Landlord and tenant — Leasehold Reform, Housing and Urban Development Act 1993 — Collective enfranchisement — Whether tenants’ initial notice valid
By an initial notice dated March 1995 the
applicant nominee purchaser, acting for a number of tenants of a block of
flats, sought to enforce their rights of collective enfranchisement under the
Leasehold Reform, Housing and Urban Development Act 1993. By a counternotice
dated May 24 1995 the respondent landlord disputed the applicants’ entitlement
on the ground, inter alia, that the initial notice did not contain the plan of
the property referred to as accompanying it and was therefore invalid. At the
hearing of the applicants’ originating application to determine the validity of
the initial notice, the respondent landlord relied on section 13 of the Act
which provides that the initial notice must be accompanied by a plan.
declaration made that the initial notice was invalid. Section 13 assumes that
the service of a plan is not a technicality; the Act uses mandatory language.
The initial notice was not validated by the provisions of Schedule 3, para 15,
or of section 22.
No cases are referred to in this report.
Aidan Casey (instructed by Clyde &
Co) appeared for the applicants; David Holland (instructed by Cawdery Kaye
Fireman & Taylor) represented the respondent.
Giving judgment, Judge Hallgarten QC said: In this
case the applicants are a nominee company formed, as I understand it, by a
number of the tenants holding long leases of a property at 7 Queens Gate Place,
London SW7, and they seek to enforce certain rights of collective
enfranchisement of the flats pursuant to a notice dated March 24 1995. The
respondent, who is, as I understand it, the head landlord or owner, by a
counternotice dated May 24 1995, disputes the entitlement of the applicants to
enfranchisement on four grounds, now reduced to one, namely that the initial
notice did not contain the plan referred to as accompanying it and is therefore
invalid. That notice was accompanied by a letter of the same date which read:
Entirely without prejudice to our
clients’ contention that the initial notice purported to be served on around
24th March 1995 is invalid, we enclose the completed … as counternotice.
That letter was from the respondent’s
solicitors. They went on to say: ‘Please note that in the first instance our
clients still intend to contest the validity of the initial notice’.
This then gave rise to an originating
application by the applicants dated July 20 1995, seeking a declaration
pursuant to section 22 of the Leasehold Reform, Housing and Urban Development
Act 1993 that they were entitled to exercise the right of collective
enfranchisement, an order declaring that the respondent’s counternotice was to
no effect and for an order that the respondent pay the costs.
In relation to the point specifically
taken in the counternotice, which I will identify, what was said was that the
omission of the plan did not render the initial notice invalid or represent
merely an inaccuracy in the particulars required by section 13 of the Act, or a
misdescription of the premises within the meaning of Schedule 3, Part III of
the Act, or amounted to a matter capable of remedy by amendment under such
Schedule in respect of which the applicants had made application to this court
for leave to amend. Pausing there, I was told that there had indeed been an
application for leave to amend but that such had been declined by the learned
district judge and no appeal arises in relation to that.
So far as documentation is concerned, I
understand that the respondent for its part put in an answer in which it
spelled out the point that there was no plan accompanying the notice and sought
orders in particular that the court should dismiss the originating application
or, by way of counterclaim, declare that the initial notice was invalid. So the
respondent’s point is a very simple one.
It is common ground that, although the
notice itself in para 1 thereof stated that the premises were those shown in
red on the accompanying plan, no accompanying plan existed — that is to say
nothing was sent together with the notice or which could be connected with the
notice. What the respondent says is that the notice was invalid, since under
section 13(3) of the Act it states that:
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 …
(ii) any property of which the freehold
is proposed to be acquired …
(iii) any property of the person who owns
the freehold of the specified premises over which it is proposed that rights …
should be granted … in connection with the acquisition of the freehold …
The applicants make a two-fold response.
The first point, logically I think, is the one which is raised in the
originating application, namely the one that arises under Schedule 3, para
15(1). That is headed ‘Inaccuracies or misdescription in initial notice’ and
the text says:
The initial notice shall not be invalidated
by any inaccuracy in any of the particulars required by section 13(3) or by any
misdescription of any of the property to which the claim extends.
What is said by Mr Aidan Casey, for the
applicant nominee purchaser, is that the failure to produce the accompanying
plan was an inaccuracy or misdescription, so that the notice was not
invalidated. I have to reject that submission for the simple reason that it is
not justified by the language of para 15(1) of the Schedule. It speaks of
inaccuracies or misdescription of any property to which the claim extends and
it does not seem to me that, if there is a failure to give particulars,
such can be said to be inaccuracy in the particulars; nor, in my view, can it
be said that there is misdescription of the property where what is involved is
failure to comply in effect with what is stated to be a condition precedent,
namely the provision of a plan.
That approach is, I think, to some extent
supported by what is said in Hill and Redman, para 3.15, which says that
the notice must contain certain information, and in para 3.16 it is said in
addition that the notice must be accompanied by a plan. It does seem to me that
there is a difference between inaccuracies in particulars and description on
the one hand and on the other the actual provision of necessary documents
which, for whatever reason, section 13 requires to be served. The underlying
reason for that requirement does not emerge, but I imagine that there may be
cases where a landlord does not find it easy to identify the premises in
question. I do not suppose that those, save among the very wealthy or the Dukes
of Westminster of this world, can exist very frequently. None the less that is
the way in which matters are framed and I do not think I can go behind the language
of section 13.
I have to say that in reaching that
conclusion I was impressed by what Mr Casey said:
Well, it is not a mere inaccuracy — it is
any inaccuracy or any misdescription. Why should a notice be
invalidated for something which is purely technical, whereas something quite
substantial by way of an inaccuracy or misdescription might nonetheless result
in the court being forced (because I do not believe that para 15(1) vests any
discretion) to treat a notice as valid.
I have some sympathy with that submission
but, for my part, I simply have to apply the wording of the Act and it is for
others to grapple with what is meant by ‘inaccuracy’ or ‘misdescription’,
although I can well see that there may be inaccuracies or misdescriptions which
are so fundamental that in practical terms they fall outside the ambit of para
15(1). That is not a matter with which I have to deal at this stage. The reason
which I formed as being the basis of my rejection of this particular submission
is that we do not even get within para 15(1).
I then turn to what is, I think, Mr
Casey’s primary submission — it certainly was the first submission in terms of
the order of his submissions — where he said that this is a case which falls
within section 22 of the Act. There is a distinction between section 22 of the
Act, which is headed ‘Proceedings relating to validity of initial notice’ and
section 25 of the Act, headed ‘Applications where reversioner fails to give
counter-notice or further counter-notice’ — a significant distinction. The
distinction is that section 25 in its terms postulates under subsection (1)
that ‘… the initial notice has been given in accordance with section 13 …’,
whereas section 22 is entirely silent about an initial notice having been
given. In effect Mr Casey, although wise not to quote such to me, none the less
seems to me to have been relying upon the maxim inclusio unius est exclusio
alterius.
It seems to me the answer to that
submission is a fairly simple one. As I see it section 22 proceeds on the
assumption that there is no challenge to the initial notice. A counternotice
after all only needs to be given in response to a valid initial notice.
Therefore prima facie if one is served, it follows that either the
original notice is valid or is deemed valid, ie by giving a counternotice. The
respondent is in fact waiving any defect that might otherwise exist. That seems
to me to be the obvious explanation why section 22 is silent as to the initial
notice.
Having said that, I was referred by Mr
Casey to a passage in Hill and Redman in para 3.37. I will just read the
entirety of that quite short paragraph:
3.37 Where the counternotice does not
admit the tenant’s entitlement to collective enfranchisement, a nominee
purchaser may, within two months from receiving the counternotice, apply to the
court for a declaration as to the
notice: s 22(1)(a), (2). Although the marginal notes to the section reads
‘Proceedings relating to validity of initial notice’, the court appears not to
be concerned with whether the notice itself was valid, but with the logically
prior question whether the participating tenants were entitled to serve a
notice. The court procedure here does not appear to be predicated on a valid
original notice having ‘been given in accordance with s 13’ (as is the
procedure under s 25, for example).
3.38 Thus, if the court is satisfied that
the participating tenants were so entitled, then the court must so declare: s
22(1)(b).
So far as the passage in section 3.37 is
concerned, I accept the logic of what is there set out but I have to say I do
not accept the conclusions. I certainly do not accept the conclusion which Mr
Casey has asked me to draw, namely that section 13 questions are irrelevant. It
seems to me that if section 13 questions are raised, they must be resolved.
Here at all material times it seems to me they were properly raised. As I see
it, it is perfectly correct that the court procedure does not appear to be
predicated in a valid original notice having been given in accordance with
section 13. But that is simply because section 22 proceeds on the basis that
there are no problems in relation to a section 13 notice. If there are
problems, those problems, as I say, have to be determined.
Mr David Holland advanced an alternative
argument based upon section 22(1)(b) relating back to section 1(b) to the
effect that section 22 does proceed upon the basis that there must be a valid
original notice. He made a similar point in relation to section 22(6). The
point under section 22(1)(b) was a reference to the relevant date and it was
said that there cannot be a relevant date under section 1(8) unless there is a
valid notice. I see some force in that but only to reinforce my basic view. I
would not have found in favour of Mr Holland if I had been against him on
section 22 as a matter of construction generally.
I am sorry that legislation intended to
benefit ordinary people should give rise to problems of this nature but, as I
see it, section 13 assumes that the service of a plan is not a technicality:
the mandatory language of the Act compels me to the conclusion which I have
reached. All I can say is that, if it is a technical conclusion, it can also be
said that the Act is very clear as to what has to be within and what has to
accompany the notice. The applicants, or whoever it was who drew up the notice,
were well aware of that requirement since it was purported to be complied with.
But alas it was not complied with and I think the consequences are inevitable
that the applicants’ claim must fail and the respondent’s counterclaim must
succeed.
