Sinclair Gardens Investments (Kensington)Limited LRX/8/2006
[1]The Application to the Leasehold Valuation Tribunal (“LVT”) was made under s. 91(1)(d) of the Leasehold Reform, Housing and Urban Development Act 1993 for the determination of the amount of costs payable by the tenant of the above-named premises under s.60(1) of the Act, upon her withdrawing a Notice of Claim made under s.42 of the Act for an extended lease of the premises.[2]The Notice of Claim had been served by her predecessor in title on 10th February 2005, and the claim had been assigned to her by deed dated the same day. The lease was assigned to her only subsequently.[3]The landlord served a counter-notice under s.45 of the Act stating in accordance with s.45(2)(b) that the landlord did not admit that the tenant had the right to an extended lease on that date, giving as the reason that the Notice of Claim was assigned prior to the vesting of the legal estate.[4]The Tenant withdrew the Notice of Claim by letter dated 6th June 2005, and by virtue of s.52(3) of the Act she became liable under s.60 for costs incurred by the landlord down to that date.[5]Such costs are “the reasonable costs of and incidental to [inter alia] (b) any valuation of the tenant’s flat obtained for the purpose of fixing the premium payable in connection with the grant of a new lease.”[6]The LVT disallowed the cost of obtaining a valuation and of the valuation itself incurred between the service of the Notice of Claim and its withdrawal., and it is in respect of that disallowance that the landlord seeks permission to appeal.[7]The LVT referred to s.33(2) of the Act as defining the test as to costs in respect of professional services which may be regarded as reasonable. That was a mistake for s.60(2) but the test is the same.[8]They pointed out that s.45(3) requiring the setting out of counter-proposals as to the terms upon which any extended lease should be granted applies only if the counter- notice admits the entitlement. If a counter-notice containing a statement under s.45(2)(b) is served, an application may be made under s.46(1) for a declaration that the tenant had no such right as had been claimed, and if such application is dismissed then by s.46(4) an order as to service of a further counter-notice to satisfy s.45(3) will be made.[9]For these reasons the LVT concluded that the landlord should not reasonably expect to incur any valuation costs at counter-notice stage, that is when the counter-notice is given under s.45(2)(b).[10]This conclusion is in my judgement clearly within the ambit of their judgement as to what would be reasonable for a landlord to incur if he had been personally liable for such costs, and indeed accords with my own judgement of reasonable conduct. Dated 16 February 2006 His Honour Michael Rich QC