Burman v Mount Cook Land Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE CHADWICK,SIR MURRAY STUART-SMITH
Judgment Date20 Nov 2001
Neutral Citation[2001] EWCA Civ 1712
Docket NumberCase No: 2000/3629

[2001] EWCA Civ 1712

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CENTRAL LONDON COUNTY COURT

(His Honour Judge Knight QC)

Royal Courts of Justice

Strand,

London, WC2A 2LL

Before:

Lord Justice Chadwick and

Sir Murray Stuart Smith

Case No: 2000/3629

Burman
Appellant
and
Mount Cook Land Limited
Respondent

Mr E Prince (instructed by Messrs Wallace & Partners, London for the Appellant)

Mr A Radevsky (instructed by Messrs Speechly Bircham for the Respondent)

LORD JUSTICE CHADWICK
1

This is an appeal against an order made in the Central London County Court on 20 November 2000 by His Honour Judge Knight QC in proceedings for a new lease brought by the appellant under the Leasehold Reform, Housing and Urban Development Act 1993. 2. Chapter II in Part I of the 1993 Act confers on the tenant of a flat held under a long lease at a low rent, in the circumstances mentioned in section 39(2), the right (exercisable subject to and in accordance with the provisions in that chapter) to acquire a new lease of the flat on payment of a premium. A claim by a tenant to exercise the right is made by the giving of notice under section 42 of the Act. Section 45 of the Act provides for the landlord to give a counter-notice to the tenant. Subsection (2) of that section requires that:

"The counter-notice must comply with one of the following requirements -

(a)state that the landlord admits that the tenant had on the relevant date the right to acquire a new lease of his flat;

(b)state that, for such reasons as are specified in the counter-notice, the landlord does not admit that the tenant had such a right on that date;

(c)contain such a statement as is mentioned in paragraph (a) or (b) above but state that the landlord intends to make an application for an order under section 47(1) on the grounds that he intends to redevelop any premises in which the flat is contained."

In that context "the relevant date" is the date on which notice of the tenant's claim is given to the landlord under section 42 - see section 39(8) of the Act. Section 45(3) of the 1993 Act is in these terms:

"If the counter-notice complies with the requirements set out in subsection (2)(a), it must in addition -

(a) state which (if any) of the proposals contained in the tenant's notice are accepted by the landlord and which (if any) of those proposals are not so accepted; and

(b) specify, in relation to each proposal which is not accepted, the landlord's counter-proposal."

The question in the present case is whether a notice which does not state, in terms, that the landlord does, or does not, admit that the tenant had on the relevant date the right to acquire a new lease of her flat - and which does not state, in terms, which (if any) of the proposals contained in the tenant's notice are accepted by the landlord is a valid counter-notice under section 45 of the 1993 Act.

3

The appellant, Ms Meera Burman, is tenant of a flat known as 4 Rossetti House, 105-110 Hallam Street, London W1. The respondent, Mount Cook Land Limited, is the landlord in relation to that lease for the purposes of the provisions in Chapter II of Part I of the 1993 Act. It is not in dispute that the appellant holds the flat under a long lease at a low rent; and that, accordingly, she is a "qualifying tenant" for the purposes of those provisions. Nor is it in dispute that she had occupied the flat as her only or principal home for a period in excess of three years in the ten years before the relevant date; so that she was a qualifying tenant who had the right to acquire a new lease - see section 39(2) and (2B) of the Act.

4

On 19 October 1999 the appellant gave notice to the respondent under section 42 of the 1993 Act. That notice complied with the requirements of that section; in particular, it set out the matters required by section 42(3)(b). Those matters include: (i) the premium which the tenant proposes to pay in respect of the grant of a new lease; (ii) the terms which the tenant proposes should be contained in any such lease; and (iii) the date by which the landlord must respond to the notice by giving a counter-notice under section 45 of the Act. In the present case the premium which the appellant proposed to pay for a new lease was £110,000; the terms which she proposed in respect of the new lease were that it should be "[a] lease at a peppercorn for a term expiring 90 years after the term date of the existing lease and otherwise on the same terms as the existing lease subject to any amendments required by Sections 56 and 57 of the Act"; and the date by which the respondent was required to give a counter-notice was 25 December 1999. 5. On 23 December 1999 the respondent, by its solicitors, gave written notice to the appellant. The notice was headed with the description:

"LEASEHOLD REFORM, HOUSING AND URBAN

DEVELOPMENT ACT 1993

Section 45

Landlord's Counter-Notice"

After setting out the names and respective addresses of the appellant and the respondent, the notice continued in these terms:

"TAKE NOTE THAT

1. We have received your notice dated 19 October 1999 claiming a new lease for Flat 4 Rossetti House 106-110 Hallam Street London W1 ("the Notice").

2. The Landlord does not accept the premium proposed by the Tenant.

3. The Landlord's counter-proposal to the premium proposed is £175,000

4. The address in England and Wales at which the Landlord may be given Notice under Part 1 Chapter 2 of the Act is Speechly Bircham 6 St Andrews Street London EC4A 3LX."

6

The notice of 23 December 1999 does not contain a statement that the landlord does, or does not, admit that the tenant had on the relevant date the right to acquire a new lease of the flat. Nor does it contain a statement as to which (if any) of the proposals contained in the tenant's notice are accepted by the landlord; in particular it does not state whether the landlord accepts the tenant's proposal that the terms of the new lease - other than the rent (a peppercorn) and the duration and commencement of the term (90 years from the term date of the existing lease), which are prescribed by section 56(1) of the 1993 Act - should be the same terms as the existing lease; as to which, see section 57 of the Act. On the other hand, the notice does contain a statement that the landlord does not accept the tenant's proposal as to premium; and does specify the landlord's counter-proposal in relation to premium.

7

The appellant took the view that the notice of 23 December 1999 was not a valid counter-notice under section 45 of the 1993 Act. Accordingly, she made application to the Central London County Court on 19 May 2000 for an order under section 49 of that Act. Section 49(1) is in these terms (so far as material):

"Where the tenant's notice has been given in accordance with section 42 but -

(a)the landlord has failed to give the tenant a counter-notice in accordance with section 45(1), or

(b)

if required to give a further counter-notice to the tenant by or by virtue of section 46(4) or section 47( 4) or (5), the landlord has failed to comply with that requirement,

the court may, on the application of the tenant, make an order determining, in accordance with the proposals contained in the tenant's notice, the terms of the acquisition." [emphasis added].

The effect of the words that I have emphasised is to limit the power the court, when determining the terms upon which the tenant is to acquire a new tenancy on an application under section 49(1), to the proposals contained in the tenant's notice - see the decision of this Court in Willingdale v Globalgrange Ltd [2000] 2 EGLR 55. 8. The respondent denied that the appellant was entitled to an order under section 49 of the 1993 Act; and, by counterclaim in the proceedings, sought a declaration that the notice of 23 December 1999 was a valid counter-notice. That issue came before His Honour Judge Knight QC. He dismissed the appellant's claim and made a declaration that the notice of 23 December 1993 was "a valid and effective Counter-Notice under Section 45(2)(a) of the [1993] Act". He gave the claimant permission to appeal against that order.

9

The reasons which led the judge to the conclusion that he reached appear from paragraph 7 of the written judgment which he handed down:

"I have, therefore, to ask myself the question whether a reasonable tenant could be misled into thinking that the landlord's counter-notice did not admit the right to a new lease? I must determine this question objectively. In my judgment a reasonable tenant would not be so misled. In reaching this conclusion I have taken into account that a reasonable tenant would have a degree of familiarity with the scheme of Ch. II of the Act, in particular the notice and counter-notice provision. Sub-sections (2) and (3) of Section 45 have to be read together. Pars. 2 and 3 of the counter-notice comply with Section 45(3), which are applicable to a Section 45(2)(a) counter-notice. These paragraphs have no application to a Section 45(2)(b) counter-notice, which must state reasons why the landlord does not admit the tenant's right to a new lease. The counter-notice contains no such reasons. In my view the only reasonable conclusion which a reasonable tenant could come to is that the landlord did admit the tenant's right, but did not accept the proposed premium, as to which there was a counter-proposal. Such a counter-proposal would be inconsistent with the landlord not admitting the tenant's right. The statutory scheme does not cater for a hybrid counter-notice, i.e. one which does not admit a tenant's right to a new lease, while at the same time specifying a landlord's counter-proposal. In my judgment a reasonable tenant on receipt of...

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