United Kingdom Upper Tribunal (Lands Chamber)

UPPER TRIBUNAL (LANDS CHAMBER)

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

 

 

 

BETWEEN PINEVIEW LIMITED Appellant

and

83 CRAMPTON STREET RTM COMPANY LIMITED Respondent

 

Re: 83 Crampton Street

 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.”E+W

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:

“Section 72(1)(a) was drafted with such an economy of wording as to make its interpretation not entirely clear.  The problem lies with the words after the comma, “with or without appurtenant property”.  Do these words mean that if the self-contained building has appurtenant property “the premises” for the purposes of the Act consist of the building plus such appurtenant property as the building may have?  Or does it mean that if the building has appurtenant property “the premises” can either consist of the building plus the appurtenant property or the building alone, leaving it to the claim notice to specify under section 80(2) which of these, for the purposes of the claim, it is?  I think it must be the first of these, so that the effect of a valid notice is to extend the right to manage to any property appurtenant to the building or part of a building.  It would be unsatisfactory if a claim notice had to specify whether or not it was made in respect of appurtenant property.  The Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010 do not require this, nor does the form in Schedule 2 of the Regulations provide for any more than a statement of the name of the premises to which the notice relates.”

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