Ayres and others v Roberts and another

Leasehold enfranchisement – Lease renewal – Section 48 of Leasehold Reform, Housing and Urban Development Act 1993 – Notice under para 8(1) of Schedule 2 to Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations 1993 – Claimant tenants not completing by date provided in para 8 notice given by defendant landlords – Defendants asserting entitlement to withdraw from transaction – Claimants seeking order for completion – Whether defendants’ para 8 notice effective – Effect of para 8 notices generally – Claim allowedThe claimants, as the long leaseholders of six flats, sought to exercise their right to acquire new leases from the defendant landlords, pursuant to Chapter II of the Leasehold Reform, Housing and Urban Development Act 1993. After the service of tenants’ notices and landlord’s counternotices, the leasehold valuation tribunal determined the premium payable for the new leases. The LVT sent its decision to the parties on 19 December 2008. The defendants received it on 22 December 2008.On Monday 16 February 2009, the claimants’ solicitor received a notice under para 8(1) of Schedule 2 to the Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations 1993, e-mailed by the defendants the previous evening, requiring the claimants to complete on the new leases 21 days from then. The claimants did not complete on the date provided by the notice, although they indicated their continuing intention to proceed and their solicitor was put in funds to complete by the end on March. The defendants asserted that, as a result, they were no longer obliged to grant the leases.The claimants applied to the county court, under section 48(3) of the Act, for an order requiring the defendants to grant the new leases. In those proceedings, issues arose as to: (i) whether the defendants’ notice was ineffective, under para 8(2), for giving a date for completion that fell after the expiry of the “appropriate period” in section 48(6) of the 1993 Act; and (ii) the effect of para 8 notices in general. On the former point, the defendants submitted that the “appropriate period”, namely two months from the date when the LVT’s decision became final, should be calculated by reference to the date when they received the LVT’s decision, rather than the earlier date when it was sent.Held: The claim was allowed. (1) The LVT’s decision had become final once the 21-day period for appealing it had expired. That period ran from the date on which the decision document was “sent” to the parties, not when it was received: see regulation 20 of the 1993 Regulations. It was not possible to construe the word “sent” as meaning “received”. The period for appealing had therefore ended at midnight on 8 January 2009; accordingly, the “appropriate period” had expired two months later at midnight on 8 March 2009.The date for completion under the defendants’ para 8 notice was the first working day after the expiration of 21 days beginning with the date the notice was given: see para 8(1). Assuming that the para 8 notice had been given on 16 February 2009, when it was received by e-mail, the 21-day period had expired on 8 March and the completion date had been the next working day, namely 9 March. Since that completion date fell after the end of the appropriate period, the notice had not been effective to fix the date for completion under para 8(1): see para 8(2).(2) Non-compliance with a para 8 notice did not entitle the other party to terminate the transaction. A para 8 notice was designed to provide an initial date for completion in the event that the parties did not agree one. Its purpose was to provide what an ordinary contract would invariably provide, namely a date for completion, since no completion date could be determined from the Act. Under an ordinary contract, the completion date was not of the essence; instead, there were provisions for time to be made of the essence by the giving of a notice to complete. Likewise, failure to complete on the date fixed by a para 8 notice did not entitle the party giving the notice to thwart the enfranchisement process. Only the court, and not a party, could make time of the essence. Non-compliance with a para 8 notice was only one factor to be taken into account by the court in deciding what order to make under section 48. On the evidence, the claimants had been able, ready and willing to complete by the end of March 2009 at the latest. Their tenants’ notice should not be treated as withdrawn under section 48(4). The appropriate course was to make an order fixing a date for completion.Ellodie Gibbons (instructed by Thackeray Williams) appeared for the claimants; the first defendant appeared in person.Sally Dobson, barrister