Tibber v Buckley and another

Collective enfranchisement – Leasehold Reform, Housing and Urban Development Act 1993 – Leaseback – Respondents claiming right to acquire freehold of property under Part I of 1993 Act – Appellant freeholder serving counternotice claiming leaseback of top flat in the property – Appellant later seeking to extend leaseback to include roof and airspace of building plus common parts and front garden – Whether extent of demise to be confined to premises specified in counternotice – Appeal dismissed The appellant owned the freehold of a terraced property containing three flats arranged over five floors. The lower two flats were let on long leases to the first and second respondents respectively, while the third flat, comprising the original top floor of the building and the converted loft space, was retained by the appellant, who let it out on assured shorthold tenancies. In 2010, the respondents gave an initial notice to the appellant of their claim to acquire the freehold of the property pursuant to the collective enfranchisement provisions in Part I of the Leasehold Reform, Housing and Urban Development Act 1993. By her counternotice, the appellant admitted the respondents’ right to acquire the freehold but disputed the proposed purchase price. She also proposed to take a leaseback of the top flat, pursuant to Schedule 9 to the 1993 Act, and specified the extent of the proposed demise as the top two floors of the building, including all roofs and windows therein, and the staircase leading to the top flat from the floor below. She further claimed the right to undertake future development of the upper flat by enlarging or adding to the dormer windows and/or converting the property into two separate units, with any consequential alteration to the roof line. On a subsequent application to the leasehold valuation tribunal (LVT) to determine the terms of the leaseback, the appellant sought to extend the leaseback demise to include the common parts of all structures of the building that were not included in the respondents’ leases, including the roof of the building and the airspace, a mezzanine floor used for storage, plus all other landings and staircases, and the front garden. The LVT held that the extent of the leaseback was confined to the top flat itself and that the terms of the leaseback should be the standard terms provided for in Part IV of Schedule 9 to the 1993 Act, since the appellant’s proposed departures from those terms were not reasonable or practical. It accordingly held that the demise would be of the existing structure of the top flat, with rights over the common parts and a term forbidding alterations to the flat without the consent of the landlord. The appellant appealed.Held: The appeal was dismissed. A counternotice was required to specify any additional leaseback proposals by the reversioner: see section 21(3)(a)(ii). The statutory language was mandatory in that regard. The 1993 Act made no provision for the amendment of a counternotice and the reversioner therefore had only one opportunity to state her requirements. The leaseback proposals that the appellant had specified in her counternotice were limited in scope to those there specified, namely the top flat itself, together with the roofs and windows, and the staircase leading to it. The appellant was bound by the terms specified in her counternotice and was not entitled to rely on subsequent departures sought to be made on her behalf before the LVT. It followed that the LVT should not have considered the proposed departures from the standard provisions that were claimed after the counternotice had been served: Cawthorne v Hamdan [2007] EWCA Civ 6; [2007] Ch 187; [2007] 1 EGLR 67; [2007] 11 EG 162 applied. The appellant should have specified her leaseback proposals clearly and in detail in the counternotice and her attempts to rely on departures from the standard terms during the hearing were too late. The LVT had none the less chosen to consider all the departures sought by the appellant and had decided that those departures from the standard terms were not reasonable or practical in the circumstances. In that respect, the LVT had erred in its approach. The appellant was, in principle, bound by the terms of what had been specified in the counternotice and her claim was limited to the proposals there set out. Benedict Sefi (instructed by Derrick Bridges & Co, of Barnet) appeared for the appellant; Nicola Muir (instructed by Bolt Burden Solicitors) appeared for the respondents. Sally Dobson, barrister