The Court of Protection considers the differences between Lasting Powers of Attorney covering Property and Financial Affairs and Health and Welfare Matters

 

 

The Court of Protection recently considered the differences between Lasting Powers of Attorney (LPAs) covering Property and Financial Affairs and covering Health and Welfare Matters in the case of Re RM [2016] EWCOP 25).

Background to the case

The Donor set up LPAs covering both Property and Financial Affairs and Health and Welfare Matters.

He appointed both his son and daughter as the attorneys of his Property and Financial Affairs LPA. The appointment was made on a “joint and several” basis meaning that they could make decisions on their father’s behalf either together or independently.

The daughter was appointed as the sole attorney under his Health and Welfare LPA.

After the powers were set up, serious doubts were raised about the daughter’s ability to make health and welfare decisions in the best interest of her father.  At one point she was absent for a period of eight weeks.

An application was made for the partial revocation of the Property and Financial Affairs LPA, so as to remove the daughter as an attorney of this power so that the son would become the sole attorney, and for the complete revocation of Health and Welfare Matters LPA. The Court of Protection (Senior Judge Lush) decided that, although it was not in the donor's best interest for the daughter to continue to act as an attorney under the Property and Financial Affairs LPA, it was nevertheless in the donor's best interest for the daughter to continue to act as attorney under the Health and Welfare Matters LPA.

In coming to this decision, the judge pointed to the differences between LPAs covering Property and Financial Affairs and Health and Welfare Matters. These included:-

1.    A health and welfare attorney has no authority to make decisions in circumstances other than those where the donor lacks, or the attorney reasonably believes that the donor lacks, capacity (section 11(7)(a) MCA 2005). The judge found that the daughter’s commitment to supported decision-making was such that she would know when to intervene and make a decision on her father’s behalf.

 

2.    The vast majority of personal welfare decisions can be taken informally under section 5 of the MCA 2005, whereas decisions relating to property and financial affairs tend to be more formal. The judge found that the daughter’s eight week absence made little or no difference as far as decisions regarding her father's health and welfare were concerned (either because he could have made the decision himself or because others could have made the decision for him, under section 5). However the judge held that the daughter’s absence could have had a detrimental effect on the administration of her father’s estate, if she had been his only attorney for property and financial affairs.

 

If you are looking for advice on Lasting Powers of Attorney or Court of Protection matters, please feel free to contact our dedicated Private Client team on 01702 352511 or via email - lhotten@tolhurstfisher.com

Congratulations!

On behalf of the Partners and everyone at the Firm, we are pleased to announce that Laura Hotten is now officially a qualified solicitor.  

 

 

Well done and may she enjoy a long and prosperous professional career.

Assured Shorthold Tenancy Agreements and the Deregulation Act 2015

Last October the Deregulation Act 2015 came into force and changed the scope of assured shorthold tenancy agreements (ASTs) and residential possession proceedings. The changes brought in under the legislation apply to all ASTs granted on or after 1^st October 2015. We are now beginning to see possession proceedings which will are governed by the provisions of the 2015 Act.

The changes do not apply to fixed term ASTs granted before 1^st October 2015. However, from 1^st October 2018, the rules will apply to all ASTs.

Under the 2015 Act tenants are protected from ‘retaliatory eviction’. If a tenant has raised a legitimate complaint about the condition of the property and notifies the landlord in writing the landlord is required to deal with the complaint before being able to serve a valid section 21 notice on the tenant.

The 2015 Act removes the need for landlords to specify the last day of a period of the tenancy as the date on which the notice expires and the Act also introduces a prescribed form of section 21 notice.

The Act also brings in various legal obligations which a landlord must comply with. This includes, but is not limited to, having to provide the tenant with a gas safety and energy performance certificate before a valid section 21 notice can be served. 

Arguably the new provisions represent a further shift in the balance of power towards tenants and with the previous legislation already fraught with potential pitfalls it is crucial that landlords follow the correct procedure and obtain legal advice at an early stage. 

Tolhurst Fisher acts for a number of private landlords and managing agents. If you require any advice or assistance with regard to possession proceedings please do not hesitate to contact one of our dispute resolution solicitors.

Danny Turpin

Solicitor – Dispute Resolution department.

When is an oral variation of a contract binding?

A recent Court of Appeal decision provides new guidance on the effect of an oral agreement to vary a contract.

In MWB Business Exchange Centres Ltd v Rock Advertising Ltd there was a dispute relating to a claim for arrears of licence fees and other charges against Rock Advertising Ltd. The licence itself contained a clause, namely, Clause 7.6 which set out the following:

“This licence sets out all the terms as agreed…No other representations or terms shall apply or form part of this licence. All variations to this licence must be agreed, set out in writing and signed on behalf of both parties before they take effect.”

Rock Advertising Ltd, however, relied on an oral agreement made between one of its directors and MWB’s credit controller. This agreement between the two parties allowed Rock Advertising Ltd to pay the licence fees at a lower monthly rate for a certain number of months and then at a higher rate for the remainder of the licence.

The trial judge found that an agreement had been reached between the two parties meaning MWB’s credit controller had authority to bind the company.

Rock Advertising Ltd appealed this, stating that the licence or contract was open to both parties to vary the contract as a whole, in any way they choose, whether by an oral agreement.

The Court of Appeal agreed with Rock Advertising Ltd. Lord Justice Kitchen endorsed the comments of Lord Justice Moore-Bick in Globe Motors Inc v TRW Lucas Varity Electric Steering Ltd, stating:

“The parties are…free to include terms regulating the manner in which the contract can be varied, but just as they can create obligations at will, so also can they discharge or vary them, at any rate where to do so would not affect the rights of third parties”.

Kitchen LJ also went further endorsing a quote from a US decision of the New York Court of Appeals in which Cardozo J said:

“Those who make a contract, may unmake it. The clause which forbids a change, may be changed like any other. The prohibition of oral waiver, may itself be waived…What is excluded by one act, is restored by another. You may put it out by the door, it is back through the window. Whenever two men contract, no limitation self-imposed can destroy their power to contract again”.

This decision demonstrates that the principle of party autonomy will not just cover anti-oral variation clauses but also typical entire agreement clauses which seek to exclude any collateral agreements. It is therefore worth considering that if parties to a contract agree to dis-apply the existence of any collateral agreements, which run contrary to the contract itself, they may still remain enforceable.

Tolhurst Fisher has one of the largest specialist commercial teams in the region and is ideally placed to advise on this and any other commercial related matter.

FRP Advisory Triathlon 2016

 

 

 

 

Tolhurst Fisher entered an individual and a teams into the inaugural FRP Advisory triathlon event in aid of Little Havens. a hugely enjoyable but hot day at Gosfield Lake Resort saw 32 teams and 19 individuals take part in a sprint triathlon.

 

our own RobertPlant came 1^st  in the individual event.

 

our team with Maxine Barrett, Graeme Provan and Attila Hunter came 7th in the team event.

 

Plans are ready in place to do even better next year.......

 

 

We would like to pass on our congratulations and gratitude to the organisers for all their hard work in arranging such a great event and we hope that the day will raise a significant amount of money towards a very worthy cause in Little Havens.

 

 

 

 

 

The Consumer Rights Act 2015

What will it do?

• The Consumer Right Act 2015 regulates agreements between traders and consumers;  this includes contracts and terms of business.
• A trader is defined in the Act as a person acting for purposes relating to their trade, business, craft or profession including: individuals such as professionals and sole traders. 
• A consumer is defined in the Act as an individual person acting for purposes which are wholly or mainly outside that individual's trade, business, craft or profession.
• The Act aims to protect consumer rights and provide the consumer with more remedies. Traders who do not adhere to the Consumer Rights Act 2015 could potentially leave themselves exposed to a claim by the consumer. 

Why was it introduced?

• Previous legislation, such as the Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979, was over 30 years old. The 2015 Act was designed to update and clarify the law.
• The advent of online trading and digital products generally meant there was a need for changes, the 2015 Act modernises the law.

When did it come into force?

• The Consumer Rights Act 2015 came into force on 1 October 2015.

If you are a trader and you want to update agreements with your consumers, for example contracts or terms and conditions, or if you want any further information regarding The Consumer Rights Act 2015 then please do not hesitate to contact me.

Attila Hunter,

Solicitor in the Corporate and Company Commercial department.

How Might the new residence nil-rate band effect your estate?

From April 2017, you may be able to pass on more of your estate on death without paying Inheritance Tax (IHT).

 

The “basic” nil-rate band (NRB) (£325,000 until 2020-21) will continue to apply.  In addition, a new residence nil-rate band (RNRB) is to be introduced.

 

The personal representatives of an estate will be able to claim RNRB, in addition to NRB, if:-

 

-      the deceased's interest in a residential property has been their residence at some point (e.g. a buy to let property that the deceased never lived in would not qualify); and

-      is left to one or more of the deceased’s direct descendants on death. This can be by the terms of their will, under intestacy or as a result of the rule of survivorship.

 

A ‘direct descendant’ means a child (including a step, adopted or fostered child) of the deceased and their lineal descendants (e.g. grandchildren). Therefore, if the deceased does not have children or does not leave his or her interest in a residential property to them, RNRB cannot be claimed.

 

The value of RNRB for an estate will be the lower of the net value of the interest in the residential property (after deducting any liabilities such a mortgage) or the maximum amount of the band.

 

The maximum amount will be phased in gradually between 6^th April 2017 and 6^th April 2020 as follows:-

 

2017–18 = £100,000

2018–19 = £125,000

2019–20 = £150,000

2020–21 = £175,000

 

It will then increase in line with Consumer Prices Index from 2021 to 2022 onwards.

 

As is the case with NRB, any unused RNRB will be transferable to a surviving spouse or civil partner.

If the net value of the deceased’s estate is above £2m after deducting liabilities (but before reliefs and exemptions), RNRB will be tapered away by £1 for every £2 where the net value exceeds £2m.

 

It is proposed that where part of the RNRB might be lost because the deceased had downsized or had ceased to own a residence (e.g. if they sold their property to fund their care) on or after 8 July 2015, that part of the RNRB will still be available provided that the deceased left a downsized residence or assets of equivalent value to direct descendants.

This is a brief summary of the proposed changes to the IHT rules. 

 

 

If you require detailed professional advice on wills, administering an estate, inheritance tax or estate planning, please contact our Wills, Trust and Probate department on 01702 352511.

 

Misleading replies to enquiries

It is standard in commercial property for the Seller to be required to provide replies to enquiries. This is usually done in the form of CPSEs (commercial property standard enquiries).

In a recent case (Greenridge Luton One Ltd and another v Kempton Investments Ltd [2016] EWHC 91 (Ch), the courts showed how they deal with misrepresentation in a routine commercial situation.

Brief facts of the case

In Greenridge, the Seller’s replies to enquiries did not disclose that the current tenant had withheld service charge payments on account of an ongoing disagreement with the Seller. Contracts were exchanged and a deposit paid. Following exchange of contracts, the Buyer became aware of the service charge dispute and subsequently rescinded the contract under the terms of the contract. The Seller refused to return the deposit, which in turn resulted in the commencement of the proceedings by the Buyer.

The matters of question in this case were; whether a false representation had been made to the Buyer during the negotiations of the contract or if it had been made in the contract itself, whether the Buyer was induced to enter into the contract by reason of any misrepresentation, whether any misrepresentations were attributable to fraud or recklessness and whether the Buyer was entitled to damages.

The High Court held that the Buyer was entitled to terminate the agreement and have its deposit returned because of the false representation that there were no service charge disputes. The Buyer was also entitled to damages for the deceit which amounted to £395,948. The damages awarded by the court were for the costs incurred in the purchase which had been wasted as a consequence of the misrepresentation, that is, professional, survey fees and other costs relating to the proposed structuring of the purchase.

Be cautious

Answering CPSEs (commercial property standard enquiries) can be a laborious task for the seller particularly where there are time constraints. It is, however, important to ensure the replies are not overlooked and are considered in full and with accuracy.  To avoid such a claim it is important that sellers ensure that buyers are provided with up-to-date replies to enquiries and kept informed of any changes.

Tolhurst Fisher has one of the largest specialist property teams in the region and, as such, is ideally placed to advise on this and any other property related matter.

For further information contact us on 01702 352511

 

 

 

Congratulations!

Congratulations to Attila Hunter who had his robing ceremony on Friday!

 

Mad Hatters Tea Party!

Our Chelmsford office modelled a fine selection of headwear in the office last week and in the process raised money for Cancer Research Day as part of our Mad Hatters Tea Party.  Rebecca Turnbull won the prize for best hat with her horny devil head dress.

 

 

Freehold Purchase – What is a house?

A recently decided case, Jewelcraft Ltd v Pressland [2015], has confirmed that a shop with accommodation above does not necessarily fall outside the definition of a house, just because it is described as a shop.

Section 2(1) of the Leasehold Reform Act 1967 defines a house in relation to a tenant’s right of enfranchisement. The section provides that a house ‘includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in’.

In Jewelcraft, the claimant was the tenant of a building comprising a ground floor purpose built shop with residential accommodation on the first floor above. Originally the shop was not self-contained and could be accessed from the flat above. The two floors were separated in the 1970’s.

The building was part of a parade of similar shops built in the 1920’s each with a 99 year lease running from 1921. The building had been sublet to a newsagent from 1978 on successive underleases, with the accommodation above occupied by its employee(s) under a service occupancy agreement.

The tenant’s claim to enfranchise under the Act was rejected by the County Court on the basis that the building did not constitute a house under section 2(1) of the Act. The judge stated that the building was not a house because it did not look like a house and was part of a parade of shops with residential accommodation above.

The Court of Appeal, however, disagreed with this approach on the basis that it was inconsistent with previous cases.  Further, in the Court’s view, the wording in section 2(1) of the Act clearly indicated that it was not Parliament’s intention to exclude the right of enfranchisement for buildings that were designed or adapted in part for non-residential use.

On a practical point, Jewelcraft demonstrates that corporate tenants may be able to use enfranchisement rights to acquire freeholds of premises which are partly used for business.

For advice on this, or any other residential leasehold matter,  please contact Robert Plant who heads up our team of leasehold experts 

Can your employer really read your private WhatsAPP messages?

If the news articles published this week are to be believed then it would appear we could all be in trouble as various newspapers have had the general public in fear that their employer can strip them of their personal mobile phone and scroll through all of the unsavoury message they’ve been receiving (but definitely not sending) in that WhatsAPP group chat they keep meaning to leave but never quite get round to in case they miss out on vital “banter”. 

The reality is, however, somewhat different. The scare mongering in the national press follows on from the decision last week handed down by the European Court of Human Rights in the case of Barbulescu v Romania.

The case concerned Mr Barbulescu, a Romanian worker who was dismissed by his employer for using a work-related Yahoo messaging account to send private messages of a personal nature to his friends and family. Mr Barbulescu was dismissed for personal internet use at work, contrary to his employers’ rules. In investigating the matter his employer accessed the private messages and used them in the disciplinary proceedings and subsequent court cases. The Romanian courts sided with Mr Barbulescu’s employer and the European Court of Human Rights held that the monitoring and use of personal messages was a proportionate interference with Mr Barbulescu’s Article 8 right to privacy. The court held that it was not unreasonable that an employer would want to verify that employees were completing their professional tasks during working hours.

It is important to note that the Yahoo messaging account in this case was a work related account set up to answer client queries and that this decision does not overrule previous decisions of the European Court of Human Rights on the reasonable expectation of privacy. Nor does it override existing UK legislation which places important limitations on employers’ powers to monitor their employees’ private communications, but why would the newspapers let such insignificant facts get in the way of a good story.

For further information on this or any other employment related matter contact Claire Rainbird, mailto:crainbird@tolhurstfisher.com