Right to manage – Commonhold and Leasehold Reform Act 2002 – Self-contained building – Respondent seeking to acquire right to manage premises comprising main building of structurally complex development – Whether main building “structurally detached” so as to comprise self-contained building to which right to manage applying – Whether this precluded where underground car park necessary to structurally integrity of building – Whether appellant freeholders entitled to raise that point before leasehold valuation tribunal despite failure to mention it in counternotice – Appeal allowed
The appellants were the freehold owners of a modern, structurally complex mixed-use development comprising three buildings, built over a large, concrete-slab underground car park, on the south bank of the Thames adjacent to Battersea Bridge in London SW11. The respondent RTM company was formed for the purpose of acquiring the right to manage the main building in that development on behalf of the lessees of the apartments in that building pursuant to Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002. By its claim notice served on the appellants under section 79 of the Act, it asserted that the main building was a self-contained building to which the right to manage applied. The appellants served a counternotice disputing the respondent’s entitlement to acquire the right to manage.
The respondent applied to the leasehold valuation tribunal (LVT) for a determination of its entitlement. Before the LVT, the appellants raised a point that they had not made in their counternotice, arguing that the main building was not a “self-contained building” within section 72(1) of the 2002 Act since it was not “structurally detached” from other parts of the development as required by section 72(2). They advanced evidence that the main building and the adjoining building, together with the underground car park, had been constructed as a single structural entity and that the stability of both buildings relied on the transfer of forces into the basement structure at ground level. They asserted that certain distinctive “V”-shaped pillars, which were exposed externally and formed a significant architectural feature of the building, had an important function as load-bearing structures generating tie-forces that transferred through vertical pillars passing through the car park onto the supporting piles beneath.
The LVT held that the appellants were not precluded from raising the issue by reason of their failure to mention it in their counternotice. However, it found that the main building, while not structurally detached from the car park, was a self-contained building to which the car park was “appurtenant property”; in that regard, it noted that the appurtenant property did not have to appertain exclusively to the self-contained building that was the subject of the right-to-manage claim. It made a determination in the respondent’s favour accordingly. The appellants appealed.
Held: The appeal was allowed.
(1) The words “building” and “structurally detached” were not defined in the 2002 Act and should be given their ordinary meaning. Whether a building was “structurally detached” within the meaning of section 72(2) of the 2002 Act, so as to qualify as a self-contained building to which the right to manage could apply, was an issue of fact that depended on the nature and degree of attachment between the building and other structures. When considering whether premises were structurally detached, it was first necessary to identify the premises to which the claim related. The respondent’s claim could not be regarded as relating only to so much of the structure as lay at, or above, ground level, so as to exclude the car park beneath. As a matter of ordinary language, the relevant “building” was not limited only to so much of the built structure as was visible above ground level. The main building did not begin at ground level but included the reinforced concrete cores that rose from basement level to the upper floors, the structural “V” columns between the ground and second floors and the vertical continuation of those columns below ground level into the car park. It also included part of the continuous concrete raft at basement level on which its supporting columns stood. The building as so described was not structurally detached at ground or basement level from the continuous concrete slabs that formed the floor and ceiling of the underground car park. In circumstances where continuous concrete structures, namely the ground and basement floor slabs, were major and integral components both of the building and of the car park, and also of adjoining structures, it was not possible to regard the main building as structurally detached. Even if the right to manage could be exercised for most practical purposes in relation to the main building, parliament had decided that it was important, for practical reasons, to confine the acquisition of the relevant right to buildings that were structurally detached. In that way, disputes or uncertainty would be avoided in the event that repairs to shared structural elements were required, or redevelopment was contemplated.
The LVT had wrongly considered that the designation of the car park as appurtenant property was sufficient to render irrelevant the fact that the main building was not structurally detached from the car park. For premises to come within the right to manage provisions of the 2002 Act, they had to consist of a self-contained building or part of a building, with or without appurtenant property. In cases involving complex or unusual buildings, a systematic consideration of that issue might be required, beginning with an identification of the premises that were said to constitute the building or part of a building to which the claim related, before considering whether those premises were self-contained in the sense that they were structurally detached. The identification of other property that was appurtenant to the self-contained building or part of a building was a separate exercise, which would not arise if the principal subject matter of the claim was not self-contained. If the only case being advanced was that the subject of the RTM claim was a self-contained building, and not a self-contained part of a building, then the existence of another structure that was not itself part of the building, but to which the building was structurally attached, would be fatal to the claim, whether or not the attached structure was appurtenant property. Accordingly, the respondent could not satisfy the requirement that the premises be a self-contained building by designating the structures below ground level, to which the building was clearly attached, as appurtenant property.
(2) The appellants had been entitled to raise the issue of whether the premises were a self-contained building before the LVT notwithstanding their failure to mention the point in their counternotice. There was no statutory requirement that the recipient of a claim notice should raise in its counternotice every challenge to the claim that it wanted the LVT to consider. Inaction on the part of the recipient of an invalid claim notice could not result in the acquisition of rights in circumstances that did not come within those to which Chapter 1 of Part 2 of the 2002 Act applied. If a claim notice was invalid because it related to a building that was not self-contained, or for any other reason the qualifying conditions set out in section 72 were not satisfied, then none of the provisions in the remaining sections of Chapter 1 had any application. The satisfaction of the qualifying conditions was essential to the jurisdiction of the LVT to make a determination of entitlement under section 84(3). Where an issue going to the jurisdiction of a first instance tribunal was raised in proceedings before it, or where the same tribunal itself identified such an issue, it was entitled to investigate and determine it: Fairhold (Yorkshire) Ltd v Trinity Wharf (SE16) RTM Co Ltd [2013] UKUT 502 (LC); [2013] PLSCS 247 applied.
Anthony Radevsky (instructed by Hutchison Whampoa Properties (Europe Ltd) appeared for the appellants; Phillip Rainey QC and James Fieldsend (instructed by Albion Riverside Residents RTM Co Ltd) appeared for the respondent.
Sally Dobson, barrister
