Important agreements, even between close family members, should always be put into writing by a lawyer as the best means of heading off future discord. The point could hardly have been more clearly made than by a High Court dispute concerning a ramshackle football ground that set father against son.

A businessman had stepped in to save his struggling local football club when it was heavily in debt and had only 109 members. Many years later, however, the fortunes of the club were transformed when its ground was earmarked for development as part of a major urban regeneration project. As a result, the site was estimated to be worth at least £10 million.

The businessman’s son and nephew argued that, before the club’s purchase, he had agreed that they would have a 20 per cent stake in the business. A former boyfriend of his daughter also claimed a 10 per cent share. They argued, amongst other things, that the club would not have thrived had it not been for their extensive and gratuitous assistance in running it. The businessman, however, resisted their claims.

In ruling in his favour, the Court was not satisfied that he had promised the three men that they would be part-owners of the club. They had neither been answerable for the club’s debts, nor had there been a partnership or joint venture agreement. In the absence of written records, it was also impossible to identify any definite and material financial contribution made by any of them to the club’s purchase.

Whilst the Court accepted that they had worked with a view to improving the fortunes of the club, their contribution had not been exceptional and had not been linked to any assurances given to them by the businessman. Following strife within the family, they had some years ago ceased their involvement in the club. The Court concluded that they had no beneficial interest in the club, or its ground.

Contact Kam Majevadia K.Majevadia@SydneyMitchell.co.uk / Hayley-Jo h.lockley@sydneymitchell.co.uk for help and advice on 0808 166 8860

HM Revenue and Customs (HMRC) have a variety of methods for uncovering tax evasion and find sectors with substantial cash income, such as takeaway restaurants, a source of easy pickings warns Leanne Schneider-Rose, Partner, Sydney Mitchell LLP; as well as having industry comparisons (and algorithms which automatically pick out 'suspect' VAT returns for investigation), they undertake test purchases to check gross profit margin claims, keep watch on premises to count the number of customers and so on. By the time the owner of a takeaway becomes aware of the enquiry, there is often a very impressive body of evidence in the possession of HMRC.

This was how the owners of a kebab shop in London came to be assessed for £71,000 in VAT based on HMRC's calculation that they had under-declared the takings of their shop, which was run as a company. By the time the calculation had been made of the additional Corporation Tax due and the penalties were added, the total debt of the company, now in liquidation, was nearly £300,000.

Having a limited company normally operates to protect the directors from personal liability for the company's debts, but not in cases such as this. The two owners were given 'personal liability orders' for the company's liability to HMRC.

They have also both received disqualification orders preventing them from acting as directors of a limited company or participating in the management of a company for seven years.

As soon as you receive a notice that HMRC is enquiring into your company tax affairs , you should take professional advice. There can be serious legal and financial ramifications and skilled professional advice is important.

If you wish to discuss this or other legal dispute matter, please call Leanne Schneider-Rose, Partner, Sydney Mitchell LLP on  0121 698 2200

You are entitled to object to your neighbours’ building plans, but wise homeowners always seek professional legal advice before doing so. In one case, which a homeowner who opposed construction of an extension next door ended up being ordered to pay his neighbours more than £20,000 in damages.

The man believed that the extension would be too close to his gas flue outlet and sought an injunction against the couple next door. In the event, the couple gave a formal undertaking that they would suspend the works pending resolution of the dispute. A property expert was jointly appointed to resolve the matter and the man promised that, if he turned out to be in the wrong, he would pay the couple damages.

After the expert found that the extension involved no encroachment onto the man’s property, the couple launched proceedings to hold him to his promise. While the building works were delayed by the dispute, the couple had to move out to live with a relative, to whom they paid rent. The costs of the project ballooned and they had to move their belongings into storage. They also had to cancel their Sky subscription and incurred extra costs in driving their children to and from school.

Following a hearing, a judge ordered the man to pay the couple £22,860 in damages. He was also directed to move his gas flue further away from the boundary so as to comply with building regulations. The man challenged the decision, but the High Court could find no flaw in the judge’s ruling and dismissed his appeal.

For help or advice on this or other property dispute matter, please speak to Sundeep Bilkhu, s.bilkhu@sydneymitchell.co.uk  on 0808 166 8827

Every landlord or property vendor should be aware that the consequences of failing to accurately answer enquiries before contract can be severe. In a Court of Appeal case, a landlord who failed to disclose that commercial premises were contaminated by asbestos ended up with a seven-figure compensation bill.

The case concerned the lease of three warehouse units and an agreement to lease a fourth. In enquiries before contract, the tenant asked if the landlord was aware of any hazardous materials, including asbestos, affecting the premises. The latter replied with the all-too-familiar words, ‘the buyer must satisfy itself.’ It also replied that it had not received notice of any environmental problems affecting the premises, but reiterated that the tenant must satisfy itself.

Prior to making those replies, the landlord's agents had received an email from a health and safety firm that had been instructed to inspect the premises. The email reported that the units were so contaminated with asbestos that they were dangerous to enter. In ignorance of the email, the tenant entered into the relevant lease and agreement. After the tenant launched proceedings, a judge found the landlord liable to pay £1.4 million in damages under the Misrepresentation Act 1967.

In dismissing the landlord’s challenge to that ruling, the Court agreed with the judge that the failure to disclose the asbestos contamination amounted to a clear misrepresentation and that the tenant was entitled to be compensated for the costs of remedial work and of arranging alternative premises during the period of almost nine months that it took to complete them.

The lease contained a clause by which the tenant acknowledged that it had not entered into the agreement in reliance on any statement or representation made by or on behalf of the landlord. However, the judge had rightly found that that provision amounted to an attempt to exclude liability for misrepresentation and was thus unreasonable, within the meaning of the Unfair Contract Terms Act 1977.

For help or advice on this or other property related matter, please contact Sundeep Bilkhu, s.bilkhu@sydneymitchell.co.uk 0808 166 8827

A holiday should be a time for rest and recovery. There is nothing worse than being injured on holiday, but if this has happened to you, you need the right specialist to help you. Mike Sutton of Sydney Mitchell LLP discusses how he can help you to recover compensation for your pain, suffering and expenses.

Holiday accidents don’t just include accidents in a hotel, but cover injuries on boats or cruises, in a plane, traveling in cars or rental vehicles, even the beach.  The causes of a holiday accident could include:

  • Wet flooring or misplaced objects causing a slip or trip accident
  • Injuries which occurred on foreign transport
  • An injury that happened when on a day excursion
  • Food poisoning from the hotel restaurant/ buffet
  • Illness resulting from bad hotel hygiene
  • Problems with your rental car that lead to a holiday accident
  • Water sports accidents
  • Skiing accidents

Report the Incident

Where possible, you should also try to ensure that details are recorded in any available accident book and reported to your travel representative.

If appropriate, also report the accident to the hotel and ask that they keep a written record of the event and provide you with a copy of the same.

Keep a Record

It is important to record as much detail as possible. This could include witness information and photographs.

Seek medical assistance as a matter of urgency.   In certain countries, it is a requirement that you seek medical assistance within a very short period of time after the accident in order to maintain your right to pursue a claim for damages. As such, if you have suffered injuries as a result of an accident that occurred in a foreign country, you should seek medical attention as soon as you realise that you have been injured to prevent any suggestion that the injuries could have been suffered in a different location.

Obtain Specialist Advice

As with any personal injury claim, the advice and assistance of a specialist is invaluable.  They can collate all of the relevant information, provide guidance on the injury claim process and negotiate a suitable settlement with the third party insurers.

In every case, medical evidence will be required, and it is necessary to show that the person you are making a claim against owed you a duty of care, that they breached that duty of care (were negligent), and that the injury you sustained was a reasonably foreseeable consequence of that negligence.

Please contact Mike Sutton or one of our specialist Personal Injury Specialists at Sydney Mitchell on 0808 166 8827 or via email to pi@sydneymitchell.co.uk.

Social housing providers are at the heart of the communities they serve and, for that very reason, can sometimes find themselves embroiled in neighbourhood conflict. That is exactly what happened in one case in which a social landlord was ordered to pay more than £8,000 in harassment damages to two of its tenants.
 
The tenants, a man and a woman, were concerned about anti-social behaviour in the area where they lived. One of them had been obliged to move four times and had formed a community group to gather evidence of unacceptable behaviour, which was posted on a website. The other was so concerned about her security that she had installed CCTV equipment to keep watch on her property.
 

Their activities had generated a considerable amount of hostility from neighbours and their landlord, a social housing trust, received complaints that the man was invading other residents’ privacy by recording them going about their lives. There was particular concern that he had filmed children and young people. There were also complaints that the woman’s CCTV equipment covered an area beyond the boundaries of her property and was being used for an inappropriate purpose.

The landlord’s response was to issue escalating warnings and threats of legal action against the tenants. They were accused of causing an annoyance or nuisance to their neighbours, in breach of their tenancy agreements, and were eventually told that injunctions would be sought against them and that their homes were at risk. After the tenants obtained legal advice, they launched proceedings against the landlord under the Protection from Harassment Act 1997.

In upholding their claims, a judge found that the landlord’s analysis of the complaints had been wholly uncritical and inadequate. Baseless and entirely incorrect allegations had been made against the man. The woman had been granted specific permission by the landlord to install CCTV at a previous address and had reasonably assumed that the same equipment could be installed at her new home. Both tenants had been subjected to an oppressive course of conduct and the man was awarded £4,750 in damages. The woman received a £4,160 award.

In dismissing the landlord’s challenge to the judge’s ruling, the Court of Appeal found that the approach of the landlord’s estate manager had been hopelessly careless and that the tenants’ treatment clearly amounted to harassment. Both were long-term assured tenants and the landlord had at all material times been aware of their concerns about anti-social behaviour. In the circumstances, the landlord should have known that its unjustified actions would cause them alarm and distress.

For help and advice contact Sundeep Bilkhu on s.bilkhu@sydneymitchell.co.uk or call 0808 166 8974.

 

Plenty of parents have difficulty in convincing their home-bird children that it might be time to fly the coop and get a place of their own, but one American family was forced to resort to extreme measures to get their 30-year-old son to move out of home.

The married couple from New York were forced to bring their son to court to have him evicted from their home, where he had lived for the last eight years.

The court heard that the couple, aged in their fifties, had made multiple and increasingly desperate attempts to convince their son to move out of his own accord, but to no avail. They had served him with letters asking him to leave and had offered him money and support in finding a place of his own and a job.

But the son, who represented himself in court, argued with the judge that he was entitled to six more months of living in the family home. The judge, after failing to convince the son to move out of his own volition, called that demand ‘outrageous’ and issued an eviction order. The son in turn called the eviction order ‘outrageous’.

The court heard that the parents had given their son a letter telling him he had 14 days to vacate the house and stating that they would “take whatever actions are necessary to enforce this decision.” When he refused to leave, they gave him another letter telling him to move out immediately and advised him to sell some of his property to help support himself. They also offered to help him find a job.

Speaking outside the court, the son insisted there had been no incidents of falling out between him and his parents but said he intended to appeal the eviction notice.

Fortunately most parents won’t need to go to such lengths to convince kids who are reluctant to spread their wings!

For help and advice contact Sundeep Bilkhu on s.bilkhu@sydneymitchell.co.uk or call 0808 166 8974.

Tenants are legally entitled to be consulted before their landlords sign agreements with their managing agents or others that extend beyond a 12-month period and result in the levying of service charges. As a Court of Appeal case showed, failure to comply with such requirements can have extremely serious consequences.

The case concerned an urban block of flats occupied by over 150 leaseholders. The property’s freeholder launched proceedings against one tenant in order to recover more than £24,000 in alleged arrears of service charges. Part of that related to the tenant’s contribution to fees payable by the freeholder to its managing agent.

That portion of the service charges was, however, disallowed by the First-tier Tribunal on the basis that the agreement between the freeholder and its agent was a qualifying long-term agreement – within the meaning of Section 20ZA(2) of the Landlord and Tenant Act 1985 – to which mandatory consultation requirements applied. There was no dispute that those requirements had not been met. The freeholder’s challenge to that ruling was later rejected by the Upper Tribunal.

In dismissing the freeholder’s appeal against the latter decision, the Court of Appeal noted that the relevant agreement stated that it would last for one year. However, it did not stop there, also providing that the agreement would continue thereafter. On its true interpretation, the agreement introduced a mandatory requirement that it would continue beyond the initial 12 months for an unspecified further period.

In those circumstances, the Court found that the agreement was indeed a qualifying long-term agreement to which the consultation requirements applied. The failure to comply with those requirements meant that, by operation of the Service Charges (Consultation Requirements) (England) Regulations 2003, the tenant’s contribution to the managing agent’s fees was capped at £100 per annum.

For help and advice contact Sundeep Bilkhu on s.bilkhu@sydneymitchell.co.uk or call 0808 166 8974.

A great many commercial and residential leases grant rights to tenants that can only be exercised with their landlords’ consent, which cannot be unreasonably withheld – but what exactly does the latter phrase mean? The Court of Appeal considered that issue in a case that broke new legal ground.

The case concerned a six-storey building occupied by a corporate tenant under a 100-year lease. The company wished to apply for planning consent to change the use of the building’s second and third floors from storage to residential. However, the lease contained a tenant’s covenant not to apply for planning permission without the prior written consent of the landlord, such consent not to be unreasonably withheld.

The landlord had refused to grant the required consent on grounds that a successful application for planning consent would significantly increase the proportion of the building that was used for residential purposes. That in turn would boost the tenant’s hopes of employing the leasehold enfranchisement provisions of the Leasehold Reform Act 1967 in order to acquire the freehold of the property.

The landlord owned a large number of properties in the area and viewed leasehold enfranchisement as an undesirable prospect that would impinge on its proper management of the wider estate. After the tenant launched proceedings, however, a judge found that the landlord’s consent had been unreasonably withheld and opened the way for the tenant to lodge the required planning application.

In ruling on the landlord’s challenge to that decision, the Court noted that the case raised novel issues on which there was no previous authority. In dismissing the appeal, it observed that the lease expressly authorised the tenant to use the whole of the building for residential purposes. There was no proviso that residential use of the whole or any part of the property was subject to the landlord’s consent.

In those circumstances, the Court found that the landlord had refused consent for the planning application for the collateral purpose of restricting the tenant’s right to make residential use of the entire building. The reality was that any third party could apply for planning permission to authorise such use and that only the tenant was precluded from doing so without the landlord’s consent. It seemed inconceivable that that was the intention of the original parties to the lease.

For help and advice contact Shilpa Unarkat on s.unarkat@sydneymitchell.co.uk or call 0808 166 8974.

 
 

Contract terms that seek to set agreements in stone, preventing their subsequent oral modification (NOM clauses), have long been controversial – but the Supreme Court has ruled in a guideline case that they perform important functions and neither frustrate nor contravene any policy of the law.
 
A property company that operates office developments in London had granted a licence in respect of certain premises to an advertising agency. The agreement stated that it set out all of the terms that had been agreed and that any variations would only take effect if formally approved in writing by both parties.

The agency accumulated licence fee arrears and its director proposed a schedule of payments to a credit controller employed by the company, by which some payments would be deferred and the payment of arrears would be spread over the remainder of the licence period. The company subsequently locked the agency out of the premises, terminated the licence and sued it for the arrears. The agency counterclaimed, seeking damages for wrongful exclusion from the premises.

A judge accepted that the company had, via the credit controller, orally agreed to the schedule of payments. However, he went on to find that the company was entitled to claim the arrears without regard to that agreement because it did not satisfy the formal requirements of the NOM clause. The Court of Appeal later upheld the agency’s challenge to that ruling on the basis that, by orally agreeing to the agency’s proposal, the company had also consented to dispense with the NOM clause and to accept an oral variation of the licence agreement.

In allowing the company’s appeal against that ruling, the Supreme Court noted that NOM clauses are commonplace and perform important purposes. They prevent attempts to undermine written agreements by informal means; they avoid disputes about whether variations are intended and, if so, their exact terms; and they make it easier for corporations to police their own internal rules.

By its decision, the Court of Appeal had overridden the contracting parties’ intention to bind themselves as to the manner in which future changes to their legal relations were to be achieved. In those circumstances, there had been no variation of the licence agreement and the company was entitled to rely on its strict terms.

For help and advice contact Sundeep Bilkhu on s.bilkhu@sydneymitchell.co.uk or call 0808 166 8974.

 

Pages

UK Top Tier Firm 2017 Lexcel Practice Management Standard Birmingham Law Firm of the Year for 2011 Resolution Collaborative Family Lawyer The Law Society Accredited in Family Law Conveyancing Quality Scheme

 

Subscribe to Business Law Updates