Civil Procedure


Bankruptcy petitions - claims - discretionary powers - fees - partnership voluntary arrangements - supervisors

John Roger Firth v Clive Everitt: ChD (Ian Croxford QC): 21 September 2007

The appellant (F) appealed against an order to strike out three claims by him against the respondent insolvency practitioner (E) and to grant a bankruptcy petition brought by E against him.



F and his wife, who had carried on two businesses together in partnership, became insolvent. Following advice, they instructed E to set up a new company for the purpose of transferring one of the existing businesses into that company. They eventually entered into a partnership voluntary arrangement (PVA), which was accepted by the creditors. E acted as the nominee and supervisor. Under the PVA, E's fees were capped, but E purportedly removed the cap with the approval of the creditors. F objected to an increase in the fees beyond the capped figure and subsequently suspended payments into the PVA fund. E then issued a certificate of default. F brought proceedings, disputing E's entitlement to the fees and seeking recovery of fees that had already been paid. The claim was struck out pursuant to rule 3.4 of the Civil Procedure Rules (CPR) on the ground, among others, that the claim had not been properly brought under the Insolvent Partnerships Order 1994. Thereafter, F commenced three new claims that closely mirrored the substance of the initial claim. There were errors and inaccuracies in the claim forms. E then issued a bankruptcy petition against F, relying on a sum due from F, namely the costs awarded against him in respect of the initial claim. A judge struck out the three claims and made a bankruptcy order against F. F contended that the judge should have exercised his discretion pursuant to rule 3.10 of the CPR, permitting him to amend his claims to the extent necessary to correct their improper form and procedural errors.



Held, in dismissing the three claims brought by F, it did not appear that the judge had been directed to or adverted at all to his powers under rule 3.10, the language of which provided that an error in procedure did not itself invalidate matters unless the court so ordered. It was a material error for the judge not to have considered the provisions of rule 3.10. The judge had simply disposed of the three claims by reliance upon rule 3.4, seemingly because the judge had considered that the substance of those claims mirrored the substance of the initial claim, which had been struck out. That too was an error. F should have been given the opportunity to amend his claims as necessary. It would be wrong to treat a failure to use the correct procedure as being a reason sufficient to prevent adjudication upon the matters raised by F.



Pursuant to rule 6.25(1) of the Insolvency Rules 1986, a court, when hearing a bankruptcy petition, had to conduct some positive inquiry into the state of the debt relied upon. On the evidence, it did not appear that that requirement had been addressed, Legal Services Commission (formerly Legal Aid Board) v Leonard [2002] EWCA Civ 744, [2002] BPIR 994 applied. Accordingly, it was appropriate to set aside the judge's decision declaring F bankrupt.



Judgment accordingly.



David Parry (instructed by Challenor Gardiner) for the appellant; Shanti Mauger (instructed by Barrett & Co) for the respondent.





Copyright - costs orders - disclosure - infringement - no clear winner

Cantor Gaming Ltd v Gameaccount Global Ltd: ChD (Daniel Alexander QC): 25 September 2007
The court was required to determine costs following a decision ([2007] EWHC 1914 (Ch)) to grant an injunction for minor copyright infringement and breach of a contractual licence.



The claimant company (C) had alleged that the defendant company (G) had, through its use of a range of computer software, infringed C's copyright in that software and breached the contractual terms of a limited licence granted by C to G to use it. G, having accepted that it had made unauthorised use of C's software in respect of one particular golf game, had given undertakings to C that it would cease using it immediately. C nevertheless sought an injunction in respect of the whole software suite, and requested further information from G. Witness statements were eventually exchanged, and attempts were made by each party to settle the dispute. By the time of the trial, G had ceased all alleged infringing use of the software. The court found that, despite the minor nature of the breach and infringement, C was entitled to the injunction sought. Thereafter, C sought its costs in full from G; G's position was that there should be no order as to costs. It fell to be determined which party had been successful or unsuccessful and whether the parties' conduct was also relevant in determining the appropriate order for costs.



Held, in the circumstances, despite C obtaining the injunction it had sought, there was no clear successful or unsuccessful party. While the court had found infringement by G, where all alleged infringing use had ceased before proceedings had commenced, the judgment in C's favour had been of limited commercial importance, and the claim had no substantive value. There had, therefore, been no real winner in respect of C's extended claim. In those circumstances, the general rule that costs follow the event would not apply. There had been no unreasonable conduct by either party in the litigation, and both sides had made attempts to resolve the matter. While those circumstances suggested that it would be appropriate to make no order for costs, there was a further specific factor to be considered, in that where a defendant had admitted an element of copyright infringement, a claimant would be entitled to its costs of verifying whether there was further infringement to enable it to circumscribe its claim, Cantor Fitzgerald International v Tradition (UK) Ltd (Costs) [2001] EWCA Civ 942, [2001] 24(9) IPD 24057 applied.



In the present case, G had given C some cause for distrust, having admitted infringement in respect of the golf game, and C had therefore been entitled to investigate the possibility of further infringement on G's part. C had only had a reasonable response from G in that respect following the exchange of witness statements. To reflect the overall justice of the case, it would be appropriate to award C its costs incurred up until 14 days after the service of witness statements, and to make no order as to costs thereafter.



Costs determined.



Justin Turner (instructed by Hammonds) for the claimant; Piers Acland (instructed by Bircham Dyson Bell) for the defendant.





Landlord and Tenant



Intention - licences - local housing authorities' powers and duties - secure tenancies

Mansfield District Council v Langridge: QBD (Judge Calvert-Smith): 21 September 2007
The appellant (L) appealed against a decision requiring him to give up possession of a flat to the respondent local authority.



The local authority had issued possession proceedings against L in respect of the house where he was a secure tenant. L then received life-threatening injuries in a serious assault, and the proceedings were stayed. When L left hospital, he moved into a hostel and his mother surrendered the keys of the house to the local authority to enable them to clean it up. L subsequently issued proceedings against the local authority, seeking an injunction ordering it to return the keys and allow his occupation. The judge held that the decision to withhold the keys was illegal and that L should be allowed to return to the house, but expressed concern that before the trial of the possession proceedings L ought to be placed in safer accommodation.



Consequently, the local authority made a flat, which was supported accommodation, available to L on a licence until the resolution of the possession proceedings, and L signed an agreement to occupy the flat on a temporary basis, confirming that it was on the basis of a licence granted to him and did not create a secure tenancy. Thereafter, L offered to settle the possession proceedings and surrender the tenancy of the house if the local authority would accept that he was a secure tenant of the flat. The local authority rejected that offer and any suggestion that L had a secure tenancy of the flat. In due course, it was granted possession of the house. L remained in the flat, and the local authority served notice to quit before issuing proceedings for possession. The judge found that it had been the parties' mutual intention that the agreement should be limited in time until the conclusion of the earlier possession proceedings and that nothing had altered that mutual intention or the nature of the licence. He concluded that the premises were not a separate dwelling for the purposes of section 79(3) of the Housing Act 1985, and made the order for possession.



L contended that the purpose of the Housing Act 1985 had been to improve security of tenure, and that schedule 1 of the Act specifically prescribed the conditions that applied if a secure tenancy were not to exist, none of which existed in his case. He submitted that an understood intention not to engage the Act was insufficient to take a tenancy and licence out of the scope of the Act if its other terms clearly brought it within the Act, pursuant to Street v Mountford [1985] AC 809, and that the only relevant intention concerned exclusive possession. L argued that the flat did amount to a separate dwelling within the meaning of section 79(3).



Held, the purpose for which premises were let was a primary consideration in deciding whether a protected tenancy had been created, Andrews v Brewer [1998] 30 HLR 203 applied. The judge had been right to look at the purpose of the agreement and to have found that its sole purpose was to preserve the parties' position until the conclusion of the possession proceedings in relation to the house. In the circumstances, L had occupied the flat as a sole residence and the intention of both parties had been to limit the occupation to the duration of the proceedings. The dwelling was not a separate dwelling and the right to occupy ceased when the possession proceedings were completed, Tyler v Kensington and Chelsea RLBC [1991] 23 HLR 380 applied.



Appeal dismissed.



Iain Colville for the appellant; Josephine Henderson for the respondent.





Planning



Green belt - hotels - planning permission - planning policy - very special circumstances

Oysterfleet Hotel Plc v Secretary of State for Communities and Local Government: QBD (Admin) (Judge Mole QC): 24 September 2007
The applicant company (O) applied under section 288 of the Town and Country Planning Act 1990 to challenge a decision of the respondent secretary of state refusing to grant planning permission for a development including a budget hotel within the green belt.



O had sought planning permission for a 60-bedroom hotel on land adjacent to a roundabout. The local planning authority found that special circumstances existed justifying a departure from green belt policy and that permission should be granted. The secretary of state called in the application and an enquiry was held. O submitted expert evidence to the effect that need for increased hotel accommodation in the area was overwhelming. The inspector found that while there was a degree of need for increased hotel accommodation in the area, that need was not a pressing one and did not amount to very special circumstances as were needed to gain planning permission in the light of green belt policy, as that need could be met in the wider area. The secretary of state accepted the inspector's finding that there were no special circumstances sufficient to outweigh the harm that would be caused to the green belt, and therefore refused planning permission.



O contended, among other things, that the 'need' for additional hotel accommodation that it had established amounted to very special circumstances and that it had not been required to demonstrate a 'pressing need', so that the inspector and secretary of state had misapplied the relevant policy in refusing planning permission on that basis. O further submitted that, on the evidence, it had not been open to the inspector to find that the need for hotel accommodation in the local area was not 'pressing'.



Held, the determination of whether there were very special circumstances that justified a departure from green belt policy required the decision-maker to perform a balancing exercise weighing the existence and degree of harm that would be caused to the green belt against the factors of advantage, Brentwood BC v Secretary of State for the Environment (1996) 72 P&CR 61 applied. 'Need' amounted to an almost infinitely variable concept, and decision-makers in green belt cases constantly recognised that.



In the present case, the inspector had been perfectly entitled to use the word 'pressing' to indicate that although he had recognised a need for additional hotel accommodation, that need did not carry sufficient weight to amount to very special circumstances overriding green belt policy. The secretary of state had been entitled to adopt the inspector's phraseology. Moreover, in assessing 'need', a decision-maker was entitled to look beyond a planning authority's boundary because developments often had an impact on an area far wider than their location. The area to be considered depended entirely on the nature of the development and its aims. In the circumstances, the inspector had been entitled to find that there was no pressing need for the proposed development, having taken account of the existing or proposed developments in the wider local area. The conclusions of the inspector and the secretary of state had, therefore, been entirely open to them.



Application refused.



Kevin Leigh (instructed by Linda S Russell) for the applicant; Paul Brown (instructed by Treasury Solicitor) for the respondent.





Employment



Comparators - equal pay - job evaluation - rated as equivalent

Redcar & Cleveland Borough Council v Bainbgridge & Ors: CA (Civ Div) (Lords Justice Mummery, Maurice Kay, Wilson): 21 September 2007
The appellant local authority appealed against a decision of the Employment Appeal Tribunal ([2007] IRLR 91) that a woman could base an equal pay claim on a comparison with a man who had been placed in a lower grade by a job evaluation study, but who in fact received more pay.



The present case was part of a network of cases in which women employed by local authorities, many of them in the north-east of England, were claiming equal pay with male comparators. Women in manual jobs such as caterers and care workers were seeking parity with male comparators such as road sweepers, gardeners and refuse collectors. The terms and conditions of employment for both groups resulted from a nationally agreed job evaluation study, which followed negotiations between local authorities and relevant trade unions. The respondent women (B) sought to refer to male comparators who were graded lower in the evaluation study. An employment tribunal and the EAT held that it was permissible for a claimant to rely on a comparator who was placed in a lower grade in the evaluation study. The local authority submitted that the tribunal and the EAT had misconstrued section 1(2)(b) of the Equal Pay Act 1970 and that where a proposed male comparator had been placed in a lower grade a female claimant was not employed on work 'rated as equivalent' with his.



Held, sections 1(2)(b) and (c) of the 1970 Act were intended to implement the same community principle of equal pay for equal work or work of equal value. Although the concept of a job evaluation study was not expressly referred to in the European instruments, section 1(2)(b) did not embody a purely domestic remedy but had a community context and purpose. A narrow construction of section 1(2)(b), on the basis that a claimant who fell outside it could still advance an equal value claim under section 1(2)(c), could not be justified. Adopting a purposive construction of section 1(2)(b), it permitted a female claimant to rely on a comparison with a male comparator who had been placed in a lower grade in a job evaluation study, Murphy v An Bord Telecom Eireann (157/86) [1988] ECR 673 applied and SITA UK Ltd v Hope (UKEAT 0787/04/MAA 8 March 2005) considered. To give effect to that conclusion, section 1(5) of the Act should be read as if it provided for a woman to be regarded as employed on work rated as equivalent with that of a man if their jobs had been given an equal value or her job had been given a higher value.



Appeal dismissed.



John Cavanagh QC (instructed by Sharon Langridge Employment Lawyers) for the appellant; Robin Allen QC, Dee Masters (instructed by Stefan Cross) for the respondents.