Sinclair Gardens Investments (Kensington) Ltd v Poets Chase Freehold Co Ltd [2007] EWHC 1776 (Ch), [2007] All ER (D) 425 (Jul)
Chancery Division
Morgan J
26 July 2007
Should a tenant’s notice seeking collective enfranchisement pursuant to the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993), s 13 prove invalid, the tenants will not be precluded thereby from serving a second, valid notice without delay.
Timothy Fancourt QC (instructed by Paul Chevalier & Co) for the defendant.
Lana Wood (instructed by Parrott & Coales) for the claimant.
The defendant landlord was the freehold owner of nine blocks of flats in Buckinghamshire. In December 2005, some of the tenants served on the landlord a notice purporting to be a notice under LRHUDA 1993, s 13. In February 2006, the landlord served a counter notice under s 21, asserting that the purported s 13 notice did not comply with the requirements of s 13(3) and was thereby invalid.
The tenants replied that they accepted that the purported s 13 notice was invalid. In April 2006, they served a fresh s 13 notice without the errors of the original notice. The landlord served a further purported counter-notice in June 2006 alleging that the tenants were not entitled to serve any further notice in view of the earlier invalid notice. The nominee purchaser issued proceedings seeking declaratory relief to the effect that the tenants were not precluded from serving a valid s 13 notice in April 2006. The landlord maintained that the tenants could not have served the second notice under the statutory scheme, or alternatively that they were stopped from doing so. The judge ruled in favour of the claimant and the landlord appealed.
MR JUSTICE MORGAN:
There was no appeal against the finding that the first notice had failed to comply with the mandatory requirement contained in LRHUDA 1993, s 13(3)(d).
Speaking generally, if a mandatory contractual or statutory provision required a party to give a notice in a particular form in order to achieve a result identified in the contract or statute and if a purported notice given by that party failed to comply with the mandatory contractual or statutory provision, then the normal position was that the notice had no legal effect. That general position might be modified by, for example, a provision such as that contained in LRHUDA 1993, Sch 3, s 15 which dealt with inaccuracies and misdescriptions in an s 13 notice. However, the judge below had held that the notice dated December 2005 was not saved by that statutory provision. Further, the general position was modified by the application of the test in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19 , [1997] 3 All ER 352 as to the reaction of a reasonable recipient to the imperfect notice. Again, the judge had held that the notice of December 2005 was not saved by an application of the Mannai test. It was held by the Court of Appeal in Speedwell Estates Ltd v Dalziel and others [2001] EWCA Civ 1277, [2001] All ER (D) 454 (Jul) that a notice which did not comply with mandatory statutory requirements and which was not saved by a provision such as LRHUDA 1993, Sch 3, para 15 in this case or by the Mannai test was invalid; that case concerned the Leasehold Reform Act 1967 which contained at Sch 3, para 6(3) a provision broadly similar to LRHUDA 1993, Sch 3 para 15. The approach in the Speedwell Estates case was applied again by the Court of Appeal in Burman v Mount Cook Land Ltd [2001] EWCA Civ 1712, [2001] All ER (D) 281 (Nov)(relating to a notice under of RHUDA 1993, Pt I, Ch II).
“Section 13”
Thus, in the absence of any provision in Ch I of Pt 1 of LRHUDA 1993 which reversed that normal result, one would conclude that the notice of December 2005, which purported to be a notice under LRHUDA 1993, s 13 but which had been held not to comply with the mandatory requirements of s 13(3), was not a notice “under Section 13” nor a notice “in accordance with Section 13” nor a notice which “has effect” for the purposes of s 13. In those circumstances, one needed to examine Ch I of Pt I to see if there was a statutory provision which reversed the normal effect of that defective notice.
Having done so, his lordship concluded that there was nothing in the statutory scheme which required one to find contrary to the normal position with non-compliant notices.
His lordship turned to the facts of the case and held that there was no scope for s 13(9) to preclude the tenants from serving what was otherwise a valid s 13 notice in April 2006 and that notice, therefore, was a valid notice under s 13.
He turned to the landlord’s alternative argument in estoppel. The landlord relied on LRHUDA 1993, s 13(8). The landlord contended that the tenants were estopped from denying that the notice dated of December 2005 was valid and were, accordingly, estopped from putting forward the notice of April 2006 as a valid s 13 notice.
His lordship held that the landlord did not rely upon a representation, if made, that the notice of December 2005 was valid for the purposes of s 13. The landlord might well have considered whether the notice was or was not valid but did not rely upon a representation, if made, by the tenants to the effect that the notice was valid. Having considered the matter, the landlord contended in its purported counter-notice that the notice was invalid. It is true that the landlord reacted to the notice but did not rely upon it. It did the very opposite. The case for an estoppel therefore foundered on the absence of reliance.
The appeal would therefore be dismissed.
