Author: Chris Alexander

The Court of Appeal has just handed down judgement in another tenancy deposit scheme case defeating another tenant seeking its the windfall of three times the value of the deposit.

Last years decision in Tiensia v  Vision Enterprises Ltd (t/a Universal Estates) and Honeysuckle Properties v Fletcher and Others [2010] EWCH Civ 1144 (QB) heavily blunted the financial sanctions against landlords for non-compliance with the deposit requirements of the Housing Act 2004. See my blog written at the time.

Potts v Densley and another [2011] EWCA Civ 1224 was an appeal by a tenant who put forward a clever argument that where a tenancy has ended before the deposit is protected, the relationship of “landlord and tenant” has ended.  Consequently, it was not technically possible for the “landlord” as defined in the Housing Act 2004, to register the deposit with a scheme after the end of the tenancy.  The Court of Appeal disagreed and said that the relationship of landlord and tenant crystallised when the deposit was paid.

A good try by the tenant but the Courts are showing a great reluctance to enforce the financial  provisions of the Housing Act 2004 and this is another example of this.  Back to the drawing board for the tenant, although as the parties represented themselves at least there were no heavy legal costs for them to deal with!

Author: Jacqueline Button

Last week I blogged about the latest horror stories from the high street. This week, however, there’s more of a chick lit feel on the retail front with up beat and feel good stories in the wake of the Royal Wedding.

Will and Kate’s nuptials gave a boost to the sales figures of more than just haute couture designers and milliners. Every self respecting street was decked with bunting and union jacks for its party; sales of barbeques went up, so did paper plates, so (more mundanely) did bin bags. Waitrose reported a 23% increase in sales as against the Easter period last year – and only part of that was due to Heston Blumenthal’s infamous royal trifle. Apparently most customers made their own and the sale of trifle sponges went up by a staggering 370%.

Across the board retail sales rose by 1.1% month on month in April. It was the warmest April on record which triggered near panic buying of flip flops and skimpy shorts – sometimes by people who would be better off buying something less skimpy. DIY sales rose (although not by enough to save Focus) as did sales of gardening products and outdoor toys.

Back to haute couture and luxury brand Burberry is linking its plans for success to another event of international importance which takes place in London – the Olympics. Last week I blogged that JJB (who are in a somewhat different market) were pinning their hopes of a revival on souvenir sportswear and now Burberry are doubling their store space in London in time for the opening ceremony. The company will increase the size of its Knightsbridge store, has taken over a whole block of Regent Street and is apparently looking for space on the Kings Road. The brand has just reported an increase in full year pre-tax profits from £215m to around £290m. Seriously impressive for a retailer which doesn’t sell trifle sponges.

The final good news is that Marks and Spencer, that bastion of the high street has announced a 12% rise in its profits to £710m (obviously it does sell trifle sponges which must have contributed in no small part to that figure). M and S is looking to re-open in Paris and transform its online presence.

So what does all this good news mean? Is it the start of a trend? Is a blip? Is it a sign that the good times are on their way back? Unfortunately, the answer to the last question is almost certainly no. Other than Royal wedding invitees and Burberry’s core customer base, people are finding that disposable income is in short supply. In April certain circumstances collided and overcame consumers’ caution. That may not happen again for a while – maybe (and this is a depressing prospect) not until the Olympics.

Author: David Linklater

As you may have heard in the newspapers recently, there has been much speculation about the possible takeover of Iceland by Morrisons.  The 40-year-old Iceland chain has been put up for auction by the Resolution Committee of Landsbanki, the failed Icelandic bank that took ownership as a creditor of Icelandic retail group Baugur.
It is suggested that this would give Morrisons the much needed boost to rival their nearest competitors by increasing the company’s market share by about 2% to 14%, bringing it nearer to its closest rival, Sainsbury’s, which has a 16% share of the sector.
Iceland has roughly 800 stores, mainly focused on high streets which will mean Morrisons get a long awaited foothold on the high street market and be a more dominant force in the South East.
There is also speculation that rival supermarket chains Sainsbury and Asda are interested in buying the majority stake in the frozen food retailer. Another name linked with the takeover is Iceland chief executive Malcolm Walker who already owns 26% and made an offer on the remaining shares of £1bn last year.
The sale process begins in September when all eyes will be watching to see what happens to the iconic brand and whether it retains its position in the market as a leading provider of discounted frozen foods or whether the new owner will try to re-brand.

Author: Chris Cook

Work experience placements of less than one year undertaken by students are generally exempt from payments and National Minimum Wage (“NMW”).

However, there are circumstances when the individual who has been taken on as an intern will fall under the definition of a “Worker” and will be entitled to payment rights. This was the case in the recent victory of Kerri Hudson, who was taken on as an intern by TPG Web Publishing.

Kerri was expected to carry out actual work instead of just being trained and was therefore awarded £1,025 for five weeks’ work at the NMW rate plus pro rata holiday.

This is not the first case of its kind.  In 2008, Ms Vetta was also awarded payment at NMW by the Employments Tribunal, despite the fact that she was taken on by London Dreams Motions Pictures Ltd as an intern on an ‘‘expenses only’’ basis.

In 2007, the position of unpaid interns was raised as part of the consultation into the NMW.  At the time the government did not pursue further legislation but in light of recent cases it might be time to reassess that decision!

Author: Clare MacKay

Yesterday (17 May 2011) saw the beginning of a judicial review case brought by the Independent Schools Council and the Attorney General to challenge the decision of the Charity Commission that independent schools must provide bursaries in order to justify their charitable status.

Since the implementation of the Charities Act 2006, independent schools have had to show that they provide a public benefit in order to claim charity status and its related tax advantages.

As a result of the Charity Commission’s guidance, independent schools demonstrate public benefit by offering bursaries to fund the education of children from poorer backgrounds.

This case will determine what is required of independent schools in order to demonstrate public benefit. Many independent schools have been arguing that working within the community and assisting state schools is a sufficient public benefit, as is indeed the provision of education to its own pupils.  They argue that the provision of bursaries operates unfairly as it means that fees have to be increased to cover that provision.  In the current difficult financial times, this is a real concern when parents are increasingly having to tighten their belts.

Author: Jacqueline Button

War and Peace

In March I blogged about the troubles of HMV – a traditional high street retailer hounded to the point of profit warnings and the threat of store closures by competition from the voracious etailing sector.

One of the ideas mooted for the survival of the brand was the combining of some outlets with those of Waterstones, its sister company. Now that is looking unlikely as HMV has been looking for buyers for Waterstones and may have found one in the form of an interesting partnership. Tim Waterstone set up the eponymous chain in 1982 using a £6,000 redundancy payment he received from WH Smith. Now in his 70s he has made 5 previous attempts to buy back the company. This time, he might well succeed because his partner is Russian zillionaire, Alexander Mamut. The news of their bid of £43m led to a 12.5% rise in HMV’s share price even though HMV had allegedly hoped to achieve a price of £75m.

If the bid is successful expect to see an increase in the works of Dostoyevsky and Nabokov on the shelves.

Wenlock and Mandeville

Another favourite blogging subject at SA Law is JJB, the struggling sports retailer which undertook a second CVA earlier this year, conducted a fundraising and moved to AIM which means, claims its broker Panmure Gordon that it now “has the finances and strategy to restore the brand”. One would hope so after spending that kind of money on rescue measures.

Apparently, JJB is looking forward to 2012 for a resurgence in sales brought about by the Olympics and England’s likely qualification for Euro 2012. They are hoping these two events will generate sales of more than £200 per square foot – that’s an awful lot of Olympic merchandise and Wayne Rooney replica shirts and an awful lot of reliance on Olympic fever taking hold (a reasonable assumption) and the England football team not crashing out of another tournament early doors (no comment).

DIY SOS

Last week saw another retailer fall from grace – Focus DIY has gone into administration following a default on their banking facilities. The good news is that the 180 stores are still trading and Kingfisher (B&Q’s owners) have agreed to buy 31 of them. In addition, the owner of Range homewear stores is also interested in the chain. Interestingly Focus blames not the weather (unlike JJB, HMV and Thorntons) but a weak housing market a low consumer confidence for its difficulties – surely a weak housing market means homeowners are resigned to staying put and want to spend money doing up their houses but perhaps they are all going to Wickes and Homebase.

Finally, it looks like there is more trouble ahead. According to Ernst and Young’s Item Club consumer spending is expected to rise by only 2% a year in the 10 years to 2020. The gap between high inflation and subdued wage growth will continue to widen and disposable income will continue to decline. This is a depressing forecast, both for shopaholics like myself and for retailers, particularly those sensitive to discretionary spending. You might think that this is every retailer except the supermarkets although the same report says technology retailers should do all right. In other words people would rather have an Apple than an apple.

Author: Marilyn Bell

The Supreme Court will be ruling  on a case where the Court of Appeal gave an ex partner an equal share in a property they both owned although they had been separated for 13 years and he had not paid toward the mortgage since they separated.
This case identifies the difficulties facing unmarried couples who jointly own property.  It is probably the biggest area of law for confusion and misunderstanding. The partner who remains in the home often thinks that their ex’s share will be limited to the value of the property at the time they split up;  or even that he/she won’t have any rights to it as they chose to move out and have not been paying toward it. This is not the case and it highlights the importance of seeking legal advice at the time of the split and basing future decisions on that advice.
It can be heartbreaking for the remaining partner to have spent years paying for a property and taking good care of it, with repairs, maintenance and improvements only to find their ex successfully claiming half.

To read more about the impact of Cohabitation Rights, click here.

© SA LAW 2011
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.

Author: Jacqueline Button

In the shops in April there were milk chocolate eggs, dark chocolate eggs, white chocolate eggs, big eggs, small eggs and enormous eggs, cute bunnies, stylish bunnies and scary bunnies, and the odd chocolate bear or duck.

If you’re a chocolate retailer you expect your best trading period to be Easter time. Thorntons, perhaps the High Street’s best known chocolatier is celebrating its centenary this year. But if it had 99 years of strong Easter trading it wasn’t to have a hundredth. The company has just issued its second profits warning of the year with like for like sales down by 12.6% on the last quarter.

It is now estimating annual profits of £3m to £4.5m. That’s a lot of chocolate but not as must as it sold last year when it made a profit of £6.1m.

And what does Thorntons blame for its poor sales of eggs and bunnies? The weather. That would be the same meteorological force on which it (amongst others) blamed its poor Christmas trading. But whereas December sales were affected by the ice and snow Thorntons reckons that the hot April weather put customers off buying chocolate.

Is this the real reason? Or the only reason? Yes, chocolate melts in hot weather but surely the combined feel-good factors of sunshine, days off work and that wedding everyone’s talking about would be more likely to make consumers splash out on chocolate goodies than less. Besides, you can keep it in the fridge.

It seems more likely that it’s a combination of factors which have hit Thorntons’ profits this Easter. One is increased competition – Thorntons isn’t the only chocolate shop on the High Street and its not just chocolatiers who sell Easter eggs. Hotel Chocolat is a dark and sophisticated presence in the market and, in London, there is even more luxurious competition from the likes of Maison du Chocolat and Godiva. All the supermarkets were selling Easter products and it’s much easier for busy parents to stock up with eggs whilst they do the weekly shop than to take time out of a busy day to queue up at Thorntons, not to mention the wider range of products and the host of three for two and bogof offers which the supermarkets were promoting.

Another factor is an increased awareness of health issues – chocolate is not, unfortunately, good for you. And finally, in households where the R word still resonates purse-strings are tight and chocolate is not (and I personally struggle with this concept) an essential purchase.

So what will the results of Thorntons’ melting profits be? One is that they’re selling ice cream in more stores which can only be a good thing, but flippancy aside the main outcome will be the closure of some of Thorntons’ 600 stores. 9 have closed this year already and the company has said that with a lot of leases coming up for renewal it will review its portfolio with a view to more stores closing. I have already blogged about the trials, tribulations and proposed store closures of other retailers such as HMV and JD Sports and it is depressing to add Thorntons to that list, especially as it celebrates its centenary. In some towns there will be another empty shop on the High Street and chocoholics will have to get their fix elsewhere.

Author: Julie Gingell

On Sunday I had the honour of presenting the Watford Football Club Player of the Year Award to Danny Graham at their End of Season awards dinner.
As top-scorer for the club, Danny was a well-deserved winner and graciously accepted the award after receiving 2,710 votes from fans.

My colleague  Steve Kenneford announced Danny as the winner at the WFC v Queens Park Rangers home game on Saturday to a very energetic and excited crowd.

Congratulations also go to Will Buckley for Young Player of the Year, Adrian Mariappa for Players’ Player of the Year, John Eustace for Goal of the Season, and Rene Gilmartin for Community Ambassador of the Year.

SA Law is proud to sponsor the award, and continues to support the club both on and off the pitch.
From everyone at SA Law, and on behalf of all who cast their votes, keep up the good work boys!

To read other related blogs, click here.