The firm are delighted once again to have been shortlisted as finalists in this year’s Enfranchisement and Right to Manage Awards. These awards are independently judged and seek to highlight excellence in enfranchisement. The firm won Solicitors of the Year in 2015 and Mark Chick won the award as Solicitor of the Year in 2016.
To find out more about our award winning leasehold team click here.‘Elim Court’ & Right to Manage – How wrong is right?
Mark Chick highlights a recent Right to Manage case which illustrates how wrong you can get it, but still get it right?
Serving notices has always been a tricky business. The emphasis in legal terms on getting it right is a balancing act between what ‘black letter’ compliance might demand and that which the reasonable layperson might expect common sense commerciality to dictate.
The case of Elim Court (Elim Court RTM Company Limited v Avon Freeholds Limited  EWCA Civ 89) is very interesting, as it really does seem to push the envelope of how wrong you can get it, yet still get it right.
Elim Court concerns RTM and so you might argue that different policy considerations apply – this is a ‘no fault’ right to take over the management after all – any failure in the process can be corrected by serving another notice and here are no economic consequences for the landlord, as unlike in enfranchisement cases, no property interests are changing hands.
However, I think that this case may well be seized upon as a ‘get out of jail free’ card by those next affected by issues of validity in their notices.
During the RTM process a notice must be given to the tenants as to where a copy of the articles of association of the company may be inspected. Three days for inspection must be nominated of which at least one must be a Saturday or Sunday. In Elim Court three days were specified, but none was a Saturday or Sunday.
The court held that the non-compliance with the requirements of the legislation was a trivial failure and would not of itself invalidate the RTM process.
Similarly, for RTM, the notice must be signed on behalf of the company. An issue arose as to whether it had been signed by an authorised member or officer. The notice was in fact signed by an individual (a member) but whose status was unclear as he had signed under a stamp that said ‘RTMF Secretarial’
The court held, nonetheless, despite the confusion the notice had been validly signed.
Lastly, the notice had not been served on an intermediate landlord – a strict requirement of the RTM legislation. The intermediate landlord in question owned a single ‘reversionary’ head lease over one flat only. This secured an equity release scheme. Accordingly, because the intermediate landlord had no direct management responsibilities the court decided that service could be dispensed with.
The previous case law (Mannai) has focused on the ‘reasonable recipient’ test and an emphasis on whether the notice complied or not with a mandatory obligation under statute.
However, this moved on in the 2014 Court of Appeal case of Natt v Osman. The test now is whether parliament would have intended that failure to comply would have invalidated the exercise of the right in question.
Elim may well be confined to its facts – as an RTM case and it is certainly true that RTM has ‘just got easier.’ Will it make a difference in enfranchisement? – We will have to wait and see.
Mark Chick is a Partner and Head of the Landlord & Tenant team here at Bishop & Sewell LLP. To discuss any of the issues raised in this article or leasehold matters generally, please email firstname.lastname@example.org or by telephoning 020 7631 4141 and asking to speak to a member of Landlord & Tenant team.Where should notice be served?
In this article Mark Chick takes a look at the case of Oldham Metropolitan Borough Council v Tanna and the question of whether service on the registered proprietor will be good service.
Click here for further details.
If you have a query about leasehold issues then please contact email@example.com or call 020 7631 4141 and ask to speak to a member of the landlord and tenant teamBishop & Sewell advises on Spinnaker Opportunities IPO
Bishop & Sewell has advised Spinnaker Opportunities, a new cash shell, on its admission to the Standard List of the London Stock Exchange and its Placing and Subscription of over 26 million shares. Admission and Dealings occurred at 5 pence per share on Wednesday 17th May.
Spinnaker is the latest venture of veteran small-cap trouble-shooter turned entrepreneur, Andy Morrison, who is chairman and a leading investor in the business. Spinnaker, which has a highly experienced board and advisory team, is now seeking a reverse takeover and is currently assessing opportunities in the oil and gas sector, mid-stream and down-stream energy and cleantech.
The transaction was handled on behalf of Bishop & Sewell by David Little, Andrew Kavanagh and Gurkirit Gill.
David Little, Partner at Bishop & Sewell, added:
“It has been a real pleasure to help Spinnaker Opportunities plc on this significant step and to see the company complete a successful offering at a time of relative uncertainty in equity markets generally.”RICS CPD Birmingham – 24th May 2017
Mark Chick is speaking at the RICS CPD Day in Birmingham giving a case update on Leasehold Enfranchisement. Any delegates from the day who would like copies of the slides or to follow up on the day should contact firstname.lastname@example.org
If you would like to discuss leasehold issues generally or have a question for our landlord and tenant team please email email@example.com or telephone 020 7631 4141 and ask to speak to a member of the landlord and tenant team.Bishop & Sewell presence at Landlord Investment Shows 2017
We will be present at several Landlord Investment Shows throughout the year in June, September and November. These events provide a platform for current and prospective landlords to keep up-to-date with industry developments and provide access to experts to gain in-depth knowledge of UK property hot-spots. You can find out more details below:
It is difficult to comprehend that you would ever lose the ability to manage your own affairs but mental and physical incapacity can happen to anyone at any time.
It is anticipated that by 2040 nearly one in seven people will be over the age of 75 (Government Office for Science) and by 2025 more than 1 million people in the UK will suffer from dementia (Alzheimer’s Society). Younger people are not immune; they too can suddenly become incapacitated from an accident or illness.
It has become more important than ever before to have a Lasting Power of Attorney (LPA) in place. It will ensure that you have the freedom to choose those individuals you trust to manage your affairs in the event you become incapacitated.
If you do not have an LPA in place and you later lose the ability to make or communicate decisions you would no longer be able make an LPA, rather it would be necessary for your family or friends to apply to the Court of Protection to access and gain control of your assets. These could be individuals you may not have necessarily chosen to act on your behalf and the application can be both a time consuming and very expensive process, so it is best to get an LPA in place as soon as you can before it is too late. You can request a guidance note here.
For more information on LPAs or to find out how our Private Client team can help you more widely, please contact Shelina Vaiya.Owens v Owens – a case of divorce purgatory
While a request for a divorce may come as a shock, most people come to the realisation that if their spouse considers that the marriage is over then, perhaps after attending marriage counselling, there is no point fighting the inevitable.
The law in England and Wales requires a marriage to have irretrievably broken down and one of five statutory facts to be proved. The third, fourth and fifth factors require spouses to have been separated for between two and five years, so the majority of divorce petitions are presented on one of the first two grounds: adultery or ‘unreasonable behaviour’. This is not only because people want to move on with their lives, but also because a financial claim cannot be progressed (other than on a voluntary basis) except within divorce proceedings. Unless there is a new relationship, a divorce petition will be presented on the basis of ‘unreasonable behaviour’.
The statutory test is “that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent”. The wording of the statute suggests an objective test, but in considering what is reasonable, the court will have regard to the history of the marriage and to the spouses before it, so the test becomes rather more subjective.
To lessen acrimony, the practice among family lawyers is to submit a divorce petition to the other side for approval before it is issued. Any disputed allegations can then be removed or watered down so long as the grounds that remain are sufficient to satisfy a judge to grant a divorce. As a result many divorces will be granted on what on the face of a divorce petition would seem to be very trivial reasons.
It is extremely rare in England for any divorce to be defended, but in early 2017 the defended divorce of Tini and Hugh Owens reached the Court of Appeal.
Hugh Owens did not want to be divorced from his wife even though she had had an affair in 2012 and had moved out of the family home. He said that he had forgiven her. He defended her divorce petition and the case went to a hearing in which they both gave evidence in the witness box. The judge was unimpressed by the wife’s evidence describing it as “hopeless”, “anodyne”, and “scraping the barrel”. He said it “lacked beef because there was none”.
The judge would not grant Tini Owens her divorce, although if Mr Owens had not defended the divorce a judge would undoubtedly have allowed the petition to go through. Tini Owens was left with two options: either wait another few years until they had been separated for five years or appeal to the Court of Appeal. She chose to appeal.
All three of the appeal judges conceded that on any view the marriage was over, but they had to apply the law. They had to deny Tini Owens her divorce which they did with regret acknowledging that it would leave her in a very unhappy situation. They went so far as to urge Mr Owens to grant his wife the divorce and called for a change in the law which would require a change in legislation to replace the Matrimonial Causes Act 1973.
So where does that leave us today? The likelihood is that the we will continue to issue ‘unreasonable behaviour’ divorce petitions based on compromise statements or ‘fudges’ to reduce conflict, although some family lawyers are worried that judges may now not allow these divorce petitions to go through.
Family lawyers have been calling for many years for no fault divorce legislation which is the law many countries. The Family Law Act 1996 was to introduce no fault divorce in this country, but the relevant part of the Act never received Royal assent, in no small part due to political fears that it would undermine marriage.
Marriage is a matter of choice and there is no test that has to be passed, so why should the ending of a marriage have to pass a judicial test.
For more information, please contact Philip Rutter, Partner in our Family Team.Passing on your estate – Inheritance Act 1975
You might think that the freedom of a person to dispose of his or her assets by Will is, or ought to be, sacrosanct. In England and Wales, as opposed to many European jurisdictions and jurisdictions further afar, this is largely the case.
That freedom exists in England and Wales, save that certain parties (primarily the spouse) but also children and those who have been maintained by the deceased (see below) may apply to the Court under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) to be awarded a part of the deceased’s estate in the absence of their having been so provided under his/her Will. Essentially, under the 1975 Act, the Court may award a spouse (or someone in similar circumstances) an amount which it considers to be reasonable provision for their maintenance or otherwise and in respect of other qualifying applicants (see below) the Court may make an award in their favour so far as is necessary with regard to reasonable provision for their maintenance alone. As appears from the judgment that follows, the Court finds the determination of ‘maintenance’ and ‘reasonable provision’ for such ‘maintenance’ to be difficult to determine and there are conflicting views.
In Ilott v The Blue Cross & Others  UKSC 17, the application of the 1975 Act came before the Supreme Court, the highest Court in England and Wales, for the first time. The claim was brought by the daughter of the deceased Mrs Jackson, namely Mrs Ilott, who had been estranged from her mother for 26 years. Her mother had determined as early as 1984 that she was not going to leave anything to her daughter who had chosen her own way of life.
The daughter, Mrs Ilott, lived in straightened financial circumstances. She applied under the 1975 Act for reasonable financial provision to be provided for her out of her mother’s estate, notwithstanding that her mother had made it clear since 1984 that she was not to receive anything and that her mother was to leave her estate to charities. A District Judge determined that Mrs Ilott should receive £50,000 as a reasonable provision for her maintenance. The Court of Appeal increased that award to £143,000, with an option to receive a further £20,000 in one or more instalments.
The Supreme Court unanimously overturned the Court of Appeal’s Judgment. They said that the Court of Appeal had been wrong in determining that the District Judge had erred in law. There is no objective standard of reasonable provision for maintenance – the parties’ behaviour and other considerations set out in the 1975 Act needed to be weighed in the balance; maintenance implies provision to meet everyday expenses of living and nothing more; the testator’s wishes in making the Will are relevant. Yet, the Supreme Court was left with no option other than to allow the District Judge’s award to stand (i.e. £50,000 to Mrs Jackson) because they could not interfere with a judgment decided upon evidence which was clearly within his discretion.
In the Supreme Court Lady Hale criticised the 1975 Act and we concur with her criticisms. Lady Hale said that there was no guidance as to how the Court should approach an application by an adult child for reasonable provision for his/her maintenance. One wonders why a person estranged from her mother for twenty six years might be able to benefit from her estate solely on the basis that she was a daughter, when her mother had made clear for over twenty years that she was not going to benefit.
The 1975 Act permits claims to be brought against the estate of a deceased by: a spouse or civil partner; a former spouse or civil partner; a child of the deceased; a person treated as the child of the deceased; or a person ‘maintained’ by the deceased.
As mentioned above, a spouse or former spouse is entitled to reasonable financial provision whether for their maintenance or otherwise. The other potential applicants are entitled to reasonable financial provision for their maintenance, as determined by the Court.
Our advice is that if you consider that there may be a risk that someone may apply under the 1975 Act in relation to your Will on the basis that they have not been reasonably provided for, you must explain the circumstances and set out the history of the relationship before executing your Will or perhaps even divest of part of your estate in advance.
For more information, please contact Will Twidale, Partner in our Dispute Resolution Team.