London Capital & Finance Plc (in Administration) & Ors v Michael Andrew Thomson & Ors
[2024] EWHC 1684 (Ch)
Abacus Land 1 (Holdco 1) Limited and Others & Ors v Secretary of State for Housing, Communities and Local Government
30 October 2024
[2024] EWHC 2753 (Admin)
High Court
Several groups sued the government over a new law affecting leaseholders and freeholders, arguing it unfairly takes away their property value. The government asked the judge to delay the case, but the judge refused. The judge said it's important to resolve the dispute quickly because the groups might lose a lot of money and won't get it back even if they win. The case will continue, and the judge will decide later whether the lawsuit has a chance of success.
Key Facts
- •Multiple judicial review claims challenge provisions of the Leasehold and Freehold Reform Act 2024 ('2024 Act') as violating Article 1 of Protocol 1 (A1P1) of the European Convention on Human Rights (ECHR).
- •The claims allege that the 'Enfranchisement Measures' in the 2024 Act amount to expropriation without adequate compensation.
- •Some claims were stayed, others were not ('Unstayed Claims').
- •The Secretary of State applied to stay the Unstayed Claims, arguing that the court couldn't assess A1P1 compliance without the commencement regulations (including deferment and capitalization rates) still being drafted.
- •Claimants argued that the Enfranchisement Measures were already causing them harm and a stay would cause undue prejudice.
Legal Principles
The court has jurisdiction to hear challenges to primary legislation that has received Royal Assent but not yet been commenced.
CPR 3.1(1)(g)
Decisions on stays are an exercise of the court's case management discretion, guided by the overriding objective (CPR 1.1).
CPR 1.1
In deciding whether to grant a stay, the balance of convenience must be considered, weighing potential prejudice to claimants against potential benefits of a single consolidated hearing.
CPR 1.1(2)(e)
A declaration of incompatibility under the Human Rights Act 1998 does not provide for damages for losses incurred before a remedial order is made.
Section 4 of the Human Rights Act 1998
Need for speedy application of judicial review, particularly where primary legislation is challenged.
R (British Aggregates) v HM Treasury [2002] EWHC 926 (Admin)
Outcomes
The Secretary of State's application to stay the Unstayed Claims was refused.
The balance of convenience favored allowing the Unstayed Claims to proceed to the permission stage, given the potential for significant financial losses to claimants and the uncertainty of the impact of the deferment and capitalization rates on the final outcome. The court recognized a risk that two separate challenges might be needed if the stay was refused, but held that the court would be better placed to assess that risk once the permission stage is passed.
Stays on the Stayed Claims were lifted.
This was agreed upon if the application to stay the Unstayed Claims failed.
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