Wild Duck Ltd v Smith [2017] EWHC 1252 (Ch), 24 May 2017

Implied terms - leases - management companies – nuisance and annoyance

Held: The claimant had purchased 5 leases for plots of land which were to be developed into holiday homes. The defendants were the lessor under the lease. The developer had gone into liquidation. The lease provided that in such circumstances the management company became liable to complete the outstanding works, but if the management company failed to perform any of its obligations the lessor could perform them instead and recover the cost from the management company. Each lessee was a shareholder in a management company.

The defendants had claimed that the management company had failed to comply with its obligations and continued the construction works. The claimant claimed damages for, among other things, breach of two implied terms in the leases, namely that the defendants should not prevent the management company from performing its obligations under the lease, and should co-operate with the management company in its performance of its obligations under the lease and the defendants were in breach of a covenant not to cause a nuisance or annoyance as there were two partially-built units which appeared to be derelict, and there was a "corridor" of fencing along the access road to the claimant's properties.

The claim was dismissed. The judge accepted that there was an implied term in the lease that the defendants would not to prevent the management company from performing its obligations. However, there was no implied term that the defendants had a duty to co-operate with the management company. Such a term was not necessary to ensure that the lease had commercial or practical coherence. Nor were the partially-built units a nuisance, construing that term in accordance with its common law meaning. The term "annoyance" had a wider meaning than nuisance; however, applying the test in an objective sense according to robust and commonsense standards, neither the units nor the “corridor” were an "annoyance".

Shri Guru Ravidass Sabha Southall, Re [2017] EWHC 1255 (Ch), 23 May 2017

Enforcement of charging orders – order of sale of multiple properties - family homes - ECHR art.8

Held: Proceedings concerning the internal affairs of an unincorporated registered charitable association had been brought by six individuals against the association's executive committee and its trustees (“the Charity”). The claims had been dismissed. The cost order made the 6 individuals jointly and severally liable for the Charity’s costs. After three of the judgment debtors were made bankrupt, the Charity obtained final charging orders over the homes of the remaining three. £50,000 out of the £368, 623 cost order remained outstanding when claims to enforce the charging orders were made. The estimated value of the three properties was £1.3 million.

Master Teverson held that it was right to make an order for sale on each of the claims. In cases of joint and several liability, the court's role was not to give marks for good or bad conduct, but to control the enforcement process. The court had to exercise its discretion in accordance with developed guidance and the requirements of the Trusts of Land and Appointment of Trustees Act 1996 s.15. In the instant case, each of the three properties was a family home and the sale of any one of them would cause real and significant hardship. On one view, it might not be necessary to order the sale of more than one property, but on a wider view, it was. The hardship would be enormous were the whole sum due to be borne out of the net proceeds of sale of only one of the properties. Although one of the three judgment debtors had already paid £60,000 towards the costs, equating to a one-sixth share, it would be an incorrect exercise of discretion to refuse to make an order for sale of his property. He and his wife owned a second property, and to refuse to make an order for sale would increase the burden on the remaining judgment debtors, whose assets were limited to their homes. Master Teverson accepted that ordering the sale of family homes engaged ECHR art.8 and was a remedy of last resort. However, the reality was that without a sale of any of the properties there was no realistic prospect of any of the costs being paid. The orders for sale were however to be postponed for two months to see if any or all of the judgment debtors could raise a sum which the Charity was willing to accept.

Doberman v Watson [2017] EWHC 1708 (Ch), 19 May 2017

Restrictive covenants - s 84(1) and (2) of the Law of Property Act 1925 – Jurisdiction - Lands Tribunal – Courtissue estoppel - res judicata

Held: The Court refused the defendants’ application to strike out and/or for summary judgment where the claimant sought a declaration pursuant to s 84(2) of the Law of Property Act 1925 that land which he owned was no longer affected by a restrictive covenant prohibiting the construction of a second dwelling on the land. The claimant’s predecessor in title had in 1978 brought a claim in the Lands Tribunal to discharge the covenant which had been refused. The defendants argued that the Lands Tribunal decision gave rise to an estoppel per rem judicatam, either by way of cause of action estoppel, or issue estoppel. Alternatively, they submitted that the proceedings brought by the claimant amounted to re-litigation of the issue, which constituted an abuse of process of the court.

The court disagreed. Section 84 drew a clear distinction between the functions of the tribunal and the functions of the court in determining disputes. Whether, and to what extent, a restriction affected land was a matter for the court under s.84(2). Whether any such restriction should be discharged or modified was a matter for the tribunal under s.84(1). The tribunal could decide an application brought under s.84(1) on the footing that the land was so affected, but that would not give rise to a binding decision. The Lands Tribunal did not have jurisdiction over the subject-matter which fell within the ambit of s.84(2). It made no decision upon such matters, and even if it did, such a decision was not final. It made no determination upon a question raised in later litigation. It made no difference that there might have been a concession in the 1978 application as to the applicability of the covenant, because the Lands Tribunal made no decision based upon it. The claim was thus not an abuse of process and there was no question of a collateral attack upon the correctness of any decision made by another court or tribunal. The crucial question was whether, in all the circumstances, one party was misusing or abusing the process of the court by seeking to raise before it an issue which could have been raised before. The answer to that question in the instant case was plainly "no"