Property litigation weekly update - 25 February 2021


This week's snapshot reports on the recent HS2 possession claim, the diversion of a river for the protection of fish and a hands-off approach from the High Court in a high value service charge dispute. Read on for an update on Trowers' report, Positioning cities for growth, followed by positive news and insight from our colleagues around the firm.

Further delays for HS2

In protest against the new high speed railway project HS2, people have dug tunnels under land outside Euston Station, required by HS2 for construction and storage purposes, barricading themselves in.

In an attempt to remove the protestors and prevent further tunnelling, HS2 issued a claim for possession and sought interim injunctions against the protestors. Whilst the court granted the interim injunctions sought, it refused to grant an order for possession on the basis that there was a question mark over HS2's ability to sue the protestors.

HS2 did not own the land under which the protestors dug tunnels and in accordance with schedule 16 paragraph 4 of the High Speed Rail (London – West Midlands) Act 2017, had to give 28 days notice to all 'owners and occupiers of land' before entering and taking possession. At the time notice was given to the owner of the land, the protestors were already in occupation. The court held that although the protestors were technically trespassers, HS2 had no better right to possession of the land than they did. The court also held that the protestors were 'occupiers of land' for the purpose of schedule 16 paragraph 4 and as such should have been given notice by HS2 under schedule 16 paragraph 4.

The claim was adjourned so as to allow HS2 to establish its title to sue. (Secretary of State for Transport (1) High Speed Two (HS2) Ltd –v- Persons Unknown)

The Fish Shall Inherit the Earth

In a victory for fish in England and Wales, the Environment Agency has won in the Court of Appeal, overhauling an earlier decision that it was liable in nuisance for diverting a river through a fish pass and away from the claimant's hydroelectric power turbine.

The Salmon and Fisheries Act 1975 gave the Agency the power to construct and maintain a fish pass (a channel enabling fish to pass beyond a mill or dam), "so long as no injury was done by such fish pass to the milling power" of the river.

The pass was constructed some 12 years ago, at which point the claimant had a "Francis" turbine in a dam in the river in order to generate electricity. The fish pass did not affect operation of this turbine, but when the landowner more recently replaced it with a more powerful model the landowner's operation was compromised.

The Court held that the injury test in relation to the river's milling power had to be assessed at the time the fish pass was put in place, having regard to any mill or turbine in place at the time. As there was no problem when the pass was constructed, the landowner's case was sunk. The net effect of all this being that the fish have retained their freedom of movement and the EA has avoided a claim in nuisance.

The ripple effect of this case could further tip the scales against humankind, which needs to increase production of eco friendly power or face the prospect of rising oceans engulfing areas of low lying landmass. The fish will doubtless be laughing all the way to the bank. (Sir George Hugh Pigot v Environment Agency (2021)) [Time to steer the bulletin back to calmer waters – Ed].

McKinsey loses high value commercial service charge dispute

A long-running legal dispute between McKinsey, the management consultancy, and its landlord, Criterion Buildings Limited, culminated earlier this month when judgment was handed down in which McKinsey were ordered to pay Criterion £2.2m plus interest in respect of unpaid service charges under commercial leases of flagship premises at One Jermyn Street.

The claim was defended on several grounds, all of which failed. The most interesting part of the judgment was how the Court dealt with McKinsey's defence that what Criterion charged as a "due proportion" did not comply with the lease because it was not a "fair" proportion.

The lease provided that what was a "fair" proportion was to be determined by the landlord, taking into account use made and benefit by the tenant concerned. McKinsey argued that the charges were not a fair proportion because they paid too high a percentage of the service charges for the whole building and that the charges were apportioned to favour another tenant (the Criterion Theatre and Restaurant) at their expense. The Judge ruled that it was not for the Court to determine what is a fair proportion when the lease is clear that this is a question for the landlord. In the Judge's words "the Court's role is simply to see that the terms of the lease are observed."

This case demonstrates that, in respect of commercial premises, where a "due proportion" is to be determined by the landlord, the Courts will not interfere unless there are compelling specific circumstances. (Criterion Buildings Limited v McKinsey & Company Inc [2021] EWHC 216 (Ch))

Positioning cities for inclusive growth

Over the last 18 months, as a firm, we have been running an initiative to understand how the built environment drives prosperity in cities and urban centres.

This campaign forms part of a long exploration we have undertaken to examine real estate's role in shaping society. Based around a series of events called City Exchanges, we have brought together leaders across communities with businesses to look at how we create the towns and cities of the future as well as examine real estate’s role in providing the platform for society to thrive.

Urban centres are drivers of prosperity across the globe; they are hubs for commerce, culture, community, innovation, and education. This is demonstrated through what we've missed over the last year.

Common themes arose before and during the pandemic; many of which are not new challenges but reinforce the positive impact the real estate sector can have, as we navigate recovery and plan for the next 30, 50 or even 100 years of city life.

This report brings together the key findings and themes that we have identified.

Positive News

  •  Read about the custard cream eating blind fox, rescued from the side of a road, that has made friends with a greyhound here.
  • Still enjoying loungewear this lockdown? You could be the proud owner of a pair of Winston Churchill's slippers which are due to be sold at auction on 9 March. You might need a large budget though.
  • The Royal Horticultural Society has discovered a super plant that can absorb air pollution. The Cotoneaster franchetii has a special ability to fight pollution and can trap harmful airborne particles.

Insight from around the firm


Webinar: Third annual mini-conference on building safety


Podcast: Rethinking Regen – a conversation with Tim Atkins, TJP Consulting


Trowers bolsters Real Estate Investment & Development offering


Trowers advises on initial public offering of The Pearl REIF


Legally brief - Contracting out of lengthy time limits for pursuing disputes: when is it possible? - Part 1


Webinar: Sustainability Linked Loans