Author: Wellers

Let Down by a Cowboy Builder? Your Complaints Should Not Go Unheard

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So-called ‘cowboy’ builders who demand overpayment for delayed and shoddy work are a curse on householders. However, as a Court of Appeal ruling showed, the law takes a tough line with dishonest tradespeople.

The case concerned a builder’s work for four clients, performed at a cost of almost £35,000. In each case, he presented himself as a solvent and stable businessman although that was far from being the case. The clients complained that his faulty work was long delayed and left incomplete.

One client received an electric shock each time she touched a washing machine he had installed. He left another client’s home uninhabitable so that she and her children were left homeless and had to move in with her ex-husband for months. She spent her life savings to get her home back into some sort of order.

After he was prosecuted, the builder pleaded guilty to engaging in unfair commercial practice, contrary to the Consumer Protection from Unfair Trading Regulations 2008. The Regulations require tradespeople to exercise skill and care in their work, to adopt honest market practices and to observe the general principle of good faith.

In sentencing him to nine months’ imprisonment, a judge noted that he had strung along and grossly misled all four clients. Making false promises, he simply ignored their concerns. Each of them was asked for more money and at least one of them was asked for cash in order to evade VAT. He behaved aggressively to one of the clients before walking off the uncompleted job.

Ruling on his appeal against the sentence, the Court had no doubt that the custody threshold was passed given the litany of wreckage and disaster he had left behind him. It was no excuse for him to argue that he was a victim of his own success, in that his business had mushroomed to the point where he was unable to keep pace with his commitments. It was a case of excessive greed rather than a businessman getting out of his depth. The judge’s decision that only immediate custody would suffice as punishment could not be faulted.

Cutting his sentence to six months, however, the Court noted his powerful personal mitigation. He was of previous good character and had received numerous positive references. He had performed charity work and had a sound working history, and his imprisonment would impact on his young family. He had wisely decided that he no longer wished to run his own construction company.

Pre-Nuptial Agreement Given Only Partial Effect in Big Money Divorce Case

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Couples who enter into a pre-nuptial agreement (PNA) with their eyes wide open can expect to be bound by its terms. However, as the outcome of a ‘big money’ divorce case made plain, judges have the power to effectively rewrite them if they fail to make fair provision for the reasonable needs of either husband or wife.

The case concerned a middle-aged couple whose realisable assets, worth more than £43 million, were almost entirely held in the wife’s name. On their wedding day they signed a PNA by which the separation between their assets was maintained. Under its terms, the husband’s financial entitlements on divorce were restricted to about £190,000 in cash and repayment of a £250,000 loan.

Following a hearing, a judge rejected his arguments that the PNA should be entirely disregarded on the basis that he entered into it in haste and without legal advice. He was found to have signed it freely and with a full appreciation of its meaning and consequences. The judge suspected that he had come to regret signing the document in the belief that it would never come into effect.

In ruling that the PNA failed to provide fairly for his reasonable needs, however, the judge noted that he had made a full contribution to the marriage and the upbringing of the couple’s three children. The wife having received a huge sum on the sale of her family’s business, the whole landscape of the couple’s finances had changed dramatically since the PNA was signed.

The judge directed the wife to provide the husband with a £2.5 million house that would revert to her on his death. She was further ordered, amongst other things, to pay him £1.2 million in capitalised maintenance and to cover his substantial debts. His total financial award came to around £1.9 million.

Had the couple married without signing a PNA, the judge suspected that, given the scale of the wife’s fortune, the husband’s award would have been significantly higher. The outcome, however, properly recognised the limiting consequences of the PNA, balanced against his reasonable needs.

Feel That You’ve Been Done Out of an Inheritance? Contact a Solicitor Today

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If you feel that you have been unjustly denied an inheritance, you should get in touch with a solicitor straight away. The dangers of delay were made plain by a case in which foot-dragging led to the sacrifice of a possible six-figure legacy.

The case concerned a man who died suddenly at the age of 50. His widow, whom he married just five months previously, obtained letters of administration on the basis of her sworn deposition that he was domiciled in England and Wales and died without making a will. The bulk of his estate, which was valued at almost £500,000, was thereafter distributed to her.

A decade later, the man’s brother launched proceedings with a view to revoking the letters of administration. He was the sole beneficiary of a will that the man had made prior to his marriage. His ultimate objective was to recover the estate from the widow so that it could be distributed to him in accordance with the will.

He contended that the man was in fact domiciled in Scotland when he both married and died and that his widow had knowingly made a false deposition in order to obtain the letters of administration. He pointed out that, unlike in England and Wales, under Scottish law a will is not revoked by a subsequent marriage.

Ruling on the case, the High Court noted that the man had drafted a new will around the time of his marriage by which he intended to leave most of his estate to his wife. However, he died before he could sign the document. The Court found that, following his death, his brother initially told his widow that he wanted nothing from the estate and that she should have all of it. Only subsequently did he change his mind.

The widow, the Court ruled, was guilty of no impropriety, either in her making of the deposition or in administering the estate. She was open and transparent in her dealings and acted on professional advice that the will was invalid and that her husband had, throughout his life, probably been domiciled in England and Wales, where he was born.

In dismissing the brother’s claim, the Court found that his delay in prosecuting the matter was both gross and inexcusable. The estate had long ago been distributed and the widow had sought to rebuild her life around her inheritance. She would suffer significant financial prejudice, and be forced to relive painful memories, were the brother permitted to proceed with his case. It would be unconscionable, at this late stage, for him to recover from the widow any of the estate’s assets.

Restrictive Covenants – Objectors Succeed in Blocking Flats Development

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If a neighbour has been granted planning permission for a development to which you object, you may feel that there is little or nothing you can do about it. As a tribunal ruling showed, however, you may well be wrong about that.

The case concerned a proposal to demolish four suburban houses and replace them with a block of 33 flats, standing up to five storeys high. Given the acute need for more new homes, planning permission was granted for the project.

Standing in the developer’s way, however, were restrictive covenants enshrined in the title deeds of three of the houses. One of them, dated 1963, forbade construction of more than one detached house on one of the plots. Another, dated 1993, required that two of the properties only be occupied by single households.

The developer applied to the Upper Tribunal (UT) under the Law of Property Act 1925 to modify the covenants so as to permit implementation of the planning permission. However, fierce objections were raised by neighbouring property owners who it was accepted enjoyed the benefit of the covenants.

The company argued that any diminution in the value of the objectors’ properties arising from the development would be modest and offered them a total of about £33,000 in compensation. The objectors, however, argued that the construction of the block would devalue their homes by 10-15 per cent, or a total of more than £380,000.

Ruling on the matter, the UT noted that, planning permission having been granted, it was difficult not to regard the development as a reasonable use of the relevant land. It was not in dispute that the covenants impeded that use. The crucial question was whether the covenants continued to secure practical benefits of substantial value or advantage to the objectors.

In ruling that it had no discretion to modify the covenants, the UT found that one objector’s property would be significantly overlooked by the proposed block. The very large and overbearing building would transform the outlook from that property, dominating views of the western sky. It would also be visible from the second-floor office and garden of another objector’s home.

Ownership of Property Depends on Intention

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Property can be owned in joint names as joint tenants, which means that each co-owner owns an undivided share in the whole property (and would therefore be the sole owner on the death of any co-owners), or as tenants in common, where each co-owner has a specified share in the property that is not necessarily equal. It is also possible for the deeds to a property to be in the name of one person but for another person to acquire an interest in it.

The relevant law in this area was set out clearly in a recent High Court case, which involved a dispute over the exact ownership of a converted barn in North Yorkshire. Arthur Aspden met Joy Elvy in 1985. In 1986, following Mr Aspden’s purchase of Outlaithe Farm, the couple began living together and went on to have two children.

The couple split up in 1995/1996. Ms Elvy left the farm with the children, but continued to be in daily contact. In 2006, Mr Aspden transferred a barn at the farm into Ms Elvy’s name and this was subsequently converted into a dwelling house at a cost of about £90,000. Mr Aspden alleged that he had provided the majority of the cash funds and carried out labouring work for the conversion, which he said he had done because the couple intended to marry and live in the barn. Ms Elvy denied this. She argued that it was ‘in recognition of her contributions to the family’ and that Mr Aspden consequently had no beneficial interest in the barn, which by this time was worth £400,000.

Judge Behrens pointed out that if a property is in joint names, the presumption will be that the co-owners intended to own it as joint tenants. This presumption can be overturned, but it is difficult to achieve this unless there is evidence that the co-owners actually intended to own the property in agreed proportions. By comparison, where a property is in a sole name, the person alleging a beneficial interest, whose name is not on the deeds, has to establish the existence of some sort of trust. There is no presumption of joint ownership. However, such a trust could arise some years after a property was initially acquired in one name.

In this particular case, the judge held that there was ‘a common intention that Mr Aspden should have some interest in the barn as a result of his substantial contribution in money and labour’. He found that Mr Aspden had a beneficial interest in the property which the judge assessed at 25 per cent.

Ripped Off By a Rogue Trader? You Can Be Compensated!

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Elderly people and those who are vulnerable are sadly prime targets for rogue traders, but the law is not powerless when it comes to helping those affected. The successful prosecution of a rogue builder promises more than £200,000 in compensation for his victims.

The builder’s modus operandi was to con householders, mostly pensioners who lived on their own, into paying extortionate sums for unnecessary work that was shoddily carried out. One victim paid more than £300,000 for work which was assessed as being worth only £1,500.

The builder was ultimately jailed for five years and four months after pleading guilty to three counts of fraud and one of theft. Proceedings followed under the Proceeds of Crime Act 2002 and he received a confiscation order requiring him to pay £217,214. That sum represents the entirety of his available assets and the authorities intend to use it to compensate his victims for their losses, at least in part.

The facts of the case emerged as he challenged the order before the Court of Appeal. He argued that his matrimonial home and a bank account containing about £100,000 were his wife’s alone, although both were held in joint names. The Court rejected his appeal as entirely lacking in merit.

Unfair Post-Nuptial Agreement Set Aside by Court

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A Russian ‘serial non-discloser’ of assets said to be worth millions of pounds had his attempt to bind his ex-wife to the terms of their post-nuptial agreement dashed recently in the family court.

The agreement was entered into in Israel after ten years of marriage. Mr Justice Mostyn ruled that although the man’s ex-wife would have understood the agreement in a literal sense, she would not have understood the rights she was thereby giving up under English law. The agreement, therefore, was grossly unfair and was set aside by the court.

Instead of the $1 million specified in the agreement, the ex-wife was awarded £12.5 million to meet her reasonable needs and those of the couple’s children.

However, the practical issue for the woman will be locating and obtaining her ex-husband’s assets. He denies having significant wealth, claims to face litigation to settle a $10 million debt and appears to have placed his assets in offshore trusts.

British courts will not enforce agreements that are, on the face of them, grossly unfair. A pre-nuptial or post-nuptial agreement which is reasonably fair and which is entered into by both parties freely and with the benefit of professional advice is likely to be upheld by the court. This was not such an agreement, however. Further information on agreements can be found in an article written by Diane Flowers, one of our family law team here.

Please contact our family team on 020 8464 4242 or email enquiries@wellerslawgroup.com for more information.

What Amounts to ‘Marital Reconciliation’? Unique High Court Ruling

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Some couples have second thoughts in the midst of divorce proceedings and get back together. However, in a unique decision, the High Court has ruled that the resumption of a toxic relationship does not amount to marital reconciliation.

The case concerned a wealthy couple who had been married for about two years when the wife petitioned for divorce. In doing so, she asserted that the husband’s behaviour was such that she could not reasonably be expected to continue living with him and the marriage had thus irretrievably broken down.

She obtained a decree nisi and, following financial relief proceedings, orders were made in accordance with the terms of a pre-nuptial agreement that both she and the husband had signed after taking legal advice. Provision was made for her housing, maintenance and other needs. However, she thereafter took no steps to finally terminate the marriage by obtaining a decree absolute.

Some years after the decree nisi was granted, the wife applied to rescind it. She did so on the basis that she and the husband had reconciled soon after it was issued and their marriage had thus continued. She asserted that her original divorce petition should be dismissed and the financial orders set aside. She acknowledged that the marriage had now finally broken down and, if her applications were granted, she intended to lodge a fresh divorce petition.

Ruling on the matter, the Court noted that it had not previously encountered a case in which a spouse sought to impeach an earlier decree nisi made in his or her favour. The wife’s applications were superficially curious and the facts of the case were very unlikely to be repeated in the future.

The Court observed that the wife’s motive in making the applications was purely financial in that the pre-nuptial agreement provided for her to receive increasing levels of financial provision depending on the length of the marriage. If the marriage had lasted for eight years, as she contended, as opposed to two, the level of her provision would therefore be substantially increased.

In dismissing the applications, the Court acknowledged that a relationship of sorts had resumed after the grant of the decree nisi. It was, however, as unhealthy and toxic as it had been since the early days of the marriage. Whilst they may have still referred to themselves as husband and wife, there was no mutual comfort or assistance and they obtained no enjoyment from each other’s society.

The Court found that it would be an abuse of language to describe the resumption of such a dismal relationship as a marital reconciliation. The original decree nisi was not granted in error in that there had indeed been an irretrievable breakdown of the marriage. The husband was granted a decree absolute, with the result that the financial orders would now, at last, take full effect.

Tenancies Can Be Worthless If Mortgage Lender Not Informed

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A lease may not be worth the paper it is written on if the landlord’s mortgage lender does not consent to the tenancy. A recent ruling by the Court of Appeal opened the way for the eviction of a mother and her two children after it found that they had no more rights than common trespassers.

The woman had taken a five-year lease on a house which was subject to a £425,000 mortgage charge. The loan agreement contained the usual term prohibiting the borrower – the landlord – from granting a lease of the property without the lender’s consent. No such consent had been sought prior to the granting of the tenancy.

Unbeknown to the woman, the mortgage had been obtained by fraud so that the identity of the property’s legal owner could not be ascertained. The counterparty to her lease was a man who claimed to act on behalf of the unidentified landlord. Mortgage repayments were only sporadically made and the woman had taken to paying her rent directly to the lender to cover sums due and arrears.

The lender obtained a possession order in respect of the property and an order for its sale from the County Court on the basis that it had not been informed of the woman’s lease. It claimed that the lease was not binding upon it in that it post dated the registration of the mortgage.

In dismissing the woman’s appeal against that decision, the Court of Appeal rejected her plea that the lender had actual or constructive knowledge of the lease in that it had accepted the repayments that she had made. It was not arguable either that the lender had consented to treat the woman as its tenant or that it had waived its right to treat her as a trespasser.

The possession order was granted.

Architect Liable for Contractor’s Errors

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A couple who engaged a contractor to carry out work on their house have succeeded in their claim against the architect in respect of the cost of putting right defects in the contractor’s work.

The couple bought a five-storey house in Putney in June 2005. Before moving in, they wished to make changes to the layout of the property, in particular the ground and lower ground floors. The house was near the River Thames and the lower ground floor was below ground level at the front of the property. They engaged an architect to redesign the house. Most of the necessary works were carried out by a contractor recommended to them by the architect.

The architect’s firm failed to ensure that the contractor had installed waterproofing, plumbing, mechanical services and electrical installations without defects.

About six weeks after they moved into the house in May 2007, the homeowners discovered extensive damp in the lower ground floor of the house. The problem was assessed by experts, who concluded that the contractor had failed to carry out proper waterproofing. There were also problems with the electrical works and the plumbing. The couple had to move out of the property for more than 18 months while remedial works were completed.

They sought compensation for the cost of remedying the works, as well as consequential losses. The contractor subsequently became insolvent.

The architect defended the couple’s claim against it on several grounds, including that, as a result of the contractor’s financial situation, the problems would not have been remedied even if the architect had detected them. The architect’s terms of engagement contained a clause limiting its liability to ‘the amount that is reasonable for us to pay’ in respect of work carried out by ‘other consultants, contractors and specialists appointed by you’. Such clauses, known as ‘net contribution clauses’, attempt to limit a service supplier’s liability to their ‘share’ of any damage. Where such a clause is not in place, all parties to a contract are jointly and severally liable for any claims resulting from it.

The court found that the architect was unable to rely on the net contribution clause. The term limiting liability in respect of ‘other contractors’ was ambiguous: given that the homeowners were consumers, the court considered the impact of the Unfair Terms in Consumer Contracts Regulations 1999 on their contractual arrangements and concluded that the ambiguity must be resolved in their favour. Whilst the clause would apply to some of the work carried out on the house, it could not apply to the work done by the contractor. Crucial to this decision was the fact that the architect had received a fee from the contractor in relation to the work.