the proposed new financial terms and A is unwilling to proceed on the basis of the originally agreed financial terms. So B commences legal proceedings.
The question before the House is what relief, in the circumstances described, B should be granted.
A number of bases of relief could be considered – proprietary estoppel; constructive trust; unjust enrichment; quantum meruit; the tort of deceit.
The House of Lords stated that the critical issue in this case was whether there was, on the judge’s findings, a common expectation of the type capable of raising equitable estoppel.
The judge at first instance held that the conditions for proprietary estoppel were satisfied and that the minimum equity to do justice to Mr Cobbe required that he be awarded one-half of the increase in value of the property brought about by the grant of planning permission and that he be granted a lien over the property to secure that interest. The judge held, also, that Mr Cobbe would have been entitled to relief on his constructive trust claim but that relief on the basis of proprietary estoppel was the more satisfactory way of satisfying the equity to which the facts of the case entitled him. The judge did not, therefore find it necessary to deal with Mr Cobbe’s alternative claim in restitution.
The Court of Appeal unanimously dismissed Mrs Lisle-Mainwaring’s appeal from the judge’s main judgement. The Court of Appeal agreed with the judge that, “proprietary estoppel could be established even where the parties anticipated that a legal binding contract would not come into existence until after planning permission had been obtained, further terms discussed and agreed and formal written contracts exchanged.”
The House of Lords unanimously allowed Yeoman’s Row’s appeal.
The House of Lords did not agree that the relief granted was justified on the basis of proprietary estoppel. It noted that the judge and then the Court of Appeal had regarded their finding that Mrs Lisle-Mainwaring’s behaviour in repudiating, and seeking an improvement on, the core financial terms of the agreement was unconscionable, as sufficient to justify the creation of a “proprietary estoppel equity”. She took unconscionable advantage of Mr Cobbe. The advantage taken was the benefit of his services, his time and his money, in obtaining planning permission for the property. The advantage was unconscionable because immediately following the grant of planning permission, she repudiated the financial terms on which Mr Cobbe had been expecting to be able to purchase the property. However, the House held that to leap from there to the conclusion that a proprietary estoppel case was made out, was not justified.
Nor did the House of Lords consider that there existed grounds for a claim of constructive trust. The property was never joint venture property and the House could not see any justification for treating it as though it was.
The House noted that there was no doubt that the value of the property would have been increased by the grant of planning permission and that the appellant had been enriched by the grant of planning permission for which it had had to pay nothing. But what was the extent of the unjust enrichment? The House held that it was not the difference in market value between the property without planning permission and the property with it. The planning permission did not create the development potential of the property – it unlocked it. Therefore the unjust enrichment was the value of Mr Cobbe’s services – the fashioning of the key to unlock the development potential.
The House held that it was clear that Mr Cobbe was entitled to a quantum meruit payment for his services in obtaining planning permission. The amount of the quantum meruit for Mr Cobbe’s services would represent the extent of the unjust enrichment for which the appellant should be held accountable to Mr Cobbe.
R (on the application of Heffernan) (FC) (Appellant) v The Rent Service (Respondents),  UKHL 58
Mr Heffernan, who is 51 years old, blind and registered with various physical and medical complaints, does not work and is dependent on welfare benefits. In March 2004, he was granted an assured (private sector) tenancy of an apartment in Sheffield at a rent of £745 per month. In April 2004, he applied to Sheffield City Council for housing benefit in respect of the whole of the rent, and the Council referred the question of his maximum allowable housing benefit to the Rent Service. After four determinations, there were two subsequent re-determinations.
In December 2004, the Rent Service re-determined that the local reference rent (“LRR”) was £433.34 per month. A second re-determination was made in May 2005 by which time the contractual rent had been reduced to £695 per month, because the parking space had been consensually removed from the tenancy. This re-determination came to the conclusion that the LRR was £455 per month.
The two re-determinations were each carried out on the basis that the “neighbourhood” of the apartment was “Sheffield Central”, and the “locality” for assessing the LRR was “the whole of the city of Sheffield and some of its surroundings” (“the Sheffield area”). In each of the two re-determinations, the rent officer stated that he was proceeding on the basis that the meaning of “locality” was:
“a broad geographical area made up of a number of neighbourhoods with a mix of property types and tenure where a tenant could, as an alternative to the property in question, reasonably be expected to live and benefit from similar amenities”.
This formula was taken from a circular distributed by the Rent Service to rent officers nationally in June 2001.
The sole relevant ground upon which Mr Heffernan sought judicial review of the two re-determinations was that it was impermissible to have taken the whole of the Sheffield area as the “locality”.
The judge at first instance quashed the two re-determinations as he considered that the two rent officers had each wrongly followed the guidance in the circular that “locality” involved a “broad geographic area” and had not properly examined each of the twelve neighbourhoods. The Court of Appeal allowed the Rent Service’s appeal concluding that the view that the Sheffield area was the appropriate “locality” for the apartment was one which each of the rent officers was entitled to reach on the evidence.
The House, by a majority of 3:2 allowed Heffernan’s appeal and quashed the two re-determinations. The rent officers had simply adopted an approach which was generally taken by the Rent Service when assessing LRR for dwellings in that area, which in turn was based on the guidance in the circular. Whilst this guidance was helpful, it could not avoid the need for rent officers determining LRR in any particular case to consider the issues raised by the Rent Officers (Housing Benefit Functions) Order 1997 para 4(6)(a) to (c) by reference to the facts of that case. These sub-paras (a) to (c) defined what was meant by “locality”. In many cases, what might be the right locality for one dwelling may not be the right locality for a dwelling in an adjoining neighbourhood.
A property developer reached an oral agreement in principle with an owner to buy its property and then spent considerable sums in obtaining planning permission. The owner then refused to proceed on the agreed terms and enter into a binding contract. The House of Lords held that the developer was not entitled to a remedy based on proprietary estoppel or a constructive trust. The developer was entitled to a quantum meruit payment for his services in pursuing and obtaining planning permission.
This is a significant case on whether Social Services or Housing Departments have a duty to accommodate a homeless child and whether a s.20 Children Act duty arises.
G, R (on the application of) v London Borough of Southwark  EWCA Civ 877 was a case in which a 17 year old child, G, who [...]
The Leasehold Reform, Housing and Urban Development Act 1993, section 24(1) did not prevent a leasehold valuation tribunal from dealing in stages with unagreed matters in relation to a collective enfranchisement of a block of flats. The LVT had jurisdiction over all matters in dispute and was not confined to specific matters raised in the pleadings.
Appeal from Sheriff Court:- The appellants were the proprietors of residential premises at 30 Constitution Crescent, Dundee and the respondents were the licensing authority for the administration of licensing in relation to activities in connection with which licences are required in terms of section 2(2) of the Civic (Government) (Scotland) Act 1982. Around June 2006, the appellants submitted an application to the respondents seeking a licence for the premises at 30 Constitution Crescent, Dundee, as a house in multiple occupation for occupancy by four tenants. At a meeting on 14 June 2007, the Licensing Committee decided to refuse the appellants’ application mainly due to the designation of the development area as a ‘Home Zone’ where the purpose of such developments is to provide a quiet, safe and stable environment for the likes of retired people and families and that could not be achieved if there were houses of multiple occupation in the midst of such an area. The appellants appealed to the sheriff against the decision of the Licensing Committee and sought the reversal of the decision taken on 14 June 2007 and also a finding that they were entitled to the licence sought. By interlocutor dated 17 October 2007, the sheriff refused the appeal. The appellants appealed to the Court of Session. It was submitted that the sheriff erred in holding that:- (1) the designation or otherwise of a road as a Home Zone was irrelevant to the issue of whether the premises were suitable for use as an HMO; (2) ‘it was reasonable and responsible for the respondents to have the view that Home Zones are primarily for families and older people and that HMOs do not fall within the desired ethos or makeup of a Home Zone.’ ; and (3) having held that there was no basis for a finding of lack of suitability due to possible problems with tenants, he should have held that there was no basis for refusal under paragraph 5(3)(c) of the first Schedule to the Civil Government (Scotland) Act 1982 and should have reversed the respondents’ decision. On behalf of the respondents it was submitted that the court should refuse the appeal and affirm the decision of the sheriff. Here the court considered the nature of Home Zones under section 74 of the Transport (Scotland) Act 2001and whether the existence of such a designation could be seen as inconsistent with the grant of a licence for a house in multiple occupation.
North Devon Homes Ltd. v Batchelor  EWCA Civ 840 concerned a claim for possession of an assured tenancy. At County Court, the claim was brought on grounds 10, 12 and 14 HA 1988. While the claim resulted in a postponed possession order for ground 10 rent arrears, the claims on ground 12 (non-performance of [...]
There is an all too common situation. A tenant with the right to buy is offered a capital sum and the mortgage payments for the (in this case) three years needed to avoid repaying the RTB discount on transfer. In the meantime, they either get to stay or hand over control of the property to [...]