Judgment call: 1 July 2013, in association with Westlaw UK, a Thomson Reuters’ product

Planning and environment

(1) Borough of Telford and Wrekin (2) St Modwen Developments Ltd v Secretary of State for Communities and Local Government; Interested parties: 1. Ravenhill Limited 2. David John Tringham (trading As Audley Avenue Business Parks); 2013 WL 2628680. QBD (Admin) Turner J. 14 June 2013

Under the national planning policy framework, preference was to be given to the development of sites in town centres over sites out of town. However, where there were two eligible sites the application of the sequential test did not have to result in a finding that one site was sequentially superior to the other. It was open to a decision-maker to find that the sites were sequentially equal.

Application refused

For the defendant Secretary of State for Communities and Local Government

11KBW ’s Jonathan Moffett instructed directly

For the claimant (1) Borough Of Telford And Wrekin

No 5 Chambers’ Ian Dove QC; No 5 Chambers’ Satnam Choongh; Wragge & Co partner Andrew Thomas

For the claimant (2) St Modwen Developments Ltd

No 5 Chambers’ Martin Kingston QC; No 5 Chambers’ Christopher Young; Wragge & Co partner Andrew Thomas

For the second interested party David John Tringham (trading As Audley Avenue Business Parks)

Landmark Chambers ’ Nathalie Lieven QC; Richard Max & Co partner David Warman

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Liam Fox v Harvey Boulter 2013 WL 2299956. QBD Bean J. 4 June 2013

Allegations that a former member of the Cabinet was in a position to provide evidence exonerating a businessman who was the subject of widely publicised blackmail allegations had a defamatory meaning as such conduct would have been considered reprehensible by the public.

Preliminary issue determined in favour of claimant

For the claimant Liam Fox

Ely Place Chambers’ William McCormick QC; 5RB’s Jonathan Barnes; PSB Law partner Simon Smith

For the defendant Harvey Boulter

5RB’s Matthew Nicklin QC; DLA Piper partner Nick Bamford

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Revenue and Customs Commissioners v Atlantic Electronics Ltd 2013 WL 2460303. CA (Civ Div) Arden LJ; Beatson LJ; Ryder LJ. 12 June 2013

Whenever a relevant consideration was wrongly excluded in a case management decision, the judge’s exercise of discretion had to be set aside. Added to that test should be a requirement that the considerations which were wrongful had to, alone or in aggregate, constitute considerations that were material in the exercise of the discretion in question.

Appeal dismissed

For the appellant Atlantic Electronics Ltd

9 Bedford Row’s Abbas Lakha QC; 18 Red Lion Court’s Edmund Vickers; Jeffrey Green Russell lawyer Monty Jivraj

For the respondent HMRC

2 Hare Court’s Christopher Foulkes; QEB’s Karen Robinson instructed directly

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Vince v Wyatt 2013 WL 2628655. CA (Civ Div). Thorpe LJ; Jackson LJ; Tomlinson LJ. 13 June 2013

Where a husband succeeded on appeal to strike out his former wife’s application for financial remedy, he was entitled to recover payments he had made to fund her litigation under an order pursuant to A v A (Maintenance Pending Suit: Provision for Legal Fees) [2001] 1 WLR 605, [2000] CLY 2528 . He could recover those payments from the date when he filed his appellant’s notice, at which point his former wife’s solicitors were on notice that those payments were vulnerable to their client losing on appeal.

Application granted

For the appellant Vince

1 Hare Court’s Martin Pointer QC; Geoffrey Kingscote and Simon Webster; Schillings partner Davina Hay

For the respondent Wyatt

29 Bedford Row’s Philip Cayford QC; Mishcon de Reya legal director Miles Geffin

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Chowdhury v Westminster City Council 2013 WL 2460333. DC Aikens LJ; Wilkie J. 11 June 2013

Whether a summons in relation to a liability order for unpaid business rates was properly served at a person’s “place of business” was a question to be decided on the evidence. However, to describe property that a landlord let out as “his place of business” was an abuse of language.

Remitted to the magistrates’ court

For the appellant Chowdhury

25 Bedord Row’s Roger Offenbach; YVA Solicitors partner Mario Economides

For the respondent Westminster City Council

13 Old Square Chambers’ James Couser, instructed directly 

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Anti-suit injunctions

AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC 2013 WL 2460305. SC Lord Neuberger JSC; Lord Mance JSC; Lord Clarke JSC; Lord Sumption JSC; Toulson J. 12 June 2013

The English courts had the power under the Senior Courts Act 1981 s.37 to injunct the commencement or continuation of proceedings brought in a forum outside the Brussels/Lugano regime where an arbitration agreement existed. The Arbitration Act 1996 was not inconsistent with that power, and there was no support for the proposition that the negative aspect of an arbitration agreement was enforceable only when an arbitration was on foot or proposed.

Appeal dismissed

For the appellant Ust-Kamenogorsk Hydropower Plant 

Debevoise & Plimpton partner Peter Goldsmith QC and partner Sophie Lamb

For the respondent AES Ust-Kamenogorsk Hydropower Plant 

Essex Court Chambers ’ Toby Landau QC leading Jessica Wells of the same set, instructed by Allen & Overy partner Richard Smith and counsel Angeline Walsh

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Euroceanica (UK) Ltd v Revenue and Customs Commissioners 2013 WL 2460300. FTT (Tax). Richard Thomas; Judge Rachel Short. 26 April 2013

Interest arising from cash required to be deposited at a bank as part of a loan arrangement to finance a shipping fleet was “relevant shipping income” under the Finance Act 2000 Sch.22 Pt VI para.50 rather than “investment income” under para.51.

Appeal allowed in part

For the appellant Euroceanica

Pump Court Tax Chambers’ Giles Goodfellow QC and Zizhen Yang; Mazars

For the respondents HMRC

Pump Court Tax Chambers’ David Yates, instructed directly

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R. (on the application of Newhaven Port and Properties Ltd) v East Sussex CC. 2013 WL 2628676. CA (Civ Div). Lloyd LJ; Lewison LJ; Gloster LJ. 14 June 2013

The Commons Act 2006 s.15(4) pursued a legitimate aim and the means by which it pursued that aim were not manifestly without reasonable foundation: accordingly it was compatible with the European Convention on Human Rights 1950 Protocol 1 art.1.

Appeal dismissed

For the appellant, R. (on the application of Newhaven Port and Properties Ltd)

Francis Taylor Buildings’ Charles George QC; Francis Taylor Buildings’ Philip Petchey; DMH Stallard partner Heidi Copland

For the respondent, the Secretary of State for the Environment, Food and Rural Affairs

Landmark Chambers’ Tim Buley; Treasury Solicitor

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Featured case:  Family

Petrodel Resources Ltd v Prest; 2013 WL 2460304. Supreme Court. 12 June 2013

The doctrine of English law which enabled the courts in very limited circumstances to pierce the corporate veil, was only to be invoked where a person was under an existing legal obligation or liability or subject to an existing legal restriction which he deliberatley evaded or whose enforcement he deliberately frustrated by interposing a company under his control.

Appeal allowed

Yasmin Prest
Yasmin Prest

The judgment is significant for family lawyers and corporate lawyers, because it clarifies the vexed question of piercing the corporate veil. Characterising “piercing the corporate veil” as “an expression rather indiscriminately used”, the court dealt with this doctrine “heavily burdened by authority, much of it characterised by incautious dicta and inadequate reasoning”.

In a precise and methodical analysis of the cases, Lord Sumption described the line, independent from the general law, the Family Division pursued, essentially for reasons of policy, of lifting the corporate veil when it was “just and necessary”.

Having found no justification for a “general legal principle for piercing the corporate veil, Lord Sumption stated: “Courts exercising family jurisdiction do not occupy a desert island in which general legal concepts are suspended or mean something different.”

The Supreme Court rejected the premise that the companies’ assets should be treated as part of the marital wealth. This would “cut across the statutory schemes of company and insolvency law”. Section 24 of the Matrimonial Causes Act does not permit assets of the company to be treated as if they were those of the spouse.

If the properties belonged beneficially to the husband, it would be property to which the husband is “entitled, either in possession or reversion” (s25 of the Matrimonial Causes Act).

On an analysis of the facts and circumstances, the companies’ properties were beneficially owned by and were held in trust for the husband.

The judgment gives much needed certainty. The Family Division does not have its own special and unique jurisdiction to disregard general principles of law, and treat assets of companies – even if 100 per cent of the shareholding in the companies is that of the spouse – as matrimonial property which can be transferred in satisfaction of an order. This does not mean that the assets of the company are to be ignored. This remains relevant as a resource available to the husband, for purposes of s25 of the Matrimonial Causes Act.

There is no general principle for piercing the corporate veil, and exceptional circumstances will be required before the separate legal personality of a company is disregarded.

If it can be found that the company held property for a spouse, as a mere nominee, and in trust for that spouse, the property of the corporate entity may be used to satisfy the spouse’s judgment debt in financial remedy proceedings.

Determining whether a company holds the property as mere nominee for a spouse is highly fact-specific, and will require a careful analysis.

We are also reminded that the Family Division is constrained, in making findings of fact, by the usual laws of evidence, and an adverse inference can be drawn from silence, only where that adverse inference is justified. This has to be seen in the context of the court’s inquisitorial role in the proceedings, and the court’s powers to compel disclosure from a recalcitrant spouse.

By Jacqueline Julyan, barrister , 7 Bedford Row

This case report was supplied by 7 Bedford Row

For the appellant Prest

Farrer & Co partner Jeremy Posnansky QC; 1 Hare Court’s Richard Todd QC, leading Stephen Trowell of the same set and Serle Court ’s Daniel Lightman

For the respondent Petrodel

Jeffrey Green Russell solicitor Sarah Ingram; QEB’s Tim Amos QC; Erskine Chambers’ Ben Shaw; QEB’s Oliver Wise and Amy Kisser