England and Wales Lands Tribunal

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Cite as: [2005] EWLands LRA_29_2004

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LRA/29&30/2004

LANDS TRIBUNAL ACT 1949

LEASEHOLD ENFRANCHISEMENT – Procedure – LVT's power to dismiss application not pursued – Improper exercise of discretion – Right of appeal – Party who "appeared" before Tribunal – Leasehold Reform, Housing and Urban Development Act 1993, s.48

IN THE MATTER OF AN APPEAL FROM A DECISION OF THE LEASEHOLD

VALUATION TRIBUNAL FOR THE LONDON RENT ASSESSMENT PANEL

BETWEEN (1) UTA DE CAMPOMAR Appellants

(2) ROBIN GEOFFREY BERESFORD-EVANS

and

THE TRUSTEES OF THE PETTIWARD ESTATE Respondents

Re: Flat 2,

44 Redcliffe Gardens,

London SW10

Before: His Honour Judge Michael Rich QC

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

on 10 February 2005

Mr Radevsky, instructed by Messrs David Conway & Co, solicitors for the appellants.

The respondents did not appear.

The following cases are referred to in this decision:

Mean Fiddler Holdings Limited v. London Borough of Islington (ACQ/29/2001)

Penman v. Upavon Enterprises Ltd [2002] L&TR 10

Willingale v. Globalgrange Ltd [2000] 2 EGLR 55

DECISION

The appellants are respectively the tenants under long leases of Flats 2 and 5 at 44, Redcliffe Gardens London SW10. On 23^rd December 2002 they each served upon the respondent landlords a notice under s.42 of the Leasehold Reform, Housing and Urban Development Act 1993 ("the Act") exercising their right to acquire a new lease of their respective flats. On 24^th January 2003 the respondents served counter-notices under s.45 of the Act admitting their rights to new leases, but disputing the premium and other terms proposed. On 14^th July 2003, that is to say within the time limited by s.48(2) of the Act, the appellants applied to the Leasehold Valuation Tribunal ("LVT") to determine the matters in dispute. A hearing was fixed for 11^th and 12^th November 2003, but before that date the parties agreed the premiums to be paid. The other terms were still the subject of negotiation and so the parties on 6^th November 2003, made a joint application for the hearing to be an adjourned.

The LVT duly vacated the hearing and the clerk to the Tribunal on 10^th November 2003 wrote:

"… 3. I shall keep my file open for you to confirm the agreement and inform me that you are withdrawing your application.

4. If I do not hear from you by 10^th March 2004, the tribunal will consider whether to dismiss the application as an abuse of the tribunal's process pursuant to its power under Regulation 4B of the Rent Assessment Committee (England and Wales) (Leasehold Valuation Tribunal) Regulations 1993. Additionally, if you wish to appear and be heard on the question of dismissal, you must notify me of this by 17^th February 2004."

At that date the parties, although close to agreement on the other outstanding terms, were still in dispute. The appellants' solicitors however, by oversight, failed to notify the LVT either that they wished a hearing date to be fixed or a further adjournment to be granted. Accordingly the LVT, without further notice, issued a Decision dated 18^th March 2004 saying:

"The Tribunal served notice on 10^th November 2003 on the applicant's solicitors that it would consider the application pursuant to its powers under Regulation 4B of the Rent Assessment Committee Regulations 1993 if it did not hear from them by 10^th March 2004. Having received no reply from the applicant's solicitors, the Tribunal hereby dismisses the application as an abuse of the process of the Tribunal."

The appellants' solicitors apologised for their failure to notify the LVT of the position and asked that the application be reinstated. The LVT replied that the Decision had been issued and the Tribunal was unable to re-open the matter. It drew attention to the parties' right of appeal to the Lands Tribunal. Mr Radevsky who appears on the present appeals, and makes his submissions with his usual helpfulness and discretion, accepts that it was indeed right that the LVT had no power to reopen their decision. He refers to the decision in the Court of Appeal in Penman v. Upavon Enterprises Ltd [2002] L&TR 10 at p.151. It is in those circumstances that the appellants have appealed to the Lands Tribunal. The Respondents have not give notice of intention to oppose the appeal, although indicating their satisfaction with the LVT's decision and giving notice that they would wish to be heard in respect of any application as to costs.

Mr Radevsky submits that the LVT had no jurisdiction to dismiss the application. The regulation relied on in the Clerk's notice dated 10^th November and in the Decision dated 18^th March 2004, has no application to applications made under the 1993 Act. This has now been accepted on behalf of the LVT in a letter dated 20^th September 2004. In that letter, however, it is contended that

"in exercise of the power to regulate its own proceedings .. the LVT was competent to dismiss the application .."

For the reasons which I, together with Mr N. J. Rose FRICS, gave in paragraphs 17 to 19 of our decision dated 9^th September 2003 in Mean Fiddler Holdings Limited v. London Borough of Islington (ACQ/29/2001) in respect of the jurisdiction of the Lands Tribunal, I accept that the LVT does have power to enforce its rules of practice and to suppress any abuses of its process by striking out or dismissing an application.

Mr Radevsky submits such jurisdiction is inconsistent with the provisions of s. 48 of the Act wherein the provision that the LVT "may .. determine the matters in dispute" must in accordance with the decision of the Court of Appeal in Willingale v. Globalgrange Ltd [2000] 2 EGLR 55 be construed as "must". The decision was in respect of s. 25 of the Act, but I accept that the reasoning is equally applicable to s.48: the serving of the original notice is to serve as an exercise of the tenant's statutory rights and the terms of such exercise must then, if not agreed, be determined by the LVT. But the Court of Appeal's reasoning explained how the word "may" in s.25 was appropriate to allow for those cases where the tenant had no right to serve a notice under s.25. The application did not, in all circumstances require the LVT to determine terms. So, in my judgement, the word "may" is appropriate in s.48 to meet the circumstance where the application, although made in accordance with the statute, is so conducted as to constitute an abuse, which the LVT has a necessary power to prevent.

The consequence of dismissing the application is however that the notices which were properly served and not disputed are rendered ineffective. They are neither withdrawn nor deemed to be withdrawn in accordance with ss. 52 and 53. To create such a situation with the effect of frustrating the statutory consequence of the notice is a draconian step. The LVT in this case, as is now acknowledged, took such step in mistake as to the source of its powers and in support of what appears to be a standard practice which fails even to follow the procedure which would have been required under regulation 4B. That regulation, where it applies, requires service of a notice that the Tribunal "is minded to dismiss the application", as opposed to the notice used in this case that it "will consider .." The fact that the Decision once issued cannot be reconsidered makes it incumbent on a LVT so minded, to consider before exercising its power whether there might be grounds for relief from the proposed sanction. That indeed is what the letter of 10^th November envisaged, but only if the applicants wrote further before 17^th February. In my judgement such consideration must involve giving specific notice of an intention to exercise the power unless cause is shown to the contrary and the giving of an opportunity to show cause. The letter of 10^th November fell short of that. The manner in which the LVT's power was exercised in this case appears to me therefore to have so far departed from the requirements of justice, and to have visited upon the applicants a sanction so far disproportionate to their fault, namely failure to apply before 17^th February, that I have no doubt in saying that the LVT's exercise of the discretion which I hold that it has, was wrong in principle, and ought to be reviewed.

The one matter that has given me pause has been the entitlement of the Lands Tribunal to entertain this appeal. The decision of the LVT in this case was regulated by paragraph 2 of Schedule 22 of the Housing Act 1980. This provided that:

"No appeal shall lie from a decision of a leasehold valuation tribunal to the High Court by virtue of section 11(1) of the Tribunals and Inquiries Act 1992 and no case may be stated for the opinion of the High Court in respect of such a decision, but any person who –

(a) appeared before a tribunal in proceedings to which he was a party; and

(b) is dissatisfied with its decision,

may … appeal to the Lands Tribunal."

Thus it is necessary to entitle a party dissatisfied with a decision of the LVT to appeal to the Lands Tribunal, that he appeared before the Valuation Tribunal.

The appellants' complaint is that their applications were dismissed by the LVT without their having appeared before it either to be heard as to the merits of the dispute which had been referred to the LVT, or even as to the appropriateness of their applications being dismissed without such hearing. If for that reason they are not entitled to appeal within the time limits provided for appeal to the Lands Tribunal, their only remedy was by application to the High Court for judicial review, for which the ordinary time limit has now long expired. Paradoxically therefore a provision for appeal to the Lands Tribunal in substitution for the statutory appeal provided under the Tribunals and Inquiries Act, precisely in order to replace the necessary resort to judicial review, would in the case of aggrieved parties who do not appear before the Tribunal force them back to the remedy of judicial review. As a matter of purposive construction it would seem to me that the test of whether a party has "appeared" before the LVT should be limited to those who would not ordinarily qualify to apply for judicial review because their involvement in the proceedings was insufficient either to give them standing or more probably grounds for such application.

In judicial and quasi-judicial proceedings the term "appear" has a wider meaning than actually attending before the tribunal. One entered an appearance to a writ by responding not by attending. In the absence of a contrary argument being placed before me, I accept Mr Radevsky's submission that in the context of this provision, the appellants appeared on the question of when a hearing should take place when their solicitor applied for and was granted an adjournment of the original hearing date. Thus the decision to dismiss the application without refixing a hearing was a decision in respect of which the parties had appeared within the meaning of the Schedule. Accordingly I am satisfied that the appellants were entitled to appeal against the LVT's decision to dismiss their applications.

Since writing the above paragraphs of this decision, I have received further submissions in writing from Mr Radevsky which I have read, but which do not require me to amend this decision.

For these reasons I allow these appeals. It follows that the applications remain to be determined and the LVT should give direction for determining any outstanding disputes accordingly.

Mr Radevsky made submissions to suggest that I had jurisdiction to award costs on these appeals to the successful appellants against the respondents, notwithstanding that they have not given notice of opposition to the appeals. That is not a matter which I would determine in their absence and I had, for the saving of costs, agreed to their absence from the hearing of the appeal itself, having been informed that they did not intend to make any submissions upon the appeal. On my indicating that, having regard to the fact that the necessity for these appeals arose from the default of the appellants' solicitors in failing to respond to the LVT's letter of 10^th November 2003, I should if an application for costs were to be made need considerable persuasion to grant it, Mr Radevsky decided to make no such application. Accordingly there will be no order as to costs.

It may be appropriate to add just this. I understand the administrative convenience of the procedure proposed to be adopted by the LVT in this case. It may be that such a procedure has been adopted more generally. Providing that the matters to which I have directed attention in paragraph 7 of this Decision are properly taken into account, it should be possible for LVTs to avoid being burdened with applications which clutter their lists and disrupt their expeditious dispatch of business, because they are not pursued with reasonable diligence. Draconian sanctions, however, applied in a manner which is incapable of review without resort to appeal, except after specific notice and enquiry as to the parties' position, will seldom be capable of justification.

Dated 1 March 2005

His Honour Judge Michael Rich QC