Landlords (and practitioners) have been eagerly awaiting the Court of Appeal’s ruling in Trecarrell House Limited v Rouncefield [2020] EWCA Civ 760, on whether a landlord’s failure to provide the tenant with a gas safety certificate (“GSC”) prior to the tenant’s occupation, prevents a landlord permanently from serving a section 21 (no fault eviction) notice to quit.

Gas safety certificates: a reminder

• Landlords must ensure that gas safety checks are conducted every 12 months on all gas appliances and flues by a registered gas safety engineer.
• A copy of the resulting certificate must be given to all tenants before they occupy the premises, or for existing tenants, within 28 days of the date of the gas safety check.
• The cost of the checks must be borne by the landlord.

What did the Court of Appeal decide?

By a 2-1 majority the Court determined that the failure to provide tenants with a GSC prior to occupation does not prevent a landlord serving a section21 notice, as long as the relevant GSC has been provided before service of the notice. The failure to provide the GSC was considered to be a remediable breach.

However what the Judgment does not consider, is whether the position would be the same if:-

• A landlord did not ensure a gas safety check was conducted, resulting in there being no GSC before the tenant went into occupation.
• A landlord does not ensure an annual inspection is carried out, also resulting in there being no up to date GSC.

Whilst the decision has provided some relief, it remains the case that prudent landlords should ensure that they continually comply with the various legislative requirements.

Care should be taken by landlords in deciding who should receive a copy of the certificate as required under the gas safety regulations, and in selecting the correct method of service. The issue of method of service will depend on the wording of the relevant tenancy agreement. Hannah Drew explained this issue in her recent article “Learning the Law: Electronic signatures and email” included in the December 2019 edition of Agricultural Lore.

In the recent case of Keith Fiander and Samantha Brower v The Commissioners for Her Majesty’s Revenue and Customs [2020] UKTT 00190 (TC), the First-Tier Tribunal Tax Chamber has considered the availability of Multiple Dwellings Relief (MDR) against Stamp Duty Land Tax (SDLT) where a property is sold with an annex.

The case

Mr. Fiander and Ms. Brower (the Appellants) purchased Hemingford House, Geddington near Petersfield in April 2016 for £575,000. The Tribunal set out the following features of the property:

• A detached property consisting of: a main house; an annex situated to the rear of the main house and connected with it by a corridor; a garage; and a summer house.
• The annex comprised a sitting room, a kitchen/utility room, a bedroom, and a shower room.
• It could be accessed from the outside via glass “French doors”, separating an outside wood “decking” area from the sitting room. It had a flat roof (in contrast to the pitched roof of the main house).
• A corridor connected the main house and the annex. To use it to walk from the main house to the annex, one had to step down a single step, turn left, walk a few steps (about equal to the length of one of the bedrooms), and then turn right and go up one step.
• There were door jambs in place at the point at which one stepped down from the main house into the corridor (but no door).
• The property was unoccupied at the time of purchase and was in some degree of disrepair – the heating was not working (the boiler needed replacing); there were problems with damp such that some of the flooring needed replacing.
• The annex did not have its own separate postbox, council tax bill, or utility supply.
• The “Rightmove” website described the property as having three bedrooms (“bedroom 1” being in the annex) and two loft rooms. It did not mention the annex as such.
• The local council had sent post addressed to “Geddington annex”.

The difference in tax with and without MDR was £10,000.

The Law

The Finance Act 2003 (FA03) at section 55 sets out the amount of SDLT due in respect of chargeable transactions. Schedule 6B sets out the relief available for MDR under section 58D.

MDR only applies if more than one dwelling is acquired, and what counts as a dwelling is set out in schedule 6B:

“(2) A building or part of a building counts as a dwelling if –

(a) it is used or suitable for use as a single dwelling …”

The way in which the relief is calculated is rather complex, but the intention is that those purchasing multiple dwellings are not taxed as if they were buying one large property, but given tax treatment more in line with the purchase of a number of single dwellings separately.

Application to this case

The Tribunal considered whether the main house and annex were, at the time of purchase, each suitable for use as a single dwelling. The Tribunal could not consider actual use, since the property was empty.

“Suitable for use”

Suitability for use was approached as an objective determination, to be made on the basis of the physical attributes of the property at the relevant time, from the perspective of a reasonable person, observing the physical attributes of the property, at the time of the transaction.

The Tribunal noted that the annex adequately accommodated sleeping, eating, cooking, and washing and sanitary needs, and a place to sit and relax. The Tribunal also noted that the annex was physically distinct from the rest of the property, enabling an occupant to live there without any loss of privacy, including by having to cross through communal areas.

Distinct separate living

The Tribunal noted that there were circumstances in which it might be possible to have distinct separate living accommodation, despite the lack of any physical secure separation of the two. For instance, where there is a very particular kind of relationship between the occupants of the two parts. The Tribunal hypothesised such as where the annex is occupied by an older relative, grown up children of the occupants of the main house, or a lodger, provided this arrangement gave adequate privacy and security to occupants of both parts of the property, given family or other bonds of trust.

The Tribunal was of the view that these “specific circumstances” would effectively be outside of the remit of the objective reasonable person observing the property, such that they would not consider each part suitable for use as a separate dwelling.

Effect of the corridor

The Tribunal was also of the view that the effect of the corridor, joining the two parts, made them unsuitable for use on a stand-alone basis, and noted that the property was marketed as one single dwelling.

Minor physical adjustments

The Appellants also pursued an argument that with a relatively minor physical adjustment being carried out, the annex could be used separately, even if that was not possible now (in this case, the relatively minor adjustment would be erecting a barrier between main house and annex). As such, given the language of schedule 6B – “used or suitable for use” – the intention of the statute cannot have been to allow HMRC to shut its eyes to such a common sense alternative.

The Tribunal did agree with this line of argument, but not its application. The Tribunal was of the view that new physical features could not be introduced to enable a new and different kind of use, even if the new physical features are relatively easy or quick to install. The (hypothetical) installation of dual locking doors (as in adjoining hotel rooms) was considered not to be easy or quick enough.

The Tribunal was not taken by arguments about the annex having a separate postal address, or no separate services or council tax status, attributing them with little weight.

Conclusions

It appears that it would have taken very little to swing this matter in favour of the Appellants, given that the Tribunal appears to have attributed most of its reasoning to the lack of a door or barrier between the parts of the property, and the manner in which it was marketed. Since a door jamb actually featured in the corridor between the two parts, it may be that a door did actually feature at some point, and it may well have been possible to market the property as two separate parts.

Vendors might consider the tax treatment of property in advance of advertising it for sale, in order to give perspective purchasers a fighting chance of availing themselves of reliefs. It is not being suggested here that building works are undertaken to split up otherwise single dwellings. However, as a minimum, it is certainly the case that the marketing materials have often proved fatal to many appellants against SDLT decisions. Beyond that, simply documenting and recording existing use arrangements is often very helpful, particularly with mixed-use claims.

One final point regarding any HMRC challenge is that in most cases HMRC has only 9 months from the date of filing a return to query it. However, buyers are required to retain transaction documents for 6 years, and HMRC has powers to revisit the assessment for up to 20 years, depending on its reasons for doing so. For those who require more finality, it is possible to make a voluntary disclosure.

What is vacant building credit and where did it come from?

Vacant building credit was introduced to promote development on brownfield sites. It allows the floorspace of existing buildings that are to be redeveloped to be offset against the calculations for section 106 affordable housing requirements (whether financial contribution or provision). It applies to any building that has not been abandoned and is brought back into any lawful use, or is demolished to be replaced by a new building.

It was announced by the Department for Communities and Local Government (‘DCLG’) in November 2014, following DCLG’s consultation on planning performance and contributions, and thereafter made its way into the national Planning Practice Guidance (‘PPG’). Since its introduction, the guidance has been clarified once already (in March 2015). Importantly, it now forms a material planning consideration for undetermined planning applications.

How is it calculated?

The PPG explains that existing gross floorspace (assuming it has not been abandoned) should be credited against that of the new development. Where there is an overall increase in floor space in the proposed development, the local planning authority should then calculate the amount of affordable housing contribution or provision required from the development as set out in their local plan on the basis of that additional floorspace.

The example given in the PPG is as follows: ‘where a building with a gross floorspace of 8,000 square metres is demolished as part of a proposed development with a gross floorspace of 10,000 square metres, any affordable housing contribution should be a fifth of what would normally be sought’.

How has the vacant building credit been applied?

The PPG offers little in the way of guidance as to when a building can be considered ‘vacant’, ’empty’ or ‘unused’ but not ‘abandoned’. It merely states that when considering how the credit should apply, local planning authorities should consider whether the building has been made vacant for the sole purpose of redevelopment, and whether the building is covered by an extant or recently expired planning permission for the same development (in which case the credit should presumably not apply).

No reference is made to time limits, in contrast to how the Community Infrastructure Levy (‘CIL’) operates. For CIL, an offset is available for buildings that have been in lawful use for 6 months out of the previous 3 years.

Some local planning authorities have sought to provide clarity through their own vacant building credit policies, for example adopting an approach akin to the CIL test set out above as per the London Borough of Southwark.

Evidence has already emerged of developers using the credit to achieve substantial reductions in affordable housing payments, not least in relation to the redevelopment of large industrial or institutional sites. It remains to be seen what the overall impact will be on housing supply of the credit. It seems likely that the provision of affordable housing will be hit, severely in some cases. However, it should also see previously unviable sites come forward.

Restrictions on affordable housing and tariff style contributions

Alongside the introduction of the vacant building credit, the PPG now sets out the circumstances in which affordable housing and ‘tariff style’ planning obligations should no longer be sought, namely for:

• developments of 10 units or less
• developments which have a maximum gross floorspace of not more than 1000sqm (gross internal area)

For designated rural areas, the limit may be lowered to 5 units or less, provided that if the policy is applied at this level, the PPG then directs that obligations in the form of cash payments should be sought for developments of between 6 and 10 units.

Tariff style obligations are those that are pooled into funding pots by the local planning authority in order to provide infrastructure for the wider area, as opposed to contributions for a specific piece of infrastructure required to mitigate the impact of the particular development.

This measure has received little resistance from local planning authorities, again fearful that affordable housing delivery will plummet, but being part of the PPG it is now a material planning consideration much like the vacant building credit. Despite this, some authorities have held firm and are applying their development plan policies for affordable housing in preference to this new national policy, reasoning that it is for them to balance competing policies.

Our Natural Capital hub contains information and resources written by our team of experts as well as papers and online materials authored by a variety of sources including the UK Government, the UN, Conservation International and the World Forum on Natural Capital.

ERA provide support to businesses looking to venture into broader reporting, as well as in other environmental matters. On its website there is a free PDF eBook “The How’s and Why’s of Sustainability”, it includes case studies, steps to help you implement a sustainability program, and information intended to assist in obtaining broad executive buy-in.

To access this resource please click here: ‘ERA Environmental Management Solutions‘.

If you have any questions about Natural Capital our Agriculture team would be pleased to hear from you: please click here for their full contact details.

To access our Natural Capital hub, please click here.

Introduction

Readers will be familiar with the rule that: for the purposes of the valuation of an interest in land following compulsory purchase, the compensation payable should not include any element of value which is attributable to (and only to) the scheme itself. This provision or principle has proved to be something of a bête noire for professionals and the Tribunal in seeking to calculate and agree compensation. Successive governments have been entreated to do something about the problem not least by the Law Commission and the House of Lords or Supreme Court. A recent consultation by the Department for Communities and Local Government and HM Treasury indicates that the current government has some enthusiasm for the idea. This article briefly sets out what the rule is, and its provenance, outlines three relevant cases and then goes on to consider the changes to the law currently being consulted upon. In conclusion the usual remarks are made upon the fact that this is yet another piecemeal adjustment to an incoherent statutory code which is spread over 100 years of legislation and case law.

The Rules of Market Value

The Land Compensation Act 1961 at Section 5 sets out the rules for calculating market value for the purposes of compensation for compulsory purchase. In summary and for convenience, they are as follows:

1. No allowance is made on account of the acquisition being compulsory.
2. Subject to these rules the calculation of market value should be based upon the price that a willing buyer would pay to a willing seller.
3. Any special suitability of the land taken for the purpose of the acquiring authority is not to be taken into account.
4. Any existing use which is contrary to law (and would have the effect of uplifting value) is ignored.
5. No account is to be taken of any increase in value attributable to the scheme underlying the acquisition.
6. Actual planning permissions benefitting the land and where a certificate of appropriate alternative development has been granted may be taken into account in valuing the land.

Rule 3 above is generally known as the ‘Pointe Gourde Principle’ following the case of Pointe Gourde Quarrying Co Limited v Sub Intendant of Crown Lands [1947] PC. In that case a quarry was acquired for the purposes of building a naval base, but that quarry included stone which would be particularly of value or useful to the acquiring authority in building said naval base. Thus, if the naval base were being constructed elsewhere on the Isle of Trinidad the quarry owners might have exploited their strategic market position in selling the stone to the acquiring authority for the construction. However, where the acquiring authority were acquiring the whole quarry the owners of that quarry were unable to benefit from that windfall. In that case it was found as fact that only the acquiring authority, or a similar undertaker would be in a position to avail itself of this benefit, and as such any potential uplift in value as a result did not fall within the definition of market value.

The Pointe Gourde case was decided under the ‘Land Acquisition Ordnance of the Trinidad and Tobago jurisdiction’ which mirrored the similar ‘Acquisition of Land (Assessment of Compensation) Act 1919’. That Act is now substantially reproduced in the Land Compensation Act 1961 at Section 5. Thus the rule or principle has become known as the Pointe Gourde principle, although for reasons which will become apparent shortly, that is probably not the most accurate label (although it is used below for convenience).

The Pointe Gourde principle

A more comprehensive summary of the rule is provided in The Law of Compulsory Purchase second edition at [428] which states:

The purpose of this rule is to eliminate from the compensation any increase in value attributable to the special characteristics of land where:

(a) the land has special suitability or adaptability for a particular purpose; and

(b) that purpose is either of the following:

(i) a purpose which could not be carried out without statutory powers, or

(ii) a purpose for which there is no market apart from the special needs of a body having power to purchase land compulsorily.

In the Law Commission’s report: ‘Towards a Compulsory Purchase Code’: the authors sought to draw out the nuances of the rule, providing the following helpful remarks at D.94:

1. The ‘adaptability’ must be a quality of the subject land itself not a quality of its product or the nature of the interest.
2. That ‘special’ implies something exceptional in character, quality or degree rather than qualities shared with other possible sites.
3. That the purchase requiring new statutory powers must relate to the subject land not to the other land.
4. That the need for general forms of consent, such as planning permission or stopping up orders, is not sufficient to bring the rule into play.
5. That the market may include a mere speculator with no direct interest in the use of the land.

Waters v Welsh Development Agency

The law in this area was explored in detail by the Appellate Committee of the House of Lords in Waters v Welsh Development Agency [2004] UKHL19.

It follows from the above that it is then necessary to work out what the ‘scheme’ is which that ‘special purpose’ relates to. That was the issue in the case of Waters decided in April 2004.

In that case the acquiring authority wished to exercise its rights to compulsorily purchase an area of low lying land adjacent to the Severn Estuary to provide environmental mitigation for the Cardiff Bay barrage project. In brief summary the affected land owner sought their compensation based upon the value of the land consequent upon its indispensable status viz a viz the Cardiff development scheme. This was referred to in the Lands Tribunal by the President as ‘ransom value’. At that time the agricultural value of the predominantly agricultural land was said to be £4,500 per acre whilst the ransom value was said to be £28,000 per acre.

Whilst the subject land had no special suitability or adaptability for the purposes of providing a nature reserve to compensate for the barrage project, the President of the Lands Tribunal took the view that any effect on value of the adoption or implementation of the proposal to provide mitigation land could not be taken into account in assessing market value.

The matter was considered in detail in the Court of Appeal by Lord Justice Carnwath, who is highly experienced and knowledgeable in this area of practice. The Court of Appeal upheld the decision of the Lands Tribunal. The Appellate Committee of the House of Lords considered in some detail the heritage of the particular rule, and came to the conclusion that whilst Pointe Gourde might be of assistance in the interpretation of the relevant statutory provisions, that case and the principles expanded within it are not to be considered as replacing in its entirety the statutory code on special value.

Lord Nicholls accepted the difficulty of deciding the width of the scheme and the potential for inequality between those inside the area covered by the acquisition or scheme and outside, but in his opinion it was necessary to make sure that an acquiring authority did not pay both for the investment in the wider area which may uplift values, and for the interest being acquired. Thus the Appellate Committee were of the view that the extent of the scheme is a question of fact which the Lands Tribunal need to decide before going on to consider whether or not there is a special value. Lord Nicholls set out the following general principles at paragraph 63 of his Opinion:

1. The Pointe Gourde principle should not be pressed too far. The principle is soundly based but it should be applied in a manner which achieves a fair and reasonable result. Otherwise the principle would thwart, rather than advance, the intention of Parliament.
2. The result is not fair and reasonable where it requires a valuation exercise which is unreal or virtually impossible.
3. A valuation result should be viewed with caution when it would lead to a gross disparity between the amount of compensation payable and the market values of comparable adjoining properties which are not being acquired.
4. When applied as a supplement to the Section 6 code, which will usually be the position, the Pointe Gourde principle should be applied by analogy with the provisions of the statutory code. Thus in the Class 1 type of case the area of the scheme should be interpreted narrowly, for instance, so as to embrace the property acquired under the compulsory purchase order and property which would probably have been so acquired had it not been bought by agreement.

Point three above does indicate that the Court is likely to be willing to scrutinise carefully comparables relied upon by acquiring authorities which produce a starkly different result for ‘scheme’ and ‘no scheme’ properties.

The result for the Waters was that the provision of wildlife mitigation measures upon their land was considered to be part and parcel of the Cardiff Bay barrage scheme as a whole, and as such the special suitability of the Waters’ land for that purpose could not be used to uplift market value for the purposes of calculating compensation.

Transport for London (formerly London Underground Limited) v Spirerose Limited (in administration)

Sections 14 to 16 of the Land Compensation Act 1961 provide for certain assumptions about planning permission to be made, for the purposes of the calculation of compensation.

Section 17 of that Act provides that a certificate can be obtained such that the relevant planning authority confirm whether planning permission would have been granted for some alternative development, but for the scheme, thus inflating the potential market value of the acquired interest.

Section 16 of the Act provides rules for specific circumstances or cases in which the overall improving effect of a scheme upon a locality is to be deducted from the market value of an acquired interest. For instance where a residential area is improved because it is part of a Housing Action Trust area, and is considered to be up and coming, and then an area of that same land is subject to a compulsory purchase order in the course of development or redevelopment of the housing action trust area, the Claimant is not entitled to any uplift in the value of that acquired interest which relates purely to the scheme of general improvement of the area.

Thus section 16 might be seen as akin to betterment offsetting which it in theory available under sections 7-8 of the Land Compensation Act 1961. Another disadvantage to those subject to the exercise of statutory powers, in contrast to those who are nearby, but not subject to such powers.

In the case of Transport for London (formerly London Underground Limited) v Spirerose Limited (in administration) [2009] UKHL44 decided by the Appellate Committee of the House of Lords, the Lands Tribunal found that, because the chances of obtaining planning permission for the development of the acquired area were, on the balance of probability, likely; the Claimant’s interest would be valued on the basis that it had planning permission.

This approach was more or less supported by the Court of Appeal. The Appellate Committee of the House of Lords however found that hope value for development should be valued on the basis of a sliding scale, rather than a dichotomous basis. This meant that the more probable it were that planning permission would have been granted, the more hope value was ascribed in the market value. In that case Lord Collins stated that it was plain, that:

1. The value of the land is the open market value;
2. Any depression in the price which the land might be expected to fetch which is caused by the scheme is to be disregarded;
3. The valuation must take into account the potential of the land, including its potential for development; and
4. The development potential must be valued in the normal way, by discounting for future uncertainties.

and if that is right, it provides a clear answer to the question on this appeal, namely that the valuation on the ‘hope value’ basis is the appropriate one.

It is worth noting that in this case, due to some technical difficulties, the Claimant was unable to avail itself of a certificate pursuant to Section 17.

The new proposal

The proposals which are currently being consulted upon are summarised at page 7 of the consultation:

In order to achieve a clearer way to identify a market value of land we propose to establish the principle of the ‘no scheme world’ fairly and effectively in the valuation process by codifying it in statute and introducing a:

• Clearer definition of the project of scheme that should be disregarded in assessing value;
• Clearer basis for assessing whether the project forms part of a larger ‘underlying’ scheme that should also be disregarded;
• More consistent approach to the date on which the project is assumed to be cancelled;
• Broadening of the definition of the ‘scheme’ to allow the identification of specified transport infrastructure projects that are to be disregarded within a defined area, over a defined period of time.

In summary the proposals are that all the previous rules, whether statutory or judge made, relating to disregarding the scheme cease to have an effect.

The statutory project is then defined with more clarity, and potentially at the outset of the compulsory purchase, within the order as a presumption. However, although that presumption may be rebutted in general, the acquiring authority will be stuck with the project as defined in the compulsory purchase order or the documents published with it.

The date for the valuation of the land shall be the launch of the statutory project and something which may be seen as a pound of flesh in return for the reform is the proposal to allow an extension of the definition of ‘the scheme’ in order to prevent land owners availing themselves of any uplift in that market which is attributable to items such as transport infrastructure. For instance a new branch line might facilitate the development of a new town. In that instance the branch line might be added to become part of ‘the scheme’ and thus any market value which is attributable to the branch line and payable by the acquirer of the new town land would be disregarded.

It is probably obvious to the reader that the inherent unfairness of this innovation is that those with interests in land which are not to be compulsorily purchased but nonetheless benefit from the additional transport infrastructure will be able to sell their land or interests with the benefit of any uplift in value, whereas the unfortunate subject of the compulsory purchase order will be stuck with market value in a no (extended) scheme world.

Consultation responses

Generally it would appear fair to state that the proposed simplification of the special value rule has been welcomed, with some reservations expressed as to the technicalities.

On the other hand it might come as no surprise that those representing those with interests in land are less enthusiastic about the inclusion of additional items within the definition of ‘scheme’ which will then water down the magnitude of market value for the purposes of payment of compensation.

Conclusions

Waters and Spirerose are littered with comments of the law lords and those in the Courts below bemoaning the lack of a complete overhaul of the compulsory purchase code. Likewise the consultation responses of the CAAV and the Law Society in particular express disappointment that the legislature are effectively tinkering around the edges, rather than grasping the nettle and reforming a complex area of law wholesale.

It is interesting to note that it would not appear the proposed changes would have had any effect upon the decisions in Waters and Spirerose. One would have expected the acquiring authority in Waters to have been savvy enough to have included the environmental mitigation area within the order and/or documentation; and the Claimant in Spirerose would not have been assisted by a valuation date which was earlier than 1993 (as the problem was that the Section 17 application had been granted erroneously for 2001). Moreover the findings of the Appellate Committee in Spirerose were really focussed upon the quantification of hope value attached to the possibility of planning permission, the principles for which appear undisturbed by the proposals of the Law Commission.

In the next edition of AgricLore we will be looking at the proposals to allow authorities to bring forward compulsory purchase orders for joint purposes.

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Highways and public rights of way law is from time to time developed by the courts indirectly, when considering personal injury claims. In Barlow v Wigan Metropolitan Borough Council [2020] EWCA Civ 696, the Court of Appeal was requested to look at whether or not a path, over which Ms Barlow was travelling when injured, was a highway for the purposes of Wigan Metropolitan Borough Council (WMBC)’s repairing obligations. If WMBC was responsible for it, then WMBC was also liable for compensating Ms Barlow for her injuries.

The court proceedings

The procedural history of the case was that the County Court heard the trial at first instance, following which the High Court heard a first appeal, and the Court of Appeal heard the appeal thereafter. In the County Court WMBC successfully argued that it was not responsible for the path. The High Court found the opposite, rejecting WMBC’s argument that it was necessary to consider which “hat” Abram UDC (the predecessor of WMBC) had been wearing when the path was constructed.

Was the “hat” issue relevant?

The High Court was of the view that it did not matter whether Abram UDC had been wearing the hat of highway authority, or the hat of local authority providing a public amenity as it was a single legal entity. This was a surprise, as public law practitioners commonly accept the “hat” concept, across the range of public body functions (see, e.g. the recent case of R (on the application of Lancashire County Council) v Secretary of State for the Environment, Food and Rural Affairs and another and our recent article highlighting this case).

The Court of Appeal did not agree that the “hat” worn was irrelevant, and determined that the capacity in which the authority creating the highway acted was determinative. However, the Court of Appeal was of the view that, given for 80 years before Mrs Barlow’s accident, the public had been allowed to walk on the paths without restriction, there was ample evidence to support the implication or presumption of dedication at common law. The offending path had become a highway by the time of the accident, and WMBC was liable.

Long reach of implied dedication

This Judgment underlines the very long reach of implied dedication, given that WMBC may well not have considered itself liable for a situation apparently created by a predecessor public body 80 years ago.  The Judgment also underlines that the capacity in which public bodies act from time to time, remains highly relevant to untangling historic situations. Public bodies should try to retain information relating to the decisions which they might make from time to time, as this material is often highly relevant.

Our Natural Capital hub contains information and resources written by our team of experts as well as papers and online materials authored by a variety of sources including the UK Government, the UN, Conservation International and the World Forum on Natural Capital.

The World Forum on Natural Capital event website includes a wealth of information on national capital, including valuation case studies, extensive blog posts, and a video wall.

To access this resource please click here: ‘World Forum on Natural Capital‘.

If you have any questions about Natural Capital our Agriculture team would be pleased to hear from you: please click here for their full contact details.

To access our Natural Capital hub, please click here.

Our Natural Capital hub contains information and resources written by our team of experts as well as papers and online materials authored by a variety of sources including the UK Government, the UN, Conservation International and the World Forum on Natural Capital.

Conservation International is promoting the benefits of valuing natural capital, and an accounting system it has developed to help governments calculate exactly how nature supports their economies. The site includes helpful case studies, and educational material.

To access this resource please click here: ‘Conservation International‘.

If you have any questions about Natural Capital our Agriculture team would be pleased to hear from you: please click here for their full contact details.

To access our Natural Capital hub, please click here.

Our Natural Capital hub contains information and resources written by our team of experts as well as papers and online materials authored by a variety of sources including the UK Government, the UN, Conservation International and the World Forum on Natural Capital.

The five year, £6.5m Valuing Nature Programme (funded by the Natural Environment; Economic and Social; Biotechnology and Biological Sciences; and the Arts and Humanities Research Councils, and the Department for Environment, Food and Rural Affairs) aims to better understand and represent the complexities of the natural environment in valuation analyses and decision making.

The programme will fund research related to valuation in two areas:

1. the role biodiversity and ecosystem processes play in human health
2. the links between ecosystem services and tipping points.

The extensive research available on this site includes the “Natural Capital Synthesis Reports” which define the current state of knowledge to address specific policy or practice needs in the language and format that is accessible to users; and define key gaps in knowledge that should be addressed by further research.

To access this resource please click here: ‘Valuing Nature Programme‘.

If you have any questions about Natural Capital our Agriculture team would be pleased to hear from you: please click here for their full contact details.

Draft legislation on clawback of payments under the Coronavirus Job Retention Scheme

Since the introduction of the Coronavirus Job Retention Scheme (the Scheme), it has been made clear in the guidance that HMRC will retain powers to claw back monies paid under the Scheme retrospectively if it transpires that they have been paid as a result of non-compliant or, worse, fraudulent claims.

At the end of May 2020, the Government published draft legislation which is currently subject to a technical consultation. The consultation runs until 12 June 2020 and the legislation will take effect from the date that the Finance Bill 2020 receives Royal Assent.

The legislation will apply to individuals, businesses, individual members of a partnership and employers who receive or apply for payments under the Scheme, as well as other Government initiatives such as the Small Business Grant Fund.

Draft plans

In summary, the draft legislation provides that, where a recipient is not entitled to a grant under the Scheme, or has misused it by, for example, not paying the monies to the employees for whom claims were made, the grant received will be subject to income tax at 100%. Essentially, this will mean that the full amount of the grant will be repayable.

It is clear from the draft legislation that it is possible for the clawback provisions to apply not only to intentional, fraudulent misuse of the Scheme, but also to those situations in which genuine errors have been made by applicants. Whilst this has always been intimated by the Government guidance on the Scheme, it appears as if this will be enshrined in law. One such example of a potential clawback will be where an employee has ceased to be entitled to monies under the Scheme, but their employer has continued to claim.

Key Points

Given that the legislation is still subject to consultation, there may well be changes before we see it in its final form. However, as it stands, the key points are as follows:

• HMRC will be able to investigate any claim within four years after the grant was made, with this time period being extended to six years in respect of careless behaviour, and twenty years for deliberate misuse of the Scheme.
• Employers are required to notify HMRC if they have received payment under the Scheme to which they were knowingly not entitled. There will be penalties for failure to notify HMRC in such situations.
• If, at the time HMRC orders repayment, an employer is insolvent, then directors may be personally liable if they were responsible for the management of the company, and they knew at the time the liability to pay HMRC crystallised, that the company was not entitled to the grant.
• HMRC has the ability to prosecute in situations where claims under the Scheme have been deliberately fraudulent. This is likely to be the case where, for example, employees have been required by their employer to work during furlough, in express contravention of the Scheme rules.

It would seem unfair, and much less likely, for HMRC to utilise the legislation to seek repayment where employers have made claims in good faith, and based on an interpretation of the Government guidance and Treasury Direction which is often woolly at best. However, some commentators have highlighted the more political and economic point that, after the enormous pay-outs which have been made by the Government under its various schemes, it will have an urgent need to raise funds over the next few years. It remains to be seen whether this will result in a more aggressive review of claims made under the Scheme.

A couple of household names have, in the past few weeks, indicated their intention to return monies received under the Scheme, given that their businesses have weathered the storm more favourably than anticipated originally. Although there is no indication that this will be a requirement in the forthcoming months and, in our opinion, it is highly unlikely to be so, we will watch this closely.

For the time being, and as we have been advising our clients and contacts from the outset, a comprehensive paper trail, which includes details of furloughed employees; the corresponding written agreements; the claims made under the Scheme; and wider detail regarding the company’s finances and the impact of the Scheme on stabilising its position; will all be important tools in demonstrating proper use of the Scheme in the months to come.

Working from home: preparing for the long term

Despite the staged reopening of retail, and possibly leisure and tourism, in the coming weeks and months, it is likely that office-based employees, who can carry out their jobs from home, will continue to do so for a long while yet.

Prior to the pandemic, working from home was seen as an attractive proposition by many employees. For a large number of people, this has proven to be the case, and many employers have seen an increase in productivity since the beginning of lockdown. However, the reality of homeworking has brought with it, for others, significant isolation and, rather than an increased ability to balance home and work life, the blurring of the boundaries and the seepage of work further into the evenings and weekends. This will have inevitable consequences on both employees’ mental health and their quality of work, and it will be important to address these issues in order to ensure that homeworking works as effectively as possible in the medium to long term.

We set out a checklist, below, which provides some ideas to help.

þWorking from home policy

Until recently, employers’ working from home policies were likely to be geared towards occasional agile working. Permanent working from home has now been commonplace for almost three months and is likely to continue for several months yet. Ultimately, this crisis is likely to result in more widespread, regular working from home, whether to save on premises costs, or in response to a call from employees to work more flexibly in the long term.

In the light of the above, now is the time to consider an overhaul of your working from home policy, both in terms of the practicalities (such as team communication), as well as the health & safety aspects (such as desk assessments). The other suggestions, below, could also be incorporated into the policy. We have significant experience in advising on working from home policies, so please do get in touch if you would like further information.

Health & safety risk assessments

Employers are under a duty to protect their employees’ health, safety and welfare. This is the case even where employees are working from home.

Your usual risk assessments should be updated in order to deal with the homeworking aspect. As a result, it may be that you will need to provide some online training to employees to ensure that they are working safely. It may also be wise to provide employees with an online desk assessment questionnaire which they can complete and return electronically.

Technology / equipment

At the beginning of the pandemic, sending employees home with a laptop and not much else would have been likely to be justifiable. However, the longer that home working continues, the greater the obligation on the employer to provide the appropriate equipment to carry out their role safely and efficiently. This is closely linked with the need to conduct a risk assessment, above. Whilst employers will need to balance the need to invest in equipment with the probability that at least a partial return to office working will be likely in the future. However, this does not negate an employer’s fundamental duty to ensure that employees have a safe system of work.

Daily interaction between managers and their teams

Working for days on end without contact from colleagues can be very isolating, and increase levels of anxiety. A daily catch-up call/video session with the whole team can help to keep employees feeling valued and engaged. On the flip side, some employees might find daily calls rather overwhelming – “Zoom fatigue” is definitely an ailment of the COVID-19 era. As a result, you may want to make these calls optional; a “drop-in” session where employees can join to have some contact with their colleagues if they wish. Save important announcements for those meetings which are mandatory.

Mentoring system

Particularly in the current situation, where tensions are especially high, many employees would benefit from a more pastoral contact, outside of their immediate team, to whom they can talk confidentially.

Promotion of separation between work and home life

The past couple of months have exacerbated the extended working culture – in many cases, employees are working harder than ever before, despite not having lengthy commutes which take up hours of their day. The proximity of their workspace to their home life is making it all the more difficult to switch off.

Whilst such a working pattern may have been sustainable in the short-term, a lengthier stint may weaken employees’ mental health and worsen productivity. Encourage employees to take plenty of breaks throughout the day, and finish work at a similar time, and in the same manner as they would do in the office.

Working from home: tax relief for home office equipment

During May 2020, the Treasury announced a temporary income tax and National Insurance contributions exemption in relation to the reimbursement for office equipment to enable home working. Whilst there has always been no income tax liability for those purchases made by employers in respect of equipment provided to employees for the performance of their duties (subject to certain criteria being met), a further exemption has now been introduced in relation to home working office equipment purchased by the employee and reimbursed by the employer.

In order to take advantage of this provision, the equipment must be obtained for the sole purpose of enabling the employee to work from home as a result of the Coronavirus (COVID-19), and the provision of equipment would have been exempt if it had been provided to the employee directly by the employer. The exemption is relevant to equipment reimbursed from 16 March 2020 and is in force until the end of the tax year 2020-2021.

Statutory Sick Pay for Test & Trace

An extension has been made to those categories of individuals entitled to Statutory Sick Pay (‘SSP’) under The Statutory Sick Pay (General) (Coronavirus Amendment) (No 4) Regulations 2020. Workers who have been told to isolate under the new ‘Test & Trace’ system will now be entitled to SSP for the requisite 14-day isolation period.

[CONTENT CORRECT AS AT 8 JUNE 2020]

If you would like to discuss any of the issues raised in this article or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker, or Andrew Tobey in Michelmores’ Employment team.

CORONAVIRUS STOP PRESS – Click here to keep up to date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

[Read time: 4 minutes]

COVID-19’s disruption to the education sector has not gone unnoticed. Not only were schools forced to shut for a large number of pupils, with the exception of children of key workers and vulnerable children, but some excluded pupils and their families found themselves in limbo with uncertainty surrounding the exclusion process. As of 1 June 2020, the School Discipline (England) (Coronavirus) (Pupils Exclusions and Reviews) (Amendment) Regulations 2020  (the New Regulations) came into force clarifying the exclusion procedures to be followed in the midst of the COVID-19 pandemic.

The New Regulations concern all maintained schools, academies and pupil referral units. They will apply to all exclusions from 1 June 2020 until 24 September 2020, including exclusions occurring before 1 June 2020 which are:

• Permanent and fixed, but have not yet been considered by the school’s governing board,
• Permanent and have been considered by the school’s governing board which has chosen not to reinstate the pupil and the time limit to apply for a review of this decision has not passed.
• Permanent where a parent or pupil aged 18 has requested a review of the school’s governing board’s decision which has not yet happened.

Additionally, the exclusions listed above will remain subject to the New Regulations so long as the procedures for scrutiny have not been exhausted, even if this extends beyond 24 September 2020.

The New Regulations are based on the 2019 statutory guidance ‘Exclusion from maintained schools, academies and pupil referral units in England‘. This has been amended to reflect the temporary changes below, about which further information can be found on the Department for Education’s website.

Remote access meetings

Telephone or videoconference can be used by schools’ governing boards or independent review panels providing that the following conditions are met:

• All participants agree to hold these exclusion meetings virtually.
• All participants are able to use the technology, allowing them to hear and speak throughout the meeting.
• All the participants are able to put across their point of view or fulfil their function during the meeting.
• A fair and transparent meeting can be held remotely.

Arranging a remote access meeting

It is important that meetings are fair. Participants, notably pupils and their families, must be informed that the meeting does not need to be held virtually. Furthermore, school governing boards, arranging authorities and panel members must bear in mind that in some situations remote access meetings may present difficulties for some participants, such as someone with a disability or whose first language is not English. Here relevant equalities legislation must be complied with.

Where a meeting is held via remote access, the chair of the meeting will need to ensure that participants are able to engage using the technology proposed so that the fairness requirement is complied with. It is nevertheless possible for some participants to be physically present and for others to join using virtual means so long as the conditions for a remote access meeting listed above are fulfilled.

Timescales for meetings of governing boards

Where the governing board has not been able to meet within the original time limit this may be extended. The governing board should reassess at regular intervals whether the meeting can be held, so as to minimise uncertainty for pupils and their families as far as possible.

Meetings to consider permanent exclusions, and fixed-period exclusions resulting in the pupil missing more than 15 school days in a term should be held, where possible, within 15 school days. Where this is not possible due to COVID-19 preventing a physical meeting, or where it has not been reasonably practicable to hold a remote access meeting, the time limit will be extended to 25 days, or as long as reasonably necessary for a COVID-19-related motive. In the case of fixed exclusions resulting in the pupil missing between six and 15 days in a term, the usual 50 days period can be extended to 60 days, or as long as reasonably necessary for a COVID-19-related motive.

However, it is important to note that where the time limit for the school’s governing board meeting expired before 1 June 2020, no extension can be made, and an overdue meeting should be arranged via remote access where the conditions for such a meeting are met, or in person, where it is safe and practicable to do so.

Timescales for application for independent reviews of exclusions

Where a school’s governing board takes the decision not to reinstate a permanently-excluded pupil, the parents, or a pupil who is 18 or older, have 25 days from the date they receive the governing board’s decision in which to apply for a review of this decision, or as long as reasonably necessary for a COVID-19-related motive.

Nevertheless, as with schools’ governing board meetings, no extension can be made where the time limit for an independent review panel expired before 1 June 2020.

If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact: Hollie Suddards, or Tom Briant-Evans in Michelmores’ Education team.

CORONAVIRUS STOP PRESS – Click here to keep up-to-date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

[Read time: 3 minutes]

The rules on execution of Land Registry documents have changed, which will help address the challenges of working remotely. In this article we cover the practical impact of some of the key changes.

Updated Land Registry guidance

Mercury signing

On 4 May 2020, the Land Registry published guidance stating it would accept deeds signed using the “Mercury signing approach”.

The Land Registry has also produced step-by-step guidance on how to adopt this process. The key points are that each party will need to sign and have witnessed their own copy of the signature page of the document. They will then send this page via email to their conveyancer along with a complete copy of the final agreed document. The conveyancer will then combine the signed page with the document and submit the combined document to the Land Registry as one document.

All the parties must be represented by conveyancers and agree to this arrangement for it to be accepted by the Land Registry.

This method will be applicable for deeds affecting dispositions of registered and unregistered land, discharges of charges (DS3s and DS1s), and powers of attorney other than lasting powers of attorney.

Witnessing

It is important to note that the witnessing must be done in person, rather than by video call. However, the relevant legislation does not prevent a signatory’s spouse, civil partner or cohabitee from acting as a witness (if they are not a party to a deed). The Land Registry has also suggested that there is no reason why the witness and signatory cannot be separated by glass. This would allow a signature to be witnessed by someone looking through a car or house window, provided they were then able to see clearly the signatory signing.

Plans

The Land Registry has clarified that where a plan is required, that plan can be signed by the conveyancer acting as an agent using a typed signature on the plan, or the parties to the deed can type their name on the plan by way of signature before returning the final agreed copy of the deed and signature page.

Companies using the Mercury signing approach

If a company is executing by way of one director in the presence of a witness then that director needs to sign the document with the witness physically present. If the company is executing by two directors (for which a witness is not required), those directors can sign separate pages, following the Mercury protocol, without their individual signatures being witnessed.

In these circumstances it is possible to sign as part of a chain whereby the first director prints, signs and scans their signature page and the entire document to the second director and solicitor. The second director then prints, signs and scans their signature page and sends it back to the first director and solicitor.

Electronic signatures

It is worth noting that, at this point in time, the Land Registry will not accept electronic signatures on deeds affecting registered land.

Docusign

Docusign is a platform that enables the uploading of documents to a site so that they can be signed electronically by various recipients.

Care should be taken when using this method of signing as it will not apply where wet ink signatures are required and it cannot be used for Land Registry documents.

However, it can be used in the execution of certain documents, provided that the person signing the document intends to authenticate that document and the formalities relating to the execution of that document are satisfied. It is also important to note that a witness still needs to be present alongside the party signing to witness their electronic signature. As outlined above, the witness can be a family member, etc., so long as they are not a party to the document itself.

If you would like to discuss any of the topics raised in this article, please contact Lucy Smallwood, Partner in Michelmores’ Real Estate team.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.