Judgment Call 21 January 2013


Nationwide Building Society v Davisons Solicitors. Munby LJ; Sir Andrew Morritt (Chancellor); Sullivan LJ. 12 December 2012

A solicitor holding a mortgage advance on trust for the mortgagee had acted in breach of trust by handing over the advance to the seller’s solicitors when completion had not taken place. However, under the Trustee Act 1925 s.61 he was relieved from liability because he had acted honestly and reasonably, and the loss had been caused by the fraud of an unconnected third party.

Appeal allowed

For the appellants Nationwide Building Society

Hailsham Chambers’ Michael Pooles QC and Derek Holwill; Berrymans Lace Mawer solicitor Jennifer Bebbington

For the respondent Davisons Solicitors

Hailsham Chambers’ William Flenley QC and 4 New Square’s Paul Parker; Eversheds principal associate Wayne Davies.


Ryanair Holdings Plc v Competition Commission; Aer Lingus Group plc. Etherton LJ; Lewison LJ; Pill LJ. 13 December 2012

Where the Competition Commission had begun an investigation into an airline’s acquisition of a minority shareholding in a rival and the European Commission had begun an investigation into the airline’s subsequent bid for the entire share capital of the rival, the duty of sincere co-operation did not preclude the Competition Commission from continuing its investigation.

Appeal dismissed

For the appellants Ryanair

Blackstone Chambers’ Lord Pannick QC and Brian Kennelly; Cleary Gottlieb Steen & Hamilton Brussels partner Nicholas Levy.

For the first respondents Competition Commission

Monckton Chambers’ Daniel Beard QC and Alison Berridge; Treasury Solicitors

For the second respondents Aer Lingus

Brick Court Chambers’ James Flynn QC and Daniel Piccinin; Cadwalader Wickersham & Taft partner Alec Burnside.


Sealion Shipping Ltd v Valiant Insurance Co. Gross LJ; Pill LJ; Tomlinson LJ. 14 December 2012

Where the breakdown of an electric motor had given rise to an insured loss under a loss of hire policy of marine insurance, a subsequent hydraulics failure, which occurred when the shipowner reasonably took advantage of removal of the motor to carry out maintenance work, did not break the chain of causation.

Appeal dismissed

For the appellants Valiant Insurance

7KBW’s Robert Bright QC and Richard Sarll; Swinnerton Moore partner Lewis Moore

For the respondents Sealion Shipping

Essex Court Chambers’ Steven Berry QC and Nathan Pillow; Lax & Co partner Mike Lax partner


Bramston v Haut. Arden LJ; Kitchin LJ; Rix LJ. 14 December 2012

The power to suspend a bankrupt’s automatic discharge from bankruptcy under the Insolvency Act 1986 s.279 was intended to be penal, and was connected to the trustee’s functions to realise and distribute the bankrupt’s estate. Accordingly, an order for suspension which was made to allow a bankrupt some time to put a proposal for an individual voluntary arrangement before creditors was outside the scope of s.279.

Appeal allowed

For the appellant Bramston

South Square’s John Briggs; Mills & Reeve consultant Nicholas Gordon

For the respondent Haut

Enterprise Chambers ’ Bernard Weatherill QC; Clarke Mairs partner Fred Banning

Real property

Freetown Ltd v Assethold Ltd. Patten LJ; Rix LJ; Sir Andrew Morritt (Chancellor). 14 December 2012

The Interpretation Act 1978 s.7 applied to the postal service provisions in the Party Wall etc. Act 1996 s.15(1) with the effect that the 14-day time limit for appeals against awards began on the date of deemed receipt of the award, not the date of posting.

Appeal allowed

For the appellant Assethold

Landmark Chambers’ Tom Weekes; the Chancery Partnership partner Raza Khan

For the respondent Freetown

11 Stone Buildings’ David Nicholls; Greenwood & Co partner Ronald Friend


Hackney Empire Ltd v Aviva Insurance UK Ltd (formerly t/a Norwich Union Insurance Ltd). Jackson LJ; Moses LJ; Sir John Thomas (President). 19 December 2012

The court summarised the principles to be applied in cases concerning additional payments made by employers to contractors, and considered whether such additional payments had the effect of releasing a bondsman from liability under a performance bond securing performance of the construction contract.

Appeal dismissed

For the appellant Aviva

39 Essex Street’s Richard Wilmot-Smith QC and Alexandra Bodnar; Gateley partner Karen Spencer

For the respondent Hackney Empire

Keating Chambers’ David Thomas QC; CMS Cameron McKenna partner and solicitor advocate Rupert Choat


Dalmare SpA v (1) Union Maritime Ltd (2) Valor Shipping Ltd. Flaux J. 13 December 2012

A sale contract on the Norwegian Saleform 1993, which provided that the vessel was to be delivered and taken over “as she was” at the time of inspection, fair wear and tear excepted, did not exclude the implied term of satisfactory quality in the Sale of Goods Act 1979 s.14(2).

Appeal dismissed

For the appellants Dalmare

Stone Chambers Timothy Hill QC; Ince & Co partner Jamila Khan

For the respondents Union Maritime and Valor Shipping

Quadrant Chambers Simon Rainey QC; Clyde & Co partner Marko Kraljevic


Geys v Societe Generale. Lady Hale JSC; Lord Carnwath JSC; Lord Hope JSC (Deputy President); Lord Sumption JSC; Lord Wilson JSC. 19 December 2012

A party’s repudiation of a contract of employment did not automatically terminate the contract. The contract would only be terminated if and when the other party elected to accept the repudiation.

Appeal allowed

For the appellant Geys

One Essex Court’s David Cavender QC and Abra Bompas; Fox Williams partner Tom Custance

For the respondent Societe Generale

11 KBW’s Christopher Jeans QC and Amy Rogers; Herbert Smith Freehills in-house advocates Ian Gatt QC and Andrew Taggart


Government administration

R. (on the appplication of Hodkin); (2) Church Of Scientology Religious Education College Inc v Registrar General of Births Deaths and Marriages. Ouseley J. 19 December 2012R. (on the application of Hodkin); (2) Hodkin Religious Education College Inc v Registrar General of Births Deaths and Marriages. Ouseley J. 19 December 2012

The registrar had been entitled to refuse to register a chapel owned by a Scientology college as a place of meeting for religious worship on the grounds that it was not a place of religious worship under the Places of Worship Registration Act 1855. This was because there had been no significant changes in the beliefs or practices of Scientologists since the decision of R. v Registrar General Ex p. Segerdal (1970), which ruled that Scientology did not involve acts of worship.

Application refused

The claimants applied for judicial review of a decision of the defendant Registrar General of Births, Deaths and Marriages refusing to register a chapel owned by Church Of Scientology Religious Education College Inc as a place of meeting for religious worship under the Places of Worship Registration Act 1855.

Hodkin, a Scientologist, had wanted to marry her fiancé at a chapel owned by the second claimant, which had applied to the registrar for the chapel to be registered as a place of meeting for religious worship under s.2 of the 1855 Act. The registrar, following the Court of Appeal (CoA) decision in Segerdal (1970), refused the application on the grounds that the chapel was not a place of “religious worship”.

The claimant sought to challenge that and presented evidence detailing changes in Scientology since Segerdal, including changes to the services, which they claimed were services of worship, prayers and a new form of wedding ceremony. The registrar submitted that she was bound to refuse the registration by the decision in Segerdal.

The claimants contended that even if Segerdal was binding, it did not preclude a finding that the chapel was a place of worship. They further contended that the Human Rights Act 1998 and the Equality Act 2010 meant the distinction drawn by the CoA between Buddhism, a non-theistic religion, and Scientology, also a non-theistic religion, could not be upheld to the disadvantage of Scientology, and that the registration of Buddhist temples but not Scientology chapels as places of worship discriminated against Scientologists.

Application refused

Segerdal did not decide whether Scientology was a religion or not; it decided that Scientology services did not involve acts of worship. It also decided that a place for religious worship could cover a place for non-theistic religious worship, Church of the New Faith v Commissioner of Pay-Roll Tax (Victoria) doubted.

The registrar’s approach could not be criticised. She had not misunderstood the decision in Segerdal. She had refused to register the chapel on the basis that Scientologists did not worship, not on the basis that Scientology if a religion was not a theistic one.

Further, the registrar had not rejected the application on the basis the evidence submitted was irrelevant because of Segerdal; she rejected it because the evidence had failed to show any material change in the nature of Scientology.

Assuming that Scientology was a religion for the purposes of the 1855 Act, Segerdal would remain binding unless a substantial change in worship had occurred. On the evidence there had been no significant change.

What had changed was the greater acceptance of Scientology as a religion. Although the definition of “worship” in Segerdal was undoubtedly inadequate for non-theistic and similar beliefs, it still applied to them.

Absent a significant change in the way Scientologists “worshipped”, Segerdal remained binding, Segerdal followed.

Section 3 of the 1998 Act did not provide a basis on which the 1855 Act could be read differently: the 1855 Act was not incompatible with the claimant’s human rights; there was no interference with the right to marry according to national laws or the right of Scientologists to practise and no discrimination on the grounds of religion.

The 1855 Act discriminated between those places where religion which involved worship undertook that worship and other places. It did not discriminate on the grounds of religion or the enjoyment of the right to freedom of worship and observance.

Similarly, the 2010 Act did not relieve the court from the binding nature of Segerdal. Any discrimination that there might have been was required by the 1855 Act and therefore could not contravene the 2010 Act.

For the claimants

Blackstone Chambers’ Anthony Lester QC

Blackstone Chambers’ Naina Patel

Withers partner Paul Hewitt

For the defendant

James Strachan of 4-5 Gray’s Inn

The Treasury Solicitor