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Website Articles for November 2009
- Employee must pay damages after setting up rival firm
- A lease cannot be ignored just because it is badly drafted
- Shop granted planning permission despite council’s ‘master plan’
- Director disqualification orders could be applied to more cases
- Government delays implementing new rights for agency workers
- Court rejects woman’s claim to a share of her former partner’s home Housing officer wins age discrimination case
- Increase in care home fees could affect people’s wills
- Lasting Powers of Attorney becoming more important than ever
- Divorcing couples may have to consider using mediation
Employee must pay damages after setting up rival firm
A man has been ordered to pay compensation to his former employer after using its database to set up a rival business organising conferences.
The court also granted an injunction to prevent the employee from passing off his new business as that of his former employers.
The employee had been appointed by the company as a conference organiser. He eventually left and set up a rival business. His former employers took legal action saying that he had misused confidential information.
The court held that there was no restrictive covenant in place so there was nothing to stop the employee creating a rival enterprise. Nor could he be prevented from using information which was not a trade secret and had not been obtained illegally.
He was also entitled to engage speakers who he had previously engaged on behalf of his former employers. However, he was wrong to have given the impression that his conferences were a follow-up to the ones he had previously organised as an employee.
He had tried to destroy his former employer’s conferences and it was clear that he had tried to pass off his events as theirs. The court also found that he had taken confidential information including a large number of customer contacts from the database and sales information.
His former employers were therefore entitled to damages and a permanent injunction to prevent further passing off and misuse of confidential information.
A lease cannot be ignored just because it is badly drafted
The fact that a lease may be poorly drafted does not mean that its terms and conditions can be ignored, even if that does cause practical difficulties for one of the parties involved.
That was the ruling of the Lands Tribunal in the case of Crampton and Park Place Ltd.
Some of Park Place’s tenants objected to some of the service charges made over a five-year period. One of the issues related to the way the lessor held on to overpayments from one year into the next.
The tenants submitted that unless the lessor operated the reserve fund along very specific lines laid down in the lease, then any overpayment made for the year ending 31st December should be returned on 30th June the following year.
Park Place did not seek to justify the retention of the overpayments by reference to the lease but submitted that there was a mismatch between the dates for which service charge payments could be demanded and the date from which the service charge year ran. It meant that if the company “operated in strict accordance with the lease, it could run out of cash in the first quarter of any year”.
The company won its case before the Leasehold Valuation Tribunal but the tenants then appealed to the Lands Tribunal.
In giving his decision, his Honour Judge Huskinson said: “The difficulties for the Respondent arising from the poor drafting to the service charge provisions are unfortunate, but they do not entitle the Respondent to disregard the terms of the lease.
“It is accepted as a matter of fact that for the service charge year ended 31 December 2005 there was a total overpayment by the lessees of £21,019.”
“Accordingly they (the tenants) are entitled to set off against the demand of service charge for the calendar year ended 31 December 2006 their respective percentage of this £21,019.”
The company was successful on two other appeals relating to service charge payments covering the cost of cleaning carpets, and service charges which were dependant on the issuing of a surveyor’s certificate.
Shop granted planning permission despite council’s ‘master plan’
The owners of a cake shop have won their appeal against a local authority decision refusing them permission to develop their premises.
The premises were in a regeneration zone. The owners wanted to demolish part of the building and add a two-storey extension. Planning permission was refused because the authority felt the development would not fit in with its master plan for the area.
The planning inspector also thought that the changes to the shop would increase its value. She felt this would therefore increase the amount the local authority would have to pay in compensation if it needed to acquire the shop in future to make way for the regeneration project.
The shop owners appealed to the Secretary of State for Communities and Local Government to overturn the decision. They argued that the inspector should have ignored the potential increase in value and that there was no evidence to back up suggestions that development of the shop would prejudice future development of the surrounding area.
The Secretary of State upheld the local authority decision so the shop owners took the matter to the High Court which has now ruled in their favour. The judge held there was no evidence to support the local authority’s concerns that development of the shop or the subsequent increase in its value would prejudice the wider regeneration.
The court also ordered that the local authority should pay the costs borne by the shop owners in bringing the case.
Director disqualification orders could be applied to more cases
The Office of Fair Trading (OFT) wants to extend the use of director disqualification orders to cover a wider range of cases involving competition issues.
A director can be disqualified from acting as a director for up to 15 years if he or his company breach competition law and the court considers that he is not fit to be involved in managing a company.
Currently, the OFT focuses on cases where a director is directly involved in a breach of the law such as by taking part in a cartel. Under the proposed change, the focus would be broadened to include cases where a director should have taken steps to prevent a breach of the law by other people, or where he should have known about a breach but did not.
The OFT Senior Director of Policy, Ali Nikpay said: “We know that the prospect of being disqualified as a director is one of the most powerful deterrents to anti-competitive behaviour.
“Our proposals aim to increase the incentives on company directors to take responsibility for competition law compliance and tackle behaviour that harms competition.”
Government delays implementing new rights for agency workers
New employment rights for agency workers will not come into effect for another two years.
The EU Agency Workers Directive means that temporary employees in the UK become entitled to the same pay, holidays and general conditions as permanent staff after they have been working for a company for 12 weeks.
It was originally thought that the directive might come into force next April but now the date has been put back until 2011. The move follows concerns that the recession has reduced the ability of companies to cope with the improved entitlements.
Business Minister Pat McFadden said: “The law will come into force in the UK in October 2011, giving recruiters and their clients time to prepare and plan. We are also mindful of the need to avoid changing requirements on business until the economic recovery is more firmly established.”
Court rejects woman’s claim to a share of her former partner’s home
A court has rejected a woman’s claim that she was entitled to a share of her former partner’s home.
The woman already had two children when the couple began their relationship. Her partner then
bought a house with his own money for her to live in with her children. He drew up a cohabitation agreement stating that the property would remain his if the relationship ended. However, she refused to sign it.
The partner then sold the house and bought a farm so the woman moved there with the children. When the relationship broke down she claimed that she was entitled to a 50% share in the property.
To support her claim she gave evidence in court that she had given up her job to work on the farm and had acted as project manager while major alterations and improvements were carried out.
The court ruled against her. The judge held that there was no evidence that she had a beneficial interest in the property – that is, a legal entitlement to a share in it or a share of the proceeds from selling it. Her partner had made it clear that he did not intend for her to have a beneficial interest in the first house when he bought it and she had not been able to prove that his intentions had changed when he bought the farm.
She had been heavily involved in the redevelopment of the farm but she had not been the project manager.
In giving his judgment, the judge said that whether or not his decision was fair was not a matter for the court. He had to act in accordance with the law and fairness was not a matter for the court to judge: that would have to be a matter for law reform.
The case illustrates the need for people to draw up official legal documents to protect their interests in such important areas. The partner’s position was helped by the fact that he had drawn up a cohabitation agreement with the help of his solicitors. The woman had no legal documents to back up her claim.
Housing officer wins age discrimination claim
A local authority employee who believed he was dismissed from his job so his employer would not have to pay for his early retirement has won his age discrimination claim.
The man had worked as a housing officer for 30 years and was then seconded to a registered social landlord. When the secondment ended he was made redundant by the authority. He was 49 at the time and was just six and a half months away from being able to take early retirement.
He claimed he had been unfairly dismissed and discriminated against on the grounds of his age. The employment tribunal ruled in his favour and that decision has now been upheld by the Employment Appeal Tribunal.
Anyone who is discriminated against at work on the grounds of age is entitled to claim compensation. Please contact us if you would like more information about this or any aspect of employment law.
Increase in care home fees could affect people’s wills
Recent increases in care home fees mean that many elderly people could be left with nothing to leave to their families in their wills.
The warning from the Law Society follows research by Age Concern and Help the Aged which shows that the average care home fees are now £470 a week.
The President of the Law Society, Robert Heslett, said: “There is a danger that many elderly people are dipping into their life savings, selling their homes or other assets to pay care home fees.
“In many instances, they will have asked their solicitor to include those assets in their will to be left to family and loved ones. However, there could be nothing left once their care home fees are paid for.”
The Society says it is concerned that not enough people are updating their wills to take account of care home fees together with the added problems caused by the recession.
Mr Heslett said: “A regular review of a will with your solicitor can ensure that family, friends and any charities are still able to receive something. It is worth asking your solicitor to include a ‘plan B’ in case your home has been sold and cannot be passed on, at least that way, if you are forced to sell up to pay for care or for any other reason, the intended recipients of your estate receive something else.”
Lasting Powers of Attorney becoming more important than ever
New research suggests that the number of people suffering from dementia could double over the next 20 years.
The research was sponsored by Alzheimer’s Disease International and predicts that by next year there will be 35 million people worldwide suffering from dementia. That figure is expected to rise to 65 million by 2030 and to 115 million by 2050.
The increase is largely down to the fact that people are living longer than ever before.
The worrying figures mean that it is now more important than ever that we should take steps to protect our interests in case we suffer from dementia or lose our mental capacity in the future.
Lasting Powers of Attorney (LPAs) enable you to nominate someone such as a family member or friend to make decisions on your behalf if you ever lose the ability to do so yourself.
The property and finance LPA allows you to appoint someone to look after your financial affairs and the personal welfare LPA lets you grant an attorney authority over such matters as health care and the kind of treatment you receive.
LPAs should be drawn up with the help of a solicitor to ensure that they accurately express your wishes and protect your interests.
Divorcing couples may have to consider using mediation
The Government is considering proposals which would oblige divorcing and separating couples to consider mediation before they can go to court.
Ministers say they want to promote ways to reduce both stress and costs when reaching a settlement over children and finances.
Currently, only couples who use legal aid funding are obliged to first consider mediation. The Justice Minister, Bridget Prentice, is now looking at ways to promote its use among all couples. She said: “The Government is committed to the promotion of family mediation, as in many cases mediation can offer considerable advantages over going to court.”
Mediation is an informal process in which a trained mediator helps the couple to resolve difficult issues amicably. The mediator’s role is to act as a facilitator to help the couple share information and reach an agreement. It is not to offer advice or favour one side or the other.
Once the couple reach agreement, the mediator will record it in two summaries. Both husband and wife should then give those summaries to their respective solicitors so they can form the basis of a consent order.
It is important that both parties have their own solicitor throughout the process to ensure their interests are protected and that one side cannot come to dominate the other.
Mediation may not be suitable for everyone but it can certainly help to diffuse tension, and as it enables couples to reach agreement more quickly it can often help to save money as well as reduce trauma and heartache.
A negotiated settlement using mediation is often more acceptable to both sides than one imposed by the court. It can help couples develop a better working relationship for the future which is particularly important if children are involved and there will be an ongoing need to liaise over contact arrangements etc.
Links to useful organisations
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