Law reports

Law reports

COSTS

Final judgment less favourable to defendant than without-prejudice offer of settlement - foreign court forbidding defendant to satisfy judgment - defendant to pay interest and 90% costs on standard basis

Mamidoil-Jetoil Greek Petroleum Company SA and another v Okta Crude Oil Refinery AD (No 4): QBD (Mr Justice Aikens): 26 November 2002

The claimants brought proceedings against the defendant, which was resident in Macedonia, for breach of two contracts dating from 1993 and 1998 respectively.

Mr Justice Aikens gave judgment in their favour.

The judge was subsequently asked to determine, among other things, whether the defendant should pay costs on the indemnity basis or interest on the award after the date when a Macedonian court had forbidden the defendant to satisfy any obligations at the request of the first claimant including the request for damages arising from the 1993 contract.

Bernard Eder QC (instructed by Stephenson Harwood) for the claimants; John Jarvis QC and Daniel Lightman (instructed by Morgan Lewis & Bockius) for the defendant.

Held, that the parties had agreed that disputes arising under the contracts were to be determined by the English courts according to English law; that it was no defence to a contractual claim to say that it would be illegal to perform the contract under the law of the state in which the defaulting party resided, and so an order of a foreign court making it unlawful for the defendant to comply with the order of the English court was irrelevant to the defendant's liability for interest; that the failure of the claimants' (late) application for an injunction preventing the defendant and its privies from bringing proceedings in Macedonia meant that the defendant should pay only 90% of the claimants' costs; that the claimants' letter to the defendant offering, for 21 days only, to accept a specific sum in full and final settlement of its claims was a valid offer under rule 36.21 of the Civil Procedure Rules 1998 because it set out the claims and issues to which it applied; that the defendant therefore had to show why it would be unjust for costs incurred after the refusal to be payable on the indemnity basis; but that it had been reasonable to reject the offer because the defendant had had a reasonable prospect of bettering it until a judgment of the Court of Appeal in March 2001 and it was difficult to gauge the strength of the claimants' claim on quantum due to their inadequate disclosure of documents until after compliance with an order made in May 2002, and so costs would be on the standard basis.

CRIMINAL

Search warrant - information containing all relevant material - justices not required to record reasons for granting warrant

R (Cronin) v Sheffield Justices: QBD (Lord Woolf Chief Justice, Mrs Justice Hallett and Mr Justice Stanley Burnton): 20 November 2002

A police constable applied to the justices for a warrant, pursuant to section 23 of the Misuse of Drugs Act 1971, authorising a search of the claimant's home for drugs.

The application was supported by an information and oral evidence from the constable.

The warrant was granted and the search took place, but no drugs were found.

The claimant, accepting that the warrant had been lawfully issued, sought judicial review by way of a declaration that, under the Human Rights Act 1998, justices were required to record their reasons for granting a search warrant.

Stephen Cragg (instructed by Howells, Sheffield) for the claimant; Fiona Barton (instructed by the Solicitor, South Yorkshire Police, Sheffield) for the Chief Constable of South Yorkshire Police, as an interested party.

Held, refusing the relief sought, that if justices accepted that an information contained all the material which they needed to be satisfied that a search warrant should be issued it was unreasonable in the ordinary case to require them to record their reasons for granting the warrant; that if a particular matter were elicited in the course of questioning the constable who was seeking the warrant it would be desirable to make a note of it, not only for the benefit of a citizen wishing to challenge the legality of the warrant but also to protect the justices and police from unjustified allegations; that, since the material upon which the warrant had been issued had been clearly contained in the information, to require the justices to record that they were satisfied of the matters required by section 23 of the 1971 Act would serve no purpose whatsoever and was not required by articles 6 or 8 of the European Convention on Human Rights; that any exceptional circumstances would have to be considered on their merits; and that if a person in the position of the claimant asked for a copy of an information there should be no objection to it being provided, subject to considerations of public interest immunity, since the citizen should be able to assess whether an information contained the material which justified the issue of a warrant.

EMPLOYMENT

Teacher applying and held eligible for ill health retirement benefits - teacher subsequently denying having retired and claiming wrongful dismissal - objective test to determine whether notice of decision to retire given

Healey v Bridgend County Borough Council: CA (Lords Justice Ward, Schiemann and Longmore): 14 November 2002

The claimant was employed by the defendant council as a teacher.

Her contract was governed by the Conditions of Service for School Teachers in England and Wales (1985), known as the 'Burgundy Book'.

In July 1999, she suffered ill health which entitled her to sick pay.

Having asserted that her incapacity was permanent and expressed to her employer a conditional willingness to retire, she applied for, and was held to be eligible for, ill health retirement benefits under the Teachers Pensions Regulations 1997 (SI 1997/3001).

Thereafter, she denied having retired, not having been asked to resign and no retirement date having been agreed, and claimed damages for wrongful dismissal based on an entitlement to receive four months' notice.

The judge dismissed the claim.

The claimant appealed.

Toby Kempster (instructed by Simon Thomas, National Association of Head Teachers) for the claimant; Peter Oldham (instructed by the County Solicitor, Bridgend County Borough Council, Bridgend) for the council.

Held, dismissing the appeal, that an objective test was to be applied in determining whether the claimant was to be treated as having given notice of a decision to retire; that, knowing that she would not return to work and had become eligible for ill health retirement benefits, the circumstances would lead an officious bystander to consider that her conduct entitled the council to treat her as having retired; and that, accordingly, she had not been wrongfully dismissed.

INSOLVENCY

Seriously ill insolvent debtor assigning life assurance policy for no consideration shortly before death - application to set aside as transaction at undervalue - policy to be valued as at date of assignment by reference to all relevant factors including date and cause of death

Reid v Ramlot: ChD (Sir Andrew Morritt V-C): 15 November 2002

The deceased took out a life assurance policy for a sum payable on death of 185,568.

Two years later, suffering from cirrhosis of the liver and awaiting a liver transplant, he assigned the benefit of that policy to the defendant for no consideration.

He died two months after the transfer both intestate and insolvent.

The claimant applied to set aside the assignment under section 339 of the Insolvency Act 1986 on the ground that it was a transaction at an undervalue.

The registrar ordered the determination as a preliminary issue of the question whether, in assessing the value of the policy, account should be taken of the deceased's death two months after the assignment.

Stephen Davies QC (instructed by Peterkins Solicitors, Aberdeen) for the claimant; Guy Newey QC (instructed by Clintons) for the defendant.

Held, that the value of the policy was to be assessed at the date of the transaction; that, if at that date the value had been dependent on the occurrence or non-occurrence of some event and that event had occurred before the assessment of value had been completed, the valuer had to have regard to the occurrence of that event along with all other matters relevant to the determination of value as at the date of the transaction; and that, since it was for the trial judge to determine what, if any, effect the date and cause of death had on the value of the policy as at the date of assignment, it was inappropriate to decide the preliminary issue.

LAND

Mortgagee claiming amount as unsecured creditor under individual voluntary arrangement - dividend paid on claim - mortgagee not abandoned security on any part of mortgage debt secured or at all

Whitehead and another v Household Mortgage Corporation Plc: CA (Lords Justice Chadwick, Sedley and Scott Baker): 14 November 2002

The claimants took out a mortgage the benefit of which was transferred to the defendant.

In 1998, following an individual voluntary arrangement by the claimants, the defendant made a claim under the arrangement for 37,000 (representing the difference between the total owing on the principal sum plus arrears of interest and the amount at which it valued its security at that date, 65,000).

In 1999, the defendant received a dividend on the claim.

In 2000, a second mortgagee obtained possession of the property and sold it at 137,000.

The defendant prepared a redemption statement showing the amount required to redeem the first mortgage as at 2001 was 118,000.

The claimants, asserting that in consequence of payment of the dividend on the claim of 37,000 the defendant had agreed to extinguish such part of the mortgage debt corresponding to that amount, claimed an account of the debt on the basis that the debt outstanding as of 1999 was 65,000.

The judge rejected the claim.

The claimants appealed.

Fred Banning, solicitor (instructed by Smithson Clarke, Newcastle upon Tyne) for the claimants; Sheelagh Putnam (instructed by Davis & Co, High Wycombe) for the mortgagee.

Held, dismissing the appeal, that, where a mortgagee claimed in a voluntary arrangement as an unsecured creditor and accepted a dividend in respect of that claim, it was not to be treated as having elected to abandon its security for any part of the mortgage debt which was secured, or as having agreed that it would not rely on its security for so much of the mortgage debt as exceeded the amount at which it valued its security at the time of acceptance, nor any other figure; and that the mortgagee was therefore entitled to insist that its security be redeemed for the full amount of the mortgage debt.

Claimants refusing electricity company wayleave through tunnel on their land - application to secretary of state to exercise statutory power to grant wayleave - power enabling grant of wayleave through installations and equipment on land including tunnel

British Waterways Board v London Power Networks plc and another: ChD (Sir Andrew Morritt V-C): 15 November 2002

The first defendants, the holders of a licence entitling them to distribute electricity in London, wished to install cables in a tunnel owned by the claimants.

Following a refusal by the claimants for a wayleave for that purpose, the defendants applied to the secretary of state for the grant of a wayleave pursuant to paragraph 6(3) of schedule 4 to the Electricity Act 1989.

The claimants sought a declaration that the secretary of state had no power to grant a wayleave because the word 'land' in paragraph 6 did not include installations or equipment attached to land and the words 'on, under or over ...

land' did not include 'through installations or equipment' on that land.

The master ordered that question to be tried as a preliminary issue.

Joseph Harper QC (instructed by Eversheds) for the claimants; Guy Roots QC (instructed by Lewis Silkin) for the first defendants; Timothy Mould (instructed by the Treasury Solicitor) for the second defendants.

Held, that the existence of the discretion of the secretary of state whether to grant the wayleave, his power to impose conditions to ameliorate its effect on the owner and/or occupier of land, and the right of compensation, suggested that there was no ground for restricting the ambit of the word 'land' or 'on, under or over ...

land'; and that, accordingly, 'land' included installations or equipment attached to land, and 'on, under or over ...

land' included 'through installations or equipment' on that land.

LANDLORD AND TENANT

Claimants and defendant lessees of neighbouring retail premises in shopping parade - defendant in breach of leasehold covenants restricting nature of business to be carried on - claimants entitled to enforce covenants directly because part of letting scheme agreed by all lessees

Williams and another v Kiley (trading as CK Supermarkets Ltd): CA (Lords Justices Simon Brown, Buxton and Carnwath): 21 November 2002

The claimants were newsagents, confectioners and tobacconists at a shop in a parade, held under a lease subject to a covenant restricting its use to those trades.

The defendant held the neighbouring properties on leases which excluded the business of newsagents, sugar confectioner and tobacconists.

He ran a supermarket there selling a range of products, including groceries, tobacco, cigarettes, confectionery and stationery.

The claimants brought an action for breach of the covenants, contending that, as lessees within the same letting scheme, they were entitled to enforce them directly, without having to rely on the intervention of the lessor.

The judge decided in their favour.

The defendant appealed.

Mark Blackett-Ord (instructed by Glass & Co, Swansea) for the defendant; Michael Davey (instructed by John Collins & Partners, Swansea) for the claimants.

Held, dismissing the appeal, that the principles behind a letting scheme, whereby restrictive covenants could be mutually enforceable as part of a local law by the owners or lessees of individual plots or buildings without the need to rely on the original grantor, could be extended to a commercial context where competing traders held business leases within a single development; that where the local law which constituted the letting scheme was imposed in the commercial interests of the tenants and restricted what would otherwise be entirely permissible, indeed desirable, activities, it was very necessary to ensure that the scheme was fully agreed by everyone and in clear terms; that not every scheme would pass that test; and that, since it was clear that the leases were part of a letting scheme and that the defendant's use involved a breach of the restrictive covenants therein, the claimants were entitled to enforce the covenant against the defendant.

MENTAL DISORDER

Mental health review tribunal - medical member examining patient before hearing - not infringing convention right not to be detained without impartial judicial determination

R (S) v Mental Health Review Tribunal: QBD (Mr Justice Stanley Burnton): 27 November 2002

The claimant, a restricted patient under sections 37 and 41 of the Mental Health Act 1983, had applied to the mental health review tribunal to be released.

The tribunal gave a direction under rule 11 of the Mental Health Review Tribunal Rules1983 that prior to the hearing of his application he attend a psychiatric examination by a psychiatrist who would be sitting on the tribunal which would determine the application.

He sought judicial review by way of an order to quash that direction on the ground that rule 11 contravened his right to an independent and impartial judicial determination of his detention under article 5(4) of the European Convention on Human Rights because the initial assessment made by one member of the tribunal would inevitably prejudice his appeal.

Kris Gledhill (instructed by Galbraith Branley) for the claimant; David Forsdick (instructed by the Treasury Solicitor and the Solicitor, Department of Health) for the tribunal and the Department of Health (an interested party).

Held, refusing the relief sought, that the position of the medical member was analogous to that of a judge who viewed allegedly suitable alternative residential accommodation for a residential tenant and, although expert evidence might be called, the judge was entitled to take into account the opinion he formed during the view; that as a matter of domestic law, there could be no objection to the expression of a provisional opinion by the medical member to his colleagues before the hearing, provided the other members understood that they were free to disagree with it if the evidence and submissions before them led to a different conclusion; and that if an otherwise impartial member of a tribunal had expressed himself in such a way as to give rise to a reasonable apprehension that he had formed a preconceived concluded opinion then he lacked the necessary impartiality, but not otherwise.

PRACTICE

Justices imposing liability order in ignorance of request for adjournment - matter reopened and order set aside - not unlawful

Liverpool City Council v Pleroma Distribution Ltd: QBD (Mr Justice Maurice Kay): 21 November 2002

On 17 December 2001, a firm of rating consultants wrote to the clerk to the justices requesting an adjournment of all proceedings against the defendant.

That letter was brought into court after a liability order for non-payment of non-domestic rates in accordance with regulation 12 of the Non Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989 No 1058) had been made against the defendant.

On 18 January, and again on 15 March 2002, the same justices decided that since the liability order had been made without having the opportunity to fully consider the application to adjourn, the order would be set aside.

The justices acknowledged that they did not have statutory authority to reconsider the original decision but were satisfied that they had common law jurisdiction to do so.

The defendant appealed.

Norman A Wright (instructed by Head of Legal Services, Liverpool City Council) for the council; James Findlay (instructed by Linder Myers, Salford) for the defendant.

Held, that the justices did not purport to exercise their discretion either to grant or to refuse an adjournment, due to the ignorance of the request; that the justices did not need a statutory provision to enable them to put right such a perceived omission; and that, accordingly, they had not exhausted their jurisdiction upon the pronouncement of the liability order and they were entitled to reopen the matter so as to address a discretion which, at the time, they had not realised was the subject of a specific request.