Leasehold Reform Act 1967 — Lease held by joint proprietors — Notice of leaseholder’s claim — Whether one of two joint tenants can serve valid notice
On October 7 1994 the applicant, one of
two joint tenants holding a lease of a house, served on the respondent landlord
a notice of leaseholder’s claim under section 8(1) of the Leasehold Reform Act
1967. In denying the validity of the notice, it was contended for the landlord
that the applicant and his wife were the joint proprietors on the land register
of the lease and that, as trustees of the legal estate, they constituted ‘the
tenant’ and must both join in the section 8 notice.
leaseholder’s notice under section 8 of the 1967 Act, or one may serve the
notice with the authority of the other.
The following cases are referred to in
this report.
Fairclough (TM) & Sons v Berliner [1931] 1 Ch
60
Jacobs v Chaudhuri [1968] 2 QB 470;
[1968] 2 WLR 1098; [1968] 2 All ER 124, CA
Lemon v Lardeur [1946] KB 613
Turley v Panton (1975) 29 P&CR 397;
[1975] 2 EGLR 75; 236 EG 197, DC
Anthony Metzer (instructed by Simons,
Muirhead & Burton) appeared for the applicant; Anthony Radevsky (instructed
by Lee & Pemberton) represented the respondent.
Giving judgment, Judge Green QC said: This is an
originating application for a declaration that the applicant is entitled to
acquire the freehold property, 16 Cadogan Lane, Chelsea, London SW1, under the
Leasehold Reform Act 1967. It involves a point of law for which there is, as
yet, no authority.
The agreed facts for the purpose of these
proceedings are as follows. On March 24 1952 the respondent’s predecessor in
title let this house for 45 years from March 24 1952 to Thomas Tilling Ltd.
That term would expire on September 29 1995. The respondent acquired the
reversion on a date which has not been supplied to me. Nothing turns on it so I
shall in this judgment refer to the respondent as including his predecessor in
title. On a date which again has not been provided to me the lease was
transferred to Thelma Wax, the applicant’s mother.
On January 14 1988 she acquired an
extended lease under the Act for 50 years from September 29 1995. I do not know
what upon date she acquired the unextended lease. On July 16 1988 the applicant
married Sarah Lousada, to whom I shall refer as ‘the wife’ though they have
since been divorced. On January 15 1991 the mother transferred the lease to her
son and his wife for £230,000. They remain registered as joint owners. On
September 13 1991 they both moved in and occupied the house. The applicant has
ever since continued to occupy the house as his sole residence at a low rent.
On April 24 1993 the wife left the house and has never returned to occupation.
On October 7 1994 the applicant served a notice of leaseholder’s claim under
section 8(1) of the Act on the respondent. On December 6 1994 the respondent
served a notice of reply under Schedule 3, Part 2, para 7.1, in which he did
not admit the applicant’s right to have the freehold. On January 11 1995 the
applicant and his wife were divorced. On August 9 1995 the applicant issued
this originating application. By his answer the respondent denied that the
notice of leaseholder’s claim was valid. The ground for this denial, which is
the sole matter in dispute before me, is that the lease was at all material
times vested in both the applicant and his wife.
For the purpose of these proceedings the
respondent admits all other matters of fact so that the only matter for my
decision is whether the section 8(1) notice was invalid for want of joinder of
the applicant’s former wife.
Mr Anthony Radevsky, who appears for the
respondent, makes a short and cogent submission as follows:
(1) The applicant and his wife remain on
the land register as the joint proprietors of the leasehold.
(2) By section 36 of the Law of Property
Act 1925 they are joint owners of the legal estate consisting of this long
lease. The landlord is not concerned with their beneficial rights inter se
and indeed has no right even to be told what they are. His dealings necessarily
are with them as trustees of their beneficial interests.
(3) The right to enfranchise given in
section 1(1), section 5(1) and section 8(1) refers in different places to ‘a
tenant’ and ‘the tenant’. He says that nothing turns on the use of ‘a tenant’
in section 1, so for the purposes of the Act, whether described as ‘a tenant’
or ‘the tenant’, the Act is referring to both trustees, namely the applicant
and his wife.
(4) If the applicant and wife jointly or
severally wish to acquire the freehold, the notice under section 8(1) must be
given by both of them.
Where the tenancy of a house is vested in
trustees and a person beneficially interested under the trusts is entitled or
permitted by reason of his interest to occupy the house, then the trustees
shall have the like rights under this part of this Act in respect of his
occupation as he would have if he were the tenant occupying in right of the
tenancy.
Under this subsection the occupation of
the applicant can be treated as if it were the occupation of the trustees. It
is common ground that the relevant date for considering the necessary
requirement of occupation is the date of service of the section 8 notice, and
at that date the applicant had the necessary history of occupation and the wife
did not. As the wife lacked the necessary qualifying occupation, her occupation
would not avail the trustees to serve a notice under the Act.
(5) The right to avail themselves of the
applicant’s occupation is derived from section 6(3). The obligation, as opposed
to the right, for both trustees to join in the section 8 notice is derived from
the authorities on similar notices, both at common law and under broadly
similar legislation. Thus, all joint tenants must apply for relief against
forfeiture: TM Fairclough & Sons Ltd v Berliner [1931] 1 Ch
60. Until the reforming section 41A was inserted by the Law of Property Act
1969 into Part II of the Landlord and Tenant Act 1954, all joint tenants had to
apply for a new business tenancy: Jacobs v Chaudhuri [1968] 2 QB
470. All joint tenants must apply to a rent tribunal for a reduction of rent
even though such reduction unarguably redounds to the benefit of those who do
not join in the application: Turley v Panton (1975) 29 P&CR
397*. Mr Radevsky further adopts the views to this effect of the learned editor
of Hague on Leasehold Enfranchisement, 2nd ed, para 5.05.
*Editor’s note: Also reported at [1975] 2
EGLR 75
(6) The only circumstances in which one
trustee can sign is if the other trustees authorise him to sign and the notice
indicates that he is signing on behalf of all trustees. Again, he adopts the
views to this effect of Hague (ibid) and the case of Lemon
v Lardeur [1946] KB 613.
Mr Anthony Metzer for the tenant makes
the following main submissions, among others:
(1) The authorities on the statutes cited
above all deal with statutes which use the expression ‘the tenant’ whereas
section 8(1) uses the phrase ‘a tenant’.
(2) The wife lacks the necessary
qualifying occupation so, if she had joined in the notice, she would have
vitiated it. Furthermore, if the respondent is right and the husband cannot on
his own serve a notice, it follows that there is no machinery by which either
or both of these two persons can obtain the freehold. That cannot be what
parliament intended.
My view as to his first submission is
this. The point would have had some force were it not for the presence of
section 6 in the Act. Section 6 clearly, in my view, legislates for the
situation where the house is vested in trustees as here.
As to his second submission, it contains
a fallacy. There exists no such mischief as he claims. The remedy of these two
joint tenants is quite simply to comply with section 6(3); that is to say, for
the applicant to obtain the consent of his former wife for him to serve the
notice on behalf of both of them. That notice would have to state that he had
been so authorised and that it was served on behalf of them both.
Alternatively, they could both serve the notice of the trustees and state that
he, but not she, satisfied all the necessary qualifying conditions. If she
refuses both such courses of action, he has various remedies. The clearest
remedy is to apply for an order compelling her to join with him under section
30 of the Law of Property Act 1925. The only financial consequence if the
respondent succeeds in this litigation is that the husband must start again and
get his tackle in order. He is also, of course, likely to have to pay the costs
of these proceedings, as to which I have not yet heard submissions. But he is
in no way out of time or prevented in some way from making a second and valid
application for enfranchisement.
I have no hesitation in preferring the
submissions of the respondent, which are to my mind clearly right. So the claim
in the originating application fails and I shall ask the respondent’s counsel
to draft the minute of order.
