JUDGE COWELL:
1. This is an application by six flat owners under section 48(3) of the Leasehold Reform, Housing and Urban Development Act 1993. There are in fact seven active claimants: the fourth and fifth Mr. and Mrs. Desborough are husband and wife and they have one flat, number 17; the first claimant Mr. Ayres is the owner of Flat 5; the second claimant Mr. Mandel of Flat 13; the third claimant Mr Bond of Flat 15; the fourth and fifth claimants are the Desboroughs of Flat 17; the sixth claimant Mr. Valance of Flat 23; and the seventh claimant Mr. Miles of Flat 37. They are all long leaseholders. The eighth claimant has dropped out of the picture for her matter was completed shortly after the issue of this claim. The defendants are the landlord or freehold owner of the block in which the flats are situated.
2. The material history of this case, after the usual tenant’s notice and landlord’s counter-notice had been given, is that the Leasehold Valuation Tribunal sent its decision on 19th December 2008 to all parties concerned, in which the Leasehold Valuation Tribunal determined what premium should be paid by the claimants in return for grants of the usual 90 year terms to which they were entitled under the 1993 Act in respect of their respective leases. There is no doubt that this application has been made within time.
3. For reasons which will become apparent, it is important to know when in this case the appropriate period began, the appropriate period being defined in section 48(6)(b)(i). That reads, so far as material, as follows:
“For the purposes of this section the appropriate period is –
(b) where all or any of those terms have been determined by a leasehold valuation tribunal under subsection (1) …”
I pause to say that is the case. The material sub-paragraph is (i):
“(i) the period of two months beginning with the date when the decision of the tribunal under subsection (1) becomes final.”
In order to determine that date, one has to go to section 101(9):
“For the purposes of this Part an order of a court or a decision of a leasehold valuation tribunal is to be treated as becoming final –
(a) if not appealed against, on the expiry of the time for bringing an appeal.”
In order to determine when that was, one has to go to regulation 20 of the Leasehold Valuation Tribunals (Procedure) (
“Where a party makes an application to a tribunal for permission to appeal to the Lands Tribunal –
(a) the application shall be made to the tribunal within the period of 21 days starting with the date on which the document which records the reasons for the decision under regulation 18 was sent to that party.”
4. So the crucial words in that regulation are the words “sent to”. The fact is in this case that on 19th December 2008, under cover of a letter of that date, the decision of the tribunal (which was of course in writing) was sent to both parties. In the letter enclosing a copy of the decision the clerk to the Leasehold Valuation Tribunal expressed the matter in relation to appeal in these words:
“Any application from a party for leave to appeal to the Lands Tribunal must normally be made to the Leasehold Valuation Tribunal within 21 days of the date of this letter.”
5. In fact that was a mis-description of the period because in accordance with the true construction of regulation 20 which uses these words “within the period of 21 days starting with the date on which the document which records the reasons for the decision under regulation 18 was sent” the 21 days started with that date, 19th December, and so that period ended at midnight on 8th to 9th January 2009. The words of the letter, “within 21 days of the date of this letter”, on their true construction would begin the period of 21 days the day after the 19th December. A similar situation arose in the case of Trow v. Ind Coope (West Midlands) Limited [1967] 2 Q.B. 899 and it was held by the Court of Appeal that it is the regulation that governs the matter, not what a letter may say about the matter or, as in that case, a wrong note in a practice book. So the position – and I am in no doubt about this at all – is that the period ended, as I say, at midnight on 8th to 9th January.
6. Going back to section 48(6), the appropriate period begins with the date when the decision of the tribunal under sub-section (1) becomes final and that means that the appropriate period ends two calendar months after that, that is at midnight on 8th to 9th March 2009. So that is the appropriate period.
7. It was argued by the defendant in a very able argument (the first defendant has appeared in person) in which he states that it is odd that a party may receive a decision from the Leasehold Valuation Tribunal after time has started to run. In fact, he received the decision on Saturday 20th December whereas the claimants, through their solicitors, received it on Monday 22nd December. It may seem odd that a period of time has started to run at the time that the parties receive the documents in question but that is what regulation 20 says, however odd it may seem. However, there are further important points to make, as indeed they were made by Miss Gibbons of counsel for the claimants. It is obviously convenient that the same period should govern the rights of both parties to a prospective appeal. Each party may receive the decision on a different date, as indeed happened in this case, and certainty is provided by using the date of sending of the decision to those parties. She points out for good measure that provided an application is made before the end of the period, the Leasehold Valuation Tribunal has jurisdiction under section 24 to enlarge the period for making the appeal. However, essentially the date of receipt by the parties of a document sent out on the same day may be so different that uncertainty is avoided by determining that the period begins on the date of the sending of the decision. She also points out that there is in those regulations no deeming provision which exists about deemed receipt.
8. The defendant also sought to argue that the word “sent” meant “received” because of certain email provisions which one finds in regulation 23. There is however a difference between the words “given” and “sent” which is specifically referred to in the opening words of regulation 23. There are also different words, “delivered” and “sent” in paragraph (a) of regulation 23(1). The email provision is in paragraph (b) of 23(1) and refers to “sent” only, not to “delivery” or “given”. The other email provision is to be found in paragraph (c)(ii) of regulation 23(1) and again that only refers to the word “sent”. In my judgment “sent” does not mean “given”. It so happens that if electronic communication is used the recipient does receive the message on the same day if he is at his computer. Incidentally, regulation 23(2) ensures that the recipient must consent to such a method of sending, that is by electronic communication, and so one can see that it may, in the case of an email, be received on the same day as the email is sent. However, it does not follow from that that because that happens in fact when email is used that when other means of communication are used the sending of it must be construed as the receiving of it. In my judgment that argument of the defendant does not assist him. My very clear conclusion is that the appropriate period ended at midnight on 8th to 9th March; 8th March 2009 was a Sunday and 9th March 2009 was a Monday.
9. I next refer to what has been called throughout the case and the argument the “notice to complete”, although what that connotes is a matter that I will come to in due course. I will first of all deal with the question of statutory interpretation, a dry legal question. In this case the defendant sent by email to the claimants’ solicitors a notice requiring completion within 21 days in accordance with paragraph 8 of schedule 2 to the Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations 1993. In fact he sent that by email to the claimants’ solicitors on a Sunday evening, the Sunday evening of 15th February 2009, although that was not in fact received by the claimants’ solicitor for, not surprisingly, she was not in the office on Sunday evening but went there on Monday 16th February and opened her email on that day. One can see from the response to that email on the same day, Monday 16th February, that she must have received it on that Monday.
10. The regulations I am now referring to are wholly different regulations from the first lot that I referred to; these are the Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations1993 which contain in regulation 4 a provision that mirrors very closely section 99 of the Act. Regulation 4 says:
“4. Any notice, statement, answer or document required or authorised to be given under these Regulations-
(a) shall be in writing, and
(b) may be sent by post.”
Section 99(1) reads very similarly:
“Any notice required or authorised to be given under this Part-
(a) shall be in writing, and
(b) may be sent by post.”
The crucial word in this case is “given”. The note in Halsbury’s Statutes under section 99(1) in relation to the words “May be sent by post” reads:
“This provision brings into operation the provisions of the Interpretation Act 1978, s 7, Vol 41, title Statutes, to the effect that service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”
11. The defendant also sent to the claimants’ solicitor a letter which was posted on 16th February, the same Monday, and that arrived on Tuesday 17th February which, incidentally, is the day on which it would have been deemed to have arrived. So there is no factual dispute about that.
12. The defendant’s argument, and I am inclined to think that it is correct, is that the giving of the notice does not have to be done by post because of the words “may be sent by post”; it may be given in another way. He argues that it was given by email when it was received by the claimants’ solicitor on Monday 16th February, for that was the day when she read it and received it. Indeed, in her response of the same date at page 142, she made the point that the notice was out of time, which I will explain in a moment.
13. Does this matter? What is the significance of all that? I think it is convenient in order to explain the matter to go to paragraphs 7 and 8 of schedule 2 to these Regulations. As a matter of undisputed fact the form of the draft leases which were to be granted were not in dispute and the form existed. Therefore what is relevant for the purposes of completion of the transaction are sub-paragraphs (6) and (7) of paragraph 7 and they read:
“(6) The landlord shall prepare the lease and as many counterparts as he may reasonably require and shall give the counterpart or counterparts to the tenant for execution at a reasonable time before the completion date.”
Pausing there, the lease of course which he has to prepare is the document that he will sign and the counterparts are the documents which the tenant will sign and he has to give the counterpart to the tenant for execution, as the paragraph says. Sub-paragraph (7) reads:
“(7) The tenant shall give the counterpart or counterparts of the lease, duly executed, to the landlord and the landlord shall give the lease, duly executed, to the tenant, on the completion date or as soon as possible afterwards.”
So that shows what, in the background, has to be going on as a matter of practical good sense.
14. I will next read in full sub-paragraphs (1) and (2) of paragraph 8 of this schedule:
“(1) Subject to sub-paragraph (2), after the draft lease is approved or deemed to have been approved, either the landlord or the tenant may give the other notice requiring him to complete the grant of the lease on the first working day after the expiration of twenty-one days beginning with the date the notice is given.
(2) Sub-paragraph (1) shall not apply if the date for completion would fall after the expiry of the appropriate period specified for the purposes of section 48 or 49 (applications where terms in dispute or failure to enter into new lease, and applications where landlord fails to give counter-notice or further counter-notice), and in that event the date for completion shall be such day as the landlord and tenant agree in writing or the court orders under section 48(3) or 49(4) (order of the court on failure to enter into new lease).
15. So the words to concentrate on in sub-paragraph (1) of paragraph 8 are “on the first working day after the expiration of twenty-one days beginning with the date the notice is given”. Assuming that the defendant’s argument is correct and the receipt of the email was on Monday 16th February and that that was the date on which the notice was given, then, without more, the period of 21 days beginning with 16th February has its last day on 8th March, and the next working day after that was Monday 9th March. That is the date which is described as the first working day after the expiration of the 21 days, and that is the date for completion. However, there is more because sub-paragraph (2) of paragraph 8 says that sub-paragraph (1) shall not apply if the date for completion (and we know that is Monday 9th March) would fall after the expiry of the appropriate period. It does fall after midnight on 8th to 9th March, the expiry of the appropriate period. Therefore by sub-paragraph (2) of paragraph 8 the date for completion must be what the Court orders, assuming that the Court does not order, which is a possibility under section 48(4), that the original tenant’s notice which began the entire proceedings should be deemed withdrawn, which would have the effect that the entire edifice built by notice and counter notice and by the leasehold valuations falls completely to the ground. It is in fact not necessary to decide if that assumption (that the defendant is correct in saying that the notice was given by the email received on 16th February) is correct for it gave a date for completion which is outside the appropriate period. Even if it is to be noticed for good measure that the email could be treated as having been given on the Sunday, the 15th, the next working day after the expiry of the appropriate period at midnight on 7th to 8th of March was also the 9th of March because the 8th was a Sunday and not a working day. On any view sub-paragraph (1) of paragraph 8 cannot apply so as to fix the date for completion.
16. I now mention a number of matters which arise as a result of careful consideration of what is the purpose of all these provisions. I begin by pointing out that lawyers who specialise in property law are very well aware that a notice to complete in the usual context of contracts voluntarily made for the sale and purchase of land connotes a right that one party has against another, defined by the contract, by which one party may make time of the essence of the contract, with the result that provided that one party is ready, able and willing to complete, if the other party does not complete within the period specified in the notice to complete then the party giving the notice has the right to treat the entire contract as repudiated and to forfeit the deposit and so on. When one comes across the term “notice to complete” one very readily thinks in terms of the usual contractual rights making time of the essence and giving an entitlement to the giver of the notice to bring the transaction to an end. What is noticeable about the 1993 Act is that it does not say what is the consequence of giving a notice to complete which is not complied with. It might have but it did not provide that the party serving the notice, if ready, able and willing to perform his obligations, could then, if the other party did not complete, treat the entire exercise as something to be unscrambled, just as if the tenant’s notice had been withdrawn. As I have pointed out, that is not what is provided.
17. There are a number of observations which I think it right to make in connection with this. The first is, as I have just pointed out, that the Act does not give a consequence equivalent to the notice to complete provisions in a normal contract by which one party may make time of the essence. At best, as Miss Gibbons points out in her written argument, it may be one of the factors among many others which may induce the Court when it becomes seized of the matter under section 48(3) to decide whether or not it should treat the tenant’s notice as withdrawn, and one of the factors which the Court must take into account in deciding what order it should, in its discretion, make. In short, the Act does not confer any right or any entitlement upon the party giving the notice. It reminds me a little of that wholly inaccurate expression used by members of the public in relation to injunctions. They frequently refer to a party taking out or issuing an injunction and what they do not seem to appreciate is that the grant of injunction is something done by the Court in the exercise of a discretion; it is not a right that one party has against another. I look at the discretion under the Act that the Court has in the same light. At any rate, that is the first point.
18. The second point is this, that only if one does treat the notice to complete given under paragraph 8 as being the equivalent of a notice to complete in the case of an ordinary contract does it seem odd that the earlier date for completion within the appropriate period may validly be fixed, whereas a later date which a party may wish to fix as a date for completion, but which is invalid under sub-paragraph (2) of paragraph 8, is in ordinary circumstances the more likely to be met by the other party. The mere fact that that seems odd indicates that this is not a provision which is designed to confer an entitlement upon the party giving the notice.
19. The next point to make is that whereas in the case of an ordinary contract the other party is entitled to complete on or before a final date, the provision in this paragraph fixes the date for completion. The words in sub-paragraph (1) are “the first working day after” and in sub-paragraph (2) “the date for completion”, so it does not require completion on or before a date; it provides a date for completion. That is the third point.
20. The fourth point is that it provides a date for completion for the first time. It seems to me that the purpose of the provision is simply to provide what an ordinary contract invariably provides, which is a date for completion. That date, under an ordinary contract, is not of itself of the essence of the contract precisely because there are provisions in the contract for time to be made of the essence by a notice to complete being given. The date for completion specified in the ordinary contract is the date in relation to which the parties work out the figures that are to be paid on that date and of course in the vast majority of cases that is the date when the contract is completed. However, one only has to look at the Act to notice that no date for completion is to be determined from the Act itself. In the case of enfranchisement there is indeed no contract, and it is possible that the parties may not agree a date for completion, and this is a very good example of the parties not agreeing a date for completion. A date is required for the simple practical reason that the parties can only work out the exact amount to be paid by reference to a date. In this case the ground rent ceases to be paid under the old lease when the new lease is granted, for the new lease is a term which reserves only a peppercorn and according to whether the ground rent is payable in advance or in arrears (if in advance some portion of it will have to be returned by the landlord; if in arrears, which is probably this very case, some proportion is going to be payable by the tenant). So, if there has been no agreement what the date for completion should be, one party can determine what it shall be by serving notice under paragraph 8(1). It is, in short, a piece of practical machinery.
21. In my judgment the notice requiring completion given under paragraph 8 does not therefore carry with it any notion that failure to complete on the fixed day confers on the party giving it any right by which he can thwart the enfranchisement progress. Indeed, paragraph 8 provides that it is the Court which essentially makes time of the essence and not a party, even a party acting under paragraph 8(1). That paragraph is designed to provide the initial date for completion; a paragraph which may be invoked if that date has not been determined by agreement.
22. It is also to be noticed that if the notice to complete is ineffective under sub-paragraph (2) then during the next two month period provided by section 48 either the parties may agree another date or, if application is made within those two months (the application cannot be made before that period of two months begins) the Court fixes the date. During this second period of two months any one party cannot fix the date for completion (that is because of sub-paragraph (2) of paragraph 8); only the Court can fix it if the parties cannot agree. It is also to be noticed that the Court’s power or discretion to deem the tenant’s original notice to have been withdrawn at the end of the appropriate period applies whether or not the completion date was fixed by one party or was never fixed.
23. Therefore one has three different periods to look at. At one extreme during what is called the appropriate period, the first period of two months running after the decision of the Leasehold Valuation Tribunal is final. The failure to comply by a tenant with a notice to complete given by the landlord and effective during the appropriate period while the landlord is ready, able and willing to complete, may give rise to a suspicion that the tenant may not want or be able to perform his obligations. At the other extreme, after the expiry of the second period of two months, if the tenant has not applied to the Court by the end of that second period of two months, essentially the statute is saying to the tenant, “It is perfectly obvious that you, the tenant, do not want or cannot perform your obligation, hence the entire exercise falls to the ground and your original notice is deemed withdrawn and has no effect whatever.” Then there is the intermediate period, the second period of two months. That is a period when the Court can investigate whether in truth there is a problem with the tenant’s willingness or ability to perform and, if there is, it can then declare the original tenant’s notice as deemed withdrawn and there is a complete falling to the ground of the entire edifice which was built upon the original tenant’s notice. As Miss Gibbons points out in her skeleton argument, for the Court to determine that a tenant’s notice is withdrawn is for the Court to take a draconian step and she explains why that is so. I entirely agree. It means that all the work that the tenant has done since serving his notice comes to nought. It means that he cannot make a further application for another year and it means in practice for various reasons that it is likely that on a second costly procedure the amount of the premium that he will be required to pay may be a good bit more, which of course is why landlords are only too pleased if they can find a way for the original tenant’s notice being treated as withdrawn. As Miss Gibbons points out, it is a matter of discretion and the Court would be slow to take such a draconian step. As I have already pointed out, it is essentially the Court which is given the task of deciding whether time is of the essence, and perhaps understandably the legislation does not leave such rights to the parties because the parties were never in a contractual relationship at all. This is enfranchisement which deprives the freeholder of property for a consideration but is not done with the freeholder’s consent.
24. I should next mention the facts of this particular case because, as a result of the statutory interpretation that I have had to give to the statute in relation to its application in this case, I have to determine what should be the completion date unless in my discretion I should exercise the draconian power of declaring the tenant’s notice deemed withdrawn. So I now mention the practical steps which have to be taken in cases like this and in this case. First of all, the landlord has to provide his costs which are payable by the tenant as a result of the enfranchisement process. In this case he did that by letter dated 26th January (page 112). When the completion date is fixed, the landlord can then work out the amount due to him, determining in this case (amongst other things) the amount due back from him to the particular tenant in respect of the ground rent which had been payable in advance on the previous quarter day or whenever it was payable. So he has to send his completion statement to the claimants’ solicitor. The next step is that the landlord also has to send, and he would probably do this at the same time, such counterparts as he wanted executed by the tenants (paragraph 7). The fourth step is that the claimants’ solicitor sends to her client (for it was Miss Hawkin in this case who acted on behalf of the claimants) the same statement prepared by the landlord together with her own fees (which are payable by the claimants) to the claimants themselves so that they know what money is required of them and there will be of course the implied, if not expressed, request for funds to be provided by the claimants by the completion date.
25. Bearing in mind those steps that have to be taken, I can refer to a helpful document provided by the defendant himself which, in the first detailed column in relation to each of the claimants and their flat numbers, he pinpoints the letters giving an indication of readiness to complete and when. I need only say that that column is entirely factually accurate. I would only add that in the case of Mr. Ayres (Flat 5) there was a further letter which should be referred to of 19th February in which the claimants’ solicitor pointed out that Mr. Ayres was in
26. The next column explains when, if at all, what I call the landlord’s completion statement and the counterparts were sent. In the case of Mr. Ayres (Flat 5) no landlord’s completion statement or counterpart was sent and the same applies to Mr. Bond (Flat 15) and the Desboroughs (Flat 17). In the case of the other claimants Mr. Mandel (Flat 13) the completion statement and counterpart were sent to the claimants’ solicitor under cover of a letter of 19th February 2009 (page 148); in the case of Mr. Valance similarly on 19th February (page 149); in the case of Mr. Miles (Flat 37) similarly on 19th February (page 150).
27. Having heard the evidence of Miss Hawkin, I have added two further columns. One is when, if at all, a completion statement was sent to the client and when the client provided funds. Not surprisingly in the three cases where a counterpart was sent and the landlord’s completion statement was sent under cover of a letter of 19th February (it may have been by email) the claimants’ solicitor, Miss Hawkin, then sent the full completion statement, including her fees, to the client in question on the same day, 19th February. That is when Mr. Mandel, Mr. and Mrs. Desborough and Mr. Miles received the information of what funds were needed for completion. In the three cases where no completion statement was sent by the defendant and no counterpart lease was sent by the defendant to the claimants’ solicitor she, on 2nd March, took it upon herself to work out effectively what the landlord’s completion statement ought to provide without of course doing an apportionment of the rent so that her clients would be paying perhaps a pound or two more than would have been the case had the landlord prepared his completion statement. She sent those to her respective clients under cover of a letter of 2nd March 2009 so that those three tenants knew what the position was on receipt of her letter of 2nd March. So that explains when the various claimants knew what they were being asked to pay for completion.
28. I take now the final column, when they put the claimants’ solicitor in funds, although that was not a matter that was known in detail to the defendants at the time. I will deal first with the three who were informed under cover of the letter of 19th February. Mr. Ayres (Flat 5) provided his funds on 13th March; Mr. Bond (Flat 15) on 26th March and the Desboroughs (Flat 17) on 17th March. I remind the reader – should there ever be a transcription of this judgment – that the first mentioned was in
29. In any event the defendant did not do or agree anything because he believed that he had a right to end the enfranchisement process, whereas only the Court can do that. It may be that he hoped to show that some fact would emerge showing that one or other of the claimants could not afford to proceed. In fact, as is now known, all of them could proceed.
30. It only remains now for me to mention some of the letters that passed before I conclude my judgment. I have already stated that the costs that the defendants were entitled to were specified on 26th January in a letter, such as the one at page 115. It is important to notice that at page 124 on 28th January the claimants’ solicitor made a suggestion that the completion date should be 27th February which only goes to underline the point that I made earlier, that there is nothing in the Act which provides a date for completion, that very practical date which enables the parties to work out the appropriate figures. So that was a perfectly sensible suggestion. Then it was qualified on page 125 on 6th February when the claimants’ solicitor very straightforwardly said that some of the lessees would be unable to complete by the end of February as initially predicted.
31. There then followed, as I have indicated, the emails of 15th February, the email response of 16th February in which the claimants’ solicitor pointed out that the notice given under paragraph 8 was out of time, and I have explained what they really meant by that. There was then, in the same email, the statement that all matters will complete by the end of March, as indeed could have happened because by the end of March, indeed by Friday 27th, which was the date suggested in a further letter dated 16th February (page 142a and 142b) as we now know, funds were available by that date from all the claimants in this case with whom I am concerned at the moment. I should point out that the schedule also refers to some other persons, but I have not troubled to say anything about them because it is not relevant to what I have to decide. In that letter of 16th February the claimants’ solicitors, on the footing that agreement might be had that the completion date should be 27th March, asked for completion statements from the defendant calculated to that date. They also asked for the appropriate engrossment deeds for their clients’ signature. At page 142 there is a statement by the claimants’ solicitor on behalf of the Desboroughs making it clear that they could complete by 27th March, just as had happened in relation to Mr. Bond. Page 133 is the notice given by the defendant under paragraph 8(1) of schedule 2 and that speaks for itself and I need say no more about it. I merely mention for the sake of fullness pages 144, 145 and 146 (which is a copy of 145). The documents I have referred to as being the defendant’s completion statement sent on 19th February are to be found at pages 148, 149 and 150. The mention of
32. The upshot of it is, as I have indicated, that the defendant was entirely wrong in thinking that he had any entitlement to treat the tenant’s notice as having been withdrawn and I am quite satisfied that the statements of intention to proceed on the part of the claimants was entirely genuine. They were all able, ready and willing to complete from and after the date that they put their solicitor in funds and the merits of this case are overwhelmingly in favour of my making an order fixing a date for completion (I will hear the parties in respect of what is a convenient date) and the merits are overwhelmingly against treating the case as one in which I should deem the tenant’s notice as deemed withdrawn. That is the end of this rather lengthy judgment.
