CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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Sinclair Gardens Investments (Kensington) Limited |
Appellant |
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Poets Chase Freehold Company Limited |
Respondent |
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Ms Lana Wood (instructed by Parrott & Coales) for the Respondent
Hearing dates: 27th & 29th June 2007
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Crown Copyright ©
Mr Justice Morgan:
The Issue
by the Leasehold Reform, Housing and Urban Development Act 1993 ("the 1993 Act"), Part I, Chapter I. In a case where qualifying tenants of flats, contained in premises to which Chapter I applies, serve a notice which purports to be given under Section 13 of the 1993 Act, but which in fact fails to comply with the requirements of Section 13(3), what, if any, is the effect of that notice? If the landlord points out that the notice does not comply with Section 13(3), or if the tenants realise this for themselves, are the tenants able without delay to serve a further notice which does comply with Section 13(3) and which will unquestionably be an effective notice under Section 13? Or does the service of the first purported notice under Section 13 mean that the tenants are not able to serve a second notice until they withdraw the first notice and, when they withdraw the first notice, is there a period of twelve months from such withdrawal within which there is a statutory prohibition on serving a second notice?
The Facts in Outline
The Statutory Provisions
The initial notice
13 Notice by qualifying tenants of claim to exercise right
(1) A claim to exercise the right to collective enfranchisement with respect to any premises is made by the giving of notice of the claim under this section.
(2) A notice given under this section ("the initial notice")--
(a) must
[(i) in a case to which section 9(2) applies,] be given to the reversioner in respect of those premises; [and
(ii) in a case to which section 9(2A) applies, be given to the person specified in the notice as the recipient;] and
(b) must be given by a number of qualifying tenants of flats contained in the premises as at the relevant date which--
(i) . . .
(ii) is not less than one-half of the total number of flats so contained;
[(2A) In a case to which section 9(2A) applies, the initial notice must specify--
(a) a person who owns a freehold interest in the premises, or
(b) if every person falling within paragraph (a) is a person who cannot be found or whose identity cannot be ascertained, a relevant landlord,
as the recipient of the notice.]
(3) The initial notice must--
(a) specify and be accompanied by a plan showing--
(i) the premises of which the freehold is proposed to be acquired by virtue of section 1(1),
(ii) any property of which the freehold is proposed to be acquired by virtue of section 1(2)(a), and
(iii) any property . . . over which it is proposed that rights (specified in the notice) should be granted by him in connection with the acquisition of the freehold of the specified premises or of any such property so far as falling within section 1(3)(a);
(b) contain a statement of the grounds on which it is claimed that the specified premises are, on the relevant date, premises to which this Chapter applies;
(c) specify--
(i) any leasehold interest proposed to be acquired under or by virtue of section 2(1)(a) or (b), and
(ii) any flats or other units contained in the specified premises in relation to which it is considered that any of the requirements in Part II of Schedule 9 to this Act are applicable;
(d) specify the proposed purchase price for each of the following, namely--
(i) the freehold interest in the specified premises [or, if the freehold of the whole of the specified premises is not owned by the same person, each of the freehold interests in those premises],
(ii) the freehold interest in any property specified under paragraph (a)(ii), and
(iii) any leasehold interest specified under paragraph (c)(i);
(e) state the full names of all the qualifying tenants of flats contained in the specified premises and the addresses of their flats, and contain . . . in relation to each of those tenants, . . .
(i) such particulars of his lease as are sufficient to identify it, including the date on which the lease was entered into, the term for which it was granted and the date of the commencement of the term,
(ii) . . .
(iii) . . .;
(f) state the full name or names of the person or persons appointed as the nominee purchaser for the purposes of section 15, and an address in England and Wales at which notices may be given to that person or those persons under this Chapter; and
(g) specify the date by which the reversioner must respond to the notice by giving a counter-notice under section 21.
(4) . . .
(5) The date specified in the initial notice in pursuance of subsection (3)(g) must be a date falling not less than two months after the relevant date.
(6), (7) . . .
(8) Where any premises have been specified in a notice under this section, no subsequent notice which specifies the whole or part of those premises may be given under this section so long as the earlier notice continues in force.
(9) Where any premises have been specified in a notice under this section and--
(a) that notice has been withdrawn, or is deemed to have been withdrawn, under or by virtue of any provision of this Chapter or under section 74(3), or
(b) in response to that notice, an order has been applied for and obtained under section 23(1),
no subsequent notice which specifies the whole or part of those premises may be given under this section within the period of twelve months beginning with the date of the withdrawal or deemed withdrawal of the earlier notice or with the time when the order under section 23(1) becomes final (as the case may be).
(10) In subsections (8) and (9) any reference to a notice which specifies the whole or part of any premises includes a reference to a notice which specifies any premises which contain the whole or part of those premises; and in those subsections and this "specifies" means specifies under subsection (3)(a)(i).
(11) Where a notice is given in accordance with this section, then for the purposes of this Chapter the notice continues in force as from the relevant date--
(a) until a binding contract is entered into in pursuance of the notice, or an order is made under section 24(4)(a) or (b) or 25(6)(a) or (b) providing for the vesting of interests in the nominee purchaser;
(b) if the notice is withdrawn or deemed to have been withdrawn under or by virtue of any provision of this Chapter or under section 74(3), until the date of the withdrawal or deemed withdrawal, or
(c) until such other time as the notice ceases to have effect by virtue of any provision of this Chapter.
(12) In this Chapter "the specified premises", in relation to a claim made under this Chapter, means--
(a) the premises specified in the initial notice under subsection (3)(a)(i), or
(b) if it is subsequently agreed or determined under this Chapter that any less extensive premises should be acquired in pursuance of the notice in satisfaction of the claim, those premises;
and similarly references to any property or interest specified in the initial notice under subsection (3)(a)(ii) or (c)(i) shall, if it is subsequently agreed or determined under this Chapter that any less extensive property or interest should be acquired in pursuance of the notice, be read as references to that property or interest.
(13) Schedule 3 to this Act (which contains restrictions on participating in the exercise of the right to collective enfranchisement, and makes further provision in connection with the giving of notices under this section) shall have effect.
21 Reversioner's counter-notice
(1) The reversioner in respect of the specified premises shall give a counter-notice under this section to the nominee purchaser by the date specified in the initial notice in pursuance of section 13(3)(g).
(2) The counter-notice must comply with one of the following requirements, namely--
(a) state that the reversioner admits that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the specified premises;
(b) state that, for such reasons as are specified in the counter-notice, the reversioner does not admit that the participating tenants were so entitled;
(c) contain such a statement as is mentioned in paragraph (a) or (b) above but state that an application for an order under subsection (1) of section 23 is to be made by such appropriate landlord (within the meaning of that section) as is specified in the counter-notice, on the grounds that he intends to redevelop the whole or a substantial part of the specified premises.
22 Proceedings relating to validity of initial notice
(1) Where--
(a) the reversioner in respect of the specified premises has given the nominee purchaser a counter-notice under section 21 which (whether it complies with the requirement set out in subsection (2)(b) or (c) of that section) contains such a statement as is mentioned in subsection (2)(b) of that section, but
(b) the court is satisfied, on an application made by the nominee purchaser, that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the specified premises,
the court shall by order make a declaration to that effect.
(2) Any application for an order under subsection (1) must be made not later than the end of the period of two months beginning with the date of the giving of the counter-notice to the nominee purchaser.
(3) If on any such application the court makes an order under subsection (1), then (subject to subsection (4)) the court shall make an order--
(a) declaring that the reversioner's counter-notice shall be of no effect, and
(b) requiring the reversioner to give a further counter-notice to the nominee purchaser by such date as is specified in the order.
(4) Subsection (3) shall not apply if--
(a) the counter-notice complies with the requirement set out in section 21(2)(c), and
(b) either--
(i) an application for an order under section 23(1) is pending, or
(ii) the period specified in section 23(3) as the period for the making of such an application has not expired.
(5) Subsections (3) to (5) of section 21 shall apply to any further counter-notice required to be given by the reversioner under subsection (3) above as if it were a counter-notice under that section complying with the requirement set out in subsection (2)(a) of that section.
(6) If an application by the nominee purchaser for an order under subsection (1) is dismissed by the court, the initial notice shall cease to have effect at the time when the order dismissing the application becomes final.
The Notices in more detail
The Landlord's Submissions
The Nominee Purchaser's Submissions
Discussion
Conclusion as to the Statutory Provisions
I note that my understanding of the operation of the statutory provisions is supported by a comment on the provisions in the judgment of Auld LJ in 9 Cornwall Crescent London Limited v Kensington & Chelsea Royal London Borough Council [2005] 2 EGLR 131, at paragraph [8]. Auld LJ plainly thought that if tenants gave a notice which was agreed or held to be invalid for want of compliance with the requirements of Section 13 then there would be no bar to the tenants giving a valid notice without delay.
Estoppel
71.
The Overall Result