Council property — Defendant offering to sell freehold to tenant at discounted price — Reference to statute not in force at relevant time — Tenant accepting offer — Landlords’ notice to complete — High Court holding that notices valid despite error in form — Tenant entitled to buy at discounted price
The plaintiffs lived at 5 Salmon Lane, Mercer’s Estate, in East London, pursuant to a tenancy agreement made with the defendant council. In June 1985 the plaintiffs claimed the right to buy the freehold pursuant to statutory rights conferred upon them by the Housing Act 1980. In August 1985 the defendants admitted the right to buy and on January 15 1986, following a valuation, the defendants offered to sell the freehold at a value of £48,000 discounted to £29,280. The plaintiffs accepted the offer. A dispute arose whether the plaintiffs were entitled to buy the property at the discounted sum in a proper state of repair.
The defendants served on the plaintiffs a landlords’ prior notice as to completion (the first notice) on July 13 1989. The notice required the plaintiffs to complete within 56 days. It referred to section 140 of the Housing Act 1985. The plaintiffs claimed that the first notice was invalid because the 1985 Act did not come into force until April 1 1986, after the defendants’ offer to sell had been accepted. It was common ground that the relevant statute to which reference should have been made in the notice was section 16 of the Housing Act 1980, as amended. On September 1 1989 the plaintiffs drew the error to the defendants’ attention. The defendants did not reply to that letter, but sent a landlords’ final notice to complete dated September 13 1989. This referred to “Housing Act 1985, section 141”. A preliminary issue arose whether the plaintiffs had the right to buy at the discounted price.
Held Judgment for the plaintiffs.
1. The onus was on the defendants to establish the validity of the notices: see Lemon v Lardeur [1946] KB 613.
2. The references in the notices to the wrong statute was a difference merely of form — the old form being substantially the same as its successor: see Morris v Patel [1987] 1 EGLR 75.
3. The notices and the information provided by way of sections 140 and 141 stated in clear and certain terms all the matters which the plaintiffs needed to know. The only mistake made by the defendants was to provide under the wrong Act precisely the information which the plaintiffs had to have. No reasonable recipient of the notices could have been misled and on the facts the plaintiffs were not misled by the notices. Therefore, neither notice was a nullity.
4. However, on the facts the defendants had waived the notices. The powers to serve a first and a final notice were discretionary powers which a landlord might exercise. The sections merely provided the machinery or procedure to be used if it was decided to serve a notice. Waiver and estoppel could apply in cases of procedure: see Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850.
5. There could be no valid objection in law to the conclusion that the defendants had waived the notice or were estopped from denying it, provided that it was supported by the facts.
6. Accordingly, the notices of July 13 and September 13 1989 were valid, but of no effect because they were waived.
Robert Latham (instructed by Marcus-Barnett) appeared for the plaintiffs; Jonathan Small (instructed by TV Edwards) appeared for the defendant council.
