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‘Want to Know’ Presentation Transcript

20th March 2013

Jeanette Dennis

Thank you ladies and gentlemen. When Katie and I divided up the current Case Law into

areas which affect us in our day-to-day practice, I did not realise that I had chosen just to

cover 20 cases in only 20 minutes! And still leave you fresh as a daisy for Katie’s slot!

Clearly, that won’t be possible. So what I have done is list the cases and a brief summary in

the synopsis in front of you. And the synopsis is a copy of the slides.

I have sub-divided my slot into 5 areas which I hope will appeal to the majority here today:

Some rights of way cases, both public and private rights Some Succession cases under the Agricultural Holdings Act 1986 Some comments on boundaries, trees and boats Some IHT Valuation cases, on farmhouses, Business Property Relief and

Holiday Cottages. And if we have time, a short word on Agricultural Workers, Joint Ownership of

Land and Service Charges on Caravan Sites.

I have limited this session to these topics but it does not mean to say that there are no other

areas. My general practice area is agricultural property and estate advice, with a particular

interest in tenancies and succession rights under the Agricultural Holdings Act 1986 and also

public access. And we are continually seeing new decisions.

Jonathan Long who heads our Agriculture and Estates team spends at least 70% of his

practice time on IHT Planning; I do to a lesser extent, and I also cover several family farming

partnership cases each year.

So, to start off: Public and Private Access.

The 2012 case of Oliver v. Symons was a dispute about a right of way where the wording

was “a right to pass with or without motor vehicles and agricultural machinery over and along

the access way over the property shown coloured yellow on the said plan”

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As is often the case with private rights of way disputes, there was a long history of bad

behaviour on both sides and this case confirmed that the wording on any such right will be

critical. Despite machinery growing over the years, the Court refused to “grow” the width of

the right of way. Apart from conceding flexibility on corners, they would not agree an

increase to allow larger machinery to pass.

The 2012 Traiil Riders case was on public rights of way: in this case, there was an

application for 5 routes to be added to the definitive map. The application was accompanied

by an enlarged copy of a 1:50,000 map, but it was meant to be on a 1:25,000. The Court

held on the judicial review that to simply enlarge; 50,000 was not sufficient. This is because

there were material feature differences between the claimed rights of way printed on the

different scaled maps.

I mention this, as I am often faced in practice with a surveyor suggesting that I photocopy

existing plans or enlarge them.

Separately we are having enormous trouble with the Land Registry on rejecting plans, and I

cannot stress enough the importance at the outset of a transaction to ensure that we have

Land Registry compliant plans from you. This case highlights that enlargement is probably

never going to be acceptable.

I have attached in the notes in front of you a summary of the Land Registry requirements, for

your ease of reference, and always original plans, please.

A short reminder of the availability of the Section 31 deposit system: use deposits of plans

under the Highways Act 1980 accompanied by appropriate statements and Statutory

Declarations to stop time running for new rights of way being claimed.

But they will not turn the clock back. Nor will it provide help where there is arguably clear

evidence on the ground of the landowner’s intention to dedicate and create a new public

right of way. But it will help on the rebuttal presumption arguments.

Turning quickly to the Agricultural Holdings Act 1986 I have highlighted here some cases

which I am using at present. We have an unusually high number of succession cases at the

moment at Ashton KCJ, probably reflecting the increasing trend of diversification, and

consequently the decreasing percentage of pure farm income. Planning for succession, not


just on death, but also in retirement, is increasingly important. I have included another check

list in the notes in front of you, which I have prepared over the years. This is not exhaustive

and please feel free to add your own thoughts to it.

It is not a recent case, but it is always worth mentioning the Keene case where the ALT had

to grapple with some very technical sub-divisions of land and land use including income from

a Pick Your Own Fruit Farm with firewood sales as well as free range chickens and a farm

shop. The shop also had an in-house bakery and franchise butchery: nothing like doing it

properly!

The case is worth a read as it highlights how the ALT analyse what is part of the farming

business, and clearly agricultural, and consequently what was the agricultural unit.

The position now has been simplified as a result of the 2006 regulatory order and the

amended definition of qualifying livelihood and agricultural contracting.

Bear in mind that to fall under the 2006 order you need to have the landlord’s written

approval after 19th October 2006. Pre-existing consents will not be sufficient. Consents can

come in any shape or form if they are in writing and could include the landlord’s consent on

sub-letting, particularly where there is a consequential recognition of the resulting rent in an

overall increase of the holding rent.

The 2011 decision in Pickard gives us a further insight into the workings of the ALT’s

analysis of the “livelihood” test and the broad ambit of benefits in kind. It is worth just

mentioning the facts of Pickard: not least because unusually for an agricultural case it covers

drugs, sex and rock and roll! The applicant succeeded, on the death of his brother and in the

face of much adverse history thrown at him by the landlord. There was also clearly a very

large historical element of bad feeling, as unusually in this case the applicant was awarded

20% of his costs to be paid by the landlord.

The characters included the applicant’s first wife, plus a lover who eventually became the

second wife, and the applicant’s income from working for Golden Fry Foods Limited (I

thought Golden Fry could be the name of a new rock band!)

Again, it is worth reading this case, to give you an insight into how the ALT will look to help

applicants wherever possible including, in this case, allowing a two-third: one-third split in the


living accommodation between the applicant and the deceased; an analysis of the telephone

bill down to the details allowing 10% of the two-third share of the apportioned bill; and

assessing the value of living in the farmhouse on the basis of an assured shorthold tenancy,

which is how the applicant would have had to rent in a house elsewhere.

The case also confirmed the applicant’s claim for various benefits in kind, being expenses

paid by the partnership, including Council Tax, heating and lighting, telephone and motoring

expenses.

Just before leaving this case it is worth mentioning the allegations of drugs and the growing

of cannabis. I love the description in this case about the appearance of the alleged cannabis

plants: “a large bunch of dead looking plants a couple of feet in length hanging upside down

from the ceiling on a rail”.

When I read this case a couple of months ago, I could not help but look at my own house

plants in my sitting room at the time and wonder whether, as a lawyer, I had been missing

the obvious under my nose for many years! Or was it simply my ability to forget to water?

A short word on the very sad Shirt v. Shirt case: and Katie tells me she had some indirect

involvement in this when she was further north (or so she tells me). On the mother’s death,

the father and son relationship broke down and consequently so did the farm partnership.

For reasons known only to himself the father stopped paying the rent and consequently the

Case D Notice to Quit meant the tenancy was lost, too.

On the settlement of the partnership dissolution the son claimed that value should be

attributed to his now lost rights of succession to Rufford Farm. The tenancy had been held

as a partnership asset. The Court agreed, reasoning that the tenancy had been a

partnership asset, damaged by the father, who was under a duty to preserve the partnership

assets.

But as William Barr commented earlier this month, the consequences of this decision are

quite dangerous, too, as it also means that the son had a duty to preserve the asset, too. So

what about the case of the son suddenly winning the lottery and therefore not able to qualify

under the financial criteria for succession? Would the father have a claim against the son?

We will have to await further clarification, as and when.


A quick word on boundaries, sales particulars and replies to buyers’ enquiries. We have the

2012 Yeates decision where there was an oral boundary agreement to solve a dispute and

then one party saying they did not like the result, and trying to wriggle out of the agreement

on the basis that it had not been in writing, even though it effectively transferred land. The

Judge would not agree this, and confirmed that an oral demarcation agreement is sufficient

even though it is not confirmed in writing, and even though that oral agreement had a

disposing effect. There was much discussion about “disposing purpose” and “disposing

effect.” One commentary I have seen confirms there are “difficult philosophical niceties” in

this case. The upshot is where there is any doubt about whether a boundary agreement

ought to be in writing or not, make sure it is, else you could be the next test case.

The High Court decision in Harsten highlights the need to be careful when preparing sales

particulars and confirming solicitors replies to enquiries raised by a buyer. In this case, a

small development plot was sold at auction and it was later discovered that the hedge did

not belong to the land, as had been stated in the auction particulars. Also, everyone had

forgotten about a drainage pipe that ran under the land. The Court eventually found that

these were actionable misrepresentations, as it meant that the property was substantially

different from what the buyer had been led to expect. Rescission resulted and the sellers

had to repay the price together with damages and SDLT. A falling market then meant

disastrous consequences for the sellers.

A quick word about Inheritance Tax and Gifts and Reservation of Benefit. We saw the

Buzzoni case last year (reported in Farm Tax Brief). Whilst it was on a flat in Knightsbridge,

the Farm Tax Brief authors considered the principles could apply equally to farmland,

particularly where after gifts tenancies are granted over parts of land and those tenancy

rights retained by the owner. It highlights the need to be clear on rights reserved, but also

check whether in doing so you reserve a benefit on a gift.

We also saw last year the Scott v- Walby case, where the conveyancer forgot to include

appropriate exceptions and reservations to benefit the farmer’s retained part of the cattle

buildings out of the land transferred to his son. In this case the Court re-emphasised that it

would not readily imply a reservation of an easement. The lesson here is to make sure that

the land agent and lawyer dealing on a sale off of part make sure they consider at the outset

all easements required for the continued use and enjoyment of the retained land and for

those rights to be expressly stated in the Heads of Terms, and then the Transfer.


On the Inheritance Tax valuation cases looking at farmhouses we had the 2011 Golding

case, on agricultural property relief, and the character appropriate test. This is in the context

in this case of an 80-year old farmer and a 16 acre holding. HMRC argued that the holding

was not financially viable but the tribunal found in favour of the taxpayer by applying a much

more rounded “elephant test” or, as some would say, the “educated role or layman test”.

Does it look and smell like a farmhouse?

We then had the position further confirmed in the Hanson case last year, confirming that the

farmhouse had been occupied for the purpose of agriculture and, again, looking at character

appropriateness. In this case the tax payer successfully argued that in deciding character

appropriates, regard should be had to land occupied with the farmhouse rather than owned

and occupied with it.

In between time, we had the 2011 Atkinson bungalow case where, for the last 4 years of his

life, the farmer was in a nursing home. Even though the bungalow was still in the tenancy of

the partnership, the tribunal held that the degree and nature of the occupation of the

bungalow was not sufficient to show occupation for the purposes of agriculture.

My final Inheritance Tax case is the case of HM RC v. Pawson’s Personal Representatives,

who were Mrs Lockyer and Mrs Robertson. (sorry about slide typo)

This decision was published on 4th February 2013, and reverses the decision of 18th

December 2012.

The facts are: A bungalow in Thorpe Ness was let as a holiday cottage. The deceased

owned a 25% beneficial interest and the remainder was divided equally between her 3

children, Mrs Lockyer, Mrs Robertson and her son Nicholas Pawson.

Her daughters claimed 100% relief as relevant business property for IHT purposes. In this

case, HMRC relied on the “intelligent business man” test, as to whether this was a true

business, rather than just an investment. HMRC referred to “active steps taken”. At the first

instance, the first tier tribunal took the view that the services provided by the Pawsons to

holiday makers who rented the cottage went well beyond those which an intelligent business

man would regard as falling on the investment side of the line.


The services provided included clean bed linen, through a laundry service, and by the

person employed as the cleaner and caretaker (although it later turned out that the laundry

service was only started after Mrs Pawson died); TV and telephone had been provided; Mrs

Pawson has done most of the holiday letting herself. She also organised the gardener. The

cleaner/caretaker renewed the cleaning materials in the property. The hot water was turned

on before guests arrived.

On appeal, the Court looked at two caravan site cases, and there was much discussion as to

what constitutes property management, where the business is of holding property as an

investment and secondly, where there is the business of running such properties. The Court

did concede, when rejecting the taxpayers’ arguments, that caution is needed, and the in-

precision of the statutory test is such that no test can be applied in a mechanical fashion.

There was also an analysis of the McCall in this case.

There was a discussion about “questions of fact and degree”, and then the application of

those considerations. HMRC’s barrister successfully argued on appeal that Mrs Pawson’s

business at Fairhaven was the provision of self catering accommodation, with some ancillary

services, and not the other way round. The “services” provided were those normally

provided for the purpose of the self catering accommodation, including heating, lighting,

television, telephone and cleaning.

Each business property relief case must be decided on its own facts, and looking through

this analysis there are some helpful hints, particularly using the examples of the caravan

parks and also industrial units.

I understand that the family wish to gather ? to appeal this case, to raise the £30k to £40k

and are looking for financial contribution. So watch this space.

A quick word about agricultural workers under the Rent (Agriculture) Act 1976 and the

Housing Acts.. A reminder that any lettings after the 15 th January 1989 fall under the

Housing Act and you still do need to serve a statutory notice if you are letting to an

agricultural worker if you want to avoid a secure agricultural tenancy. This is the only case

where a notice still needs to be served.

Be aware of differing views about “qualifying worker”, and “qualifying ownership” of the

accommodation. The occupier’s employer must be either the owner of the cottage or have


made arrangements with the owner of the cottage for it to be used as housing

accommodation for people employed by the former. I had this confirmed by Counsel last

month.

We have seen a few strange tripartite agreements, possibly to get round the security of

tenure provisions of the Housing Act. But our advice must remain: if in doubt, always serve

at the beginning of any letting the appropriate statutory notice, and in the correct form.

And bear in mind that a A service letting agreement may not be a true service occupancy if

the person purportedly granting the occupancy is not the employer. Sounds strange, but we

have seen 3 such cases in the last 12 months.

A quick word about the January 2013 decision in the White v. Troutbeck case. I have picked

this as it features a farm, albeit owned since 1999 by a Panaranian company and a Nigerian

business family.

The argument here was whether or not Mr White and his partner, Miss Todd, were

employees or not. The case referred to the various statements made at the outset between

the parties about what the services rendered/expected involved, which included

housekeeping duties, onsite security, keeping the gardens and grounds in good condition,

and all maintenance issues and overall management.

On appeal the Court Tribunal disagreed and felt that if the express terms of the Contract did

not provide which party was to have which right the question must be answered by

indication. Looking at the written agreement in the round, they felt that whilst substantial day-

to-date responsibility was placed on the shoulders of Mr White and Miss Todd, Troutbeck

retained a sufficient right of control. Mr White and Miss Todd were, when all was said and

done, the manager, caretaker and housekeeper of an asset belonging to Troutbeck, and, as

such, they were employed by Troutbeck.

It is worth bearing in mind the principles of what is a “worker” and a “contractor” on farming

operations and to make sure that the documentation clearly reflects the parties common

intention.

A quick word about the trees case in Felbridge Hall: this was brought to my attention 2

weeks ago at an agricultural law update in Cambridge and knowing Felbridge Hall ??? I was

particularly interested in this case. The claim was brought against the National Trust who


successfully defended its position whent there was an awful incident , when a tree branch

fell and killed a young child. The Court pointed out that whilst the tree was potentially

dangerous, a tree surgeon’s advice was being actively followed, and the Court felt that a

plan conducted by a professional if followed would avoid the blame falling on the National

Trust for the falling branch killing the child. Possibly a harsh decision but perhaps sensible.

The ?? of this is to perhaps now consider whether it is always such a good idea as a

landowner to except and reserve timber out of tenancies. If you are not actively managing

and looking after those trees, as under this case, if there was a problem, you would be liable

as the person in charge of the trees. Also, please bear in mind another awful local case, in a

park in Sawtry. Sophie, aged 13, was killed when a branch fell on her. In this case, though

Sawtry Parish Council was found liable. Experts found that sudden limb drop syndrome

causes branches to randomly explode. And that this tree should have been felled. HSE

found that the Parish Council was not ensuring the health and safety of the public as it could

not prove that it had an effective system for managing trees in the park.

We could not come to St. Ives without considering a water mooring case: the 2013 Nigel

Moore case (moor? ooh a bad pun!) has a couple of interesting points: Nigel Moore failed to

prove that a riparian owner had the right to moor personally. But allowing his appeal the

Court decided that the real issue here was for the British Waterways Board to show that

mooring was unlawful. Starting from the proposition that an activity should be considered

lawful unless it could be shown to infringe any law, the Board were unable to show any such

infringement, and the enforcement proceedings, to get Mr Moore to cease mooring his boats

failed.

The next case is on are recovery of service charges on caravan sites, just a quick word that

if you are managing such a site you now have to serve a Section 20 Notice under the

Landlord & Tenant Act 1985, as a consultation notice, to the tenants, setting out the

landlord’s intention to carry out qualifying works, where the costs of those works would

produce a tenant’s contribution of more than £250 in a service charge year.

This will produce less certainty for landlords and higher management charges for tenants to

pay. And more work for you all!

Finally, on joint ownership, the Jones and Kernott case and the Pankhania cases are worth

bearing in mind. Both are concerned with beneficial interests. In Jones .v. Kernott, a couple


brought the property in joint names and then separated. After 15 years, when they had

eventual settlement, the Court held that the equity had migrated to 90%/10% on the facts of

the case. The Court allows the word “intention” to move the equitable interest. But perhaps

the Judge really found in Ms.Jones’ favour as Mr Kernott had moved away.

Contrast that with the Pankania case, where an aunt and nephew brought a house with a

mortgage. It was transferred into their joint names as joint tenants to hold as tenants in

common in equal shares and the Declaration of Trust in the Transfer confirmed that. There

was laster a dispute as to the basis on which the house had originally been acquired. The

Court held that an express Declaration of Trust is conclusive unless it is varied by the

parties, rectified or set aside in exceptional circumstances, such as fraud.

That and the he Court will have regard to the parties’ intention as to how they hold the

property but there are also other factors that the Court would need to take into account.

Finally, in January of this year we saw new Land Registry guidance on joint ownership which

may make things simpler. There is a new Land Registry form: an express requirement to

declare interest and for you all to be aware of the new conflict rules, and make clients aware

of the potential consequences of not making Declarations of Trust at the time of acquisition.

Can you act for both sides? And what about the need to review their Wills.

Katie Moreton

Registration of overriding interests:


13th October 2013 is the tenth anniversary of the Land Registration Act 2002 coming into

force and the date from which certain unregistered interests will cease to be interests which

override either:

1) a first registration; or

2) a registered disposition for valuable consideration.

The main overriding interests will be mines and minerals, chancel repair liability and

manorial rights and so far the bulk of the applications made have been chancel repair

liability. If your clients are beneficiaries of such interests or think they might be it is very

important that they make an application to register over the coming months and if you act on

behalf of developers then you need to make them aware that these applications are being

made, which can throw a the proverbial spanner in the works for a development or onward

sale.

So from midnight on 12th October 2013 the overriding interests will no longer have automatic

protection under the Act. If your client is a beneficiary and wants to secure their automatic

protection then they will need to make an application which should reach the Land Registry

by 12th October. Depending on whether land is registered the beneficiaries will need to

register either a caution against first registration or a notice against a registered title. At the

moment these applications don not incur a fee.

If clients miss the deadline, applications can still be made after 12 th October but only where

there has been no transfer of the land for valuable consideration after 12 October 2013.

There will be also a fee payable for registering either the notice or charge so it’s important to

encourage beneficiaries to register over the coming months.

So what happens if clients miss the deadline to register their interests?

If the land is already registered, a purchaser who registers a transfer of the affected

land for valuable consideration after the deadline (but before a notice is registered

against the title) will not be bound by the interest.

If the affected land is unregistered and is first registered after 12 October 2013 and if

no notice of the overriding interest is entered on the title at that time then the interest

will not bind the owner or any subsequent purchaser of the relevant land. If this were

to happen it would be too late for the beneficiary of an overriding interest to

subsequently register a notice to protect it.


Given what I have just said I think this is more reason for owners of unregistered land to

make an application for voluntary first registration as soon as they can so they can at least

have some certainly. It is possible to challenge evidence provided to the Land Registry by

the beneficiary of an overriding interest and each case will generally be taken on its own

merits but I have also read that the Land Registry may actually complete an application to

register an overriding interest without notifying the registered proprietor until after the

registration is complete so it isn’t wise to leave it to chance.

Town and village greens:

Around 4% of the land area in England is registered common land. This equates to

approximately 550,000 hectares. Town and village greens developed under customary law

as land where local people took part in lawful sports and pastimes such as picnics and fetes.

Most greens were actually registered in the late 1960s under the Commons Registration Act

1965 but now anyone can apply under section 15 of the Commons Act 2006 to register land

as a green if it has been used by local people for lawful sports and pastimes ‘as of right’

(defined as without permission, force or secrecy) for at least 20 years. Since 2006 the

number of Town and Village Green applications has certainly increased, although the

numbers of successful applications has fluctuated. The number of cases has also increased

and we are seeing a significant number reaching the High Court and the Court of Appeal.

The Government has now published the Growth and Infrastructure Bill, which is expected to

become law this year and which contains reforms to the law for registering new town and

village greens. The aim of the Bill is pretty much as its name suggests. It looks at reducing

red tape and so reducing barriers to development, although perhaps not surprisingly it was

made with mixed views with land owners and developers on one side and environmental

campaigners (and probably local residents) on the other.

If it is actually enacted then it should reduce the risks associated with Town and Village

Green challenges by allowing a landowner to lodge a statement with the relevant commons

registration authority effectively bringing to an end any recreational use which has been

enjoyed by members of the public ‘as of right’. The lodging of a statement will be a similar

process to that of public rights of way. At Ashton KCJ we are involved in quite a few

applications on behalf of clients but the majority of our clients aren’t aware that they can do


this so I imagine the process for TVGs will be the same and it will be a case of us informing

clients.

Perhaps the most significant proposed reform is that the Bill should prevent village green

applications from being made where:

1) planning permission has been secured to develop a site;

2) where a site has been advertised for planning permission purposes; or

3) where the site has been earmarked for development in a local or neighbourhood

plan.

The idea is that the Bill will introduce measures to prevent development being sterilised or

frustrated by an application to register land as a town or village green. The designation of

land for development in a neighbourhood or local plan, or the making of a planning

application will both be trigger events which will exclude the land from the town and village

green application process and so that should flush out prospective applications to register

the land as a town or village green quite early on.

The Bill does seem to be a big shift away from the intentions of the Commons Act 2006

because although the CA 2006 never actually intended that completely new areas of land

would be registered, it really gave anyone the right to apply to register land used by local

people for recreation as a protected Village Green. Depending on what side of the fence you

sit on, it could also be said that the Act prevented otherwise acceptable and often much-

needed developments from going ahead so I’m very interested to see how this will actually

work in practice. If the Bill is passed I think we are likely to see a new wave of case law.

Time doesn’t allow for me to go through the vast number of cases and unless you have a

particular interest in TVGs you probably won’t want me to either but I have included in the

notes two of the most significant cases which are Taylor v Betterment Properties Limited and

Adamson v Paddico (see cases below).

Right of Light:


The Law Commission published its consultation on rights of light on 18 February 2013 and

the consultation closes on 16 May 2013, which came about after the right to light test case of

Heaney in 2010. The consultation will be of particular interest to landowners, developers and

their advisors seeking to defend light to light claims and the responses to the consultation

paper will influence the Law Commission's final recommendations to government.

The Heaney case isn’t a recent case but has been significant in this consultation and I just

by way of a refresher in this case Mr Heaney bought a Grade II former bank and spent

around £2 million converting it into an upmarket conference centre. Shortly afterwards a

developer purchased the office block next door and extended it upwards by 2 floors. Mr

Heaney did object but the building went ahead. Mr Heaney pursued the matter further and it

reached the High Court and then went to the Court of Appeal but settled out of court. The

judge eventually found in his favour using the 400 year old law, which allows people to have

sunlight in their homes and ordered the developer to remove the top 2 storeys.

Another case, which was quite timely is Pavledes v Hadjisavva which is a similar case in

which the Chancery Division allowed the claimants application for a declaration as to their

property's rights of light, even though there was no imminent or immediate threat that their

rights would be infringed. Rather than go through this now I have set the case out below so

that you can read it at your leisure.

Rights to light are extremely valuable and shouldn’t be treated any differently to any other

easement. They give landowners certainty that natural light will continue to be enjoyed by a

property, which, in turn, increase its utility, value and amenity. The right currently enable

landowners to prevent construction that would interfere with their rights or, in some

circumstances, to actually have a building demolished. Where a development has taken

place, but a court doesn’t order its demolition, the court may award substantial damages. It

may not be clear which remedy the court will order and landowners may succeed in

preventing development even if they raise the issue after building has commenced.

The Law Commission has said that whilst existing protections are important "there is also a

public interest in the development of the modern, high-quality residential office and

commercial development that we need in our town and city centres". Whether we need any

more commercial development or whether we should be renovating and filling the empty

buildings in town centres is probably a question for another time but it would be an

interesting debate to have.


The consultation considers the law relating to the entire life-cycle of a right to light, from

creation to extinguishment and the paper itself makes some provisional proposals:

It should no longer be possible to acquire rights to light by long use/prescription -

Under current law, homeowners with windows that have received natural light for at

least 20 years are entitled to maintain their level of illumination.

The introduction of a new statutory test to clarify the current law on when courts may

order a person to pay damages instead of ordering that person to demolish or stop

constructing a building that interferes with a right to light.

The introduction of a new statutory notice procedure, which requires those with the

benefit of rights to light to make clear whether they intend to apply to the court for an

injunction (ordering a neighbouring landowner not to build in a way that infringes their

right to light). The aim is to introduce greater certainty into rights to light disputes.

The Lands Chamber of the Upper Tribunal should be able to extinguish rights to light

that are obsolete or have no practical benefit, with payment of compensation in

appropriate cases, as it can do under the present law in respect of restrictive

covenants.

Homes older than 20 years are unlikely to be affected but changes could hit 2.8 million

homes built in England and Wales in the past two decades and although the changes really

seem to be aimed at promoting housing developments and reducing delays in the planning

process will it actually be the ordinary homeowner who is affected.

Agricultural Ties:

I wanted to talk about Ag ties not because we have many requests from clients to remove

the ties but more the process involved in trying to lift a restriction. I was watching Escape to

the Country recently and a couple who were looking to escape to the country were shown

quite a substantial property with an Ag tie. This surprised me because neither were either

working in agriculture or living in the locality, both of which are common Ag tie restrictions,

although do check the wording of the restrictions because they differ. Out of all of the houses

they were shown this one fit the bill because it actually gave them everything they wanted

and was within their budget – of course it was, it had an Ag tie. The property was being

marketed at a lower than market value and the presenter advised the couple to ‘speak’ to the

Council if they wanted to take it further. It really isn’t that straightforward. We don’t get a

huge amount of instructions on the removal of Ag ties but they do come up and fortunately


we have an in house planner who has lots of experience in dealing with such applications

but the basic position is this.

There are two ways to achieve lifting of the restriction. One is to show 10 years continuous

breach of the condition, which is the “easier” route but obviously relies on good evidence.

The second and much more difficult route is to seek removal of the restriction by means of

an application. This involves agreeing a discounted price for the house (can be as much as

66%) with the Council and then undertaking an agreed marketing campaign for a minimum

of 6 months. If no one comes forward then the application is likely to be successful but there

have been cases where further discounts are required or longer advertising campaigns have

been sought. Remember that the house is not just for a particular farm but for farming in the

locality which is generally regarded as being within a 10 mile radius of the property.

It therefore goes without saying that if clients, who are looking to remove the ag tie, are

currently complying it is going to be much more difficult to use the second means and it

would completely rule out the first. If that is the case, the best means of achieving the end

result probably is to wait and hope that the 11th commandment (Thou shalt not get caught)

is not engaged until the 10 year period has expired.

If the property is let to tenants who are not complying with the condition and they move out

then there can be a break in occupation and this means that the accrued period of breach

will be wiped clean and a new period will commence afresh.

As regards a client’s occupation the issue is about sole or main income. It is well established

that hobby farming whereby wealthy individuals seek to argue that the condition is being

complied with because their wife/partner (although could be husband!) is engaged in

farming, while they make their fortune elsewhere is not something that finds favour with

either the planning inspectorate or the courts. On this basis, there would be no problem from

a breach point of view as it could not be argued that they derive their principal income from

farming.

An application to remove based on lack of demand for the dwellings as agricultural dwellings

is fraught with difficulty. Ultimately the local authority will fight tooth and nail to preserve the

restriction. A by product of the restriction would be that the current breaches would be

discovered and would almost certainly lead to enforcement action being take. The only basis


will be to show that there has been 10 years breach. This means that a minimum of 9 and

probably 10 years will need to elapse before an application can be made. The risks

associated with this is if there were to be a break in occupation other than for holidays,

hospital stays etc then the requirement for a continuous 10 year breach could become

difficult to achieve. In addition, someone with grudge or just a parish busybody could

innocently or otherwise ask the council whether or not there was a breach. If that were to

occur the enforcement action would likely follow and the council would seek either

compliance with the condition or require the clients to vacate the property.

If enforcement were to occur there is a right of appeal to the Secretary of State and it is at

that stage that one would activate the lack of demand point and seek to show that there was

no demand. Once an appeal is lodged, the terms of the enforcement notice are suspended

so the clients could remain in the property until the appeal has been decided. If the notice is

quashed the condition would no longer apply and the property would be free from the

restriction. If the notice is upheld there will be a period for compliance which in cases of this

nature is usually 6 months and can be as much as 12 months in appropriate cases so clients

can at least be reassured that they would not become immediately homeless once the

council became involved. It will be for clients to take the temperature of the area as to

whether there is someone who may complain to the council as part of any risk assessment.

Renewable Energy:

Renewable energy forms a large part of our work in the agricultural department with the bulk

being carried out by Simon Cunningham in our Norwich office.

According to an update published by the Department of Energy and Climate Change

(DECC) in December 2012 on the Renewable Energy Roadmap 2011, the UK has made

good progress towards meeting its target of 15% renewable energy by 2020. More than 10%

of energy in the UK now comes from renewables and the cost of several renewable energy

technologies (in particular, solar PV) has fallen. That said, I think the debate is likely to

continue in this year as to whether the government's plans for new gas, coal and nuclear

power stations are diverting attention from its renewable energy strategy and whether the

proposals in the Energy Bill 2012-13 (currently before Parliament) will actually give the long-

term certainty which is needed if people are going to invest in the renewable energy in the

UK – particularly in bio-mass, which requires significant investment.


The government intends to lay a Renewables Obligation (Amendment) Order before

Parliament in 2013, subject to EU state aid approval. The Order is likely implement most of

the changes resulting from the Renewables Obligation (RO) banding review that was carried

out in 2012. The changes are expected to come into force by 1 April 2013.The government

has also said that it will lay a separate Renewables Obligation Order in 2013 to implement

the notification process for new dedicated biomass power plants. Those changes are

expected to come into force by October 2013 so if you work in energy and renewables keep

your eyes open.

One of the issues which arises for our renewables team particularly in respect of solar farms

is ownership of land both around the proposed site and also the ownership of land which

sites a connection point. This is actually quite a common issue especially within farming

families where land on the holding can be held by several parties e.g. mum and dad own

some land and son acquires an adjoining field. Even if this is the case, family fallouts come

up in our area of work time and time again so don’t just assume that you can do without a

written agreement. You also need to bear in mind that if adjoining land is held by family on

trust the trustees are under a duty to get the best possible amount of compensation for the

land. This is something that we can check relatively quickly with the Land Registry for very

little cost. There are several risks associated with this and the main risk is that the owner (or

a future purchaser) of the surrounding land could quite easily plant trees around the

development site which could be make or break for a solar farm. You would also need to

consider the possibility of being ransomed by the adjoining land owner if you need to cross

their land to say connect to the grid. This really could be the key to unlock development

potential of land and clients could very easily find themselves involved in some costly

negotiations.

At the moment I think many still follow the Stokes (Stokes v. Cambridge Corporation (1961)

13 P & CR 77) principle when it comes to the valuation of a ransom strip, which is one-third

of the increase in value of the adjacent land provided by the ransom strip. I know that case

relates to a compulsory purchase but I’d like to hear from you at the end as to what sort of

percentages are put forward as a starting point and what sort of percentages you see

agreed.

There was another high profile case regarding ransom value was Souter v Bracknell Forest

District Council, a 2005 case, which was settled out of court. The intrinsic value of the land to


be acquired under a compulsory purchase order was said to be just £13,600, whereas the

settlement was said to be £7.7m. It seems that each case needs to be taken on its facts.

Feed in Tariffs:

On 23 January 2013, it was announced that a total of 17 solar PV installation companies had

commenced civil proceedings against the Department of Energy and Climate Change

(DECC) claiming £140 million of losses allegedly incurred as a result of the Department’s

unsuccessful attempt to cut the feed-in tariffs for smaller-scale solar PV by more than half at

short notice late in December 2011.The cuts to solar FiTs were ruled to be ‘unlawful and

unfair’ by the High Court, Supreme Court and Court of Appeal in Spring 2012. Initially, three

companies had alleged losses of £2.2 million so this is a now a really substantial claim,

which the Department says it is going to fight. The High Court has consolidated the claims

into a single claim for damages, which alleges DECC:

Abused its position by frustrating the claimants' legitimate expectation that DECC

would comply with the FITs statutory framework; and

Breached Article 1 of the first Protocol to the European Convention on Human

Rights, which is a qualified right entitling every person to peaceful enjoyment of his

possessions.

On a practical level the companies say they saw a reduction in consumer confidence,

orders, sales and profit margin as well as the loss of substantial contracts almost over night.

I think it’s fair to say that the solar industry is now recovering (due mainly to the fall in solar

prices) with around 370,000 in the UK having solar installed. This is obviously good news for

the government and their renewables target. That said, there is still a long way to go and I

would also question which pot the £140 million will come out of if the DECC lose their case.

SDLT for leases:


I just want to mention that draft legislation to be included in the Finance Bill 2013 introduces

changes aimed at simplifying the SDLT treatment of leases. The changes, which will apply

from the date on which the Bill receives Royal Assent, are very much welcomed as the

current rules are complicated to apply and are also quite onerous in terms of timescales.

The changes:

1) abolish the abnormal rent increase provisions (which were expected to be clarified in

the Finance Bill 2009 but were not); and

2) simplify the reporting requirements for substantially performed agreements for lease;

and

3) simplify reporting requirements for fixed term leases that continue after expiry.

The last 2 of these rules were also rather onerous to comply with given the 30-day

deadlines but the deadlines will be changing so there is a bit more flexibility.

Dealing with each of these in turn:

1) Abnormal rent increases - variations after the first five years of the term of a lease

are not generally taken into account for SDLT purposes. However, there is an anti-

avoidance rule that applies if, after fifth year of the term, the amount of rent payable

increases, regardless of whether the increase is provided for in the lease, and the

increase falls to be regarded as "abnormal" (paragraphs 14 and 15, Schedule 17A,

Finance Act 2003). Broadly, a rent increase is abnormal if the rent doubles(or more

than doubles) after the fifth year of the term. The rule is not limited to open market

reviews. If an increase is abnormal, there is deemed to be the grant of a new lease in

consideration of the excess rent (paragraph 14(1)-(4), Schedule 17A, Finance Act

2003).The abolition of the rules on abnormal rent increases will apply to any

increases taking effect on or after the date of Royal Assent to the Finance Bill 2013.

2) Substantial performance is, broadly, either:

a. When the whole or a substantial proportion of any premium is paid.

b. When the tenant takes possession of the whole or substantially the whole of

the premises.

c. When the tenant first pays any amount of rent.

d. If an agreement for lease is substantially performed before it is completed:

e. A notional lease is deemed to be granted.


f. The date of substantial performance is taken as the effective date for the

notional lease.

Under the draft legislation, the notional lease and actual lease will be treated as one

single lease, which is said to be granted on the date of substantial performance, for a

term beginning on that date and ending at the end of the term of the actual lease.

The consideration for that single lease will be the total rent (and any other chargeable

consideration) payable over the term. Unless a land transaction return or a further

return is required when a transaction is linked with an earlier transaction and the later

transaction has the effect of making the earlier transaction notifiable or gives rise to

additional SDLT, the grant of the actual lease is to be ignored.

The amendments concerning substantial performance will apply where the effective

date of the actual lease is on or after that date.

3) For SDLT in leases, a holding-over period will count as an extension of the original

lease and it is necessary to recalculate the net present value of the lease at the start

of every year of holding over. If, as a result, further SDLT is due or becomes due

where none was due before, the tenant must submit a return (a letter sent to the

Birmingham Stamp Office) and pay the additional SDLT at the rate applicable as at

the date of extension of the lease.

Where a new lease is granted and expressed to begin during an extension, that new

lease is to be treated as beginning immediately after the expiry of the original lease

(or the previous one-year extension if there is more than one such extension) and

rent due in relation to the one-year extension in which the lease is granted is to be

treated as payable under the new lease

The revised reporting rules will delay the deadline to submit a land transaction return

to 30 days after the end of the period of extension, which will be treated as the

effective date. Currently, the submission deadline is 30 days after the end of the

original expiry date of the lease.

According to HMRC, the changes are intended to streamline the process and reduce the

related costs for around 22,000 business each year. HMRC also estimates that 13,000 of

these businesses will benefit with a reduction in admin costs of £150 per business (the


estimated cost of calculating whether a rent increase is abnormal or not) and 9,000 of these

businesses should benefit with a reduction of £53 per year because they will need to fill in a

least 1 less return. We also have to factor in costs/time involved in familiarising ourselves

with the new rules and although it’s a step in the right direction and generally I’m a glass half

full sort of person I wonder how much difference it will actually make.

Commercial Properties:

Good news in terms of empty rates for new build commercial properties. From October of

2013 all newly constructed commercial properties which were completed between 1 October

2013 and 30 September 2016 will be exempt from empty property rates for the first 18

months. It will be interesting to see whether developers hold back until this time and whether

the period of 18 months will be sufficient.

Currently for industrial and warehouse property there is 100% relief for a continuous period

of six months only and a period of 3 months for shops and offices. Although last year’s case

of Makro Self Service Wholesalers Limited V Nuneaton and Bedworth Borough Council

(case below) does go to showthat a six-month grace period from the tax could still be

triggered where only a small amount of space in the property had been used for business

purposes.

In this case the High Court held that occupation of a very small percentage of a warehouse

was rateable occupation which allowed the claimant to claim empty rates relief when the

occupation ceased. If the property is re-occupied for six weeks or more (the ’42 day rule’),

this allows the owner to claim a further period of exemption when the property becomes

vacant again (regulation 5, 2008 Regulations).So if a business can make some use of the

property, paying business rates, for six weeks, it will be able to claim another rate-free

period.The judge in this case said that the company's usage of what was effectively 0.2% of

the warehouse's available floor space was enough to trigger the grace period.

I know that industry bodies have called on the Government to consider changes to the law or

restore previous reliefs as a means of encouraging regeneration and although we have the

new 18 month rate free period on new builds it will be interesting to see if there’s more to

come.

Council Tax exemptions for residential properties:


Bad news for landlords of residential property and so for many of our clients who either own

residential properties off site or estate cottages.

Currently, there is no Council Tax to pay on empty and unfurnished homes for up to 6

months. After this, a property may qualify for a discount of up to 50%, depending on the local

authority as it’s up to your council to decide how much discount they give.

From 1 April 2013, the Government will be abolishing council tax benefit and has now

allowed local councils to decide their own rates of charges for empty and second homes.

The categories of exempt Class A (Unoccupied, unfurnished properties undergoing major or

structural repairs - exempt up to 12 months) and exempt Class C (Unoccupied and

unfurnished properties - exempt up to six months) have been abolished with effect from 1

April 2013 and in their place Councils have been given discretion to award a discount if they

so wish. Given the short time I will just focus on the old Class C.

I have just checked on a few local council websites just to give you some figures but what I

will say is there does seem to be a bit of confusion. I spoke to my local council and the rate

they told me over the telephone was different to the rate on their website so it’s important

that our clients double check if they want to know in advance. Otherwise it will be a case of

awaiting the statement.

Suffolk Coastal actually say on their website that they “have decided to reduce the

discounts and exemptions to help encourage more empty homes back into use”. I

would disagree with that to an extent as the exemption was generally used to give

the property a lick of paint between tenants or market the property for let when a

tenant moves on. Either way, properties that are unoccupied and unfurnished (old

Class C) will, from 1st April, receive a discount of 25% for up to three months and

then will be charged 100%.

Mid Suffolk Council’s website say that after 1st April 2013 there will be a 100%

discount for 28 days followed by a full charge. I was actually told I have to pay 90%

so we will wait and see what arrives in the post!

Cambridge City Council says that from 1stApril 2013, the exemption will be removed

and will be replaced with a 100% discount for a maximum period of 1 month.

Finally, Fenland say that from 1st April 2013 full council tax will be payable.


It will be interesting to see the impact this has on the rental market and whether landlords

start reducing rents just to keep tenants or to attract new ones. I don’t think the changes

have been very widely published so it may take a bit of time before we see any changes if

indeed we do.

Recent Case Law:

1. Taylor v Betterment Properties Limited/Dorset County Council 2012 EWCA Civ 250

In this case the Court of Appeal upheld the High Court's decision to cancel the

registration of a town or village green nine years after the land was first registered.

The court considered the following:

There had not been use "as of right" for 20 years. The landowner had done enough

to make the use contentious even though some of the users did not see the signs

that the landowner had erected because other users had removed or vandalised

them.

It was just to rectify the register notwithstanding the delay and that the applicant had

bought the land for a lower value in the hope that the application for rectification

would be successful.

This case is a useful clarification of what steps landowners should take to make user

of their land contentious and therefore not "as of right". Whilst developers will

welcome this decision, they should note that the following will be significant factors

which will be taken into account in deciding whether it is just to rectify the register:

A delay in challenging the registration. Any challenge should be brought

promptly. If there has been very lengthy delay, prejudice will be inferred even

in the absence of any evidence. A delay of decades would be a sufficiently

lengthy delay. Furthermore, a delay of a decade would be capable of being a

delay that was so long that prejudice could be inferred.

A change of ownership in the hope that a rectification application will be

successful. A party who "buys litigation" cannot complain of injustice if his

speculation is unsuccessful.


2. Adamson v Paddico (267) Limited EWCA Civ 262

In the Adamson case the Court of Appeal allowed an appeal against the High Court's

decision to reverse the registration of land as a town or village green. The

Background of the High Court case is that a developer bought some land, knowing

that it had been registered as a TVG, with the intention of instigating proceedings to

reverse the registration. The developer argued that the council had been wrong to

register the land as a TVG in 1997. The land was not land on which the "inhabitants

of any locality" had indulged in lawful sports and pastimes, as of right, for not less

than twenty years. As a result, the land did not fall within class c of the definition of a

TVG in section 22(1) of the Commons Registration Act 1965.

A highly technical and specialised meaning has been given to the concept of a

locality by the authorities over many years. On the basis of these authorities, the

developer successfully argued that a locality meant a legally recognised

administrative district, and use had to be predominantly by the inhabitants of that

legally recognised administrative district. At the time of the registration, the applicant

identified the locality in its application form as "Edgerton/Birkby". There was no

legally recognised administrative district of "Edgerton/Birkby" nor of either Edgerton

or Birkby, so the application should have failed.

The court reluctantly held that the council had incorrectly registered the land as a

TVG under the CRA 1965 and that the register should be rectified to remove the

land. The court recognised that the result was unpalatable and was caused almost

entirely by:

(a) an unfortunate geographical position that meant the land lay between districts,

neighbourhoods, parishes and localities; and

(b) the unsatisfactory interpretation of the law as governed by the CRA 1965.

However, this case was (albeit briefly) a major success for the developer and it is

interesting that the developer deliberately bought the land with a view to unravelling

the TVG registration, which was actually a big risk to take.


When this case went to appeal the court agreed with the High Court's decision that

the land should never have been entered onto the register because:

the inhabitants did not come from a single locality defined by legally

significant boundaries

there was no alternative locality on which the application for registration could

have been based.

It was held that rectification of the register was not just in this case because the

landowner's delay of over 12 years in making the rectification claim was excessive.

This decision will be disappointing for landowners and developers looking to overturn

registration of their land as a town or village green and particularly those who

purchased commons land a long time ago and have simply banked it for future

development. It is also a clear warning to developers considering buying land with a

view to initiating a speculative rectification claim. Even if the land should never have

been registered in the first place, a delay in making a rectification claim will be a

significant factor in the court's decision on whether it is just the rectify the register.

3. Pavledes and another V Hadjisavva and another [2013] EWHC 124 (Ch)

4. Makro Self Service Wholesalers Limited V Nuneaton and Bedworth Borough Council

[2012] EWHC 2250

Makro Properties Ltd (MPL) and Makro Self Service Wholesalers Ltd (MSSWL) were

group companies. MPL owned the freehold of a 13,000 square metre retail

warehouse (warehouse). MSSWL was the tenant of the warehouse which it used as

a "Cash and Carry") until June 2009 when the warehouse was cleared and vacated.

For a period of just over six weeks between November 2009 and January 2010,

MSSWL stored sixteen pallets of paperwork at the warehouse. The lease was

surrendered in December 2009. From the surrender of the lease to January 2010,

there was an unwritten informal intra-group permission between MPL and MSSWL

allowing MSSWL to store the paperwork at the warehouse. The pallets occupied

0.2% of the floor space of the warehouse.

For a period of just over six months from January 2010 to July 2010, the warehouse

was empty. Forty pallets of MSSWL paperwork were then delivered and stored there.


The floor space occupied by the pallets was again roughly 0.2% of the total floor

space.

The magistrates' court held that MPL was liable to pay empty rates between

November 2009 and January 2010 because MSSWL's occupation was so small that

it did not amount to actual occupation. Also, the occupation by MSSWL was not

beneficial to MSSWL. The pallets were stored there to incur rateable liability to

MSSWL and trigger a new period of empty rates relief for MPL. The only benefit of

the occupation was MPL's avoidance of liability.

MPL appealed to the High Court by way of case stated and the judge said that the

company's usage of what was effectively 0.2% of the warehouse's available floor

space was enough to trigger the grace period.

5. Lloyds TSB Bank plc v Marandan & Uddin [2012] EWCA Civ 65 and Nationwide

Building Society v Davisons [2012] All ER (D) 141

In both of these cases mortgage loans obtained to buy property were sent to fake

branch offices purportedly acting for the sellers. Needless to say the fraudsters

disappeared with the money and the lenders sued the buyers’ solicitors. As, by

definition, completion did not actually take place the conveyance is potentially liable

to return the monies handed over in breach of trust. There is however a defence

under section 61 of the Trustee Act 1925, which means that the court has discretion

to exclude liability if the trustee (here, the conveyancer) has acted honestly and

reasonably. Obviously in both cases the conveyance acted honestly but the question

is whether they acted reasonably. In the Davisons case the branch office was

actually registered with the SRA. When the legitimate firm realised the deception they

notified the SRA, although the SRA took 5 months to remove the office from their

records and website. The solicitor at Davisons who acted was also a solicitor and

experienced conveyance, who checked against the legitimate office, the branch

office and the solicitor.


Documents

Web viewshort word on Agricultural Workers, ... keeping the gardens and grounds in good condition, ... allowing MSSWL to store the paperwork at the warehouse