Leasehold enfranchisement — Leasehold Reform, Housing and Urban Development Act 1993 — Lease extension — Deceased landlord — Landlord leaving property to son in will and naming him as an executor — No application for grant of probate — Tenant of property seeking to exercise right to new lease under Chapter II of 1993 Act — Whether identity of landlord unknown in absence of grant of probate — Whether tenant entitled to new lease by vesting order under section 50 — Whether required to serve section 42 notice — Whether method of service under section 18(1) of Law of Property (Miscellaneous Provisions) Act 1994 available to tenant of deceased landlord for service of section 42 notice
The respondent was the long leaseholder of a residential property of which the deceased owned the freehold until her death in 1997. The appellant was the deceased’s son and one of the executors and trustees under her will. The deceased had left her estate, including her freehold interest in the property, to the appellant for life and thereafter to her grandchildren. The appellant and his co-executors did not apply for a grant of probate of the will.
Twelve years later, the respondent sought to acquire a new long lease of the property pursuant to Chapter II of the Leasehold Reform, Housing and Urban Development Act 1993. Rather than serving a notice under section 42 of the Act, he applied to the court for the grant of the new lease by means of a vesting order under section 50, on the ground that the landlord could not be found or his identity ascertained within the meaning of section 50(1)(b). The claim form named as defendants the deceased’s personal representatives and gave the appellant’s correct address as the place for service of the proceedings.
The deputy district judge held that the appellant was not entitled to defend the proceedings because he had not been properly constituted as a personal representative of the deceased. He held that since probate had not been granted in respect of the will, the landlord of the property was unknown, section 50 applied and the respondent was entitled to a vesting order. |page:72|
The appellant appealed. He contended that: (i) section 50 did not apply where an identified landlord was known to have died; and (ii) the requirements of section 5(1)(b) had not been met on the facts of the case. He submitted that the tenant of a deceased landlord could serve a section 42 notice by using the machinery in section 18(1) of the Law of Property (Miscellaneous Provisions) Act 1994 and in CPR 19.8 for service on “The Personal Representatives” of a named deceased at the deceased’s last-known address. Moreover, in such circumstances, no lacuna arose that section 50 needed to fill.
Held: The appeal was allowed. (1) The death of a landlord does not mean that his or her successor in title cannot be identified or found within the meaning of section 50(1)(b). Title will devolve in one of the usual ways on the deceased landlord’s personal representatives. So long as those personal representatives can be identified and found, the condition in section 50(1)(b) cannot be satisfied. In the case of property left under a will, an executor’s title to real property derives from the will and not from the grant of probate; the deceased’s property vests in him from the moment of the testator’s death. A grant of probate is not required for the court to receive evidence of the existence of a will or its contents. The production to the court of the deceased’s will was sufficient evidence of the appellant’s title and should therefore have been accepted as such. On that evidence, the necessary conditions for the operation of section 50 were not made out.
Moreover, the structure of section 50 is predicated on the tenant’s inability to serve a notice under section 42. If it is possible to serve a section 42 notice, section 50 will not operate. Since the respondent had the executors’ correct details, he could have served a section 42 notice on them in the usual way. Alternatively, he could have used the method of service contained in section 18(1) of the 1994 Act. The words of section 18 were apt to cover the case and the fact that it was a “saving” provision of general application did not alter its applicability or relevance to the circumstances. Accordingly, there was no lacuna in the 1993 Act, relating to the service of notices on personal representatives, that section 50 was intended to fill.
(2) Once proceedings were in contemplation, subject to the filing of notices and counternotices the appropriate defendants would have been the executors. However, in the instant case the appropriate course would have been to appoint the appellant to represent the estate of the deceased, on the application of the respondent, pursuant to CPR 19.8(2)(b).
The following cases are referred to in this report.
MA Holdings Ltd v George Wimpey UK Ltd; sub nom R (on the application of George Wimpey UK Ltd) v Tewkesbury Borough Council; George Wimpey UK Ltd v Tewkesbury Borough Council [2008] EWCA Civ 12; [2008] 1 WLR 1649; [2008] 3 All ER 859
Whitmore v Lambert [1955] 1 WLR 495; [1955] 2 All ER 147, CA
This was an appeal by the appellant, Anthony Stanton, as the son and named executor of the deceased, from a decision of Deputy District Judge Evans, sitting in Central London County Court, allowing a claim by the respondent, Thomas Power, for the grant of a new long lease by vesting order under section 50 of the Leasehold Reform, Housing and Urban Development Act 1993, and barring the appellant from defending that claim.
Samuel Laughton (instructed by Magrath LLP) appeared for the appellant; Lloyd Sefton-Smith (instructed by Bryan O’Connor & Co) represented the respondent.
Giving judgment, HH Judge Marc Dight said:
[1] This is an appeal from the decision of Deputy District Judge Evans made on 27 August 2009, whereby he held that the claimant was entitled to a new lease of the upper maisonette known as 21A Wotton Road, London NW2 (the flat), pursuant to Chapter II of the Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act) and made various consequential orders to give effect to his decision. The learned deputy district judge held that the appellant, despite alleging to be an executor and main beneficiary of the estate of his mother, the late Ms Yetta Martha Stanton (the deceased), did not have any standing in the claim because there had been no grant of probate of her will, and he went on to make orders relying on section 50 of the 1993 Act (the court’s power to make a vesting order where the landlord cannot be found) on the basis that, in effect, the landlord had not been found, the claim was undefended and the estate of the deceased unrepresented.
[2] The problem in this case has largely been caused by the fact that notwithstanding the death of the deceased more than 12 years ago, the appellant and his co-executors have failed to take a grant of probate to her estate.
[3] The appellant contends that the learned deputy district judge was wrong to make the order that he did because he wrongly held that section 50 of the 1993 Act applied, he failed to recognise the appellant’s true status and failed to take account of section 18 of the Law of Property (Miscellaneous Provisions) Act 1994 (the 1994 Act) and r 19.8 of the Civil Procedure Rules (CPR), which, it was submitted, contained the appropriate provisions to be applied where a landlord from which a new lease is sought pursuant to the 1993 Act has died. The appellant concludes by saying that the learned judge should have dismissed the claim and held that the tenant should have served a notice pursuant to section 42 of the Act if he wanted to seek a new lease.
[4] The respondent contends that the learned deputy district judge reached the right conclusion for the reasons that he gave.
Factual background
[5] The deceased has at all material times been registered at HM Land Registry as the sole proprietor of the freehold interest in 21 Wotton Road, London NW2, under title no MX 208834. By a lease dated 19 March 1976 (the lease) made between Mr Harry MacLeod Burghes and Ms Phyllis MacCleod King (1) and Mr Thomas Simmonds and Ms Maureen Janis Reed (2), the flat was let for a term of 99 years from 25 December 1976 at an initial rent of £25 pa to the claimant’s predecessors in title. Title to the lease is registered at HM Land Registry under number NGL 280313. The claimant/respondent has been registered as sole proprietor of the lease since 29 August 2002. The deceased is the successor in title to the grantors of the lease. It appears to be common ground that the respondent is a qualifying tenant within the meaning of the 1993 Act and is entitled to acquire a new lease of the flat.
[6] The deceased passed away on 29 December 1997. The death certificate dated 29 December 1997, a copy of which is attached to the claim form, identifies the appellant as the person who informed the registrar of his mother’s death, described him as her son and stated his usual address.
[7] By her will dated 27 August 1997, the deceased appointed the appellant and a Dr Lawrence Shaw as her executors and trustees and, after a small number of pecuniary bequests, left her estate to the appellant for life and thereafter to her grandchildren. As I have already mentioned, no grant of probate has been taken in respect of the estate. It is accepted by the appellant that he had not produced a copy of the will to the respondent prior to the commencement of proceedings, although there had been correspondence between the parties.
[8] By his claim form issued in Barnet County Court, the respondent sought a vesting order pursuant to section 50 of the 1993 Act and an order that the premium for the new lease be determined by the leasehold valuation tribunal (LVT). In the claim form, it is said that: “The claimant has through his solicitors traced Anthony Trevor Stanton who has stated that he is entitled to apply for a grant of probate in relation to his mother’s estate but that no grant has been taken out.”
[9] The claim form names as the defendants the personal representatives of the deceased and gives the appellant’s correct address as the place for service of the proceedings.
[10] Since the tenant took the view that his landlord could not be found, he had not initiated the usual process provided in Chapter II of the 1993 Act for the acquisition of a new lease of a flat by serving a notice under section 42 of the Act. Such a notice would have, inter alia, specified the premium that the tenant proposed paying and the |page:73| terms that he proposed for the new lease. It would also have triggered an obligation on the part of the landlord to serve a counternotice if he did not accept that the tenant had a right to a new lease or disagreed with the premium or terms that had been proposed. Failing agreement, proceedings could have been taken. Instead, the tenant started these proceedings seeking a vesting order.
[11] The claim came on before the learned deputy district judge, who apparently heard from the solicitor for the respondent and from the appellant, who produced the will to him. He held, inter alia, as follows:
… I have suggested that I do not know how the claimants have brought this action on you because you were not properly constituted as personal representative. That is you at the moment do not have any standing in this action. That is where I started off. I have effectively taken the view that it is proper to proceed in the manner in which they have proceeded because your mother has passed away, unfortunately, therefore, the landlord is currently unknown and so section 50 applies and I am satisfied that it applies and I am satisfied that this order, therefore is the proper order. If you believe otherwise then you ought to do what you should have done some time ago and I am sure you have your own reasons. You should have made an application for a grant of probate. The moment you have got an occasion for a grant of probate you can take part in the litigation. You can apply to be joined as a defendant and you can do whatever you want. Until then Mr Stanton, my view stands.
[12] Criticism is made of the fact that the transcript included in the appeal bundle is inadequate because it is plain from the extract quoted above that the learned deputy district judge had already expressed part of the reasons for his conclusions earlier in the course of argument and that a transcript of the entire hearing should therefore have been before me on appeal. It is undoubtedly true that the learned deputy district judge appears to have indicated his views on the merits of the appellant’s stance prior to the passage that I have quoted, but, in my judgment, the transcript with which I have been provided contains sufficient of his reasoning for me to understand the true basis for his decision. His reasons must have been that because the landlord had passed away and there had been no grant of probate, the landlord could not be found or his identity could not be ascertained: per section 50(1)(b) see below.
[13] By his order, the learned deputy district judge effectively declared that the respondent was entitled to a new lease of the flat in the form that the respondent had proposed. His ancillary orders provided for the grant of the new lease to be made via a vesting order “of the Defendant’s interest in the premises” (sic) and execution of the new lease by a district judge of the court on payment into court of a price to be determined by a surveyor to be selected by the president of the Lands Tribunal, after the deduction of the respondent’s costs of the proceedings. In other words, the estate was effectively prevented from taking part in the process by which the terms and price for the new lease were to be arrived at.
Locus to appeal
[14] As a preliminary point, it was submitted that by virtue of the reasoning of the Court of Appeal in George Wimpey UK Ltd v Tewkesbury Borough Council [2008] EWCA Civ 12; [2008] 3 All ER 859, the definition of “appellant” in CPR 52.1(3)(d) is sufficiently wide to embrace a non-party in the position of the appellant that may be adversely affected by the proceedings. On behalf of the respondent, it was not strenuously argued otherwise. In any event, I would hold, in the absence of agreement, that because of his status as executor of the deceased’s estate the appellant has locus by virtue of the provision of the CPR mentioned above, as explained by George Wimpey, to challenge the outcome of these proceedings in the court below by way of appeal.
A vesting order?
[15] A vesting order is defined by section 51(1) of the 1993 Act as:
an order providing for the surrender of the tenant’s lease of his flat and for the granting to him of a new lease of it on such terms as may be determined by a leasehold valuation tribunal to be appropriate with a view to the lease being granted to him in like manner…as if he had, at the date of his application, given notice under section 42 of his claim to exercise the right to acquire a new lease of his flat.
[16] Section 50 of the 1993 Act, which is headed “Applications where landlord cannot be found”, provides, in so far as material, as follows:
(1) Where
(a) a qualifying tenant of a flat desires to make a claim to exercise the right to acquire a new lease of his flat, but
(b) the landlord cannot be found or his identity cannot be ascertained,
the court may, on the application of the tenant, make a vesting order under this subsection.
(2)…
(3) The court shall not make an order on any application under subsection (1)… unless it is satisfied
(a) that on the date of the making of the application the tenant had the right to acquire a new lease of his flat; and
(b) that on that date he would not have been precluded by any provision of this Chapter from giving a valid notice under section 42 with respect to his flat.
(4) Before making any such order the court may require the tenant to take such further steps by way of advertisement or otherwise as the court thinks proper for the purpose of tracing the person in question; and if, after an application is made for a vesting order under subsection (1) and before any lease is executed in pursuance of the application, the landlord is traced, then no further proceedings shall be taken with a view to a lease being so executed, but (subject to subsection (5))
(a) the rights and obligations of all parties shall be determined as if the tenant had, at the date of the application, duly given notice under section 42 of his claim to exercise the right to acquire a new lease of his flat; and
(b) the court may give such directions as the court thinks fit as to the steps to be taken for giving effect to those rights and obligations, including directions modifying or dispensing with any of the requirements of this Chapter or of regulations made under this Part.
(5) An application for a vesting order under subsection (1) may be withdrawn at any time before execution of a lease under section 51(3) and, after it is withdrawn, subsection (4)(a) above shall not apply; but where any step is taken (whether by the landlord or the tenant) for the purpose of giving effect to subsection (4)(a) in the case of any application, the application shall not afterwards be withdrawn except
(a) with the consent of the landlord, or
(b) by leave of the court,
and the court shall not give leave unless it appears to the court just to do so by reason of matters coming to the knowledge of the tenant in consequence of the tracing of the landlord.
[17] The appellant submits, first, that section 50, on its proper construction, is not applicable to a situation where an identified landlord is known to have died. Second, it is submitted that the statutory criteria contained in subsection 50(1)(b) were not satisfied because identities and addresses of the personal representatives of the deceased were readily ascertainable from the terms of the documents and correspondence available to the respondent. Third, it is submitted that where a landlord has died, as opposed to disappeared, machinery is to be found in section 18(1) of the 1994 Act and r 19.8 of the CPR for the service of an initial notice under section 42 of the 1993 Act and for the constitution of proceedings prior to the grant of probate. Therefore, it is said, there is no lacuna in the 1993 Act relating to deceased landlords that has to be filled by the use of section 50.
[18] The respondent submits that sections 50 and 51 of the 1993 Act provide a complete and concurrent scheme for acquisition of a new lease, separate and distinct from that provided by section 42, and entirely apposite to a situation in which a landlord has died but no grant of probate has been obtained. Second, it is submitted that, prior to grant, the statutory criteria of section 50 are satisfied in this case and that, once satisfied, the court has jurisdiction to make a vesting order. As to the appellant’s third submission, it is said that section 18 of the 1994 Act is permissive only; it is a saving provision of general application and merely plugs a gap where there may not be someone to accept notices and proceedings and would not fulfil the intended function of section 42, that is to identify and engage a party with which to negotiate over the terms of grant of a new lease. |page:74|
[19] The respondent further submits that where 12 years after the death of the landlord probate has still not been sought, “a court would need fairly compelling evidence to conclude that the appropriate legal identity could now be ascertained and that there was not some other reason connected with IHT avoidance, fraud etc”. That led to the further submission that the learned deputy district judge was not entitled to conclude that the appellant was the personal representative and was therefore correct to hold that the personal representative were unidentified and/or untraceable.
[20] Turning first, therefore, to the proper construction of section 50. The words that lie at the heart of this dispute are to be found in subsection 50(1)(b): “the landlord cannot be found or his identity cannot be ascertained”. Unless that condition is satisfied, section 50 has no application. Prior to death, the landlord was both identified and her address known. The question is whether death renders both (or either) of those criteria uncertain. The section does not specifically refer to death. Further, as a matter of logic, it seems to me that it does not follow that because a landlord has died his successor in title as landlord cannot be identified or found. Title will devolve in one of the usual ways on the landlord’s personal representatives. So long as those personal representatives can be identified and found, it seems to me that the condition in subsection 50(1)(b) cannot be satisfied.
[21] The respondent submits, however, that the situation is different where, as here, there has been no grant of probate because, until that point, the identity of the personal representatives is uncertain. So far as property left by will is concerned, it seems to me that such a submission is ill founded. An executor’s title to real property derives from the will, not from the grant of probate, and the property of the deceased vests in him from the moment of the testator’s death: see Whitmore v Lambert [1955] 2 All ER 147, per Sir Raymond Evershed MR, at p151 and following. In so far as the learned deputy district judge may, by necessary inference, have held otherwise, he was, in my judgment, wrong.
[22] The routes to the grant of a new lease contained in sections 50 and 42 are said by the appellant, in reinforcement of his primary submission, to be mutually exclusive. The respondent disagrees and suggests that they provide concurrent routes to the grant of a new lease. The terms of subsections 51(1) and 50(3)(b), (4) and (5) not only contemplate a situation in which a notice under section 42 has not been served on the landlord but could not be given, either because the landlord could not be identified or found. Moreover, subsection 50(4) provides, in effect, that where a landlord is traced part-way through the vesting order process, that process is to come to an end and the usual route for grant of a new lease followed. I agree with the appellant that the entire structure of section 50 is predicated on the inability of the tenant to serve a notice under section 42 and that therefore, in my judgment, it follows that if it is possible to serve a notice under section 42 there is no room for the operation of section 50.
[23] The question then arises as to whether, in the instant case, the statutory criteria of section 50(1)(b) are, properly construed, satisfied. Although I have great sympathy with the respondent’s submissions on this point, it seems to me that the production of the will to the court was sufficient evidence of the appellant’s title, in which respect I would again refer to the judgment of the Master of the Rolls in Whitmore, in which he held that there need not be a grant of probate before the court can receive evidence of the existence of a will or its contents. In those circumstances, the will should, in my judgment, have been accepted as evidence of the title of the appellant and his fellow executor, on which the learned deputy district judge should have come to the conclusion that, as a matter of fact, the necessary condition for the operation of section 50 was not made out.
[24] Turning next to the machinery said to have been operable in the circumstances. Section 18 of the 1994 Act provides, in so far as material, as follows:
(1) A notice affecting land which would have been authorised or required to be served on a person but for his death shall be sufficiently served before a grant of representation has been filed if
(a) it is addressed to “The Personal Representatives of” the deceased (naming him) and left at or sent by post to his last known place of residence or business in the United Kingdom, and
(b) a copy of it, similarly addressed, is served on the Public Trustee.
(2) …
(3) The method of service provided for by this section is not available where provision is made
(a) by or under any enactment, or
(b) by an agreement in writing,
requiring a different method of service, or expressly prohibiting the method of service provided for by this section, in the circumstances.
[25] The learned editors of Hague on Leasehold Enfranchisement (5th ed) apparently express their view on this issue without any comment, in para 34-17, as follows:
Service on a dead landlord
If the landlord is dead, a notice, eg section 13 or section 42 notice, is sufficiently served before a grant of representation has been filed if it is addressed to “The Personal Representatives of” the deceased (naming him) and left at or sent by post to his last known place of residence or business in the United Kingdom, and a copy of it, similarly addressed, is served on the Public Trustee: section 18(1) of the Law of Property (Miscellaneous Provisions) Act 1994.
[26] Taking the words of section 18 at face value, they are entirely apt in this case and set out a procedure that could have been followed by the tenant in order to serve a notice under section 42 of the 1993 Act. I have been taken to nothing in the 1993 Act itself that would have the effect, in accordance with subsection 18(3)(a), of prohibiting the method of service contained in section 18(1) from being used in this case. The fact that the provision is of general application or is “saving” in nature does not alter its applicability or relevance. In my judgment, even though the respondent appears to have had the correct details for the executors and could have served on them a notice under section 42 in the usual way, it was open to him also to use the machinery afforded by section 18 of the 1994 Act. It follows that I also agree with the submission that there is no lacuna in the 1993 Act relating to the service of notices on personal representatives that section 50 was intended to fill.
[27] Once proceedings were in contemplation, subject to the filing of notices and counternotices the appropriate defendants would have been the executors. However, in this case, it would plainly have been open to the deputy district judge to appoint the appellant to represent the estate on the application of the respondent pursuant to CPR 19.8(2)(b) and, in my judgment, the respondent should have so applied and the learned judge should have made an order appointing the appellant to represent the estate of the deceased.
Premium
[28] In para 5 of his grounds of appeal, the appellant asserts, and the respondent now accepts, that the learned deputy district judge erred in directing that the premium for the new lease be fixed by a surveyor selected by the president of the Lands Tribunal and the premium for the new lease (and the terms) should have been referred for determination by the LVT.
Conclusion
[29] For the reasons that I have given above, I would hold that section 50 of the 1993 Act has no application in this case, that the learned deputy district judge misdirected himself in reaching his conclusions, and that his order ought to be set aside. In its place, I would appoint the appellant to represent the estate of the deceased and dismiss the claim with costs.
Appeal allowed.
