It's been another busy year for the courts and tribunals in England and Wales. In this blog, we summarise the cases in eight key areas of focus. The milking maids themselves would even say these are the cream of the crop...

1. Building Safety Act 2022

The one that makes the history books

Waite & Others v Kedai Limited (2023, FTT(PC) LON/00AY/HYI/2022/0005 & 0016)

A group of 30 flat owners successfully obtained the very first remediation order under the Building Safety Act with little legal representation and without submitting their own expert evidence. On 9 August 2023, the First-tier Tribunal (FTT) granted the remediation order against Kedai Limited to remediate building safety defects in mixed-use buildings. The buildings were in Streatham and included former offices converted to flats with a commercial unit on the ground floor and a new seven storey block of flats. The tenants had concerns over the construction of their buildings since completion in 2015/16, and focus turned to building safety after the Grenfell Tower fire in 2017. The judgment provides useful guidance for parties considering/facing an application for remediation orders, of which we expect to see many more in 2024.

The one that confirms the retrospective nature of the Act

Adriatic Land 5 Limited v The Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC)

In this case, the Upper Tribunal had to consider whether the service charge restrictions in Schedule 8 of the Act concerning costs of remediation works took effect from 28 June 2022 for all service charge costs, including those which had been incurred before the provisions came into force (assuming they remained unpaid). The Upper Tribunal endorsed the approach of the FTT in Waite v Kedai that the Act is a self-contained code and emphasised the importance of the overall purpose of the Act. Accordingly, the service charge costs were not recoverable under the Act. This benefits tenants who have not paid service charges demanded/payable before 28 June 2022 where they relate to remediation works to address fire/safety defects in buildings at least 11 meters high.

2. Planning (varying planning permissions)

In last year's Yule Blog (8 Jolly Judgments) we considered the impact of Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30, a significant Supreme Court decision on overlapping permissions which had profound consequences for the use of "drop-in" applications in multi-phase developments. This year saw two judgments on the related issue of varying planning permissions granted under section 73 of the 1990 Act – both High Court decisions but important nonetheless.

The one that provided clarity ...

Armstrong v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 176 (Admin)

This case seemed to clarify the scope of section 73, confirming that section 73 applications were not limited to minor material amendments as the related Planning Practice Guidance might suggest and that, moreover, there is nothing in the statute which provides that section 73 applications cannot be used to approve substantial or fundamental changes to development – the development just needs to be consistent with the description of development in the original permission. In consequence, the government amended the relevant guidance.

... and the one that made it blurry

R (on the application of Fiske) v Test Valley Borough Council [2023] EWHC 2221 (Admin)

However, this later decision introduced confusion. Here, the court considered that two tests should be applied – first, whether the section 73 application resulted in a conflict between the wording of the description of development and the conditions as amended (this is consistent with Armstrong), and, secondly, whether it brought about a fundamental change to the development as a whole (even if there is no inconsistency with the description of development – this conflicts with Armstrong). The Fiske decision is under appeal – so hopefully there will soon be some clarity on these conflicting decisions.

Where does this leave us? The new route for "material" variations to planning permissions introduced by the Levelling Up and Regeneration Act 2023 (on which we blogged here) may prove helpful – the new section 73B of the Town and Country Planning Act 1990 will enable developers to vary an original permission provided that the development as varied will not be substantially different from that of the original permission. However, section 73B is not yet in force (and we're not sure when it will be) and it does not provide a complete solution to the problem. Lawyers and developer alike therefore keenly await the Court of Appeal's decision in Fiske.

3. Injunctions (trespass)

The one that created newcomer injunctions

Wolverhampton City Council and others v London Gypsies and Travellers and others [2023] UKSC 47

The Supreme Court has created a new type of injunction which can bind persons unknown and unidentified at the point the injunction is granted, even if the prohibited action is not ongoing or threatened at the time the application is made. This case involved various local authorities who had secured such injunctions against the gypsy/traveller community to prevent trespass and unauthorised encampments. Newcomer injunctions can be made to protect civil rights or enforce public law where that aim is not adequately met by other remedies. They must include safeguards, such as presenting to the court any points which a newcomer might raise when making the application and an obligation to draw the application/order to the attention of those likely to be affected by it. They should also be strictly limited, geographically and temporarily. Whilst the case concerned travellers, the court accepted that newcomer injunctions may be relevant to prevent unlawful protestor action, although each case will turn on its own facts.

4. Landlord and Tenant

The one decided in favour of tenants...

AHGR Ltd v Kane-Laverack and another [2023] EWCA Civ 428

This case serves as a reminder that leases must be carefully drafted and negotiated to avoid interpretational issues, especially with respect to user. The landlord owned a mixed-use building in Bermondsey, consisting of offices and residential flats, that also included one live/work unit. The lease of this unit permitted the tenant to use the premises as a "live/work" unit and the dispute concerned the proper interpretation of this user covenant. The Court of Appeal held that "live/work" meant "live and/or work" as the phrase was ambiguous and could mean "live and work", "live or work" or "live and/or work". The Court of Appeal also put weight on the plan in the planning permission showing the whole of the premises shaded as "live/work" which meant that there was no sub-division imposed into separate "live" or "work" areas.

...and the one decided in favour of landlords

Aviva Investors Ground Rent GP Ltd and another v Williams and others [2023] UKSC 6

This decision affirms leases which provide for the landlord to re-apportion residential service charge percentages. The dispute concerned the interpretation of service charge provisions in leases of residential units in a block in Southsea, Hampshire. The leases provided for the payment of service charge as either a fixed percentage or "such part as the Landlord may otherwise reasonably determine" and the landlords had been demanding service charges in different proportions from those stated in the leases for many years. The Supreme Court unanimously found that the landlords were entitled to vary service charge percentages and that the purpose of section 27A(6) of the Landlord and Tenant Act 1985, which gives the FTT jurisdiction to make decisions about service charges, is limited to the review of the contractual legitimacy of the landlord's reapportionment.

5. Business lease renewals and the Landlord and Tenant Act 1954

The one that helps landlords who fail to serve a redevelopment counternotice

B&M Retail Ltd v HSBC Bank Pension Trust (UK) Ltd (2023)

This county court judgment awarded a redevelopment break clause to the landlord, HSBC, which could be triggered on the first day of the renewal lease of a unit on retail park in Willesden. HSBC missed the chance to serve a counternotice to B&M's section 26 request for a new lease, relying on ground (f) of section 30(1) of the 1954 Act, even though it planned a redevelopment. The court accepted the landlord's evidence that there was a real possibility of redevelopment and securing planning permission for it and ordered a rolling break in the renewal lease to be exercisable on 6 months' notice.

The one on discretionary termination grounds

Gill v Lees News Ltd [2023] EWCA Civ 1178

This Court of Appeal decision clarifies that the court should look at the termination grounds under section 30 of the Act individually and cumulatively and consider the tenant's conduct across the term. The landlord sought to rely on grounds (a), (b) and (c) – which are tenant default grounds relating to disrepair, persistent delay in paying rent and substantial breaches of the tenancy respectively. The court confirmed that ground (a) can be triggered by minor disrepair during the term, even if remedied by the date of the hearing, although the extent of the disrepair (and any steps taken to remediate it) will be considered by the court when deciding how to exercise its discretion to refuse a new tenancy. On the facts in this case, the landlord failed to convince the court that the relationship had broken down or that he could no longer trust the tenant so a new tenancy was granted.

6. Construction (limitation periods)

The rare one on the Defective Premises Act 1972

URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 772

The Court of Appeal offered some useful guidance in this case concerning the ability of claimants to rely upon the recently extended limitation period under section 1 of the Defective Premises Act 1972 (DPA). Historically, cases regarding the DPA have been fairly thin on the ground, but following the implementation of section 135 of the Building Safety Act 2022, claims under section 1 of the DPA now have a 30 year retrospective limitation period for claims relating to new dwellings accruing before 28 June 2022. The Court of Appeal confirmed that the developer claimant in this pre-existing action was entitled to amend its pleadings to make a claim against the defendant consultant under the newly-extended section 1 of the DPA, making a distinction between ongoing claims and those which had been settled, and which would not be able to take advantage of the extended limitation period. For further detail, take a look at our Construction Notes blog on the case.

7. Construction (claims against consultants)

The one about causes of action

Lendlease Construction (Europe) Ltd v Aecom Ltd (Rev1) [2023] EWHC 2620 (TCC)

In this recent case, one of the issues the Technology and Construction Court (TCC) considered was when a contractual cause of action against a design consultant for a failure to review its design or to advise of any non-compliance would accrue. The court confirmed that each failure to review or advise would give rise to a separate cause of action, and each such cause of action would accrue when the failure occurs.

For a claim in negligence based on defects in a design, the cause of action accrues when the negligence first causes damage. This usually occurs when a drawing containing the relevant defective design is issued to the contractor for construction purposes and the contractor then builds in accordance with that drawing.

On the other hand, the cause of action for breach of contract in relation to defective design will accrue at the date of breach. This often occurs when the designer hands over its design to the contractor for construction, even if construction is not completed until substantially later. However, where a design consultant's duties go beyond those of a "pure designer" (eg they include a contractual obligation to continue to review the design), the cause of action might accrue after the provision of its design or, at the latest, on practical completion. In this case there was no continuing duty to review the design after the construction phase began, and the claim was therefore time-barred.

8. Construction (contract terms)

The one about invoices and the Construction Act

Lidl Great Britain Ltd v Closed Circuit Cooling Ltd (t/a 3CL) [2023] EWHC 2243 (TCC)

The TCC held that a contract term which provided for a final date for payment other than by reference to a specified period between the due date and the final date for payment was not in accordance with the requirements for a compliant payment mechanism under s.110(1)(b) of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). In this case the final date for payment was stated to be 21 days after either (i) the contractual due date, or (ii) receipt by the employer of the contractor's valid VAT invoice, whichever was later. The TCC confirmed that the only discretion permitted under s.110(1)(b) was for the parties to agree a set period of time (and not an event or mechanism) between the due date for payment and the final date for payment. Therefore, imposing a further condition between the due date and the final date for payment (in this case, the provision of a VAT invoice), was not compliant with the HGCRA 1996.

2023 Yule Blog

Links to the previous posts in our 2023 Yule Blog are below.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.