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You are here: BAILII >> Databases >> United Kingdom Upper Tribunal (Lands Chamber) >> Pineview Ltd v 83 Crampton Street RTM Company Ltd [2013] UKUT 598(LC) (04 December 2013) URL: https://www.bailii.org/uk/cases/UKUT/LC/2013/LRX_29_2012.html Cite as: [2013] UKUT 598(LC) |
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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2013] UKUT 598(LC)
LT Case Number: LRX/29/2012
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD
AND TENANT – right to manage – claim notice – validity – whether claim notice
may validly be signed by RTM company
’s solicitor – whether necessary to
identify appurtenant property in claim notice – ss.80-81, Commonhold and
Leasehold Reform Act 2002- appeal dismissed
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
LEASEHOLD VALUATION TRIBUNAL FOR THE
LONDON RENT ASSESSMENT PANEL
and
83 CRAMPTON STREET RTM COMPANY
LIMITED Respondent
London
SE17 3BQ
Before: Martin Rodger QC, Deputy President
Decision on Written Representations
© CROWN COPYRIGHT 2013
The following case are referred to in this decision:
Assethold Ltd v
15 Yonge Park
RTM
Co
Ltd
[2011] UKUT 379 (LC)
Assethold Ltd v
14 Stansfield
Road
RTM Company Ltd
[2012] UKUT 262 (LC)
Avon Freeholds Ltd v
Regent Court
RTM
Co
Ltd
[2013] UKUT 213 (LC)
Dorset Healthcare NHS Trust v
MH [2009] UKUT 4 (AAC)
Gala Unity Ltd v
Ariadne Court
RTM Company Ltd
[2011] UKUT 425 (LC)
Gala Unity Ltd v
Ariadne Court
RTM Company Ltd
[2012] EWCA Civ 1372
Moskovitz v
75 Worple Road
RTM
Co
Ltd
[2010] UKUT 393
Petch v
Gurney
[1994] 3 All ER 731
Speedwell Estates Ltd v
Dalziel [2002] 1 EGLR 55
St Ermins Property Co Limited
v
Tingay [2002] EWHC 1673: [2003] L & TR 6
7 Strathray Gardens Ltd v
Pointstar Shipping &
Finance
Ltd
[2004] EWCA Civ 1669
West Midland Baptist (Trust)
Association v
Birmingham Corporation [1968] 2 QB 188
Decision
Introduction
1.
This is an appeal, brought with the permission of the Tribunal (George
Bartlett QC, President) against a decision of the Leasehold Valuation Tribunal
for the London Rent Assessment Panel (“the LVT”) given on 19 January 2012 on an
application under section 84(3), Commonhold and Leasehold Reform Act 2002 (“the
2002 Act”). The LVT determined that the respondent, 83 Crampton Street RTM
Company Ltd
, was entitled to acquire the right to manage the large self
contained block of flats at
83 Crampton
St, London NW8 (“the Building”) from
which it derives its name.
2. The application had been preceded by a claim notice given under section 79 of the 2002 Act which was served on the appellant by the respondent on 21 June 2011 (“the Claim Notice”). At the hearing before the LVT the appellant raised seven issues, each of a technical or procedural nature, in support of its contention that the application ought to be dismissed. Two of those issues are the subject of this appeal, namely:
(1) Whether
the Claim Notice was defective because it had not been signed by an authorised
member or officer of the respondent company
, but had instead been signed on its
behalf by its solicitors (“the signature issue”).
(2) Whether the Claim Notice was defective because it failed to specify whether the premises to which it related did or did not include appurtenant property (“the appurtenant property issue”).
3.
On 14 June 2012 the Tribunal directed that the appeal should be stayed
to await the decision of the Court of Appeal in the case of Gala Unity v
Ariadne Road
RTM Company
Limited which was expected to be relevant to the
appurtenant property issue. The Court of Appeal gave its decision on 25
October 2012 and the parties in this appeal have made further submissions in
writing on its effect.
4. I have determined this appeal without an oral hearing on the basis of written representations which have been prepared on behalf of the appellant by Mr Oliver Radley-Gardner of counsel, instructed by P Chevalier & Co, solicitors, and on behalf of the respondent by Mr Simon Serota of Wallace LLP, solicitors. I am grateful to them both for their comprehensive submissions.
The facts
5. The relevant facts are not contentious.
6. The Building comprises a single modern self contained block of flats. From the register of title the block appears to consist of a basement car park, an undercroft containing seven storage rooms, a ground floor occupied by 8 flats and a further 8 “units” which I take to be in commercial use, above which are eight further floors of flats numbered, each of which is let for a term of 125 years from a common commencement date.
7.
On 21 June 2011 the respondent sent the Claim Notice to the appellant
and to a management company
which was also party to the leases of flats at the
Building. Shorn of a surplus postcode which the LVT found was immaterial, paragraph
1 of the Claim Notice asserted the respondent’s claim to acquire the right to
manage “
83 Crampton Street
, London NW8 9RE (“the premises”)”. Paragraph
2 then went on as follows:
“The company
claims that the premises
are ones to which Chapter 1 of the 2002 Act applies on the grounds that the
premises consist of a self-contained building or part of a building and contain
two or more flats held by qualifying tenants, and the total number of flats
held by such tenants is not less than two-thirds of the total number of flats
contained in the premises. (See Note 2 below).”
8. Note 2, to which reference was made, informed the recipient that “The relevant provisions are contained in section 72 of the 2002 Act (premises to which Chapter 1 applies)”.
9.
The Claim Notice contained a Schedule giving the names of the qualifying
tenants who are members of the respondent company
and particulars of their
leases. It concluded with a signature accompanied by these words:
“Signed by authority of the company
[signature of Wallace LLP]
Wallace LLP for and on behalf of the
company
”
10. A counter-notice served by the appellant’s solicitors on 25 July 2011 disputed the claim. The counter-notice identified section 72(1) of the 2002 Act as one of a number of statutory provisions justifying the appellant’s assertion that the respondent was not entitled to acquire the right to manage the premises specified in the Claim Notice.
11.
In its statement of case to the LVT the appellant took the point that
the Claim Notice was defective because it had not been signed by an authorised
member or officer of the company
. It also took issue with the Claim Notice on
the grounds that it identified the premises to which the claim related only by
reference to their postal address and did not refer to any appurtenant property.
The appellant pointed out that there were “open areas including the car park
surrounding the Building” and that this was appurtenant property for the
purpose of the 2002 Act which ought either to have been expressly included or
expressly excluded when the premises were identified in the Claim Notice.
The LVT’s decision
12. The LVT dealt with the issues it had to determine in six concise sentences. At paragraph 9(iii) of its decision it disposed of the signature issue in these terms:
“The Tribunal finds that the signature
of Wallace LLP on the Claim Notice is provided by an agent with the appropriate
delegated authority from the board members of the RTM Company
.”
13. The LVT was equally brisk in its dismissal of the appurtenant property issue at paragraph 9(iv) of its decision, where it said:
“The Tribunal accepts the Applicant’s submissions that there is no requirement that appurtenant properties be specified in the Claim Notice.”
The relevant statutory provisions
14.
Chapter 1 of Part 2 of the 2002 Act makes provision for the acquisition
of rights in relation to the management of premises to which the chapter
applies by a company
, known as an
RTM company
, controlled by the qualifying tenants
of flats forming part of those premises. The rights which are to be acquired
and exercised in accordance with those provisions are referred to collectively
as “the right to manage”.
15. Premises to which Chapter 1 applies are identified in section 72 of the 2002 Act which provides, so far as is relevant:
“72.-(1) This Chapter applies to premises if—
(a) they consist of a self-contained building or part of a building, with or without appurtenant property,
(b) they contain two or more flats held by qualifying tenants, and
(c) the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.”
16. Section 79(1) provides that a claim to acquire the right to manage any premises is made by giving a claim notice. Section 79(6) identifies those on whom a copy of a claim notice must be served. They include each person who on the relevant date is landlord under a lease of the whole or any part of the premises, a party to such a lease otherwise than as landlord or tenant, or a manager appointed under Part 2 of the Landlord and Tenant Act 1987 (c. 31) to act in relation to the premises.
17. The contents of a claim notice are dealt with in sections 80 and 81. So far as they are material, these provide as follows:
“80 Contents of claim notice
(1) The claim notice must comply with the following requirements.
(2) It must specify the premises and contain a statement of the grounds on which it is claimed that they are premises to which this Chapter applies.
(3) It must state the full name of each person who is both –
(a) the qualifying tenant of a flat contained in the premises, and
(b) a member of the RTM
company
,
and the address of his flat.
(4) And it must contain, in relation to each such person, such particulars of his lease as are sufficient to identify it, including –
(a) the date on which it was entered into,
(b) the term for which it was granted, and
(c) the date of the commencement of the term.
(5)-(7) …
(8) It must also contain such particulars (if any) as may be required to be contained in claim notices by regulations made by the appropriate national authority.
(9) And it must comply with such requirements (if any) about the form of claim notices as may be prescribed by regulations so made.
81 Claim notice: supplementary
(1) A claim notice is not invalidated by any inaccuracy in any of the particulars required by or by virtue of section 80.
(2) ....
(3) Where any premises have been specified in a claim notice, no subsequent claim notice which specifies –
(a) the premises, or
(b) any premises containing or contained in the premises,
may be given so long as the earlier claim notice continues in force.
(4) ….”
18.
Section 84 of the 2002 Act makes provision for a person who receives a
claim notice from an RTM company
to give a counter-notice either admitting or
disputing that the
company
was entitled to acquire the right to manage the
premises specified in the claim notice. In addition to a statement of the
recipient’s attitude to the claim, such a counter-notice is a described by
section 84(2) as containing:
“ …. such other particulars (if any) as may be required to be contained in counter-notices, and complying with such requirements (if any) about the form of counter-notices, as may be prescribed by regulations made by the appropriate national authority.”
19. The Secretary of State has prescribed the forms and content of claim notices and counter-notices in the Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010/825 (“the 2010 Regulations”). I will refer to the relevant parts of the 2010 Regulations as necessary below.
The signature issue
Submissions
20. The Claim Notice was signed on the respondent’s behalf and by its authority by its solicitors, Wallace LLP. It is said by the appellant that that mode of signing was fatally defective.
21. There is nothing in sections 80 or 81 concerning the identity of the signatory of a claim notice, nor anything elsewhere in the 2002 Act concerning permissible signatories of other notice to be given under Chapter 1. The appellant’s contention rests instead on the form of claim notice and counter-notice prescribed by Schedules 2 and 3 of the 2010 Regulations, and on the direction in section 80(9) that a claim notice must comply with any requirements about the form of such notices which may be prescribed by regulations.
22. Paragraph 8 of the 2010 Regulations makes provision for forms of notices for the purposes of the 2002 Act. Paragraph 8(2) provides that claim notices “shall be in the form set out in Schedule 2” and paragraph 8(3) that counter-notices “shall be in the form set out in Schedule 3” to the 2010 Regulations.
23.
The prescribed form of claim notice concludes with a schedule, in two
parts, followed by text relating to the signing of the notice. The schedule is
required to be completed with the names of the qualifying tenants who are
members of the company
(in accordance with section 80(3) of the 2002 Act) and with
particulars of their leases (as required by section 80(4)). Including the concluding
text, those parts of the prescribed claim notice take this form:
“Schedule
Part 1
Full
names and Addresses of persons who are both qualified tenants and members of
the company
[Set out here the particulars required by paragraph 3 above]
Part 2
Particulars of leases of persons named in Part 1
[Set out here the particulars required by paragraph 4 above].
Signed by authority of the company
[Signature of authorised member or officer]
[Insert date].”
24. It will be noticed that the draftsman of the 2010 Regulations has adopted the convention of placing an explanatory rubric in square brackets to indicate how those parts of the claim notice are to be completed. The convention is adopted to identify what Parts 1 and 2 of the schedule ought to contain, to describe the status of the signatory of the notice and to indicate that the notice ought to be dated.
25.
The appellant contends that the words in square brackets in the
prescribed claim notice – “[signature of authorised member or officer]” –
indicate a requirement that the claim notice be signed by a member or officer
of the RTM company
and by nobody else.
26.
Permission to appeal in this case was given on 18 May 2012. A little
over two months later, on 30 July 2012, the Tribunal (George Bartlett QC, President)
dismissed another appeal raising the signature issue, Assethold Limited v
14
Stansfield Road
RTM Company
Limited [2012] UKUT 262 (LC), in which a less fully
developed variant of the appellant’s contentions was rejected. Understandably,
the respondent has argued that that decision should be regarded as
determinative of the signature issue in this appeal.
27.
In 14 Stansfield Road the validity of a claim notice given under
section 80 of the 2002 Act was challenged because it had not been signed by an
authorised member or officer of the RTM company
but by a person who, although authorised
to sign by all three directors of the
company
, was not herself a member or
officer. The Tribunal noted that the LVT had “unsurprisingly” rejected that
contention. The Tribunal took a similar course, saying at paragraph 18 of its
decision:
“The appellant’s contention has force,
it is clear, only if the words in square brackets “[signature of authorised
member or officer]” are to be treated as imposing a limitation on who may sign
the form. The appellant says that they are to be so treated because that is
what the notice “clearly provides”. In my judgment, however, that is not
correct. If the form had provided for the status of the signatory to be stated
(for example): [Insert as appropriate “member” or if officer, position held]”),
there would be obvious force in the contention. The fact that it does not do
this, however, suggests that the words are not to be treated as imposing a
limitation on who may sign. My conclusion is that it is sufficient that the
person signing “by authority of a company
” does in fact have that authority.”
28. The argument on the signature issue advanced by Mr Radley-Gardner in his written representations for the appellant in this case, is more sophisticated than that rejected by the Tribunal in 14 Stansfield Road.
29. The main foundation of Mr Radley-Gardner’s submission is a contrast between the forms of claim notice and counter-notice prescribed in Schedules 2 and 3 of the 2010 Regulations. The form of counter-notice prescribed by Schedule 3 of the 2010 Regulations concludes with the following alternative directions for signature:
“Signed:
[Signature of person on whom claim notice served, or an agent of such person. Where an agent signs, insert also “Duly authorised agent of [insert name of person on whom claim notice served].”
OR
Signed by authority of the company
on whose behalf this notice is given
[Signature
of authorised member or officer and statement of position in company
]”
30. Mr Radley-Gardner draws attention to the first of these alternative instructions which clearly contemplates that the signatory of the counter-notice may be an agent of the person on whom the claim notice was served, and he points out the absence of any such contemplation in the second formulation which is close to the formulation used in the prescribed claim notice. He argues that the contrast in wording between the claim notice and the counter notice is so stark that the 2010 Regulations admit of no other possible construction than that the signature of an agent, while acceptable in the case of a counter-notice, is impermissible in the case of a claim notice.
31.
Mr Radley-Gardner also relies on the decision of Lloyd J in St Ermins
Property Co Limited v
Tingay [2002] EWHC 1673, in support of his
submission.
32. St Ermins concerned compliance with section 99(5)(a) of the Leasehold Reform Housing and Urban Development Act 1993 (“the 1993 Act”) which makes provision for the service of notices under Chapters I and II of that Act. Chapter I permits collective enfranchisement by the tenants of flats under a procedure initiated by a notice of claim under section 13. Chapter II confers a right on tenants of individual flats to acquire a new lease by a procedure initiated by the service of a notice of claim under section 42. Section 99 concerns notices generally and includes, at section 99(5) the following:
“Any notice which is given under Chapter I or II by any tenants or tenant must –
(a) if it is a notice given under section 13 or 42, be signed by each of the tenants, or (as the case may be) by the tenant, by whom it is given;
(b) in any other case, be signed by or on behalf of each of the tenants, or (as the case may be) by or on behalf of the tenant, by whom it is given.”
33. In St Ermins the tenant of the flat wished to exercise her right to acquire a new lease under Chapter I of the 1993 Act by giving notice under section 42. The tenant was elderly and has executed an enduring power of attorney in favour of her son and daughter. Her claim for a new lease was initiated by a claim notice signed on her behalf by her son but it was held in the county court that the notice was invalid because it had not been “signed … by the tenant” as required by section 99(5)(a). The tenant’s appeal to the High Court was dismissed by Lloyd J who said, at paragraph 34 of his judgment:
“34. However, whatever anomalies this provision may produce, or however much of a trap it may be for tenants and their advisers I agree with HH Judge Cowell that the distinction drawn in the construction (in the sense of putting together, as opposed to reading) of sub-section (5) between the method of signature of notices under section 13 or 42 on the one hand, and other notices on the other hand, is so clear and so plainly deliberate that I cannot give section 99(5)(a) the meaning that it would have in isolation, and I must interpret it as requiring personal signature by the tenant, and not permitted signature on her behalf by anyone else, whether an ordinary agent or an attorney.”
34. It is argued by the appellant in this case that a similar deliberate distinction has been drawn in the 2010 Regulations between the persons who may sign a claim notice under section 80 and those who may sign a counter-notice under section 84. The only conclusion which can be drawn, it is suggested, is that (contrary to the Tribunal’s decision in 14 Stansfield Road) Parliament intended to impose a limitation on who may sign a claim notice. Mr Radley-Gardner submits that 14 Stansfield Road was decided per incuriam, in that the contrasting provisions of Schedules 2 and 3 were not drawn to the Tribunal’s attention and St Ermins was not cited. I am therefore invited not to follow it.
35.
In his written representations in response Mr Serota makes two submissions.
The first relies on the Tribunal’s decision in 14 Stansfield Road which
Mr Serota says was correctly decided and is not called into question by St
Ermins which concerned a different statutory provision contained in primary
rather than, as here, in secondary legislation. The words “[signature of
authorised member or officer]” which follow “signed by authority of the
company
” in the prescribed claim notice are not themselves part of the
prescribed form. All that is required, Mr Serota submits, is that the claim
notice be signed by the authority of the
RTM company
.
36.
Alternatively, if the effect of Schedule 2 to the 2010 Regulations is to
require that a claim notice be signed by an authorised member or officer of the
RTM company
, Mr Serota submits that a failure to comply with that requirement is
not fatal to the validity of a notice which has nonetheless been signed with
the authority of the
RTM company
. He relies on two decisions of the Court of
Appeal, Petch
v
Gurney [1994] 3 All ER 731
and 7 Strathray Gardens
Ltd v
Pointstar Shipping & Finance
Ltd
[2004] EWCA Civ 1669. Had the appeal been determined at an oral hearing he
would no doubt also have made reference to the recent decision of the Tribunal
(Sir Keith Lindblom, President) in Avon Freeholds
Ltd v
Regent Court
RTM
Co
Ltd
[2013] UKUT 213 (LC) which reviewed all of the relevant jurisprudence
after the parties’ submissions in this case were completed.
37.
In 7 Strathray Gardens it was held that a failure of a
counter-notice given under section 21 of the 1993 Act to state whether or not
the specified premises were within the area of an estate management scheme (as
required by section 21(6)) did not invalidate the counter-notice. The Court of
Appeal considered its previous decision in Petch v
Gurney and the legal
consequence of non-compliance with different statutory provisions. In certain
cases a requirement must be strictly complied with and failure to comply will
invalidate everything that follows. In other cases a statutory provision
should still be complied with, but failure to comply is not taken to invalidate
subsequent procedures. In each case it is necessary to consider the substance
of the relevant statutory provision to ascertain what Parliament intended the
consequences of non-compliance to be. If the conclusion is that strict
compliance is not essential, the right approach (see Avon Freeholds
Ltd
at paragraph 39) is to consider whether the statutory provisions have been
substantially complied with, and whether such prejudice has been caused as to
undermine the right to manage process as a whole.
38.
In further written submissions Mr Radley-Gardner rightly pointed out
that if a statutory provision is properly regarded as mandatory, so that strict
compliance is essential, no question of prejudice will arise. He relied on Speedwell
Estates Ltd v
Dalziel [2002] 1 EGLR 55, at [24] where Rimer J said, of a
tenant’s notice under Part I of the Leasehold Reform Act 1967:
“The point, however, is that there is nothing optional about the information required to be contained in a tenant’s notice under Part I of the 1967 Act. Schedule 3 provides that it “shall be in the prescribed form, and shall contain the following particulars …”. Those are mandatory requirements, and if the tenant wants his notice to be a valid one, he must comply with them. If he does not, then he runs the risk that his notice will not do the statutory work he requires of it.”
Discussion
39.
Before the abolition of the Lands Tribunal on 1 June 2009 by article 2
of the Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous
Amendments) Order 2009 and the transfer of its functions to the Lands Chamber
of the Upper Tribunal (a superior court of record under section 3 of the
Tribunals, Courts and Enforcement Act 2007) it was well established that the
Lands Tribunal was not bound to follow its own previous decisions. In West Midland Baptist (Trust) Association v
Birmingham Corporation [1968] 2 QB
188, Salmon LJ said:
“No doubt previous decisions of the tribunal on points of law should be treated by the tribunal with great respect and considered as persuasive authority, even when made by a layman. But they should never be treated as binding.”
40.
Since 1 June 2009 the Tribunal has adopted the same approach (see, for
example, Assethold Ltd v
15 Yonge Park
RTM
Co
Ltd
[2011] UKUT 379 (LC),
a decision of Her Honour Judge Walden-Smith declining to follow an earlier
decision of the President (Mr George Bartlett QC) in Moskovitz
v
75 Worple
Road
RTM
Co
Ltd
[2010] UKUT 393). The same practice is adopted in other
chambers of the Upper Tribunal (see, for example, Dorset Healthcare
NHS Trust
v
MH [2009] UKUT 4 (AAC) at [37]).
41. On the other hand, of course, a decision of the Tribunal on an issue of law is of considerable persuasive authority. In the interests of judicial comity and to avoid confusion on questions of legal principle it is to be expected that the Tribunal will normally follow its own prior decisions. Nonetheless, there can be no slavish adherence to earlier decisions, as this could lead to the perpetuation of error.
42. I approach this case, and the submissions I have received on the Tribunal’s decision in 14 Stansfield Road, with those observations in mind.
43. The form prescribed by paragraph 8(2) and Schedule 2 of the 2010 Regulations, like any such statutory notice, is intended to initiate a legal process and to provide information to the recipient. The information to be communicated is of two sorts.
44.
Part of the information is common to all claim notices and consists of
material describing the process and indicating where information specific to
the particular notice can be found; thus, for example, paragraph 2 informs the
recipient that the company
’s articles of association accompany the notice or
identifies where they may be inspected, paragraph 3 informs the recipient that
the names of the
company
’s members, directors and secretary are set out in the
schedule, while paragraph 11 invites the recipient to become a member of the
company
. All of that standard information is included in the printed form of
claim notice found in schedule 2.
45.
The remainder of the information to be provided is unique to each claim
notice and must be inserted into the printed form. Thus, for example, the name
of the RTM company
and the name of the premises over which it claims the right
to manage are required to be inserted into paragraph 1. In the same way, the
schedule must be completed by listing the members, directors and
company
secretary.
46.
The prescribed form also requires that the claim notice be signed and
dated. It requires that the signature be preceded by the words “signed by
authority of the company
” because those words are part of the printed form.
The information that the person whose signature appears beneath those words has
the authority of the
company
to sign the claim notice is thus part of the
information which is required by section 80(9) and regulation 8 to be
communicated.
47. On the other hand, I do not consider that section 80(9) and regulation 8 require the words “[Signature of authorised member or officer]” or “[Insert date]” are to be included in the completed claim notice. It is obvious, both from the use of square brackets and from their contents, that the description of the signature as being that of an authorised member or officer and the instruction to insert a date are not required to be communicated to the recipient.
48.
So far as the signature itself is concerned, the effect of the
prescribed form is that the recipient of the claim notice is to be told no more
than that the document has been signed by authority of the company
. Neither
the 2002 Act nor the 2010 Regulations require that the recipient be informed
that the signatory is an authorised member or officer. A recipient who consulted
the form in Schedule 2 to the 2010 regulations and saw the rubric in square
brackets would be aware of the indication that the claim notice should be
signed by an authorised member or officer, but there is, of course, no
requirement that the recipient be sent a copy of the 2010 Regulations themselves.
In point of form, therefore, a completed version of the prescribed form,
omitting the rubric in square brackets, and bearing the signature of a person
who has the authority of the
company
will comply with the requirements of
section 80 and will convey all of the information which Parliament has
considered ought to be communicated. To put it another way, the identity of
the signatory is not one of the prescribed requirements about the form of claim
notices referred to in section 80(9).
49. That was the basis of the conclusion of the Tribunal in 14 Stansfield Road and I find it convincing. Nonetheless, I have consulted the Tribunal’s file relating to 14 Stansfield Road from which, as Mr Radley-Gardner anticipated, it does not appear that any express reference was made in either party’s written submissions (on the basis of which the appeal was determined without an oral hearing) to the decision of Lloyd J in St Ermins or to the contrasting form of the claim notice and the counter-notice prescribed by the 2010 Regulations. Attention was drawn to the counter-notice itself, which in 14 Stansfield Road was given by a duly authorised agent, identified as such, but the argument of the appellant in this case was not deployed.
50. The provisions governing the form of claim notice under the 2002 Act are very different from those considered in St Ermins which concerned an explicit direction in section 99(5)(a) of the 1993 Act that a notice given under section 42 must be signed by the tenant by whom it was given. The contrasting direction in section 99(5)(b) permitting other types of notice to be given under Chapters I or II of the 1993 Act to be signed by or on behalf of the giver inescapably indicated that, for whatever unfathomable reason, only the signature of the tenant would do for the purpose of section 42. In this case there is no such explicit direction.
51.
The puzzling contrast between the provisions as to the signature of the
claim notice and the counter-notice, while it may raise a question mark over
the underlying intention of the draftsman, does not undermine the analysis in 14
Stansfield Road to the point where I would be prepared not to follow the
Tribunal’s earlier decision on the same issue. The prescribed form of
counter-notice has alternative directions for signature, the purpose of which
is not immediately apparent. It may be that the first option (“[signature of
person on whom claim notice served, or of agent of such person]”) is intended
to be completed by an individual recipient, while the alternative formulation
(“Signed by authority of the company
on whose behalf this notice is given
[Signature of authorised member or officer and statement of position in
company
]”) is for corporate recipients, but why the signature of an agent
should suffice in the former case but not in the latter, and why one should be
described as the receiver of the claim notice and the other as the giver of the
counter-notice when both descriptions are equally apt for each of them, is far
from obvious. The overall impression is of an absence of coherent purpose rather
than of a contrast which is “so clear and so plainly deliberate” (as in St
Ermins) as to require the conclusion that only personal signature will
suffice. Whatever the explanation may be it does not seem to me to detract
from the point which impressed the Tribunal in 14 Stansfield Road that
the form of claim notice does not require the recipient to be notified of the
status or capacity of the signatory; it follows that the fact of signature by
someone who is not within the category described in the bracketed rubric does
not cause the completed claim notice to deviate from the prescribed form.
52. I am therefore satisfied that the LVT was correct to find that the signature of Wallace LLP on the Claim Notice did not render it void.
53.
In case I am wrong in that conclusion I ought briefly to consider Mr
Serota’s alternative contention, that an infringement of the requirement of
signature by an authorised member or officer of the RTM company
is not of such
seriousness that Parliament can be taken to have intended that the claim notice
should be of no effect. I accept that submission as far as it goes. Notwithstanding
the imperative terms of sub-sections 80(1) and 80(9) the absence of consistency
in the provisions for signature, and the absence or obscurity of any possible
explanation for it, seem to me to indicate that the signature of a particular
category of person cannot have been intended to be a critical component of the
statutory procedure without which the procedure must be taken to be a nullity.
54.
Because I have accepted Mr Serota’s primary submission, and have decided
not to depart from the Tribunal’s decision in 14 Stansfield Road, this
aspect of the appeal is not critical to its outcome. Had I taken the opposite
view on the primary submission it would have been necessary to investigate any
practical consequences of the non-compliant signature. These were not
investigated before the LVT, and as this appeal is being determined as a review
on written representations it would have been necessary for me to invite
further submissions on whether the application should be remitted to the LVT
for it to consider whether any party could be said to have sustained prejudice
as a result of non-compliance with the requirement of signature by a member or
officer. The only recipients of the Claim Notice in this case were the
appellant itself, which has never suggested that prejudice was caused to it,
and the management company
.
The appurtenant property issue
55. The second issue raised by the appeal is whether the Claim Notice was invalid because it failed to specify whether or not the premises included appurtenant property. The appellant’s case before the LVT was that section 80(2) of the 2002 Act requires that the claim notice should contain a statement of the grounds on which it is claimed that the premises are premises to which the right to manage provisions apply, and that a claim notice which fails to specify whether appurtenant property is involved (and to identify it if it is) is fatally defective. The LVT dismissed that contention in the summary terms repeated in paragraph 13 above.
56.
The premises to which the RTM
provisions of the 2002 Act apply, as
described in section 72(1)(a), consist of “a self contained building or part of
a building with or without appurtenant property”. “Appurtenant property” is
defined in section 112 (1) as follows:
"appurtenant property", in relation to a building or part of a building or a flat, means any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the building or part or flat……
57.
In Gala Unity Ltd v
Ariadne Court
RTM Company Ltd
[2011] UKUT 425 (LC) the Tribunal (George Bartlett QC, President) held that where a self
contained building had the use of appurtenant property, that any appurtenant
property was automatically part of the premises for the purpose of an
RTM
claim
under the Act. At paragraph 14 the Tribunal said this:
58. The
Tribunal’s decision in Gala Unity was the subject of an appeal to the
Court of Appeal ([2012] EWCA Civ 1372) where it was upheld. The only question
considered by the Court of Appeal was whether the appurtenant
property must appertain exclusively to the self contained building which is the
subject of the claim, so that property over which a number of different
buildings shared appurtenant rights could not be part of the premises over
which RTM
could be claimed. The Tribunal had held that there was no such
condition and that jointly appurtenant property could be the subject of
RTM
;
the Court of Appeal agreed.
59.
The respondent relies on Gala Unity as determinative of the
appurtenant property issue, but once again the appellant seeks to distinguish
the decision and invites me not to follow it. In his written
submissions Mr Radley-Gardner accepted that the physical extent of the premises
which will be the subject of RTM
(and in particular the extent of appurtenant
property) is not a matter to be determined by the leasehold valuation tribunal;
the appurtenant property, whatever it amounts to, is automatically within the
claim. Nonetheless, he contends, it is critical to know the details of what
are, and what are not, claimed to be the “premises” which are the subject of
the claim. That procedural question was not considered in Gala Unity but,
he suggests, it is essential to the statutory scheme because of sections 73(4)
and 81(3).
60.
Section 73(4) provides that a company
cannot be an
RTM company
if
another
company
is already an
RTM company
in relation to the premises, or any
premises containing or contained in the premises. Section 81(3) provides that
where any premises have been specified in a claim notice, no subsequent claim
notice which specifies those premises, or any premises containing or contained
in the premises, may be given so long as the earlier claim notice continues in
force. There cannot be competing claims to
RTM
in respect of the same premises
specified in a claim notice.
61.
There is, it seems too me, no real force in the appellant’s contention.
The Court of Appeal has decided in Gala Unity that appurtenant property need
not pertain exclusively to the self contained buildings which are the subject
of an RTM
claim. Shared appurtenances are common place and the potential for
more than one party to have management responsibility for such appurtenances is
therefore part of the statutory scheme, as the Court of Appeal recognised. It
would be nonsensical to suggest that management functions in relation to
appurtenant property may be exercised simultaneously by an
RTM company
and by the
landlord of the building, but may not be exercised simultaneously by an
RTM
company
and another
RTM company
which manages an adjacent building, and I
reject the appellant’s suggested construction of sections 73(4) and 81(3) to
that effect. I can see no reason why, in a scheme which extends to shared
appurtenances, the fact that one
RTM company
is already exercising management
functions over such property should preclude another
RTM company
from doing the
same. Sections 73(4) and 81(3) do not create or imply such a prohibition
because they do not require that the specification of the premises over which
RTM
is claimed should include a description of any appurtenances enjoyed with
the building. The purpose of the notice is to identify the premises, but that
is sufficiently achieved by identifying each self contained building to which
the claim relates, as was done it Gala Unity. Both the giver and the
receivers of the notice know the additional property, if any, which is
appurtenant to that building because they are all either parties to the leases
of the building which confer rights over the appurtenant property or a tribunal
appointed manager of the building. The identification of the building over
which
RTM
is claimed is therefore a sufficient specification of the premises to
satisfy the requirement of section 80(2).
62. Consistently with that approach to the statutory scheme, the prescribed form of claim notice requires only that the premises be named, and makes no provision for any appurtenant property to be described or referred to by a plan or otherwise (contrast section 13(3)(a)(iii) of the 1993 Act, which requires appurtenant property to which a claim for collective enfranchisement relates to be specified and shown on a plan).
63.
Mr Radley-Gardner next draws attention to the formulaic approach taken
to the drafting of the Claim Notice in this case and contrasts it with the
requirement in section 80(2) that not only must a claim notice specify the
premises which are the subject of the claim, but it must also contain a
statement of the grounds on which it is claimed that the premises which have
been specified are premises to which the RTM
provisions apply. I have set out
the form of the Claim Notice in paragraph 7 above and, as will be seen, it does
no more than recite the statutory conditions to be found in section 72(1). In
particular it does not state whether it is asserted that the premises are a
self-contained building as opposed to part of a building, nor whether or not it
contains appurtenant property, nor specifically how many flats held by
qualifying tenants it is said to contain.
64.
It may be that the draftsman of the Claim Notice had two objects in mind
when completing the prescribed form in this way, namely economy (no thought is
required to complete a claim notice in this form) and the avoidance of risk
(that if a more considered attempt is made to state the grounds on which it is
claimed that the Act applies, it may later be alleged that some fatal error has
been made which invalidates the whole procedure). Whatever the reason, and however
unhelpful the technique, the question remains whether the form of Claim Notice
complied with the requirement of section 80(2) to state the grounds on which it
is claimed that the premises are premises to which the RTM
provisions of the
2003 Act applies.
65.
The object of section 80(2) is to ensure that the recipient of the
notice is aware of the premises themselves and the basis on which the claim is
being asserted. A claim notice is not required to be comprehensive and should
contain a statement of grounds, rather than full particulars of the detail of
the claim (much of which is provided in the schedule to the notice). Whether
it does contain such a statement will obviously depend on the nature of the
case which the RTM company
intends to advance in support of its claim and the
terms in which the statement is framed, and no universal rule can be
formulated.
66.
Experience of claims to acquire RTM
demonstrates that some recipients of
a claim notice will take every possible point available to them in challenging
an
RTM company
’s assertion of entitlement. Such points are often ingenious and
sometimes they are successful, but when examined very many lack both substance
and merit. A landlord is not to be criticised for adopting that tactic; it is
entitled to put a claimant to proof that it has complied fully with the
relevant statutory procedures, and if it is takes the view that a claim is
vulnerable to a technical challenge it is entitled to have regard to its own
interests and to make that challenge.
67.
Nonetheless, the consequence of the approach I have described, of which
the appellant’s original seven pronged challenge to the Claim Notice in this
case is not atypical, is that an RTM company
and its advisers sometimes adopt a
safety-first approach to drafting a claim notice in expectation of such
challenges. Rather than provide details which will only be picked over in
search of some inconsistency or supposedly fatal omission, the cautious
draftsman seeks to keep all options open by framing the claim notice in the
most general terms. The result in some ways is unhelpful, but I do not
consider it to be inaccurate or impermissible, if it informs the recipient of
the case which the giver of the notice intends to put forward.
68.
In my judgment the Claim Notice in this case was not defective. The
notice correctly anticipated that the RTM
claim would be strenuously resisted
and I read it as informing the appellant that the respondent intended to claim
that the premises were within the Act by employing every possible permutation
of the statutory grounds which were available to it. So long as that statement
was a proper reflection of the basis of the claim it satisfied the requirement
of section 80(2). Before the LVT the appellant raised the omission from the
Claim Notice of any reference to specific appurtenant property, but it did not
suggest that the statement itself was inaccurate.
69.
The appellant also submits that it is part of the function of the claim
notice to achieve clarity as to the property and rights which will come within
the management responsibility of the RTM company
when the
RTM
project is
brought to fruition. Such clarity is essential, it is said, to define the
respective roles of the landlord and the
RTM company
and to enable the notices
required by section 92 to be given to third parties who will be affected by the
change in management. I do not agree.
70.
It is a striking feature of the statutory scheme that no general
jurisdiction to resolve disputes is given to the tribunal tasked with determining
whether or not the RTM company
is entitled to acquire
RTM
. The tribunal’s
jurisdiction under section 84(3) is binary: yes, on the relevant day the
company
was entitled to acquire
RTM
, or no it was not. Taken together with
other significant features of the scheme, including the minimal qualifying
conditions to be satisfied before
RTM
is achieved and the absence of any
requirement of fault on the part of the landlord, this suggests a statutory
policy to minimise complexity and uncertainty in the achievement of
RTM
, while
leaving any questions over the consequences of the
company
exercising the right
to be worked out after that event. There would be considerable potential for
real or manufactured disputes over the extent or description of appurtenances
identified in a claim notice, creating a risk of lengthy delay while such
disputes were resolved. The structure and simplicity of the procedures laid
down by the Act suggest that such disputes are not to delay the achievement of
RTM
. That approach has the considerable advantage that only genuine disputes,
and not purely tactical quibbles, are likely to require to be resolved by the
court or tribunal (for example on an application relating to the recoverability
of service charges for work undertaken to appurtenant property as the Tribunal
suggested in paragraph 17 of Gala Unity).
71.
The possibility of genuine disagreement or uncertainty over the extent
of appurtenant property or other issues obviously cannot be ruled out, but
nothing in the 2002 Act suggests that such disagreement was to be resolved in
advance. There is therefore no justification for requiring the claim notice to
include a comprehensive statement of the appurtenant property over which the
RTM company
asserts an entitlement to exercise
RTM
, or of the grounds on which
it is said that that property is appurtenant.
Disposal
72. I am therefore satisfied that the LVT was correct to dismiss the appellant’s complaint that the Claim Notice was defective. I conclude:
1.
A claim notice is not invalid by reason only of having been signed by an
RTM company’s solicitor or other authorised agent.
2. A claim notice need not specify whether the premises to which the claim relates do or do not include appurtenant property.
73. For these reasons the appeal is dismissed.
Martin Rodger QC
Deputy President
4 December 2013