Let me start by saying that this dispute was complex. It involved 3 parties, instead of the typical 2. There were multiple grounds for dispute and each party required their own language interpreter.
Written by Colin Smith, Solicitor & Mediator at Leonard Gray.
Legal proceedings had been issued and a First Court Directions Appointment had already taken place. The judge had encouraged the parties to try mediation before giving any further Directions for a Trial. The case had been adjourned for 21 days for mediation to be tried.
The three parties all had grounds for grievance
A high street constructed in the Victorian era comprised shops, gardens at the rear with buildings at the back facing onto a housing mews. The shops and mews housing behind had gardens between them divided on a roughly 50/50 basis.
Party 1: The owners of the mews house that backed on to the tenants
Owned by foreign nationals, the house was used primarily as a storage facility for their own small business. They rarely ventured outside in to their garden but one day discovered that the tenants of the shop had extended the premises building out over their own and the mews garden up to within six feet of the back of the mews house. They issues proceedings for trespass, conversion and damages arising. They sought a complete removal of the extended business premises and required the garden to be returned to its original state, and damages. They were also seeking their legal costs.
Party 2: The shop tenants
The tenants had been in possession for over ten years and were charged with trespass, conversion and damages arising. The tenants were seeking to claim “adverse possession” over the portion of the garden of the mews house they occupied.
Party 3: The landlord of the freehold shop
The owners been drawn into the litigation as the tenants had extended the premises without their permission. They felt very aggrieved that the tenants had acted in this way and, in particular, were getting the benefit of increased premises without increased rent. The owners felt that they had been put at risk of litigation by the actions of the tenants in breach of the tenancy agreement.
By the time the case came to mediation, legal costs were around £7,000 each
All parties needed language interpreters for the mediation. Three solicitors were present with three barristers. I commenced the mediation by agreeing with all parties that as we only had three hours, opening statements from the solicitors/barristers could be dispensed with. I then visited each of the parties and asked them to consider their positions very carefully.
Leaving aside the strict law applying to the matter, we needed to find a pragmatic solution to the problem which was acceptable to all and would allow the current expensive and anticipated lengthy litigation to be resolved.
We achieved a more creative remedy that would not have been available to us through the legal process
It occurred to me that the owners of the High Street shop might benefit in the longer term if they were able to buy the garden over which their tenants had extended and the mews house behind. The owners were commercial in their approach in realising that if they could sell the mews house and garden for an enhanced sum (bearing in mind the strength of their legal case and that there was a likelihood they would receive damages), then they may benefit.
The conveyancing solicitors for the two owners came straight to the mediation to add their input. A price was agreed and the conveyancing solicitors drew up contracts (subject to such matters as searches and other unforeseen circumstances). These were signed on the evening.
Party 1: The owners of the mews house received an enhanced value by several thousand pounds bearing in mind their claim for damages.
Party 2: The tenants were granted a new five-year lease over the existing shop, land and mews property behind at an enhanced rent bearing in mind the increased premises.
Party 3: The landlord of the freehold shop agreed with their tenants that there would be a lump sum payment to compensate them for the enhanced value which was paid to buy the land and the mews property.
The issue of legal costs was argued very hard between the parties but in the end they all agreed to bear their own legal costs as there would be a saving of future litigation costs, uncertainty and their commercial need to proceed.
Although the law on the case was complex, common sense prevailed and the best outcome was achieved
This was a typical case where the issues were complex to start with. However, although conducted in the backdrop of the law for obvious reasons, the parties all wanted to reach a suitable agreement so they could carry on with their commercial undertakings without the continuing expense and time committed to litigation. The legal representatives were all satisfied because their clients had reached outcomes which suited them and the uncertainty of continued litigation was avoided.