Reconsidering your options

A recent decision of the Outer House of the Court of Session has reinforced the need for both landowners and developers to have regard to contractual constraints when negotiating planning gain and, where appropriate, to revisit the terms of concluded contracts to ensure that their value is retained. It has potential ramifications for the way in which option contracts are worded, to make sure that landowners cannot frustrate the process when it comes to signing a Section 75 Agreement.

Conditional agreements for the purchase of land

Most conditional deals or option agreements anticipate that the developer will be responsible for pursuing a planning application. It is normally assumed that the contract will not become unconditional, or that the developer will not wish to exercise the option, until an acceptable planning consent has been secured. In most instances, for any form of larger scale development, obtaining a planning consent is likely to be dependent on entering into a Section 75 Agreement with the Local Authority to deal with issues such as planning gain contributions, affordable housing, and so on. It is therefore normal practice for a developer's contract with the landowner to oblige the landowner to sign any necessary Section 75 Agreement, which will facilitate the release of a planning permission.

There has always been the theoretical danger for the landowner that, having signed the Section 75 Agreement, for other reasons the contract does not become unconditional or the developer fails to exercise the option, meaning the landowner is left with potential liabilities under the Section 75 Agreement. In practice this risk can often be minimised by ensuring that the Section 75 Agreement does not trigger any onerous obligations until it is implemented. However, that may not always be possible, particularly where the land is going to be developed in phases.

Cala Management v The Firm of A & E Sorrie

The decision in the case of Cala Management v The Firm of A & E Sorrie examined whether, in the context of an option agreement and purchase missives concluded between the parties, the landowner was obliged to enter into a Section 75 Agreement as a pre-requisite to planning permission for development of the site being granted. While the judgement does not disclose the detailed particulars of the contractual arrangements between Cala and the Sorries (the landowner), it is clear that Cala entered into two separate option agreements and purchase missives with the Sorries in relation to three separate areas of land. The three areas together formed the extent of Cala's outline planning application to Aberdeenshire Council for a mixed use development. The option agreement and purchase missives imposed an obligation on the Sorries to sign any planning or other Agreement required as a pre-requisite to planning permission or other statutory consent being obtained, at the reasonable request of Cala.

In terms of the commercial deal Cala was to pursue the planning application at its sole cost. The option to buy the land could then be exercised in up to four tranches. The purchase price was to be calculated at 87.5% of open market value. These broad heads of terms are not of themselves unusual.

Cala progressed the application and agreed with Aberdeenshire Council the terms of a Section 75 Agreement, which the Sorries had to sign as landowner as a pre-requisite to planning permission being granted. However, the Sorries declined to sign the Section 75 Agreement, with the result that this action was raised, to determine whether, on a proper construction of the bargain between the parties, the Sorries were in fact contractually obliged to enter into the Section 75 Agreement.

The meaning of "reasonable request"

The court found that, in the context of the particular circumstances of the case, the obligation on the landowner to enter into a Section 75 Agreement at the "reasonable request" of the prospective purchaser, created a requirement for the terms of the Section 75 Agreement itself to be reasonable, rather than simply meaning that the request must be reasonable.

The practical effect of this interpretation is that, in certain circumstances, a developer may be effectively constrained in negotiating with the planning authority to ensure that the terms of any planning agreement are reasonable. The risk of a planning authority insisting upon unreasonable terms as a pre-requisite to planning permission being granted rests with the applicant. The question of reasonableness is not determined solely on planning principles enshrined in a case law and Circular 12/1996 (the guidance setting out government policy on the use of planning agreements), but rather considers the allocation of liabilities and risks to parties involved in the land transaction. It is relevant in the determination of the Cala case, that the court took into account that a deduction would be made from the purchase price to reflect the extent of planning gain contribution secured through the Section 75 Agreement. The court effectively identified a risk that the landowner could be hit twice for the planning gain, once by a deduction from the price, and secondly by a direct liability to the local authority, as the landowner would probably remain an owner of the parts of the property affected by the Section 75 after obligations to pay became live.

Other factors that affected the developer's position

Some of the factors which worked to Cala's disadvantage were:

• The land could be acquired in tranches – this meant the landowner could still be liable for payment of Section 75 contributions, as they would still retain some of the land affected. 
• The landowner was retaining a ransom strip on the boundary which was within the land affected by the Section 75 – again the court considered this left the landowner potentially liable for significant obligations. 
• The price was a percentage of market value – the court took this as indicating that it was not intended that the landowner would be subject to future liabilities. This was reinforced by the fact that specific provision was made for planning gain deductions from the price – as no specific provision was made for other costs, the court effectively held that the parties meant to exclude that possibility. 
• The missives did not contain an indemnity by Cala for any liability that might arise – while protection against liability might more normally be a provision inserted into the contract by a landowner, the court's reasoning suggests that if the landowner had offered such an indemnity when drafting the contract the court might have come to a different decision.

Review options to reduce risk

While this case was determined on the particular circumstances and specific contractual terms in question, it does reinforce the need for all landowners and developers to have careful regard to the terms of their land deals when negotiating planning gain, to avoid a ransom situation arising. In particular, where the intention is that a landowner should bear no liability for costs associated with planning gain obligations, appropriate indemnification provisions should be considered.

On the facts of this case, if a Section 75 contains obligations that do not become enforceable until after the planning permission is implemented (which means after the developer will have acquired title), and the option is over the whole land affected by the Section 75, then it would appear that it would be "reasonable" to expect the landowners to sign a Section 75. In any other circumstances the situation looks less certain.

The court's reasoning also reinforces the commercial imperative of considering the requirements of the local planning authority when concluding option agreements and missives to purchase.

In light of this decision, landowners and developers alike may wish to review concluded land deals to highlight any risk of consent to planning agreements being withheld, or the value of existing option agreements being jeopardised.

Read the decision in the case of Cala Management Ltd v The Firm of A & E Sorrie.

28 August 2009

Are Energy Performance Certificates required in business asset sales?

The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (SI2007/991) introduced a new regime implementing the Energy Performance of Buildings Directive in England and Wales. Similar, but separate regulations apply in Scotland. This article is concerned with the application of the England and Wales Regulations, and the views expressed relate specifically to that jurisdiction.

Whenever a building is sold or rented out, a prospective seller/landlord must make an energy performance certificate available free of charge to any prospective buyer/tenant in relation to its building. The Regulations are supported by Guidance produced by the Department for Communities and Local Government. From 4 January 2009 the obligation to provide an EPC has applied to virtually all commercial property with only limited exceptions.

An EPC rates the energy performance of the building and is accompanied by a report recommending any actions that could be taken to improve the rating. EPCs are valid for up to 10 years or until a newer EPC is produced.

Lack of clarity

Since they were introduced, the Regulations have been amended no less than four times. This has led to confusion as to what has actually been required of property owners. Insufficient time has passed to allow market practice on their application to commercial transactions to be established and a lack of clarity in the drafting of the Regulations means that a level of uncertainty remains. (The same can be said of the Scottish Regulations). Unhelpfully, the extensive Guidance is itself not clearly drafted and many questions remain at large. A number of these issues are relevant to business asset sales (whether or not including a portfolio of properties and whether or not conducted by an insolvency practitioner).

When does the duty arise?

If the Regulations apply to the particular transaction, the EPC must be provided to the buyer/tenant at the earliest opportunity and certainly no later than the earliest of the following times:

• In the case of a person who requests information about the building, the time at which the relevant person first makes available any information in writing about the building to the person.
• In the case of a person who makes a request to view a building, the time at which the person views the building. 
• Before entering into a contract for the sale/assignment/lease or if there is no contract before the transfer/assignment/lease itself.

Is there an obligation to provide EPCs in business asset sales?

The duty to provide an EPC is imposed on the "relevant person". In the context of these sales the "relevant person" must be a "seller" or a "landlord" (other persons comprised in that definition being irrelevant for these purposes). According to the Guidance, a seller includes an assignor of a lease, although there is no mention of assignors in the Regulations.

Often the assignment of leasehold interests to the purchaser of a business will be for no monetary consideration with no value being attributed to the leasehold properties in the business sale agreement.

The question which arises in the context of business sales is whether there is a duty to provide an EPC for the transferring property or properties. The obligation to provide an EPC may impact on the timing of the transaction and cause delays, and is clearly an important consideration in anticipation of completion of any business sale.

Requirement to provide an EPC on "sale" or "rent"

There is no definition of "sold or rented out" in the Regulations. Neither are the terms "sale" or "seller" defined in the Regulations or in the European Directive. In the absence of any statutory definition, the terms have, however, previously been the subject of a number of judicial decisions.

The case-law is very clear: a sale means an exchange of property for money. It does not include an exchange of property for other valuable consideration, such as the assumption of lease covenants. Money is not the same as money's worth and therefore an agreement to transfer leasehold land in return for the buyer agreeing to be bound by the leasehold covenants has been held not to be a "sale" (Robshaw Brothers Limited v Mayer 1957 [Ch] 125).

This decision remains good law and has been followed in a series of cases, culminating in the House of Lords decision in Inland Revenue Commissioners v Littlewoods Mail Order Stores Ltd 1963 [AC] 135. In this case, the court confirmed that to constitute a sale there must be a transfer of property for a price in money. The court was not prepared to extend the meaning of the word "sale" so as to include a transaction in which any consideration is given that is capable of valuation. Accordingly, where the consideration being provided is the assumption by an assignee of the tenant covenants of the lease, there is no "sale" and there is no "relevant person" on whom a duty to provide an EPC can be imposed. The Regulations simply do not apply.

The Guidance tentatively suggests that some "not for value transactions" fall outside the Regulations. Further support for the contention that a monetary payment is required before there can be a "sale" can be found in the Regulations themselves: the statutory duty does not arise if the relevant person believes, on reasonable grounds, that the prospective buyer is "unlikely to have sufficient means to buy … the building."

Enforcement and penalties

Local authorities (through trading standards officers) are responsible for enforcing the statutory duty. They can act on their own initiative or upon any complaint by a third party. If the seller fails to provide a copy of an EPC within 7 days of a request by a trading standards officer then the seller will be liable to a penalty charge.

In most cases this would be calculated as being 12.5% of the rateable value of the building, subject to a minimum of £500 and a maximum of £5,000. Failure to comply with the Regulations is a civil offence and does not attract criminal liability.

Within the period identified in the notice the relevant person may request the enforcement authority to review whether it was appropriate to issue the notice in the first place and if the outcome of the review is not satisfactory the relevant person may appeal to the county court within a period of 28 days from the date the outcome of the review is communicated to him. One of the grounds for appeal is that the recipient of the penalty charge notice did not commit the breach of duty specified in it.

Cost of an EPC

The cost of the EPC is borne by the seller and in the context of a business sale affecting a portfolio of properties the obligation to provide an EPC for each property could amount to a substantial sum. The cost will depend on the size, type and location of the property. An accredited Energy Performance Assessor is required to inspect the property and, ideally, building plans should be provided in advance of a site visit.

The Final Regulatory Impact Assessment in respect of the Regulations indicates that, in the Government's view, typical costs would range from £260 for a small retail unit through to £480 for a small commercial building, to £1,790 for a large commercial building. Anecdotal evidence would suggest that these figures are somewhat on the low side.

The obligation is on the seller to provide the EPC "free of charge". Therefore given this explicit wording, it is perhaps unlikely that a prospective buyer would accept an obligation to pay for an EPC. It is therefore clearly in the seller's interests to be aware of the ambiguities in the Regulations and to take the position that the duty to provide an EPC does not arise.

The buyer's perspective

Although no sanctions fall directly on a buyer or tenant who is entitled to, but does not, receive an EPC, one will be needed on any subsequent sale, lease assignment or underletting of the whole or part of the building. Any prospective buyer or tenant therefore has a vested interest in ensuring that one is obtained and handed over as part of the transaction. A seller may therefore be faced with a difficult buyer, insisting that EPCs should be provided. In such cases it may come down to a matter of negotiation. However, it is our view that there is simply no statutory obligation to provide an EPC if the properties are transferring for no monetary consideration.

Licences to occupy

Often in the sale of the business and assets of a company the proposed buyer requires a right to occupy the trading premises on a short term basis so as to be able immediately to take over the business and continue to trade. Typically this is achieved by a tenancy at will or licence to occupy, while the buyer negotiates with the landlord for an assignment of the company’s lease of the premises. The grant of a short-term contractual licence is considered unlikely to constitute the seller company as a "landlord". In our view, the obligation to provide an EPC is not triggered by the mere grant of a contractual licence to occupy.

If, however, under the terms of the sale agreement the company’s interest in the premises is being sold to the buyer for monetary consideration an EPC will need to be provided as part of the assignment process.

Conclusion

There is no consensus of opinion about whether an assignment of a lease for no monetary consideration (but in which the assignee merely gives a covenant to observe and perform the tenant covenants of the lease) triggers the duty under the Regulations to provide an EPC. The Guidance does shed some light on how the regime is intended to operate in practice. Despite this and continued dialogue with industry stakeholders, confusion and uncertainty remain.

The circumstances in which a statutory duty arises should be clear and certain. In the absence of clear legislative guidance, case-law has to be relied upon. Until Parliament or the Courts clarify the meaning of the words "sale" and "seller" in the context of the Regulations our view is there is no duty to provide an EPC where a property is transferring for no monetary consideration.

Leaving aside the difficulties with the construction of the Regulations, sellers should bear in mind that where the Regulations do apply, the obligation to provide an EPC arises very early in the course of the transaction. Failure to provide an EPC to the proposed buyer, tenant or assignee may result in a fine of up to £5,000. It is recommended that specialist advice be obtained as soon as possible in relation to the application of the Regulations to any proposed sale, letting or assignment of any commercial premises that might be affected.

28 August 2009

Building a sustainable future

Recent climate change legislation imposes challenging targets for the reduction of greenhouse gas emissions, and it is fast becoming clear that the UK will find it impossible to meet its declared environmental targets without reducing the carbon emissions from buildings and those generated during construction. The Joint Contracts Tribunal (JCT) which produces standard form documents for the construction industry has recognised this and, following preliminary consultations with senior industry figures, it initiated an industry-wide consultation in 2008 to consider whether construction contracts should incorporate obligations in relation to sustainability.

Guidance on sustainability

Following the consultation, the JCT published a guidance note "Building a sustainable future together" early in 2009. The guidance note concluded that there is scope for the introduction of sustainability provisions in contract documents on a limited scale and highlighted, amongst other points, how crucial the client's commitment is to the process and the need to involve the supply chain early on to achieve sustainability in relation to the design process as well as in construction practices.

Sustainability clauses in construction contracts

Revision 2 of the JCT 2005 suite of Contracts includes new sustainability provisions. In the Design and Build Contract, these are to be found in the Schedule of Supplemental Provisions, the terms of which will apply unless the contract specifically excludes them. The principal clauses provide for the contractor to be encouraged to suggest economically viable amendments to the works, to improve environmental performance either in relation to the construction process or of the completed development. In addition, there should be disclosure of information by the contractor regarding the environmental impact of the supply and use of materials and goods which it selects.

The objective of the new sustainability clauses produced by the JCT along with guidance is not to inflict an inflexible regime upon parties, but to provide a framework within which sustainability issues can be addressed in the contract. Whilst the inclusion of sustainability wording can be viewed as a positive step towards addressing "green" issues, it is difficult to see how these provisions will be effective or indeed, enforceable. In particular, use of vague language such as "the Contractor is encouraged to suggest" does not impose a contractual obligation which would be easy to enforce and is likely to be open to subjective interpretation. There are no clear remedies for lack of compliance.

How effective will these new provisions be?

The combination of the positioning of the wording in a schedule to, rather than in the body of the contract, the language used and the absence of clear remedies in the event of default suggest that the provisions will be relatively easy for contractors to ignore. That said, the JCT acknowledges that in addition to the contract conditions, the contract documentation may address the issue of sustainability. The response to the consultation highlighted a preference from the industry for inclusion of detailed requirements in the project specification rather than the contract. In recent years, various employers have been importing sustainability provisions into their contracts by imposing an obligation on the contractor to comply with the employer's corporate policies. These policies often include extensive sustainability provisions. Notwithstanding the introduction of the new clauses in the JCT contracts, it is likely that the contract documentation will continue to play the key role in incorporating sustainability provisions.

Employers and developers who wish to include obligations in relation to sustainability in their contracts will need to ensure that there are clear contractual provisions and obligations in the contract documentation, as the JCT wording alone will not be sufficient. From a contractor's perspective, consideration must be given to potential discrepancies that can arise with the incorporation of the employer's corporate policies – the sustainability provisions should be reviewed to ensure that they do not contradict the other contract documents.

A good start

Despite reservations regarding the effectiveness of the provisions, the JCT should be applauded for recognising the requirement for sustainability wording and for launching the consultation and implementing the findings. Revision 2 could be the first step in a larger move towards more concrete sustainability obligations.

Click here to access the guidance note "Building a sustainable future together".

28 August 2009

Planning Reform - the new regime provisions now in force

The Planning etc (Scotland) Act 2006 introduced some of the biggest changes to the Scottish planning system for over a decade. It may have felt to anyone involved with planning that the changes would never actually arrive. However, on 3 August the implementing regulations came into force making wholesale changes to the way that the planning system operates. A few of the more significant changes are highlighted here.

Planning Hierarchy 

• All developments now fall into one of three categories, either national, major or local. National developments are those listed within the National Planning Framework 2 and will be comparatively rare. Developments include a range of different types, including residential developments in excess of 50 units.
• Anything which is neither national nor major is local. 
• The category of development determines how an application is processed and significantly, the type of appeal which will be available.

Development Management Regulations

Pre-Application Consultation

• Pre-application consultation is now a requirement for all national and major developments. No application for such development can be lodged until at least 12 weeks have elapsed from the submission of a pre-application notice.
• Pre-application consultation includes consultation with the local community and this must involve at least one public event which must be advertised in advance. 
• Although many large developers already engage in pre-application consultation as a matter of good practice, it has now been put on a statutory footing and the likelihood is that planning authorities will, in the first instance at least, seek to achieve the best possible pre-application consultation currently undertaken as a model to be rolled out.

Neighbour Notification 

• Neighbour notification is no longer the responsibility of an applicant. Responsibility has passed to the planning authority.
• Those in receipt of notification now have 21 days in which to lodge representations. 
• In order to minimise the judicial review risk from an error or omission in notification, anecdotal evidence suggests that some developers are preparing notification documentation and passing it to the planning authority to deliver.

Processing Agreements

• Processing Agreements are now available for national and major development. These are voluntary rather than mandatory and are intended as a project management tool. They will cover matters such as the nature of reports to be received, consultations to be put in hand and the date of determination. 
• There can be no appeal against the non determination of an application within the timescale agreed for determination. 
• In order to keep the right to appeal against non determination alive after the expiry of the period in the processing agreement, a written agreement should be entered into with the Planning Authority and must be within 6 months of the expiry of the 2 or 4 month period for determination. Should no written agreement be entered into within this timescale, the right to make such an appeal will fall away.

Determination Periods

• Local developments will remain at 2 months while major and national developments will now be 4 months to more accurately reflect the timescale for determination.

Schemes of Delegation

• Each planning authority now has an approved scheme of delegation. This dictates which applications can be dealt with under delegated powers without reference to a planning committee. Each scheme is different but, in general, each will set out the circumstances in which delegated applications have to be referred to the committee. This is generally linked to level of representations received.
• Anecdotal evidence suggests that applicants may seek to encourage representations in order to trigger a committee decision and a right of appeal to the Scottish Ministers.

Types of Application 

• Outline planning permission has been replaced by planning permission in principle. 
• Reserved matters have now been swept away, instead there are matters to be approved. Each of the matters to be approved requires to be the subject of an application to the planning authority and must be accompanied by a planning fee.

Timescale for Commencement

• The decision notice on all permissions will now include a period for a commencement of development of 3 years. In the case of detailed permission this is 2 years less than previously. 
• There remains an opportunity for planning authorities to extend or reduce the period as appropriate. In the case of windfarm development for example it may be that the lack of availability of a connection on to the grid will provide grounds for an extended period of 5 years as was previously the case.

Appeals

• The period for lodging an appeal for developments has been reduced from 6 to 3 months for all applications determined after 3 August. 
• Local developments which have been refused under scheme of delegation will carry a right of appeal to a local review body only. The local review body will comprise 3 or more members of the Local Authority albeit these members will not have had sight of the application previously. 
• Major and national developments will continue to carry a right of appeal to the Scottish Ministers. 
• In terms of local reviews and planning appeals, there is an emphasis on front loading of the system and all information and supporting documents should be lodged with a Notice of Appeal. Only in exceptional circumstances will additional information be considered. 
• The right to be heard, which was a fundamental characteristic of the previous system, has now been removed. Now, an appellant or planning authority may suggest a particular form of disposal but the Reporter will have the final say. 
• It is prudent to consider a legal audit before submission of an appeal, to ensure that a full and robust submission has been made.
• Precognitions at appeal inquiries are to be restricted to 2,000 words, therefore, there is likely to be a greater emphasis on supporting documentation in order to meet this threshold.

28 August 2009

Underground trespass - the impact for landowners and energy companies

Energy and utility companies will be interested in the outcome of the recent Court of Appeal decision in the case of Bocardo SA v Star Energy UK Onshore Limited [2009] EWCA Civ 579. The case considers the law of trespass as it applies to ground lying beneath the surface of an owner's land and while in this case the trespass related to oil pipelines, the principles will be of relevance to other instances of substrata trespass. This decision could have significant impact for energy and utilities companies, as well as landowners.

Drilling of pipelines constituted trespass

It is well established that a landowner owns the substrata beneath his property, in theory down to the centre of the earth. Star had acquired a licence from the Crown to extract oil from an oilfield which in fact lay underneath land owned by Bocardo. Star constructed a well head on adjacent land and drilled three pipelines from the well head, at an angle running through the substrata of Bocardo's land, at a depth of between 800 and 2,800 feet, to the oilfield. These were to be used for the extraction of the oil from the oilfield.

It was clear that the pipes did not interfere in any way with Bocardo's use and enjoyment of its land at surface level. Bocardo argued that the construction of these pipes amounted to trespass, as no agreement was obtained to the laying of the pipes, and Star had not applied for any ancillary rights under the Petroleum (Production) Act 1934 to do so. Originally, the High Court upheld this view. Damages were assessed on the basis of the figure that the parties would have agreed, had they negotiated a payment for the use of the rights. This figure was valued at 9% of the income received from the extraction of the oil, from the time the trespass first occurred until the oilfield was exhausted, which at the time of the case amounted to over £600,000.

Technical trespass which reduced the measure of damages

Clearly, the decision at first instance posed a potentially serious problem for utilities companies who may have found themselves exposed to liabilities in respect of infrastructure previously constructed without the necessary rights from landowners having been obtained and may therefore have been dissuaded from pursuing new infrastructure projects in the future.

Star appealed to the Court of Appeal which agreed that a trespass had been committed. Whilst Star undoubtedly owned the right to extract the oil, it had neither a common law nor a statutory right to run the pipelines through the land and it had not reached agreement with Bocardo to do so.

However, the Court of Appeal described the trespass as "purely technical" as it did not interfere with Bocardo's use or enjoyment of the land in any way. As Bocardo did not even own the oil beneath the land (which belonged to the Crown and Star as its licensee), it had not lost any rights through the construction and use of the pipelines.

In deciding how much compensation to award, the Court looked at two factors: first, the amount of money to which Bocardo would have been entitled, under the statutory compensation framework, had Star sought to acquire the right to lay the pipes by invoking some statutory regime. This was valued at £82.50. Secondly, the Court considered what would have happened in the event of a negotiation between the parties. In contrast to the High Court decision, this assessment was made against the background of the statutory compensation regime. It was considered that Star would have been inclined to be generous to avoid incurring great legal expense in protracted negotiations and on this basis, the sum awarded was £1,000. One of the crucial factors in determining the case was that there was no 'special' value to the land as a result of the ability to extract the oil from it, as Bocardo did not own the oilfield itself.

The Court distinguished cases where the owner of the land granted the license to extract oil beneath the land, but failed to grant ancillary access rights at the time of granting the license to extract. It was held that in such situations, the landowner would be stopped from preventing access. However, in this case, Bocardo had not been involved in the licensing of the oilfield.

What are the consequences for energy and utility companies, and landowners?

If this decision is followed, where a "technical" trespass of the substrata has occurred which has not affected the owner's use of the property or indeed its value, any damages awarded will be nominal.

That said, the fact that the Court of Appeal has upheld a claim for trespass in these circumstances does mean that energy companies must seek to acquire the necessary rights from landowners either by agreement or by invoking some statutory regime to acquire them compulsorily. At the development stage of projects, energy companies ought now to be able to assess more accurately the cost of obtaining the required rights. It is undoubtedly helpful to know that costly legal challenges to a fair offer are unlikely to succeed. Whilst the initial decision by the High Court could potentially have opened the floodgates to backdated high-value trespass claims, the Court of Appeal decision has effectively closed off this avenue. The likelihood of such claims now being brought where there has been a technical trespass that has little effect on the landowner's right to the use and enjoyment of his land should therefore be much reduced.

Click here to read the judgement in Bocardo SA v Star Energy UK Onshore Limited.

28 August 2009