Right to manage – Procedure – Chapter 1 of Part 2 of Commonhold and Leasehold Reform Act 2002 – Respondent applying to acquire right to manage development containing flats – Appellant freeholder asserting in statement of case that valid notices of invitation to participate not served on lessees as required by section 78 of 2002 Act –LVT taking view that no jurisdiction to determine that point where not raised in appellant’s counternotice – LVT determining application in favour of respondent –Appeal allowed
The appellant owned the freehold of a development in London SE16, comprising five blocks of flats held by lessees on 999-year leases. One entire block was let to a housing trust, which had in turn granted 125-year leases of individual flats. In April 2011, the respondent company served notice on the appellant of its claim to acquire the right to manage the development in accordance with Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002.
In early May 2011, the appellant wrote to the respondent requesting various relevant documents, including copies of the notices served on lessees, under section 78 of the 2002 Act, inviting them to participate in the right-to-manage process. The appellant had not received those documents by the time it served its counternotice, a few days before the deadline for such service in mid-May. The counternotice disputed the respondent’s right to manage on various grounds including a failure to serve an invitation to participate on the housing trust.
The respondent applied to the leasehold valuation tribunal (LVT), under section 84(3) of the 2002 Act, for a determination that it was entitled to acquire the right to manage. By its statement of case served in opposition, the appellant contended that the respondent’s failure to provide copies of its notices of invitation to participate made it impossible to establish whether the correct statutory procedures had been followed and that, in the absence of evidence to the contrary, it should be assumed that no valid notices had been served. Although the respondent, by its own statement of case, claimed that it had served such notices and purported to attach a sample copy, the appellant submitted in reply that the respondent’s bundle of documents contained no invitation to participate in the required form but only an application to join the right-to-manage company.
The LVT determined that the respondent was entitled to acquire the right to manage. Although it referred to the appellant’s submissions regarding the lack of valid invitations to participate, it held that that was an additional further point not set out in the counternotice and that, consequently, there was no jurisdiction to decide it. The appellant appealed.
Held: The appeal was allowed/dismissed.
Under section 84 of the 2002 Act, a person who received a claim notice was not obliged to give a counternotice. There was no need to serve a counternotice admitting the right to manage if it was not in dispute. However, a landlord who sought to deny the right to manage had no option but to serve a counternotice within the time allowed. The appellant had served a valid counternotice under section 84(2)(b), alleging that the respondent was not entitled to acquire the right to manage by reason of a failure to comply with the statutory requirements, and triggering the respondent’s right to apply to the LVT for a determination under section 84(3). The appellant had not been obliged to set out in that counternotice every issue on which it wanted the LVT’s decision. There was no statutory requirement to that effect. Where an application was made to the LVT, its jurisdiction, as defined by section 84(3), was to determine whether the RTM company was on the relevant date entitled to acquire the right to manage the premises. There was no provision in section 84 or elsewhere to confine the jurisdiction of the LVT to the contents of the counternotice.
In opposing a claim to acquire the right to manage, a landlord could legitimately take the point that the procedures prescribed in the 2002 Act and the Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010 had not been followed. That might include the contention that the notice of invitation to participate required by section 78 of the 2002 Act was materially defective and thus invalid. Although it was desirable that such a point should be taken at the earliest possible opportunity and should, if possible, be raised in the counternotice, the LVT could not avoid the task of satisfying itself that the statutory procedures had been correctly followed if the point was taken at a later date. Moreover, the LVT could consider the procedural integrity of the right-to-manage process on its own initiative, whether or not the point had been raised by any of the parties, provided its procedure was fair and the parties were given a reasonable opportunity to present any relevant evidence or submissions. Where the appellant had, in its statement of case, expressed its concerns about the respondent’s apparent failure to follow the statutory procedure for notice of invitation to participate, and where the respondent had reacted to by asserting in its own statement of case that the statutory procedures had been correctly followed, the LVT had been obliged to reach a conclusion on the matter. The LVT had erred in refusing to do so on the ground that it lacked jurisdiction where the point had not been raised in the counternotice. If it was to tackle the question raised by the appellant in its statement of case, the LVT needed to satisfy itself that a valid notice of invitation to participate had in fact been given to the tenants who ought to have received one. It had not done so. The respondent’s application was accordingly remitted to the LVT for determination.
Andrew Skelly (instructed by Estates & Management Ltd) appeared for the appellant; Rosana Bailey (instructed by Lake Jackson Solicitors) appeared for the respondent.
Sally Dobson, barrister
Fairhold (Yorkshire) Ltd v Trinity Wharf (SE16) RTM Co Ltd
Right to manage – Procedure – Chapter 1 of Part 2 of Commonhold and Leasehold Reform Act 2002 – Respondent applying to acquire right to manage development containing flats – Appellant freeholder asserting in statement of case that valid notices of invitation to participate not served on lessees as required by section 78 of 2002 Act –LVT taking view that no jurisdiction to determine that point where not raised in appellant’s counternotice – LVT determining application in favour of respondent –Appeal allowed The appellant owned the freehold of a development in London SE16, comprising five blocks of flats held by lessees on 999-year leases. One entire block was let to a housing trust, which had in turn granted 125-year leases of individual flats. In April 2011, the respondent company served notice on the appellant of its claim to acquire the right to manage the development in accordance with Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002.In early May 2011, the appellant wrote to the respondent requesting various relevant documents, including copies of the notices served on lessees, under section 78 of the 2002 Act, inviting them to participate in the right-to-manage process. The appellant had not received those documents by the time it served its counternotice, a few days before the deadline for such service in mid-May. The counternotice disputed the respondent’s right to manage on various grounds including a failure to serve an invitation to participate on the housing trust.The respondent applied to the leasehold valuation tribunal (LVT), under section 84(3) of the 2002 Act, for a determination that it was entitled to acquire the right to manage. By its statement of case served in opposition, the appellant contended that the respondent’s failure to provide copies of its notices of invitation to participate made it impossible to establish whether the correct statutory procedures had been followed and that, in the absence of evidence to the contrary, it should be assumed that no valid notices had been served. Although the respondent, by its own statement of case, claimed that it had served such notices and purported to attach a sample copy, the appellant submitted in reply that the respondent’s bundle of documents contained no invitation to participate in the required form but only an application to join the right-to-manage company.The LVT determined that the respondent was entitled to acquire the right to manage. Although it referred to the appellant’s submissions regarding the lack of valid invitations to participate, it held that that was an additional further point not set out in the counternotice and that, consequently, there was no jurisdiction to decide it. The appellant appealed.Held: The appeal was allowed/dismissed. Under section 84 of the 2002 Act, a person who received a claim notice was not obliged to give a counternotice. There was no need to serve a counternotice admitting the right to manage if it was not in dispute. However, a landlord who sought to deny the right to manage had no option but to serve a counternotice within the time allowed. The appellant had served a valid counternotice under section 84(2)(b), alleging that the respondent was not entitled to acquire the right to manage by reason of a failure to comply with the statutory requirements, and triggering the respondent’s right to apply to the LVT for a determination under section 84(3). The appellant had not been obliged to set out in that counternotice every issue on which it wanted the LVT’s decision. There was no statutory requirement to that effect. Where an application was made to the LVT, its jurisdiction, as defined by section 84(3), was to determine whether the RTM company was on the relevant date entitled to acquire the right to manage the premises. There was no provision in section 84 or elsewhere to confine the jurisdiction of the LVT to the contents of the counternotice.In opposing a claim to acquire the right to manage, a landlord could legitimately take the point that the procedures prescribed in the 2002 Act and the Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010 had not been followed. That might include the contention that the notice of invitation to participate required by section 78 of the 2002 Act was materially defective and thus invalid. Although it was desirable that such a point should be taken at the earliest possible opportunity and should, if possible, be raised in the counternotice, the LVT could not avoid the task of satisfying itself that the statutory procedures had been correctly followed if the point was taken at a later date. Moreover, the LVT could consider the procedural integrity of the right-to-manage process on its own initiative, whether or not the point had been raised by any of the parties, provided its procedure was fair and the parties were given a reasonable opportunity to present any relevant evidence or submissions. Where the appellant had, in its statement of case, expressed its concerns about the respondent’s apparent failure to follow the statutory procedure for notice of invitation to participate, and where the respondent had reacted to by asserting in its own statement of case that the statutory procedures had been correctly followed, the LVT had been obliged to reach a conclusion on the matter. The LVT had erred in refusing to do so on the ground that it lacked jurisdiction where the point had not been raised in the counternotice. If it was to tackle the question raised by the appellant in its statement of case, the LVT needed to satisfy itself that a valid notice of invitation to participate had in fact been given to the tenants who ought to have received one. It had not done so. The respondent’s application was accordingly remitted to the LVT for determination.Andrew Skelly (instructed by Estates & Management Ltd) appeared for the appellant; Rosana Bailey (instructed by Lake Jackson Solicitors) appeared for the respondent.Sally Dobson, barrister
