Legal updates

The importance of written contracts

2012-05-07T20:51:20Z

It is uncontroversial that when agreeing commercial terms with another party it is very important to record those terms in writing writes Peter Laskey, Partner. This should avoid uncertainty or ambiguity as to those terms, and reduce – if not completely eliminate – the risks of costly and time-consuming litigation if the relationship breaks down. A recent Court of Appeal decision (BVM Management Ltd v Roger Yeomans t/a the Great Hall at Mains [2011] EWCA Civ 1254) illustrates starkly what can happen if no signed agreement exists.

Mr and Mrs Yeomans owned the Great Hall at Mains in Lancashire, and operated an events management business from that venue. The catering for the business was, until 2007, provided by a company of which Mr Bevan Middleton was a director. The contract governing the provision of those services allowed either party to terminate the arrangement by giving three months written notice. In May 2007 it was agreed that Mr Middleton’s company would take over the whole events management business, and a draft “Management Services Agreement” was prepared which was expressed to last for two years but included provision for termination on three months notice. That agreement was not signed.

In the summer of 2007 it was agreed that a new company owned/controlled by Mr Middleton – BVM - would take over the events management business at the Great Hall. At a meeting between the principals it was (the first instance Judge found) agreed that the contract would be on the same terms as already applied. It was accepted by all that there was no discussion at that meeting of the termination provision.

In February 2008 Mr Yeomans terminated the arrangement summarily alleging that BVM was in breach of contract, and that in any event he was entitled to give three months’ notice. BVM denied the breach and said there was no entitlement to terminate within the two year period, and sued for damages for wrongful termination.

At first instance the Judge held that an agreement was entered into at the meeting in July 2007, but as a written contract had not been signed he had to decide based on the oral evidence and all surrounding circumstances whether that agreement included the three months’ notice provision. Mr Middleton argued that as it was an agreed period of two years, giving him and his company the security they wanted, a notice period allowing termination within that period was inconsistent with that fundamental term and should not be incorporated. Mr Yeomans referred to the previous contracts, and the unsigned draft agreement, which included the notice period, and the fact that no-one had objected to it at that time.

The Judge decided that the three month notice period was agreed at the meeting, and BVM’s claim was therefore limited to damages for that period. The Court of Appeal agreed with the Judge and dismissed BVM’s appeal, holding that when a judgment is based largely upon oral evidence an appeal court should be slow to overturn the first instance Judge’s findings. It was not inconsistent with a two year contract for there to be a notice provision, and that had been agreed – either expressly or tacitly – at the meeting.

Draft agreements had been circulated after the meeting – which were referred to in Court to assist in determining the intention of the parties – but never signed. Both parties therefore incurred very substantial costs. It could be said that both parties lost - BVM’s damages claim was limited to three months profit but Mr Yeomans was not entitled to terminate without giving notice. The Court of Appeal judgment does not include the subsequent arguments about costs, but there is little doubt that failing to complete and sign the documentation will have been a very expensive experience for all concerned.

Contact: Peter Laskey, PartnerFor more information about litigation, claims and dispute resolution contact Peter Laskey on 020 8221 8062 or e-mail peter.laskey@bowlinglaw.co.uk.

Attorneys and gifts

2012-05-07T19:16:48Z

A commonly asked question by the holder of a Lasting Power of Attorney (LPA) or an Enduring Power of Attorney (EPA) is whether the attorney has the right to make gifts on behalf of the person whose power of attorney he or she holds.

In practice, the document setting up the power (EPAs have not been available for several years, but existing EPAs are still valid) will normally allow such gifts to be made by the attorney. An attorney can act under an EPA without taking any special steps. Under an LPA, the power must be registered before it can be acted upon.

The right to make gifts is, however, limited and normally restricted to appropriate birthday etc. gifts and donations to charities that are appropriate in the context of the value of the assets as a whole. In each case, the overriding issue is whether or not the gift can be considered to benefit the person who has appointed the attorney.

Contact: Graham Hirschfield, ConsultantWhere a larger gift is anticipated, an application for permission should be made to the Court of Protection.

If you are concerned about your rights and responsibilities as an attorney for someone else, then you should contact Graham Hirschfield on 020 8221 8000 or e-mail graham.hirschfield@bowlinglaw.co.uk.

How wide is a right of way?

2012-05-07T19:14:04Z

A recent dispute over the extent of a right of way over farmland in County Durham may be of interest to property owners, particularly to owners and occupiers of agricultural land.

Farming brothers Colin and John Oliver enjoyed a right of way over land formerly owned by their mother, which included the right to use a track for agricultural and other vehicles as well as on foot, a right which had been granted to allow the men access to their farmland.

The dispute arose over the erection by Mr and Mrs Symons, the present owners of the farmhouse previously occupied by the men’s mother, of a number of gates along the track. The dispute clearly became heated with allegations of pick-up trucks being driven at the gates and forced removal of locks. When the case came to court, it was fought over a number of points but, by the time that it reached the Court of Appeal, the pivotal issue was the extent of the right of way.

In the lower court the judge had found that the right of way was limited to the width of the track itself. It was argued by the Olivers that, whilst the wheel base of any agricultural vehicle using the track must remain within its width, there should be some tolerance for wide loads both in allowing additional ‘swing space’, so that the vehicles could manoeuvre through the gates, and ‘verge space’, where large vehicles using the track were bound to veer onto the grass verge.

The Court of Appeal upheld the decision of the lower court that the right of way did not include any swing or verge space and was limited to the physical width of the track. However, the Olivers’ claims appear to have failed on a lack of evidence. It is therefore possible that in a future case rights of way may be construed as including swing and verge space if sufficient evidence is adduced to support those contentions.

Contact: Justin Barker, PartnerIf you are unsure of your property rights, or you are involved in any form of dispute involving property, then contact Justin Barker on 020 8221 8000 or e-mail justin.barker@bowlinglaw.co.uk to arrange a confidential, no obligation discussion.

Cowboy will-writers in Last Corral

2012-05-07T19:07:59Z

It has been announced that both will-writing and the administration of estates are to be brought within the list of "reserved legal activities".

The move follows a persistent stream of cases of maladministration of estates and problems with wills drafted by unqualified will writers.

The move is aimed at ensuring that people who charge for drafting wills or administering the estates of deceased persons are "fit and proper persons" and are registered with an appropriate regulatory body which will ensure that acceptable standards are maintained.

Contact: Ali Ebrahim, ConsultantAll practitioners in these areas will also have to carry professional indemnity insurance. Many people who have suffered loss due to the activities of 'cowboy' will-writers have subsequently found that their attempts to gain recompense have been stymied by the absence of insurance on the part of the will-writer.

If you are concerned that your will may not be adequate or you have not updated your will for a little while then telephone Ali Ebrahim, Consultant on 020 8221 8000 or e-mail him at ali.ebrahim@bowlinglaw.co.uk and he will be able to help you.

Guidance on the Diamond Jubilee bank holiday

2012-05-07T19:01:28Z

To mark the occasion of the Queen’s Diamond Jubilee, there is an extra bank holiday this year on Tuesday 5 June. Also, the spring bank holiday, which normally falls at the end of May, has been moved to Monday 4 June.

Acas has issued a reminder to employers to plan ahead to avoid last minute leave request clashes or short-term absences.

Acas National Helpline Manager Stewart Gee said, “For many, the Queen’s Diamond Jubilee is an opportunity to celebrate and with two bank holidays at the beginning of June, employers may receive more requests for time off. We’re already getting calls to the Acas helpline from employers seeking advice. It’s important to be as fair and consistent as possible by having a policy on how to manage time off and leave requests so employees can join in the celebrations and employers can maintain morale at work.”

There is no statutory right to bank/public holidays, so the additional bank holiday does not increase any entitlement to holiday under the Working Time Regulations. Whether or not an employee will benefit from the extra bank holiday will depend on the wording of their contract.

Contact: Peter Holland, PartnerThere is also no legal right to be paid any extra for working on a bank holiday. Again, this will depend on the terms of the employment contract.

For more information about working rights around the Diamond Jubilee bank holiday or for any other employment related matter contact Peter Holland on 020 8221 8072 or e-mail peter.holland@bowlinglaw.co.uk.

Denial of audience unfair in child custody case

2012-04-18T09:20:04Z

When a judge failed to invite a child’s aunt and her husband, who were willing to care for him, to attend a hearing to determine his future care arrangements, a challenge was inevitable.

The child was three years old and had been taken into care by the local authority and fostered at the age of one. After an extensive assessment process, the council had determined that he should not return to live with his parents but should remain in care of the local authority.

The child’s aunt was willing to care for him and had made this known. However, she and her husband were only told of the hearing the day before it took place and could not arrange to take time off work at such short notice.

An application for an adjournment was refused on the ground that the couple had not submitted any statement prior to the hearing and had not applied to ‘intervene’ in the case. The judge therefore carried on with the hearing regardless and made a placement order in regard to the child.

The couple appealed the decision on the ground that not to hear their evidence was procedurally unfair.

The Court of Appeal considered that such a significant decision regarding the child’s future demanded that the couple should be heard before it was taken.

Accordingly, the Court ruled that the case should be heard again, but this time by a different judge, and that the couple should be allowed to present their case.

Contact: Urmilla SeenathFor more information about any child custody issues, contact Urmilla Seenath on 020 8221 8000 or e-mail urmilla.seenath@bowlinglaw.co.uk.

Unequal rentcharge remains valid

2012-04-18T09:12:34Z

The fact that a tenant does not have equal ability to make use of services provided by the landlord and charged under an estate rentcharge does not make the rentcharge unreasonable.

In a case heard recently in the Court of Appeal, a tenant was seeking to have its rentcharge reduced because, it argued, it was in effect paying 90 per cent of the cost of maintaining the only road on an estate over which it had access and 18 per cent of the cost of maintaining the other roads on the estate, over which it had no access.

The case was brought when the tenant, one of forty on the estate, had built up arrears of rentcharge payments totalling some £15,000 over a seven-year period.

However, the Court ruled that a registered estate rentcharge, validly created for a ‘permitted beneficial purpose’ and of benefit to the land on the estate as a whole, could be validly levied on the tenant.

Contact: Justin Barker, PartnerFor more information about rentcharges, service charges and how to challenge them or respond to a challenge, contact Justin Barker on 020 8221 8000 or e-mail justin.barker@bowlinglaw.co.uk.

Couple's intentions not binding after signing wrong wills

2012-04-18T09:08:03Z

A man who was the intended beneficiary of a £70,000 estate has lost out after the discovery of a major blunder at the time the wills of his deceased ‘parents’ were signed.

Terry Marley befriended a married couple who, in 1999, had a meeting with their solicitor in order to sign wills that had previously been drafted for them. The wills were brief and almost identical to one another. Each spouse left their entire estate to the other or, if their spouse failed to survive them by one calendar month, to Mr Marley, whom they had treated as a son for several years. The clear intention of the couple, Alfred and Maureen Rawlings, was to exclude their own two sons from benefiting under their wills and instead to pass their estate to Mr Marley.

Unfortunately, when it came to signing the wills, each of them mistakenly signed the other’s. The mistake went unnoticed on the death of the wife in 2003, but came to light when the husband died in 2006. At that time, the two sons successfully claimed that their father had died intestate, as neither will was valid, having been signed by the wrong person.

On appeal, counsel for Mr Marley tried to invoke sections 20 and 21 of the Administration of Justice Act 1982. These provisions allow for the rectification of a will in order to give effect to the testator’s intentions. However, it was held by the Court of Appeal that in order to take advantage of such provisions, it was first necessary to have a valid will. The Court upheld the view of the original trial judge that the wills were invalid as they had not been properly signed.

Contact: Ali Ebrahim, ConsultantIf you have a problem with a will or you would like to check that your will is effective, contact Ali Ebrahim, Consultant on 020 8221 8000 or e-mail ali.ebrahim@bowlinglaw.co.uk.

EU extends parental leave

2012-04-18T09:01:08Z

Any employee who has completed one year of continuous employment and who ‘has, or expects to have responsibility, for a child’ is entitled to take up to four weeks’ unpaid parental leave per year while their child is under age five (or under 18 if the child is disabled), subject to an overall maximum of 13 weeks’ leave in respect of each child.

As a result of an EU Directive from March 2013 male and female workers are each entitled to at least 18 weeks’ parental leave until the child reaches a given age up to eight years, to be determined by each Member State. At least one of the four months is to be provided on a non-transferable basis. The Directive also gives parents returning from parental leave the right to request, for a set period of time, changes to their working hours and/or patterns of work, and employers will have to respond to such requests taking into consideration both their own and their employees’ needs.

Whether or not the new Directive will make any difference to the habits of workers with responsibility for children remains to be seen as take-up of the full existing entitlement to unpaid parental leave is still relatively uncommon.

Contact: Peter Holland, PartnerFor more information about parental leave or any other aspect of employment law contact Peter Holland on 020 8221 8000 or e-mail peter.holland@bowlinglaw.co.uk.

TUPE/Administration: Dismissals

2012-03-26T19:12:03Z

In a case concerning the sale of a business in administration, which amounted to a ‘relevant transfer’ for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the Court of Appeal has ruled that it is not necessary for a specific transferee to have been identified at or before the moment of dismissal for the dismissal to be for a reason connected with the transfer (Spaceright Europe Ltd. v Baillavoine).

Prior to this decision, there had been conflicting authorities on this issue.

In Ibex Trading v Walton, the Employment Appeal Tribunal (EAT) attached significance to the definite article in TUPE Regulation 7(1), whereby an employee will be treated as unfairly dismissed if the ‘sole or principal reason for the dismissal is the transfer itself or a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce’. In this case, whilst it could be said that the employees had been dismissed for a reason connected with a possible transfer of the business, the EAT was not satisfied that they were dismissed by reason of the transfer or for a reason connected with the transfer.

In Harrison Bowden v Bowden, the EAT held that dismissals could be for a reason connected with the transfer, even when no actual prospective transferee had been identified at the time of the dismissal. This approach was also followed in Morris v John Grose.

The Court of Appeal ruled that the approach in Harrison Bowden was to be preferred as being more consistent with the broad purpose of the EC Directive which TUPE implements, which is to protect the employment rights of employees in the event of the transfer of an undertaking, and with the ordinary meaning and effect of the language of Regulation 7(1).

Contact: Dinesh Raja, Managing PartnerFor more information about restructing or selling your business, contact Dinesh Raja on 020 8221 8000 or e-mail dinesh.raja@bowlinglaw.co.uk.