Tudor and Others v M25 Group Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Carnwath,Lord Justice Potter |
| Judgment Date | 04 December 2003 |
| Neutral Citation | [2003] EWCA Civ 1760 |
| Docket Number | Case No: B2/2003/0790 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 December 2003 |
[2003] EWCA Civ 1760
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HH JUDGE COOKE)
Lord Justice Potter and
Lord Justice Carnwath
Case No: B2/2003/0790
Mr Anthony Radevsky (instructed by Messrs. Wallace and Partners) for the Appellant
Mr Jonathan Gaunt QC (instructed by Rochman Landau) for the Respondent
Introduction
Part I of the Landlord and Tenant Act 1987 conferred upon "qualifying tenants" of flats rights of first refusal, enabling them to purchase the interest of their landlord if and when he proposes to dispose of it. It followed recommendations of a committee chaired by Edward Nugee QC on the Management of Privately Owned Blocks of Flats (1985): see extracts cited in Belvedere Court Management Ltd v Frogmore Developments Ltd [1997] QB 858, 874–5. The committee was concerned by evidence of cases in which ownership of the freehold passed through several hands in quick succession, leaving tenants uncertain who their landlord was. It was not at that stage thought right to give tenants a right to buy the interest of a landlord who wished to continue to own the property. However, where the landlord wished to dispose of his interest, the "presumption against exproprietory legislation" was thought to apply with less force; it was recommended that in that event tenants should have an opportunity to purchase the reversion themselves (Report para 6.18).
Since that time there have been a number of legislative interventions in this field, designed to give leaseholders greater rights to secure ownership, or to manage their buildings, the most recent being the Commonhold and Leasehold Reform Act 2002.
In the meantime the right of pre-emption under the 1987 Act has remained, but in a much modified and expanded form. Experience revealed serious problems with the drafting of Part I, as well as a lack of any effective means of enforcement. Extensive amendments and substitutions were made by the Housing Act 1996. It is in that amended form that it falls to be considered in this case. In looking at the authorities, it is necessary to bear in mind that most of them pre-date the amendments.
The Scheme
Part I applies to a building which contains two or more flats held by "qualifying tenants", if the number of flats held by qualifying tenants exceeds 50% of the total number of flats in the building (s1(2)). A "flat" for these purposes is a "separate set of premises" adapted for use as a dwelling and divided horizontally from some other part of the building (s60(1)). A "qualifying tenant" is any tenant, other than one under a protected shorthold tenancy, a business tenancy, an assured tenancy, or one linked to employment (s3(1)). Other exclusions from the definition of qualifying tenant are any tenant of at least three flats in the same premises (s3(2)), and any tenant whose landlord is a qualifying tenant of the same flat (s3(4)).
The principal substantive rule is found in section 1: a landlord must not dispose of the premises to which Part I applies, unless he has first served a notice on the qualifying tenants under section 5 of the Act. The notice must comply with requirements set out in four sections 5A to 5D, depending on the proposed form of sale. In the typical case of a contract to be completed by conveyance, the notice must contain particulars of the principal terms of the disposal, and state that it constitutes an offer by the landlord to enter into a contract on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats, within a specified period (s5A(3)). The "requisite majority" for the purposes of a notice under section 5 means qualifying tenants of more than 50% of the flats let to qualifying tenants at the time when the offer expires (s18A(1),(2)(a)). Sections 6 to 10 provide the machinery for acceptance of the landlord's offer, beginning with an "acceptance notice" served by the qualifying tenants (s6(2),(3)).
If the original landlord disposes of the premises without serving the required notice, then a new set of rights comes into play against the purchaser (ss11 —12C). The first, which is in issue in this case, is the right of qualifying tenants to obtain information as to the terms of disposal (s11A). The others are designed to give them the right to ensure that the landlord, or the purchaser (if the sale has been completed), sells the property to them on the original terms (ss12A-12D). The time limit for serving a notice requiring such a sale is 6 months beginning from the date when the tenants were given notice of the sale, or, if a notice has been served under section 11A, the date when the purchaser complied with the notice (s12A(2)).
Section 19 enables the Court on the application of any person interested to make an order requiring any person "who has made default in complying with any duty imposed on him by any provision of this Part" to make good the default within the time specified in the order. The application cannot be made until 14 days have elapsed since the service of a notice requiring the other person to make good the default. In addition to this means of enforcement, the 1996 Act introduced a penal element. A landlord who makes a relevant disposal without complying with section 5, or in contravention of a prohibition imposed by sections 6 to 10, commits an offence triable summarily (s10A(1)).
The issue in this case turns on the effect of section 11A taken with section 54.
"11A Right to information as to terms of disposal &c
(1) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him –
a. To give particulars of the terms on which the original disposal was made (including the deposit and consideration required) and the date on which it was made, and
b. Where the disposal consisted of entering into a contract, to provide a copy of the contract.
(2) The notice must specify the name and address of the person to whom (on behalf of the tenants) the particulars are to be given, or the copy of the contract provided
(3) ….
(4) A person served with a notice under this section shall comply with it within the period of one month beginning with the date on which it is served on him
54 Notices
(1) Any notice required or authorised to be served under this Act-
(a) shall be in writing; and
(b) may be sent by post
(2) Any notice purporting to be a notice served under any provision of Part I or III by the requisite majority of any qualifying tenants (as defined for the purposes of that provision) shall specify the names of all of the persons by whom it is served and the addresses of the flats of which they are qualifying tenants.
Factual background
The defendant acquired the freehold reversion of Brambridge House in Hampshire on 3 rd December 2001. The claimants are a number of tenants of flats in the building. A section 5 notice was given by the previous landlords but there is a dispute (largely turning on the treatment and valuation of fishing rights attached to the property) as to whether the subsequent disposal contravened the provisions of sections 6 to 10 of the Act. That is not before us. For the purpose of this appeal it is to be assumed that there was such a contravention. On 13 th May 2002 notice was given (under the Landlord and Tenant Act 1985, s3, 3A) notifying the tenants of the change of ownership.
On 27 th May 2002 notice was given on behalf of the claimants, purportedly under Section 11A, requiring information about the disposal. There was no response to that notice. On 29 th May 2002 the Appellant's solicitors, Wallace & Partners wrote "We do not believe that the notice enclosed with your letter constitutes a valid notice…..". On 8 th September 2002, the claimants gave notice under section 19 requiring compliance. The statutory 14 days elapsed without response, and these proceedings were commenced. For present purposes there is no dispute that the persons giving the section 11A notice were the requisite majority of the qualifying tenants.
I turn to the form of the notice, which is under challenge. There is no prescribed form for such a notice. Accordingly the only guidance available as to its contents is that contained in the Act. The notice was signed by the solicitors for the named tenants. It was addressed to the M25 Group at the address of their solicitors. It referred to the notice of the disposal given on 13 th May 2002. It required the purchasers to give particulars of the terms on which the disposal was made, including the consideration paid and a copy of the contract. It required those particulars to be sent "to us as solicitors to the above qualifying tenants".
So much is uncontentious. The difficulty arises over the identification of the tenants, which was stated as follows:-
"We act for John James Tudor, Ruth Watts Davies, Richard Earlam, Edith Dorothy Stock and Canara Limited, who are the qualifying tenants in respect of Brambridge House, Brambridge Park, Bishopstoke, Hampshire."
There is no dispute that all those named were qualifying tenants, and that accordingly the first part of section 54 (2) was satisfied. However the notice failed to state "the addresses of the flats of which they are qualifying tenants", as required by that subsection. It is also common ground that, if the section 11A notice was not valid, then the time for exercising the tenants' rights under section 12 has expired, and those rights are effectively lost. It...
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