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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Raymere Ltd. v Belle Vue Gardens Ltd. [2003] EWCA Civ 996 (17 July 2003)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/996.html
Cite as: [2003] 3 WLR 1334, [2004] Ch 29, [2003] EWCA Civ 996

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Neutral Citation Number: [2003] EWCA Civ 996
Case No: B2 2003 0162

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WINCHESTER COUNTY COURT
His Honour Judge Thompson QC

Royal Courts of Justice
Strand,
London, WC2A 2LL
17th July 2003

B e f o r e :

LORD JUSTICE BROOKE
LORD JUSTICE JONATHAN PARKER
and
MR JUSTICE HOLMAN

____________________

Between:
Raymere Ltd
Appellant
- and -

Belle Vue Gardens Ltd
Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Mr Anthony Radevsky (instructed by Messrs Derek T Wilkinson) for the Appellant
Mr Gabriel Fadipe (instructed by Messrs Preston Redman) for the Respondent

____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
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____________________

Crown Copyright ©

    Lord Justice Jonathan Parker :

    INTRODUCTION

  1. This is an appeal by Raymere Ltd, the claimant in the action, against an order made by His Honour Judge Thompson QC on 17 January 2003, in the Winchester County Court, dismissing its appeal against an order made by District Judge Weintroub on 5 September 2002, in the Bournemouth County Court, dismissing the claim. Permission for a second appeal was granted by Peter Gibson LJ on the papers on 1 April 2003.
  2. The appeal raises a short question as to the true construction of section 20 in Chapter I of the Leasehold Reform, Housing and Urban Development Act 1993 ("the 1993 Act").
  3. Section 1(1) of the 1993 Act confers on tenants of flats who meet the statutory criteria ("qualifying tenants") a "right to collective enfranchisement", that is to say a right on "the relevant date" (which is defined in section 1(8) as the date on which a notice is given under section 13) to combine with other tenants of flats in the same block in acquiring, through a nominee purchaser, the interest of the reversioner in the block. Section 13(1) provides that the procedure for exercising that right is initiated by the giving of a notice ("the initial notice") to the reversioner. An initial notice must meet the requirements laid down in section 13; in particular, it must contain particulars of the lease of each tenant who has joined in giving the initial notice. Section 13(2)(b) lays down the minimum number of qualifying tenants by whom an initial notice may be given. Qualifying tenants who join in giving an initial notice are defined in section 14 as "participating tenants". Section 20(1) enables the reversioner, where an initial notice has been given, to require the nominee purchaser, in the case of any participating tenant, "to deduce the title of that person to the lease by virtue of which it is claimed that he is a qualifying tenant ....". I will refer to such a notice hereafter as a "section 20 notice".
  4. Section 20(2) provides that the nominee purchaser "shall comply" with a section 20 notice within the period of 21 days beginning with the date on which the section 20 notice is given. Section 20(3) provides that in cases where, had the participating tenant or tenants who have failed to comply with a section 20 notice not joined in giving the initial notice, the minimum number of participating tenants required by section 13(2)(b) would not have been achieved (and it is common ground that the instant case would be such a case), the initial notice shall be deemed to be withdrawn at the end of the 21-day period. Section 13(9) provides (among other things) that where an initial notice is deemed to have been withdrawn, no subsequent initial notice in respect of the whole or any part of the premises to which the initial notice related may be given for a further twelve months. Section 21 requires the reversioner, where an initial notice has been served (and is not deemed to have been withdrawn), to give a counter-notice to the nominee purchaser stating whether or not the reversioner 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 initial notice, and if not, the reasons why such entitlement is not admitted. Section 22 provides that where the reversioner has given a counter-notice not admitting the entitlement of the participating tenants to exercise the right to collective enfranchisement, but the court is satisfied, on an application made by the nominee purchaser within two months of the giving of the counter-notice, that the participating tenants were so entitled, the court shall so declare.
  5. The blocks of flats in question in the instant case are Blocks A, B and C Bellevue Gardens, Belle Vue Road, Southbourne, in Bournemouth; the reversioner is the appellant (as the freeholder of the three blocks); and the nominee purchaser in relation to each of the three blocks is Belle Vue Gardens Ltd (the defendant in the action and the respondent to this appeal). The respondent is nominee for 49 tenants, who claim to be "qualifying tenants". All but one of the tenants' titles are registered at HM Land Registry.
  6. The issue in the appeal is whether, in relation to the 48 tenants with registered titles, the respondent has failed to comply with section 20 notices given by the appellant requiring it to deduce the titles of those tenants to their respective leases, with the result (which it is common ground would follow in the event of such failure) that the initial notices are deemed to have been withdrawn.
  7. THE FACTS

  8. The facts are not in dispute, and can be shortly stated.
  9. On 6 August 2001 the respondent gave the appellant initial notices pursuant to section 13 of the 1993 Act in respect of each of the three blocks. The initial notices are dated 6 August 2001, and both parties were content to proceed on the footing that they were given on that day. Accordingly 6 August 2001 is "the relevant date" for the purposes of Chapter 1 of the 1993 Act. The initial notice in respect of Block A was given by 17 tenants, the initial notice in respect of Block B by 17 tenants, and the initial notice in respect of Block C by 16 tenants. It is common ground that the initial notices complied with the requirements of section 13(2)(b) as to the minimum number of qualifying tenants by whom an initial notice may be given. The initial notices contained the required particulars of the leases of each of the participating tenants.
  10. On 10 August 2001 the appellant gave section 20 notices in respect of each of the three blocks, requiring the respondent to deduce the titles of all the participating tenants to the leases by virtue of which they claimed to be qualifying tenants. The 21-day time limit for compliance with the section 20 notices would expire on 1 September 2001.
  11. On 29 August 2001, in purported compliance with the section 20 notices, the respondent's solicitors, Messrs D'Angibau Wilmot, supplied the appellant's solicitors, Messrs Derek T. Wilkinson & Co, with office copy entries in respect of the 48 registered titles, together with an epitome of title in respect of the one unregistered title. The office copy entries showed the tenants as the registered proprietors of the respective leases particularised in the initial notices.
  12. Whilst it is common ground that the entries on the register of the titles in question as at "the relevant date" (6 August 2001) were as shown in the office copy entries supplied by the respondent, the Land Registry endorsement on the office copy entries states that the entries shown were the subsisting entries as at 12 June 2001 (that is to say, some eight weeks before "the relevant date").
  13. On 11 September 2001 the appellant's solicitors wrote to the respondent's solicitors contending that the respondent had failed to comply with the section 20 notices, in that (among other things):
  14. ".... the office copy register entries you have supplied are historical in that they pre-date the date of the section 13 initial notices and accordingly do not show the tenants as registered proprietors on the relevant date."
  15. They accordingly contended that the initial notices were deemed to have been withdrawn.
  16. These contentions were disputed by the respondent's solicitors, who maintained that the respondent had complied with the section 20 notices.
  17. That led inevitably to the present action, which was commenced by the appellant on 7 February 2002. In the action, the appellant seeks declarations that the respondent failed to comply with the section 20 notices and that the initial notices are accordingly deemed to have been withdrawn.
  18. By his order dated 5 September 2002 the District Judge dismissed the claim. The appellant's appeal against that order was dismissed by HHJ Thompson QC by his order dated 17 January 2003, against which the appellant now appeals.
  19. THE RELEVANT STATUTORY BACKGROUND

  20. I must now refer to the relevant statutory background in more detail.
  21. Part I of the 1993 Act is headed "Landlord and Tenant". Chapter 1 of Part I (which consists of sections 1 to 38) is headed "Collective Enfranchisement in Cases of Tenants of Flats".
  22. Section 1 confers the right to collective enfranchisement. It provides as follows (so far as material):
  23. "(1) This Chapter has effect for the purpose of conferring on qualifying tenants of flats contained in premises to which this Chapter applies on the relevant date the right, exercisable subject to and in accordance with this Chapter, to have the freehold of those premises acquired on their behalf –
    (a) by a person or persons appointed by them for the purpose, and
    (b) at a price determined in accordance with this Chapter;
    and that right is referred to in this Chapter as "the right to collective enfranchisement".
    ....
    (8) In this Chapter "the relevant date", in relation to any claim to exercise the right to collective enfranchisement, means the date on which notice of the claim is given under section 13."
  24. Section 3 identifies the types of premises to which Chapter 1 applies. It is common ground that Blocks A, B and C meet the relevant criteria. Section 5 identifies who are "qualifying tenants" for the purposes of Chapter 1. No issue arises on this appeal in relation to section 5.
  25. Section 6 imposes a residence condition on qualifying tenants, viz. that the tenant has occupied his flat as his only or principal home for the last 12 months or for periods amounting to 3 years in the last 10 years. Again, no issue arises on this appeal as to the residence condition.
  26. Section 13 provides as follows (so far as material):
  27. "(1) A claim to exercise the right to collective enfranchisement with respect to any premises is made by the giving of notice of the claim under this section.
    (2) ....
    (3) The initial notice must –
    ....
    (e) state the full names of all the qualifying tenants of flats contained in the specified premises and the addresses of their flats, and contain the following particulars in relation to each of those tenants, namely –
    (i) such particulars of his lease as are sufficient to identify it, including the date on which the lease was entered into, the term for which it was granted and the date of commencement of the term, ....
    ....
    ....
    (g) specify the date by which the reversioner must respond to the notice by giving a counter-notice under section 21.
    ....
    (9) Where any premises have been specified in a notice under this section and –
    (a) the notice .... is deemed to have been withdrawn, under or by virtue of any provision of this Chapter ...., or
    (b) ....
    no subsequent notice which specifies the whole or part of those premises may be given under this section within the period of twelve months beginning with the date of the .... deemed withdrawal of the earlier notice ....
    ...."
  28. I pass next to s.20, which is headed: "Right of reversioner to require evidence of tenant's right to participate". It provides as follows (so far as material):
  29. "(1) The reversioner in respect of the specified premises may, within the period of 21 days beginning with the relevant date, give the nominee purchaser a notice requiring him, in the case of any person by whom the initial notice was given, to deduce the title of that person to the lease by virtue of which it is claimed that he is a qualifying tenant of a flat contained in the specified premises.
    (2) The nominee purchaser shall comply with any such requirement within the period of 21 days beginning with the date of the giving of the notice.
    (3) Where –
    (a) the nominee purchaser fails to comply with a requirement under subsection (1) in the case of any person within the period mentioned in subsection (2), and
    (b) the initial notice would not have been given in accordance with section 13(2)(b) if –
    (i) that person, and
    (ii) any other person in the case of whom a like failure by the nominee purchaser has occurred, had been neither included among the persons who gave the notice nor included among the qualifying tenants of the flats referred to in that provision,
    the initial notice shall be deemed to have been withdrawn at the end of that period."
  30. Section 21 requires the reversioner, where an initial notice has been served, to serve a counter-notice. It provides as follows (so far as material):
  31. "(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).
    (2) The counter-notice must comply with one of the following requirements, namely –
    (a) state that the reversioner admits that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the specified premises;
    (b) state that, for such reasons as are specified in the counter-notice, the reversioner does not admit that the participating tenants were so entitled;
    (c) ....
    ...."
  32. Section 22 provides as follows (so far as material):
  33. "(1) Where –
    (a) the reversioner in respect of the specified premises has given the nominee purchaser a counter-notice under section 21 which .... contains such a statement as is mentioned in subsection (2)(b) of that section, but
    (b) the court is satisfied, on an application made by the nominee purchaser, that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the specified premises,
    the court shall by order made a declaration to that effect.
    (2) Any application for an order under subsection (1) must be made not later than the end of the period of two months beginning with the date of the giving of the counter-notice to the nominee purchaser.
    ....
    (6) If an application by the nominee purchaser for an order under subsection (1) is dismissed by the court, the initial notice shall cease to have effect at the time when the order dismissing the application becomes final."
  34. Next, I refer to the Leasehold Reform (Collective Enfranchisement and Lease Renewal) Regulations 1993 (SI 1993/2407) ("the 1993 Regulations"). Regulation 2 of the 1993 Regulations, which is headed "Procedure for collective enfranchisement", provides as follows:
  35. "In a transaction undertaken to give effect to an initial notice the nominee purchaser, the reversioner and any relevant landlord shall, unless they otherwise agree, be bound by Schedule 1 to these Regulations."
  36. Paragraph 2 of Schedule 1 to the 1993 Regulations, which is headed "Evidence that residence condition is satisfied", provides as follows:
  37. "(1) The reversioner may require the nominee purchaser to give him evidence of the occupation on which a qualifying tenant who is claimed in the initial notice to satisfy the residence condition relies, by giving him notice within the period of twenty-one days beginning with the relevant date.
    (2) The nominee purchaser shall comply with any such requirement by giving a statutory declaration made by that qualifying tenant to the reversioner within the period of twenty-one days beginning with the date the notice is given."
  38. Paragraph 3 of the Schedule, which is headed "Delivery of proof of title", is in the following terms (so far as material):
  39. "(1) Sub-paragraph (2) applies where the reversioner has given a counter-notice complying with section 21(2)(a) (admitting the right to collective enfranchisement) or .... the nominee purchaser has applied to the court for an order under section 25(1) (applications where the reversioner fails to give counter-notice or further counter-notice).
    (2) .... the nominee purchaser may require the reversioner to deduce title to the interests proposed to be acquired in accordance with section 13(3)(a) and (c)(i) (matters specified in the initial notice) .... by giving him notice.
    (3) The reversioner shall comply with any such requirement by giving the nominee purchaser –
    (a) in the case of an interest registered in the register of title kept at Her Majesty's Land Registry, all particulars and information which have to be given or may be required to be given on a sale of registered land pursuant to section 110 of the Land Registration Act 1925 (provisions as between vendor and purchaser), and
    (b) in the case of any other interest, an epitome of title, within the period of twenty-eight days beginning with the date the notice is given."
  40. Section 110(1) of the Land Registration Act 1925 obliges a vendor of registered land, notwithstanding any stipulation to the contrary, to furnish the purchaser, if required, with (among other things) "a copy of the subsisting entries in the register" so far as they affect the property to be sold. Section 110(3) provides as follows (so far as material):
  41. "(3) Except as aforesaid, and notwithstanding any stipulation to the contrary, it shall not be necessary for the vendor to furnish the purchaser with any abstract or other written evidence of title ...."

    THE JUDGMENT OF THE DISTRICT JUDGE

  42. The district judge concluded that if the reversioner took the view that the nominee purchaser had not deduced good title, that was a matter which he could raise in his counter-notice under section 21(2)(b). He accordingly declined to make the declarations sought.
  43. THE JUDGMENT OF THE JUDGE

  44. The judge reached the same conclusion as the district judge, for essentially the same reason. After summarising the opposing arguments presented by Mr Radevsky (for the appellant) and by Mr Fadipe (for the respondent), and after referring to the authorities which they had cited, the judge continued (at page 9D of the transcript of his judgment):
  45. "In the instant case I am concerned with the construction of the statute and interpreting, or endeavouring to interpret, what it was that Parliament required, namely where the reversioner sought information what information it was that should be given.
    The counter-argument on behalf of the nominee purchaser put forward by Mr Fadipe is this. He says that the position really is clear under section 20(1), and to adopt the approach which is suggested by Mr Radevsky on behalf of the reversioner would involve adding to section 20(1) the words 'at the relevant date' after 'person' ....
    So, says Mr Fadipe, one has to add those extra words to section 20(1) to bring about the result which is claimed by the reversioners in this case.
    Not so, says Mr Radevsky, it is axiomatic in the wording of the section that the title deduced must be of the persons who are tenants at the relevant date.
    I think the arguments here are finely balanced, and the position comes back to this. With considerable hesitation, and I confess that my mind has fluctuated from one way to the other several times during the course of this hearing and when endeavouring to construe the various arguments which are put forward, that I have come to the conclusion that the learned district judge was right in the conclusion to which he came when he said: "If the landlord does not admit the deduction of title it is my view that the landlord must say so in his counter-notice".

    I think the position really is fairly straightforward, because obviously when the nominee purchaser advances the application on behalf of the various lessees the reaction or attitude of the landlord at that stage is not known. The landlord may serve a counter-notice under section 21(2)(a) and state that he admits that the participating tenants were on the relevant date entitled to exercise the right to collective enfranchisement in relation to the specified premises, and then simply go on to argue about the price at which he is willing to transfer the freehold to the nominee purchaser. Or, conversely, under section 21(2)(b) the reversioner may state, for reasons which he specifies in his counter-notice, that he does not admit that the participating tenants were so entitled.
    I think the learned district judge was absolutely right in saying that if the reversioner is going to contend that the participating tenants were not so entitled, a reason which he may put forward is simply that he does not accept that at the relevant date, namely in this instance 6 August 2001, that the relevant tenants still had title as such at the relevant date, and in those circumstances call upon the nominee purchaser to produce a fresh deduction of title in respect of the relevant tenants.

    I think it would be nonsensical, if one looks at the structure of the Act, for a nominee purchaser to proceed with an application of this nature in the first place without satisfying himself on behalf of the participating tenants that they were in a position to deduce title.
    If the landlord is then going to require that to be done again, it seems to me that he should give notice to that effect when he serves his counter-notice under section 21(2)(b), and not simply say that the titles produced are not satisfactory, and in that way rely on upon the original notice being deemed to have been withdrawn.
    So for these reasons I have come to the conclusion that the decision of the learned district judge was correct, and that this appeal should be dismissed."

    THE ARGUMENTS ON THIS APPEAL

  46. On this appeal, Mr Radevsky effectively repeats the submissions which he made below. Thus, he submits firstly that, on its true construction, the requirement to 'deduce .... title' in section 20(1) of the 1993 Act is a requirement to deduce title as at the relevant date. He submits that there is no other possible date which can be of significance, given the terms of, in particular, section 1(1) and section 13, and given that the landlord is not interested in who owned the flats historically, on a date before the initial notices were served.
  47. Mr Radevsky further submits that the requirement to 'deduce .... title' is a requirement to prove conclusively that, as at the relevant date, the tenant in question had title to the leasehold interest particularised in his initial notice. He submits that in relation to registered land such a requirement will not give rise to any practical difficulty since office copy entries as at the relevant date or any date subsequent thereto will constitute conclusive proof of the title as at the relevant date. He points out that for a modest fee (he informed us that the fee is currently £2 per title) the nominee purchaser can access the Land Registry via the internet and download office copy entries.
  48. Mr Radvesky reminds us that Chapter 1 provides what is in effect a compulsory purchase procedure, submitting that it is well-established that in such a context the requirements of the relevant statute must be strictly applied.
  49. Mr Radevsky accepts that, as the register has since 1990 been accessible by any member of the public, the reversioner could himself discover without difficulty whether the qualifying tenants still owned their leasehold interests as at the relevant date, but he submits that under the scheme of the 1993 Act the reversioner is not required to take any step himself to investigate the title of qualifying tenants. This submission is reinforced, he submits, by the tight timetable which is prescribed for compliance with the statutory procedure.
  50. Mr Radevsky further submits that section 21(2)(b) is of no assistance in construing section 20(1), and that both the district judge and the judge fell into error in concluding that it is. He submits that if the nominee purchaser fails to produce conclusive proof of title within the stipulated 21-day period, he has failed to comply with the section 20 notice and the initial notice is accordingly deemed to have been withdrawn. He accepts that there is nothing to prevent a nominee purchaser who has applied to the court for an order under 22(1) from adducing additional evidence as to the title of a qualifying tenant, but he submits that in circumstances where an initial notice is deemed to have been withdrawn section 22 never comes into play. He submits that any issue as to whether title (i.e. title as at the relevant date) has been conclusively proved falls to be determined at an earlier stage in the statutory process, that is to say in the context an issue as to whether or not the initial notice is to be deemed to have been withdrawn.
  51. Turning to the facts of the instant case, Mr Radevsky submits that the respondent failed to comply with the section 20 notices in relation to the 48 tenants with registered titles in that the office copy entries which it supplied (and which were certified by the Land Registry to be show the entries subsisting on the register as at 12 June 2001) did not constitute conclusive proof of the state of the register as at the relevant date since further dispositions of the leases may been entered on the register between 12 June 2001 and the relevant date.
  52. Mr Radevsky accepts that the office copy entries were put forward by the nominee purchaser in support of the assertion in the initial notices that the tenants owned their leasehold interests as at the relevant date; but he submits that, absent either confirmation by the Land Registry that the office copy entries were those which were subsisting on the register on the relevant date or, possibly, a statutory declaration by the tenants that they had not disposed of their leasehold interests prior to the relevant date, the nominee purchaser has failed to produce evidence of title as at the relevant date.
  53. In making these submissions, Mr Radevsky, with commendable frankness, disowns a passage in paragraph 26-03 of Hague on Leasehold Enfranchisement, 3rd edition, of which he happens to be a joint editor, to the effect that since there is no power to extend the 21-day time limit for compliance with a section 20 notice:
  54. ".... a nominee purchaser would be well advised to be in a position to deduce title prior to serving the initial notice".

  55. Mr Radevsky accepts that had this been a sale by the tenant, as registered proprietor, it would be in accordance with normal conveyancing practice for the tenant vendor to supply the purchaser, prior to contract, with office copy entries; but he points out that in the case of a sale of registered land the purchaser can protect himself against the possibility of subsequent dispositions being entered on the register by applying for an official search of the register, the practical effect of which is to freeze the register in its then existing state during the ensuing period of priority. He points out that no equivalent means of protection is available to a reversioner faced with an initial notice.
  56. Whilst accepting that there is no authority which is directly in point, Mr Radevsky relies on the decision of this court (Chadwick LJ and Sir Murray Stuart-Smith) in Burman v. Mount Cook Land Ltd [2002] Ch 256 as indicating the approach to be adopted in construing the relevant provisions of the 1993 Act. The issue in that case was whether a landlord's counter-notice under section 45 of the 1993 Act (in Part 1 of Chapter II of the 1993 Act, which deals with the individual right of a tenant of a flat to acquire a new lease) was valid, notwithstanding that it did not expressly admit the tenant's right to a new lease nor did it address the proposals in the tenant's notice. In paragraphs 10 and 11 of his judgment, with which Sir Murray Stuart-Smith agreed, Chadwick LJ said this:
  57. "10. The first question for decision on this appeal, as it seems to me, is whether the judge was right to pose the question which, as he thought, he had to decide in the terms that he did: "whether a reasonable tenant could be misled into thinking that the landlord's counter-notice did not admit the right to a new lease?" Implicit in the question posed by the judge is the assumption that a notice served by a landlord in response to a tenant's notice under section 42 of the Act is capable of being a valid counter-notice under section 45 provided that a reasonable tenant, on receipt of the notice, could not be misled into thinking that the right to a new lease was not admitted. To put the point another way, is it right to assume – as the judge did assume – that section 42(2)(a) of the Act requires the landlord's notice to do no more than bring home to a reasonable tenant, having a degree of familiarity with the scheme of Chapter II, Part 1, that the landlord does not deny the right to a new lease? Or does section 45(2)(a) of the Act require, as a literal construction of the statutory language would suggest, that the landlord's notice must state that the landlord admits that the tenant had on the relevant date the right to acquire a new lease of his flat?

    11. The answer to that question is not to be found in the terms of the landlord's notice. The relevant inquiry is what does the statutory language require. The task is to construe the words which Parliament has used in the context of the statutory scheme. It is only when the court has informed itself of the true nature of the statutory requirement that it can sensibly address the second question: does the notice in this case meet that requirement?"
  58. Mr Radevsky submits that, adopting that approach, the conclusion must follow that there has been a failure to comply with the section 20 notices, with the consequence that they are deemed to have been withdrawn.
  59. Mr Fadipe, in his written skeleton argument, submits that the requirement to 'deduce .... title' in section 20(1) is not a requirement to prove conclusively that the tenant has a good title. It is, he submits, no more than a requirement to explain the basis on which the tenant claims to be the owner of the flat.
  60. He relies on the fact that there is no express requirement in section 20(1) that title shall be proved conclusively as at the relevant date, and he submits that there is no ground for implying such a requirement. He submits that in the case of unregistered land it would be impossible to meet such a requirement.
  61. He submits that the office copy entries which were supplied in the instant case were good evidence of the title of the tenants in question, and that any reasonable reversioner would, on receiving them, assume that the tenant was putting them forward as demonstrating not merely that at some date prior to the giving of the initial notice he had become the registered proprietor of the leasehold interest, but also that he remained the registered proprietor of that interest at the relevant date.
  62. CONCLUSIONS

  63. In addressing the question of construction which arises in the instant case it is to be borne in mind that, although since 1990 the whole of England and Wales has been a compulsory registration area, with the result that there remains only a dwindling number of unregistered titles to leasehold flats, nevertheless unregistered titles continue to exist; and that the statutory scheme for the exercise of the right to collective enfranchisement must apply to unregistered as it does to registered titles. In particular, the requirement imposed by a section 20 notice cannot, in my judgment, vary in strictness according to whether the title in question happens to be registered or unregistered. With that in mind, I turn to the question of construction.
  64. In the first place, I agree with Mr Radevsky that the title which is relevant in the context of the collective enfranchisement provisions in Chapter I in Part I of the 1993 Act is the tenant's title to his leasehold interest as at the relevant date (in the instant case, 6 August 2001), since it is at that date that the right to collective enfranchisement arises under section 1(1). But it does not follow from the fact that the entitlement to exercise the right arises as at the relevant date that in the instant case the respondent failed to comply with the section 20 notices, since that must in turn depend on the true nature and extent of the requirement in section 20(1) to 'deduce .... title'.
  65. I also agree with Mr Radevsky that the task of the court in addressing that question is that which Chadwick LJ identified in Burman v. Mount Cook Land Ltd (see ibid. paragraph 11, quoted in paragraph 41 above), namely that of construing the words which Parliament has used in the context of the statutory scheme.
  66. Reading Chapter I as a whole, it seems to me that there are, outside the confines of section 20 itself, useful indicators of the true nature and extent of the requirement to deduce title.
  67. In the first place, the consequence of non-compliance with a section 20 notice is (at least in the circumstances of the instant case) that no further initial notice can be given in respect of the same premises for another twelve months. To my mind, that is some indication that the requirement to deduce title is more in the nature of an administrative or procedural requirement than a requirement to prove conclusively that the tenant has a good title in law as at the relevant date. Where a nominee purchaser has, within the prescribed 21-day period, provided evidence to support the claim of a particular tenant to ownership, as at the relevant date, of the leasehold interest specified in an initial notice, but the evidence so provided discloses some defect in the tenant's title, it seems to me to make little sense that the consequence of that should be that no further initial notice can be given in respect of the premises in question for another twelve months. The twelve months embargo looks to me far more like a sanction imposed for failure to meet the statutory 21-day deadline rather than for failure to prove conclusively a good title in law as at the relevant date. If a participating tenant cannot establish his entitlement to exercise the right to collective enfranchisement (i.e. his entitlement to do so as at the relevant date), then his claim will fail on the merits, regardless of the statutory time-limit.
  68. In the second place, I agree with the district judge and with the judge that section 21(2)(b) is framed in terms which are wide enough, on the face of them, to enable the reversioner to challenge a tenant's entitlement to exercise the right to collective enfranchisement on the ground that the tenant's title to the leasehold interest particularised in the initial notice is defective, e.g. on the ground that prior to the relevant date he had disposed of that interest. Accordingly, unless the overall context yields some good reason for confining its scope, section 21(2)(b) will afford an opportunity for the reversioner to contend in his counter-notice that, on the basis of the evidence which the nominee purchaser has provided in response to a section 20 notice, the tenant has failed to establish his entitlement to exercise the right to collective enfranchisement.
  69. In the third place, as Mr Radevsky rightly accepted, there is nothing elsewhere in the statutory scheme to prevent a nominee purchaser, on an application to the court under section 22, from adducing additional evidence to make good any alleged defect in this title.
  70. Fourthly, it must be remembered that a section 20 notice is a response to an initial notice which asserts, in relation to each participating tenant, that he is the owner, as at the relevant date, of the leasehold interest particularised in the initial notice.
  71. In my judgment, these indications point clearly to the requirement to deduce the title of a participating tenant being no more than an administrative or procedural requirement on the nominee purchaser to provide evidence to support the assertion in the initial notice that the tenant in question was, as at the relevant date, the owner of the leasehold interest particularised in the initial notice; and to do so within 21 days. Reading the statutory scheme as a whole, it seems to me that it contemplates that issues as to whether the evidence so provided establishes the entitlement of a participating tenant to exercise the right to collective enfranchisement – that is to say, issues as to title – are to be resolved in proceedings brought by the nominee purchaser under section 22, rather than in litigation where the issue is whether or not the nominee purchaser has "failed to comply" with a section 20 notice.
  72. That is not to say, of course, that a nominee purchaser who does nothing at all to comply with a section 20 notice within the prescribed 21-day period can be heard to say that he has not failed to comply with the section 20 notice: undeniably he has failed to do so. Equally, at the other extreme, a nominee purchaser who in response to a section 20 notice provides all the available evidence relating to the title in question, and who does so timeously, will in my judgment have complied with the section 20 notice, albeit there may be an issue as to whether, as a matter of law, the evidence discloses some defect in the title which in turn bears upon the tenant's entitlement to exercise the right to collective enfranchisement. Between those two extremes, the question whether or not there has been a failure to comply with a section 20 notice will inevitably depend on the facts of each particular case.
  73. Support for this construction is also to be found, in my judgment, by considering the position where a title is unregistered. An epitome of title will trace the tenant's title up to the point where lease became vested in him. If section 20 requires that he prove conclusively that the lease remained vested in him at the relevant date, he could only meet that requirement (if, in truth, he could meet it all) by providing a statutory declaration to that effect. But, in contrast to the position in relation to compliance with the residence condition (as to which, see paragraph 2 of Schedule 1 to the 1993 Regulations, quoted in paragraph 27 above), neither the 1993 Act nor the 1993 Regulations make express provision for such a statutory declaration.
  74. In the instant case, in response to the section 20 notices the respondent provided office copy entries which established that the tenants in question were, as at 12 June 2001, the registered proprietors of the respective leasehold interests particularised in the initial notices. And it did so within the 21-day period. However, the fact that the confirmation by the Land Registry that the office copy entries were the subsisting entries on the register was "out of date", in the sense that it related to a date earlier than the relevant date, left open the possibility (more theoretical than real) that there may have been some later registered disposition of the leasehold interests.
  75. In my judgment, on those facts the respondent clearly complied with the section 20 notices, and it was for the appellant to challenge the tenant's titles in its counter-notice should it see fit to do so - although before deciding to do so it would no doubt have taken the precaution of finding out for itself whether any further entries on the register had in fact been made. In fact, as noted earlier, it is common ground that there were no further entries.
  76. I would accordingly dismiss this appeal.
  77. Mr Justice Holman:

  78. I agree that this appeal should be dismissed. In my view, District Judge Weintroub and His Honour Judge Anthony Thompson QC were each correct in their reasoning and their conclusions.
  79. Clearly, the scheme and machinery of Chapter I of the 1993 Act has to be construed in the light of section 1(1), which confers a right to have the freehold acquired on people who are qualifying tenants "on the relevant date". So what is prerequisite and crucial is title on that date. I accordingly agree with Mr Radevsky that the reference in section 20(1) to deducing title must be a reference to deducing title on the relevant date, and not some earlier date.
  80. I also agree that, in the case of registered land, a person who produces an office copy of an entry bearing an earlier date does not thereby accurately and conclusively deduce title on the relevant date.
  81. I also agree with Mr Radevsky that the approach adopted by Chadwick LJ in Burman v Mount Cook Land Ltd [2001] EWCA Civ 1712, [2002] Ch 256 at paragraphs 10 and 11 should also be adopted in the present case, viz :
  82. "The relevant enquiry is what does the statutory language require. The task is to construe the words which Parliament has used in the context of the statutory scheme. It is only when the court has informed itself of the nature of the statutory requirement that it can sensibly address the second question: does the notice in this case meet that requirement ?"
  83. Adapting that passage to the present case, one must substitute some such words as "the information which was supplied" for the words "the notice".
  84. It is worth noting, however, that Chadwick LJ referred in paragraph 11 to "the context of the statutory scheme"; and in his judgment as a whole he clearly considered not just the words in question where they appear in section 45(2), but the wider context of Chapter II of the 1993 Act as a whole.
  85. In the present case, Mr Radevsky submitted that we should construe the requirements of section 20 without reference to the provisions of section 21; for he submitted that if the initial notice is deemed to have been withdrawn by virtue of section 20(3), the machinery of section 21 never comes into effective play. I agree that that is the consequence and effect of section 20(3) in the practical operation of the scheme and machinery of these provisions. But I cannot accept that when a court is performing the quite different task of construing these provisions it must look at section 20 alone, and disregard section 21 and the statutory scheme and context as a whole. I agree with both the district judge and the judge that it is relevant when construing section 20 that one of the options open to the reversioner under section 21(2) is to state in his counter-notice that he does not admit that the participating tenants were entitled on the relevant date to exercise the right to collective enfranchisement.
  86. The argument of Mr Radevsky focused narrowly on the words "…. requiring him …. to deduce the title ….." (implicitly, on the relevant date) where they appear in section 20(1). In my view, however, the focus should be no less upon the words "The nominee purchaser shall comply with any such requirement…." in section 20(2), and on the words " Where – (a) the nominee purchaser fails to comply …." in section 20(3). The trigger for a deemed withdrawal under section 20(3) is "fails to comply".
  87. In ordinary language there is a distinction between failing to do something, in the sense of failing altogether to do it, and failing to do something, in the sense of doing it imperfectly or incompletely. It seems to me that the statutory consequence of "deemed withdrawal" flows more naturally from a failure in the first than in the second sense. Clearly, if a person fails altogether to comply with a requirement, then he may readily be deemed to have withdrawn his underlying notice or application. But it would be odd that he should be deemed to have withdrawn it at the very time that he has positively done his, admittedly imperfect or incomplete, best to comply with the requirement.
  88. In the context of the statutory scheme this approach seems to me to be borne out also by the provisions of section 21(2)(b) which clearly enable the reversioner to require the nominee purchaser to do better and to produce better or more complete evidence of title.
  89. I do not propose to paraphrase the language of statute. But in my view the words "shall comply with any such requirement" where they appear in section 20(2) require that the nominee purchaser does, at the very least, take positive steps, in good faith, to produce good evidence or material to deduce title. Preferably and properly, that evidence or material should be perfect and conclusive. But the nominee purchaser cannot be said to have failed to comply, so as to trigger section 20(3) and the deemed withdrawal, merely because the evidence or material supplied is less than perfect and conclusive.
  90. These conclusions are, in my view, fortified by the consideration that the provisions of section 20 apply equally to unregistered (however rare it now is) as to registered land. In the case of registered land it is simple and straightforward to obtain and produce office copy entries of the land register, including ones dated on or after the relevant date. But deducing title to unregistered land is more complex, and the question whether title has been conclusively or sufficiently deduced may be less clear cut. In operating the statutory scheme, the occurrence of a deemed withdrawal needs to be clear cut and decisive. It would be undesirable if a dispute as to the adequacy or sufficiency of purported compliance in good faith with a requirement to deduce title had first to be investigated, and even adjudicated upon, before it was known whether there had been a deemed withdrawal.
  91. Clearly it is a question of fact in any case whether there has been a compliance or failure to comply in the senses that I have tried to describe. Office copy entries might be supplied which were so out of date that their production could not be regarded as complying at all. In the present case the relevant date was on (or shortly after) 6th August 2001. On 10th August 2001 the reversioner gave notice to the nominee purchaser requiring it "to deduce the title of" each person giving the initial notice. By letters dated 28th August 2001 the nominee purchaser wrote "To meet your Notices …. we enclose Office Copy Entries for Flats [which were then listed] …" and enclosed office copy entries dated 12th June 2001. Mr Radevsky submits that those office copy entries were as useless and ineffective as if the nominee purchaser had enclosed blank pieces of paper. I cannot agree. Even although it did not deduce title on the relevant date, the nominee purchaser produced recent entries in a positive attempt in good faith to comply with the requirement. It cannot be said that the nominee purchaser "failed" to comply. The deemed withdrawal was not triggered. The remedy of the reversioner if he wanted in-date entries to be produced was to make that clear by his counter-notice under section 21.
  92. For these reasons and those given by my Lord, I would dismiss this appeal. However I would like to add that although the construction we have adopted allows some tolerance for less than perfect compliance, it should not be regarded as any licence or encouragement for lax practice. It is clearly preferable, in the case of registered land, to produce office copy entries dated on or after the relevant date so as to leave no room for argument or doubt.
  93. Lord Justice Brooke:

  94. I agree with both judgments
  95. Order; Appeal dismissed; agreed order lodged with court; leave to appeal refused.

    (Order does not form part of the approved judgment)


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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/996.html