England and Wales Lands Tribunal

[2004] EWLands LRA_35_2004 (6 December 2004)

LRA/35/2004

LANDS TRIBUNAL ACT 1949

LEASEHOLD ENFRANCHISEMENT – collective enfranchisement – preliminary issue – whether valid counter-notice served – Leasehold Reform, Housing and Urban Development Act 1993, sections 21 and 24.

IN THE MATTER OF AN APPEAL FROM THE DECISION OF THE LEASEHOLD VALUATION TRIBUNAL FOR THE LONDON RENT ASSESSMENT PANEL

BETWEEN

MRS EILEEN RANJIT-SINGH

Appellant

and

GWYNN TECWYN PARRY

Respondents

STEPHEN JOSEPH O'FARRELL

PAULA ELIZABETH SAYER
STEPHEN PETER GREAVES

Re:

Three flats at

167 Alexandra Park Road

Wood Green

London N22 7UL

Before: The President

Sitting at Procession House, 110 New Bridge Street, London EC4V 6JL

on 3 December 2004

Dr Isidora Ranjit-Singh for the appellant with permission of the Tribunal

The respondent Mr Parry in person and for the other respondents with permission of the Tribunal

The following case was referred to in argument:

O'Brien v Glentamer Mansions Management Ltd (unreported; LT ref LRA/58/2003)


 


DECISION

1. The appellant in this case, Mrs Eileen Ranjit-Singh, is the freehold owner of a house, 167 Alexandra Park Road, London N22 7UL, which has been divided into three flats. The respondents are the respective leaseholders of the three flats, and Mr Gwynn Parry, who is joint tenant with Mr O'Farrell of the first floor flat, is the nominee purchaser of the freehold under the Leasehold Reform, Housing and Urban Development Act 1993. The tenant of the ground floor flat, Mr S P Greaves, holds under a lease of 125 years from 25 March 1990, and I understand that the two other flats are held under similar leases. The tenants are qualifying tenants under section 5 of the Act, and the premises satisfy the requirements of section 3. They have the right to have the freehold acquired on their behalf under Part I Chapter I of the Act (see section 1(1)) – the right to collective enfranchisement. For some time they have been seeking to exercise this right and the appellant has been willing to transfer the freehold. The only difference between them has been the price. On 12 July 2002 one of the tenants, Ms Paula Sayer, wrote to Mr A Ranjit Singh, Mrs Ranjit-Singh's husband and at that time part-owner with her, "to confirm that all three occupiers of the existing flats seem to be in agreement that we will jointly buy the Freehold from yourself at the price of £6,000". Some months later, however, Mr Parry sought advice on the price from a chartered surveyor, who valued the freehold for the purposes of the Act at £1,875. This then became the price that the tenants were willing to pay. The freeholder maintained that the price should be the £6,000 that had been said to be agreed.
2. By notice dated 29 October 2003 the tenants served notice under section 13 of the Act on the appellant claiming to exercise the right to collective enfranchisement. The notice identified Mr Parry as the nominee purchaser. It stated that the response date, the date "by which you must respond to this notice by giving a counter-notice under section 21", was 29 December 2003. On 10 December 2003, Mr Ranjit Singh wrote to Mr Parry on behalf of his wife. The letter, under the heading "Re: Freehold offer of three flats at £6,000", began by saying:

"Further to the above, my letter to you dated 30^th October 2003 and your notification re Leasehold Reform …, I write to confirm that I am now in receipt of your communication.

Firstly, please be informed that I am happy you have taken action to resolve the above matter via 'Leasehold Reform …'."

The letter went on to protest about the timing of the notice – when Mr Ranjit Singh was out of the country – "even though you are taking the correct action, with which I am in agreement."

3. On 19 December 2003 Mr Parry wrote to Mrs Ranjit-Singh "Re: The Freehold Title to 167 Alexandra Park Road" as follows:

"Thank you for your letter of 10 December 2003 being the Counter-Notice.

Under the terms of the Leasehold Reform and Urban Development Act 1993 your letter is deemed as a Counter-Notice under Section 24 in response to the Section 13 Notice served upon you dated 28 October 2003.

It is clear that the only point of dispute between us is the premium for the freehold and under the Act we have 2 months from the date of your Counter-Notice which is dated 10 December 2003 to resolve this matter amicably which takes us up to 10 February 2004.

Should we not hear from you by 10 February agreeing to our offer to purchase the freehold in the sum set out in our Section 13 Notice to you we shall immediately apply to the Leasehold Valuation Tribunal for a Hearing Date to have the matter determined by the Tribunal."

4. On 7 January 2004 Mr Parry wrote to the LVT on behalf of the leaseholders. He referred to a telephone conversation of the previous day and enclosed a number of documents, including the section 13 notice, the letter of 19 December 2003 to the freeholder and "4. Copy Landlord's letter dated 10 December being the Counter-Notice to Section 13 Notice received from the West Indies and copy letter from landlord dated 30 October enclosed also." Mr Parry's letter of 7 January 2004 and a later letter from him of 16 January 2004 were treated by the LVT as an application to it under section 24 of the Act.
5. On 20 January the LVT wrote to Mrs Ranjit-Singh saying that the papers had been considered by a Tribunal and that it had been decided to set the matter down for a preliminary hearing to decide whether the LVT was able to deal with the application having regard to the landlord's counter-notice. A hearing was held on 16 February 2004, and on 24 February 2004 the LVT gave a short written decision. Having recited the dates on which steps relevant to the proceedings had been taken, it said:

"The applicant claimed that the counter notice was invalid. Dr Ranjit-Singh alleged that it was valid. Whilst she accepted that it did not cover all the requirements of Section 21 of the Act, she maintained that many of them were not relevant to the subject application. In any event she considered that an agreement to purchase the freehold at a price of £6000 had been reached.

The Tribunal, whilst accepting that no form of counter notice is prescribed, was satisfied that the letter of 10 December 2003 did not sufficiently cover the requirements prescribed in Section 21.

Secondly, in these circumstances, the Tribunal determines that an application under Section 25, may be made by the applicant to the County Court for an order determining the terms on which, in accordance with the proposals contained in the initial notice, the interests and rights specified in it are to be acquired."

The appellant now appeals against this decision.

6. For the appellant Dr Ranjit-Singh says that Mr Parry's letter of 19 December 2003 accepted that the latter of 10 December 2003 was a counter-notice. The letter did essentially agree to the sale of the freehold, although it did not fully meet the requirements of section 21 of the Act. In particular, section 21(2)(a) was satisfied by what the letter implied. Section 21(2)(a) provides as follows:

"(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;"

7. Mr Parry said that he accepted that the letter of 10 December 2003 by implication satisfied the requirements of section 21(2)(a) and made clear that the only point in issue was the enfranchisement price. However, the letter had three deficiencies which prevented it from being a valid counter-notice. These were:

(a) It failed to specify an address in England and Wales at which notices might be given to the reversioner, as required by section 21(6);

(b) it failed to state whether or not the premises were within the area of an estate management scheme, as required by Article 4 of the Leasehold Reform (Collective Enfranchisement) (Counter-notices) (England) Regulation 2002; and

(c) it failed to state which (if any) of the proposals contained in the initial notice were accepted by the reversioner and which (if any) of those proposals were not so accepted, as required by section 21(2)(c).

8. Mr Parry accepted that he had not been prejudiced by these deficiencies. It had, he said, been the LVT that had raised the question of the validity of the counter-notice, but if it was invalid the position was the same as if no counter-notice had been given. Relying on the LVT's decision the leaseholders had made application to the county court on 5 March 2004 to acquire the freehold under the terms of the section 13 notice, and this had been the subject of adjournments pending the determination of the present appeal.
9. I have to say that I should be disappointed if I found myself constrained to hold that the counter-notice was invalid and that the LVT had no jurisdiction to determine the tenants' application. The parties were agreed on transfer of the freehold, with the exception of the price, about which there was a genuine disagreement that both sides were looking to the LVT to resolve. The tenants had expressly accepted the letter of 10 December 2003 as a valid counter-notice and had made their application to the LVT on this basis. The suggestion that the counter-notice might be invalid came from the LVT.
10. Happily I am satisfied that the LVT was wrong in its conclusion. Its power to determine a dispute is contained in section 24(1), which provides:

"(1) Where the reversioner in respect of the specified premises has given the nominee purchaser –

(a) a counter-notice under section 21 complying with the requirement set out in subsection (2)(a) of that section, or

(b) a further counter-notice required by or by virtue of section 22(3) or section 23(5) or (6),

but any of the terms of acquisition remain in dispute at the end of the period of two months beginning with the date on which the counter-notice or further counter-notice was given, a leasehold valuation tribunal may, on the application of either the nominee purchaser or the reversioner, determine the matters in dispute.

11. In the present case, therefore, (paragraph (b) having no application) the LVT had jurisdiction, provided that a counter-notice complying with section 21(2)(a) had been given. It was not a pre-requisite of the exercise of its power to determine the matter in dispute that all the other statutory requirements, in section 21 and elsewhere, as to the contents of the counter-notice should have been met. There is no doubt, in my judgment, that the letter of 10 December 2003 met the requirements in section 21(2)(a), and indeed Mr Parry does not contend otherwise. It welcomed the steps being taken under the Act by the tenants to resolve the dispute as to the price, and it carried the necessary implication that the tenants were entitled to exercise the right to collective enfranchisement. None of the deficiencies to which Mr Parry points matter, because he was not prejudiced by them. Had there been prejudice to him it might have been necessary to consider whether that affected the exercise by the LVT of its powers under section 24(1), but, in the absence of any prejudice, it is unnecessary to do so.
12. I should add that I have also considered whether on the facts there might not be an estoppel by convention disabling Mr Parry from challenging the validity of the counter-notice, but, in view of the conclusion I have reached on the effect of section 24(1), it is unnecessary for me to deal with this.
13. The appeal must be allowed and the preliminary issue determined in the appellant's favour. In view of the provisions of section 175(6) of the Commonhold and Leasehold Reform Act 2002, I make no order as to costs.

6 December 2004

George Bartlett QC, President