Monthly Archives: April 2018

The subsoil beneath…

In the recent case of Gorst & Anor v Knight [2018] EWHC 613 (Ch) the High Court held that the demise of a lower maisonette did not include the subsoil beneath it.The leasehold owners of the lower maisonette wished to develop the basement by extending downwards and applied to the landlord for consent to the proposed works. The landlord argued that the subsoil was excluded from the demise and it was therefore not under a duty to consider the leaseholders’ application, nor grant consent. The High Court accepted there is a presumption that a freehold interest in land, unless otherwise indicated, includes the airspace above and the subsoil below. However, it said no such presumption applies to leasehold land which is divided horizontally, so that whether it includes the airspace or subsoil will depend on a careful interpretation of the lease, particularly the description of the relevant demise. It said that, as the subsoil is key to the stability of the whole building, the question of whether a demise includes the subsoil is to be distinguished from the question of whether it includes the airspace.The High Court considered previous cases that have looked at the construction of contracts and said that when interpreting a lease, the court must ascertain the objective meaning of the language used. In doing so, it must consider the lease as a whole and may also take into account the factual background known to the parties at or before the date of the lease.  The description of the lower maisonette expressly included the cellar and foundations. The court said this specific wording implied the subsoil was excluded from the demise. It said this was further supported by a reservation in the lease to the landlord to enter upon the land to repair the foundations should the tenant fail to do so and also to pass services through conduits “under” the demised premises. The court said these provisions of the lease also indicated a lower limit to the demise and that, consequently, the subsoil was not included in it.The judgment contains a useful summary of how the courts will approach interpreting a lease, particularly when determining whether the demise includes the subsoil. If a tenant intends to develop a property in such a way, it should carefully review the lease to ensure it will not be restricted from doing so. 

Posted in Shorter Reads | Comments Off on The subsoil beneath…

4-to-3 mergers are never easy

Sainsbury’s and Asda still need Competition & Markets Authority (CMA) approval to merge, and 4-to-3 mergers in markets that large is never straightforward. Some smaller European countries have allowed them for mobile phone networks but, in the UK, there are four networks and the “big four” banks are widely viewed as exerting insufficient competition over each other.Sainsbury’s and Asda/Walmart will no doubt argue that the notion of the “big four” supermarkets is outdated, with the emergence of challengers like Aldi, Lidl and online-only services like Amazon Fresh. The question for the CMA is how many “big four” shoppers see these new arrivals as acceptable alternatives.Usually, mergers first go through “Phase 1” of CMA investigation. Complex cases progress to “Phase 2” examination, of which there are only a handful each year. Companies tend to prefer to negotiate approval in Phase 1 in exchange for undertakings, e.g., to sell off branches or stay out of certain markets. Sainsbury’s and Asda know they face a challenge. In a highly unusual move, they have asked the CMA to move straight to Phase 2, where the three possible outcomes are unconditional clearance, clearance subject to undertakings … or prohibition.

Posted in Shorter Reads | Comments Off on 4-to-3 mergers are never easy

Cryptocurrency and divorce – are lawyers and the courts up to speed?

With fortunes being won and lost in the space of months, cryptocurrencies are on everyone’s minds and it is inevitable that they are going to form a significant new asset class in many future divorces. But how prepared are lawyers …

Posted in Longer Reads | Tagged | Comments Off on Cryptocurrency and divorce – are lawyers and the courts up to speed?

Could a Blockchain Land Registry be the way forward for England and Wales?

5th April 2018 saw the first digital mortgage deed entered into the Land Registry. It is part of the HM Land Registry initiative to move away from witnesses being required to watch as a homeowner signs a paper mortgage deed, to save time and provide security for all parties. However, this is a small step in comparison to other countries.Those ahead of the curve are investing in new technology to reinvent the way they record property ownership and transactions. In February 2016 the Bitfury group began the land-titling project it is building with the Republic of Georgia’s National Agency of Public Registry. Russia is also due to test a blockchain-based land registry this year, with a report due in September.  The Blockchain distributed ledger is a database which is not maintained by a single entity such as a government, as the HM Land Registry is. It is maintained collectively by a number of users and all changes are encrypted in such a way that they cannot be altered or deleted without leaving a record of the earlier state. Therefore, a permanent and secure register is kept, that cannot be manipulated.The appeal to countries which struggle with corruption is clear, however, England and Wales could also benefit from an accurate and complete records which improves efficiency and trust. BitFury’s head, Valery Vavilov purports that blockchain can become the foundation to build a trusted, transparent and auditable system. This format therefore lends itself to property transactions, as property is usually an individual’s greatest asset, and often has trust based relationships built around it, in the form of mortgages, security and leases. The biggest risk posed to lenders is fraud and particularly mortgage fraud at an estimate of over £1bilion per annum. In addition to the loss caused by the fraud itself, considerable time is spent establishing the true ownership of a property in an attempt to prevent fraud.A Blockchain Land Registry would be a solution to this problem. The system would require owners to enter certain details or identifiers which would be stored on the Blockchain and would prevent fraudulent sales or financing.From a legal perspective, use of a Blockchain Land Registry would increase certainty of ownership and title. It would be beneficial for property transactions and disputes, as well as the use of property as security. It also has potential to speed up the post-completion process in property transactions, as changes to the register would be automatic. The HM Land Registry does appear open to exploring technology solutions, in an article posted in December 2017 the HM Land Registry ‘digital transformation’ and its ‘Digital Street’ project were unveiled. A further article in February of this year detailed the three concepts produced by the project: ‘Digital Mortgage’ which will replace the paper mortgage deed and digitise the process for homeowners remortgaging; ‘Find Property Information’ which intends to improve the format of digital property information; and changes to their Rules to allow for fully digital conveyancing. Although none of it ground-breaking, the proposals do show an appetite for change in the HM Land Registry and pose the possibility of improved use of technology to come.  

Posted in Shorter Reads | Comments Off on Could a Blockchain Land Registry be the way forward for England and Wales?