The Supreme Court has granted permission for a “leapfrog appeal” from the Upper Tribunal in the right to manage (“RTM”) case of A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2023] UKUT 27 (LC).
The question to be decided on appeal is whether the RTM Company’s failure to serve the claim on an intermediate landlord with no management obligations will invalidate the claim. The appeal has been leapfrogged to the Supreme Court due to the Court of Appeal’s decision in Elim Court RTM Co Ltd v Avon Freeholders Ltd [2017] EWCA Civ 89 that a failure to serve an intermediate landlord of a flat in the building did not invalidate the RTM claim.
The present case involves Tudor Studios, a block of student accommodation. The Appellant, A1 Properties (Sunderland) Ltd, holds a 999-year lease of various common parts in the building. These are then sublet to the management company for a rent.
The RTM claim was served on the freeholder and the management company, but not served on the Appellant.
Section 79(1)(6) of the Commonhold and Leasehold Reform Act 2002 (which governs RTM claims) states:
“The claim notice must be given to each person who on the relevant date is—
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the Landlord and Tenant Act 1987 (c. 31) …”
The Appellant in the Tudor Studios case is seeking to argue that the Court of Appeal’s decision in Elim Court was wrong and that failure to comply with section 79 of the Act will invalidate the claim, even if the landlord that was not served has no management responsibilities. Alternatively, they argue that Elim Court can be distinguished on its facts.
This will be an interesting decision which should clarify for all those involved in RTM claims exactly who should be served with the claim. Arguably, the decision will also have wider significance in relation to how the Courts and Tribunals should deal with questions of non-compliance with statute in relation to acquisition of property and similar rights when the statute is silent in that regard.
Watch this space for more updates!
This is another appeal arising out of what the Court of Appeal called the “melancholy fact that whenever Parliament lays down a detailed procedure for exercising a statutory right, people get the procedure wrong” (...Lewison LJ...). - Judge Elizabeth Cooke
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