Assethold Limited v 110 Boulevard RTM Company Limited [2017] UKUT 316 (LC)

By Ranjeet Johal, Mills Chody LLP & Jeff Hardman, New Square Chambers

Summary

HHJ Behrens, sitting in the Upper Tribunal (Lands Chamber), dismissed the appellant’s appeal and found that the First-tier Tribunal (‘F-tT’) had been right to conclude that an RTM company was permitted to serve a copy of a claim notice on qualifying tenants by email.

Relevant Facts

The property at the centre of the dispute was a freehold building comprising five flats, each of which was held by a qualifying tenant pursuant to s.75(8) of the Commonhold and Leasehold Reform Act 2002 (‘2002 Act’). Each qualifying tenant was a member of the RTM company (s.73). A claim to acquire the right to manage (‘claim notice’) was given to the landlord by the RTM company and a copy was emailed to each qualifying tenant.

The relevant statutory provisions provide that:-

“79. Notice of claim to acquire right

  • “(1) A claim to acquire the right to manage any premises is made by giving notice of the claim (referred to in this Chapter as a “claim notice”); and in this Chapter the “relevant date”, in relation to any claim to acquire the right to manage, means the date on which notice of the claim is given.
  • ……………
  • (3) The claim notice must be given by a RTM company which complies with subsection (4) or (5).
  • ……………
  • (6) 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….

            ……………

  • (8) A copy of the claim notice must be given to each person who on the relevant date is the qualifying tenant of a flat contained in the premises.
  • [………….]

111 Notices

(1) Any notice under this Chapter—

(a) must be in writing, and

(b) may be sent by post.”

The F-tT held that service on the qualifying tenants had taken place in accordance with the 2002 Act and rejected the landlord’s contention that email service was invalid by virtue of non-compliance with s79(8) and s.111. Furthermore, and in any event, none of the parties would have been prejudiced by such a defect.

Upper Tribunal decision

The Upper Tribunal concluded that qualifying tenants need only be given a copy of the claim notice rather than the original (s79(8)). Furthermore, s.111 “clearly contemplates that a notice can be given other than by post”. As such, the Upper Tribunal held that an email sent to the qualifying tenants, containing an attachment or copy of the claim notice, would constitute valid service under s79(8).

Despite it not being strictly necessary to do so, the Upper Tribunal went on to consider the appellant’s alternative submission on prejudice. Following consideration of Elim Court RTM Company Ltd v Avon Freeholds Ltd [2017] EWCA Civ 89, which emphasised the importance of the relevant background facts and the effect of any non-compliance, the Tribunal dismissed the appellant’s reasoning. It held that service of the claim notice, in circumstances where all the tenants were already members of the RTM company, was “ancillary and of secondary importance.” Consequently, even if email service was an invalid method of service, it would not automatically invalidate all subsequent steps taken.

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