Property Notepad - February 2010
1. Planning: Certificate of Lawful Use Obtained by Deceit
A recent decision of the Court of Appeal has upheld a land owner's claim to be entitled to a certificate of lawfulness of existing use or development (CLEUD), even though in his evidence to the planning inspector, the land owner had confirmed that he had deliberately deceived the planning authority.
The land owner had obtained planning permission for a barn, and although he built a building with the appearance of a barn, it was fitted out internally for residential use. The land owner lived in the building for 4 years before applying for a CLEUD.
The Court of Appeal decided that, although use of the building as a dwelling was in breach of the planning permission, the breach use was immune from enforcement action under the "four year rule" imposed by the Town and Country Planning Act 1990. Note that if the change of use had been to anything other than a single dwelling, 10 years use would have been required before immunity from planning enforcement was achieved.
Perhaps surprisingly, the Court held that the land owner's actions in deliberately deceiving the planning authority were not sufficient to negate operation of the "four year rule". For further information see Welwyn Hatfield Council v Secretary of State for Communities and Local Government [2010].
2. Security: Proposals to Restrict Enforcement of Charging Orders
The Ministry of Justice is inviting consultation as to whether restrictions should be introduced to limit enforcement of charging orders relating to Consumer Credit Act (CCA) debts.
Currently, creditors (including unsecured creditors where the debt is regulated by the CCA) can apply for a charging order to secure the debt against property. Once a charging order has been obtained and registered, the creditor can ask the court to order sale of the property, even if the debt is modest.
The Government has expressed concern that this practice, which converts unsecured CCA debts into secured liabilities, will cause an increase in the repossession of homes, which might be undesirable in the current economic climate. Views are therefore being sought on a number of the options, including the introduction of a monetary threshold for all charging order and sale applications, or an absolute prohibition on charging orders being used to secure CCA debts on residential property.
Consultation will close on 30 April 2010.
3. Contractors: Concurrent Liabilities in Contract and Tort
The Technology and Construction Court has confirmed that, in principle, a builder can owe concurrent duties in both contract and tort.
In the case in question (Robinson v P E Jones (Contractors) Ltd [2010]), a tortious claim failed as it was statute barred under the Limitation Act 1980. However, the Court indicated that had the claim not been statute barred, there would have been nothing to prevent the claimant pursuing both tortious and contractual claims.
The case also serves as a useful reminder that whiles the Courts may be willing to recognise concurrent tortious and contractual liabilities, these liabilities can be expressly limited by the contract terms.
4. Contract: Passing on Obligations
People often refer to passing on the obligation to perform a contract on assignment assuming nothing more is required. The recent Court of Appeal case of
Davies & Others -v- Jones & Another (2009) is a useful reminder of the position at law.
In this case, some landowners contracted to sell land. The contract contained obligations on the purchaser to carry out demolition works. The purchaser assigned the benefit of the contract to a supermarket company, but without any direct deed or agreement being entered into between the original sellers and the supermarket company. The property was transferred directly by the sellers to the supermarket company at completion. A dispute then arose regarding the demolition works.
The Court of Appeal confirmed that the original sellers could not enforce the contract against the supermarket company, as the burden of the obligation to demolish had not passed to them. There had been no direct deed of covenant (novation) between the supermarket company and the original sellers. The original sellers still, however, had a remedy against the original purchaser.
This is a timely reminder of the position when a contract is assigned. Whilst the Contracts (Rights of Third Parties) Act 1990 enables those who are not original parties to a contract to enforce its terms (unless the contract provides otherwise), it does not work the other way round. Save in very exceptional circumstances, you cannot enforce against a third party who is not the original contractual party unless you enter into a fresh agreement with them under which they agree to be bound by its terms.
Laytons cannot accept any responsibility for any liabilities of any kind incurred in reliance on this Notepad. For specific advice on these issues, please contact your client partner or one of the team at the addresses set out below:
Contact: Charles Hodder email charles.hodder@laytons.com
Contact: Neil Bucknell email neil.bucknell@laytons.com
Contact: Mark Gillies email mark.gillies@laytons.com
This Notepad is offered on the basis that it is a general guide only and not a substitute for legal advice. If you wish to copy this Notepad please do so, but please acknowledge its source.
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