Arbitration Criminal Human Rights Insolvency Land Practice Tort


Arbitration



Construction contract - statutory requirement of notice if payment to be withheld after final date for payment - no bar to obtaining stay of proceedings on reference to arbitration where no notice given

Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd: CA (Lords Justice Brooke, Clarke and Neuberger): 7 December 2004



In proceedings relating to a construction contract and arbitration agreement, the claimant sought payment of a final account.


The defendant, having retained payment, and relying on section 111 of the Housing Grants, Construction and Regeneration Act 1996, obtained a stay of proceedings under section 9 of the Arbitration Act 1996 on the foundation that the matter had been referred to arbitration. On appeal, the claimant contended that, since section 111(1) stated that a party to a construction contract 'may not' withhold payment after the final date for payment of a sum due 'unless he has given an effective notice' of intention to do so, and the defendant had not done so, the defendant could not continue to withhold the money, nor was it entitled to seek a stay of proceedings in reliance on referral of a dispute for arbitration.


John Robson (instructed by Thackray Williams, Bromley, Kent) for the claimant; Kirsten Houghton (instructed by Piper Smith Watton, London) for the defendant.


Held, dismissing the appeal, that nothing in section 111 deprived a party of his right to seek a stay of proceedings where, under an arbitration agreement and the Arbitration Act 1996, a dispute had properly been referred to arbitration; and that, on the facts, there was such a dispute (WLR).



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Criminal



Manslaughter by gross negligence - defendant and victim setting fire to defendant's property using petrol - jury to determine whether defendant owing victim duty of care

R v Willoughby: CA (Lord Justice Rose, Mr Justice Douglas Brown and Mr Justice Mackay): 6 December 2004


The defendant was charged with arson, being reckless as to whether life was endangered, and manslaughter by gross negligence. The Crown's case was that the defendant, who owned a public house on which he owed mortgage arrears of more than £200,000, had recruited a local taxi driver to help him and had poured petrol inside the public house which, when ignited, had caused an explosion, killing the taxi driver and injuring the defendant.


The defendant was convicted and appealed against the manslaughter conviction on the ground that the judge had erred in directing the jury that the defendant owed a duty to the victim to ensure that he was safe from the risk of injury, by reason of his position as owner of the premises, while the two of them were engaged in burning them down.


Richard Barraclough QC and Simon Clarke (assigned by the Registrar of Criminal Appeals) for the defendant; John Hillen (instructed by the Crown Prosecution Service, East Kent) for the Crown.


Held, dismissing the appeal, that the defendant would not owe a duty of care in law towards the victim merely because he was the owner of the property to be destroyed for his financial benefit, but the fact that he had enlisted the victim and that it was the victim's role to spray the petrol were factors capable in law of giving rise to criminal responsibility; and that where there was evidence capable of establishing a duty, it was ordinarily for the jury to determine whether the defendant owed the victim that duty of care.



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Human Rights



Statutory control over sites of special scientific interest - refusal of consent to works or leisure activities without compensation - not incompatible with convention right against deprivation of property

R (Trailer and Marina (Leven) Ltd) v Secretary of State for the Environment Food and Rural Affairs and another: CA (Lord Phillips of Worth Matravers Master of the Rolls, Lords Justice Sedley and Neuberger): 16 December 2004


Following the coming into effect of sections 28 to 28Q of the Wildlife and Countryside Act 1981, as amended by the Countryside and Wildlife Act 2000, English Nature told the claimant that its previous notification of the claimant's canal as a site of special scientific interest (SSSI) was absolute, that it would not give consent to any works or leisure activities on the canal, and that by reason of the amendments, the restrictions on the claimant's use of the canal would no longer be compensated.


The claimant sought a declaration by way of judicial review against the Environment Secretary and English Nature that sections 28 to 28Q were incompatible with its rights under article 1 of the First Protocol to the European Convention on Human Rights. The judge dismissed the claim. The claimant appealed.


Gerald Rabie (instructed by Rollits, Hull) for the claimant; John Howell QC and James Maurici (instructed by the Treasury Solicitor) for the secretary of state and (instructed by Browne Jacobson, Nottingham) for English Nature.



Held, dismissing the appeal, that although a deprivation of property without compensation would normally infringe the article, the control of use of property in the public interest without compensation would not normally do so, unless the control amounted to a de facto expropriation of the property; that, when considering whether legislation controlling the use of property in the public interest infringed the article, a fair balance had to be struck between the general public interest and individual rights, according to the legislature the appropriate measure of judgment; that provided the state could properly take the view that the benefit of the community outweighed the detriment to the individual, a fair balance would be struck, without any requirement to compensate the individual; that although the effect of the amendments would be to curtail, sometimes severely, the uses to which SSSI land could be put, with detrimental, in some cases severely detrimental, effect on the profits to be made from activities on the land, the provisions were not inherently incompatible with the article and did not amount to disguised appropriation; and that since the claimant had not established that the restrictions on its use of the canal amounted either to a de facto expropriation or represented a disproportionate burden on it, it was not entitled to relief.



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Insolvency



Defendants participating in arrangement to sell farm at undervalue thereby overreaching claimant's charge - claimant entitled to relief on basis that defendants 'entered into a transaction' - government's failure to remove remains of animals infected with foot- and-mouth disease immediately after slaughter not trespass provided animals belonging to farm

Department for Environment Food and Rural Affairs v Feakins and another: ChD (Mr Justice Hart): 26 November 2004


The first defendant and his wife conducted their business through a company to which they granted an agricultural tenancy of their farm. The company ceased to trade and to pay rent on the tenancy, and the couple divorced.


The claimant obtained a charging order against the farm in connection with litigation involving the first defendant. When foot-and-mouth disease was diagnosed, the farm was declared an 'infected place' and subjected to lengthy and invasive measures by the claimant pursuant to section 34 of the Animal Health Act 1981 (as amended by the Animal Health and Welfare Act 1984) and subordinate legislation, involving the slaughter and disposal of all the cattle and sheep and consequent cleaning and disinfecting, including burying the burnt animal remains. The first defendant sold the farm to the second defendant, his fiancée, on a tenanted basis, for £450,000, thereby overreaching the claimant's charge. The next day, the second defendant entered into a contract to sell the farm, untenanted, to third parties for £1 million. The company then surrendered the tenancy for minimal consideration.



The claimant claimed relief against the defendants under section 423 of the Insolvency Act 1986, pleading that, at the time of the sale, the agricultural tenancy was unenforceable against them since it had become a sham. The defendants counterclaimed in respect of damage alleged to have been suffered as a result of the operations undertaken by the claimant following the outbreak of disease.


Sarah Lee and Paul Harris (instructed by the solicitor, Department for the Environment, Food and Rural Affairs) for the claimant; Stephen Jourdan and Edward Peters (instructed by Burges Salmon, Bristol) for the defendants.


Held, allowing the claim and, in part, the defendants' counterclaim, that the phrase 'enters into a transaction' in section 423 could be read as 'participates in an arrangement'; that the first defendant had participated in an arrangement whereby his assets had been transferred to the second defendant at an undervalue; that, accordingly, the claim under section 423 succeeded and the claimant was entitled to an order restoring its position to what it would have been had the transaction not been entered into; that under section 34 of the1981 Act, the government was not liable in trespass to land if, following an outbreak of foot-and-mouth disease at a farm, it did not either immediately remove the carcasses of slaughtered animals belonging to that farm or bury them on the farm; but that section 34 and did not apply in respect of animals not belonging to that farm.



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Land



Family farm - father allowing daughter to use farm as long as it stayed family farm - daughter not entitled to compensation for loss of farm when sold to pay ancillary relief on father's divorce

Wormall v Wormall: CA (Lords Justice May, Jonathan Parker and Neuberger): 25 November 2004


The father allowed his daughter to use his farm property to run her farming business as long as the farm remained the family farm. The daughter assumed that could use the farm for her business as long as she wished and continued her business in the farm property.


Following divorce proceedings between the daughter's parents, the father claimed possession of the farm so that he could sell it and use the net proceeds to meet the ancillary financial relief ordered in the divorce proceedings. The judge held that the arrangement had created a proprietary estoppel and ordered the father to pay the daughter £50,000 as compensation for her loss of the farm. The father appealed against the compensation order.


Philomena Harrison (instructed by M & S Solicitors Ltd, Heather) for the father; Penelope Reed (instructed by Burges Salmon, Bristol) for the daughter.


Held, allowing the appeal, that the aim of the court, where it had found a proprietary estoppel in equity, should be to look at the circumstances of the case to ascertain in what way the equity could be satisfied; that it was clear from the arrangement that the daughter could continue using the farm only so long as the farm remained the family farm, but it would cease to be the family farm when it was sold to pay the ancillary financial relief; and that, therefore, the daughter should vacate the farm without compensation by the time when the sale of the farm had been completed.



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Practice



Application by defendant to set aside judgment where notice not received - judge considering merits of defence without trial and entering judgment for claimant - no violation of right to fair trial

Akram v Adam: CA (Lords Justice Brooke, Jonathan Parker and Keene): 30 November 2004


The claimant obtained an order for possession against the defendant. The order was overturned by a district judge, who found that the defendant had not received notice although it had been duly posted to his 'usual or last known address' pursuant to rule 6.5(6) of the Civil Procedure Rules (CPR).


On the claimant's appeal, the judge, after investigating the merits of the defence without a trial, reversed the decision and entered judgment for the claimant. The defendant appealed, claiming that the procedural rules relied on by the judge violated his right to a fair trial guaranteed under article 6 of the European Convention of Human Rights.


David Carter (instructed by the Bar pro bono unit) for the claimant; the defendant in person.


Held, dismissing the appeal, that a regularly entered judgment could only be set aside as a matter of discretion under CPR rule 13.3, and the judge had properly exercised such discretion; that the jurisprudence of the European Court of Human Rights did not require procedural rules obliging a claimant to initiate further ancillary proceedings to strike out a defence, or to enter summary judgment; that, although the fair trial guarantees within article 6 entitled a defendant to be heard, if he could not demonstrate that his defence would have a real prospect of success, or that there was some other compelling reason why a trial should be conducted, the parties and court need not indulge in an expensive and time-consuming charade; and that, accordingly, article 6 did not, as of right, entitle the defendant to a trial, or oblige the claimant on some other occasion to show that the defendant had no arguable defence.



Judge and counsel for one party from same set of chambers - defendant making no objection - unsigned draft order handed to defendant on day fixed for judgment - draft judgment as good as judgment signed and sealed - no appeal on ground of bias

Birmingham City Council and another v Yardley: CA (Lords Justice Kennedy, Jacob and Gage): 9 November 2004


The defendant repeatedly wrote letters to the local authority, complaining that it had not acted fairly in relation to his application to renew his taxi licence.


The local authority applied to restrain the defendant from communicating with it or its members. Before the hearing, the judge informed the defendant that he and counsel for the local authority were members of same set of chambers; the defendant did not make any objection.


The judge delivered an unsigned draft judgment finding against the defendant, and at a subsequent hearing he ordered the defendant not to write letters to the local authority except for one letter per calendar month relating to his licence application. Later, the defendant was committed for breach of the injunction. The defendant appealed on the grounds that the judgment was an unsigned draft and was not binding on him and that the judge was biased.


The defendant in person; Alastair Smail (Birmingham City Council Legal Office) for the city council.


Held, dismissing the appeal, that a draft judgment delivered to the litigants on the day of judgment was as good and forceful as a judgment signed and sealed for the purpose of enforcing it; and that the appropriate time to object to the judge hearing the case on the ground that there was a risk of bias was just before the hearing and that it was not a ground of appeal.



Family proceedings - proceedings heard in private - appropriate to give judgment in open court

Blunkett v Quinn: FamD (Mr Justice Ryder): 3 December 2004


In family proceedings, in which the applicant sought parental responsibility and contact orders, the respondent applied to vacate a conciliation appointment and adjourn proceedings. The judge refused the application to adjourn but vacated and re-listed the conciliation appointment. The respondent appealed.


The appeal was heard in private but the applicant applied for the judgment to be given in open court to correct factual issues, and so that the public might have confidence that the system of family justice was fair and not wrongly cloaked in unnecessary or inappropriate secrecy.


Peter Jackson QC (instructed by Bindman & Partners, London) for the applicant; Jeremy Posnansky QC (instructed by Mishcon de Reya, London) for the respondent.


Held, dismissing the appeal, that in light of much inaccurate reporting of the case in the media it was right, having regard to the competing rights under articles 6 (fair trial), 8 (respect for privacy and family life) and 10 (freedom of expression) of the European Convention of Human Rights, to deliver judgment in open court; that the ability to correct false impressions and misconceived facts would go further to help secure the article 6 and 8 rights of all involved than would the court's silence, which in this case would only promote further speculation and adverse comment which would damage both the interests of those involved and the family justice system itself; and that, furthermore, it was possible to guard against arbitrary interference in the private and family lives of all concerned by hearing the appeal in private and by excluding from the judgment unnecessary personal material.



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Tort



Negligence - annual statutory statement prepared by solicitor's accountant failing to draw attention to misappropriation of clients' account money - Law Society compensating clients from trust fund &150; Society's cause of action against accountant not arising until decision to compensate clients

Law Society v Sephton & Co and others: CA (Lords Justice Carnwath, Neuberger and Marice Kay): 13 December 2004


A partner in a firm of accountants prepared annual statutory statements from 1989 to 1995 for a practising solicitor as prescribed by the Accountant's Report Rules 1986 and 1991, in order for the solicitor to renew his practising certificate.


The accountant certified that he had examined all records and that all the monies in his client accounts were consistent with what was in the relevant ledger accounts.


During those accounting periods, the solicitor misappropriated about £750,000, but the annual returns failed to highlight it. The Law Society, after receiving complaints from clients, compensated them out of its trust fund by March 1999. The Society issued proceedings against the accountant and his partners in May 2002 for negligence and in December 2002 for fraud seeking compensation.


In a preliminary hearing, the judge held that the Society's cause of action accrued well over six years before, when the solicitor misappropriated the monies, and struck out the action. The Society appealed.


Timothy Dutton QC and Rosalind Phelps (instructed by Wright Son & Pepper, London) for the Law Society; Michael Pooles QC, and Derek Holwill (instructed by Barlow Lyde & Gilbert) for the defendants


Held, allowing the appeal (Lord Justice Neuberger dissenting), that the tort of negligence was not complete until actual damage was suffered; that a risk of increasing loss was not enough; and that the Society's cause of action for negligent misstatement of the accountant accrued only when the Society, as the trustee of the Solicitors Compensation Fund, resolved to compensate the clients for their loss.



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