Right to manage – Commonhold and Leasehold Reform Act 2002 – Withdrawal of claim – Company set up by tenants applying for right to manage flats – Claimant freehold owner issuing counternotice – Company applying to defendant tribunal to determine right to manage – Company purporting to withdraw notice – Claimant seeking judicial review of defendant’s refusal to determine issues raised – Whether notice of withdrawal terminating proceedings – Whether defendant ceasing to have jurisdiction – Claim allowed
The claimant was the freehold owner of a block of flats in Brentwood, Essex. The first interested party, an RTM company formed by the tenants of the flats, served a notice seeking to acquire the right to manage the premises under the Commonhold and Leasehold Reform Act 2002. The second interested party was the underlessee of the claimant. The claimant served a counternotice under section 84(1) of the 2002 Act, disputing the RTM company’s entitlement to acquire the right to manage.
The RTM company applied to the leasehold valuation tribunal (LVT) under section 84(3) for a determination that it was entitled to acquire the right to manage the premises, but subsequently informed the LVT that it had withdrawn the claim notice. The LVT treated that communication as a withdrawal of the application and a cancellation of the hearing. The claimant argued that the RTM company could not unilaterally withdraw its application. Having incurred costs in preparation for the hearing, the claimant wished to ensure that the LVT continued to have jurisdiction to deal with the application and make any consequential orders. The LVT took the view that a notice of withdrawal by the applicant itself was sufficient to bring the proceedings to an end and that it had no further jurisdiction in relation to the application.
The claimant applied for judicial review of the LVT’s decision. It contended that the giving of notice of withdrawal of an application made under section 84(3) did not automatically end the proceedings. It submitted that the LVT retained jurisdiction over the application unless it consented to the withdrawal and remained under a duty to determine the application; or alternatively, to determine whether or not to determine the application or to dismiss it and award costs.
Held: The claim was allowed.
(1) It was implicit in section 87(1) of the 2002 Act that an application to acquire the right to manage might be withdrawn and section 87(2)(b) also provided for the date on which the claim notice was deemed to be withdrawn, namely the date of the withdrawal of the application. However, there were indications that parliament had not intended to bring about the end of the proceedings simply on giving notice of withdrawal, most notably in the provisions relating to costs: see sections 87,88 and 89. Given that section 89(2) contemplated the RTM company’s liability for costs continuing down to the date of withdrawal of the application, which was likely to include some costs incurred in respect of the proceedings, and given that such liability would only arise if the LVT dismissed the application, those provisions indicated that the LVT retained jurisdiction over an application even where the RTM company had given notice that it intended to withdraw.
(2) On application under the Land Registration Act 2002, a party was entitled to withdraw his case and could not be compelled to continue. However, it was then for the relevant tribunal to rule as to how to deal with any such withdrawal, which would require a consideration of all the circumstances: Hanson v Church Commissioners for England [1978] 1 QB 823 and Silkstone v Tatnall [2012] 1 WLR 400 considered.
A similar approach ought to be taken to the interpretation of the statutory provisions relating to right-to-manage applications. The statute expressly contemplated that an application made under section 84(3) might be withdrawn. There was no statutory prohibition or bar on such a withdrawal. However, the relevant provisions did not specify how such a withdrawal was to be effected. The intention was that such a withdrawal would only be effective to terminate proceedings where the LVT consented to the withdrawal. The LVT would be required to reach a decision, although it would usually be satisfied that the application should be dismissed by reason of the withdrawal. That would be sufficient to ensure that the liability of the RTM company to pay the costs incurred by the proceedings was preserved.
(3) Accordingly, in the instant case, the LVT had erred in concluding that it no longer had jurisdiction in relation to the application simply because the RTM company had given notice of its wish to withdraw the application. Equally, the LVT was not under a duty to hear and determine the underlying merits of the case. It retained jurisdiction and could either decide to dismiss the application on the basis it had been withdrawn, or, if it thought it appropriate to do so, could proceed to determine the application.
Daniel Dovar (instructed by Wallace LLP) appeared for the claimant; the defendant and the interested parties did not appear and were not represented.
Eileen O’Grady, barrister
