Kay-Green & Ors v Twinsectra Ltd

Under Part I of the Landlord and Tenant Act 1987, a valid purchase notice imposes a duty on the new landlord to give effect to the tenants’ right to acquire the relevant reversion.

“Premises” are ordinarily assessed building by building. Registered title is irrelevant. A purchase notice must be written, timely and sufficiently clear about the estate or interest sought. Other content requirements may be directory, so defects such as including extra property or failing to use precise statutory wording will not invalidate the notice where the new landlord has adequate notice of the claim.

The applicants were qualifying tenants of Tudor Court and Tudor House. Their original landlord had sold the freeholds without serving the notices required by Part I of the Landlord and Tenant Act 1987. The applicants served a section 11 notice and then a purchase notice on Twinsectra, the new landlord.

HH Judge Hull QC dismissed the claim, holding that the applicants lacked the requisite majority because the transaction also involved Parr Court and that the purchase notice was invalid. On appeal, the applicants challenged the decision concerning Tudor House and buildings 1 and 4 of Tudor Court. The issues were whether a purchase notice imposed a duty on the new landlord, how the relevant premises and majority were identified, and whether defects in the notice were fatal.

Appeal allowed unanimously. Aldous LJ gave the leading judgment. May LJ agreed with both judgments. Staughton LJ concurred and added observations on statutory interpretation. Declarations were granted for the tenants of Tudor House and buildings 1 and 4 of Tudor Court. The question whether three houses in building 1 formed part of the property to be acquired was left undecided.

1. Duty to comply. A valid purchase notice under section 12 of the Landlord and Tenant Act 1987 required the new landlord to dispose of the estate or interest acquired in the original disposal. That duty followed from the statutory purpose, the language of section 12(1) and (4), and the fact that sections 12 to 17 would otherwise have no effective purpose. The court treated the approach in Belvedere Court Management Ltd v Frogmore Developments Ltd [1996] 1 All ER 312 and the result in Denetower Ltd v Toop [1991] 1 WLR 945 as consistent with that conclusion.
2. Relevant premises. “Premises” under section 1(2) ordinarily meant the whole or part of one building. Separate buildings were therefore considered separately. The fact that buildings were included in the same registered title did not alter the analysis. Parr Court was consequently irrelevant when calculating the requisite majority for Tudor House and the relevant Tudor Court buildings.
3. Validity of the notice. The imperative requirements were that the purchase notice be in writing, served on the new landlord in time, and give adequate notice of the tenants’ desire to acquire the relevant estate or interest. Applying the distinction discussed in Howard v Secretary of State for the Environment [1975] 1 QB 235 and Howard v Boddington [1877] 2 PD 203, the requirements in section 12(3)(a) were directory. The inclusion of additional property did not invalidate the notice because it clearly identified the buildings sought and excluded Parr Court. Nor was it necessary to reproduce the statutory wording concerning modifications to the original terms.
4. Construction of the notice. The omission of flat 7 from the heading was not fatal. Read as a whole and with the accompanying letter, the notice clearly sought the whole freehold interest in Tudor House. Staughton LJ also noted that the notice’s possible inclusion of buildings 2 and 3 was a directory defect which did not defeat the notice as a whole.

Staughton LJ contrasted the case with Inland Revenue Commissioners v Ayrshire Employers Mutual Insurance Association Ltd [1946] 1 All ER 637, where the statutory language could not achieve its apparent purpose. The appellants were awarded the costs of the appeal and half their costs below. Leave to appeal to the House of Lords was refused.

• Staines County Court: HH Judge Hull QC dismissed the applicants’ claim for declarations, holding that the requisite majority had not served the notice and that the purchase notice was invalid.
• Court of Appeal (Civil Division): The appeal was allowed for Tudor House and buildings 1 and 4 of Tudor Court. Appropriate declarations were granted, subject to the unresolved issue concerning three houses in building 1.