Tag

high court
•November 11, 2020•

Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd

Supreme Court Judgement: Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45

s.84 Law of Property Act 1925, arguing ‘public interest’ and a warning to Developers to discharge or modify restrictive covenants prior to commencing development work.

Key Contact: Jennifer Butcher

Author: Abby Stephens

On 6th November 2020, the Supreme Court handed down judgement and in doing so rejected a property company’s attempt to modify restrictive covenants so that thirteen affordable houses built in breach could remain in place.

This is the first time that the highest court (whether House of Lords or Supreme Court) has considered section 84(1) of the Law of Property Act 1925 (“the Act”). Under this section of the Act, an application can be made to a tribunal for the discharge or modification of a restrictive covenant and gives the tribunal discretion to do so where one or more specified grounds are satisfied, so as to enable the development of burdened land.

Background

In July 1972, a farmer sold a parcel of land (“the Land”) to a company that already owned the land next door (“together the Site”). As part of the sale, the company covenanted that at all times (i) no building structure would be built on the Land, and (ii) the Land would only be used for car parking (“the Restrictive Covenants”). The farmer’s son, Mr Smith, later inherited a parcel of land adjacent to the Site and in 2013 gifted part of this land (“the Hospice Land”) to Alexander Devine Children’s Cancer Trust (“the Respondent”).

Millgate Developments Ltd (“Millgate”) subsequently acquired the Site, with the knowledge of the Restrictive Covenants, and in July 2013 applied for planning permission to build twenty-three affordable houses. Thirteen of the houses were to be built on the Land and therefore in breach of the Restrictive Covenants, as some of these houses would overlook the Hospice Land. Planning permission was granted, and construction began in July 2014, which was objected to by Mr Smith in September 2014. In May 2015, Millgate agreed to sell the Site to Housing Solutions Ltd (“the Appellant”).

Court Proceedings

In July 2015, Millgate retrospectively applied to the Upper Tribunal (“UT”) seeking modification of the Restrictive Covenants under section 84 of the Act, arguing that the social housing development was in the public interest. The Respondent and Mr Smith objected to this application. Construction of the hospice began in September 2015 and on 18 November 2016 the UT allowed Millgate’s application, with a condition that £150,000 was to be paid to the Respondent by way of compensation.

On 28th November 2018, the Court of Appeal (“CA”) overturned the UT’s decision and the Appellant subsequently appealed to the Supreme Court. One of the crucial factors in the CA’s decision was that Millgate proceeded with the development, in full knowledge of the Restrictive Covenants.

On 6 November 2020, the Supreme Court unanimously dismissed the appeal and the application to modify the Restrictive Covenants was refused, however for different reasons to those given by the CA. It was held that the threshold to exercise discretion had not been satisfied and therefore the primary remedy is an injunction to remove the offending development.

In the leading judgement, Lord Burrows stated that the UT erred in law by failing to consider (i) had Millgate respected the rights of the Respondent by applying for planning permission to develop an alternative plot on the Site (which did not benefit from the Restrictive Covenants) then an application under section 84 of the Act would not have been required; and (ii) had Millgate respected the rights of the Respondent by making the application before development had started, it is likely they would not have been able to satisfy the “contrary to public interest” limb of section 84(1)(aa), as they would have been met with the objection that planning permission would be granted for affordable housing on alternative unencumbered land on the Site. Therefore, the upholding of the Restrictive Covenants would not be contrary to the public interest.

Comment

The decision has important legal and practical implications for developers seeking to rely on the public interest limb of section 84 of the Act and highlights the importance of seeking to discharge any restrictive covenants prior to commencing development works.

If you have any questions in relation to the above or would like any advice in relation to breach of restrictive covenants, please contact Jennifer Butcher in our Dispute Resolution team.

•October 30, 2020•

Employer not vicariously liable for “practical joke” of employee which caused contractor’s hearing loss

Employer not vicariously liable for “practical joke” of employee which caused contractor’s hearing loss

Key Contact: Claire Knowles

Author: Rebecca Mahon

In the case of Chell v Tarmac Cement and Lime Limited, the High Court found that Tarmac was not vicariously liable for the actions of a rogue employee who sought to play a practical joke on his colleague. This is one of the first cases to apply the Morrisons judgement of the Supreme Court, handed down earlier this year.

Mr Chell worked as a contractor for tarmac and suffered a perforated ear drum, serious hearing loss and tinnitus after a Tarmac employee (Mr Heath) set off two “pellet targets” next to Mr Chell’s ear. Mr Chell argued that he had brought the tension between contractors and permanent employees to the attention of his supervisor before the incident occurred. It was said that the permanent employees felt that the contractors were putting their jobs in jeopardy and that bad feeling had arisen as a result. Mr Chell argued that in not addressing this issue “head on” at the time, Tarmac was negligent and breached its duty of care and should be held vicariously liable for the actions of Mr Heath.

Tarmac promptly dismissed Mr Heath following the incident.

Dealing with the issue of negligence and breach of duty, the court held that Tarmac is actually “an organisation that took health and safety matters seriously” and that “it is expecting too much of an employer to devise and implement a policy or site rules which descend to the level of horseplay or the playing of practical jokes”. Notwithstanding that Tarmac had been informed of tensions between the contractors and permanent employees, this “did not merit specific action in relation to Mr Heath where there was no foreseeable risk of injury to the Claimant” and “the criticisms of Tarmac are very much made with the benefit of hindsight”.

With regard to the issue of vicarious liability, the court considered the Morrisons judgement. It specifically honed in on the point made by Lord Reed in the Supreme Court in that case that the individual “was not engaged in furthering his employer’s business when he committed the wrongdoing but rather, on the contrary, he was pursuing a personal vendetta”. In other words, in the Morrisons case it was held that the individual was acting on a “frolic of his own”. Applying this to incident involving Mr Chell, the court found that:

  • Mr Heath had brought the pellet targets on-site from his home with the sole intention of playing a practical joke (they were not needed for work and had nothing to do with work).
  • To “set off” the pellet targets, Mr Heath hit them with a hammer which belonged to Tarmac, and the incident took place in a Tarmac workshop. However, Mr Heath had no work-related reason to be in the workshop (he had come across from a different area of the site, where he was supposed to be working, in order to play the practical joke) and the use of the Tarmac hammer was “wholly incidental to the act in question”.
  • Whilst there was a “seamless transition” between working in the course of employment and causing the explosion, this was not a significant factor in this case.

This is a welcome judgement for employers who, despite their best efforts, may not be able to prevent every workplace incident from occurring. The courts have clearly recognised that sometimes, an employer will unfortunately end up with a “rogue employee”. As per the Judge’s closing remarks in this case, whilst one may have significant sympathy for Mr Chell, “sympathy cannot found a sound legal basis for a finding of liability”. It is noteworthy that in this case a lot of attention was given to Tarmac’s health and safety policies and procedures and witness evidence provided by the HR manager regarding Tarmac’s investigation procedures. Absent such stringent policies and procedures being in place, the outcome of this case may have been quite different.

If you need any help or support with your internal policies and procedures, whether you need new ones or a review of your existing documents, please do not hesitate to contact our employment team.