Latest News and Articles - April 2008
Families, Co-Habitation and Property Ownership . . . The Pitfalls
The advent of the civil partnership and the legal protection now provided to those who are the subject of such arrangement is in many ways a step in the right direction. It of course puts couples who have entered into a civil partnership on the same level as married couples as relates to the way the law protects their interest in assets accrued during their relationship on breakdown. The determination of issues involving civil partners on the breakdown of their relationship has left the arena of property law and entered the area of family law which in itself is more concerned with a fair settlement than brutal principles of property law.
However, what this highlights even further is the lack of protection given to co-habitees in heterosexual relationships and indeed property arrangements where families own property in joint names for a specific purpose. An example of this relates to the right to buy purchases of council properties in the 1980’s and 1990’s where large discounts were offered and it was fairly common place for parents to buy a property where they were previously the council tenants and required the assistance of a sibling or child to purchase the property to ultimately make the mortgage payments necessary and therefore the property actually being purchased in three names rather than the proposed two. In my experience of the breakdown of such relationships it is very rare that there is in place a trust deed or other document confirming what the actual common intention was at the time of the purchase of the property concerning future ownership.
Furthermore, as relates to the co-habitees especially in circumstances where one co-habitee is placing a far greater sum by way of deposit at the time of a purchase of a jointly owned property there is rarely the relevant document in place to protect future entitlement.
In both these types of arrangements and the law as it stands it is imperative that all and every step be taken at the time of purchase to protect and reflect future entitlement. A few hundred pounds spent on the appropriate document at the time of purchase can save many thousands of pounds in legal fees of contested litigation at a later date.
The advice of a solicitor skilled in such property law issues is important at an early stage and this is clearly an area where parties seeking advice and assistance prior to the breakdown of a relationship rather than post breakdown can benefit substantially.
For more information and assistance contact Tony Neocleous at our Uxbridge office or alternatively, Michelle Everest at Ruislip.
Annual Increase in Tribunal Awards
The Employment Rights (Increase of Limits) Order 2007, which details the annual inflation-linked increase in limits on the amounts which can be awarded by employment tribunals, was made on 18 December 2007 and applies where the appropriate date falls on or after 1 February 2008.
The main increases in compensation limits are:
- the maximum compensatory award for unfair dismissal has increased from £60,600 to £63,000;
- the maximum amount for a week’s pay (for calculating basic award or redundancy payment) has increased from £310 to £330; and
- the limit on the amount of guarantee payment payable to an employee in respect of any day has increased from £19.60 to £20.40.
As there is no statutory cap on the amount a tribunal can award in discrimination cases, the Order does not cover them.
The full list of the increases can be found in the Schedule to the Order at http://www.opsi.gov.uk/si/si2007/uksi_20073570_en_2.
The general tribunal system in the UK is being reformed, under the Tribunals, Courts and Enforcement Act 2007. Since 1 December 2007, tribunal chairmen have been called ‘employment judges’ as this more accurately reflects the nature of their role.
E-Conveyancing on the Way
Plans to update the conveyancing process in England and Wales have been ongoing since 1998, when preliminary proposals were set out in a report, compiled by the Law Commission and the Land Registry, entitled Land Registration for the Twenty-First Century. Consultation on how best to go about re-engineering the system has been extensive. The aim is to develop an electronic system of conveyancing that makes buying and selling easier for all those involved in the process.
The Land Registry’s e-conveyancing project, developed by IBM, is expected to go live some time this summer following the introduction of a public key infrastructure (PKI) system that uses cryptography to guarantee the authenticity of property transaction documents. The system is designed to allow authorised users to exchange information quickly, securely and reliably with each other and with the Land Registry. Documents will be encrypted and signed with a digital certificate. Documents will only be able to be produced or read by those in possession of a cryptographic token, username and password. Once up and running, the system should allow property and mortgage registrations to be completed instantly, funds to be transferred immediately, securely and reliably and it will enable accurate and up-to-date information on the progress of all linked conveyancing transactions to be accessed online.
For further information on the e-conveyancing system, see
http://www.landregistry.gov.uk/e-conveyancing/.
Evasiveness Shows True Intentions
There have been several cases before the courts in recent years which arose because a house or property was purchased in the name of one of an unmarried couple and then when the couple split up, the ‘non-owner’ claimed that they were entitled to an equitable share in the property concerned.
In general, where it can be demonstrated that a couple’s intention was to hold the property jointly, the courts will accept such claims. However, a recent case shows that not having the right sort of evidence of the intention can lead to what seems, on the face of it, to be a very unfair result.
Sharon James lived with Peter Thomas, who was an agricultural contractor. She worked in his business, but received no payment. All the income from the business went into an account in Mr Thomas’s name and all the couple’s expenses were paid from this account, including the mortgage on the cottage they shared. The property had been purchased by Mr Thomas before he and Ms James started living together. Ms James had carried out improvements to the cottage which had enhanced its value. A piece of adjoining land was also acquired in Mr Thomas’s sole name, payment for this being made in kind by work done by the couple.
The business was reconstituted as a partnership in 1999 and the bank account was made a joint account in 2002.
In 2004, after 15 years together, the couple separated and shortly after that the partnership was dissolved. Ms James claimed that she had a beneficial interest in the cottage, arguing that Mr Thomas had said she would be ‘well provided for’. Interestingly, the court heard evidence that when the subject of formal joint ownership of the property was raised, Mr Thomas had been evasive. This was taken to mean that he had no intention of parting with an equitable share in the property. The court also considered that Mr Thomas’s comment that Ms James would be well provided for was a general statement of a beneficial outcome, rather than a commitment to share ownership.
The court ruled that her claim failed, leaving her with only a share in the partnership assets on the dissolution of the business.
Cohabiting couples are often unaware that they do not have the same legal rights as married couples or civil partners and this case is proof of the wisdom of unmarried couples setting out in clear terms what their financial arrangements are to be. This is easily done by creating a ‘living together agreement’. Contact us if you need advice on protecting your financial position in the event of a break-up of your relationship.
Right to Buy – Common Sense Prevails in Definition of Premises
The right of a tenant to buy his or her property (under the Leasehold Reform, Housing and Urban Development Act 1993) is now well known. The right, however, does not apply in all cases and one of the exceptions is that a landlord may refuse to sell a property if it is the landlord’s intention to redevelop the premises.
Recently, a tenant’s application to buy his flat, which was one of a block of 50 in a nine-storey building, was refused by the landlord on the grounds that he intended to redevelop the premises, in this case by making the flat into a ‘duplex’ including the flat below.
The relevant section of the Act allows the landlord to resist an application if the landlord intends to ‘redevelop any premises in which the tenant’s flat is contained’, but only in cases in which the construction works are carried out on a ‘substantial part of any premises in which the tenant’s flat is contained’.
At issue was what was actually meant by the phrase ‘any premises in which the flat is contained’. In the view of the landlord, it meant any definable part of the building which could be shown on a plan. The tenant, however, argued that ‘premises’ meant a recognisable part or area which contains the flat in question. In essence, this argument is that if a space is one which a visitor would recognise as constituting premises, then that space or area counts as premises for the purposes of the Act. If, on the other hand, a visitor would not recognise the ‘separateness’ of that space or area, it is not premises. The House of Lords agreed that this must be the test, since it could not have been the intention of Parliament to allow landlords to define what constitutes premises, in such circumstances, according to their own wishes.
In the case in point, the Lords considered that a visitor to the block of flats would consider the block as a whole to be the premises, not the tenant’s flat plus the flat below it. In this case, therefore, the landlord’s claim failed, since the premises as a whole were not subject to redevelopment plans.
Welcome News for People Injured Abroad
Being injured in a road traffic accident whilst on holiday is a very unpleasant occurrence. Until recently, this has been made worse in many cases by the difficulties which can arise in seeking legal redress against the insurer of the responsible person.
Recently, the European Court of Justice has issued a ruling that will come as a relief to people who find themselves in this situation. The Court decided that a person who is injured abroad can bring a claim against the responsible person’s insurer in their home country – subject to certain conditions. The main condition is that the claimant and insurer must be domiciled in the European Economic Area. The right does not extend to claims against individuals, but would also apply to an injury sustained in the UK where the person who caused the injury is insured abroad.
The right to make a claim in the UK courts in such circumstances will make the whole process quicker and less expensive, which is to be welcomed.
If you are injured through the fault of someone else whilst on holiday abroad, contact us for advice.
Whose Fault is it Anyway?
One of the main problems with working out who is to blame when an accident occurs on a public road is that the legislation which governs roads requires the relevant authority to ‘maintain’ the highway, but not to take steps to make it safe to use as a road. For example, if there is a reverse camber or blind spot and the authority does nothing, then very probably it will not be regarded as having any legal responsibility for an accident resulting from the defect in the road, even if it fails to erect a warning sign.
On the other hand, if for example the authority allows the road to be covered with water or ice, it may well be liable if an accident occurs as a result. However, if the authority can demonstrate that it has taken reasonable steps to deal with the problem – e.g. by salting the roads in a proper and organised way in conditions likely to lead to the formation of ice – it can defend a claim made against it by a person injured as a result of skidding on the ice.
For any claim to be successful, the claimant must show that the road was in a condition which made it dangerous for traffic and that the danger was due to a failure to maintain the road. That in turn will depend on whether the failure is a transient failure or a longer-term failure indicative of a breach of the authority’s duty. If the latter, the authority will be liable unless it can demonstrate that it took reasonable care to ensure that the road was ‘reasonably passable for ordinary traffic without danger caused by its physical condition’. In practice, this will turn on the degree to which the authority can demonstrate that it operated well-considered and effective policies on road maintenance.
The message for road users is that it is their responsibility to assess the inherent risk in the road and behave accordingly. Only if an accident can be shown to be caused by the failure of the authority to discharge its duty to maintain the road will the authority be liable. The fact that the road may not be safe in the first instance is not the issue.