Right to manage – Claim notice – Commonhold and Leasehold Reform Act 2002 – Respondent RTM company claiming right to manage building containing flats let to its members – Claim notice held to be validly given under section111(3) of 2002 Act at address provided to lessees under section 48 of Landlord and Tenant Act 1987 for service of notices – Whether use of that address prohibited under section 111(4) on ground that different address notified to respondent for service of notices under 2002 Act – Appeal dismissed
The appellant owned the freehold of a residential building in Benfleet, Essex. In July 2014, the respondent RTM company, whose members were lessees of flats in the building, gave a notice to the appellant, under section 79 of the Commonhold and Leasehold Reform Act 2002, claiming the right to manage the building pursuant to Chapter 1 of Part 2 of that Act. The respondent served a counternotice in which it set out an address, namely that of its solicitor, to which future communications “in relation to the subject matter of the claim notice and any other notice which may be served” under Chapter 1 of Part 2 should be sent.
In February 2015, the appellant’s property management company issued the lessees of the flats with service charge invoices which set out the address of the landlord for the purposes of sections 47 and 48 of the Landlord and Tenant Act 1987; they gave the address of the appellant’s registered office for the purpose of serving notices.
The respondent did not pursue its original right-to-manage claim but later made a second such claim by a notice which was hand-delivered to the appellant’s registered office in April 2015. The appellant again served a counternotice, in which it disputed the validity of the claim on the grounds that the claim notice had been given at the wrong address.
An issue arose as to whether the appellant’s registered office was the correct address at which to give the notice pursuant to section 11(3) of the 2002 Act, being the address given under section 48 of the 1987 Act for the service of notices, or whether the use of that address was precluded by section 111(4) on the grounds that the appellant had stipulated a different address for the service of claim notices under the 2002 Act.
The first-tier tribunal (FTT) held that the claim was valid since the address notified in the February 2015 service charge invoices superseded that given in the 2014 counternotice and accordingly section 111(3) of the 2002 Act applied. It further held that, even if that were wrong, it did not affect the validity of the claim since no one had been prejudiced by the defect in circumstances where the appellant had in fact received and responded to the claim.
Held: The appeal was dismissed.
(1) The application of section 111(3) and (4) of the 2002 Act was not confined to notices given by post but applied to any method of service. If a landlord had notified an RTM of a different address for the giving of notices under the 2002 Act, then the prohibition in section 111(4) on the use of an address provided in accordance with section 47 or 48 of the 1987 Act applied whatever method of delivery of the notice was adopted.
(2) A company and its members were distinct persons. Because a notification for the purpose of section 111(4) of the 2002 Act was given for a different purpose, and to different recipients, from notices under section 47 or 48 of the 1987 Act, it was not possible to regard a statement made in service charge demands sent to a number of lessees as countermanding or superseding a statement previously made to an RTM company that notices under the 2002 Act should be served at a specific address. The FTT had therefore been wrong to base its decision on a finding that the service charge demands of February 2015 had countermanded the address notified in the appellant’s 2014 counternotice.
(3) The FTT had nonetheless correctly found that the delivery of the claim notice to the appellant’s registered office in April 2015 was an effective giving of that notice for the purpose of section 79(1) of the 2002 Act. Rent demands and notices under sections 47 and 38 were given to tenants, not to RTM companies, whereas a notification given by a landlord for the purpose of section 111(4) had to be given to the RTM company itself, not to its members. A landlord was not obliged under the 2002 Act to give an address at which the RTM company could give notices but was instead given the opportunity to do so. If a landlord had not taken that opportunity, then the RTM company could fall back on an address given to its members. The service charge invoices sent to the members of the respondent RTM company had identified the appellant’s registered office, without qualification or restriction, as its address for the service of notices. Reliance on that address was not prohibited by section 111(4), because no different address had been identified by the appellant to the respondent itself as an address for the service of future claim notices under the 2002 Act.
(4) The counternotice given by the appellant in response to the 2014 claim notice did not amount to such a notification. It did not state that any further notice to be served under the 2002 Act should be sent to the appellant’s solicitor, but rather that communications in relation to any such notice, or perhaps in relation to the subject matter of such notice, should be sent there. The natural meaning of the statement was that any further notice in relation to the subject matter of the July 2014 claim notice had to be sent to the solicitor which was acting in relation to that claim notice. The 2002 Act contemplated a good deal of communication in the form of notices passing between an RTM company and a landlord before the acquisition was completed. A reasonable recipient of the first counternotice, reading it in that light, would read it as referring to communications relating to the then-current claim and would not understand it to mean that the address of the appellant’s solicitor was to be used as the appellant’s address for the service of any future claim notice that the respondent might want to give. It followed that no different address for the giving of notices under the 2002 Act had been notified to the respondent for the purposes of section 111(4) and, for that reason, it had been entitled to give the second claim notice at the appellant’s registered office pursuant to section 111(3).
Per curiam: It was not necessary for present purposes to determine the effects of non-compliance with the statutory procedures under the 2002 Act. However, the better view was that the FTT had erred in its approach to that issue. Where the right to manage was acquired, the RTM company, although not acquiring the landlord’s property, nonetheless acquired many of the rights and obligations that were the consequence of the landlord’s ownership of the property and in doing so divested the landlord and others of contractual rights. Parliament had identified the steps to be taken to acquire that status and it was not for tribunals to confer the same status by something less than complete compliance with those steps. Whether something less than complete compliance could have the same effect would depend on whether, as a matter of statutory construction considering the procedural rule in the context of the 2002 Act as a whole, it could be concluded that parliament did not intend non-compliance to be fatal. Prejudice to any of the parties interested was immaterial to the issue of what parliament intended to be the consequences of a failure of compliance: Osman v Natt [2014] EWCA Civ 1520; [2015] EGLR 11 and Triplerose Ltd v Mill House RTM Co Ltd [2016] UKUT 80 (LC) PLSCS 68 considered.
The appeal was determined on the written representations of the parties.
Sally Dobson, barrister
Click here to read transcript: Gateway Property Holdings Ltd v Ross Wharf RTM Co Ltd
