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Christmas 2001
In this issue On the
move We have been in Orchard Street since the First World War so a move is not exactly over-hasty! We have been looking for new premises for some considerable time but wanted to make sure that in relocating we found offices that are suitable for our use and enable us both to enhance the service that we currently provide and give us a platform for growth and development in the future. Work is already under way to equip the premises and we anticipate a move in early February of next year. Our new offices will provide us with precisely what we want to provide a professional and efficient service in a modern setting. They will give us a substantial foundation from which to develop and expand our services and, most importantly of all, provide the specialist services which our clients require. It has been a very busy year for us and for our clients. If you can, do have a good break over Christmas and a very good holiday. I look forward to seeing and welcoming as many of you as
possible to our new offices. In the meantime best seasonal wishes from all of
us here to all of you and your families. Surveyors
liable for noise? In Farley v Skinner the House of Lords recently considered the case of a house buyer who planned to purchase a property 15 miles from Gatwick airport. The buyer employed a surveyor to advise on whether the property was adversely affected by noise from aircraft. The surveyor negligently failed to discover that the property was close to a navigation beacon over which aircraft would circle when the airport was busy. The judge at first instance awarded the purchaser £10,000 for the stress and inconvenience of living in property adversely affected by aircraft noise. The Court of Appeal set the award aside but the House of Lords said that the claim in this case was for breach of a specific undertaking important for the buyer's peace of mind. The Lords said the scope of recovery should not depend on cases where the very object of the contract was to ensure peace of mind. It was sufficient for an important part of the contract to provide reassurance. The award of the judge at first instance was reinstated. The case has important implications in many negligence cases - especially surveyors. Expect the cost of reports to increase and for them to be much more carefully worded than previously! Adam Chivers ajc@meadeking.co.uk Tax man wins
on reverse premiums This question has been rumbling through the Courts since the early 1990s and at last we have an answer. The European Court of Justice (ECJ) has decided that VAT must be charged on a reverse premium payable to a buyer of an existing lease. Moreover it also appears that a tenant who is receiving a reverse premium from a landlord in return for taking a new lease must also be charged VAT though this point is less clear. The ECJ gave its decision in two parallel cases simultaneously. The first arose from Mirror Group Plc relocating in 1993 to Canary Wharf. It took a new lease and an option to acquire a further lease of extra space in return for inducement payments totalling £12 million. The second case also arose in 1993. Here, Cantor Fitzgerald received a payment of £1.5 million in return for buying an existing lease. The ECJ reached its decision in both cases by interpreting strictly the exemption of certain land transactions from VAT contained in Article 13 of the EC Sixth Directive. The victory for Customs in the Mirror Group and Cantor Fitzgerald cases means that anyone who has recently received or paid a reverse premium should now seek advice on their position. The cases may also have an effect on rent free periods or concessionary rent periods which are commonly given by landlords to tenants at the start of a new lease. Hitherto Customs have only treated these inducements as chargeable to VAT if they are linked to specific tenant's obligations, for example to carry out works to improve the property. The twin victories for Customs may encourage them to adopt a harder line but judging by the Cantor Fitzgerald and Mirror Group cases a quick change seems unlikely! Edward Langford eal@meadeking.co.uk Holiday
Pay Richard Holmes rwfh@meadeking.co.uk New Employment
Bill
These changes are planned to take effect from 2003. The bill is intended to enforce the use of grievance and disciplinary procedures by fixing statutory minimum procedures and giving employment tribunals a power to vary awards of compensation by up to 50% either way if either employee or employer has ignored such procedures. The plan is also that employees will be prevented from making claims to a tribunal until they have first exhausted the employer's grievance and appeal procedures. The bill gives additional power to make regulations to protect employees on fixed term contracts and generally to ensure that such employees are given equal treatment with permanent employees. Full details including any commencement date will not be known until the bill has completed its passage through Parliament. Richard Holmes rwfh@meadeking.co.uk Age
discrimination Richard Holmes rwfh@meadeking.co.uk Wives,
Husbands and Banks For a number of years the Court of Appeal heard undue influence claims every four months on average. Lots of scope for wives and plenty of work for the lawyers! In the recent decision of Royal Bank of Scotland v Etridge the House of Lords has now set out guidelines in determining these cases. It considered six appeals at the same time and heard six silks backed by 13 junior barristers. This area of law has now been much more clearly defined and the number of claims by wives can be expected to reduce significantly. The Lords were sympathetic to the banks. The House of Lords has now held that the bank is put on enquiry in every case where the relationship between the surety (normally the wife) and the debtor (normally the husband) is non-commercial. Once the bank is on notice it has to alert the wife to the risk of the proposed transaction by communicating directly with her and providing any solicitor advising her with information about the husband's account. The minimum requirements for that advice should be a face-to-face meeting in the absence of the husband and in non-technical language. The points to be covered include:
The bank should not proceed with the transaction until it has received appropriate confirmation from the solicitor. If the appropriate steps are taken it will be difficult to show undue influence because the bank will be able to show that it has taken reasonable steps to avoid it. In conjunction with Nicholas Briggs (of Guildhall Chambers who specialises in banking disputes and acted for Natwest in one of the appeals before the House of Lords) Meade-King has produced a briefing note on the Etridge decision. For a copy please speak to Adam Chivers on 0117 926 4121 or e-mail ajc@meadeking.co.uk Pensions and
Bankruptcy - No change after all The appeal had involved a challenge to the decision in the Court of Appeal that, in respect of bankruptcies based on petitions filed before 29 May 2000, a bankrupt's pension fund vested in his trustee in bankruptcy. From 29 May 2000 the effect of the Welfare Reform and Pensions Act 1999 is that pensions are excluded from the bankrupt's estate. Where pensions do not have statutory protection:
Keith Mahoney kwm@meadeking.co.uk |
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