ASSETHOLD LIMITED v 63 HOLMES ROAD (LONDON) RTM COMPANY LIMITED This decision is supplemental to my decision of 20 July ([2020] UKUT 0228 (LC)). The appellant has now made the submissions it would have made had it been given the opportunity to do so by the FTT. Mr Bates takes two points on its behalf. The first point is that the notice of invitation to participate served [2020] UKUT 228 (LC)
UPPER TRIBUNAL
LANDS CHAMBER
[2020] UKUT 228 (LC)Case No LRX/110/2019
Between
ASSETHOLD LIMITEDApplicant63 HOLMES ROAD (LONDON) RTM COMPANY LIMITED This decision is supplemental to my decision of 20 July ([2020] UKUT 0228 (LC)). The appellant has now made the submissions it would have made had it been given the opportunity to do so by the FTT. Mr Bates takes two points on its behalf. The first point is that the notice of invitation to participate servedRespondent
[1]UPPER TRIBUNAL (LANDS CHAMBER) UTLC Case Number: LRX/110/2019 TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007 IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE FIRST TIER TRIBUNAL (PROPERTY CHAMBER) Between: ASSETHOLD LIMITED Appellant and 63 HOLMES ROAD (LONDON) RTM COMPANY LIMITED Respondent This decision is supplemental to my decision of 20 July ([2020] UKUT 0228 (LC)). The appellant has now made the submissions it would have made had it been given the opportunity to do so by the FTT. Mr Bates takes two points on its behalf. The first point is that the notice of invitation to participate served[2]on the leaseholder of Flat 6, Gil Toledano, who was the only leaseholder who was not already a member of the RTM company, was defective. The suggested defect is that the notice was not signed by an authorised member or officer of the RTM company, as the printed form of notice contained in the Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010 provides. Instead the notice was signed with the printed name “Prime Management (PS) Limited”. Mr Bates submitted that the form of signature did not comply with section 44, Companies Act 2006, which requires that a company signing a document must do so by affixing its common seal, by having two authorised signatures, or the signature of a director attested by a witness. I agree that the notice was not properly signed and did not comply with the requirement of section 78(3), 2002 Act. Mr Bates argued that, as a result of that defect, the subsequent service of the Notice of Claim was invalid. I disagree. In Elim Court RTM Co Ltd v Avon Freeholds Ltd [2017] EWCA Civ 89, the Court of Appeal considered the consequences of a failure to comply with the statutory procedure for obtaining the right to manage. At [51] Lewison LJ explained the general approach (the references in brackets are to the earlier decision of the Court of Appeal in Natt v Osman [2014] EWCA Civ 1520 from which the general approach was derived): “The outcome in such cases does not depend on the particular circumstances of the actual parties, such as the state of mind or knowledge of the recipient or the actual prejudice caused by non- compliance on the particular facts of the case: see [32]. The intention of the legislature as to the consequences of non- compliance with the statutory procedures (where not expressly stated in the statute) is to be ascertained in the light of the statutory scheme as a whole: see [33]. Where the notice or the information which is missing from it is of critical importance in the context of the scheme the non-compliance with the statute will generally result in the invalidity of the notice. Where, on the other hand the information missing from the statutory notice is of secondary[3]importance or merely ancillary, the notice may be held to have been valid: see [34]. One useful pointer is whether the information required is particularised in the statute as opposed to being required by general provisions of the statute. In the latter case the information is also likely to be viewed as of secondary importance. Another is whether the information is required by the statute itself or by subordinate legislation. In the latter case the information is likely to be viewed as of secondary importance. In this connection it must not be forgotten that while the substantive provisions of a bill may be debated clause by clause, a draft statutory instrument is not subject to any detailed Parliamentary scrutiny. It is either accepted or rejected as a whole. A third is whether the server of the notice may immediately serve another one if the impugned notice is invalid. If he can, that is a pointer towards invalidity.” If I am wrong about the signature issue, I would have no hesitation in saying that the consequences of non-compliance are not fatal to the validity of the notice if the claim notice is signed by someone who is actually authorised by the RTM company to sign it. As I have said, there is no requirement for signature in the Act itself; nor is there any such explicit requirement in the Forms Regulation. I do not accept that if there is an inferential requirement contained within the rubric of the prescribed form Parliament must have intended a failure to comply precisely with that requirement would invalidate the notice.” One of the suggested defects in the notice in issue in Elim Court was exactly the defect Mr Bates relies on in this case, a failure properly to sign a notice inviting participation. The Court of Appeal held that there had been no defect, but at [68] Lewison LJ considered the validity of the notice in the event he was wrong on that conclusion. He said this: “If I am wrong about the signature issue, I would have no hesitation in saying that the consequences of non-compliance are not fatal to the validity of the notice if the claim notice is signed by someone who is actually authorised by the RTM company to sign it. As I have said, there is no requirement for signature in the Act itself; nor is there any such explicit requirement in the Forms Regulation. I do not accept that if[4]there is an inferential requirement contained within the rubric of the prescribed form Parliament must have intended a failure to comply precisely with that requirement would invalidate the notice.” The same reasoning applied in this case leads to the conclusion that the defective mode of signature of the notice did not invalidate it or render the whole procedure for the acquisition of the right to manage abortive. Mr Bates’ second point was that there was no proof of service of the notice inviting participation. I dismiss that objection because the RTM company’s statement of case stated in terms that the notice had been served on flat 6 and produced two versions of the document, one addressed to the leaseholder at the flat itself and one at an address in Israel. The statement of case was signed by Mr Wiles and dated 12 July 2019. Mr Wiles also signed a witness statement on the same day in which he explained that where the RTM company was aware of an additional address for any leaseholder the copy of the claim notice required to be served was posted both to the address of their flat and to their additional address. Although Mr Wiles does not say in terms that the same procedure was followed in the case of the notice of invitation to participate served on the leaseholder of flat 6, the fact that two copies of the notice were exhibited, each addressed to a different address, invites the obvious inference that it was. I am left in no doubt that the procedural unfairness which infected the FTT’s approach to the determination of the application for the right to manage did not result in any substantive unfairness. Neither of the points which the appellant was prevented from taking has proved to be meritorious. The outcome of the application would undoubtedly have been the same had the FTT followed a fair procedure and having established that, there is no reason to interfere with its decision. I therefore dismiss the appeal. The appellant asked that an order be made for the reimbursement of the tribunal fees which it had incurred in bringing the appeal. As the appeal has been unsuccessful I dismiss that application.[5]Martin Rodger QC Deputy Chamber President 22 September 2020