Property Newsletter: April 2020

Introduction

Welcome to the April 2020 edition of the Property Newsletter from Hardwicke. This is not intended to be yet another update about the ‘c’ word, but the topic is of course pretty hard for anyone to avoid, even if they wanted. We are all adapting to new ways of working, and/or new ways to keep ourselves occupied during working hours. We hope that you and your team, like us and ours, continues to remain adaptive, calm, positive, and confident about what can be achieved and done right now and in the near future.

On a lighter note, while the identity of the particular member shall never be revealed (the editor may or may not be open to bribes of Toblerone or Toblerone equivalent currency), the editor’s job this month was made very much more enjoyable when the request for contributions to the newsletter asking for “funny/humorous tales of remote hearings/memes/new hobbies/box sets watched” was read as “funny/humorous tales of remote hearings/memes/new hobbies/sex bots watched”. Go figure what goes on in their mind…

This month Jonathan Titmuss guides us through the likely position tenants may encounter if their landlord faces insolvency.

For those who have “completed Netflix” (other streaming services are available) Andy Creer and Brie Stevens-Hoare KC have provided dingbats and a numbers quiz to keep us all occupied and entertained. Answers next month and a swotty name check to the first reader who emails us with the correct answers!

And Charlotte John spins the wheel of questions for us.

For all things Covid-19 word related, Hardwicke’s Covid-19 resources related hub can be found by clicking here.

The next newsletter will be around the end of May 2020. From all the team at Hardwicke we continue to wish you and your family all the best at this difficult time.

Carl Brewin – Editor

Activity Report – What we have been up to and what we'll be getting up to over the coming month

John de Waal KC has been enjoying his first remote mediation.

Brie Stevens-Hoare KC has been dealing with a bit of conspiracy and outright dishonesty, a bit of fire and flood along with some forfeiture. She is also exploring escape routes from a couple of property transactions that turned out not to be what they promised. The rest of us have noticed Brie is unduly excited by changing her Zoom background multiple times during internal meetings. Our theory is she is missing her travels…

When not moderating the #HardwickeBrew, Cameron Stocks has had an influx of work advising on disrepair in both commercial and residential premises as well as an acrimonious boundary dispute over the placement of a fence which has been exacerbated by the neighbours not being able to leave their properties for the last month…

Days before the lockdown, Andrew Skelly was on the Isle of Wight, for a three-day Tribunal hearing in which he was resisting an adverse possession claim.  Although there had been adverse possession by the neighbouring developer, it was unable to establish any estoppel, or reasonable mistake as to the boundary, and so its claim failed.  Back on the mainland, he has had several Japanese Knotweed matters to advise on, for both claimants and defendants. He has also been sitting as a DDJ in Dartford and Brighton, on some of the few remote hearings being conducted at county courts.

Peter Petts has been dealing with the topical issues of insurance and access to vacant leasehold properties.

Monty Palfrey eventually sorted out extending the Wi-Fi to the garden. He is busy with work but missing the train!

Katrina Mather has been embracing WFH which has included conducting a (telephone!) trial in her PJs! When life gives you lemons, take all the novelties you can get…

Charlotte John has had a busy month dealing with a variety of probate and trusts disputes, including a succession of constructive trust and 1975 Act claims and interesting arguments concerning the enforceability of an express trust and a charge, involving, respectively, a laches defence and arguments about mental capacity.

James Hall has had an interesting time recently, with apparently unfeasible five-hour hearings going ahead by telephone and working remarkably smoothly, whilst short hearings that the parties were happy to do by telephone or video have been vacated by various courts without reason being provided.  To misquote an allegedly ancient Chinese expression, ‘may you never live in interesting times’…

Daniel Gatty has spent the last month on rectification of commercial leases, (alleged) conveyancing negligence, commercial service charges, restrictive covenants and disputes between co-owners, amongst other things. He has also spent quite a lot of time on the table-tennis table in his back garden trying, but too often failing, to win against his teenage sons. It turns out that lockdown-facilitated practice doesn’t make perfect!

Jamal Demachkie has had his first Coronavirus case – an urgent application against Hardwicke’s Andy Creer. He has also had an upturn in boundary and neighbour disputes (no doubt perpetuated by everyone being at home all the time, and realising they either love, or loathe, their neighbours!)

This month John Clargo has been advising on landlords’ commercial repair obligations, easements, proprietary estoppel/constructive trusts and various other co-ownership of land issues (broadly from Peckham to Portugal) and has hosted two of the Hardwicke Property Brews. There was quite lot of chocolate eaten over Easter. Not all of it was stolen from his children.

Andy Creer has been advising on a wayleave agreement, obtaining ex parte mandatory injunctions against two mortgagees in possession, and an injunction to prevent persons from entering a building. She has dealt with a number of requests for quizzes since Lockdown began. She is getting used to ‘advocacy in her slippers’, but can’t help noticing that working from home used to be so much quieter before Zoom.

Clare Anslow has spent the month learning how (finally) to operate a paperless practice and is looking forward to maintaining it once the world returns to normal. When she hasn’t been in zoom meetings/webinars/coffee mornings she has been advising on the Coronavirus Act 2020 (particularly s82) and the impact of the new practice direction 51Z.

Lina Mattsson is celebrating concluding her Jarndyce v Jarndyce – it took seven years for the County Court at Barnet to finally determine her client’s service charge claim. What a slog! But Lina’s victory with indemnity costs made it (almost) worthwhile… Lina has also been advising on proprietary estoppel, overage provisions and rent review provisions.

Events

The Hardwicke Team have successfully launched its #HarwickeBrew series on Zoom, an informal chat that lets you into our team’s thoughts and discussion surrounding current issues and practical challenges practitioners and their clients are facing. Wandering children and/or pets are very welcome…bring your own hot drink!

Upcoming Brews and Zoom Sessions

30 April 2020 (11:00 – 11:30am) – Empty Properties

6 May (11:00 – 12:00) – Interested in the Register? Priorities, Rectification and Indemnities

Previous #HardwickeBrews and Zoom Sessions

Up above and down below: Developing above and below blocks of flats – A Hardwicke Zoom Seminar

#HardwickeBrew: Property – Insolvency Issues

Rights to Light: Where are we now? A Hardwicke Zoom Seminar 

#HardwickeBrew: Property – Commercial Landlord & Tenant

#HardwickeBrew: Property – Residential Properties

If you would like copies of the #HardwickeBrew Takeaway Cups from all the #HardwickeBrews that have taken place or a copy of the handouts from either of our recent Zoom seminars, please click here.

Lina Mattsson: Did you see? You may have missed...

PRACTICE DIRECTION 51Z: STAY OF POSSESSION PROCEEDINGS, CORONAVIRUS

PD 51Z was amended (again) on 20 April 2020. It now reads:

2. Subject to paragraph 2A, all proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed for a period of 90 days from the date this Direction comes into force.

2A. Paragraph 2 does not apply to—

(a) a claim against trespassers to which rule 55.6 applies;

(b) an application for an interim possession order under Section III of Part 55, including the making of such an order, the hearing required by rule 55.25(4), and any application made under rule 55.28(1); or

(c) an application for case management directions which are agreed by all the parties.

3. For the avoidance of doubt, claims for injunctive relief are not subject to the stay in paragraph 2, and the fact that a claim to which paragraph 2 applies will be stayed does not preclude the issue of such a claim.

Promontoria (Oak) Ltd v Emanuel (2020) EWHC 563 (Ch)

Assignments – Legal Charges – Possession Claims

The Facts

The claim started life as a possession claim pursuant to a Legal Charge and for a money judgment for the balance outstanding on various loan facilities. The loan facilities were originally extended by National Australia Bank Limited and the Legal Charge was originally in the Bank’s favour. The Respondent, Promontoria Oak, had taken an assignment of the loan facilities and the Legal Charge. It was registered as the proprietor of the Charge at Land Registry. Only a substantially redacted Deed of Assignment had been produced at trial.

The trial judge granted a possession order and entered judgment in favour of Promontoria for £123,730 plus interest. The owners appealed.

On appeal, Mr J Marcus Smith determined that the trial judge finding that Promontoria had title to sue through the Deed of Assignment was wrong and had to be set aside: [2019] EWHC 2896 (Ch). The issues between the parties was whether this finding had any effect upon the possession order or money judgment entered.

The decision

Mr J Marcus Smith held that the trial judge’s order was unaffected by his findings on appeal.

The pleadings were clear. Promontoria was claiming in two capacities: as assignee pursuant to the Deed of Assignment and as the proprietor of the Legal Charge. As a matter of law, the Deed of Assignment could neither transfer to Promontoria legal title in the Legal Charge nor the right to claim possession. The most that the Deed of Assignment could support was a claim in debt in relation to any monies owing by the owners to (initially) the Bank and (after the Deed of Assignment) to Promontoria. In other words, some claims advanced by Promontoria could only be advanced by it as the proprietor of the Legal Charge.

The Property and the Legal Charge were both subject to the regime of registration under the Land Registration Act 2002. As owner, the Bank had the “power to make a disposition of any kind permitted by general law in relation to an interest of that description”: section 23(2)(a) LRA 2002. According to sections 27(1) and 27(3) LRA 2002, a transfer of a registered charge is required to be completed by registration and does not operate at law until the relevant registration requirements are met. Once registration is effected, it is conclusive: section 58 LRA 2002.

It followed that the right to possession was based on the proprietary interest created upon registration of Promontoria’s interest at Land Registry.

The same was however not true so far as the money claim was concerned. Although – by analogy with section 114 of the Law of Property Act 1925 and pursuant to section 51 LRA 2002 – registration of a new proprietor is capable of transferring from the old proprietor to the new proprietor all of the former’s interest in a legal charge to the latter, including the right to claim any outstanding debt, it is also possible to transfer the legal interest in the debt by way of an assignment under section 136 of the Law of Property Act 1925. It is however necessary to distinguish between the right to sue at law for the mortgage debt and the proprietary interest created as security for its repayment. Section 136 applies only to the former.

In this case, it appeared to have been the Bank’s and Promontoria’s intention to transfer the debt owed by the owners by way of the deed of assignment. It followed that, consequent to the appeal judgment, that claim had to fail. But it did not follow that the alternative route to claiming the debt as the registered proprietor of the legal charge had to similarly fail. To the contrary, there was no reason why it should not succeed.

The trial judge’s orders should therefore not be set aside. The owners had however succeeded on the substantial part of their appeal. To reflect the fact that the appeal had only technically been successful were awarded 50% of their costs of the appeal.

Conclusion

The right to claim the debt due and the proprietary interest created as security for its repayment are distinct. This case highlights the importance of considering the various routes open to a mortgagee to enforce its security – both to the mortgage and the mortgagor.

"Hardwicke Unrobed" - Get to know us better

Each month, a member of our property team has to spin ‘the Wheel of Questions’ and answer the first three questions that come up. This month, Charlotte John tried her luck with the wheel.

If you could instantly become an expert in something, what would it be?

It would be fun to acquire instant expertise in something that is not generally expected to be within the accomplishments of your average lady barrister. My daughter and I have been practising beatboxing together, so perhaps that. To be honest, it is going to be a while before I will otherwise be ready to make my debut.

If you could win an Olympic medal in any sport, what would it be?

Quidditch.

Who, or what, was your biggest teacher?

I was very lucky to go to a perfectly ordinary primary school, at which an entirely extraordinary lady named Mary Denniss was deputy head teacher. Mary ran a choir, open to all local children. Anyone could join, without audition, so long as they were willing to work hard. That ethos led us to all sorts of exciting experiences, such as singing in the Proms at the Royal Albert Hall, winning Sainsbury’s Choir of the Year, and visiting Vienna at the invitation of the Vienna Boys’ Choir. Mary was awarded an MBE for her services to music in 1990. She is the fiercest advocate I have ever encountered of the maxim that success is 10% inspiration and 90% perspiration. Many of her lessons have carried over to my career at the Bar, but most particularly her unshakable belief that you can achieve pretty much anything if you work hard enough. We won’t tell her about my beatboxing aspirations, though.

Want to try for yourself? 

Click on the wheel below!

Contact Us

If you would like to discuss any of the topics in this newsletter, please contact a member of our Practice Management Team:

James Duncan-Hartill, Senior Practice Manager
Patrick Sarson, Practice Manager

To find out more about our Property Team and their work, visit the property page on our website. To view a copy of our privacy statement, please click here. The Property Newsletter is edited by Carl Brewin. Comments or queries about this newsletter? Please get in touch with him!