What lies ahead in 2023?

It has been a busy year in the world of property litigation, despite – or perhaps because of– the economic and other woes affecting the country.  In the usual way, I set out here the results of my discussions in chambers as to what will be happening over the course of 2023. 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, infrastructure disputes, restrictive covenants and telecoms. Landlord and tenant Let me start with landlord and tenant disputes, where the field of battle encompasses rent claims, dilapidations, service charge and use disputes, break clauses, pre-emption rights and enfranchisement. Pandemic rent defences seeking to rely on implied terms were dispatched by the Court of Appeal in 2022, leaving tenants with only one possible avenue for relief under the Commercial Rent (Coronavirus) Act 2022, which allows claims to be settled by arbitration in appropriate circumstances. Most such claims have now been dealt with by awards (see the Falcon Chambers Arbitration website for the details), but a few remain in the pipeline and will be published in due course. In our response to the Law Commission consultation on possible revision of the Arbitration Act 1996, we made the point that the 2022 Act device of requiring awards to be published was one that deserved wider currency. We shall see what the Law Commission does with that suggestion when it delivers its final report in 2023. And on to dilapidations. In 2023, the Technology and Construction Court is to hear a claim in The Office Group Properties Ltd v The Station Hotel (Newcastle) Ltd, concerning the cause and effect and/or responsibility for shared soil stacks as they pass through different demises, with complex issues of consequential losses regarding sub-tenants vacating the allegedly affected premises. The case includes claims in nuisance said to arise from alleged water ingress and noise nuisance during extensive refurbishment works to a hotel occupying several floors above office premises at Langham Place, W1. And so to service charges, where we have three cases for your delectation. In the first, which was due to have been heard by the First-tier Tribunal last year but is now scheduled for March 2023, around 2,500 lessees on two central London estates, St George Wharf and Battersea Reach, are litigating the issue of principle (of general application) whether it is reasonable (for the purposes of section 19 of the Landlord and Tenant Act 1985) for their landlords to employ staff via a managing agent (which attracts VAT) rather than directly (which does not). The lessees say direct employment of staff would save around £250,000 pa on the service charge costs. The landlords say shifting to direct employment would cost more than would be saved and have a negative impact on the quality of services provided. Second, the substantial fight brought by the Valley View GPs and others in five test cases against the NHS – largely decided by Edwin Johnson J in 2022 ([2022] EWHC 1393 (Ch); [2022] PLSCS 95) – will be returning to court at the end of 2023 for the determination of issues relating to the quantification of the service charges arrears. And third, earlier in the year, 89 Holland Park (Management) Ltd returns to court for another round of litigation concerning the landlord’s ability to recover legal costs through sweeper provisions in the service charge machinery: whether the legal costs incurred in the litigation were for the maintenance/safety/amenity/administration of the building when there were serious structural and amenity concerns (the Upper Tribunal said no), and whether Assethold Ltd v Watts [2014] UKUT 537 (LC); [2014] PLSCS 359 can be distinguished (the Upper Tribunal said yes). Another perennial favourite for landlord and tenant litigation concerns use covenants, and we have an example coming up in the shape of AHGR v Kane. This is a second appeal, against Meade J’s decision that the term “live/work” in a planning permission and a user covenant in a residential lease meant “live and/or work” not “live and work”. The appeal will be heard by the Court of Appeal in a window from 13-15 March. A review of landlord and tenant cases in the pipeline would not be complete without at least one break clause case, and I am therefore delighted to bring to your attention Maidenhead Cloud Gate Ltd v Dialogic (UK) Ltd, which is due to be heard at Central London County Court in May 2023. In this case, commercial premises were held under a lease containing a mutual break clause. The tenant’s notice could only be exercised if it had complied with certain conditions, which included payment of all rent due and further payment of the sum of £10,500 at least 14 days prior to the notice date. The tenant purported to exercise the break notice but did not pay the sum of £10,500, and was also in rent arrears. The landlord has brought proceedings for a declaration that the lease was not determined, and so the rent continues to fall due. The tenant seeks to argue that the landlord is estopped from relying on the break notice conditions and/or has waived the same.  And so to pre-emption rights. In Prescott Place Freeholders Ltd v Batin, the High Court is due to consider in January a claim under the Landlord and Tenant Act 1987 concerning the capacity in which the nominee purchaser holds the freehold. Enfranchisement continues to provide challenges, with the latest being the judicial review of the Ministry of Defence’s decision to serve notices of claim in relation to two sites acquired from the MoD by Annington Homes Ltd, in order to rescue itself from what it regards as the onerous financial impact of its sale-and-leaseback deal.  Telecommunications Telecoms law continues to develop, although the overall sense is that the “big” questions have been largely resolved. One exception is the upcoming appeal in Vodafone Ltd v Gencomp (No 7) Ltd [2022] UKUT 613 (LC); [2022] PLSCS 141, the appeal in which has been expedited by the Court of Appeal. The case considers the impact on Part 5 renewal rights of the subsequent interposition between site provider and operator of an intermediate leasehold interest. The Upper Tribunal has decided that this means Part 5 is in abeyance for the duration of that lease. The Court of Appeal will need to consider whether that is an outcome that is compelled by the Electronic Communications Code.  The next year will also see the coming into force of the Product Security and Telecommunications Infrastructure Act 2022. This contains many detailed and complex provisions dealing with non-responsive landlords and the like. It will also equalise rents between the Landlord and Tenant Act 1954, Part 2, though the transitional provisions have yet to be produced to establish when and how that will apply.  Notably, the Act does not tackle the issue that was expected to be at its heart – the definition of “occupier”, which proved problematic in light of the Court of Appeal decision in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201 and two cases that followed it. The Department for Digital, Culture, Media and Sport appears content to leave that matter resting with the Supreme Court’s decision in the conjoined appeal in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd and conjoined appeals [2022] UKSC 18; [2022] EGLR 28. The wisdom of that decision will doubtless be tested in the Upper Tribunal in 2023. Real property So much for landlord and tenant. There is also much to look forward to in the law of real property, with rights of light perhaps finally receiving a proper examination in Adjoin Ltd v FortyTwo House Sarl, in which the arguments are essentially identical to those that would have been considered in Sirosa Properties Establishment v The Prudential Assurance Company Ltd (the relevance of artificial lighting, Waldram method versus radiance, etc).  Restrictive covenant practitioners will be gratified to note that the long-running saga in Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45; [2021] EGLR 1 has not yet run its course, with one of the original objectors, Barty Smith, continuing to object to the development. The case has been heard, with judgment expected in the new year. Agriculture continues to be a fertile field for property litigation, with two farming family proprietary estoppel cases in the pipeline for next year: one in the High Court in the summer, which will involve the usual issues of assurance, reliance, detriment and the satisfaction of the equity if there is one; and the other (Greenwood v Greenwood) raising a novel issue about the effect of a double promise, and whether the son (as promise) can still sue in respect of promises made by his father (who is not a party to the litigation). And finally, a range of cases to do with insolvency and securities in a property context, including: Ahuja v Alternative Bridging (UK 1) Ltd, raising in the High Court many of the complex issues concerning enforcement of mortgages which are more usually heard in the county court; Alma Property v Compton, in which the Court of Appeal will consider two points concerning the scope of LPA receivers’ powers and indemnities; and another to be heard in Leeds in March, concerning provisions in a CVA allowing a compromised landlord to terminate the lease. And last, but very much not least, the recurring Manchester Ship Canal Co Ltd v United Utilities Water Ltd [2022] EWCA Civ 852; [2022] EGLR 33, which will be heard by a seven-judge panel of the Supreme Court sitting in Manchester in March, where the issue is whether watercourse owners have rights to sue in court for discharge from sewers or are required to use statutory mechanisms for redress.  These are the cases in which I and members of my chambers are principally involved. There are many others. 2023 will be another interesting year. Guy Fetherstonhaugh QC is a barrister at Falcon Chambers Images © Ekaterina Bolovtsova/Pexels; Dimitris Legakis/Shutterstock