Back to Latest NewsArchived news - 2008

Extension Blues

Household extensions are a frequent source of dispute, although in most cases the dispute is between the property owner and the builder. It is not often that one sees problems arising because there is an issue with the building itself, rather than the extension.

In a recent case, however, a householder went to see an architect because he wished to add an extension to a property he had owned for three years. The architect noticed that the house itself differed considerably from the plans that had been approved by the local council at the time it was built. That was bad enough, but things got worse. The pre-commencement conditions for the building could not be shown to have been discharged, which meant that the house itself was in breach of planning regulations.

No plans had been provided when the man had subsequently purchased the house and the planning consent granted was not clear. Unsurprisingly, he claimed damages from the conveyancer who acted for him on the purchase of the property.

The moral is that when undertaking a property transaction, make sure you use a reputable firm, which is covered by insurance and has proper complaints and disciplinary procedures. All solicitors are obliged to meet these criteria.

Back to the top

Fairness Means Couple Receive House

It is common for families to dispute agreements made relating to property. In a recent case, a father, his two sons and the wife of one of the sons became embroiled in a complex dispute over the ownership of a family property in Wimbledon.

The property had originally belonged to the father and his wife. When the wife died, the father moved to Alderney in the Channel Islands. For Inheritance Tax purposes he purported to transfer the property to his two sons as tenants in common with equal shares, ‘in consideration of my natural love and affection for my sons’. This was the apparent position in 1986. However, the married son and his wife claimed that in 2000 his father had agreed with them that the property would become theirs if they renovated it and maintained it at their expense.

The couple claimed that, relying on this promise, they invested a great deal of time, effort and money into the renovation and upkeep of the property.

Recently, the father and his other son went to court, claiming that no such agreement had been made. The couple had merely been granted permission to live in the property if they maintained it. It was their contention that any money spent by the couple on the house was not in reliance on any representations, agreements or warranties from either of them. The father claimed that the property still belonged to him.

The married son and his wife claimed that the father was either being unduly influenced by his other son or was of insufficient mental capacity to make his own decisions.

Miss Justice Black, following the ruling in Stack v Dowden and the legal doctrine of proprietary estoppel, decided that it would be unjust for the married couple not to receive the property after they had acted to their detriment as a result of relying on the promises made to them.

This was a multifaceted case and the judge concluded that before other aspects of it could be decided, it first had to be determined who was the rightful owner of the family property in Wimbledon. In doing so, Justice Black had to examine the original intentions of those involved. Her decision was that, taking all the relevant circumstances together, equity could only be satisfied if the ownership of the property were to vest in the married son and his wife.

Making informal arrangements, particularly where family property is concerned, can be fraught with problems. It is important that any agreements you make are properly documented and implemented correctly in order to avoid disputes. Michael Cutler can advise you on the best way to deal with family arrangements of all kinds.

Back to the top

Forced Marriage – The Current Position

The Forced Marriage (Civil Protection) Act came into force on 25 November 2008, with specialist courts being created to deal with the cases arising.

The key concept is that a forced marriage is one in which one of the parties is forced into the marriage without their full and free consent.

The Act gives the courts the right to prevent a forced marriage occurring and to stop attempts by a person to coerce another person into a marriage.

Where the marriage has already taken place, the court is able to make an order to protect the victim if necessary. The Act does not allow the court to annul the marriage, nor does it make forced marriage a criminal offence.

The court can make a Forced Marriage Protection Order (FMPO) and has several powers, such as requiring the surrender of a person’s passport or that they reveal the location of missing persons. A power of arrest is available when an actual threat of physical violence has been made. Failure to comply with a FMPO constitutes contempt of court, an offence which can lead to imprisonment. A FMPO can be applied for by anyone who believes they are at risk of being forced to marry or, with the leave of the court, by an interested third party. In addition a ‘Relevant Third Party’ (RTP) can apply. A RTP is a person appointed by the Lord Chancellor who acts in a way similar to the official solicitor and who is empowered to make an application on behalf of the victim. As yet, exactly how the role of the RTP will work in practice is unclear.

The Government has announced its intention to abolish forced marriage and if the new legislation fails to prove effective, there is little doubt that the law will be amended.

Contact Karen Eves for advice on all family law matters.

Back to the top

Parental Responsibility Prior to Adoption Abroad

The interpretation of the laws that apply when a child is to be adopted by prospective adopters who live in a foreign country remains unclear, following two recent rulings.

In the first case, the parents of a girl agreed that adoption was the desired solution but the mother did not want the child to be adopted outside the UK. The proposed parents were the father’s sister and her husband, who lived in the USA. They resided in the UK temporarily, in order to satisfy the requirements of the Adoption and Children Act 2002 (ACA), which dictates the determination of parental responsibility prior to adoption abroad.

The father of the child was happy for the adoption to go ahead but the mother was not. She claimed that during the ten week period the prospective adopters were caring for the child, only the sister had been present the entire time and so the statutory requirements had not been satisfied. The judge rejected this argument, saying the husband had been there for a substantial enough period of time.

The child’s mother also claimed that pursuant to Regulation 10 of the Adoptions With a Foreign Element Regulations 2005, the couple had not satisfied the requirement to obtain confirmation in writing, from the relevant foreign authority, that the child is or will be authorised to enter and reside in that country. The issue arose because the United States Embassy in London was not prepared to grant the child a visa until the adopters could produce the order showing that they had exclusive parental responsibility. They were unable to obtain such an order until such time as they could demonstrate to the English courts that they would be able to reside with the child in the USA.

The judge concluded that it did not need to be a governmental body that said that the child would be able to reside in the USA. The equivalent of an English adoption agency would suffice. He gave the prospective adopters 28 days to ascertain from the American Adoption Agency whether it was likely that the child would be authorised to enter and reside permanently in the USA.

In the second case, a child was also to be adopted by a family member who lived in the USA. The issue arising here was that for some part of the requisite period of determination of parental responsibility, the child had been staying with the prospective adopters in America. This would seem to have been in contravention of statutory requirements as it is an offence to remove a child from England or Wales, for the purposes of adoption, without a court order. Haringey London Borough Council was seeking to obtain such an order to legitimise the removal of the child from the UK, making the foreign residence period ‘count’ for the court proceedings.

The judge saw no reason why ‘home’ for the purposes of the ACA had to be in England or Wales. He was not, however, prepared to grant an order going against the intentions expressed by Parliament. He therefore gave leave to appeal to the Court of Appeal for it to rule on this point of law.

The ruling of the Court of Appeal in the second case will affect the ease with which adoptions such as these can go ahead. As the law stands at the moment, it is difficult for those who live abroad to adopt a UK based child as they are required to leave their country, home and work in order to satisfy the requirement for a lengthy period of residence in the UK prior to adoption.

If you need advice on any family law matter, contact Alison Whistler for advice.

Back to the top

Reasonable Discretion and Financial Settlements

When decisions are made in ancillary relief proceedings (the legal term for the financial arrangements made on divorce), there is not one single reasonable way to evaluate evidence, but a ‘spectrum’ of reasonable approaches.

Therefore, to appeal successfully against a decision made at a judge’s discretion, it is necessary to convince the appeal court that the decision was outside the spectrum of reasonable responses.

In a recent case involving an Iranian couple, the former wife sought to overturn the settlement awarded by the court, claiming that it was not reasonable.

The couple owned their matrimonial home and an investment property in the UK. The wife also owned properties in Iran, some of which had been inherited. After commencing divorce proceedings against her husband in Iran, she purported to transfer the properties to her children, retaining the power of attorney to administer them on behalf of the children and a life interest in them. In practice, the arrangement meant that she retained ownership of them.

The couple sought a clean break, with the former wife retaining the matrimonial home. The judge ordered her to pay her husband a total of £180,000. In practice, this meant she ended up with slightly more than half of the couple’s assets.

The wife appealed, claiming that the award to her husband was plainly excessive and that in the absence of evidence that she could remove assets from Iran, the judge should have proceeded on the basis that she could not.

The Court of Appeal agreed that the judge should have explained the basis for his decision and created a balance sheet for each party. However, the order did not offend the ‘needs’ principle in that it left the wife with substantially more than her assessed needs. In practice, her ability to meet those needs was based on the assumption that she could realise assets in Iran and remit the proceeds to the UK to discharge her liabilities here. In that regard, the finding that the arrangement she had made with regard to the Iranian properties was equivalent to ownership of the assets was a key finding of fact by the court. Were the properties in Iran to be only notionally attributable to her, she would not have had the ability to meet her liabilities in the UK.

Although a different judge might have taken a somewhat different view on how best to treat the inherited assets, the judgment of the court was not considered to be outside the spectrum of reasonable responses and so the appeal was dismissed.

Says Karen Eves, “This case had many complexities, including the question of which system of law (English or Iranian) should apply. In such cases, there is no ‘right answer’ and the Court of Appeal will uphold a decision which is reasonable, even one which is not necessarily the best possible decision. In practice, the best results, especially in cases where the assets are substantial, are normally achieved by careful negotiation with the benefit of expert legal support.”

Back to the top

Removing or Modifying Restrictive Covenants

Restrictive covenants are restrictions on the rights relating to a property. They may, for example, allow rights of access over the property concerned or operate to prevent a nuisance to nearby landowners.

The procedural law relating to such covenants is complicated, but any covenant created after 1 January 1926 must be registered to be effective.

It is often the case that a covenant was created many years ago for a perfectly good reason, but the reason no longer exists. When that is the case and the covenant has a negative impact on the land owner it affects, it may be possible to have the covenant modified or removed altogether. This can be done by contacting the person benefiting from the covenant and obtaining their agreement to discharge it or by making an application to the Land Registry, which can often lead to a court hearing.

The law allows a covenant to be modified or discharged when:

• it is obsolete in that it secures no practical benefit to those entitled to enforce it; or
• it is contrary to the public interest; or
• financial compensation would be adequate recompense for its discharge and its continuation would impede a reasonable user of the land; or
• its modification or discharge has been agreed (expressly or by implication); or
• its discharge or modification would not harm those entitled to benefit from it.

Although this list makes it look as though obtaining a modification or discharge of a covenant should be straightforward, the court will not permit this unnecessarily. For example, in a recent case, an application to discharge a covenant which prevented the erection of more than one dwelling on a piece of land was rejected by the court, which took account of the impact of the building on the neighbourhood. An increased risk of flooding, the alteration of the character of the area and a reduction in sunlight to adjoining property were just three of the factors which collectively swayed the court.

If your land is subject to a covenant that impairs your use of it, contact us for advice. It may seem tempting to try to reach an agreement yourself with the person benefiting from the covenant, but it is normally inadvisable as there are a number of complexities and potential traps for the unwary. For example, in some circumstances a modification or discharge of a covenant may create a charge to Stamp Duty Land Tax. Contact Brian Regler for advice on all property matters.

Back to the top

Who Decides the Location of the Funeral?

The general rule regarding a person’s funeral is that the executor of the estate has the right to make any necessary arrangements. Where there is no will, the person granted the letters of administration of the estate has the right.

That seems straightforward and it usually is, but not always. A recent case dealt with the funeral arrangements of a man who died intestate. His divorced parents were jointly entitled to administer his estate.

The father wished his son to be buried in the town in which he had lived for several years and in which his brother, most of his friends and also his fiancé lived. The man’s mother wanted him to be buried near where she lived.

It took a court hearing to determine that he should be buried in his home town.

Says Michael Cutler, “In this case, the failure to make a will didn’t cause problems over the division of the man’s estate, but over the administration of it. Had he made a will, whoever was appointed executor under it could have decided and made the appropriate funeral arrangements, no doubt saving much distress as well as time and money. There are reasons other than the disposal of property for making a will.”

Back to the top

Bankruptcy and the Family Home

With the economy in poor shape and personal debt still at high levels, the outlook is less than rosy for people who are facing insolvency. Even after the changes made by the Enterprise Act 2002, bankruptcy is still a difficult experience for most bankrupts. This is especially true where the family home is the main asset of the bankrupt’s estate.

The trustee in bankruptcy will normally seek a possession order over the property so that it can be sold to satisfy the claims of creditors.

When deciding whether the possession order is to be granted, the court is obliged to consider:

• • the interests of the creditors;
• the conduct of any spouse or civil partner (current or past) in contributing to the bankruptcy;
• the needs and financial resources (if any) of the current or former spouse or civil partner and any children; and
• the other applicable circumstances of the case.

Where an application for a possession order is made more than a year after the property has vested in the trustee in bankruptcy, the court will normally regard the interests of the creditors as paramount. The 12 month delay between the bankruptcy and the application may give a false sense of security, but does at least allow time for alternative living arrangements to be made if a sale is probable.

An application to resist the possession and sale can be made if there are exceptional circumstances, but consequences for the family arising from the bankruptcy will only very rarely be considered as exceptional circumstances.

Where a delay in paying creditors is unlikely to cause them any prejudice, a case may be able to be made out that the circumstances are exceptional enough to justify the defeat of an application for possession. An example might be when there is a great deal of equity in the property, such that the debts plus interest thereon are likely to be paid in full on an eventual sale. Such an argument might apply where the creditor is HM Revenue and Customs, for example.

Serious illness in the family (not that of the bankrupt personally, except where this creates a need for a family member to remain in the house to look after the bankrupt) may also be regarded as an exceptional factor.

There are a number of other factors that may also constitute exceptional circumstances. If you are faced with a possession application, it is important to take legal advice promptly as there may be other solutions (such as a relative purchasing the trustee in bankruptcy’s interest in the property) which can be explored.

However, the best approach is to take advice as soon as you get into financial difficulty. Normally, the earlier such issues are addressed, the greater the likelihood of a satisfactory outcome – possibly avoiding bankruptcy altogether.

Contact John Lennon for further advice.

Back to the top

Bogus Air Fare Offers to be Banned

New regulations are to be introduced to ensure that ‘the price you see is the price you pay’, when booking cheap flights via the Internet. These will mainly affect low cost airlines which offer extremely low fares that are then subject to myriad extras, some of which (such as taxes and landing fees) are unavoidable.

The regulations will effectively ban ‘fly free’ and ‘fly for £1’ type promotions.

The change follows a finding by the European Commission that up to a third of low cost airline passengers considered that they had been misled over the cost of flights they had booked online.

The pernicious practice of carriers automatically charging for certain extras (such as travel insurance and bag charges) unless you specifically indicate on the booking form that these are not applicable is not covered by the regulations.

Other ‘extras’ charged for by budget airlines are:

• reserved seats;
• extra legroom seats;
• priority boarding;
• carriage of hold luggage;
• climate change compensation;
• checking in at the airport (not online); and
• snacks and beverages.

When the cost of these extras is added, on some routes it may be less expensive to use a scheduled airline.

Back to the top

Boundary Dispute Highlights Need for Clarity

A recent boundary dispute has illustrated the desirability of ensuring that when a property is sold, the description of it in the conveyance is as clear as possible.

The dispute was over a farmhouse and adjacent fields, which were at one time under common ownership. In 1988 they were sold separately, the farmhouse being sold first and then the fields. The original owner had built a fence between the farmhouse and the fields. Regrettably, the plan, which was marked ‘for information only’, showed the fence as lying within the boundary of the property attaching to the farmhouse. The written description of the property conveyed with the farmhouse was inadequate, but the vendor (who at that time still owned the fields) had covenanted to maintain the fence. This made no sense if the fence were no longer on the vendor’s property.

The subsequent owner of the fields sought to have a declaration made by the court that her land included the land on which the fence stood and to have the copies of the plans filed at the Land Registry altered to show the fence as part of her property, not the farmhouse land. The Court of Appeal agreed that the fence stood on her land and that the boundary shown in the plan should be altered to show her ownership of the disputed land.

The plan of a property is normally only indicative and the extent of the true title is contained in the description of the property. It is therefore very important that conveyances contain accurate and comprehensive descriptions of the property being conveyed and also that documents of title are examined and compared with the filed plan to ensure that any anomalies can be resolved.

We can assist you to ensure that your interests are protected in any property transaction.

Back to the top

Court Adopts Broad Brush Valuation of Business on Divorce

On divorce, the valuation of a family business is often a highly emotional and contentious issue, so it was unsurprising when the divorce of a couple after 15 years of marriage led to an acrimonious dispute over the value of their successful restaurant business.

The ex-husband valued the total assets (including the business, which he had run for 33 years) at £4.2 million. His ex-wife placed a valuation on the assets of £7.6 million, valuing the business at £5.3 million. She sought 50 per cent of the net assets plus school fees for the children. Her ex-husband offered 42 per cent of the net assets (£1.7 million), although this offer was later reduced.

Both produced expert witnesses to back up their respective valuations of the business, which was the main point of dissent. The experts differed, but the main point of contention was whether the valuation should be based on a multiple of six times ‘maintainable earnings’ or nine times.

The judge relied on evidence of transactions in similar circumstances and ruled that the multiplier should be 6.5. He commented that the valuations of experts were of ‘doubtful utility’ because they are a matter of opinion and experts’ opinions differ. He therefore adopted a broad brush approach. Since there were insufficient resources for a ‘clean break’ arrangement to be financed, he ordered that the wife should receive £1.45 million plus periodical payments of £60,000 annually, child maintenance of £20,000 per annum and the cost of the school fees.

Says Alison Whistler, “Few aspects of the financial arrangements in a divorce can be as contentious as the value of a family business and it is by no means uncommon for quite unrealistic values to be put forward. In many cases, the best overall result is achieved by the use of a single joint expert and sensible negotiation.”

Contact us for advice on all family law matters.

Back to the top

Covenant Prohibits Lawful Use

Covenants containing restrictions on the use or development of land can cause problems between neighbours.

Recently, a couple obtained planning permission to build a bungalow on a corner of their land.

Their property was subject to a covenant on development, which prevented them from building a residential property on it without the agreement of their neighbour. This was asked for and denied. The neighbour was of the view that the occupants of the bungalow would have use of the surrounding garden land and this might interfere with her privacy. She was unmoved by the argument that the owners of the existing property could use the land themselves without a bungalow being built and this would have the same effect on her privacy but would not breach the restrictive covenant.

The couple applied to the Lands Tribunal to have the covenant lifted. It refused permission and so they appealed to the Court of Appeal.

The Court upheld the decision of the Lands Tribunal. In its view, the value of the covenant to the neighbour was that her privacy was protected not only by prevention of the building, but also because of the potential use of the surrounding land as a garden. It was not in point that the benefit to her derived from the covenant restricting construction of the building rather than restriction of use of the land in question as a garden.

Says Brian Regler, “In this case, the covenant prohibited what was, in effect, a lawful use of the land as a garden. The prohibition was for occupiers of the proposed bungalow, not the couple who owned the land. Their use was not restricted, but the protection operated by prohibiting the construction of the bungalow.”

Back to the top

Good News for Victim of Hit and Run Driver

Uninsured drivers are a menace, but worse still are drivers who are involved in an accident but cannot be traced.

In 1946, the Motor Insurance Bureau (MIB) was established as a private company limited by guarantee for the purpose of entering into agreements with the Government to compensate the victims of negligent uninsured and untraced motorists. Every insurer underwriting compulsory motor insurance is obliged, by virtue of the Road Traffic Act 1988, to be a member of the MIB and to contribute to its funding.

In a recent case, a claim was made by a man who was struck by an unidentified hit and run driver in 1991, when he was three years old. In 1999, his parents became aware that a claim for compensation could be made to the MIB and submitted one on his behalf. The claim was rejected because under the Untraced Drivers’ Agreement (UDA) in operation at that time, the time limit for claims to the MIB for injuries caused by untraced drivers was three years.

When he was 16 years of age, the victim’s parents began proceedings against the MIB, claiming that European law required that the limitations applying to the MIB fund should be no less favourable than those applying generally and, in a ‘normal’ action, the time limit is suspended during the minority of a claimant – in other words, it starts to run only on the 18th birthday of the claimant.

The judge ruled for the claimant and the MIB appealed to the Court of Appeal, which referred the issue to the European Court of Justice (ECJ).

The ECJ considered the position and ruled that the protection given had to be equivalent to that available where the driver is uninsured. The claim would have been admissible at any time prior to the victim’s 21st birthday had the driver been insured or uninsured but identified. The UDA clearly gave less favourable treatment to people injured by a driver who could not be traced.

Accordingly, the claimant was able to proceed with his claim to the MIB.

Many people are unaware of the existence of the MIB fund. For further information, see http://www.mib.org.uk/Default.htm.

Back to the top

Is a Beneficial Loan a Detriment?

“Where informal (or no) arrangements are made regarding property ownership or financing, disagreements are often the result,” says Brian Regler.

Recently, a dispute about ownership of a property arose between a brother and sister. The brother had lived with their mother until her death and at that point had succeeded to the secure tenancy of her council house. Using the ‘right to buy’ legislation, he applied to buy the house. To finance this, he obtained a mortgage and borrowed £5,000 from his sister on the basis that she would be entitled to the repayment of her loan and half the sales proceeds (net of her loan and the mortgage) if the property were sold. She was also paid 5 per cent interest on the loan – a rate below market rates at the time.

The two later fell out and the sister agreed that if her loan were repaid immediately, she would have no further claim regarding the property. This was done. Several years later, the property was sold for £385,000 and the sister claimed she was entitled to half of the net proceeds. Her argument was that the loan constituted a ‘detriment’ to her and there was therefore a ‘constructive trust’ in her favour.

The first question was whether she had suffered a detriment. The court was able to agree that the advancing of a loan on beneficial terms was sufficient to constitute a detriment. Furthermore, under the original agreement, the sister had no control over when her loan was to be repaid. Her argument that the original agreement created a constructive trust in her favour was therefore accepted. That the detriment was not substantial was not in point.

However, the court ruled that her express agreement regarding the repayment of the loan meant that her claim to have an interest in the property was extinguished.

“The main lesson to be learned from this case,” says Brian Regler, “is that doing things on a casual basis is fraught with danger. Had the appropriate documentation been executed at the time of the transactions, there would have been nothing to argue about. If you are entering into an agreement with regard to an asset as valuable as property, it makes sense to get this properly documented at the time it is made.”

Back to the top

New Road Safety Laws Come into Force

Motorists who kill while avoidably distracted at the wheel will face prison under new road safety laws which came into force on 18 August 2008.

Section 20 of the Road Safety Act 2006 (RSA) creates a new offence of causing death by careless or inconsiderate driving, which covers distractions that can lead to accidents and carries a maximum penalty of five years’ imprisonment. A distraction can be anything which takes a driver’s attention away from the road and which a court rules to have been an avoidable distraction. The definition includes smoking whilst driving, using a mobile phone (whether hands-free or not), listening to music, talking to fellow passengers, drinking, eating, using technological aids and personal grooming.

Section 21 of the RSA creates a new offence of causing death by driving whilst unlicensed, disqualified or uninsured and this carries a maximum penalty of two years’ imprisonment.

Prior to the changes in the law, the maximum sentence for those convicted of causing death by careless, uninsured or unlicensed driving was a maximum £5,000 fine and penalty points on the driver’s licence.

Employers with employees who drive on company business are strongly advised to make employees aware of the changes in the law and to update their road safety policies to include a warning not to contravene the latest Highway Code.

The Highway Code can be viewed online at http://www.direct.gov.uk/en/TravelAndTransport/Highwaycode/index.htm.

Back to the top

Non-Disclosure Did Not Affect Settlement

In divorce proceedings, it is usual to make a full disclosure of assets and future financial prospects when agreeing the financial settlement. Failing to do so can cause a legal battle, as a recent case illustrates.

It involved a couple who had met at university and married. Both worked for a time, but the wife stopped working when the couple had children, who were aged 10 and 8 at the time of the divorce.

The husband was a stockbroker. Because of the nature of his earnings and the fact that the majority of the couple’s assets were tied up in the family home, a clean break was not achievable. Neither the husband nor the wife had any material assets when they were married, so the question of whether assets were ‘matrimonial’ or ‘non-matrimonial’ assets did not arise.

The court therefore ordered the ex-husband to pay his ex-wife £75,000 per year, plus the children’s school fees and extras, and gave the family home to her with the provision that if it were sold, 24 per cent of the gross sale proceeds would belong to her ex-husband.

Normally, that would have been the end of the story. In this case, however, within a fortnight of the financial provision order being made, the man left his employment for a new job which left him better off.

As a result of this, his ex-wife sought to have the order set aside, her main argument being that he had not disclosed that he was in negotiation for a new position that would make him materially better off. Had she known of it, she would not have agreed to the financial settlement.

The question for the court, therefore, was whether or not the ex-husband was under an obligation to disclose his negotiations. He admitted that he had not, but held that he was under no obligation to do so. He argued that the new job was not a ‘done deal’ and that the negotiations did not affect what he thought was a fair offer to his ex-wife. Furthermore, he considered that disclosure might have been harmful had the job offer not materialised.

In addition, he had originally offered her a percentage of his income (34 per cent up to £350,000 and 10 per cent of any excess). It was she who demanded a fixed sum.

The court ruled that the ex-husband had breached his duty to disclose material information. The question which then needed to be considered was whether the absence of full and frank disclosure led the court to make an order substantially different from that which it would otherwise have made. On this issue, the court ruled that the job offer had not affected the proposed financial settlement – there were still uncertainties in the contract. In addition, had the ex-husband stayed in his previous job, his earnings would also have risen and the difference between what he would have earned in his old job and his earnings in the new job were not substantial enough to set aside the original financial arrangements.

Says Karen Eves, “To fail to make a full disclosure in such circumstances is a risky strategy, but in this case it did not backfire. Achieving a just result normally depends on sensible negotiation based on sound legal advice and experience. We can advise you on all family law matters.”

Back to the top

Right of Way - Law, Not Intention, Determines Outcome

Where an easement (the ability to use someone else’s land in some way) is granted, it is usual for its terms to state any restrictions which may apply to its use.

Recently, a case came to court where a property was conveyed with a right of way over a pathway over the adjacent property such that access could be obtained to the road from the rear of the property.

The right of way stated that the occupiers of the property had the right of use of the pathway at all times for the purpose of access to or egress from the property for ‘all reasonable use necessary for the proper enjoyment of the property’. Unfortunately for their neighbour, this involved access early in the morning and late at night by visitors. The neighbours took the view that this use was more than was needed ‘for the proper enjoyment of the property’ and sought a ruling to restrict the use of the path.

The judge agreed, ruling that the original purpose of the right of way was to allow access to the rear of the property when access to the front was impracticable. In reaching this decision, he considered two documents which purported to come from the local council (which had sold both properties under the ‘right to buy’ legislation). These stated that the right of way was restricted in various ways. One of these documents, however, was written after the properties had been sold.

On appeal to the Court of Appeal, the decision was reversed. The understanding of the parties at the time of the grant of the right of way was not in point, what mattered was the law which applied. The legal documentation clearly stated that the grant of the right of way applied at all times for the reasonable use of the property. If there had been the intention to limit the right, it should have been contained in the deeds.

“There is no substitute for including any necessary clauses in the original documentation,” says Brian Regler. “This involves the vendor and the purchaser thinking through the possible issues and ensuring that any necessary rights or limitations of rights are dealt with at the time.”

Back to the top

Uncertainty Increases Over Offers to Settle Claims

You might think that ‘more advantageous than’ means the same as ‘better’, but this change in wording has led the Court of Appeal to conclude that offers to settle claims in litigation should be interpreted in a new way.

Under the ‘old regime’, an offer to settle a claim (called a Part 36 offer in legal parlance) could be made by a defendant by the payment into court of a sum of money. If the case then went to court and the claimant ‘failed to better’ the payment, the court normally ordered the claimant to pay any costs incurred by the defendant after the latest date on which the payment could be accepted by the claimant. In 2007, the wording of the rules was changed slightly. They now state that costs will be payable if the claimant ‘fails to obtain a judgment more advantageous than a defendant’s Part 36 offer’. There may seem to be no difference, but the Court of Appeal thinks otherwise. In its view, a broader approach must be taken.

In the case in point, a woman who sued BAA plc was awarded damages by the court that were £51 more than the Part 36 offer. She therefore sought payment of all of her legal costs by BAA. BAA disputed her claim, arguing that she had failed to obtain a judgment more advantageous than its offer. The judge sitting in the Central London County Court agreed with BAA, awarding it costs from the time that the period for acceptance of the offer had expired.

The woman appealed and her appeal was rejected by the Court of Appeal, Ward LJ stating that, “the judge was thus entitled to look at the case broadly and to find on the facts: (i) that the extra £51 gained was more than offset by the irrecoverable costs incurred by the claimant in continuing to contest the case for as long as she did; and (ii) that it was appropriate to make no order for costs for the prior period in light of the manner in which the litigation had been conducted.”

Says John Lennon, “As a result of this decision, although the claimant ‘won’, she was left to cover part of BAA’s costs. In practical terms the effect of this judgment may well be that defendants make lower offers in settlement of claims than they would have done heretofore. Furthermore, it creates an area of uncertainty in the law – no longer can a defendant who ‘beats the offer’ be guaranteed more than a Pyrrhic victory and the question of ‘where the line lies’ is likely to take years to make clear.”

If you are making or defending a claim, we can advise you to help achieve a speedy and advantageous result.

Back to the top

When a Home is Not a Dwelling

To most people, ‘dwelling’ is just a fancy term for ‘home’ or possibly ‘house’. However, the difference in the meaning of words is a common source of legal dispute, as was illustrated in a recent case that also has significance for tenants of holiday park homes and similar properties and their landlords.

The case concerned bungalows at a holiday park in Cornwall. As is common in such cases, the planning permission under which they had been built prohibited permanent occupation of the bungalows, which were stipulated as being for holiday purposes only. The tenants also covenanted with the park owner landlord ‘not to use the…bungalow for any purpose other than that of a holiday bungalow’. It was recognised that this restriction was not adhered to by several of the tenants.

As is also normal, the tenants were required to contribute to the costs of maintaining the site etc. by payment of service charges. The dispute arose because some of the owners claimed that the service charges were excessive and relied on the Landlord and Tenant Act, which provides that only reasonable service charges can be recovered from tenants of ‘a dwelling’. Specifically, the Act defines a dwelling as ‘a building or part of a building intended to be occupied as a separate dwelling…’. The tenants applied to the Leasehold Valuation Tribunal (LVT) for a ruling on the fairness of the charges.

The LVT refused to hear their claim on the ground that the holiday bungalows were not dwellings since they could not be used as permanent residences. The tenants appealed.

The question that needed to be settled was whether a home can be a dwelling, for the purposes of the Act, if it is a place in which a person cannot permanently reside. Unfortunately for the tenants, the Lands Tribunal could not agree that the protection offered by the Landlord and Tenant Act was intended to apply to premises such as the bungalows in this case.

Back to the top

Wife Beats Home Possession Claim

With mortgage defaults rising, banks are increasingly seeking to repossess properties on which they have advanced mortgages. When proceedings are commenced, it is by no means unusual for a bank to find that the property is not occupied by the mortgagee, but by someone else – often another family member.

Under the law, an ‘undisclosed tenant’ (one who is there without the knowledge of the mortgagor) has no right to remain and cannot prevent the repossession, even by paying the mortgage. However, there are exceptions to this rule. If the occupier is the spouse or civil partner of the mortgagee, then the lender will have to negotiate with them. Another issue may arise if the person living in the property claims to have contributed to the mortgage and offers to continue to pay it. Unless the lender makes it clear than any payment is accepted as being made on behalf of the mortgagee, the occupier may acquire equitable rights over the property.

In a recent case, a woman who had contributed to the mortgage on a house owned by her husband’s cousin was faced with an application for possession, from UCB Home Loans, after her marriage broke up and significant arrears built up on the mortgage. She also faced an application for possession from her husband and his cousin. She claimed she had built up an equitable interest in the property because she had paid the mortgage. UCB agreed that they would not seek possession of the property if she paid the arrears and that they would treat any payments made as being made on behalf of her husband’s cousin.

When she fell into arrears again, UCB again sought possession and she sought to suspend the order. The court ruled that UCB was prevented (by a doctrine called estoppel) from not treating her as if she were the mortgagee and ruled that the possession proceedings should be held in abeyance pending the conclusion of the divorce proceedings, when the divorcing couple’s financial arrangements could be settled.

This case illustrates that the courts will seek to ensure that in circumstances similar to these, fairness will prevail. If you are faced with a claim for repossession of your property, taking professional advice promptly can mean the difference between retaining your home and losing it.

Back to the top

Boy Injured on Bouncy Castle to Receive Sizeable Settlement

A boy who suffered brain damage after he was kicked in the head while playing on a bouncy castle has been awarded compensation that could amount to £1 million, a ruling that will cause parents to stop and think.

Sam Harris, who was 11 years old at the time of the accident, had been playing on a bouncy castle set up in a field behind the home of Catherine and Timothy Perry. The Perrys had hired the bouncy castle for their triplets' birthday party. Sam, who was passing with his father, asked Catherine Perry if he could join in.

Whilst on the bouncy castle Sam was kicked in the head by a 15-year-old boy doing a somersault. Sam's skull was fractured and he suffered a very serious and traumatic brain injury. As a result, he now has severe behavioural problems and requires round the clock care.

In court the judge decided that the accident had been caused because the Perrys had not supervised properly the children playing on the bouncy castle. There should have been someone there to prevent the older boy from using it at the same time as the younger children and to ensure that dangerous play was prevented. The hire contract for the castle also stipulated that it should be under constant supervision whilst in use. At the time of the accident, however, Mrs Perry had her back turned away from the castle while attending to another child.

The judge dismissed the defence's claim that Sam's father should have provided better supervision.

The total compensation payable could be as much as £1 million.

The Perrys have been given permission to appeal against the decision although the judge rated their chances of succeeding as ‘poor’.

Back to the top

Buying a House and Consumer Protection

With the advent of Home Information Packs (HIPs), the appointment of an Ombudsman for Estate Agents (OEA), the laying down in statute of the duties of estate agents and the recent passing of the Consumers, Estate Agents and Redress Act 2007 (CEARA), a property purchaser might reasonably conclude that their interests are strongly protected under the law. This view is likely to be bolstered by an awareness of the existence of the National Association of Estate Agents’ (NAEA) own disciplinary and redress scheme. However, the assumption that a buyer’s interests are well protected is not as well founded as you might think.

The main function of the HIP is to collect information (searches, title details and so on) about the property and its energy efficiency. It is supplied by a provider independent of the owner of the property. The rights of the property purchaser are primarily protected by making the HIP provider carry insurance to meet claims for losses suffered by buyers as a result of incorrect HIP content.

The estate agent’s main duty is to the vendor of the property, so the regulations under which they operate relate mainly to their relationship with the vendor. They are bound not to discriminate against purchasers who do not wish to buy other services they offer and to declare a personal interest to any buyer. It is important to note that even when the sales particulars of a property are inaccurate, the right of redress may be limited. Recently, the court ruled that an agent was not liable for providing false information to the effect that a property included a substantial area of land which was not in fact registered in the vendor’s name. The estate agent had simply accepted without enquiry that the area of land was part of the property and included it in the sale particulars. The court considered that any purchaser would have made sure that a proper search of the title was done and in any event the offer for sale was ‘subject to contract’ – placing the onus on the purchaser to make sure their enquiries were carried out carefully!

The Ombudsman service deals with claims against estate agents, but its powers are limited and the maximum award that can be made is £25,000. In practice, most awards are a small fraction of that amount. Members of the NAEA must belong to the OEA redress scheme.

Whilst the CEARA requires estate agents to belong to an approved redress scheme, the tendering process for operation of the scheme has not yet been completed and it is not expected to be fully implemented until October 2008. The relevant section of the Act itself mainly relates to record keeping and inspection of records issues and the grounds under which estate agents can be warned or banned. There is no specific mechanism for compensating consumers.

“The best protection for a buyer is to use a solicitor who will take care to make sure that everything is as it should be. A person’s house is normally the most valuable asset they will ever own and, as such, it makes sense to ensure that the purchase is carried out in a professional way,” says Brian Regler.

We can assist in all property matters and disputes arising from property and other transactions.

Back to the top

Debt Collectors – Better Protection for Consumers

Rogue debt collectors face tough new rules in a Government bid to improve consumer protection in this contentious area. This is because of changes to the Consumer Credit Act 2006 (CCA) which have recently come into effect.

Chief among the new powers given to the Office of Fair Trading (OFT) is the ability to fine debt collectors up to £50,000 for infractions and to impose limitations on the licences under which they operate.

Another major change is the removal of the limit of £25,000 above which the CCA did not previously apply. This means that even large loans (including those currently in existence) are now governed by its provisions.

The OFT has also imposed more stringent criteria for the granting of a licence to operate as a debt collector.

In October, further changes to the CCA will require lenders to provide borrowers with additional information, including annual statements.

Back to the top

Easements and Covenants – Changes to the Law Proposed

The law relating to covenants, easements and ‘profits à prendre’ over land is a relatively complex area given that such rights are common – the Land Registry has suggested that nearly two thirds of properties have some sort of easement over them and nearly 80 per cent have a covenant of some sort.

An easement is a right enjoyed by one landowner over the land of another. A positive easement (such as a right of way) is a right to go onto or make use of something in or on a neighbour's land. A negative easement is essentially a right to receive something (such as light or support) from the land of another without obstruction or interference.

Covenants are promises made with regard to land (i.e. not to allow it to be used for stated purposes).

Profits à prendre allow the holder the right to remove products of natural growth from another's land. Shooting and fishing rights come under this category.

The Law Commission has stepped in to reform the current system by proposing a simpler system for dealing with covenants and easements. It has issued a consultation paper which aims to remove anomalies and complications in the law. However, the proposed changes are limited to private law rights and will not deal with rights available to the public at large, such as rights of way, or with covenants between landlords and their tenants.

Back to the top

Estate Agency Fees Require More than Introduction

Estate agents must do more for their money than simply show a potential purchaser around a property, following a recent decision of the Court of Appeal.

When a Mrs Bicknell signed a standard sole-agency agreement with Foxtons Ltd. to sell her £1.4 million home, she agreed, among other things, to pay the agency 2.5 per cent of the sale price if contracts were exchanged ‘with a purchaser introduced by us [Foxtons]’.

In June 2005, Foxtons showed a Mr and Mrs Low around the house three times but, after initially showing interest in the property, the couple took no further action. In July, Mrs Bicknell ended the sole agency arrangement and agreed a multiple agency deal with Foxtons at 3 per cent commission.

She then appointed a second firm, Hamptons International, at a 2.25 per cent commission rate. In October, Hamptons spoke to the Lows and persuaded them to view the house again, eventually securing an offer of £1.15 million for the property. The offer was accepted and the purchase was completed in January 2006.

Hamptons duly submitted an invoice for their commission and received payment. When Foxtons learned of the sale, however, they also sought to be paid a commission. When payment was refused, they commenced court proceedings. The lower court decided in favour of Foxtons on the basis that the Lows were a purchaser introduced by Foxtons and this alone was sufficient to secure their right to a commission.

On appeal, the question of the meaning of ‘a purchaser introduced by us’ was again raised. The Court of Appeal held that in order to charge commission, an agent must be the effective cause of the sale. Simply introducing a property to a person who eventually becomes the purchaser is not sufficient.

Had the reverse been true, Mrs Bicknell would have been in the unusual position of having to pay two agencies a commission for the same sale. Mrs Bicknell was not required to pay Foxtons for their initial, unsuccessful, introduction.

Back to the top

HIPs – Questions Answered

Part-exchanged Properties

With the property market tightening rapidly, a builder is more likely than ever to offer to take the existing property of a buyer in part-exchange for the purchase of a new one. Often, the builder will wish the house being part-exchanged to be put (or remain) on the market between the exchange of contracts and completion of the sale, in the hope that the builder will have the part-exchanged property ‘on its books’ for as short a time as possible.

When the property being part-exchanged is already on the market, a Home Information Pack (HIP) will have been prepared. If the HIP received by the builder is ‘in date’ (i.e. not more than 12 months have passed since the date the property was first marketed), then parts of it can be ‘recycled’.

In all cases a new sale statement and index would be required. However, the energy performance certificates and Land Registry documents can be reused. Searches cannot be reused in normal circumstances, as the liability for the accuracy of the search cannot be ‘passed on’. However, the builder can market the property using the previous documents of title until the change in ownership has been recorded by the Land Registry.

Shared Ownership Properties

If a shared ownership property is being purchased by a sitting tenant, a HIP is not necessary if no marketing of the property has taken place. However, if such a property is being sold on the open market, then a HIP is necessary.

Back to the top

In Case They Don’t Live Happily Ever After…

If you have family wealth that you wish to protect, the joy at the prospect of one of your children getting married may be tempered somewhat by a touch of trepidation in case the marriage doesn’t last, particularly if a large settlement of assets is to be made on the happy couple.

In such circumstances, the use of a pre-nuptial agreement (‘pre-nup’) is likely to make a great deal of sense. Legally speaking, such agreements are still rather a grey area. However, the judge in a leading case on the subject has most helpfully suggested a number of criteria which would assist the courts in deciding whether or not a pre-nup should be regarded as enforceable.

The most important of these from the perspective of the parties to a pre-nup are:

• does the spouse being asked to sign the pre-nup understand it?
• has he or she been properly advised as to its terms?
• was pressure exerted by one spouse to make the other sign?
• was there full disclosure of the relevant assets?
• was pressure exerted by anyone else to make them sign?
• was the agreement signed willingly?
• did one spouse exploit a dominant position?
• was the agreement entered into in the knowledge that there would be a child?
• has any unforeseen circumstance arisen which would make enforcing the pre-nup unjust?
• does the order preclude the payment of any periodical payment for maintenance of a spouse and if so, would it be unjust to hold the parties to that agreement?
• are there grounds for believing that upholding the agreement would be unjust?

For a pre-nup to achieve the desired object, it must be properly drafted and put into place in the correct circumstances. In particular, both parties to it should have the benefit of independent legal advice.

If you are concerned that a relationship might not have a happy ending, we can assist you to help protect your family’s assets from the depredations of an ex-spouse. Contact Alison Whistler.

Back to the top

Judges Slam Council Over Adoption

Local councils that achieve high levels of adoption are rewarded by increased funding and this is widely thought to affect their adoption policies.

The Court of Appeal recently criticised East Sussex County Council over its approach when it proceeded with the adoption of a baby girl against the wishes of the girl’s father.

The child was born after a casual affair and her father did not even know he had a child until the Council contacted him to tell him that care proceedings had been commenced, which was some time after the baby’s mother had abandoned her in a special care unit.

The father was initially unable to take part in the proceedings since he was in hospital after suffering a heart attack. When he had recovered sufficiently, he went to see his solicitors, who attempted to stop the adoption proceedings. The Council ignored his intervention and placed the baby with the prospective adoptive parents before his case could be brought to court.

After an earlier reversal in court, the father took his case to the Court of Appeal on the basis that the Council’s action was a breach of his human right to have a family life. The Court considered that the common belief that councils have a ‘secret agenda’ to place as many children as possible for adoption fuelled ‘public distrust in the good faith of public authority’. However, the Court refused the appeal on the ground that the 2002 Adoption and Children Act is compatible with human rights law. The Council had complied with the Act so the father’s action failed.

The Court took the unusual step of ordering that copies of the judgment be sent to all family judges and all adoption agencies, stressing that the wishes of both parents had to be taken into account in adoption proceedings. The Court advised that it wishes to ensure that the conduct of the Council in this case is not repeated elsewhere.

“Councils are often criticised for the way in which they handle child care cases,” says Karen Eves. “If a council’s decision is to be contested, it is important to act as quickly as possible.”

Back to the top

No Trust Created Where Intentions Not Clear

When a couple’s conduct over a period of time is consistent with co-ownership of a property, it might be thought that the property would come to belong to them both, no matter what the legal form of ownership may be. Such assumptions are often tested in divorce cases when a property is owned by one or other of the divorcing couple.

Recently, a case came before the Court of Appeal dealing with just such an issue. It involved a dispute over the financial settlement decided by the lower court.

The divorced couple lived in the family farm, which was originally owned by the mother of the husband. Latterly, the husband and his mother had created a partnership to run the farm and the farmhouse was then owned by the two of them as joint tenants.

Early in the couple’s relationship, the wife had helped out with the farming business and took part in business decisions regarding the farm. She received no payment for this. She also bought additional land, which added value to the property, and subsequently operated a successful riding school on the farm. This was initially financed by an interest-free loan from a company owned by her husband. She later incorporated her business.

Following the break-up of their marriage, the wife moved out of the farmhouse and claimed a share in the farm in the divorce settlement. Neither her ex-husband nor his mother had ever raised the question of the wife’s ownership specifically and nor had she. However, she claimed that her right to a share arose because her ex-husband and his mother had conducted themselves in a manner which supported the view that there was a common intention to hold the farm jointly – in legal parlance that a ‘constructive trust’ had arisen in her favour. The judge awarded her a quarter share in the value of the farm. Her ex-husband and mother-in-law appealed.

In the Court of Appeal, the judge took a different view, holding that the conduct of the parties did not necessarily prove the fact that the ex-wife was intended to have a beneficial interest in the farm. In the absence of any legal agreement regarding the ex-wife’s ownership of the farm, he could not see how encouragement of the horse-riding business or her minor role in the farming business could be interpreted as constituting sufficient evidence that a constructive trust had been created. In any event, her claim would be counterbalanced by the support she was given when setting up her business.

Says Michael Cutler, “In truth, claims of this nature can be a bit of a lottery and much will depend on the availability of contemporary evidence of the intentions of the parties involved. The simplest way to avoid an appearance in court is to make sure that the intentions of the parties are properly evidenced in the first instance so that, in the event of a later dispute, the position can be readily resolved. We can assist you in making sure that your assets are legally held as you wish them to be and can also advise you on planning to minimise capital taxes.”

Back to the top

No You Cock-a-Doodle Don’t

Noise nuisance is regrettably an increasing feature of modern life, but one normally expects problems with noise to be associated with city living, not the countryside. Recently, however, a man from Shepton Mallet in Somerset was given an Anti-Social Behaviour Order (ASBO) and ordered to pay fines and costs totalling £7,500 after he defied a noise abatement order. The cause? – his flock of 80 chickens, which was the cause of a sustained series of complaints about noise from his neighbours.

On a test visit in 2006, investigations carried out by an independent environmental health officer, sent by South Somerset Council, recorded 800 ‘crowings’ between 5 am and 7 am. Neighbours also complained of the smell caused by the birds. An order was made requiring the man to eliminate the nuisance to his neighbours, but he failed to comply with it.

The magistrates were unimpressed with the man’s lack of cooperation and issued the ASBO. They also banned him from replacing the chickens with other animals.

Problem neighbours can be the blight of anyone’s life and the ASBO legislation does at least provide one possible method of reducing or eliminating problems of anti-social behaviour. If you have problems with noisy or anti-social neighbours, or problems arising from late-night noise due to pubs or clubs, we can advise you on the best course of action to take.

Back to the top

Rights of Way – Landowners Take Note

Landowners who wish to prevent their land becoming part of the public highway should take note of two recent decisions in the House of Lords.

The cases dealt with what constitutes a landowner’s ‘sufficient intention’ not to allow their land to be dedicated as a public highway.

Land can become a public highway by being added as such to the Definitive Map maintained by the county council, provided an application is made. The Definitive Map shows publicly accessible bridle ways, footpaths and byways and once entered onto the Map, the status of the highway is conclusively proved.

For property owners who do not wish their land to become open to the public, the correct strategy is therefore one of prevention. Until recently, all that was necessary to prevent an application for the Definitive Map to be altered was for the landowner to write to the council opposing it or to demonstrate some prior right over the land in question (i.e. that it is let to someone else). However, the Lords’ decisions mean that this is no longer sufficient.

It is now recommended that any landowners who wish to oppose an application, or to prevent one being made, consider taking further measures, such as erecting appropriate signs advising that the land in question is not a public right of way and obstructing paths. Trespassers should be advised that the land concerned is not open to the public.

It is recommended that evidence should be retained of all measures taken.

If land is used as a public right of way for 20 years without steps being taken by the landowner to preserve their right to exclusive use of the land, and without demonstrable intent to oppose dedication of the land as a public highway, the right to prevent the land concerned being dedicated as such will be lost.

Says Mike Stone, “Landowners are also advised to review periodically the status of any measures they have put in place (e.g. signs and obstructions) and to repair or replace them as necessary. This will enable them to demonstrate their continuing intention to retain their exclusive rights over the land, should the question arise.”

Back to the top

Selling Your Property at Auction

In recent years, increased mobility and growing rates of home ownership have meant that ever-larger numbers of people nowadays inherit properties from relatives who lived many miles away. Similarly, many buy-to-let properties have been purchased in areas with a large student population, miles away from where their owners live. In such cases, when the time comes to sell the property, it is often difficult for the usual process of showing it to prospective purchasers to be carried out by the owner.

In such circumstances, it is quite common for a property to be sold at auction. If you are considering selling a property by this method, here are some steps you can take to help make sure your sale goes as smoothly as possible.

Well before the auction is planned, make sure you put together the necessary documentation, such as the Home Information Pack.

Make a list of the information a prospective buyer will find useful, such as the age of the central heating system, wiring etc. and include any guarantees.

Set your reserve price, which is the lowest price you will accept for the property. If the reserve is not met at auction, the property will not be sold. The reserve price should therefore be reasonable as if the property does not sell, there will still be costs to meet for the marketing of the property and the related legal work.

You should also decide when you want the completion date to be. The contract to buy and sell is created when the auctioneer's hammer falls and the deposit is payable immediately, with the completion normally a few weeks later.

Work out your plan B. In the present market, property is becoming more difficult to sell, so do not assume that the property will inevitably sell at auction. It may not. Make sure, therefore, that you are prepared for the possibility that after the auction, the property will still be yours. Vacant properties do qualify for rate relief, but other costs (such as insurance) may rise.

We can assist you with all legal matters relating to buying and selling property. Contact Brian Regler.

Back to the top

Settlement Must Be Fair

When the financial arrangements are being made on divorce, the court must ask itself whether these are fair and do not discriminate against one party bearing in mind all the circumstances.

Recently, a woman appealed to the Court of Appeal regarding the orders for ancillary relief (as they are known to lawyers) made for her benefit following her separation from her husband. The couple had married in 1992 and had a child that year. They separated twelve years later. The wife had inherited a substantial sum which the couple lived off without working for the first five years of their marriage. In 1997 they used her capital to set up a car wash business, which the husband ran, paying a below-market rent to his wife.

When they separated, the couple’s assets were valued at a little under £1.4 million, which included the car wash business. The judge concluded that the yardstick of equality was applicable to the division of the assets and ordered the transfer of the building housing the car wash to the husband.

The wife had argued that her husband’s misconduct had been so grievous as to justify departing from the normal 50:50 split. Indeed, she argued that his application for ancillary relief should be rejected altogether. This argument was rejected on the facts in the lower court, as was her contention that since she had introduced all the assets to the marriage, they did not constitute ‘matrimonial assets’ for the purposes of making an equitable division. She appealed to the Court of Appeal.

In the Court of Appeal, it was held that the assumption of equality of division of assets could only be departed from if there were a good reason for so doing. In the present instance, the assets had been disproportionately brought into the marriage by the wife. Whilst it made sense that the ex-husband should be able to continue in business, this did not mean that the property he let should be transferred to him.

The Court therefore concluded that the ex-husband should be allowed to continue to occupy the premises, paying rent at half the present market rate, and that on the sale of the premises, the money received should be divided equally. The judge declined to transfer the car wash premises into joint ownership because to do so would have adverse tax consequences.

In practical terms, the decision split the family assets so that approximately two thirds remained with the wife.

“The judge made the point that each case must be dealt with on its own facts and that this case did not set a precedent,” says Alison Whistler. “It is instructive to note that as is normal, arguments relating to the conduct of the husband were not considered relevant.”

Contact us for advice on all family law issues.

Back to the top

Shared Intentions Determine Ownership

The danger of cohabiting without making an express agreement as to how the title to property is to be held has again been underlined by a recent case.

It concerned a woman who had lived with a man for several years in a house which was registered in their joint names and financed by a mortgage. However, there was no document recording the couple’s respective shares in the ownership of the property. The man had paid the deposit on the house from his own funds and also paid the mortgage repayments. He also paid other costs relating to the property, such as rates and utility bills. The couple had children and the woman, who worked, spent the majority of her income on them and the maintenance of the family. The couple drew up wills leaving their estates to one another.

When their relationship broke down, the man argued that whilst he intended that his partner should inherit the property on his death, he had not intended it to be owned in equal shares. In court the judge decided that ownership of the house should be apportioned by the respective contributions of each party to its purchase. Since the woman had made no contribution, her share was nil. She appealed to the Court of Appeal, asserting that a beneficial joint tenancy had been created with her rightful share being 50 per cent. The man argued that his intention had been only that she would inherit the property if he predeceased her and they were still a couple on his death.

The Court of Appeal found that the judge in the lower court had erred in considering the couple’s respective contributions to the cost of the property as representing their intentions with regard to its ownership. The fact that the property was jointly owned justified the assumption that both were beneficial owners. The ownership split had to be determined by the intentions of each party and the important issue was that the relevant intention was the intention understood by the other party. Furthermore, the respective contributions of each party could not be conclusive. The man’s intentions were not made clear. His argument that his partner’s share should be a lesser sum did not rest on logic and he could not demonstrate that the couple had shared the common intention that her share should be other than a half of the total.

In this case, had there been documentation created when the property was purchased to show how it should be owned, there would have been little room for dispute. The fact that there was no evidence of any such agreement made it possible for the case to go all the way to the Court of Appeal.

If you are buying a property with someone else, having the agreed ownership documented when it is purchased is inexpensive and easy to do. Contact Brian Regler for advice.

Back to the top

£2.5 Million Settlement in Hotel Illness Case

A group of British holidaymakers has won more than £2.5 million in compensation for illness they suffered while staying at a hotel in Spain.

Many holidaymakers contracted the ‘norovirus’ infection while staying at the Beach Club Hotel in Torremolinos between 2000 and 2002. Norovirus is the name given to a group of viruses, the symptoms of which are nausea, vomiting, diarrhoea and stomach cramps. The virus is often contracted from eating or drinking contaminated substances.

The effects of the virus normally last for a few days, but some of the claimants are still suffering from its after-effects years later.

The holidaymakers brought the group action against tour operators Thomson and Thomas Cook, who for a long time denied liability for the claim, even though over a prolonged period a number of people had become ill while staying at the hotel. However, medical evidence was produced as well as documents showing that the hotel management, along with others, had made serious mistakes with regard to hygiene.

Shortly before the case was due to be heard in the High Court, the claim was settled. The tour operators and the hotel agreed to pay more than £2.5 million in compensation, thought to be the largest settlement of its type. The money will be divided between nearly 1,000 claimants on the basis of a number of factors including the severity of their illnesses.

If you are struck down with illness on a package holiday, you may have a right to claim against the tour operator. It is important to remember that such illnesses are common and to obtain compensation you need to prove that the tour operator was at fault and the resort failed to exercise reasonable care to prevent infection. In order for a claim to be successful, there are a number of steps you should take:

• Get evidence. Obtaining pictures or video footage and supporting evidence from other holidaymakers is important. Make notes of the standard of cleanliness, food hygiene and so on. Ask to see and copy (or make notes on) the complaints file at the resort;
• Share names and addresses with anyone else at the same resort who is also ill;
• Make a diary of where you went and where you ate. If you have eaten food not provided by the tour operator, be prepared to show that other people eating at the same place did not become ill;
• Inform the holiday representative of your illness as soon as possible and make notes of your conversations with them and anyone else working for the holiday company;
• Be prepared to prove that you were ill. Obtain documentary evidence of your illness from the doctor or hospital. See your doctor as soon as possible once you get home if symptoms persist; and
• Record your symptoms in detail for as long as they persist and their effect on your everyday life.

It may be difficult to obtain a great deal of evidence – especially when you are ill – but in order to be successful, you will need to demonstrate that the tour operator (i.e. the resort they have contracted themselves to) is the source of the sickness and that they are responsible for it because of a failure to exercise reasonable care to prevent the infection or contamination.

If you have had your holiday ruined by illness, contact John Lennon for advice on how to proceed.

Back to the top

E-Conveyancing on the Way

Plans to update the conveyancing process in England and Wales have been ongoing since 1998, when preliminary proposals were set out in a report, compiled by the Law Commission and the Land Registry, entitled Land Registration for the Twent-First Century. Consultation on how best to go about re-engineering the system has been extensive. The aim is to develop an electronic system of conveyancing that makes buying and selling easier for all those involved in the process.

The Land Registry’s e-conveyancing project, developed by IBM, is expected to go live some time this summer following the introduction of a public key infrastructure (PKI) system that uses cryptography to guarantee the authenticity of property transaction documents. The system is designed to allow authorised users to exchange information quickly, securely and reliably with each other and with the Land Registry. Documents will be encrypted and signed with a digital certificate. Documents will only be able to be produced or read by those in possession of a cryptographic token, username and password. Once up and running, the system should allow property and mortgage registrations to be completed instantly, funds to be transferred immediately, securely and reliably and it will enable accurate and up-to-date information on the progress of all linked conveyancing transactions to be accessed online.

For further information on the e-conveyancing system, see http://www.landregistry.gov.uk/e-conveyancing/.

Back to the top

Government Abandons Plans to Protect Cohabitees

The Government has announced that it does not, for the time being at any rate, intend to proceed with reforms to the law that would have given cohabiting partners similar rights to married couples or civil partners on the breakdown of their relationship.

This unexpected announcement was made by Justice Minister Bridget Prentice and is all the more surprising given the inconsistency of rulings made by the courts in this problematic area.

The Law Commission had spent two years working on proposals to give protection to couples who live together. If introduced, these would have set out the respective rights of cohabitees as regards the financial arrangements on the termination of a relationship.

The number of people who are living together in a relationship but who are neither married nor civil partners continues to rise. Many of these people are probably completely unaware that they have few rights in the event of a break-up of their relationship and that such rights as they do have centre around any children of the relationship.

“The problem stems from the fact that, contrary to popular belief, in law there is no such thing as a ‘common law spouse’,” says Alison Whistler. “Couples who live together do not acquire legal rights and there are no set rules for how their assets should be divided if they split up. With over 2.5 million people currently living together informally, the courts are seeing a flood of disputes about who owns what when such relationships end.”

One common problem is where partners have lived together for a long time but the property they share continues to be held in the name of only one of the couple. If the couple then split up, this may give rise to a claim that the property should belong to both parties. The issues involved are often complex and such disputes can be very expensive to resolve in court. In some cases, people who have made a very substantial contribution to the financing and improvement of a shared home have been left with little or nothing for their efforts.

The review of the law in this area was intended to create more certainty in such cases, but the Government has chosen instead to wait to see what are the effects of planned reforms to the law in Scotland before any changes are made to the law in England and Wales.

“Meanwhile, the position of cohabitees is best protected by having a formal written agreement, which should be made with the benefit of independent legal advice on both sides,” says Alison Whistler. “This is particularly important where the assets involved are substantial, so that in the event that the relationship founders, a drawn out and acrimonious dispute can be avoided.”

Back to the top

Intention Not Enough Rules Court

When promises are made but not kept, the law often provides no redress for the disappointed person, as a recent case involving a couple who looked after a friend demonstrates.

The couple looked after their friend when he became unable to care for himself, and they helped him deal with his affairs. He offered them the use of two properties he owned, which they accepted. Over the ensuing years, they decorated and maintained the properties and even carried out improvements to one of them. The man told the couple that he intended to leave the properties to them when he died and also made other people aware that this was his intention. He signed a document to that effect, but it was not a valid will and he died legally intestate. At the point at which the man died, the properties were worth £280,000.

The couple applied for the title to the properties to be transferred to them. When their request was refused, they went to court claiming that the man’s promise had created a ‘constructive trust’ for them and that they were entitled to the properties because they had acted to their own detriment on account of the man’s promise. Where a person acts to their own detriment on the basis of a promise made by another person, it may be possible to mount a successful claim.

However, the court rejected the couple’s claim. There was, in the mind of the judge, an insufficient link between the promise and the couple’s detriment to mean they should benefit, except by way of compensation for their expenditure and a small amount for their disappointment. Accordingly, an award of £20,000 was made. The couple appealed, claiming that there was in effect a bargain between them and the man which the court should uphold.

The Court of Appeal concluded that the man’s offer of property for use was not accompanied by a requirement that the couple carry out the acts for which they claimed compensation, so there was no ‘bargain’. Nor was there any ground for the assumption that receipt of properties worth £280,000 was in proportion to the detriment (approximately £20,000) that the couple had suffered. The claim was therefore rejected.

Says Michael Cutler, “The couple were no doubt disappointed, but relying on stated intention in such cases is a very risky strategy. The sensible thing to do is to make sure that the correct paperwork is put in place to give effect to the owner’s intention. Creating the documentation needed to transfer property or writing a will is both quick and inexpensive.”

Back to the top

Lack of Clarity Causes Title Disputes

When a couple’s intention is that a property should be owned in a way which is not the same as the legal form of ownership (i.e. where the intention is that they both have an equitable interest in their home, the title to which is in one of their names only), it is always sensible to make sure that the appropriate documentation is put in place to reflect this position – if only to avoid the potential problem of unnecessary legal costs if the ownership is subsequently disputed.

Two recent cases illustrate the potential pitfalls. In the first of these, a divorced couple who had had a stormy relationship for years got back together and bought a house in the name of the ex-husband, although both contributed towards its purchase. When their reconciliation failed, the ex-husband left the property. His ex-wife sought a declaration by the court that the property was hers alone whilst he sought a declaration that the property was jointly owned. The case went to the Court of Appeal, which rejected the ex-wife’s claim. However, the Court considered that she would not have contributed to the purchase and moved in to the house without an assurance that she could continue to live there if their relationship collapsed again. Accordingly, it ruled that the property could not be sold without the consent of the ex-wife and that on sale she would be entitled to half the proceeds.

Another case resulted from the death of a man who emigrated from Bromley to Australia 60 years ago, leaving his house in the UK to be occupied by his relatives here. The house purchase had been financed by a bank loan and loans from members of his family. His will left the residue of his estate to a woman in Australia who had cared for him in his old age. The man’s relatives claimed that he had held the house in Bromley on trust for his family. Again, the case went all the way to the Court of Appeal, which ruled that the man’s family had failed to discharge the burden of proof that their loans were contributions to the purchase price of the property, entitling them to a share in it, rather than just advances of money.

“To avoid problems, it is a simple matter to execute the appropriate legal documents giving someone a legal interest in a property. Failure to make one’s intentions clear can prove expensive and cause delays in the event of a dispute over ownership later on,” says Nessie Orosco–Yousaf.

Back to the top

McCartney Split - Implications for Divorcing Couples

The much-publicised divorce of Paul McCartney and Heather Mills has led to a settlement in favour of Ms Mills of £24.3 million. Press speculation was rife that she might be awarded anything up to £60 million from Sir Paul’s fortune, which is estimated to be £400 million – the figure presented by his side in the proceedings and accepted by the court. Ms Mills, who represented herself, claims that he is worth £800 million.

What is significant about the judgment is that the award is based only on the needs of Ms Mills and the couple’s daughter. The implication of this is that the judge clearly considered that Ms Mills had added nothing of significance to the wealth of the McCartney household during their four years of marriage.

The decision contrasts with the July 2007 divorce of insurance magnate John Charman and his wife Beverley, who received £48 million from Mr Charman’s £130 million-plus fortune.

“The difference between the cases in legal terms is that Mrs Charman was considered to have made a much greater ‘special contribution’ to the couple’s 28-year marriage and to the acquisition of marital assets during that time than Ms Mills had made during her four-year marriage to the former Beatle,” says Alison Whistler.

The McCartney settlement follows a recent case in which a thrice-divorced woman, who on marrying for the fourth time had signed a pre-nuptial agreement to the effect that in the event of divorce neither she nor her husband would make any financial claim against the other, withdrew her claim for a share of her ex-husband’s fortune when the couple divorced, after the judge issued a preliminary ruling that the pre-nuptial agreement would be of material importance to the case.

It appears the courts are looking much more closely not only at the stated intentions of people going into a marriage but also at their relative contributions to the wealth created during the marriage. This does not mean that ‘stay at home’ spouses will necessarily receive a small settlement. If they can demonstrate that they provided the environment and support which enabled or assisted the ‘go getter’ to amass wealth, then there is every chance of them being awarded a significant proportion of the marital assets, particularly if the marriage has lasted several years.

The other factor the court will consider is the wealth brought into the marriage by each party. By and large, the ‘non-marital assets’ are divided in the proportion in which each spouse or civil partner introduced them.

Back to the top

Remarriage Not Ground for Alteration of Divorce Settlement

When financial arrangements are being made on divorce, the issue of the payment of maintenance is often in point. One of the concerns from the point of view of the payer is that if the ex-spouse remarries, their circumstances may well change significantly, so that the payment of maintenance is no longer appropriate.

Another issue which often arises is what happens when the person paying maintenance retires, as this can also affect the appropriate amount of maintenance payable.

Recently, a case was heard which dealt with both these issues. A man had been paying maintenance to his ex-wife for 12 years. As he was coming up for retirement, he sought to pay her a lump sum instead of continuing to pay maintenance. He enquired on more than one occasion whether she was cohabiting or intended to remarry and was informed that neither circumstance applied. In 2005 he therefore agreed to a consent order, as a result of which he paid his ex-wife a lump sum of £125,000 in lieu of future maintenance payments.

In 2006 his ex-wife remarried. He went to court to make an application for the consent order to be set aside on the basis that her remarriage had made the assumptions on which it had been based invalid.

For such an action to succeed, it is necessary that:

• since the order was made there has been a supervening event which has led to a change of circumstances which undermines or invalidates the basis of the order;
• the events are such that if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed; and
• the new events have occurred within a relatively short time of the order having been made.

The court ruled that the man’s ex-wife had not planned to remarry at the time the settlement was negotiated and therefore the settlement stood. The man appealed to the Court of Appeal. The Court considered that the payment of the lump sum was intended to provide for a ‘clean break’. That in turn depended on the intentions of the parties at the time. The purpose of the husband’s enquiries regarding his ex-wife’s domestic situation was to assure himself that she was not cohabiting, rather than to protect himself from the risk of her remarrying. At the time of the agreement, she had no intention of remarrying, but that carried no implications regarding her future intentions. There was no basis for making the assumption that she would not remarry in any particular period, nor had the agreement between them provided for any variation in the event that she did remarry within a particular time frame.

On a majority decision, the Court of Appeal rejected the man’s appeal.

“This case shows how difficult it can be to alter financial arrangements designed to achieve a clean break and proves again that in such matters you get what you negotiate, not necessarily what you deserve,” says Karen Eves.

Back to the top

Taking Children into Care - The Legal Process

We often hear of children being taken into care, but the process by which this occurs is not well known. The Children Act 1989 lays down the circumstances under which it is appropriate for a child to be taken into care or a supervision order made. The necessary criteria, somewhat rephrased, are:

• that the child concerned is suffering, or is likely to suffer, significant harm; and
• that the harm, or likelihood of harm, is attributable to the care given to the child (or which would be given if a care or supervision order were not made) and is not what could be reasonably expected of a parent, or that the child is beyond the control of the parents.

In order to determine whether these criteria are met, a thorough fact-finding exercise must first be carried out. One common difficulty arises when the proceedings to take a child into care are based on an expectation that the child may be harmed in the future, rather than on the basis of harm having been done to the child in the past. In such cases, the local authority is required to prepare a clear written analysis of the facts on which the authority’s decision to apply to take the child into care is based. This analysis should be divided into three stages:

• an establishment of the primary facts;
• an assessment as to whether the criteria outlined above are met; and
• an overall assessment of what action is likely to be in the child’s best interests.

All the other parties involved have the right to respond to any allegations made in the analysis.

We can assist you in your dealings with the local authority and other bodies. Contact Alison Whistler for advice.

Back to the top

Uncertainty Prevents Revision of Divorce Arrangements

One factor that comes into play when decisions are being made about the financial arrangements following a divorce is the earning capacity of the couple.

A problem that can arise in such cases is what to do when the earning capacity of one of the ex-spouses is uncertain. In a recent case, which also involved a number of other issues, the wife of an airline pilot went to court over the level of the maintenance payments she received.

Her ex-husband had suffered a severe depressive illness and he had been suspended from flying duties by his airline. The financial arrangements made in the District Court took account of the uncertainty of his future employment prospects.

Some time later, his condition appeared to improve and he was able to return to ground duties, receiving a captain’s basic salary. An occupational physician’s report concluded that it was possible that he might be able to return to flying duties in due course.

The Court of Appeal, however, concluded that the uncertainty surrounding the man’s future employment had to be taken into account. His current earnings were no guide to his future level of earnings. The original decision regarding the division of assets therefore had to stand.

Says Karen Eves, “This decision will be of interest to anyone in similar circumstances and indicates that in the absence of hard and fast evidence of changed circumstances, an appeal is unlikely to change the considered decision of the judge in a lower court.”

Back to the top

Victim Wins Right to Proceed with Compensation Claim

A landmark decision of the House of Lords could pave the way for some victims of sexual abuse to claim compensation from their attackers many years after the attack took place.

Mrs A, a retired teacher, has won the right to sue for damages a man who attacked her in 1988. Her attacker, Iorworth Hoare, was jailed for six sex attacks committed during the 1970s and 1980s.

At the time of the attack, Mrs A was advised not to bring a claim against Mr Hoare because he did not have any money. Instead, she made a claim to the Criminal Injuries Compensation Board and received just £5,000 in compensation.

However, since then Mr Hoare has scooped a £7 million win on the lottery after he bought a ticket whilst on day release from Leyhill open prison in 1994. Mrs A then commenced a claim for compensation in the High Court. However, the Court ruled that her claim was outside the legal six-year time limit for bringing an action. The Court of Appeal rejected Mrs A’s appeal against this decision.

When the case came before the House of Lords, Mrs A asked for a change in the law that prevented compensation claims for sexual assault being made outside the strict time limits. Five Law Lords unanimously ruled that courts should have the discretion to extend the limitation period to permit ‘out of time’ claims. The case will now go back to the High Court to be reconsidered in the light of this decision.

Four other appeals by people seeking compensation for sexual abuse that took place more than six years ago were also heard and these can also now proceed.

Says Karen Eves, “Prior to this judgment, the law prevented victims of sexual assault from bringing a claim after the six-year time limit had expired. In cases of child abuse, claims were only permitted up to six years after the child had reached the age of 18. Such attacks can have long-term traumatic effects on the victim which may prevent them proceeding with a timely damages claim.”

Back to the top

Victory for Pre-Nuptial Agreements

Pre-nuptial agreements have been given a boost following a recent case involving a ‘serial divorcee’.

A pre-nuptial agreement is an agreement made by a couple before they marry specifying how their assets are to be divided in the event that they divorce. They are commonly made by wealthy people, especially where the assets of the couple prior to the marriage are very unequal.

However, UK law does not (in theory) recognise pre-nuptial agreements – the argument being that marriage is to be encouraged in the public benefit, so an agreement which presupposes divorce is contrary to the public good. However, ‘pre-nups.’ are having more influence as the courts increasingly accept that they are indications of a couple’s intentions at the outset of their relationship.

In the case in point, thrice-divorced Susan Crossley abandoned her claim to a share of the fortune of her property developer fourth husband Stuart after their 14-month marriage broke up. Mrs Crossley had received £18 million in divorce settlements from her previous husbands. Prior to her marriage to Mr Crossley, she had signed a pre-nuptial agreement stating that in the event of the failure of their marriage, she would receive nothing. Hours before a scheduled hearing at the High Court, Mrs Crossley abandoned her claim, accepting that she had little or no chance of persuading the Court that the pre-nuptial agreement was invalid.

Mrs Crossley had claimed that the agreement was invalid because her husband, whose wealth is estimated at £45 million, had not disclosed to her ‘tens of millions’ of pounds held in offshore accounts. In an earlier hearing, however, the Court of Appeal ruled that the pre-nuptial agreement should be considered by the Court before looking at any other claim Mrs Crossley might have.

Says Alison Whistler, “The courts are having to cope with increasing numbers of divorces involving wealthy clients, which can take up large amounts of court time, so they are becoming more willing to give weight to pre-nuptial agreements. If you are considering marriage and have, or are likely to have, wealth to protect, a pre-nuptial agreement is worth consideration. Contact us for advice on all family and wealth preservation matters.”

Back to the top

What is Collaborative Law?

Divorce can be highly confrontational and can involve a great deal of negotiation conducted by correspondence on the part of solicitors and their clients. This necessarily takes a great deal of time and can make what is already a stressful process even more so in many cases. Also, the client can seem detached from the whole exercise, especially in cases where there is a great deal of correspondence arguing points between the respective law firms involved.

In a bid to provide a quicker and less confrontational process, a new approach to divorce, termed collaborative law, has been created. The idea behind collaborative law is to allow the parties to resolve their differences as far as possible in a quicker and more flexible way, with the hoped-for results being the better preservation of family assets and maintenance of better relations between the divorcing couple. It is offered by lawyers who are specially trained to work in this way, with the aim of achieving a solution which works for the whole family.

Using collaborative law will not be appropriate in all cases, especially where the degree of conflict is great. If it is used and is not successful, a client may still opt for formal mediation or to use the courts.

The collaborative law process involves the client signing a participation agreement, which is in effect an agreement that they will not go to court. The client can withdraw from this at any time but, if they do so, the lawyers who advised them in collaboration cannot represent them in court. A series of four-way meetings follows, involving the clients and their legal representatives, which focus on finding solutions that work for everyone involved. In some situations, a ‘neutral’ third party may be used to suggest solutions to particular problems.

Collaborative law can have significant benefits in appropriate circumstances. Contact Alison Whistler for more information on using this approach.

Back to the top

Willingness to Improve Enables Father to Regain Custody

A father who showed significant improvement in his ability to look after his son has been granted custody of the child by the Court of Appeal.

The child had been placed in the care of the local authority following the father’s separation from his wife. The authority had become increasingly concerned about the deteriorating mental health of the father and the effect this was having on his two sons. When the father showed suicidal tendencies and threatened to kill his sons, the local authority sought to take them into care.

The father refused to participate in the care hearing and his elder son was taken into care and an interim care order was made with regard to the younger son. The case heard by the court concerned only the elder son. The children were placed separately with foster parents and communications between the father and the elder son were stopped. The elder son wrote several letters to the local authority asking to be reunited with his father and made attempts to return to him and began playing truant from school.

The father had agreed to participate with the local authority in a package of measures intended to improve his parenting skills, as a result of which he would receive help and support and have his parenting monitored.

The Court judged that the local authority’s care plan had clearly failed in relation to the boy and that the fostering arrangements it had made were having an adverse effect on his emotional well-being, schooling and health. The boy wanted to be with his father who, in turn, was attempting to improve his parenting skills. In the circumstances, it was appropriate to set aside the care order and substitute an interim care order under which the boy and his father were reunited. If the revised arrangements prove successful, the father can then apply to have the care order discharged.

“Many people think that when children are taken into care, there is little chance of regaining custody,” says Karen Eves. “However, that is not the case – the court is normally willing to reunite families when circumstances are such that this is in the interests of the child or children.”

Back to the top

A Promise is a Promise

A woman who was widowed mere hours after getting married has been ordered by the Court of Appeal to honour a promise her husband had made to his ex-wife.

Kathleen Soulsby married her husband Owen in 2000 at the London hospital where he was being treated for leukaemia. He had divorced his ex-wife, Elizabeth, in 1986 and they had agreed a settlement under which he was to pay her £12,000 a year plus maintenance for their children. In 1993, he agreed to give her £100,000 on his death in exchange for being relieved of the obligation to pay further maintenance payments. His will was altered to give effect to the agreement.

Under UK law, however, marriage invalidates any previous will and Kathleen argued that the bequest was therefore invalid.

The Court of Appeal considered that the agreement between Owen and Elizabeth was enforceable. She had ceased to receive maintenance in 1993 and had not pursued him for the payments. She had therefore complied with her part of the bargain and his estate was bound to honour his side of it.

Says Michael Cutler, “It is often forgotten that marriage or civil partnership invalidates an earlier will. It may not be very romantic, but it is practical to make sure that after the ceremony a new will is executed as soon as is practicable.”

Back to the top

Adoption Agency Need Not Consult Father

The Adoption and Children Act 2002 does not require a local authority or other adoption agency to consult the father or extended family of a child put up for adoption by its mother. This was the ruling of the Appeal Court in a case involving a mother who wished to give birth without the knowledge of her family or the baby’s father.

In this case, the pregnancy arose from a one night stand. The mother did not want the father, or her own family, to know about the pregnancy and wished to put the child up for adoption at birth. As a consequence of a County Court judge’s ruling, the authority wrote to the mother’s parents, which led to them finding out about their grandchild.

Relying on the Adoption and Children Act 2002, the Court of Appeal held that when a decision needed to be made about the long-term care of a child whom the mother wished to be adopted, there was no duty of an absolute kind to make inquiries. There was only a duty to make inquiries if it was in the interests of the child to do so.

It was further held that the provisions of the European Convention on Human Rights concerning a father’s right to respect for his family life did not apply in this case. The father had no family life with the child. He had never lived with the mother nor expressed any commitment to the child, because he was unaware of the child’s existence.

The Adoption and Children Act requires the interests of the child to be considered. It does not give the family the right to be involved in decisions relating to the child in circumstances such as these.

For advice on adoption, fathers’ rights and other family matters, contact Karen Eves.

Back to the top

Animal Danger for Owners

Owners of animals that are known to be potentially dangerous are usually aware that if their animal causes an injury, they will most likely be held responsible. However, owners of animals not normally considered dangerous may well assume that they will not be held liable for an injury caused by their animal, for example if their animal causes an accident.

A recent case has brought further clarification to the law and spells out a warning for animal owners.

The case concerned a horse which reared up and threw its rider, a 17-year-old girl. The girl suffered a serious head injury as a result. The horse had no history of misbehaviour and the girl was considered competent to ride it. The girl sued the owners of the horse for negligence, or in the alternative, claimed that the owners were strictly liable for the injury under the Animals Act 1971.

The court rejected the allegation of negligence. However, it accepted that the owner of the horse was strictly liable under the Act.

The Act places strict liability on the keeper of an animal that does not belong to a dangerous species if the animal causes harm where the following points are satisfied:

• where the damage is of a kind which, unless restrained, the animal was likely to cause or which, if caused, is likely to be severe; and
• where the likelihood of the damage or its being severe is due to the characteristics of the animal which are not normally found in animals of the same species or are not normally so found except at particular times or in particular circumstances; and
• where those characteristics are known to the keeper of the animal.

All three of these must be present for the animal’s keeper to be liable under the Act. The court considered that it was clear that an accident involving a horse rearing is likely to be severe and that in certain circumstances horses are likely to rear if not restrained. The court accepted that in certain circumstances horses are likely to act unpredictably and that the owners, as experienced keepers of horses, would know this. Accordingly, the court found the owners liable.

The owners appealed. In the Court of Appeal the case turned on whether the behaviour of the horse was ‘normal’. The Court held that normal means ‘conforming to type’ and that rearing is natural behaviour for horses in certain circumstances. The owners’ appeal was therefore rejected.

“The implications of this case for animal owners are potentially far-reaching,” says Karen Eves. “If the likely result of an accident is severe and it occurs because of the normal behaviour of the unrestrained animal in particular circumstances, then the owner is likely to be found liable, even if the behaviour of the animal is unusual.”

At present, the practical solution to the problem this raises for animal owners is probably to be found in their insurance policies, which should be read carefully. MP Stephen Crabb is proposing changes to the Animals Act which would mean that strict, non-fault based liability would only be applied to genuinely dangerous animals and that an owner’s liability for damage caused by a non-dangerous animal would be limited to cases of fault via common law negligence claims or under health and safety legislation. The Government is reported to be sympathetic to a change in the law.

Back to the top

Broken Homes – Split Houses

A recent House of Lords case has emphasised that when there is a break-up of a relationship and there is joint legal ownership of the house, the division of the value of the house will depend on what the couple’s intentions were. All of the relevant circumstances need to be taken into account. In the case in point, the fact that the couple maintained separate financial arrangements was germane to the decision.

But what is the case when the owners of the house are not a couple, for example where the property is owned jointly between family members of different generations? In one such case, a woman died and the property she lived in was owned jointly by her and her son. There had been no declaration of what proportion of the house each owned. Each had contributed equally to the household expenses and mortgage until the mother and son had quarrelled, at which time he moved out and the mother then met all of the mortgage payments herself. The son claimed a beneficial interest in the property and this was contested by the woman’s other beneficiaries.

The judge hearing the case considered that the purpose of buying the property was to provide a home for the mother, who could not obtain a mortgage on her own. Mother and son had kept their finances separate and the solicitor who acted for them on the purchase considered that there was no intention that the property should be beneficially jointly owned. Furthermore, the judge considered that the mother would not have wished to deprive her other children of a share in her property.

The court therefore ruled that the son had no beneficial interest in the property.

In another case, a divorced couple bought a property with a view to being reconciled. The property was put into the husband’s sole name. When the relationship failed again, he left and his ex-wife remained living in the house. The court ruled that because the husband had given his ex-wife assurances that she could remain in the property as long as she wished, it could not be sold by her ex-husband without her consent.

Says Nessie Orosco-Yousaf , “Houses are usually the major asset of a family. It is therefore advisable to make sure that any details regarding the ownership of, and people’s rights to, the family home are put down clearly in proper form when the property is acquired. This may save a great deal of expensive argument later.”

Back to the top

Child Custody – Expert Evidence Crucial

A judge who in her verdict in a child care case failed to give adequate reasons for departing from the clear evidence of experts recently found her decision overturned by the Court of Appeal.

The case dealt with the residency arrangements for four children whose parents were getting divorced. The mother of the children had a long history of addiction to amphetamines. At the custody hearing, evidence was given to the court that she had tested negative for use of amphetamines at the time of the hearing, but there was evidence of earlier use. The mother claimed that she had ceased to use drugs altogether.

A psychologist, a psychiatrist and a social worker submitted reports suggesting that a residence order should be made giving custody of the children to their father.

Surprisingly, the judge ordered that the children should reside with their mother on weekdays during the school term-time. The father appealed against the decision.

The Court of Appeal was of the view that the judge had placed a disproportionate amount of weight on the mother’s evidence and had not given a good reason for taking a decision which differed so sharply from the opinion of the experts. The Court ruled that the residence arrangements should be referred back to another judge to determine.

Says Alison Whistler, “It is not often that judges ignore clear expert evidence in such cases and, when they do, it is incumbent on them to give sufficient reasons for so doing. It is very important to use an expert who is good at presenting evidence clearly. We ensure that clients relying on experts for evidence use those who are well-qualified and experienced.”

Back to the top

Family Gifts Part of Marital Assets

When couples divorce, their assets can be considered to arise from two sources. There are the assets created during the marriage, which are called ‘marital assets’, and those which are brought into the marriage by the spouses individually, termed ‘non-marital assets’.

The normal assumption is that marital assets will be divided more or less equally, but that assumption does not hold as regards the non-marital assets. Needless to say, there is often a dispute over whether assets are marital or non-marital.

Recently, a man appealed against an order which ‘ring-fenced’ assets that had been given to his ex-wife by her family. These were regarded by the judge as non-marital assets and, as such, not to be divided equally between the couple. The assets had been held in the wife’s sole name. She had not worked for many years in order to look after the couple’s two children, who are now adults.

The husband had continued to work and had acquired various assets. His wife had received £70,000 from her father and a further £12,000 from an inheritance. She had used this money to reduce the mortgage on the couple’s property. She also owned a 50 per cent share in her parents’ home and had been given an investment bond worth in excess of £114,000. Her ex-husband believed that she would inherit the bulk of her parents’ estate, said to be worth more than £1m.

At the end of their marriage, the husband was retired. He was earning about £5,000 per annum and also had a pension. His wife was working at a school, which gave her free board as well as a wage of £1,000 per month. The judge ruled that the couple’s assets, which now included two houses, should be divided equally, except for the bond and the share in her parents’ home, both of which were reserved for the wife.

The husband argued on appeal that this was unfair. He claimed he had introduced assets at the start of the marriage and had made the major contribution to the creation of the assets of the marriage. He also claimed that the judge had failed to take proper account of his wife’s expectations with regard to her parents’ fortune. The Court of Appeal accepted these arguments in part.

On the question of the expected inheritance, the Court could not agree that the husband had suffered any loss that needed to be compensated for, especially as his ex-wife’s parents were free to direct their estates in whatever way they thought best. However, the Court agreed that ring-fencing the wife’s other assets was unjustified.

Back to the top

Hearing Loss Damages of £3,500

A factory worker whose hearing was damaged because of exposure to noisy machinery has been awarded £3,500 in compensation.

Stuart Capell, 61, worked for Alcoa Extruded Products (UK) Ltd. as an extrusion operative from 1974 to 2005. During this time he was exposed to excessive noise from presses and surrounding machinery. His employers did not offer him any hearing protection until the mid-1980s.

Mr Capell realised his hearing had been affected after he had a medical in 2005. He was diagnosed with noise induced hearing loss which is a permanent condition.

Whilst the law on controlling noise levels at work was tightened up when the Control of Noise at Work Regulations 2005 were introduced in April 2006, employers have been required to protect workers from damage to their hearing for decades.

Research suggests that as many as 170,000 people in the UK have suffered deafness, tinnitus or other ear conditions as a result of exposure to excessive noise at work.

Meanwhile, the Health and Safety Executive estimates that more than a million workers are exposed to potentially damaging levels of noise at work.

Not only can prolonged exposure to excessive noise cause hearing damage but it is also a safety hazard. A noisy environment can hamper communication as well as cause psychological stress to workers.

The Control of Noise at Work Regulations 2005 place a number of duties on employers. These include implementing noise prevention measures as well as providing workers with ear protection.

If you have suffered damage to your hearing as a result of exposure to high noise levels at work, you could be entitled to compensation. Contact John Lennon to discuss your claim.

Back to the top

House Owner Pays Price for Contract Failure

Failure to make contractual terms clear is a sure recipe for trouble and in construction contracts, where the sums of money involved can be substantial, getting the contract terms agreed up front is always sensible.

In a recent case, a woman arranged with a property developer that the developer should carry out refurbishment work on her property. The development of the property was to proceed in three stages and it was agreed that the developer would start the first phase as soon as the necessary planning permission and building control permission were obtained.

The woman made up-front payments to cover professional fees and to fund the commencement of the works. Unsatisfied with the subsequent progress, she demanded an account of how the money had been spent and decided that now was the time to have a formal contract. She refused to make further payments until a schedule of payments based on progress achieved was agreed. The developer refused to continue without further progress payments. He sent a solicitor’s letter to the woman demanding payment of the sums due.

Each side accused the other of repudiating the original contract and eventually the dispute ended up in court.

The court had to decide the following issues:

1. Was there a binding contract or contracts?
2. If there was a binding contract or contracts, what were the contractual terms?
3. If there was a binding contract or contracts, was either party to the dispute in breach of the contract(s)? and
4. If there was a breach of contract, what damages resulted?

The court concluded that the woman had entered into two separate contracts with the developer. The first was with regard to the first phase of the works. She had repudiated this contract when she regarded the developer’s breach of the contract as a repudiation of it. Her response had not been the correct one. She had herself created a repudiatory breach of contract by failing to pay the second instalments due under the contracts. The developer was therefore entitled to damages for the profits he would have made had the contracts been completed and paid for as agreed.

This case shows how what may seem to be a reasonable reaction – in this case declining to make payments when a development falls behind schedule – can lead to difficulties. In this case, the problem was compounded by the woman’s response to the solicitor’s letter sent on behalf of the developer. Had the original contract contained a clause which linked payments to the meeting of specific targets, then each side would have known where it stood and the dispute could probably have been avoided.

The time to get a contract right is at the beginning. We can help you negotiate a building contract that ensures your interests are protected. Contact John Lennon for advice.

Back to the top

Lover Awarded £1m from Estate

The long-term lover of a man who had promised to marry her but died before they could wed has received more than £1m from his £3m estate.

Multimillionaire Henry Bahouse and former dental nurse Cyd Negus had a ‘flamboyant lifestyle’ before he committed suicide in 2005. His will made no provision for 50-year-old Ms Negus, who therefore claimed for financial provision to be made for her from his estate.

Mr Bahouse’s family contested the claim, arguing that Ms Negus had already received the proceeds of a life assurance policy, taken out by Mr Bahouse for her benefit, and a half share in a Spanish property. Together, these were worth in excess of £600,000. According to Ms Negus, she and Mr Bahouse were intending to get married and even hoped to start a family.

According to Mr Bahouse’s family, the couple were on the verge of breaking up and Mr Bahouse had no intention of marrying Ms Negus.

In the view of Deputy High Court Judge Roger Kaye QC, Ms Negus had become a housewife ‘in all but name’ and had a reasonable basis for believing that her future financial needs would be met by Mr Bahouse. There had been no diminution in the couple’s love for one another. He awarded Ms Negus the ownership of the flat she had shared with Mr Bahouse (valued at approximately £400,000) and a lump sum of £240,000. The balance of the estate, worth about £2m, went to Mr Bahouse’s family – mainly to his son Gordon. The court action cost the Bahouse family approximately £100,000 in legal costs.

Says Michael Cutler, “If a person has been supported financially by another, under some circumstances a claim can be made on the estate after the death of the person providing the financial support. In such cases, the court, not the will of the deceased, determines how the estate is to be divided. If you have been financially reliant on another person who has died and have not been made a beneficiary under their will, you may be entitled to make a claim on the estate. Contact us for advice.”

Back to the top

Reduced Earning Capacity in Marriage Warrants Compensation

A recent case, in which a man’s ex-wife sought an increase in the financial provision originally made for her following their 1988 divorce, has raised an interesting issue regarding the calculation of the division of the financial spoils on the break-up of a marriage.

Although there were a number of issues raised, there were two points of primary interest. The first was that in the original settlement, even though the couple had been married for 24 years, the woman was awarded only 26 per cent of the capital of the marriage. She was, however, awarded 35 per cent of her husband’s income at that time.

Subsequent to their divorce, the woman’s ex-husband was able to increase greatly the value of his assets, becoming a multimillionaire. She had found a job after their divorce, but her argument that she should have an increase in her financial settlement was based not only on her increased financial need (by the time the case was brought, her only income was a pension of approximately £15,000 per year), but on the basis that she should be compensated for her reduced earning capacity during the marriage because she had not worked whilst bringing up their children.

The court accepted this line of reasoning and awarded her a six-figure settlement.

Back to the top