Right to manage – Notice – Validity – Section 79 of Commonhold and Leasehold Reform Act 2002 – Respondent RTM company seeking to acquire right to manage building – Respondent giving notice of claim notice to appellant freeholder of building – Copy of claim notice being sent to qualifying tenants by email – Whether method of service being impermissible – Whether notices complying with statutory requirements – Whether non-compliance invalidating right-to-manage claim – Appeal dismissed
The respondent RTM company brought a claim to acquire the right to manage a property known as 110 Boulevard, Hull, which comprised five flats, each of which was held by a qualifying tenant. It was common ground that the claim notice was served on the appellant landlord as required by section 79(6) of the Commonhold and Leasehold Reform Act 2002. The First-tier Tribunal (FTT) also found that a copy of the claim notice was sent to each of the qualifying tenants by email. The appellant contended that that method of service was impermissible under section 79(8) of the 2002 Act which required that a copy of the notice be “given” to each qualifying tenant and that the respondents’ failure to comply with the service obligation was fatal to the validity of the procedure.
The FTT rejected the appellant’s contention and held that, even if there had been a breach of the service requirements in section 79(8), none of the parties would have been prejudiced and so a failure to comply would not have been fatal.
The appellant appealed arguing, in reliance on the decision in Cowthorpe Road 1-1A Freehold Ltd v Wahedally [2016] EGLR 55, that the FTT was wrong and service by email did not comply with section 79(8). Cowthorpe concerned the service of a counternotice by landlord under section 21 of the Leasehold Reform, Housing and Urban Development Act 1993 and the sole question was whether the notice had been served in time. The appeal was dealt with under the written representations procedure. Detailed grounds of appeal were settled by Justin Bates of Counsel on behalf of the appellant. No written representations were submitted by the respondents.
Held: The appeal was dismissed.
(1) The obligations under section 79(6) and (8) were different in that the RTM company had to give the actual claim notice to the landlord but only a copy of the claim notice to the qualifying tenants. Whereas the landlord was given the right to serve a counternotice under section 80(1), no such right was given to the qualifying tenants. The service of the copy of the claim notice on the qualifying tenants did not appear to confer any additional rights on them.
(2) The decision in Cowthorpe concerned the service by email of a landlord’s counternotice under section 21 of the 1993 Act and the court held that service of a copy rather than the original did not comply with section 21. That decision was not binding on the Upper Tribunal and there were crucial differences between the requirements of the 1993 and 2002 Acts. In particular, there was no requirement in section 79(8) of the 2002 Act to give an original claim notice to each qualifying tenant. The requirement was to give a copy. That was a crucial distinction and none of the judge’s reasoning in Cowthorpe applied to the giving of a copy. The original notice was signed and there was no requirement for any further signature by the RTM company on the copy or otherwise; thus the question of electronic signature did not arise. There was nothing in the 2002 Act which required the copy to be a hard copy and the Act clearly contemplated that a notice could be given other than by post. Accordingly, the sending of an email containing, either as an attachment or otherwise, a copy of the claim notice to the email address of the qualifying tenant complied with the RTM company’s obligation under section 79(8) of the 2002 Act: Cowthorpe Road 1-1A Freehold Ltd v Wahedally [2016] EGLR 55 distinguished.
(3) (Obiter) In the light of the Tribunal’s views on section 79(8), it was strictly unnecessary to deal with the question whether the parties would have been prejudiced by a failure to comply with the relevant service requirements. However, had it been necessary to do so, the tribunal would also have dismissed the appeal on that ground. Even if service of the copy notice by email was not a valid method of service, it did not automatically invalidate all subsequent steps and would not have done so in the present case. The requirement to serve copies of the notice was ancillary and of secondary importance. In the present case, all the qualifying tenants were members of the respondent RTM company and were participating in the application to manage. Section 79(8) was for the protection of the qualifying tenants and Parliament could not have intended that a landlord could successfully contend that a breach of section 79(8) would invalidate all subsequent steps: Avon Freeholds Ltd v Regent Court RTM Co Ltd [2013] UKUT 213 (LC) and Elim Court RTM Co Ltd v Avon Freeholds Ltd [2017] EWCA Civ 89; [2017] PLSCS 40 applied, Natt v Osman [2014] EWCA Civ 1520; [2015] EGLR 11 considered.
Eileen O’Grady, barrister
Read a transcript of Assethold Ltd v 110 Boulevard RTM Co Ltd here
