Leasehold Reform, Housing and Urban Development Act 1993 – Collective enfranchisement – Initial notice – Appellants holding leases of flats in property owned by respondent landlords – Appellants serving initial notice under section 13 of 1993 Act of claim to acquire freehold of property by collective enfranchisement – Notice omitting details prescribed by section 13(3)(e) in respect of one flat – Whether non-compliance with section 13(3)(e) invalidating notice – Appeal dismissed
The appellants were the long leaseholders of two of the four flats in a property in London N10, the freehold of which was owned by the respondents. One of the four flats was located in the attic of the property and was let to the respondents’ daughter. In June 2010, the appellants served an initial notice on the respondents, under section 13 of the Leasehold Reform, Housing and Urban Development Act 1993, claiming the right to acquire the freehold of the property by collective enfranchisement under Chapter I of Part I of the Act.
The notice specified that the property contained only three flats held by qualifying tenants. The appellant deliberately omitted the attic flat because they considered that it was not a flat for the purposes of the 1993 Act, on the ground that the staircase leading up to it had been constructed on a landing that properly fell within the demise of one of the other flats and was therefore a trespass. The respondents disagreed and brought county court proceedings for a declaration that the initial notice was invalid for failure to comply with the requirements of section 13(3)(e) of the 1993 Act so far as it failed to give the name of one of the qualifying tenants in the property, the address of that tenant’s flat or the particulars of her lease. The respondents commenced separate proceedings seeking a determination as to the extent of the demise of the flat next to the landing and, if necessary, rectification.
Ruling in favour of the respondents, the judge held that: (i) the landing was not included in the demise of the adjoining flat and there were no grounds for rectification; (ii) the attic flat therefore had a lawful means of access and satisfied the definition of a “flat” for the purposes of the 1993 Act; and (iii) the omission of the details of the attic flat from the appellants’ initial notice rendered that notice invalid.
The appellants appealed. They contended that the omission of certain of the details specified by section 13(3)(e) should not invalidate the initial notice where the consequences of non-compliance were not significant and caused no prejudice to the respondents.
Held: The appeal was dismissed.
Where a statute laid down a process or procedure for the exercise or acquisition of some right conferred by the statute, and the statute did not expressly state the consequence of a failure to comply with that process or procedure, the modern approach was to determine the consequence of non-compliance as an ordinary issue of statutory interpretation, applying all the usual principles of statutory interpretation. That exercise would invariably involve an assessment of the purpose and importance of the requirement in the context of the statutory scheme as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 and R v Soneji [2005] UKHL 49; [2006] 1 AC 340 applied.
In cases where there was a statutory requirement to serve a notice as part of the process of acquiring, or resisting the acquisition, of property or similar rights conferred by the statute, the court would not adopt an approach of asking whether there “substantial compliance” but would instead interpret the notice to see whether it actually complied with the strict requirements of the statute. If it did not, it would be invalid: Burman v Mount Cook Land Ltd [2001] EWCA Civ 1712; [2002] Ch 256; [2002] 1 EGLR 61, Newbold v The Coal Authority [2013] EWCA Civ 584; [2014] 1 WLR 128; [2013] PLSCS 115 and Keepers and Governors of John Lyon Grammar School v Secchi (1999) 32 HLR 820; [1999] 3 EGLR 49 applied.
On that approach, the outcome did not depend on the particular circumstances of the actual parties, such as the state of mind or knowledge of the recipient or the actual prejudice caused by non-compliance on the particular facts of the case: Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277; [2002] HLR 43; [2002] 1 EGLR 55 and Tudor v M25 Group Ltd [2003] EWCA Civ 1760; [2004] 1 EGLR 23 applied. That was consistent with the policy of providing certainty in relation to the existence, acquisition and transfer of property interests. The service of an initial notice under section 13 of the 1993 Act had important property consequences: it restricted a right to terminate the lease of a flat held by a participating tenant; further, the notice could be registered as an estate contract under the Land Charges Act 1972 or could be protected by notice under the Land Registration Act 2002, so restricting the ability of the landlord to deal with the property.
The use of the word “must” in section 13(3) of the 1993 Act, while denoting an obligation, threw no particular light on whether the legislature intended non-compliance to result in invalidity when detached from the statutory scheme as a whole. However, a consideration of the statutory scheme led to the conclusion that non-compliance invalidated an initial notice. In the instant case, there had been a failure to comply with section 13(3)(e) by reason of the failure to identify all the qualifying tenants and to state their addresses in the property. Those matters went to the very heart of the right to collective enfranchisement, since the information was intended to disclose, on the face of the section 13 notice, the number of qualifying tenants in the premises, whether the total number of flats held by the qualifying tenants was not less than two-thirds of the total number of flats in the premises and whether the section 13 notice had been given by qualifying tenants of not less than half of the number of flats contained in the premises, as was required in order to exercise the right. Moreover, the 1993 Act specifically provided, in para 15 of Schedule 3, that the initial notice would not be invalidated by certain kinds of inaccuracies, and would be capable of amendment in certain circumstances; that tended to indicate that other errors in the notice would render it invalid. It was relevant that there was no restriction on the service of a new notice at any time after an invalid notice. If the landlord challenged the validity of a section 13 notice, there was nothing to prevent the immediate service of a fresh section 13 notice without prejudice” to the tenants’ contention that the original notice was valid: 9 Cornwall Crescent London Ltd v Kensington and Chelsea Royal London Borough Council [2005] EWCA Civ 324; [2006] 1 WLR 1186; [2005] 2 EGLR 131 applied.
Accordingly, on a consideration of the statutory scheme as a whole, the appellants’ initial notice was invalidated by reason of the non-compliance with section 13(3)(e).
Piers Harrison (instructed by Layzells Solicitors) appeared for the appellants; Paul Letman (instructed by Anthony Gold Solicitors) appeared for the respondents.
Sally Dobson, barrister
