The monstrous regiment of Dog Walkers

TW Logistics Limited v Essex County Council

 [2018] EWCA Civ 217                                                                           bailli link


The framework of planning law – arguably – provides a principled and balanced approach between a landowner’s desire to maximise the economic efficiency of their property and competing public interest.  This case illustrates the effect of a parallel regime whose effect is to restrict a landowner’s use of their land, and preserve it for all time in its current.   There is no compensatory regime for the landowner, and the effect is often arbitrary. 

Well that was a rabble-rousing start!  Anyone know what I’m talking about?

Section 15 of the Commons Act 2006 is not a piece of legislation that shares wide renown.  If you bumped into it in the frozen foods’ aisle in your local supermarket, you might not give it a second glance.  However this insignificant sounding section has educated the children of  many a lawyers, and caused many a property developers to weep bitter tears into their gin and tonics.

The impulse between this part of the Commons Act 2006 comes with pedigree.  I’m not going to do a debretts on it, but you could if you chose, look back to a case in 1757 about the common law right to run through wheat fields out of season.  Mrs May’s forerunner may have lost on that occasion, but the right to use land for recreation if it did not interfere with the legal owner’s use of it, and they did not object, was well established early.

Victorian Eco warriors with hipster beards contributed greatly to the development of what I shall call, for shorthand, the town and village green movement.  The idea that, with increasing industrialisation, it was a nice idea to have places where the worker bees, their dogs and children might repair for exercise and recreation.

Section 15 is the current manifestation of this movement.  An unkind person would wonder at the drafting of it: so many words and disparate, unexplained ideas flapping about, ready to be seized by that monstrous regiment of dog walkers, blackberry pickers and mushroom gatherers.  (This is an ‘in joke’ and if you don’t get it, don’ worry.  You’re probably not a property litigator)

What the legislation wants to do is a worthy one.  It is founded on the general feeling in English and Welsh law that if you, as a landowner, don’t exert yourself to stop people larking around on your land (in lawful activities) then after a while – twenty years in this case – you won’t be able to stop them in the future.  The monstrous regiment of dog walkers etc., will be able to make an application to their local authority (basically) and get the area on which they have been distorting themselves designated as a town and village green (TVG).

It’s a bit like acquiring a right of way, either for the benefit of a particular piece of land, or for public use.  If you allow people to use your field as a short cut to the pub, then after a while you won’t be able to stop them doing it in future.

Don’t get me wrong.  If you chose to erect barbed wire fences and hire large gentlemen wearing black leather jackets  politely to stop people tramping over your field in the first place, then the law will back you to the hilt.

Think also of the old law on adverse possession – or squatters’ rights as we used to call them: if you take timeous action to hoof interlopers out of your six bedroom house in Southwark (#justsayin’) then your county court will help you out.  Leave it for more than twelve years (as was) and the boot is on the other foot.

Like us, you’ve probably got a clear idea of what a village green is.  It probably encompasses some, but not necessarily all, of the following: ducks, grass, children, cricket, clandestine underage drinkers.

However town and village green status has been conferred upon rocks, car parks, golf courses, school playgrounds, a quarry and scrubland, not to mention a sustained (but failed) attempt over a tidal beach forming part of a port.   You might wonder if this was eco-enthusiasm gone crazy. Indeed, TVGs have been the nuclear option for the eternal British conflict – between those who want to build over the countryside/build homes for people to live in and the dog walking classes.     Many a proposed development has been frustrated by a timeous town and village green application, and how intrepid are the forces of dog walkers in seeking out new lands to colonise.

And so we come to the battle of Allen Quay.  Allen Quay is part of the Port of Mistley, near Manningtree in Essex.  Mistley is a modest, but still working port.  Should you have the odd small ship you’d like to disembark on the river Stour, then the port owners and operators  – TW Logistics – the appellant in this side, would be happy to accommodate you.  There is potential for onward transport by road.

As you try to imagine this battle field:  I don’t want you to think Harwich, or Tilbury.  On the evidence, only ninety HGVs in a particular year made the trip.  However, as many a local Mistley resident testified, it makes a mighty pleasant place to walk, with or without dogs, and to chat with your fellow flaneurs.   And if you should chance upon an HGV, then it is but little trouble to put the dog on the lead, or move your conversation to a safe distance.

This battle might never have erupted, had not, in 2007, the Health and Safety Executive bullied TW Logistics into erecting an unsightly fence along the edge of the quay to save the port employees, and dog walkers from an unscheduled dip in the estuary.  The Mistley fence provoked public demonstrations.  The village rose as to one to protest against their enforced segregation from the sea, and the deprivation of their liberty to go crabbing, feed the swans, and land pleasure craft on the quay.  One particular denizen, the second respondent, was moved to make an application to have the quay designated as a TVG, and after a public enquiry, the quay was so designated.

T W Logistics were unhappy.  There is a deliciously retro warehouse near the quay, which is just aching to be turned into flats-sorry-apartments, and for which they have secured planning permission.  The TVG designation was therefore supremely unhelpful, and hence – I am guessing – their attempt to have their quay deregistered.  They failed last year before Barling J, and the judgment on the rematch in the court of appeal was handed down last week.

And yes.  The hegemonic dog walkers win again. 

Lewison LJ paid tribute to the ingenuity of the appellant’s brief, veteran New Square Chambers silk, George Laurence, but remained politely unconvinced.

Cognoscenti will appreciate that every nook and cranny of section 15 has been prodded and pushed and pinched over the years, so I’d like a small round of applause for the side that pressed the Inclosure Acts into service.  The argument goes like this:

  • Mistley is a working port.  Sometimes, (not that often) ships dock and discharge their cargo which is loaded onto HGVs.  This takes up space, and therefore may constitute an interruption of the use of the Allen Quay for the purposes of exercise and recreation.
  • The Inclosure Acts criminalise any activity that tends to do this.
  • Therefore, if Allen Quay is saddled with a TVG designation, the port operators will become criminals simply by carrying out their lawful business.  That just can’t be right, can it?

Neat eh?

As George Laurence confides to his readers on his web page:

I have always tried very hard to win “unwinnable” cases…where the law needs to be developed in some way… in order to achieve victory. 

Fighting talk, and the man has a point.  Lord Hoffmann spoke of his visceral unease at the lack of resemblance between the land registered [as a TVG] and the “traditional” village green. It is difficult to reconcile green swards and asphalt quays overlooking atmospheric tidal rivers, until you realise that what is being protected is usable public space, which is pleasant to look at and wander over.  Nicer than flats-sorry-apartments, and the loss of a place where you have become used to going to to blow away the cobwebs.

TW Logistics cannot be allowed to win because to do so would be to expose the flimsiness of the “give and take” rationale we see from Lord Brown in Lewis.  Flimsy, yes, but based on  robust common sense.  The public is not aiming to stop the activities the landowner has traditionally carried out on the land, hitherto compatible with their own enjoyment of the land.  You won’t stop golfers golfing on your brand new TVG, or farmers cutting grass, or horses grazing.

Similarly, TW Logistics are able to carry on their modest business as a working port.  What they cannot do is use the land for something different entirely, which would materially affect the enjoyment of the monstrous regiment of walkers.  The planning framework may have approved their aspirations for the site, but there is no joined up thinking between this and the Commons Act.  (Obviously, we see the same disconnect between public planning law and private law restrictive covenants).  They have been deprived of an economic opportunity, whilst the inhabitants have gained a pleasant place to continue to walk.

Don’t despair, though, if you are a property developer.  Dry those tears. Section 15’s ability to restrict development has been hobbled by subsequent amendments which restrict village green applications in certain circumstances – for example when a planning permission application has been submitted.  “Levelling the playing field between dog walkers and developers”  a pun too far?

Will TW Logistics appeal to the Supremes?  I’d bet against.  Lewison LJ is not a man to appeal lightly and policy considerations militate against a win there. Watch this space.




Who knew? There are two eight o’clocks in the day!

The news that Durham’s law department is to schedule lectures for first years at oh eight hundred hours must have made some students wonder whether their “fall back” uni choice was not a better option. Going that far north (almost in Scotland) will be shock to the many Southerners who make the September trek up the Great Northern Road. Discovering that there are actually two eight o’clocks in the day may cause serious unhappiness for first year undergraduates.

And not just for the students. What about the lecturers?  Those poor southern babies excited at their first academic post, shining doctorates on legal theory at the ready.  And then the grim reality of a lecture theatre full of sleeping children, happily oblivious of the complexities of section 53(1)(c) LPA 1925, or the rule in Shelley’s case.

The papers say – and I have no inside knowledge – that it’s only for a year until the new building is finished and everyone can go back to a nine o’clock start. It seems rather careless to recruit more students than you have room for, but no doubt entitled bottoms on seats are needed to pay for the state of the art* accommodation.

I wonder why Durham didn’t take a bold step – which could also be extolled in suitably hyperbolic prose – and abolish – or at least suspend – the lectures altogether. Lectures no doubt had their place when books were rare and purposely written in small, dense type to make the writer look even cleverer.  As a neophyte, you would have needed some knowledgeable type, who had better eyesight and more patience to explain things to you.  Is that so necessary, now there are a whole plethora of books for all attention spans and abilities.  Some law textbooks even have pictures, and colours and diagrams!

Some lecturers, a very few, bear you heavenwards like Peter Pan guiding you past the second star on the right and then straight on to a life time love of their subject. In my own limited experience, Professor Burn did this for land law.  Alas, though, most lecturers are not Teddy Burn, nor do universities seem to audition their lecturers for golden globe potential.  Some lecturers read from their own text books – which is probably good practice for aspiring barristers – others vie with each other to see how many words can be squeezed onto one power point slide.

I’ve also noticed that many students ignore lectures and lecture notes, and rely on power point handouts and crib books of A5 dimension. I was gratified when one of my students once reproduced my choicest bons mots and she automatically got a starred first†.

Recorded lectures, on demand, Netflix style are also good. They can provide a reassuring soundtrack for club rugby on the television, and can comfortably be combined with playing on your phone. You can feel virtuous that you’re doing some work, whilst catching up on the backlog of recordings clogging up Sky.  I’ve got my doubts, as to the efficacy of that, but perhaps it’s my age.

Perhaps I’m being cynical. Just perhaps eight o’clock will be the perfect time for English Legal Systems and contract law and the marks and the student engagement will increase. I would have thought lectures into the night were the way forward.  At least it will prepare the little darlings for those long years of all-nighters in their City firms.

Conveyancing: a pas de deux, not a Dad dance

First Tower Trustees Ltd & Anor v CDS (Superstores International) Ltd

[2018] EWCA Civ 139

Many of our readers will have bought residential property, and have been told (or should have been told) that the principle of “buyer beware” obtains. A  vital exception is made for the seller’s solicitors written answers to the buyer’s particular questions.  Here, the sanctity of this exception is underlined, albeit in a commercial property situation.

Returning to resi, for a moment, an example that could happen to any one of us. My pre-contract enquiry asks “What are your neighbours like?” Answer:  “There was a bit of bother five years ago, but everything is lovely and quiet now”.  I move in.  So do the chapter of Hells Angels who return home after release from a ten stretch. They resume their happy hell raisin’.   I will have a claim for breach of contract against my sellers, and it’s quite likely that the court will rip up the agreement.

The same procedure, albeit with bells on, is used in commercial property, though rescission of a lease is very, very unlikely. With commercial leases, however, rescission is unlikely. First Tower Trustees pits two Guernsey based trustee companies as landlords against a large retailer tenant of a ‘shed’ in Barnsley:  big boys and big boys’ rules.  (The tenant, trading as “The Range”, is an out of town retailer of decorative domestic Stuff that no one really needs.)

This deal made headlines in 2015 (if you read that kind of publication), and has been keeping lawyers busy since. No sooner had CDS moved in, they discovered asbestos  contamination. Obviously asbestos laced frou-frouery isn’t quite the thing, so a spot of decontamination was necessary.  CDS then (counter) claimed against the landlords for their losses: decontamination and short term alternative storage.

Commercial property ingenues may be a bit surprised that the landlords bothered to defend the claim. Perhaps, you thought, a bunch of flowers and a bit off the rent would be a judicious opening gambit. At first instance, before Michael Brindle QC, the landlords went down heavily, but nothing daunted got up, dusted themselves off and called a re-match.  Maybe they were hoping to sneak home on points in front of an appellate panel, more interested in human rights and fluffy family fortunes, a possibility when the listing office wants a bit of a laugh.

Their hopes were dashed. Lewison LJ was sitting with George Leggatt, a retired Brick Court heavy weight.  Their wing man was Colin Rimer, who has an impressive record of being overturned on appeal.  I guess he welcomed a slot on this bench as a retirement alternative to his usual in the park feeding the pigeons.

Let not frivolity, however, cloud my serious match commentary. XXIV Old Buildings’ veteran, Alan Steinfeld knew he had to lead with his chin. When asked by the buyer, in the routine CPSE form about contamination, the landlord had insouciantly suggested the buyer make its own enquiries.  Well, that’s kind of legit, but showing CDS a clean report “accidentally” about a different shed is hardly Queensbury rules.  How was the Anthony Joshua of the Chancery bar going to punch his way out of this one?

As you all know, the common law takes the view – with big boys at least – that they can agree pretty much whatever they like, and not come crying to teacher when it all goes wrong. Even for big boys, however, this bracing robustness is tempered by the Misrepresentation Act 1967:  if the misrepresentor can prove that they had reasonable grounds for believing their own tall stories, and did in fact believe them – note this double test – then it might just get away with it.

On the evidence, the landlords knew full well that the shed was asbestos ridden.   Did that cook their goose? You don’t need to have been in practice since the Moon Landings, to point out that big boys can exclude or restrict liability for pre-contractual wishful thinking.  As long as –  yes, there’s always a proviso –  section 11 of the Unfair Contract Terms Act 1977 doesn’t think it’s going a bit far.

The landlords, advised, by Olswangs as was (now the firm with the longest name in London) had inserted the standard ‘tall stories mitigation’ clause, declaring that CDS hadn’t relied on any pre-contractual blandishments before entering the contract. As is standard, the tenants solicitors would have amended this up to except the solicitors’ written responses to the CPSEs

Kim Lewison had fashioned a useful tall stories measuring stick in FoodCo v Henry Boot, which the senior judiciary has run with it ever since.  It’s what you’d expect:  equality of arms, equality of advice, term open to negotiation and most importantly if your tall story is written down by your lawyers, then that’s sacrosanct.

Oh dear, Muhammad Ali, of Lincoln’s Inn, how will you get off the ropes? You, dear reader, will already of guessed.  Don’t call it an ‘exclusion clause’ call it a “basis of contract” clause.  A basis of contract clause does not limit liability, oh no, so it is outside the mischief of the Act.  It says: “the ball park is the four corners of this document, and there’s no documentary landscape outside of it.”

Contractual estoppel is fairly well established – think Springwell (slight chortle there) and Peekay. Heavyweights can agree to enter a contract on an Alice in Wonderland basis, if they show so chose, with no regard for the facts on the ground.  So urged our prize fighter, but Lewison LJ was dismissive.  Leggatt LJ, riffing on Lewison, had little patience too for the estoppel fantasy.  Contractual estoppel prevents liability from existing at all. It does not exclude a liability created independently by statute existing.  You can deem that you are wearing a prophylactic for congress, but if pregnancy results, you must accept that biology trumps make believe.

It’s wasn’t a hard case to decide. I imagine everyone had a good time (except the landlords) as it’s always nice to see clever people on top of their game.  Significantly, and this is the realpolitik qua Kim Lewison, if this sort of exclusion clause were allowed to flourish, commercial conveyancers can hang up their boxing gloves and go home.  Otherwise, the perfect non-reliance clause would become a holy grail whose pursuit generated many chargeable hours, but would hardly be a Good Thing for the market.

Will this go off to the Supremes? Hardly.  We need a purely commercial case to get the basis of contract v exclusion of liability clause question sorted out –  conveyancing is a traditionally choreographed pas de deux, not a drunken dad dance at a PTA Christmas party.



Easements: more than a walk in the park

Elham House, Broome Park Estate, near Canterbury
by Jessamy/Whiskers

Regency Villas v Diamond Resorts

[2017] EWCA Civ 238

Easements 2.0: updated for the twenty first century, courtesy of our new Chancellor of the High Court, Vos C.  The case has slightly unusual circumstances.  Elham House is the manor in the middle of the Broome Park Estate outside Canterbury. Former owners include everyone’s favourite First World War Lord, Lord Kitchener. 

Like many houses who have outlived their privileged place in society, Elham House has been forced to reinvent itself.  It is now a golf course and sports club.  In the grounds are a number of chalets (I can hear Lord Kitchener shuddering in distate), in which people have time shares. 

The timesharers – “Regency Villas” – had been asked to pay an increased fee for the enjoyment of the various facilities including 18-hole golf course, 3 squash courts, 2 outdoor hard-surfaced tennis courts, a putting green and a croquet lawn as well as extensive grounds and an Italianate Garden. 

So this was basically all about money, and how much the time sharers should contribute to upkeep.  The owners of the golf club etc., held that the rights the timesharers held were personal rights, and therefore could be withdrawn, whilst the timesharers claimed the uses as easements. 

So pretty particular facts to the case, but it gives us a far wider definition of what can form an easement than we had before. 

Judges have always recognised that easements must move with the times.

“The category of servitudes and easements must alter and expand with the changes that take place in the circumstances of mankind.”

said Lord St Leonards in 1852.

But Brougham LC cautioned against it getting silly:

“It must not therefore be supposed that incidents of a novel kind can be devised and attached to property at the fancy or caprice of any owner.”

So is the right to use squash courts, tennis courts, an 18 hole golf course and a swimming pool capricious and fanciful? Sir Geoffrey was certainly keeping a straight face. I’m not quite sure that his nineteenth century predecessors would have though. Re Ellenborough Park had established that recreational rights could be easements, but this was taking recreation to a whole new level.

Vos’ Weltanschauung (“world view”) means that the learned judge should check his entitlement. In Vos-land, houses routinely have swimming pools and tennis courts, and we are all familiar with how expensive it is to maintain a decent golf green, aren’t we chaps? Also, I wonder whether how many of the population of “somewhere”, rather than VosWelt, would necessarily agree with his words:

[54]: “…Physical exercise is now regarded by most people in the United Kingdom as  either  an essential or at least a desirable part of their daily routines.  It is not a mere recreation or amusement.  Physical exercise can, moreover, in our modern lives, take   many forms, whether it be walking, swimming or playing active games and sports. We cannot see how an easement could … be ruled out solely on the grounds that the form of physical exercise it envisaged was a game or a sport rather than purely a walk in a garden.”

A lot of things to think about in this case, and expect some chunky articles in Jessamy’s favourite comic, The Conveyancer.  For those unhappy souls sitting land law or conveyancing exams, dazzle your tormentors by referring to this shiny new case. 

Of Ball Grabs, stoats and weasels

 by whiskers

First Subsea v Balltec
[2017] EWHC 866 (Ch)

This is a story about ball-grabs. It also contains a serious warning for company directors: dishonest breaches of their fiduciary duty do not attract Limitation Act forbearance.

Ball-grabs are not cognates of POTUS-grabs. They are a clever idea for making underwater oil pipes less leaky. If you want an illustration of the brilliance of this device, you will find a diagram at the end of the first instance case report.

Ball-grabs were invented by Mr Emmett. Mr Emmett had birthed the ball-grab early on his career. His company, BSW Engineering had employed a small and cohesive workforce of six. If you wanted a Silicon Valley analogy, it would be set in a garage, with a basket ball hoop on the wall, and Mr Emmett would be played by Matt Damon wearing glasses and trying to look intelligent. Norris J, at first instance, clearly warmed to Bob Emmett and his ball-grabbing obsessions. He describes him thus:

Mr Emmett was a passionate engineer with unbounded enthusiasm for the technology he created and a deep loyalty towards those who had helped him develop it and market its products.

Sir Alastair took less kindly to the Claimants. He described one of them as an “abrasive” witness. For Emmett, had like poor Mr Toad, given the keys of his beloved firm to Toad Hall to the Stoats & Weasels. Needing extra investment to develop his ball-grabbers, he had sold a 71% stake to a rather unpleasant and corporate outfit in Aberdeen. This was not going to end well. The entrepreneurial spirit of the Garage was never going to gel with the sort of outfit that had HR departments, health and safety policies and zero talent in management of the free-spirited.

Mr Toad remained a director of the company, but was more and more excluded from everything. At the end, even the premises of the company. He had responded badly to the Stoats & Weasels sacking his best friend, Mole, and funded his best friend’s claim through the Employment Tribunal. Mole won, and that can’t have pleased the Stoats & Weasels one bit.

Mr Toad took against the libertine ways of the Stoats & Weasels- imposed Managing Director. He was the sort of man downloads porn onto receptionists’ computers for grins. The sort of man who lacks passion for ball-grabbing, but considerable enthusiasm for other types of grab.

And so, lacking a Badger to come to his aid and cleanse the Augean Stables, poor Toad started a new company in Ratty’s hole on the riverbank, with his old friends. Unfortunately, he did this when still officially a director. The gang tendered for three contracts to build ball-grabbers for Angolans. They won one of the tenders, and whilst losing the other two, forced the Stoats & Weasels to lower their tender price, thereby causing loss to Toad Hall.

Oh dear, poor Mr Toad. After a twenty four day trial, in which Stoats & Weasels threw everything at him and his nascent company; after a judgment of 487 paragraphs, Mr Toad defeated all the claims of the Stoats & Weasels. Except the claim for breach of fiduciary duty.

But his brief, 1 Essex Court’s, David Cavender, gave it one last shot: the Limitation Act. Mr Toad is out of clink, because the breach of fiduciary claim is time barred. Now some of you might be as unfamiliar with section 21 of the LA 1980 as you are of ball-grabbing activities. (Yes: there is life in the old joke yet).

In a nutshell, section 21(3) offers absolution for trustees and trustee shaped people from breaches of trust/fiduciary duty after six years. So say you – qua trustee – bunged the trust fund into the wrong investments because you are a bit thick – after six years from breach you’re in the clear.

The problem, though, is section 21(1). This is a two-headed avenging angel, and there is no redemption for the fiduciary – let’s say a company director like Mr Toad – who acts to the detriment of the company fraudulently. Equity doesn’t like fraudsters. (Neither does it like fiduciaries who feather their nest with trust assets – which Toad hadn’t done.)

Fraud is a nasty word, but that is what Toad had actually done.   He should have resigned from the company, shaken the dust off his feet and started afresh. He had tried to buy back Toad Hall, but the Stoats & Weasels had declined to negotiate. But all this notwithstanding, he had gone tendered against a company of which he was director. However badly that company has been treating you, it never excuses a lowering of the standard of fiduciary duty.

On a brighter side, I can report that Toad’s new company, with Ratty and Mole is flourishing and employs over 250 people. I’m sure that Mr Toad will be able to afford the relatively small amount of equitable consideration, for which he has been found liable. Also, given that the Stoats & Weasels lost on so many points of their pleaded case, the costs judgment will be lenient to Toad.

A bicycle made for two?

by Whiskers

Davis v Jackson

[2017] EWHC 698 (Ch)

This case is an abomination, and illustrates yet again that depriving people of legal aid does the development of the common law a great disservice.   Snowden J, who is a clever chap, should have known better.  The contest is between an estranged wife and her husband’s trustee in bankruptcy.

Before I narrate this sorry tale, let me ask you a question.

 Biffy buys a bicycle.  She says that if Wills pays half, then, even though the bicycle lives in Biffy’s garage, the bicycle is “as much his as hers”. The offer isn’t time limited.  

Wills doesn’t pay half. What interest does he have in Biffy’s bicycle?

I know what you are going to say.  It’s “diddly squat”, isn’t it?  

Or is it? If you yourself have a bicycle, can anyone come along and claim halfsies, if they give you half the purchase price?  No, clearly not.  Biffy has parted with something.  I’d say this “something” was a contingent interest in 50% of the bicycle.   

Anyway, back to the case. Mrs Jackson (“Mum”) – let’s pretend we’re touchy feely family bods here – is married to Mr Jackson (“Dad”).  They have been “estranged” since 2001.  However, they are still married. Mum has four children, but it’s not clear that they are Dad’s too, or some other dad.  Anyway, Mum brings one of the kids to court to help her.  She’s called “Monique”.  Snowden J says nice things about Monique:

“But I must also pay particular tribute to Ms. Lewis, who does not have any legal training, but who assisted and represented her mother in difficult circumstances with remarkable ability, poise and confidence, both in written submissions and by way of oral submissions at the hearings before me.”

Sir Richard also says nice things about the Trustee’s counsel too – Ms Daisy Brown (“Daisy”) of Guildhall Chambers:

Ms. Brown, counsel for the Trustee and faced with a litigant in person, conducted the case in an exemplary manner, which reflects the stance taken by the Trustee and his solicitors.

Not that exemplary, Daisy! You could have done your job and reminded the court of some elementary principles of property.

But that’s enough ad hominem (feminam) abuse from me.  Back to the narrative.  

Mum buys Blackacre (194 Harrington Road, Beckenham) with some of her own money from a property she previously owned, and a mortgage. (Dad knows all about mortgages, having run a one-man band mortgage broking firm. Subsequently he was struck off by the FCA.)  Dad never, ever, lives there.  He occasionally telephones the kids.

Then Mum does a very silly thing. She goes to Dad’s solicitors and executes a Deed of Trust.  The Deed says that she holds Blackacre in equal shares for Dad and herself.  Why?  In evidence, she said she was told by the lawyers that this was to protect the kids if she should shuffle off the mortal.  Yeah right. 

The Trust Deed does contain a magic clause. I say “magic” because even though they read it, indeed the learned judge quotes it, the words are hidden by the cloak of not-knowingness.  It states – and think back to the bicycle that started this story – that Dad’s getting fifty percent of Blackacre is in consideration of him paying half of the mortgage payments and outgoings.

 Are we agreed here?  In the real world, Dad has a contingent interest, which becomes actual, if and only if, he coughs up the wonga.  In Snowden-world, though, the grand wizard pulls out magic pixie dust from his robes, sprinkles it on Dad’s contingent interest, and like some New Testament miracle, the halt can walk and the blind can see, and Dad has got his share upgraded.  

Mum then gets into trouble with her mortgage payments. The extent of Dad’s help is to get her a new, shiny mortgage.  A condition of the mortgage is that the legal title is transferred into both their names.  So Dad has finally given some consideration – the value of his joint covenant. 

Imagine that this is pre 1998, what do we have? Again, in the real world, we have joint legal tenants, with Dad having a contingent interest thingy in the equitable title.

However, this all happened in 2007. What’s changed?  That little box-ette on the TR1, which joint legal tenants tick to record the beneficial interest.  Unhelpfully, Mum and Dad’s solicitors tick that little box on the TR1 saying that they held Blackacre on trust for themselves as joint tenants.

And off Snowden goes on his Stack v Dowden frolic.  His subversion of the case is breath taking.  Have you read Stack v Dowden recently?  It’s about cohabitants.  Ms Dowden, was you might remember, TfL’s most senior engineer.  She had lived with Mr Stack for thirty odd years and also had four kids by him. Stack v Dowden is a Baroness Hale special.  As a matter of policy, it is beyond criticism.  As a matter of law – and I say this as a Baroness Hale groupie – it is a bit pragmatic.  Far be it from me to ally myself with pillars of the establishment, but I’m rather with Lord Neuberger in this judgment. 

Stack is therefore instantly distinguishable. It is about cohabitants and a family home.  It is not about a home purchased by an estranged wife with her own money, and with the mortgage liability solely discharged by her, to provide a home for herself and her children.

But let’s put Stack aside, and let’s put Mum’s mere equity for undue influence/mistake aside (as the learned judge did) and think about what interest Dad has after Mum ticked the fatal TR1 box.  Two possibilities, I suggest. 

Firstly that Mum ended the trust that the trust deed had created and resettled Blackacre so that she gratuitously conferred a beneficial interest on her estranged husband.

Secondly, Mum ticked the box because as far as she was concerned she already held Blackacre not absolutely, but contingently for her husband, and for herself. As Baroness Hale says in Stack, the starting point is the TR1, and you need proof of the parties’ intentions to go beyond that.  I’d say a trust deed was pretty good proof.

Much later, Dad went pop. His trustee in bankruptcy went after half of Blackacre.  I don’t doubt that Snowden J thought he was doing the right thing by using equitable accounting to reflect Mum’s contributions, and get her a bigger share.  However his starting point is fundamentally misconceived. 

This is a very unfortunate case. I was reminded of Lord Denning’s words in another lamentable case about errant equitable interests: Re Vandervell (no 2)

[Counsel] realised that the claim….had no merit whatsoever. He started off by reminding us that “hard cases make bad law”. He repeated it time after time. He treated it as if it was an ultimate truth. But it is a maxim which is quite misleading. It should be deleted from our vocabulary. It comes to this: “Unjust decisions make good law”: whereas they do nothing of the kind. Every unjust decision is a reproach to the law or to the Judge who administers it.




When I use a word, said Humpty Dumpty…

Wood v Capita Insurance 

[2017] UKSC 24

I imagine the Supremes sitting in their kitchenette idly flipping through the appeal petitions and bickering about which ones are going to be allowed.  All the judges will have their own hobby horses and bêtes noires.  Baroness Hale is unlikely to get fired up over a dodgy tax scheme, whilst Lord Sumption is not even going to read petitions that originated in the Family Division.   Horse trading and tactical voting will take place, with Lord Neuberger being grand and statesmanlike, and Lady Hale being smiley and steely and softly, softly, catchy monkey

So whose itch was this case scratching?  The most likely is the Supreme who gave the only judgment: with Lord Hodge.  Lord Hodge is the Scottish Judge, who tends to the commercial end of the spectrum.  Either that, or he’d won a game of rock-paper-scissors, with Lord Carnwath, who was still sulking over losing in Arnold v Britton.

What had riled Lord Hodge, was the apparent suggestion that there was some kind of “rowing back” from Rainy Skies orthodoxy in the majority decision in that aforementioned ghastly case Arnold v Britton.

Capita’s ground of appeal had been on this very point.  The Appeal Court had dismissed the idea that there was any dissonance between the two cases.  Capita had therefore claimed that excessive reliance on the textual purity approach in Arnold had meant that the contextulism advocated by Rainy Skies  was occluded. If the Appeal Court had taken a more contextual approach, then they would have put greater reliance on the matrix of fact, and Capital would have won.

The facts of the case are dull and predictable.  Some company of which Mr Wood was the 93% shareholder, and one of three directors was sold to Capita Insurance.  The business of the company was selling insurance to owner of classic cars.  The business  model was slightly more dodgy:  a classic car owner would input their details into an aggregator on the internet, and would be given a quote.  Funnily enough, when the punter was subsequently rung by the salesman to take credit card details, the premia had increased from the website quote, even though the risk profile hadn’t changed.

Capita reported themselves to the FSA, and had to compensate punters who had been diddled under l’ancien regime.  They therefore tried to claim on the warranties that Mr Wood et al had given them under the SPA.  The argument developed around the wording of the indemnity.  At first instance, the insurance company had won in front of  Popplewell.   A strong appeal court had held for Mr Wood, and if you read the clause, you’ll see for yourself, that it’s ambiguous.  In a nutshell, the draftsperson hadn’t considered a situation where loss might arise from the Capita whistleblowing on itself to the FSA as it was bound to do, under FSMA 2000.

The panel agreed with Popplewell,  and the appeal allowed Lord Hodge a platform to reformulate the orthodoxy.  First of all, he said, he was not going to reformulate the Rainy Sky and Arnold guidance.  However,  he thought he’d like to explain why Arnold was not a recalibration of Rainy Sky.

A court’s job was not to use a slavish, literalist approach, parsing each word like a GCSE English paper.  Rather, the contract was to be seen as a whole, depending on its nature, formality and quality of the drafting.  Greater or lesser consideration to these elements should be given, depending on the wider context.

Lord Hoffmann’s bid for judicial immortality in ICS v West Bromwich, where contextualisation was hailed as a novelty, should be put in its historical context.  The factual background known to the parties at or before the date of the contract had been considered far earlier in Prenn v Simmonds and Reardon-Smith v Yngar Hansen-Tangen by one of the pantheon, Lord Wilberforce.  Further, the sainted Lord Bingham had written a sound piece in the Edinburgh Law Review, which had said Hoffmann, was, as per usual, bigging himself up and pretending to be original.

Reprising Lord Clarke in Rainy SkyLord Hodge said that construction is a unitary exercise.  Where rival meanings exist, then it is appropriate to view them through the prism of commercial common sense.  The unitary process is also an iterative process:

“it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each”.

And feeling the need for a good sound bite for undergraduates and GDL-ers he says:

 “Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation.”

Finishing off, with a rousing and patriotic chorus (all together, now):

  1. On the approach to contractual interpretation, Rainy Skyand Arnold were saying the same thing.
  2. The recent history of the common law of contractual interpretation is one of continuity rather than change. One of the attractions of English law as a legal system of choice in commercial matters is its stability and continuity, particularly in contractual interpretation.

So now we all know where we are, and Lord Hodge would be ever so grateful if this could be the last word on the subject for a while.

Getting hurt in far away places

by Whiskers

MIB v Moreno is the penultimate case of the legal year. It should not share the opprobrium of some cases rushed out carelessly by a de-mob happy judiciary eager to clear their desks before long vacation, but it feels rather unloved.  The result is probably the right one for those who value consistency, but I do prefer Moore-Bick’s Appeal Court judgment in Jacobs v MIB on precisely the same point. 

The case is about hurting yourself in faraway countries. Or more precisely, if you do hurt yourself, by what country’s law are your damages to be assessed?  The lex loci delicti, (the place where the accident occurred) as they call it on the continent, or the lex fori – domestic law?  There’s no obvious answer to this.  On the one hand lex loci delicti prevents arguments, especially when there are three nationalities involved eg a French man hits an English woman in Italy.  However once liability is established, then there’s a powerful argument for saying that damages ought to be assessed in the country where the victim lives. 

 This was illustrated by the case of Bloy v MIB which followed Jacobs.  The facts were tragic.  A baby and his mum injured by an uninsured driver, and the damages in the lex loci delicti (Lithuania) were capped and insufficient to compensate the baby for the lifelong care he was going to need.  This is how it used to be in the UK, as illustrated by the House of Lords case of Harding v Wealands.  Liability assessed by Australian law and damages with reference to UK law. 

Lord Clarke was clearly in grumpy mood and didn’t want to be there at all. He brought up Harding v Wealands even before the MIB’s counsel had got his ducks in a row.  Lord Clarke made it obvious that he wished poor Mr Mercer from Essex Court Chambers – a diffident but quietly determined advocate – would shut up and let him go back to deciding what books he was going to take on his hols.

Lord Mance and Lord Toulson were gentler and looked grateful for Mr Mercer’s comprehensive history of motor insurance in Europe. Mr Mercer’s junior was scarily clever Marie Louise Kinsler from 2 Temple Gardens.  She kept passing him notes and whispering the answer to all those nasty questions from their Lordships.

 The question, as Lord Clarke kept pointing out, was a simple one. If, as happened to poor Miss Moreno, you are a pedestrian hit by an uninsured Albanian driver in Greece, should Greek law decide how much compensation you get, or should English law? 

English damages for RTAs are more generous than most of Europe. So Miss Moreno clearly would have preferred those.  On the other hand, the scheme by which the Motor Insurance Bureau was liable to compensate her – Regulation 13(2) of the Motor Vehicles (Compulsory Insurance)(Information Centre and Compensation Body Regulations) 2003 (SI 2003/37)(“The Regulations”) – only allowed the MIB to claim damages back from Greece at the level they would have been in Greece.

 Now to put this in context, British drivers who hit people and things in Europe pay damages according to the law of the country where the prang happened. Also, if you’re hit by an insured driver in Europe, you get damages according to the lex loci delicti.  Why then should those with the misfortune to be hit by uninsured reprobates be better off. 

 Well why indeed? Unfortunately, as Moore-Bick LJ said, because our Regulations, which give effect to this diktat from Brussels – the Fourth Directive on Motor Insurance – (although quite a useful diktat in many ways) say that.   And although we now have a policy that UK legislation should be read in such a way as to give effect to EU legislation – the Marleasing case – you can’t just re-write UK legislation to make it compliant.  Or, as Lord Mance said, using Latin for extra gravitas, the court cannot act contra legem.

 Instead, what you have to do is make an application to the European Court of Justice who tells you that your draftspersons are rubbish and then Parliament has to change the offending law. Needless to say this is all a lot of fuss, and quite frankly why bother now that we’re out of there anyway? 

 Once we had been treated to a comprehensive history of motor insurance in Europe with extensive and close textual analysis by Mr Mercer, it was time for Mr Beard to rise. He seems not to have bought a clever little friend along with him.  There was a teenager in the solicitors’ benches, who might have been there on work experience, and behind him four civilians who presumably had come down to London to see justice done.  Although they sat very still and listened attentively, one had to wonder whether it’s kind to force non-combatants to undergo this type of experience.

 Lord Hodge regarded Mr Beard with less impatience, perhaps because Mr Beard did not want to give a revisionist version of the history we had heard. Mr Beard talked much about people having “to lump it”.  Lumpage is a new term of art for when you find yourself on the wrong end of a conflict of laws point, I think.  Lumpage was regarded as a Bad Thing, but a necessary evil, especially when Regulations which were supposed to implement EU law smoothly, without any fuss turn out to do just the reverse.  He resisted all the onslaughts of all five justices, and maintained his submissions of fidelity to the laws of the UK as drafted. 

 You decide: when an SI – a baby law – says this…

 the compensation body shall compensate the injured party in accordance with the provisions of Article 1 of the second motor insurance directive as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain.

What’s your reaction?   Act as though the accident had indeed happened in GB. Seems logical? 

Ultimately, though, it was not to be. The Supremes bowed beneath the weight of history and succumbed to the siren songs of pan-European tortious conformity.  

 The words of legal fiction – as if the accident had occurred in the Great Britain – were held merely to extend the existing scope of the MIB’s compensatory liability, not to set out the basis for assessment of loss.

 So, Brexit may be coming some day, but this doesn’t stop their Lordships liking their law nice and tidy. Anomalies are bad, even if Moore-Bick could live with them.

Tell me Sweet little Lies

Versloot Dredging v HDI Gerling Versicherung Industrie AG

[2016] UKSC 45

Should an action be sanctioned according to its actual consequences or is dishonesty itself worth of adverse sanction? Should we punish dishonesty pour encourager les autres, especially where fraud is rampart and difficult to detect?

 Those of you who were fortunate enough to have done jurisprudence will be familiar with the debate, and no doubt this case brought back happy memories of sunlit tutorials to the Supremes.

This is an important case.  On the glorious 12th, not only will we be able to shoot grouse, the fresh faced Insurance Act 2015 will come into force.  (I went to an utterly incomprehensible talk about it by a clever young lad from Fountain Court back in the spring, but still feel unprepared for this glorious day.) The Marine Insurance Act 1906 is amended, but has been given a makeover for the cuddly exigencies of the new millennium.

What the fresh-minted Insurance Act 2015 doesn’t tell us, though, is what a “fraudulent claim” actually is. How rotten is rotten?  This case tells us what “fraudulent claim” isn’t. 

So back to my introductory question, if I set out to do a naughty thing, but do not succeed, should I suffer adverse consequences?  Let’s look at this in the insurance claim context, on a sliding scale.

I set fire to my factory, because it’s making a loss and I need the money from the insurance policy?  Fraudulent/Not Fraudulent?

I think we are all clear on that one. Getting the matches out is way more culpable than falsehoods.  

I pretend that I had ten Hermes scarves in my genuinely lost luggage, when all I had was a few bits and bobs from Primark;  fraudulent/not fraudulent?

Ten’s probably taking the p***.  How about one or two, though?   It’s only an insurance company after all. I suspect most of the readers of this blog probably wouldn’t exaggerate their claim.  Nor would I.  It’s just rather tacky.  And anyway how many Hermes scarves does a girl need?

Now what about when my house is broken into.  In my insurance claim, I say I returned home on the last train, but I didn’t notice anything until next day, when I surfaced with my hangover? 

The truth is that I didn’t go home at all that night.  But I don’t want my husband, (who’s on holiday with the kids) to find out that actually I went home with my  hot new personal trainer, Danny.

 I’m telling a porkie, not to bolster my claim, but so as not to upset the matrimonial apple cart.  Fraudulent? Something we’d all do? Enough to let the insurers wriggle out of their contractual obligations?

Of course, gentle reader, you are not the sort of moral reprobate that would go home with a person to whom you were not married for carnal purposes.  So this wouldn’t apply to you.  But if you were?  Wouldn’t that little white lie be practically a moral imperative?

In this case, the DC Merwestone, an old workhorse of a ship, was wending its way back to the Netherlands from Lithuania.   One of the crew left the wrong tap open and the cruel sea flooded into the engine room causing €3.2m worth of damage.  

The Owners didn’t want tedious and lengthy investigations about the ship’s seaworthiness, and suggested to the Insurers that it was a faulty bilge alarm, or perhaps a stray albatross had caused the mishap.  It wasn’t a very enthusiastic porkie, nor one that they persisted in. As it happened, they were insured for the loss anyway, and but for their porkie, the Insurer would have had to pay out.  The ship was seaworthy too, but they weren’t giving the Insurers a chance to delay a badly needed payout.

 The term of art for this kind of postmodern view of the truth is “a fraudulent device”.  At first instance, Popplewell J held that the Owners were hoist on their own petard and the Insurers had acted lawfully.  He clearly felt unhappy with his decision, though, but was bound by the very firm 2002 judgment of Mance LJ in The Aegeon.

The result is that Gerling got to avoid a contract because the society has traditionally held insurance contracts to be “special”.  Like fiduciaries, a higher standard of probity is expected from policy holders in an insurance contract.  Traditionally insurance contracts have been uberrimae fides.   The “informational asymmetry” merits the law’s special protection.   

What level of protection is appropriate in these egalitarian, fair-minded days.  Should one half-hearted little fib entitle the insurer to a sin tax of potentially millions of pounds?

No, said Lord Sumption, giving the leading judgment. He rebadged “fraudulent device” as “collateral lies”, and came to the conclusion that this mollycoddling of the insurance industry was out of date.  Perhaps such preferential treatment was justified by social context in 1906 when McKenzie Chambers put pen to parchment, but it was wholly inappropriate now.  Dishonesty without consequences should not be so severely punished.  His is a fine, rigorous and historically grounded judgment, where policy is modestly clothed in precedent to give a tailored finish. 

 Lords Clarke and Toulson had a brief assenting chunter, but it was criminal/family judge, Lord Hughes really got his teeth into it.  It would be sneery of me to imagine him saying to himself “Finally, “dishonesty!  I know what that means!”  His judgment is more nuanced than Sumption’s, but essentially comes to the same conclusion.  The court has no business sanctioning mere lack of moral hygiene.

 So it was left to Lord Mance to defend the moral high ground, and his position in The Aegeon.  Any lie is bad, he said.  The informational asymmetry between insurer and insured merits the greatest solicitude.  Any tolerance of dissimulation fosters an environment where fraud can flourish.  It is artificial to draw a distinction between a lie’s intention and its consequences.  The judgment is couched in utilitarian terms, but there is a ring of genuninely held belief.  A lie is a lie.  And that’s all there is to it.

 So back to our examples. The arsonist is not let off the hook, nor the embellisher of genuine claims.  A policy holder with a genuine claim, who tells lies in order to facilitate their claim or save their marriage does not however suffer forfeiture.  Does that feel right?  I think that’s probably a matter of personal taste.

 This  judgment is bad news for the industry, but then so is the new Act. I’m guessing there’s going to be a lot of litigation as insurers work out where they are. 

Note that this judgment deals with the common law position.  If Insurers want to put in anti-fraudulent device wording in their policies, they can, providing that they comply with the transparency requirements of the legislation.

Bailii judgment

Post script:  the DC Merwestone was repaired and continues to plough her weary furrow.

Faites vos jeux, Flopsy, Mopsy and Cottontail

By Cheesy

Playboy Club London v Banco del Lavoro

[2016] EWHC Civ 457

So much to dislike about this case, but so many lolz too.  Gambling, caddish behaviour and tort law.  A dress code for bunny girls that really puts the PWC heels story in perspective. The Respondent here was Hefner’s Playboy club.

Also the story line is reminiscent of an episode of Inspector Montalbano.  Except the plot thickens, or perhaps curdles, in Parma rather than Sicily.  One Hassan Baccarat (Barakat) spends most of his time gambling at the Casino du Liban.  This is near Beirut, and has the cheesiest of cheesy websites:  check it out!

Wishing for something more sophisticated perhaps, he’s recommended a London club by the manager of the Casino du Liban, where the croupiers pretend to be bunnies. And not even convincing ones.  Lebanese Manager recommends Hassan to Chief Rabbit at the Playboy as a fool likely to be soon parted from his money.

So far, so of sociological interest only. But Hassan needs to open an account at the Warren before he can play, and for this he needs a bank reference. Hassan produces the card of one Paola Guidetti, a bank manager at the Parma branch of the Banco del Lavaro.  As this is Montalbano, I’m guessing Paola is luscious and has an audacious cleavage and vertiginous high heels.  Chief Rabbit is far too discrete to approach the bank himself.  Instead he does it through eminence grise bunny, its service company called “Burlington”.

Eminence grise rabbit faxes the bank and using Banco di Lavoro notepaper, sultry Paola responds to the enquiry about her (???) lover’s liquidity.  Good for £1.6 mil, a week, she writes confidently in fluent English, though using a rather unsightly CAPITALISED font.  “PRIVATE AND CONFIDENTIAL.”

Two things are a bit wrong with this.  First of all, the Banco di Lavoro didn’t know that they were credit referencing to Flopsy, Mopsy and Cottontail, But, whether they did, or they didn’t, they are fixed with apparent authority and there is and end of it.  There was no appeal on this.   Secondly, there wasn’t even one lot of £1.6m in the bank account; merely a bank account opened with the promise of that sum to be deposited.

Hassan turns up at The Burrows, and the Flopsy, Mopsy and Cottontail, the Chief Rabbit’s cashiers let him have £800k of chips (or “plaques” as they are called).  The cheques admittedly looked a bit odd, – sort of, uh, photocopies, but as Hassan comes highly recommended, that little detail was overlooked.  Hassan then plays lots and wins a bit and then loses lots.

Yes, I’m guessing you know what happens next, because you’ll all have seen the films/series.  Hassan is unmasked, and, resplendent in DJ, gets into a high performance fanny magnet and is pursued around scenic London by Flopsy, Mopsy and Cottontail. Not that one.  Wrong film. Television isn’t real, you know!

No, the one I’m thinking of, is that the cheques bounce and Hassan disappears back to the Levant, where he carries on gambling happily.  Flopsy et al sue Banco del Lavoro for negligent misrepresentation with damages of £1.25m.  (Paola is let go by the bank.  It seems she has been careless with her favours elsewhere).

At first instance, HHJ Mackie found in favour of Chief Bunny.   Following Heller, which itself involved a dodgy credit reference, he found that Banco del Lavoro was skewered good and proper by Paola, and had assumed liability not just to the Burlington front bunny, but also the Club itself. 

And also, the counterfeit cheques didn’t break the chain of causation.  At least the judge knocked something off the claim for contributory negligence.

The Appeal Court took a different view and allowed the bank’s appeal.  Longmore LJ disagreed that the Burlington reference could also be relied on by the Chief Rabbit. The bank had not assumed any responsibility for the Playboy Club.  of the ambit of Longmore said, that if Flopsy wants to protect the identity of its customers by using a lagomorphic front company, then the bank is entitled to believe that its representation would not go any further.  The learned lord justice pointed out this tactic of “the undisclosed principal” type of jag might have worked in the seminal case of Hedley, but the facts of that case could be distinguished.

Once the court had decided this, then the novus actus point becomes redundant.  However, obiter he held that the counterfeit did not break the chain of causation.  It’s difficult to argue with that. 

I was amused by counsel for the bank’s question to the actual cashier, who accepted the photocopied cheque. 

“Would you have accepted such a cheque in payment for your own car?” 

“Of course not!” the lady replied indignantly.

No new law here, but a nice story for the weekend, with a moral and principled end.



The Chief Rabbit