Willingale v Global Grange Ltd

Section 25(1) of the Leasehold Reform, Housing and Urban Development Act 1993 does not give the court a general or residual discretion to alter the terms proposed in an initial notice where the reversioner fails to serve a counter notice. Subject to section 25(3), the court must determine the acquisition terms in accordance with those proposals. The court may correct inaccuracies or misdescriptions under paragraph 15 of Schedule 4, but cannot substitute different interests, rights or prices. Cadogan v Morris provides protection against deliberately unrealistic proposals.

The tenants of flats served an initial notice under section 13 of the Leasehold Reform, Housing and Urban Development Act 1993, seeking collective enfranchisement at a specified price. The freeholder failed to serve a counter notice within the period required by section 21.

On the tenants’ application under section 25, the Central London County Court held that the freeholder could not challenge the proposed terms or price. The freeholder appealed, arguing that section 25(1) permitted the court to determine different terms.

1. Appeal dismissed with costs.
2. Section 25(1) requires the court to determine the terms “in accordance with the proposals contained in the initial notice”. It cannot alter the specified interests and rights or substitute a different purchase price. It may decline to make an order if the requirements in section 25(3) are not satisfied.
3. The word “may” confers a power to make an order, subject to the statutory conditions. It does not confer a general or residual discretion to relieve a reversioner from failure to comply with the counter-notice timetable.
4. A residual discretion would deprive the counter-notice provisions and the section 24 leasehold valuation tribunal procedure of practical purpose. Section 91(1) does not provide a basis for referring valuation to a tribunal where the court is acting under section 25.
5. Cadogan v Morris, [1999] 1 EGLR 59, provides a safeguard against deliberately unrealistic proposals. The ministerial statement relied on by the freeholder was neutral and added nothing material to the construction of section 25.
6. Lord Justice Waller agreed with Lord Justice May and emphasised that the absence of a valuation jurisdiction for the tribunal under section 25 supported determining the acquisition at the price proposed in the initial notice.

• Court of Appeal (Civil Division): Appeal dismissed with costs.
• Central London County Court: His Honour Judge Cooke held that the initial notice was valid and that the freeholder could not challenge the proposed terms.