Author: Wellers

Is Your Water Supply Sourced from a Neighbour’s Land? Do You Know Your Rights?

Posted on by Wellers

Many rural homes obtain their supplies of fresh water from sources which lie beyond their boundaries and such arrangements can sadly prove fertile ground for dispute. A case in which a farmer and his niece were at odds over water rights showed the wisdom of seeking early legal advice so that such disagreements can be nipped in the bud.

The niece lived with her partner and young son in a converted agricultural building which had been bequeathed to her by her grandfather in his will. The property was served by a water pipe connected to a borehole on neighbouring land which was owned by her uncle.

A dispute developed after a tap was turned off, disconnecting the property from its water supply. The pipe was subsequently severed by the uncle’s workmen and not repaired. The niece and her family were as a result dependent on tanked and bottled water for about a year.

After the niece took action against her uncle, a judge found that the property was already connected to the borehole when it was conveyed into her grandfather’s sole name. He and any future owner of the property therefore had a right – or easement – to continue to draw water from the borehole. Turning off the tap and refusing to reconnect the water supply amounted both to a substantial interference with that right and a nuisance.

Given that probate in respect of her grandfather’s estate had yet to be granted, the niece did not own the property and her occupation of it was tenuous. The judge, however, noted that she had a reasonable expectation that she would become its legal owner in due course. Her occupation, which had been tacitly accepted by the executor of her grandfather’s will, was in any event sufficient to found her nuisance claim.

The judge made a formal declaration that the property is entitled to a water supply from the borehole and granted the niece an injunction to ensure that supply. Her uncle was also ordered to pay her £5,500 in damages to reflect the inconvenience she suffered whilst the property was deprived of piped water.

Making a Will? Appointing a Professional Executor Can Save Strife and Money

Posted on by Wellers

The trouble with appointing loved ones as executors of your will is that they are likely to be grief-stricken and there can be no guarantee that they will get on. A High Court decision showed that appointing a professional to perform the task is often the best way to save money and preserve harmony.

The case concerned a businessman who sadly died at a young age. He had assets worth about £920,000, principally made up of three properties and his shares in a company he ran with his life partner. The partner and the deceased’s brother were appointed executors of the estate.

After the executors failed to see eye to eye, the brother launched proceedings on the basis that the partner had refused to participate in the process of obtaining a grant of probate. The partner denied that there had been any lack of cooperation on his part and eventually agreed that he and the brother should both step down as executors and be replaced by a legal professional.

The executors, however, both put forward candidates to fulfil that role and the Court was required to adjudicate between them. There was little between the candidates’ knowledge and experience and both were well qualified to perform the task. The Court, however, appointed the candidate preferred by the partner, principally on the basis that he would charge a lower hourly rate for his services in executing a will that contained no complicated or unusual provisions.

The Court expressed sympathy for the partner, who had suffered a devastating grief reaction to the businessman’s death. Although he had presented his case well and appropriately, he had used language in pre-trial correspondence which was at times intemperate. Due to such unreasonable conduct, he was ordered to pay the legal costs of the case on the punitive indemnity basis.

Capital Gains Tax – Couple Triumph in ‘Principal Private Residence’ Appeal

Posted on by Wellers

Home is where the heart is and the question of whether a property is your principal private residence for Capital Gains Tax (CGT) purposes depends, at least in part, on your intentions. An instructive case on point concerned a couple who made a house their home for only a few weeks before moving out again.

For a year after buying the house, the couple lived in rented accommodation whilst substantial renovation works were carried out. Whilst working in the property’s front garden, the man was approached by a stranger who offered to buy it. The couple turned him down more than once but, after he increased his offer, they eventually agreed to sell him the house at a handsome profit. The couple and their children lived in the property for only six to eight weeks.

The couple did not declare the gain generated by the sale on their tax returns. HM Revenue and Customs took the view that CGT was payable and raised demands against the couple totalling almost £24,000. They were also issued with penalties of more than £4,000 on the basis that the omission of the gain from their tax returns was carelessly inaccurate.

In upholding the couple’s appeal against those bills, the First-tier Tribunal found that that they were entitled to 100 per cent relief from CGT on the basis that the house was, albeit briefly, their principal private residence. They had intended that the property would be their family home, where they would live indefinitely, and they had only accepted the purchaser’s offer after moving in. The CGT assessments were reduced to nil and the penalties were cancelled.

Clubbing Together with a Friend to Buy a Home? See a Lawyer First

Posted on by Wellers

It makes sense for friends to club together so that they can buy properties they would be unable to afford by themselves. However, a cautionary High Court ruling showed that such arrangements are only wise if lawyers are consulted so that all concerned know exactly where they stand from the outset.

The case concerned two work colleagues, one of whom had £50,000 to put towards the purchase of a home of her own. Her credit rating was, however, too poor for her to obtain a mortgage. She had discussions with her colleague (the landlord) as to whether the latter might be able to assist her in buying a property.

A suitable property was purchased in the landlord’s name. The purchase was mainly financed by a buy-to-let mortgage, but the tenant contributed her £50,000 and the landlord £60,000. The tenant had lived in the property under an assured shorthold tenancy for eight years since its purchase.

After the landlord sought possession of the property, citing substantial rent arrears, the tenant asserted that it had always been agreed between them that the property was to be her own home. She claimed that the tenancy was a sham that had been entered into as a temporary device to enable the property to be purchased with the assistance of the landlord’s money. She said that it was understood between them that she would take over ownership of the property and the mortgage when she repaid the landlord for the investment she had made.

The landlord, however, gave a very different account of what had been agreed prior to the purchase. Pointing out that she alone had met the mortgage instalments, she said that the lease genuinely reflected their intentions. She asserted that the tenant had agreed that, once her credit score improved, she would purchase the property from her at its full market value, discounted by the £50,000 she had contributed to the purchase price.

Following a trial, a judge preferred the landlord’s account and found that the tenancy agreement was binding. The landlord was granted the possession order sought and the tenant was ordered to pay her more than £67,000 in rent arrears. The judge also ruled that the tenant had no beneficial interest in the property despite her £50,000 contribution. In dismissing the tenant’s appeal against that outcome, the High Court found that the judge’s findings were open to him on the evidence.

Get in contact to find out how we can help you if you are jointly buying a property or find out more about our experience and services here.

Couple Overturn Capital Gains Tax Demands Raised on Sale of Their Home

Posted on by Wellers

HM Revenue and Customs (HMRC) are big battalions by anyone’s standards, but their word is not law and, with expert legal assistance, they can sometimes be proved wrong. In one case, a couple succeeded in overturning six-figure Capital Gains Tax (CGT) demands raised against them following the sale of their home to a developer.

The couple reluctantly sold their substantial home when faced with the prospect of new houses being built all around them. On the basis that the property was their principal private residence (PPR) and thus exempt from CGT, they did not report the gain arising from the sale on their tax returns. About three years later, however, HMRC raised CGT demands of £162,820 against each of them.

HMRC asserted that the property’s garden – which extended to 0.94 hectares – was larger than it needed to be and that CGT relief was only available in respect of 0.5 hectares. However, in challenging the demands before the First-tier Tribunal (FTT), the couple contended that the whole of the garden was required to enable reasonable enjoyment of the property.

Ruling on the matter, the FTT noted that, in determining whether the garden was larger than required, context was everything. At one extreme it might be said that nobody needs a garden at all. At the same time, what might be viewed as a large garden in a city centre would be considered far too small for a stately home.

Upholding the couple’s appeal, the FTT observed that the property was located in a rural setting and comprised a large main house, a one-bedroom cottage, a three-car garage and a swimming pool. The garden was proportionate to the property’s scale and character and its size was comparable to the grounds of other substantial country homes. The couple were thus entitled to full PPR relief in respect of the property’s sale and the CGT demands were reduced to nil.

Thwarted by Planners? Persistence and Legal Advice Can Still Win the Day

Posted on by Wellers

Obtaining authorisation for construction projects can be extremely demanding, but a combination of persistence and the right legal advice will often win the day. In a case on point, a householder whose hopes of building a garden room were time and again thwarted by planners was finally granted his wish by the High Court.

The householder twice applied to his local authority for a certificate confirming that his proposed development was automatically permitted under the terms of the Town and Country Planning (General Permitted Development) Order 1995 (GPDO) and that formal planning permission was therefore not required. His applications were rejected on both occasions and his appeals to planning inspectors were dismissed.

His challenge to that outcome hinged on whether his plans fell within Class E of Schedule 2 of the GPDO. Class E permits the provision within the curtilage of a dwelling any building which is for a purpose incidental to the enjoyment of that dwelling. There was no dispute that the proposed garden room fell within that definition.

However, Class E places tight restrictions on the height and scale of new buildings. Relevant to the householder’s proposal was the requirement that the height of any structure, measured from the ground immediately adjacent to it, must not be more than three metres. Where a building is within two metres of a dwelling’s boundary, and is more than 2.5 metres in height – again measured from the immediately adjacent ground – it is also excluded from Class E.

Ground to the north of the proposed building had been excavated some years previously and the planning inspector who most recently rejected the householder’s case ruled that the height of the planned structure, measured from the existing level of immediately adjacent ground, would exceed three metres. The householder pointed out that the excavated ground would be back-filled in the course of the development. His argument that the structure’s height should be measured from the level of the ground post back-filling was, however, rejected.

Overturning the inspector’s decision, the Court found that the only sensible reading of the relevant parts of the GPDO accorded with the householder’s interpretation. Back-filling formed part of the plans he had submitted and the Court found that the building’s height should be measured from the level of the immediately adjacent ground on completion of the development. That height would be less than three metres.

The south flank of the building would abut a wall marking the property’s boundary and the inspector found that, when measured against the immediately adjoining ground – which could not be back-filled – that part of the structure would exceed 2.5 metres in height.

However, in also upholding the householder’s challenge to that ruling, the Court found that the ground immediately adjacent to the south flank should be taken as being his neighbour’s garden. That was less than 2.5 metres lower than the nearest part of the proposed building.

The Court concluded that the only correct answer to the issues raised by the case was that the proposed development fell within Class E and would thus be lawful development. The Court had no power to substitute its own decision for that of the inspector. However, it remitted the matter for reconsideration by the Welsh Ministers in accordance with its judgment.

Divorce and the Increasing Use of Arbitration – Court of Appeal Test Case

Posted on by Wellers

Amidst the COVID-19 pandemic it has become even more popular to seek resolution of financial issues arising from divorce via private arbitration rather than formal court proceedings – but to what extent are arbitration awards binding and enforceable? The Court of Appeal confronted that issue in a guideline case.

A divorcing couple who, due to the pressure on judicial time, faced a potentially long delay in receiving a court hearing instead took the quicker route of submitting their financial differences to arbitration. That procedure had the added advantage of being conducted away from the eyes of the media. They signed an agreement whereby they accepted that the arbitrator’s award would be final and binding.

The husband was dissatisfied with aspects of the arbitration award concerning his housing needs, the distribution of pensions and the amount of maintenance he was required to pay his ex-wife. He applied to a judge either for permission to appeal against the award or for a direction that it should not be given effect by an order under the Matrimonial Causes Act 1973. In rejecting his application, however, the judge emphasised the importance of arbitration awards being treated as final.

In ruling on the husband’s challenge to that outcome, the Court noted that the case raised an important point of principle. It was a common misconception that arbitration as an alternative to court process is the purview of the rich in search of privacy. The backlog of cases arising from the pandemic meant that arbitrations were likely to become a prevalent means of resolving even modest-value cases.

It was of the utmost importance that potential users of the arbitration process were not deterred from doing so by, on the one hand, doubts as to the certainty and enforceability of awards or, on the other, concerns that the consequences of mistaken or unfair awards may be inescapable.

In ruling that the husband’s application could succeed only if he were able to show that the arbitrator’s decision was seriously or obviously wrong, or that it was based on a fundamental error or errors that leapt from the page, the judge had applied too high a test. Noting that the overriding objective of arbitration is to achieve fairness, the Court found that the husband was entitled to relief if he could establish that the arbitrator’s award was simply wrong.

The husband’s application was sent back for redetermination by another judge. Noting the impact that growing legal costs was likely to have on the modest marital pot, the Court implored the couple to seek a negotiated settlement rather than engaging in further litigation.

At Wellers we can advise you on all the types of alternative dispute resolution available on divorce and of course, we have specialist family lawyers to advise generally on all aspects of divorce, including children and finances.

Has Your Privacy Been Violated? You Don’t Have to Put Up With It

Posted on by Wellers

For many people there is almost nothing more painful than having their private affairs aired on the internet or in publicly available print. As a High Court decision showed, however, specialist lawyers know exactly how to deal with such intrusions.

The case concerned a woman who had a relationship with a man who she claimed had subjected her to a sexual offence. She complained to the police, but the man was not charged with any offence. His employer, however, instituted disciplinary proceedings which had adverse consequences for him.

A self-published book was subsequently offered for sale which appeared to describe the relationship and its aftermath from the man’s perspective. The woman asserted that he had written the book and published it under a pseudonym. Deeply concerned that the book would come to the attention of her family or friends, she launched proceedings against him.

Ruling on the matter, the Court found that she had established a strong case that the man was the book’s author and that its publication breached her fundamental human right to respect for her privacy and amounted to a misuse of her confidential information. Although she was not named in the book, she was likely to be identifiable by a large number of people as the woman referred to. She also had a strong argument that the book tended to identify her as a complainant of a sexual offence, in violation of her statutory right to lifelong anonymity in that regard.

She was more likely than not to succeed in establishing that the book’s invasion of her privacy was serious, extensive and disproportionate to its author’s freedom of expression rights. It contained much salacious detail of a very private nature and appeared to do no more than restate the author’s version of events. In any event, its contention that the author had suffered as a result of corruption and a miscarriage of justice did not appear at all persuasive.

Noting that the author had expressed strong negative feelings against the woman referred to, and a wish to do her harm, the Court issued an interim injunction banning any further publication of the book. The order would remain in force pending a full trial of the woman’s claim or further order.

Licensing Houses in Multiple Occupation – Ignorance of the Law is No Defence

Posted on by Wellers

Landlords who fail to license houses in multiple occupation (HMOs) commit a serious criminal offence and can expect to be hit hard in the pocket. In making that point, the Upper Tribunal (UT) emphasised that stiff financial penalties are generally required in such cases as a deterrent to others.

The case concerned a landlord who let six bedrooms in his former family home as bed sitting rooms. There was no dispute that the property was an HMO and, after discovering that it was unlicensed, the local authority notified him that he had committed an offence under Section 72 of the Housing Act 2004. As an alternative to prosecution, the council imposed on the landlord a civil financial penalty of £10,000.

In upholding the landlord’s appeal against that penalty, the First-tier Tribunal (FTT) accepted that he was unaware of the licensing regime and had no knowledge of the term HMO. On being notified that a licence was required, he had applied for one immediately. He had also spent considerable sums on swiftly making safety improvements to the property.

Noting that the landlord’s wife was suffering from cancer and that he was under considerable stress, the FTT expressed surprise that the council had seen fit to impose a penalty. It was also unimpressed by the council’s delay in processing his licence application. Overall, it found that the threat of prosecution had served its purpose and that a financial penalty was unnecessary and unreasonable.

In upholding the council’s appeal against that decision, the UT noted that prudent landlords make inquiries to ascertain their legal obligations and that ignorance of the licensing regime is no defence. The landlord had no reasonable excuse for not having a licence and, in deciding that no penalty should be imposed, the FTT had taken an exceptional course in what was an unexceptional case.

Parliament intended that the offence should be treated as serious and there was a need to impose deterrent penalties, even on non-professional landlords with only one or two properties. The landlord’s belated licence application afforded him only limited mitigation. In the light of his personal circumstances, however, the UT reduced his penalty to £4,000.

We advise both Landlords and tenants on the full range of matters including tenancy agreements, evictions, breach of tenancy and landlord & tenant disputes. Please do get in contact.

Inheritance – Lifetime Promises Can Be Legally As Well As Morally Binding

Posted on by Wellers

When it comes to inheritance, the obligation to keep your promises may well be legal as well as moral. In a case on point, a judge followed the demands of conscience in ruling that a hard-working man should inherit the farmland of a close friend who for many years treated him as a son.

When the friend died without making a will, the land passed automatically to his next of kin, his only daughter. The man launched proceedings on the basis that that outcome was unconscionable in that the friend had repeatedly assured him that, when he died, the land would be bequeathed to him.

Upholding his claim, the High Court found that the friend had on more than one occasion clearly represented to him that the land would one day be his. In reliance on those assurances, he had worked hard on the land for about 20 hours a week for more than 20 years. The relationship between them was clearly a special one, akin to father and son, and he had trusted the friend to keep his word.

Whilst she would retain the farmhouse, the daughter was ordered to transfer to the man the farmland and outbuildings, which were worth about £330,000. The Court also upheld a claim by the man’s brother in respect of a small plot of land on which he had placed a log cabin as his family home. He too had acted to his detriment in reliance on the friend’s assurances that the plot would be transferred to him.