Persimmon Homes Ltd and others v Ore Arup & Partners Ltd and another [2017] EWCA Civ 373

Wide exclusion clause excludes liability for asbestos claims

A consortium of developers, including Persimmon Homes, instructed civil engineering consultants, Arup, to investigate a Welsh industrial site for potential contamination. Following Arup's report, the developers decided to purchase the site for redevelopment. Arup's contract with the developers included an exclusion clause which stated that "liability for any claim in relation to asbestos is excluded". Arup also provided duty of care warranties to each developer which included the same exclusion clause.

A few years later, the developers discovered significant amounts of asbestos on the site. They sued Arup for negligence as it had failed to report on the contamination and the exclusion clause did not expressly exclude negligence claims. Arup denied negligence and argued that, in any event, its potential liability for asbestos claims was excluded.

The Technology and Construction Court (TCC) held that the contract and warranties excluded all liability for asbestos, including negligence. The normal meaning of the clause was clear and the contra proferentem rule (which states that a clause will be construed against the party who proposed it) should only apply where the wording is genuinely ambiguous.

The developers appealed on the basis that (a) the clause only excluded liability "for causing" the spread of asbestos (but not for failing to advise on its presence), and (b) the contra proferentem rule should have been applied.

The Court of Appeal agreed with the TCC and dismissed the developers' appeal. In light of the language used and business common sense, it was clear that the clause was intended to exclude all liability for claims relating to asbestos (as opposed to liability for causing asbestos). The clause was also wide enough to exclude liability for all claims for asbestos, whether arising from negligence or otherwise. It is common for commercial parties to allocate risks between them and exclusion clauses are a mechanism for doing so. In such cases, there is no need for the court to dilute the effect of the clause, as the risk distribution will be reflected in the agreed fees. Where parties of equal bargaining power agree commercial contracts, the contra proferentem rule will have limited application and should only be used where the wording of the clause is genuinely ambiguous.

S'Franses Ltd v The Cavendish Hotel (London) Ltd [2017] EWHC 1670 QB

Landlord's motives are irrelevant in establishing opposition to lease renewal

S'Franses was the tenant of the ground floor and basement of 80 Jermyn Street, which it occupied as a retail art gallery. The landlord, The Cavendish Hotel, operated the rest of the property as a hotel. S'Franses' occupation was pursuant to two leases which benefited from security of tenure under the Landlord and Tenant Act 1954. When S'Franses requested a renewal of its leases, Cavendish opposed on the basis that it intended to redevelop, under section 30(1)(f) of the 1954 Act (ground (f)). S'Franses argued that some aspects of the proposed redevelopment works were artificial and had been "contrived only for the purposes of ground (f)". The landlord's primary motive for undertaking the works was to evict the tenant.

S'Franses contended that the intention of ground (f) was to ensure that business tenants were not an obstacle to the improvement of buildings which would be in the public interest. However, the protection granted to business tenants would be undermined by allowing landlords to undertake works for the sole purpose of defeating the tenant's claim for a new tenancy.

The High Court agreed with the tenant that it was clear that the landlord's primary commercial objective was to carry out the works in order to establish ground (f). Indeed, the landlord's witness had admitted that some of the works would not be carried out if the tenant vacated of its own accord. However, the court did not consider that the landlord's motive was relevant in assessing its intention to redevelop. The landlord gave an undertaking to carry out the works and its intention to do the works was clear. Provided the works were sufficient to satisfy ground (f), the court had no discretion to grant a new tenancy. The 1954 Act does not contain any anti-avoidance provisions and the landlord's motives should not be taken into account.

Welford and others v Graham and another [2017] UKUT 297 (TCC)

Servient landowner fails to prove prescriptive right of way was not used "as of right" for 20 years

Mr and Mrs Welford (W) owned a property which adjoined a yard owned by Mr and Mrs Graham (G). W claimed that they had a right of way over G's yard, as their predecessors had acquired the benefit of an easement by long use as of right. W applied to the Land Registry to register a prescriptive right of way with vehicles over G's yard. G objected to the application.

Neither W nor G had witnessed the use of vehicles over the yard. However, W adduced evidence which showed access, with and without vehicles, over the right of way from around 1960 to 2012. They also submitted evidence from a previous owner of the yard that they had never given permission for vehicles to use the yard during their ownership between 1978 and 1988. From 1988 onwards, there was no evidence as to whether the access over the yard was with the landowner's permission or not.

At first instance, the First Tier Tribunal held that W had failed to establish a right of way acquired by prescription because they had not proved that their predecessors used the yard without permission for a period of 20 years. W appealed.

The Upper Tribunal allowed the appeal. Once W had shown that the yard had been used openly with vehicles for over 20 years, then there was a rebuttable presumption that the easement had been enjoyed as of right and without permission. The burden was then on G to call evidence to show that there had been permission or that the use was contentious and without permission. G was unable to adduce evidence to rebut the presumption. Therefore W's application was permitted.

Dodd v Raebarn Estates Ltd and others [2017] EWCA Civ 439

Court of Appeal confirms landlord is not liable under Defective Premises Act 1972 where there is no disrepair

On Christmas Day in 2007, Mr Dodd and his wife were on honeymoon in a first floor flat in London. Mr Dodd fell down the staircase, which did not have a handrail, and suffered fatal head injuries.

The staircase of the property had been replaced in 1988, pursuant to planning permission obtained by the head tenant, which specified the installation of a handrail. The freeholder, Raebarn, had given its consent to the alterations. However, the new staircase had not been built in accordance with the planning permission and breached building regulations. There was no handrail on the staircase at the time of D's accident and no evidence that a handrail had ever existed.

By February 2014, the original developer had gone into administration and JLK purchased the property from the administrators. Later that year, the communal boiler stopped working and the building was condemned under section 20 Housing Act 2004. The students vacated and squatters moved in. The long leaseholders argued that they should not be liable to pay the service charge under section 27A of the Landlord and Tenant Act 1985 (LTA 1985).

Mr Dodd's wife (D) brought claims against R, as well as the head tenant and sub-tenant of the flat in question. The High Court had rejected D's claim, and D appealed. At the Court of Appeal, the sole question was whether R was liable for D's injuries under section 4(4) of the Defective Premises Act 1972 (DPA 1972), which imposes a liability on landlords for injuries to third parties which result from defects to premises which the landlord has a right or obligation to remedy under the terms of the lease.

The Court of Appeal dismissed D's claim and held that R was not liable. R had no obligation to remedy the defect under the terms of the lease. Whilst it had a right to enter the premises to carry out certain works, that right was restricted to rectifying the head tenant's breaches of its repairing covenant. The obligation to repair did not arise unless there was disrepair and it was not the same as a duty to make safe. As the staircase never had a handrail, there was no deterioration in its condition and therefore no obligation to repair arose. Therefore, R had neither the obligation nor the right to remedy the defect under the terms of the Lease and could not be liable under section 4(4) DPA 1972.

JLK Ltd v Ezekwe and others [2017] UKUT 277(LC)

Student accommodation is not protected by statutory service charge provisions

An old 19th century fire station in Liverpool had been converted into a student accommodation block comprising 93 units. Most units had en-suite facilities but they all had rights to use communal kitchens, lounges and bathroom facilities. Each unit was let at a peppercorn rent (with a premium payable on the grant of the lease) for a 250-year term. A service charge was payable each year. The long leaseholders sublet the units to students at a market rent. 

By February 2014, the original developer had gone into administration and JLK purchased the property from the administrators. Later that year, the communal boiler stopped working and the building was condemned under section 20 Housing Act 2004. The students vacated and squatters moved in. The long leaseholders argued that they should not be liable to pay the service charge under section 27A of the Landlord and Tenant Act 1985 (LTA 1985).

The question was whether the units were "occupied or intended to be occupied as a separate dwelling" under the LTA 1985. The First Tier Tribunal (FTT) decided that the units were "dwellings".

On appeal, the Upper Tribunal held that a dwelling did not need to be a "home", so the lack of individual washing or kitchen facilities did not exclude them from being dwellings. However, the units were not dwellings under the LTA 1985 because they were not occupied as separate dwellings. As they were let with the intention that those facilities would be shared, the units were only part of the dwelling. Therefore the units were not occupied or intended to be occupied as separate dwellings. The FTT did not have jurisdiction to consider the leaseholders' applications, which were dismissed.

Jones and another v Oven and another [2017] EWHC 1647 (Ch)

"Retained land" burdened by restrictive covenants includes land transferred back to owner

Mr & Mrs Jones (J) lived on a farm in Essex. J sold part of their land to a developer in two separate transactions in 2002 and 2003. As part of the 2002 transfer, J entered into a restrictive covenant for the benefit of the transferred land, which prohibited activities on J's retained land that might cause a nuisance to residential neighbours, including keeping livestock. In 2003, J entered into the same restrictive covenant in favour of the second parcel of transferred land. There was also a provision that, if a barn on the second parcel of land were ever demolished, the owners would transfer a four metre strip of land back to J. However, it was not clear whether that strip would become subject to J's restrictive covenants upon the re-conveyance.

The developer built a residential property on part of the transferred land and sold it to Mr & Mrs Oven (O), together with the four metre strip housing the barn. The transfer to O obliged O to transfer the strip of land back to J if the barn were ever demolished.

The barn was demolished a few years later, triggering the requirement for O to transfer the strip back to J. However, J had been keeping pigs on their retained land, which O argued was in breach of covenant. The pigs eventually ventured onto the strip of land. O refused to transfer the strip unless J accepted that it would be burdened by the same restrictive covenants as J’s retained land.

J sued O for the transfer of the strip. O sought a declaration that the “retained land” included the strip of land and should be subject to J’s restrictive covenants.

The High Court made a declaration that the “retained land” included the strip of land. Although the strip was not retained at the time of the initial transfer, the literal reading of “retained land” would not make sense, as it would result in J being able to cause a nuisance on the strip which lay even closer to O’s land than the initial retained land. It was clear that the parties had intended that all of J’s land which lay in the vicinity of O’s land should be burdened by the restrictive covenants, which included the strip re-transferred to J.

Lea Valley Developments Ltd v Derbyshire [2017] EWHC B22 (TCC) (19 April 2017)

Court has inherent jurisdiction to decide on matters under Party Wall Act 1996

Lea Valley had undertaken works to its property which had seriously damaged the neighbouring property belonging to Mr Derbyshire. The works included notifiable excavation works under the Party Wall Act 1996 (PWA 1996). Lea Valley gave notice of its intention to carry out the works and obtained a party wall award authorising those works, which provided that it must make good all damage to the adjoining property and pay compensation in lieu of repairs. The dispute related to the basis for calculating the amount of compensation payable to Mr Derbyshire where Lea Valley’s works had caused so much damage to his property that it had to be demolished and rebuilt, rather than just repaired.

The first question for the court was whether it had the necessary jurisdiction to make that decision. The judge held that the court has an inherent jurisdiction to make a declaration about a matter covered by the PWA 1996 regime, and it would take very clear wording in a statute for it to oust the inherent jurisdiction of the courts. As well as the ability to deal with an appeal under section 10 of the Act, or to grant an injunction when a neighbour has failed to comply with the Act, the court has inherent jurisdiction to grant declaratory relief as well.

As for the correct measure of damages, the court decided that the common law basis should apply. The injured party should be restored to the position they would have been in had the damage not been caused. The value attributable to that was the cost of reinstating the building to its original condition, which in this case involved demolishing the existing building and rebuilding it.

In arriving at that conclusion, the judge drew parallels with the law of nuisance, reasoning that the cause of the damage was an action which (but for the operation of PWA 1996) would have constituted a legal nuisance, but emphasised that there is no hard and fast rule which can be applied in all cases.

Gore v Naheed [2017] EWCA Civ 369

Neighbouring garage for ancillary use benefits from right of way

Gore (G) owned a property known as the Granary, which benefited from a right of way over Naheed’s (N) driveway for loading and unloading. As well as using the right of way to access the Granary, G used it to access a garage that he owned on adjacent land, which was used in connection with the Granaary but did not directly benefit from the right of way.

N ran a business from the property and sometimes had delivery vans parked on the driveway which obstructed access to the garage. G claimed for an injunction to restrict the obstructions, but N claimed that the right of way did not extend to a right of access to the garage.

The High Court declared that the right of way included the right for G to pass over the driveway to park vehicles in the garage. The Court granted an injunction preventing the obstruction of vehicular access to the garage. However, N was still permitted to park on the driveway for the purposes of loading and unloading for up to 20 minutes. N appealed.

The Court of Appeal rejected the appeal. Even though the garage did not directly have the benefit of the right of way, its use was ancillary to the use and enjoyment of the Granary. The right of way was expressed as being for “all purposes connected with the use and occupation of the Granary” which therefore included G’s use of the garage.