Decision Nº LRX 139 2013. Upper Tribunal (Lands Chamber), 12-06-2015 , [2015] UKUT 0320 (LC)
| Jurisdiction | UK Non-devolved |
| Judge | Sir Keith Lindblom, President |
| Neutral Citation | [2015] UKUT 0320 (LC) |
| Date | 12 June 2015 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | LRX 139 2013 |
|
UPPER TRIBUNAL (LANDS CHAMBER) |
|
|
UT Neutral citation number: [2015] UKUT 0320 (LC)
UTLC Case Number: LRX/139/2013
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
Leasehold Enfranchisement – Flat – two-stage enfranchisement – Leasehold Reform, Housing and Urban Development Act 1993 – paragraph 14 of Schedule 6 – paragraph 5 of Schedule 13 – paragraph 5 of Schedule 6 – section 3 of the Human Rights Act 1998 – article 1 of the First Protocol to the European Convention on Human Rights
IN THE MATTER OF AN APPEAL AGAINST A DECISION
OF THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER) RESIDENTIAL PROPERTY
Appellants
AND
GREENSLEEVES OWNERS LIMITED
Respondent
Re: Greensleeves
9 Milner Road
Bournemouth
Before: The President, Sir Keith Lindblom
Sitting at: Upper Tribunal (Lands Chamber), Royal Courts of Justice, Strand
London WC2A 2LL
on 22 and 23 January 2015
Mr Philip Rainey Q.C., instructed by Preston Redman LLP, for the appellants
Mr James Fieldsend, instructed by Coles Miller Solicitors LLP, for the respondent
The following cases are referred to in this decision:
Nailrile Ltd. v Cadogan [2009] 2 E.G.L.R. 15
Money v Cadogan Holdings Ltd. [2013] UKUT 0211 (LC)
Cadogan v Sportelli [2008] UKHL 71
James v United Kingdom (1986) 8 E.H.R.R. 123
Papachelas v Greece (2000) 30 E.H.R.R. 923
Lindheim v Norway [2012] ECHR 985
Jones v Wentworth Securities Ltd. [1980] A.C. 74
R. (on the application of Fuller) v Chief Constable of Dorset [2003] Q.B. 480
Hosebay Ltd. v Day [2012] 1 W.L.R. 2884
Oliver Ashworth (Holdings) Ltd. v Ballard (Kent) Ltd. [2000] Ch. 12
Salvesen v Riddell [2013] H.R.L.R. 23
Kanala v Slovakia [2007] E.C.H.R. 575
R. (on the application of Kelsall) v Secretary of State for the Environment, Food and Rural Affairs [2003] EWHC 459 (Admin)
Holy Monasteries v Greece (1995) 20 E.H.R.R. 1
R. (on the application of Hammond) v Secretary of State for the Home Department [2006] 1 All E.R. 219
Thomas v Bridgend County Borough Council [2012] Q.B. 512
Cadogan v Trumann Holdings, 20 February 2012, unreported
Cadogan v McGirk [1996] 4 All E.R. 643
Cusack v London Borough of Harrow Council [2013] 1 W.L.R. 2022
Mosley v Hickman (1986) 18 H.L.R. 292
Kammins Ballrooms Co. Ltd. v Zenith Investments (Torquay) Ltd. [1971] A.C. 850
McHale v Cadogan [2011] 1 P. & C.R. 14
Pepper v Hart [1993] A.C. 593
Wilson v First County Trust (No.2) [2004] 1 A.C. 816
Ghaidan v Godin-Mendoza [2004] UKHL 30
Mellacher v Austria (1990) 12 E.H.R.R. 391
Lithgow v United Kingdom (1986) 8 E.H.R.R. 329
Marcic v Thames Water Utilities Ltd. [2004] 2 A.C. 42
Introduction
-
In this case the Tribunal must consider whether, in a claim for collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993, the negative value of a head-lease held by a party unconnected to the freeholder should be deducted from the value of the freeholder’s interest in the premises, and whether in those circumstances the freeholder is entitled to compensation for the loss he suffers as a result of the acquisition of the freehold.
-
The appellants, the Trustees of the Alice Ellen Cooper-Dean Charitable Foundation (“the Trustees”), appeal against the decision of the First-tier Tribunal, dated 30 August 2013, on the claim made by the respondent, Greensleeves Owners Limited (“GOL”), under Chapter I of Part I of the 1993 Act, to exercise the right to collective enfranchisement of a building known as “Greensleeves”, at 9 Milner Road, Bournemouth (“the building”). Permission to appeal was granted by the First-tier Tribunal.
-
The Trustees own the freehold of the building. There is a head-lease, which is held by Greensleeves (Bournemouth) Management Ltd. (“the management company”). The building contains eight flats, each of which is let on a long lease. GOL is the nominee purchaser appointed to acquire the freehold on behalf of the participating tenants, who are the lessees of six of the eight flats – flats B, D, E, F, G and H. The participating tenants are also shareholders of the management company.
-
In the appeal, as before the First-tier Tribunal, the Trustees have been represented by Mr Philip Rainey Q.C., GOL by Mr James Fieldsend.
The issues in the appeal
-
In paragraph 5 of their “Statement of Agreed Facts and Issues”, dated 9 January 2015, the parties have agreed that there are three main issues in the appeal. These are:
-
whether, on its true construction (applying the common law principles of construction of statutes and section 3 of the Human Rights Act 1998) and in the circumstances of this case, paragraph 14(2) of Schedule 6 to the 1993 Act operates to reduce the price payable for the Trustees’ interest in the building from £166,770 to nil;
-
if so, whether the Trustees are entitled to additional compensation under paragraph 5 of Schedule 6 to the 1993 Act in an amount equivalent to the lost value of £166,770; and therefore
-
what the premium should be.
-
There are several related and subsidiary questions, which I shall consider in discussing those three main issues.
Collective enfranchisement under the 1993 Act
-
The right to collective enfranchisement is provided in Part I of the 1993 Act. Under section 1 “qualifying tenants” of flats in “relevant premises” are given the right to have the freehold of those premises acquired on their behalf by a “nominee purchaser”, at a price to be determined. The qualifying tenants are required by section 2 to acquire certain leasehold interests, including certain intermediate leasehold interests, and entitled to acquire others. They are obliged to acquire the interest of the tenant under any lease which is superior to the lease held by a qualifying tenant of a flat in the relevant premises. Section 13 provides for an “initial notice” to be served on the reversioner by the tenants of at least half of the flats in the specified premises, identifying the nominee purchaser, setting out the proposed purchase price for the freehold interest and for the leasehold interests, and specifying a date for the reversioner’s counter-notice not less than two months from the date of the initial notice. Section 21 requires the reversioner to give a counter-notice by the specified date, either admitting or denying the right to collective enfranchisement, and, if the right is admitted, stating which proposals are accepted and which are not, and the reversioner’s counter-proposals. Under section 24, if, after a further period of two months from the service of the counter-notice, agreement has not been reached as to the terms of acquisition, either side may, within six months of the service of the counter-notice, apply to the First-tier Tribunal to determine the matters in dispute.
Schedule 6
-
The value of the freeholder’s interest is to be ascertained by applying the provisions of Part II of Schedule 6, and the value of any intermediate leasehold interest by applying the provisions of Part III. Paragraph 2 in Part II of Schedule 6 provides for the price payable for the freehold of the specified premises:
“(1) Subject to the provisions of this paragraph, where the freehold of the whole of the specified premises is owned by the same person the price payable by the nominee purchaser for the freehold of those premises shall be the aggregate of –
-
the value of the freeholder’s interest in the premises as determined in accordance with paragraph 3,
-
the freeholder’s share of the marriage value as determined in accordance with paragraph 4, and
-
any amount of compensation payable to the freeholder under paragraph 5.
…”.
Paragraph 3 of Schedule 6
-
Under paragraph 3(1) of Schedule 6 the value of the freeholder’s interest is “the amount which at the relevant date that interest might be expected to realise if sold on the open market by a willing seller …”, on certain assumptions, which are set out. The “relevant date” is the date on which the initial notice is given under section 13 (section 1(8)). Paragraph 3(5) states:
“The value of the freeholder’s interest in the specified premises shall not be...
To continue reading
Request your trial