Guy’s crystal ball: What lies ahead in 2022?

From our vantage point in Fleet Street, you could be forgiven for thinking that the world of property was moribund. Not so, according to the amount of property litigation that reaches our desks in Chambers. In the usual way, I set out the results of my discussions in Chambers as to what will be happening over the course of 2022. As always, that seems to me to be a pretty good basis for a survey of the property litigation market. The results range across the whole real estate field – from defences to rent claims, to infrastructure disputes, to restrictive covenants, through to telecoms. Landlord and tenant Let me start with landlord and tenant disputes, where the field of battle encompasses rent claims, enfranchisement, service charge disputes and forfeiture. A number of rent claims were heard in 2021, and in each of them the landlords prevailed, despite defences including frustration, various implied terms and (in those cases where landlords have been able to obtain insurance) the availability of insurance against loss of rent. The tenants in two of the cases (Bank of New York Mellon (International) Ltd v Cine-UK Ltd and other appeals [2021] EWHC 1013 (QB); [2021] EGLR 26 and London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and others [2021] EWHC 2591 (Ch); [2021] EGLR 43) have appealed to the Court of Appeal, and their cases are due to be heard together in February. In the same month, the Court of Appeal will also hear the appeal in Alberti v Cadogan Holdings Ltd [2021] UKUT 85 (LC); [2021] PLSCS 72, about the disregard of value added by improvements under section 9(1A)(d) of the Leasehold Reform Act 1967. The issue is this: does the statute require a valuation of the property on the assumption that the improvements were not made, as the deputy president of the Upper Tribunal held? Or does it only require one to strip out any effect on value attributable to the estimated cost of carrying out the works on the valuation date, as Cadogan argues? It makes a huge difference, because the works in question converted the property from five flats to a single house. At the time, planning permission was not needed to do that, but by the valuation date it was needed and would not have been given. We have a brace of service charge cases. First, in February in Pollock v St Joseph’s Gate Management Company, the First-tier Tribunal will be asked (among other things) to exercise its discretion to apply a clause in a lease allowing the management company to change the tenants’ proportions on the footing that it would be equitable to do so. And, if that is not exciting enough, the FTT will in the autumn decide the issue of whether the landlord of circa 2,500 residential tenants of two mixed-use developments – St George Wharf (pictured below) and Battersea Reach – is entitled to recover as part of the service charge VAT payable on the wages of staff employed in the management of the estate. The staff are currently employed indirectly by a managing agent. If the staff were employed directly by the landlord, then there would be no VAT, because of a relevant exemption. The lessees say it is unreasonable for the landlord to employ staff indirectly when, by direct employment, there could be a 20% reduction in costs. The case is of wider significance, because the practice of delegating employment of staff to managing agents appears to be fairly commonplace, particularly for large, mixed-use developments. If the application succeeds, many landlords will be compelled either to directly employ site staff or, alternatively, bear the VAT accruing due to indirect employment arrangements themselves rather then passing this on via the service charge. As far as forfeiture is concerned, in June the High Court will hear a claim where the landlord relies on two acts of insolvency, as defined by the lease. The claim is defended on grounds that one of the supposed acts of insolvency (proposing a formal insolvency arrangement) did not meet the definition in the lease; that although the other act of insolvency (inability to pay debts as they fell due) did occur, that was remedied when the arrangement was approved; that the right to forfeit was waived by demands for rent made when the landlord knew about the acts relied on; and that if all else fails, relief from forfeiture should be granted. Other property cases in which we are involved include Milestar v Gandesha, with judgment expected early in the year from the Central London County Court on the extent to which a tenant’s right of equitable set off is relevant to whether ground (b) in section 30(1) of the Landlord and Tenant Act 1954 is made out, and whether cross-claims arising because of other contractual arrangements between the landlord and the tenant, but outside the four corners of the lease, can rank as a set-off. And in the same court there is also Park Lane Holdings Inc v Saidco, in which the appellants are seeking an order for costs against the person who made the award following a successful appeal against a party wall award. Telecoms Last year, I spent some time dealing with the numbers of telecoms cases that were set to engage the attentions of the Court of Appeal. In February 2022, they all move up a rung to the Supreme Court, where the conjoined appeals in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201, Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd and another [2021] EWCA Civ 90; [2021] EGLR 14 and Arqiva Services Ltd v AP Wireless II (UK) Ltd [2020] UKUT 195 (LC); [2020] PLSCS 127 will be heard, dealing with the question of who may confer, or be required to confer, Code rights under the Electronic Communications Code. In the first, Compton Beauchamp, the Court of Appeal upheld the UT’s ruling that it lacked jurisdiction to impose an agreement on a landowner under Part 4 of the Code where the landowner was not in occupation of the relevant site. In the second, Ashloch, the Court of Appeal ruled that, where a telecommunications operator with a protected tenancy under Part II of the 1954 Act asked the UT to impose an agreement under the Code, the transitional provisions in the Digital Economy Act 2017 Schedule 2 precluded the operator from renewing the lease under Part 5 of the Code; although, it could renew under Part II of the 1954 Act. And in the third, Arqiva, the UT held that it did not have jurisdiction to impose an agreement under Schedule 3A to the Communications Act 2003 (the Electronic Communications Code) paragraph 20, where there was no subsisting agreement between the parties when the Code came into force. As with last year, quite apart from all this appellate activity, the UT is also set to hear a number of other Code disputes this coming year. Real estate And now to that other mainstay of the property world: real estate disputes. January will see the High Court adjudicating in a six-day case, Davies-Gilbert v Goacher. The issue concerns an allegation that consent has been unreasonably withheld to an application to carry out works to a heritage estate. At the tail end of 2021, the Supreme Court finally came to hear the claim that overlooking from the Tate Modern viewing gallery constituted a breach in the rights of neighbouring flat owners not to be overlooked, amounting to a nuisance: Fearn and others v Board of Trustees of Tate Gallery [2020] EWCA Civ 104; [2020] EGLR 14. Judgment is expected in early 2022, and will prompt either a tidal wave of claims from sunbathers overlooked by the neighbour’s roof terrace, or barely a ripple in the development of our law of tort. Finally, in another long-running saga, the Court of Appeal will at the end of March hear the appeal from the judgment of Fancourt J in Manchester Ship Canal Co Ltd v United Utilities Water Ltd [2021] EWHC 1571 (Ch); [2021] PLSCS 109. The issue is the extent to which there is a private law action for pollution to watercourses, or whether it is all dealt with under the statutory regime. These are the cases in which I and members of my Chambers are principally involved. There are many others. 2022 will be another interesting year. Guy Fetherstonhaugh QC is a barrister at Falcon Chambers Images © Shutterstock