Sinclair Gardens Investments (Kensington) Ltd v Poets Chase Freehold Co Ltd

Collective enfranchisement – Acquisition of freehold by tenants – Section 13 notice – Original notice not complying with section 13(3) – Whether tenants prohibited from serving further notice with 12 months of original notice – Whether estopped from challenging efficacy of own notice – Landlord’s appeal dismissed The claimant company was formed by qualifying tenants of a block of flats to exercise the right to collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993. In December 2005, the tenants served a notice on the defendant landlord, claiming to exercise the right to purchase the freehold under those provisions. The defendant served a section 21 counter-notice, in which it asserted that the tenants’ notice was invalid because it failed to comply with the requirements of section 13(3). In April 2006, the tenants wrote to the defendant, accepting that their notice was invalid. They then purported to serve a fresh section 13 notice. By a further counter-notice, the defendant asserted that the second notice was also invalid. It relied upon the provisions of section 13(8) and (9), prohibiting the service of any further notice within 12 months of the withdrawal or the deemed withdrawal of a previous notice in respect of the same premises.The claimant brought proceedings for declaratory relief.It contended that the original invalid notice did not qualify as a section 13 notice and that the tenants had been entitled to serve a valid section 13 notice in April 2006. The defendant contended that the original notice had had sufficient validity and that a withdrawal of it under section 28, or a deemed withdrawal under section 29(1), would trigger the prohibition on further notices under section 13(8) and (9). It further submitted that the claimant and the tenants were estopped from challenging the efficacy of their own notice. The judge rejected both of those arguments and found in favour of the claimant. He held that the December 2005 notice was invalid and was not saved by para 15 of Schedule 3 to the 1993 Act regarding inaccuracies and misdescriptions, or by application of the “reasonable recipient” test in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 1 EGLR 57; [1997] 24 EG 122; [1997] 25 EG 138. The defendant appealed.Held: The appeal was dismissed. (1) The normal position was that if a mandatory contractual or statutory provision required a party to give a notice in a particular form, in order to achieve a particular result identified in that contract or statute, a purported notice that did not comply with that provision had no legal effect. If the tenants’ notice were not saved by a provision such as para 13 of Schedule 3 to the 1993 Act or by the Mannai test, it would be invalid unless, on examination of Chapter I of Part I, the normal effect of such a defective notice was reversed by a statutory provision: Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277; [2002] 1 EGLR 55; [2002] 02 EG 104 and Burman v Mount Cook Land Ltd [2001] EWCA Civ 1712; [2002] 1 EGLR 61; [2002] 06 EG 156 applied. There was no such provision. Nothing in the scheme of Chapter I of Part I required that a purported notice under section 13, which was ineffective for failure to comply with section 13(3), none the less had some statutory consequences such that it was to be treated as a notice “under section 13”, a “notice in accordance with section 13” or a “notice which continues in force” within the meaning of Part I.Since the tenants’ December 2005 notice had not complied with section 13(3), it had not been a valid notice under section 13. Once that was drawn to the tenants’ attention, they were entitled to serve a valid section 13 notice in April 2006: 9 Cornwall Crescent London Ltd v Kensington and Chelsea Royal London Borough Council [2005] EWCA Civ 324; [2005] 2 EGLR 131 considered. Given that the December 2005 notice was ineffective and had no force, it did not have to be withdrawn under section 28, and the claimant’s failure to apply to the court within two months of the purported counter-notice did not result in a deemed withdrawal under section 29. Accordingly, there was no scope for the application of the prohibition on further notices under section 13(9).(2) The tenants were not estopped from asserting the invalidity of the December 2005 notice. Even if the notice contained a representation that it was a valid section 13 notice, the defendant had not relied upon that representation. It had done the opposite by contending, in its counter-notice, that the notice was invalid. Moreover, even assuming that the defendant would have become liable for a fee for its solicitor’s work in considering the December 2005 notice, any element of detriment involved was not sufficiently substantial to make it unjust or inequitable for the tenants to highlight the non-compliance of the notice with section 13(3): Gillett v Holt [2001] Ch 210 applied; Bremen v Varden [1978] 2 Lloyd’s Rep 109 and John Lyon School v Mayhew [1997] 1 EGLR 88; [1997] 17 EG 163 distinguished.Lana Wood (instructed by Parrott & Coales, of Aylesbury) appeared for the claimant; Timothy Fancourt QC (instructed by Paul Chevalier & Co) appeared for the defendant.Sally Dobson, barrister