An attempt by a seller of property to avoid liability for misrepresentation by seeking to rely on an exclusion clause failed in the Court of Appeal on 19 June 2018: First Tower Trustees Limited & Intertrust Trustees Limited v CDS (Superstores International) Limited [2018] EWCA Civ 1396.

Buyer’s due diligence

Caveat emptor (buyer beware) should be a familiar principle to all those involved in property transactions. Consequently, a buyer of property usually goes to some effort with his due diligence to discover everything he can which might affect his decision to buy a property. If the buyer makes enquiries of the seller, the law requires the seller to supply the buyer with accurate information to the best of his ability. However, the process has developed into an almost contentious process, with sellers frequently stonewalling buyers and telling them that they must satisfy themselves in relation to a particular enquiry. Not only that, but contractual terms designed to protect sellers from liability for misrepresentation have become common place. Such attempts often appear as ‘entire agreement’ or ‘non-reliance’ clauses in contracts. Often these clauses are included in contracts by the parties’ lawyers without the parties themselves realising or truly understanding their effect. Lawyers frequently include them in contracts as a matter of course or (it has to be said) sometimes without thinking, simply because they are a common feature of precedent documents.

Attempted exclusion by the seller

In First Tower Trustees the Court of Appeal found that a landlord of business premises had misrepresented the position about environmental contamination (the presence of asbestos) during its tenant’s enquiries before contract. The agreement for lease contained a ‘non-reliance’ clause which provided that the tenant agreed that it had not entered into the contract ‘in reliance on any statement or representation made by or on behalf of the Landlord other than those made in writing by the Landlord’s solicitors in response to the Tenant’s solicitor’s written enquiries’.

In addition, the lease itself provided that ‘the tenant acknowledges that this lease has not been entered into in reliance wholly or partly on any statement or representation made by or on behalf of the Landlord’.

Statutory limitations

In property transactions, it is conventional for the buyer’s solicitor to make written enquiries of the seller’s solicitors, who are in turn expected to give written replies. As a matter of law, it is accepted that the parties to a transaction may agree to confine themselves to a particular process which may have the effect of limiting the liability of one party to the other. Lawyers refer to this as ‘contractual estoppel’.

But despite the ingenuity of lawyers in seeking to protect their clients from liability, the law still seeks to protect a buyer from things which a seller may very well know, or ought to know, yet is reluctant to disclose. Historically, the law was that a buyer would have to show that a seller’s provision of incorrect information (his misrepresentation) was fraudulent, i.e. dishonest. The Misrepresentation Act 1967 removed that requirement and only permitted the maker of a false statement to escape liability if he could prove that he had reasonable grounds to believe, and did believe up to the time of the contract was made, that the facts represented were true.

Further, the Misrepresentation Act limits the effect of exclusion clauses, particularly the form of non-reliance clause seen in the First Tower Trustees case. It makes any attempt at exclusion subject to the test of reasonableness found in the Unfair Contract Terms Act 1977, section 11(1), which in turn places the burden of proving reasonableness on the maker of the statement, i.e. the seller.

In the First Tower Trustees case, both the trial judge and the Court of Appeal found that the landlord was aware of potential asbestos contamination. The Court accepted that the parties had agreed in the contract to limit the tenant’s reliance on statements to those given in the written replies to enquiries, because that was their contractual right. However, the Court found that the landlord’s knowledge of the true situation and its attempt to avoid liability by way of the ‘non-reliance’ clause in the lease, was unreasonable within the meaning of the Unfair Contract Terms Act.  The landlord was therefore liable for the tenant’s loss as a result of discovering the asbestos contamination.

Liability of trustees

This case is also a rich mine on the law relating to the liability of trustees and the procedural rules of litigation. It illustrates the potential liability of trustees, even though trustees themselves may not be directly involved in a transaction, or may not themselves have any knowledge of the matters about which a buyer enquires.

The lessons are clear: Whilst the principle of ‘buyer beware’ still applies, a seller must be aware that if he has knowledge of anything which might contradict the information given to a buyer he should consider the position carefully. The First Tower Trustees case makes it plain that the law may not protect a seller from liability for a misrepresentation, despite the best attempts of his lawyers.

For more information please contact Andrew Baines, Partner and Head of the Property Litigation team on Andrew.Baines@michelmores.com or +44(0)117 906 9336.

It is important to have a crisis management policy to deal with negative material published against you or your company. You can never be too prepared when it comes to crisis management as it is in the first few hours that a well-planned response can have the best impact.

1. In the first instance you should speak to a defamation specialist for advice and potentially a PR agent if there is going to be significant fall-out. PR agents can be really helpful because they can give practical advice about what the newspapers might just do.
2. Ask journalists for any questions in writing and push back on unrealistic deadlines. Don’t be bullied to provide a verbal comment.
3. Assume that what you say to journalists may well be published. In the absence of a contract (and in some cases even then) the phrase ‘off   the record’ is unlikely to be a guarantee that the information will not be published in some form, albeit anonymised.
4. Most publications provide specific contact details for complaints and it is advisable to use them to ensure a complaint is directed to the right person. We often liaise with legal departments of larger publications when seeking the removal of, or corrections to, defamatory material both before and after publication. Again PR agents can be helpful to try to limit creating a sense that there is more to the story.
5. Seek legal advice. We have prevented, removed or limited the damage of a number of articles published online, and in the national and international press.
6. If you are accused of defamation, don’t panic. There are many defences which may be open to you and actions which will limit the extent of any claim against you. Again, seek legal advice and remember that truth is a defence to defamation.
7. Have social media policies in place in the workplace. These may well give you and your company further protection to deal with employees who publish defamatory and/or malicious statements both inside and outside work. A well-worded policy could save considerable time and legal fees.

For an overview of how to protect your reputation, take a look at our tools and tactics you can deploy if defamatory information is published about you or your company.

For more information about how to control and protect your brand and reputation across a range of issues, please contact Jayne Clemens on +44 (0)1392 687724 or email jayne.clemens@michelmores.com.

If a tenant agrees with the landlord to restructure rent payments, whether in arrears or not, the agreement must be documented properly. The judgement of the Supreme Court in Rock Advertising Limited v MWB Business Exchange Centres Limited on 16 May 2018 is a salutary lesson to the former occupier of serviced offices. The landlord, in effect, forfeited the licence for occupation when the occupier fell into arrears of monthly payments and did not accept (as the occupier believed it had) a proposal to restructure the arrears and ongoing payments.

The case

The case concerned an occupational licence.  This is a less secure form of occupation than a lease or tenancy, but the consequences are the same in the case of business premises. This is because a landlord will invariably retain the ability to forfeit or ‘peaceably re-enter’ in the event of a breach of agreement by the tenant. This is typically done by changing the locks when the tenant is absent.

The Rock Advertising case involved a licence in which one of the terms was a “no oral modification” (“NOM“) clause:

“This Licence sets out all of the terms agreed between MWB and the Licensee.  No other representation or term shall apply or form part of this Licence.  All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect.”

The problem for Rock Advertising was that their restructuring proposal was not set out in writing. Representatives of Rock Advertising believed that they had agreed a restructuring with a representative of MWB and this gave rise to a number of arguments, which are commonly deployed in situations where one party wants to try and circumvent a written contract, or achieve some other objective in the absence of any written contract. These strategies usually include (in typical descending order of prospects of success): misrepresentation, an implied term, a collateral contract, and estoppel.

These disputes often occur because parties sign standard form written agreements without one or both parties truly understanding what the written agreement says. The common complaint when events depart from those imagined by the written agreement is that one party alleges that the other assured it of an alternative agreement. Sometimes such claims are successful, but they almost invariably require considerable analysis of the facts; an expensive legal process in which to become involved.

Supreme Court decision

The outcome in Rock Advertising might seem unsurprising given that the alleged agreed variation was not put in writing, but that did not stop the parties arguing vigorously.  The majority of the Supreme Court agreed that there was no implied term that the NOM clause could not be overridden by an oral agreement to do so, or that there was a collateral agreement to that effect.  It was possible that an estoppel (detrimental reliance on an alternative assurance) might have saved them, but there was insufficient evidence to support the criteria for such a plea.

Lessons from this case

This case applies not just to the situation in which rent arrears are restructured; it could equally apply to any other variation of the contract agreed between the parties, where a NOM clause is included.

The lesson, as ever, is to read the lease or contract at the outset and where possible renegotiate any unacceptable terms before the contract is completed. If this is not possible, or if it becomes necessary to renegotiate terms during the term of the lease or licence, the deal struck or any amended conditions should be properly documented and the original contract varied, so that they form part of an enforceable legal agreement between the parties.

For more information please contact Andrew Baines, Partner and Head of the Property Litigation team on Andrew.Baines@michelmores.com or +44(0)117 906 9336.

The winners of the 16th annual Michelmores Property Awards have been announced, celebrating outstanding property and construction projects in Devon, Somerset, Bristol, Dorset and Cornwall, across ten categories.

Tate St Ives was awarded the accolade of Building of the Year, after undergoing a complete refurbishment of the existing galleries and a four storey extension providing a new gallery, conservation and learning spaces and office accommodation. It reopened to the public in October 2017 and now accommodates a quarter of a million visitors each year which is a fantastic economic boost for Cornwall.

Another Cornish success was winning Education Project of the Year for the development of Callywith College. A landmark campus for Bodmin and the whole of Cornwall, this state-of-the-art further educational facility includes recreational areas, such as a 3G sports pitch, and which is accessible to the local community.

In Plymouth two projects stood out for their regeneration of previously derelict and deprived areas. The judges were particularly impressed with the Nelson Project which won the Alternative Property Investment Project of the Year. This Plymouth City Council flagship ‘Plan for Homes’ development comprises of 24 high quality homes, 12 dedicated to military veterans, six to people with learning difficulties and six as general need affordable accommodation. The most outstanding element was the rehabilitation programme of military veterans who built the development and have now gained construction skills.

Winner of the Residential Project of the Year (36 Units and Over), was formerly a fortified MOD estate which was closed to the public. Mountwise is now a thriving community of 250 high quality homes with a further 59 apartments, surrounding a cricket pitch and has an on-site café, retail space and several office spaces in the centre of Plymouth.

Bristol benefitted from two exceptional, though very different, developments. Winning Leisure & Hospitality Project of the Year, Aerospace Bristol, the nine-acre site on Filton Airfield, covers over 100 years of aviation history and combines two First World War Grade II listed hangars with a fantastic new building that houses the last flown Concorde. This has become a great visitor attraction to the area.

Meanwhile, the restoration of a Grade II listed terrace and the repurposing of a 1970’s extension overlooking the floating harbour in the Redcliffe Conservation Area in Bristol took home the award for Residential Project of the Year (35 Units and Under). The restored facade is now a significant landmark in Bristol.

National College for Nuclear, Southern Hub, Cannington was awarded Project of the Year (over £5m). This cutting edge nuclear training facility based in Cannington, includes a virtual reality environment, a reactor simulator and training rooms, sports facilities and student accommodation. The new facilities will develop the UK’s nuclear curriculum while creating career opportunities and delivering economic growth in the South.

The John Laurence Special Contribution Award, which spotlights outstanding property and construction professionals in the region, was awarded to Plymouth-based Ian Potts of Architects Design Group for his significant contribution to the property landscape of the South West.

Other winning projects for 2018 include,

Lloyd’s Lounge in Exeter awarded Project of the Year (under £5m), and Higher Mill at Buckfast Abbey, awarded Heritage Project of the Year.

Emma Honey, Head of Real Estate at Michelmores, said: “Once again, the standard of entries we received for this year’s Property Awards was outstanding. From a cutting edge nuclear training facility in Somerset to a residential development that rehabilitated military veterans through a self-build training programme in construction skills, the range and breadth of projects has been fantastic and has demonstrated the excellence of the property and construction sector in our region. My congratulations go to all of our winners and to all those shortlisted.”

The winners were announced at an Awards Dinner on Thursday 7 June at the University of Exeter, hosted by comedian and actor Josh Widdecombe.

The 2018 Michelmores Property Awards winning projects in full:

Project of the Year (under £5m), supported by Grenadier Estates

Lloyd’s Lounge, Exeter – submitted by Morgan Sindall

Project of the Year (over £5m), sponsored by LHC Architecture + Urbanism

National College for Nuclear, Southern Hub, Cannington – submitted by Midas Group

Education Project of the Year, sponsored by TClarke

Callywith College, submitted by Kier Construction

Leisure & Tourism Project of the Year, sponsored by JLL

Aerospace Bristol, submitted by Kier Construction and Hydrock

Heritage Project of the Year, sponsored by Attention Media

Higher Mill, Buckfast Abbey, submitted by Form Design Group

Alternative Property Investment Project of the Year, sponsored by Midas Group

The Nelson Project, Plymouth, submitted by Form Design Group

Residential Project of the Year (36 Units and Over), sponsored by Kier Construction

Mount Wise, Plymouth, submitted by Ward Williams Associates

Residential Project of the Year (35 Units and Under), sponsored by Natwest

Redcliffe Parade, Bristol, submitted by Alec French Architects

Building of the Year, sponsored by Girling Jones

Tate St Ives, submitted by BAM Construct UK

The John Laurence Special Contribution Award, supported by The Michelmores Charity of the Year, The Amber Foundation, who help homeless, unemployed young people move on to positive, independent futures.

Ian Potts, Architects Design Group

Click here to view the shortlist in full

The winners of the 16^th annual Michelmores Property Awards have been revealed, celebrating outstanding property and construction projects in Devon, Somerset, Bristol, Dorset and Cornwall, across ten categories.

Congratulations to The Nelson Project, Plymouth – winner of Alternative Property Investment Project of the Year sponsored by Midas Group.

The Nelson Project is a Plymouth City Council flagship ‘Plan for Homes’ development. This scheme utilised a derelict site with the objective to rehabilitate military veterans through a self-build retraining programme in construction skills. The project comprises of 24 high quality homes, 12 dedicated to military veterans, six to people with learning difficulties and six as general need affordable accommodation.

The winners were announced at an Awards Dinner on Thursday 7 June at the University of Exeter, hosted by comedian and actor Josh Widdecombe.

View the full list of winning projects

The winners of the 16^th annual Michelmores Property Awards have been revealed, celebrating outstanding property and construction projects in Devon, Somerset, Bristol, Dorset and Cornwall, across ten categories.

Congratulations to Aerospace, Bristol – winner of Leisure & Tourism Project of the Year sponsored by JLL.

A family attraction offering aerospace exhibits and hands-on activities to showcase over a century of aviation history. The nine-acre site on Filton Airfield, includes two First World War Grade II listed hangars, and a new building housing the last flown Concorde, with conference facilities including a lecture room, three meeting rooms and a studio space.

The winners were announced at an Awards Dinner on Thursday 7 June at the University of Exeter, hosted by comedian and actor Josh Widdecombe.

View the full list of winning projects

Following a string of recent proprietary estoppel decisions, a new case brought by a disinherited farmer’s daughter has provided further clarification of what is required to bring a successful proprietary estoppel claim.

The case

The case of Habberfield v Habberfield [2018] was heard by Mr Justice Birrs in the Chancery Division of the Bristol Civil Justice Centre.

The claimant, Lucy Habberfield, brought a claim against her mother, Jane Habberfield, on the basis that she had devoted her entire working life to the family farm near Yeovil, Somerset. She alleged that this was as a result of assurances by her father that she would take over the farm and be given ownership of it. Lucy in fact left the farm in 2013, after a fight with her sister in the milking parlour. On her father’s death in 2014, Lucy was informed that her father had left the whole of his interest in the farm to her mother.

The judgment

Lucy was successful in proving her claim against her mother. The Judge found that she had been promised ‘a viable dairy farm’. The Judge awarded Lucy £1.17 million (to be settled in cash, or by a sale of the farm). The value of the farm was around £2.5 million, so the amount awarded represented a significant proportion of the property.

In his judgment, Mr Justice Birrs confirmed a much used summary of the requisite elements of a proprietary estoppel claim, namely “a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance.” He reiterated the warning in earlier cases “against subdividing proprietary estoppel into watertight compartments”. He confirmed that the Court’s ultimate purpose is to prevent “unconscionable conduct” and that this “permeates all elements of the doctrine.”

It is argued that a number of the assurances made by Lucy’s father were questionable; these included representations that Lucy would ‘take over the farm’ when he could no longer farm, which the defence team argued meant taking over the farm business, rather than actually having assets transferred to her; whenever Lucy asked for time off she was told that “the cows would not be there when she got back”; and receiving low wages for her work, as she could not expect to receive the benefit of her work both now and in the future. The Judge took a broad brush approach, holding that the combination of all of the assurances made to Lucy gave her the reasonable expectation that she would be inheriting land and property at the farm.

Statement of current intention v promise

Importantly, the defendant’s legal team sought to rely on the recent judgment of His Honour Judge Matthews in James v James [2018] (another farming case). In that case a distinction was drawn between a statement of current intention as to a future gift and a promise of that future gift. Mr Justice Birrs in Habberfield agreed that such a distinction does exist, but that its significance is likely to be fact specific. In his view the representations given to Lucy could not have been understood as simply statements of current intentions as to future gifts The statements comprised assurances that in return for what Lucy was being asked to do now, she would receive something in the future.

The Judge also reinforced the principle that greater weight would attach to representations that stood for a lengthy period of time, especially in situations where the claimant has to devote a long time doing something in return for what had been promised to them – in this case, working long hours on the farm.

Conclusion

The conclusion to be drawn from this and other proprietary estoppel cases is that the outcome is notoriously difficult to predict and will nearly always turn on the credibility of witnesses, in particular the claimant and the defendant, assuming the defendant is available for cross examination.

For more information please contact Rajvinder Kaur, Associate in the Agricultural Team, on 0117 906 9352 or email rajvinder.kaur@michelmores.com.

Two recent planning cases have shed new light on how the planning assumptions contained within sections 14 to 16 of the Land Compensation Act 1961 (“LCA 1961“) should be applied in conjunction with the Pointe Gourde principle. The cases are:

• Homes and Communities Agency v J S Bloor (Wilmslow) Ltd [2017] UKSC 12; and
• Boland v Bridgend CBC [2017] EWCA Civ 1004

The Pointe Gourde principle has previously been considered but in summary provides that market value assessed under section 5 of the LCA 1961 cannot include any increase in value attributable to the underlying scheme of an acquiring authority.

JS Bloor case: The facts

JS Bloor was the former owner of two plots of grazing land, acquired together with an additional adjacent parcel of land for a total of £1.3m (“the Land“). The Land was earmarked for the development of the ‘Kingsway Business Park’.

As set out in the North West Development Agency’s 2002 ‘Regeneration Prospectus’ Kingsway Business Park is a 170ha site in Rochdale adjacent to Junction 21 of the Trans-Pennine M62, originally in 75 separate ownerships.

Eventually, the Acquiring Authority (a predecessor to the Homes and Communities Agency (“HCA“)) acquired the Land by General Vesting Declaration on 4 January 2006 pursuant to ‘The North West Development Agency (Kingsway Business Park, Rochdale) Compulsory Purchase Order 2002’, made 15 May 2002, and confirmed on 5th October 2004

The Land had an elaborate and rather hopeless planning history commencing in the 1960s, including various allocations, and an unsuccessful application for housing. The latter perhaps not terminally, as that application was turned down on the basis that it was not part of a comprehensive development.

As at the valuation date the applicable planning documents included: Regional guidance (RPG13) approved in March 2003; and the Rochdale Unitary Development Plan (“UDP“) adopted in March 1999. The Land was listed in RPG13 as one of 11 Strategic Regional Sites, and allocated under the UDP, which allowed for individual development if it was compatible with the objective of a strategic business park development; and or “limited residential development … provided it is part of a comprehensive development scheme for predominantly business uses …”.

In August 2006 JS Bloor made an application for a Certificate of Appropriate Alternative Development, which was recommended for refusal on the basis of a failure to comply with the UDP, the application was then withdrawn.

The decisions

At the Upper Tribunal (Lands Chamber) (“UT“) the battle lines were drawn around the difference between the existing use value, said by the Acquiring Authority to be around £50,000 and the development value, said by JS Bloor to be elevated by hope to around £2.6 million.

The UT awarded £746,000, the Court of Appeal remitted the matter back to the UT applying the law in a different manner (in the Acquiring Authority’s favour), commenting that the UT “…appears to have overvalued the reference land for the purposes of compensation”.

The Court of Appeal was of the view that the UT had incorrectly applied weight to ‘the extensive policy support for residential development on part of the reference land’, because it should have stripped out (arguably) all potential for such development on the basis of the Pointe Gourde principle.

The Court of Appeal’s view was that the UT should have considered the planning potential of the reference land, without regard to the development scheme and its underlying policies and therefore its effect on value. In that no scheme world it should have examined what wider no scheme specific policies might apply, but should not apply the current and emergent UDP because that was the basis of the Order.

The Supreme Court restored the UT’s original decision. The Supreme Court was of the view that the Court of Appeal should not have treated the required disregard of the scheme as extending also to all the policies, past and present, which supported development on the Land. The Supreme Court endorsed the approach of the UT in  taking account of the “historic, current and emerging policies” promoting a business park, and considering “the extensive policy support for residential development” on the Land.

The Supreme Court endorsed the approach of the UT, commenting that the Tribunal:

“…properly took account of the pattern of development as seen by them on the ground, and the long history of identification of this land for substantial development. They did not ignore potential policy objections, such as under or policy EC/6, but took the view that they would not have sufficient weight to rule out the possibility of development in the absence of the KBP scheme. That reasoning discloses no error of law.”

The Supreme Court also considered submissions made on behalf of the HCA that effectively the market value disregards (including the Pointe Gourde principle) applied not only to the assessment of compensation under Section 5 of the 1961 Act, but also to the planning assumptions in sections 14 – 16 of that Act. The result of such a submission, if successful, would have been that the planning status of the Land would be fixed by the scheme of development envisaged under the Order, but no compensation (reflecting any uplift) would have been payable, because that planning status was due to the scheme itself.

By way of example, if land was acquired for purpose X, that was the only planning consent applicable to the subject land, and as such purposes Y, or Z could not be considered, but an uplift in value due to purpose X could not be recovered either. The Supreme Court confined the application of the Pointe Gourde principle to the assessment of compensation under section 5 stating:

“The statutory assumptions work only in favour of the landowner, not against him, and do not deprive him of the right to argue for prospective value under other provisions or the general law.”

The Boland v Bridgend CBC case

That application has also recently been considered by the Court of Appeal with regard to section 17 of the 1961 Act in Boland v Bridgend CBC [2017] EWCA Civ 1004:

“In considering a section 17 application, a decision-maker must proceed on the basis that the relevant scheme for development in the public interest is cancelled, so far as the land that is the subject of the proposed compensation assessment is concerned, at the date of the notice that it is proposed to acquire the land compulsorily. The ‘no scheme world’ is confined to the assessment of compensation under Part II of the 1961 Act, which involves the consideration of broader factors than does section 17 in Part III.”

Is this now ancient history?

In JS Bloor Lord Carnwath points out that the complexities in these matters may be resolved by the changes to sections 14 – 18 of the CPA 1961 first brought about by the Localism Act 2011 s.232, and more recently to section 5 by the Neighbourhood Planning Act 2017 section 32 (see also previous article).

The current drafting of section 14 of the CPA 1961 defines the approach to deciding the scheme of development underlying the acquisition:

(8) If there is a dispute as to what is to be taken to be the scheme mentioned in subsection (5) (“the underlying scheme”) then, for the purposes of this section, the underlying scheme is to be identified by the Upper Tribunal as a question of fact, subject as follows—

(a) the underlying scheme is to be taken to be the scheme provided for by the Act, or other instrument, which authorises the compulsory acquisition unless it is shown (by either party) that the underlying scheme is a scheme larger than, but incorporating, the scheme provided for by that instrument, and

(b) except by agreement or in special circumstances, the Upper Tribunal may permit the acquiring authority to advance evidence of such a larger scheme only if that larger scheme is one identified in the following read together—

(i) the instrument which authorises the compulsory acquisition, and

(ii) any documents published with it.

Although the wording of subsection 8 above is pleasantly clear, the essence of the exercise, which the tribunal needs to undertake, is essentially unchanged. The tribunal needs to consider (on the basis that it is deciding appropriate alternative development):

• The extent of ‘the scheme’.
• The planning ‘alternative reality’ without the scheme.
• The planning policies which might apply in the ‘alternative reality’.
• The likelihood of those policies applying (and permitting development).
• The extent to which the value of subject land might be increased in the ‘alternative reality’.

The difference in the law now is that the tribunal assesses value based on the assumption that: at the relevant valuation date, planning permission for the development could reasonably have been expected to be granted, even though no action has been taken (including acquisition of any land, and any development or works) by the acquiring authority wholly or mainly for the purposes of the scheme.

This effectively excludes arguments that the scheme is cancelled in respect of the subject land alone, but not surrounding land, and as such the subject land benefits from uplifts in value due to the scheme as a result of things like improved infrastructure.

Conclusions

The conclusions which can be drawn from these two decisions include the following:

• As previously stated, if ‘the scheme’ is actually the only ‘game in town’ with regard to any particular package of land, then it will fall to be disregarded, and the claimant left with perhaps only a small additional sliver of hope value in addition to the base value.
• On the other hand, if (as happened in JS Bloor) development opportunities abound whether the compulsory scheme occurs or not, a more substantial slice of hope value might be added to the base value.
• Clearly, and rather encouragingly, in JS Bloor the Supreme Court was keen to uphold the findings of fact of the UT, in the circumstances where the panel brought its expertise to bear, following a detailed analysis of the applicable planning policies and development potential.
• The tribunals need material upon which to decide these matters, highlighting the importance of well researched credible expert evidence, and elegant case presentation.
• The matters raised in this article clearly demonstrate the value in landowners coming together to promote development land, or else risk losing out on the opportunity to benefit from uplifts in value due to development potential.

For more information please contact Adam Corbin, Barrister and Senior Associate in the Agriculture team.

In this update, we examine how the Court has dealt with anti-fracking protestors and other recent developments relating to hydraulic fracturing or ‘fracking’.

Fracking operators have been consistently targeted by intensive and often vitriolic protest campaigns, often involving direct action by protestors. However, the High Court has now provided a clear blueprint for fracking operators seeking to reduce the adverse impact of these protest activities.

INEOS Upstream Ltd v Persons Unknown [2017]

In July 2017, petrochemical multinational, INEOS obtained a pre-emptive, interim injunction, without notice to the protestors, to prevent a range of unlawful conduct on or near the proposed fracking sites and its offices. The matter returned to the High Court in November 2017, to establish whether or not the injunction should remain place.

On 23 November 2017, Mr Justice Morgan granted INEOS a peremptory injunction, known as a quia timet injunction (being an injunction in anticipation of a breach of a legal right), restraining a wide range of unlawful conduct by protestors. The Defendants were well known protestors, who had taken direct action against other fracking operators, and who could potentially disrupt INEOS’s activities. An interesting aspect of the case was that only the identity of two of the Defendants was known, the others were described as “Persons Unknown”.

The decision was made in anticipation of disruption by protestors to INEOS through marches, static demonstrations, obstruction of the highway or site accesses (including the tactic of “slow walking”- protestors obstruct vehicles by walking slowly in front of them), the use of lock-on type devices and office incursions or occupations, the likes of which have occurred on other fracking sites across the UK.

INEOS’s causes of action included trespass, actionable interference with private rights of way, public nuisance, harassment and conspiracy to injure by unlawful means. The protestors opposed the applications on the basis that the grant of injunctions would be disproportionate (being too broad in scope); improperly brought against persons unknown; there was no imminent and real risk of harm; and granting such injunctions would impede the Defendants’ rights to protest.

Mr Justice Morgan granted the injunctions restraining trespass, private nuisance, interference with the right of access to and from the public highway, and unlawful means conspiracy. These sorts of injunction are rare and were only granted on the grounds that there was an imminent and real risk of infringement of INEOS’s rights. Mr Justice Morgan also held that a Court considering whether to grant a final injunction would take the view that a fracking operator’s property rights should prevail over the protestors’ right to protest.

The successful application by INEOS provides a blueprint for the arguments needed to succeed with, and the evidence required to support, the application. The decision is also notable for the fact that the injunctions also covered interference with INEOS’s upstream supply chain.

R (Preston New Road Action Group) v Secretary of State for Communities and Local Government and another [2018]

The background to the appeal brought by the Preston New Road Action Group is complex and was described in detail in the 2017 Summer Edition of Agricultural Lore.

On 12 January 2018, the Court of Appeal held that the decision to grant permission for exploratory works to Cuadrilla had not involved the misconstruction or misapplication of local and national planning policies and that the environmental impact assessment had addressed all concerns adequately. The appeals were dismissed and the right to appeal the matter further to the Court of Justice of the European Union was denied, the Lord Justices deeming the contentious matters “acte clair”, with no scope for reasonable doubt.

As a result of this ruling, Cuadrilla has effectively been given the go ahead to explore the site and consequently begin the first horizontal fracking project in the UK. Cuadrilla has also been granted permission by West Sussex County Council to begin exploratory testing in Balcombe.

INEOS granted permission to pursue land access rights over National Trust land

On 22 February 2018, INEOS stated that it had been granted permission by the Oil and Gas Authority to pursue an application in the High Court, to allow access to the National Trust’s Clumber Park in Nottinghamshire. INEOS wants to carry out seismic testing on the land, but the National Trust has refused access to-date, stating:

“We have no wish for our land to play any part in extracting gas or oil”.

Lynn Calder, Commercial Director of INEOS Shale, stated:

“These surveys are both routine and necessary across the UK, including on National Trust land……The National Trust’s position is very disappointing as we have had positive relationships with a range of stakeholders and landowners during surveys”.

Conclusion

The goals of fracking operators are evidently increasing in ambition and scope. However, these developments must also be viewed in a wider context. The Government’s publication, ‘A Green Future: Our 25 Year Plan to Improve the Environment’, makes no express reference to fracking (nor does it expressly refer to renewable energy, rather the more ambiguous “cleaner, sustainable energy”). Fracking was also conspicuous by its absence in the Government’s ‘Clean Growth Strategy’, published in October 2017.

These glaring omissions dovetail with the Government’s rhetoric surrounding a proposed ‘Green Brexit’. On a more local level, fracking operators have also seen a number of their applications rejected by local councils in recent months, including an application by INEOS in South Yorkshire.

Notwithstanding this, while fracking remains a viable and active solution to a transition to a reduced carbon economy, rural landowners and others with interests in areas where shale rock is prevalent, should be aware of any developments, and familiarise themselves with the obligations of fracking operators in relation to access, payments and any restoration and aftercare of the land.

Finally, landowners, tenants and fracking operators must be aware of their options and rights in relation to any protest activities on their land; if these actions adversely affect their business, they should consider applying to the Court for an injunction.

For more information please contact Ben Sharples on ben.sharples@michelmores.com or 0117 906 9334.

Michelmores has advised the Mayor’s Office For Policing And Crime (MOPAC) on its acquisition of The Empress State Building in Earls Court, London for a purchase price of £250M. Whilst the building was already occupied by the Metropolitan Police Service, under a lease, for back office and operational functions, this freehold acquisition has secured the Met’s long term occupation.

Forming part of the Mayor of London’s £412M investment to create a new, single-site, counter-terrorism and organised crime hub for the Metropolitan Police Service, the acquisition will, for the first time, bring the Met’s counter-terrorism command and specialist crime and operations under one roof. The acquisition paves the way for a significant upgrade project to make the building and associated sites fully secure and fit for purpose.

The transaction team was led by Richard Honey, Head of Asset Management at Michelmores and involved over 15 Michelmores lawyers.

Richard Honey said:

“Having worked closely with MOPAC in recent years, on a number of high profile and sensitive transactions, we are delighted to have successfully concluded this one for them within an extremely tight timescale while pulling together the breadth and depth of a number of our cross-departmental and cross-office disciplines.”

“Our role in delivering this acquisition for such a prestigious institutional client reflects our increasing activity and involvement in the London real estate market.”

The Michelmores team comprised of:

Partners: Ian Binnie, Chris Hoar, Ian Holyoak, Richard Honey, Mark Howard, Carol McCormack

Other: Catherine Davis, Consultant Solicitor, Yvonne Farrell, Solicitor, Phil Parrott, Associate, Sarah Phillips, Associate.

This article has been co-authored by Andrew Oldland QC and Freshfields Bruckhaus Deringer.

The term FinTech is used to describe the application of technology to financial services. Technological change in financial services is nothing new, but what is new is the pace of change coupled with a significant amount of investment. FinTech is affecting all aspects of financial services, from disruptors to collaborators, retail services to investment banking, front office to back office. FinTech has also brought to light entirely new services and products that didn’t exist five years ago – for example, virtual currencies, distributed ledger technology, crowdfunding, robo-advice.

In relation to these new products and services, the applicable regulatory position is not always clear. Taking virtual currencies (also  known  as  cryptocurrencies)  as an example, a key problem for regulators  is  the definition of cryptocurrencies and tokens – a clear definition is an essential pre-requisite to ‘good’ regulation.

It seems that the prevailing view among regulators is that cryptocurrencies are more akin to an asset class than a currency.

At present, the three key areas of concern shared by regulators worldwide relating to cryptocurrencies are:

• consumer protection (including the protection of personal data)
• the prevention of financial crime, in particular money laundering
• the integrity of the markets.

Currently, we find ourselves in a somewhat counter- intuitive position. National regulators are reluctant to regulate, or indeed, may not be sure how to regulate, whereas many participants want to be regulated so as to have the badge of credibility that goes with authorisation.

Regulatory enforcement in this area can be sporadic and primarily focused on money laundering, (see the US authorities acting against the Silk Road). In Turkey, an example was given of drugs money being laundered through Bitcoin.

Initial Coin Offerings (ICOs) have also received a lot of attention recently, being ways of raising funds from the public, effectively by way of a coin or token sale – usually   in exchange  for  cryptocurrency.  The  regulatory  position in relation to ICOs is similarly not always clear (and where   it is, it is often because ICOs are banned). The confusion      is compounded by the fact that the broking of ICOs may well fall within regulation.  A  number  of  regulators  have caveated their position by stating that the characteristics of the token issued will determine whether the token is considered to be a security, a form of payment or a representation of some sort of service or utility. The current position of many regulators, which appears to be one of ‘wait and see’, is unlikely to be sustainable in the longer term. Indeed, we are beginning to see guidance emerging (e.g. in Switzerland).

As to consumer protection,  in  the  UK  for  example,  ICOs are generally unregulated (although again, this depends on the characteristics of the coin being offered)  but  the  FCA has issued stark warnings to consumers about the risks.

At the other end of the FinTech spectrum are financial services or products which, although enabled by cutting edge technology, clearly fall within regulation. Regulators are also starting to be much more encouraging of start- ups and new services. In order to encourage competition through advances in technology, in many countries, national regulators now have the powers to relax their requirements or provide guidance through so called ‘sandboxes’. Sandbox participants may benefit from lighter-touch regulation, but are required to provide often detailed information to the regulator which will help better inform regulation going forward. Here regulation appears to be working well.

Predominantly, regulators are tending to follow ‘neutral’ regimes (or relying on their existing frameworks) rather than producing detailed rules and regulations specifically on FinTech. This is often through ‘principles based’ regimes where regulators have greater discretion and flexibility.

Two further important issues  relate  to  the  protection of personal data and intellectual property (IP). The introduction in the EU of the GDPR, with its enhanced requirements, will have a significant impact on many FinTech companies. Improved methods of IP protection are also likely to be required to enable FinTech companies to flourish.

In the UK, the FCA has four objectives. Its strategic objective is to ensure that the relevant markets function well.

The FCA’s operational objectives are to:

• protect consumers – the FCA aims to secure an appropriate degree of protection for consumers
• protect financial markets – with the aim to protect and enhance the integrity of the UK financial system
• promote competition – the FCA aims to promote effective competition in the interests of consumers.

View from Turkey

Cost efficiency, financial inclusion, establishment of an eco-system, intellectual property rights and cyber security are the most important considerations for the regulators. There are a number of ongoing regulatory initiatives concerning FinTech in Turkey. A working group composed of the Central Bank of Turkey, the Capital Markets Board and the Banking Regulation and Supervision Agency has been studying cryptocurrencies. In addition, the Banking Regulation and Supervision Agency has been collaborating with payment services firms to ensure growth and to contain cyber risks. Last but not least, Turkey’s Ministry of Development is expected to cover FinTech in the 11th National Development plan to be published in June 2018.

Borsa Istanbul

It is worth noting the FCA’s focus on financial inclusion and the ability of Fintech to provide services to vulnerable consumers. In 2016, the FCA hosted a TechSprint event focussing on this and the only mention of Fintech in the FCA’s 2017 mission related to financial inclusion:

“We can use our convening powers to bring participants together and explore innovative ways of improving market effectiveness, such as developing Fintech to reduce the cost of financial services or to extend access to vulnerable consumers.”

It also features as one of the eligibility criteria of the robo- advice unit (Potential to deliver lower cost advice or lower cost guidance to unserved or underserved consumers).

Noting in particular that innovative tech can create better competition, the FCA is seeking to promote innovation  as part of the ‘virtuous circle’ of competition, where competition is a very powerful driver of innovation and vice versa. With that in mind, the FCA set up Project

Innovate,1 which aims to tackle regulatory barriers to allow firms to innovate in the interest of consumers. Project Innovate consists of:

• direct support and guidance
• an advice unit – a dedicated team providing feedback to firms developing automated advice and guidance models
• the sandbox – ultimately to facilitate testing
• engagement with others, covering industry (such as the FCA’s ’themed weeks’), regional engagement

(i.e. outside of London) and international engagement with other regulators.

In respect of the FCA innovation agenda and the sandbox, the FCA has available, where permitted, certain tools, such as restricted authorisation, individual guidance, waivers of rules and no-enforcement action letters.

Looking to crowdfunding as a practical example of legislating a new area, the FCA reviewed the peer-to-  peer lending sector and noted that while equity-based crowdfunding platforms were already likely to be included in the regulatory perimeter, loan-based platforms (also known as peer-to-peer lenders) were not. When it took on competence for consumer credit activities in April 2014, the FCA brought in a bespoke, lighter-touch regulatory regime which applied to the operators of loan-based peer-to-peer platforms. The FCA has been keeping developments in the peer-to-peer lending sector (both equity-based and loan-based) under review. We expect to see revisions to the regulatory regime in the future, including a consultation paper with proposals for rule changes, addressing the concerns raised by the FCA in its interim review paper. While this might be somewhat difficult for the affected providers, who will need to keep updating their policies and procedures, as well as keeping up to date with the regulatory requirements that apply to them, the intention of the review is a proportionate and appropriate regulatory regime.

The European Commission is also considering legislation on crowdfunding and has very recently published a proposal whereby operators of platforms can ‘opt in’ to an EU framework. This includes an EU regime that platforms wishing to conduct cross-border activity could opt into, while leaving the rules for platforms conducting only national business unchanged. Whether this will be the ultimate outcome for this proposal remains to be seen.

For more information please visit the FinTech service page. Contact the Finance & Investment team or Andrew Oldland KC at andrew.oldland@michelmores.com or on 01392 687690.

On Monday 5 March, Theresa May outlined plans to “rewrite” the rules on planning to help developers and local authorities build more affordable homes.

For decades, the UK has not had enough homes. Demand far exceeds supply resulting in inflated prices and increasing rents. Yesterday’s announcement is the first major overhaul of the National Planning Framework in six years and aims to ensure more of the “right homes” are built in the “right areas”. The changes will release more land for development and penalise councils who miss their planning targets.

Throughout her address to a national planning conference in London, Mrs May criticised the current system saying there is a “perverse” financial incentive for developers to sit on land once planning permission has been approved, rather than to build on it. The current system creates a market where “lower supply equals higher prices” she said, and consequently, developers aren’t encouraged to build the homes the country needs.

Pending consultation, up to 80 proposals are to be implemented to change the system. Some of the key measures include:

• 10% of homes on major sites to be available for affordable homes
• Councils to possibly revoke permissions if building hasn’t started within 2 years
• New rules to determine how many homes councils must build, taking into account house prices, wages and worker numbers, with higher targets being set for areas where house prices exceed earnings
• Allowing councils to take a developers previous rate of build into account when deciding whether to grant planning permission

For more information on the proposed changes, contact the Michelmores Planning Team.