Proprietorship Law: Notes of Advice - Case Study Example

Law s of Advice Part A – Geoff case: Issues: The main aspects in this case, is the un ised use of the wide footpath belonging to the Duke of Monmouth’s Trustees, by the present owner of Primrose Hill Cottage, Geoff, despite legal several warnings issued by them, to previous owner, Jack, forbidding such acts of transgression. This had no impact on previous owner Jack, and he carried on his activities with apparent impunity. Jack was so deep-rooted in his intentions to use the path belonging to the Trust, which he disregarded legal warnings from the Trustee’s lawyers and perhaps also made constructions, which allowed to him to block the road which led to his cottage, and instead use the footpath belonging to the Trustees in order to reach his home. The present incumbent, Geoff is also following similar practice of using private footpath without permission from its legal owners. Thus, the first issue that arises is whether Geoff, the present owner, has the right to use the land of the Trustees, the practice followed by his predecessor, Jack, without seeking permission, and legal exemption to indulge in such actions. Another change took place during 2008, this time, all the properties of the Trustees, along with the footpath was sold to an investment company, Cannock, who had it registered and intended to use if for commercial purposes. Cannock builds blockages on the footpath and makes it criminally unlawful for motorists to use it. The present owners believe that nobody has the privilege to transgress their land and are legally entitled to prevent the current owner of Primrose Hill Cottage, Geoff, from using the footpath. The third issue would be whether Cannock Company is entitled to proceed as they have done under UK laws and current legislatures. Rules: The main aspect that governs Right of access is found under the provisions of the Right of Access Act 2000. 1 The footpath laws under Blue Book of England & Wales is the Right of Way. The rules enunciated under the blue book also need to be seen. Offences committed under section 34 of the Right of Traffic Act 1988 and also U/s 34 of Road Transport Act, 1988. Again it is also seen that according to the current laws in UK, it is an offence to drive a motor vehicle on a footpath, bridleway or restricted byway, without permission, from the owner. 2 Again, it is seen that, even if the owner allows permission for house to be located within15 yards proximity, it could be disallowed, at the discretion of lawful owner. Thus it could be seen that it is well within the right of law for disallowing the right of passage of a new owner. Interpretations: It is seen that the first issue would be in terms of whether it is well within the rights of the present owner, Geoff, to make use of the footpath. It is seen that the main aspect impinging upon this infringement would be the fact that nobody had taken the required permission needed for allowing passage of roadway. Whether it was Jack, or subsequently Geoff, it is seen that explicit permission of trustees is required, before using the footpath. In order to enforce proprietary rights on property, it is necessary that the claimant needs to have some kind of interest or benefit in the land. In this case, it is seen that Geoff does not have any proprietary right, or interest in the land belonging to the Trustees, but subsequently sold to another. Again, Courts have held that “that mere possession of land did not give title to sue the person who owned the freehold interest in trespass.” 3 Further, it could also be said that in this case, the Trustees were the absolute owners of the property, but had subsequently sold their rights of ownership and possession to subsequent owner. Thus, having sold the property to the investment company, Cannock, the new owners are now in absolute control of said land and appurtenantances thereto, and thus, Geoff cannot partake of the liberties that may not have be entrusted to him, and for which he did not have legal entitlements bestowed from its true owners. Conclusions: The use of trespass in the context of UK laws needs to be assessed whether the claimant has beneficial interests in the land. In this case, it is seen that neither Jack, nor Geoff had interests in the land and therefore, their rights have not been really threatened, or compromised. The act of driving through a private footpath needs to be seen in the context of seeking suitable permission. It is seen that in this question, ab initio, Jack did not feel it necessary to seek permissions from the trustees before making use of the private road, and subsequently Geoff also carried out the same practice with impunity. In the case of Patricia Hunter v. Canary Wharf limited, [1997] 2 All ER 426, it is seen that the issue related to private nuisance, in that the wharf towers interfered with the reception of TV signals that caused distress to viewing by the complainants. It was held that an owner has the absolute authority to make constructions in his land and he need not have to seek the permission for construction in his own land. 4 But in this case, it is seen that Geoff is seeking permission to use the footpath although he was not legal owner of the footpath, nor was he sufficiently empowered to drive across the trustees’ land. Thus, rights and privileges that were not bestowed to the previous owner, Jack, cannot be re-established by vehicular access, belonging to the Trustees, across their land to his cottage. Moreover, rights acquired the present owners of the Trustee property, Cannock, also include possession and ownership over the footpath, and Cannock is entitled, as registered owners, to ward off trespassers and outsiders, who are not legally entitled to make use of privately owned property. The construction of barriers and blocks is considered to be a necessary and normal adjunct to these privacy and security measures, and cannot be debarred by law. Thus, it is seen that in most certainty, Cannock could enforce their rights and privileges of use of footpath, against the unlawful act of Geoff, continuing to use private property. Part B: Christopher case: Issues: The issues in this case are as follows: 1, Christopher’s uncle, Mr. Stanley has registered a First Charge in his name against the loan of £125,000 borrowed from him. The first legal charge over the freehold as security for repayment of the loan is thus duly registered as a charge favouring Mr. Stanley. 2. Subsequently, Christopher took a loan from Natwest for £60,000 with the freehold held as the second charge. It is assumed that Christopher is carrying on proprietorship business. It is seen that Christopher’s uncle is the principal and first charge holder of the assets, and therefore it is necessary that his share needs to be paid off first. However it is seen that there is a shortfall in dissolution dues in that the total assets fetch £165,000, whereas the creditors together measure £185,000, thus leading to a shortfall of £20,000., as uncovered debts that may need to be repaid unless Christopher is able to seek a composition with creditors.. Besides, it is also necessary that the dissolution charges be paid and the trustees in bankruptcy receive respectively from the proceeds of sale. Thus there are by law, several claimants- His uncle Stanley having a first charge, Nat West who has the second charge, The trustees in final dissolution proceedings and Finally, unsecured creditors. Under the laws of UK proprietorship concerns, the proprietor becomes personally liable for the debts of the company carried during the courses of business and has to pay off all the creditors and other debts incurred. In the event there is a shortage of assets, normally the sole proprietor has to pay off the debts from his personal accounts. Thus in this case, Christopher may have to file for personal bankruptcy since his assets are not enough to meet liability. “A sole proprietorship is a big financial risk because youre personally liable for all obligations of the business, including debts incurred in the operation of the business, as well as for the negligent or willful acts of your employees.” 5 In the case of Close Asset Finance Ltd v TaylorCA (Ward LJ, Smith LJ, Lloyd LJ) 2006 (Lawtel) the question arouse as to whether the second chargholder has proprietary estoppels over the first shareholder. This could be possible if the second charge holder challenges the records validating the disbursal of loan to the firm or its agents. 6 In this case, it is seen that creditors have obtained Bankruptcy Code against Christopher. What transpires next is that the Court Order may be granted that places the firm under the control of administrators, for the protection of assets and its fair distribution to creditors. However, it is advised that Christopher negotiates with creditors for IVA. Rules: In the UK context, it could be seen that bankruptcy is a serious offence and usually lasts a year. 7 The provisions of Part VIII of UK Insolvency Act 1986 would apply in this case. The affected bankrupt person has the options which he could choose; it could be in terms of making negotiations with creditors’ dues, under an Individual Voluntary Arrangement. (IVA) for the waiver or delayed payment of the unsecured part of debts he has incurred. 8 It could also be in seeking professional help from authorized people to monitor debts and revenues and seek out the best course available that is satisfactory to the authorised insolvency practioner and also creditors, and in the event there are government debts in the form of taxes, arrears etc. 9 Another major aspect would be in terms of prioritising debts- which to pay first, which later and so on. It is seen that priority, or preferential debts need to be paid off first, in terms of secured and preferential creditors. The UK laws are intended to afford a fair and equitable distribution of assets of the bankrupt firm, to the satisfaction of all secured claimants. The next issue that would come into effect is the fact that trustees in bankruptcy receive a portion of the proceeds, in terms of a person who would “act on behalf of debtor to ensure that both the creditors and debtors interests are maintained in accordance with the rule of law, and often acts as a negotiator between the two.” 10. Thus in this case it is seen that, taking a deviance from established practices, it would be needed to seek outside debts settlement. Thus, seeking to revoke bankruptcy order through an individual voluntary arrangement (IVA) would be a suitable solution for Christopher. This could also obviate the need for bankruptcy proceedings to be initiated against Christopher. Recommendations: “It is further seen that “such jurisdiction as either the court which made the request or the court to which the request is made, could exercise in regard to similar matters within their respective jurisdictions.“ 11This content can be found on the following page: http://www.investorwords.com/5087/trustee_in_bankruptcy.html Further it needs to be seen that there are various measures by which creditors like this one could acquiesce to a small amount being paid off month scheme for several months, or years in settlement of debts. Conclusions: Christopher needs to seek an Individual Voluntary Arrangement (IVA) that could address aspects of seeking extension of the period of loan repayment options under a more reasonable scheme. Under arrangement and confirmation with unsecured creditors, it would be possible to seek payment of balance dues through monthly installments up to a maximum of 60 months, (5 years) or earlier, as may be decided upon mutual consent. Again, in the case of Christopher, it is seen that there are not many charges except on freehold, which possesses a first mortgage charge on his relative and the second on the bankers, Nat west. After paying off secured and preferential creditors, including charge holders, as necessary, it may be necessary for Christopher to seek and negotiate concessions with unsecured creditors. Thus, Christopher needs to seek an Individual Voluntary Arrangement (IVA) that could address aspects of seeking loan repayment options without interest payments or under monthly installments. However, it is seen that the ultimate decision whether to accept or reject an IVA is vested upon 75% of the value of those that vote for the IVA, which is imperative for the success of IVA.12 References Basics of footpath law 2009, Ramblers: at the Heart of Walking, viewed 28 June 2009, http://www.ramblers.org.uk/info/britain/footpathlaw/ Bennett, S 2009, Sole proprietorship: how a sole proprietorship works, Lawyers.com: Every legal issue. One Legal Source, viewed 28 June 2009, http://business-law.lawyers.com/business-formation/Sole-Proprietorship.html Delaney v TP Smith Ltd (1946) 2006, The K-Zone: Wasting Your Internet Bandwidth Since 1994, viewed 28 June 2009, http://www.kevinboone.com/lawglos_DelaneyVTPSmithLtd1946.html Hunter vs Canary Warf ltd 1997, House of Lords, viewed 28 June 2009, http://www.ipsofactoj.com/international/2000/Part2/int2000(2)-009.htm Priorities: charging order and legal charge 2006, The Property Law Website, viewed 28 June 2009, http://www.ask.com/bar?q=legal+charges+on+assets+-+UK+context+&page=1&qsrc=2417&ab=0&u=http%3A%2F%2Fwww.propertylawuk.net%2Fmortgagepriorities.html Statutes: bankruptcy act 1914 2009, Swarb.co.uk: Law Forum: Law Books, viewed 28 June 2009, http://www.swarb.co.uk/acts/1914BankruptcyAct.shtml Trustee in bankruptcy: definition n.d., InvestorWords.com, viewed 28 June 2009, http://www.investorwords.com/5087/trustee_in_bankruptcy.html What happens when you become bankrupt n.d., Directgov: Public Service all in one Place, viewed 28 June 2009, http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/CourtClaimsAndBankruptcy/DG_10023215 Individual voluntary arrangements (IVA) FAQ’s 2008, Debt Help UK, viewed 28 June 2009, http://www.debthelpuk.co.uk/individual-voluntary-arrangements-faqs.95.html Read More