7 Strathray Gardens Ltd v Pointstar Shipping and Finance Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden |
| Judgment Date | 15 December 2004 |
| Neutral Citation | [2004] EWCA Civ 1669 |
| Docket Number | Case No: B2/2004/0617 CCRTF (CHY03219) |
| Court | Court of Appeal (Civil Division) |
| Date | 15 December 2004 |
[2004] EWCA Civ 1669
Lord Justice Ward
Lady Justice Arden and
Lord Justice Jacob
Case No: B2/2004/0617 CCRTF
B2/2004/0617/B FC3
(CHY03219)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON
COUNTY COURT
(His Honour Judge Cooke)
Royal Courts of Justice
Strand, London, WC2A 2LL
Jonathan Gaunt QC (instructed by Glinert Davis) for the Appellant
Anthony Radevsky (instructed by Wallace & Partners) for the Respondent
This is an appeal by the defendants in this action against the order of HHJ Cooke sitting in the Central London County Court dated 12 February 2004. The appellants own the freehold of 7 Strathray Gardens, London NW3 ("the premises") . The premises are leased to a number of tenants who served a notice of collective enfranchisement served on behalf of the tenants of the premises pursuant to section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 ("the 1993 Act") . This appeal concerns the validity of the landlords' counter-notice served in response. The judge held that the landlord's notice did not comply with the mandatory statutory requirements for such notice and that accordingly under section 25 of the 1993 Act the tenants' nominee purchaser ("the company"), which is the respondent to this appeal, was entitled to acquire the freehold and leasehold interests in the premises on the terms contained in the tenants' notice dated 4 March 2003. The non-compliance in question was the failure by the landlords to state in their counter-notice whether the premises were in the area of a scheme approved as an estate management scheme under section 70 of the 1993 Act. In fact, they were not and so the counter-notice should have contained a negative statement that the premises were not in such an area. As explained below, this requirement is not in the 1993 Act. It was imposed for the first time by regulations made in 2002. I refer below to an estate management scheme as an "EMS". References to the 1993 Act are to the 1993 Act prior to amendment by the Commonhold and Leasehold Reform Act 2002.
The statutory provisions
Section 21 of the 1993 Act provides for the service of a landlord's counter-notice. Section 21(1) is important. It provides:-
"(1) The reversioner in respect of the specified premises shall give a counter-notice under this section to the nominee purchaser by the date specified in the initial notice in pursuance of section 13(3) (g) ."
Where the landlord admits that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the premises specified in the tenants' notice, the landlord's counter-notice must contain a statement that the landlord so admits (section 21(2) (a)) . In that event, section 21(3) requires that such counter-notice must in addition:-
"(a) state which (if any) of the proposals contained in the initial notice are accepted by the reversioner and which (if any) of those proposals are not so accepted, and specify-
(i) in relation to any proposal which is not so accepted, the reversioner's counter-proposal, and
(ii) any additional leaseback proposals by the reversioner;
(b) if (in a case where any property specified in the initial notice under section 13(3) (a) (ii) is property falling within section 1(3) (b)) any such counter-proposal relates to the grant of rights or the disposal of any freehold interest in pursuance of section 1(4), specify-
(i) the nature of those rights and the property over which it is proposed to grant them, or
(ii) the property in respect of which it is proposed to dispose of any such interest,
as the case may be;
(c) state which interests (if any) the nominee purchaser is to be required to acquire in accordance with subsection (4) below;
(d) state which rights (if any) [any] relevant landlord, desires to retain-
(i) over any property in which he has any interest which is included in the proposed acquisition by the nominee purchaser, or
(ii) over any property in which he has any interest which the nominee purchaser is to be required to acquire in accordance with subsection (4) below,
on the grounds that the rights are necessary for the proper management or maintenance of property in which he is to retain a freehold or leasehold interest; and
(e) include a description of any provisions which the reversioner or any other relevant landlord considers should be included in any conveyance to the nominee purchaser in accordance with section 34 and schedule 7.
(4) The nominee purchaser may be required to acquire on behalf of the participating tenants the interest in any property of any relevant landlord, if the property-
(a) would for all practical purposes cease to be of use and benefit to him, or
(b) would cease to be capable of being reasonably managed or maintained by him,
in the event of his interest in the specified premises or (as the case may be) in any other property being acquired by the nominee purchaser under this Chapter.
…
(6) Every counter-notice must specify an address in England and Wales at which notices may be given to the reversioner under this Chapter …"
Accordingly, section 21 contains no reference to matters required to be stated in a landlord's counter-notice otherwise than under that section.
Section 25(1) provides:-
"(1) Where the initial notice has been given in accordance with section 13 but -
(a) the reversioner has failed to give the nominee purchaser a counter-notice in accordance with section 21(1), or
(b) if required to give the nominee purchaser a further counter-notice by or by virtue of section 22(3) or section 23( 5) or (6), the reversioner has failed to comply with that requirement.
the court may, on the application of the nominee purchaser, make an order determining the terms on which he is to acquire, in accordance with the proposals contained in the initial notice, such interests and rights as are specified in it under section 13(3) ."
As appears below, the judge held that, because of the non-compliance referred to in paragraph 1 above, the landlord's counter-notice was not in accordance with section 21(1) of the 1993 Act.
The 1993 Act confers a power on the Secretary of State by secondary legislation to prescribe the form of notices to be given under Part I of the 1993 Act and in addition to prescribe the particulars in any such notice. This power is conferred by section 99(6) of the 1993 Act, which is in the following terms:-
"(6) The Secretary of State may by regulations prescribe:-
(a) the form of any notice required or authorised to be given under this Part; and
(b) the particulars which any such notice must contain (whether in addition to, or in substitution for, any particulars required by virtue of any provision of this Part) ."
Section 100 provides:-
"(1) Any power of the Secretary of State to make orders or regulations under this Part –
(a) may be so exercised as to make different provision for different cases or descriptions of cases, including different provision for different areas; and
(b) includes power to make such procedural, incidental, supplementary and transitional provision as may appear to the Secretary of State necessary or expedient.
(2) Any power of the Secretary of State to make orders or regulations under this Part shall be exercisable by statutory instrument which (except in the case of regulations making only such provision as is mentioned in section 99(6)) shall be subject to annulment in pursuance of a resolution of either House of Parliament."
Accordingly, any regulations made under section 99(6) are subject to the affirmative procedure.
The Secretary of State has not exercised the power conferred by section 99(6) (a) . However, on 20 December 2002, the Secretary of State made the following regulations (referred to below as "the 2002 regulations") :-
" Citation, commencement and extent
1. (1) These Regulations may be cited as the Leasehold Reform (Collective Enfranchisement) (Counter-notices) (England) Regulations 2002 and shall come into force on 10 April 2003.
2. These Regulations extend to England only.
Interpretation
3. In these Regulations-
'the 1993 Act' means the Leasehold Reform, Housing and Urban Development Act 1993;
'the specified premises' has the same meaning as in section 13(12) (a) of the 1993 Act.
Additional content of reversioner's counter-notice
4. A counter-notice given under section 21 (reversioner's counter-notice) of the 1993 Act shall contain (in addition to the particulars required by that section) a statement as to whether or not the specified premises are within the area of a scheme approved as an estate management scheme under section 70.
Application
5. These Regulations shall apply to counter-notices given under section 21 on or after the date these Regulations come into force.
Signed by authority of the First Secretary of State
Tony McNulty
Parliamentary Under Secretary of State, Office of the Deputy Prime Minister
20 December 2002
EXPLANATORY NOTE
(This note is not part of the Order)
A person who receives a notice for a claim for collective enfranchisement made under Part I of the Leasehold Reform Housing and Urban Development Act 1993 must respond by giving a counter-notice admitting or opposing the claim. These Regulations prescribe a requirement, in addition to those specified in section 21 of the Act, as regards the contents of the counter-notice.
These Regulations only apply to counter-notices given on or after the date these Regulations come into force.
Notes
[1] 1993 c.28. The Secretary of...
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