Burman v Mount Cook Land Ltd

A statutory notice must satisfy the requirements imposed by the particular statutory scheme. The court must first identify those requirements and then decide whether the notice, properly construed, complies with them.

Under section 45(2)(a) and (3) of the Leasehold Reform, Housing and Urban Development Act 1993, a landlord admitting a tenant’s right to a new lease must state that admission expressly or by language which, properly construed, contains it. The notice must also identify every proposal accepted or rejected and give a counter-proposal for each rejected proposal. A reasonable recipient’s ability to infer the landlord’s intention cannot replace mandatory statutory statements.

The tenant served notice under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 claiming a new lease of her flat. The landlord’s purported counter-notice rejected the proposed premium and offered a higher figure. It did not state whether the tenant’s right was admitted, nor whether her other lease proposals were accepted.

His Honour Judge Knight QC dismissed the tenant’s section 49 claim and declared the counter-notice valid. He considered that a reasonable tenant would infer an admission from the premium counter-proposal and the absence of reasons disputing entitlement. The tenant appealed. The central issue was whether such an inference satisfied the mandatory requirements of section 45(2)(a) and (3).

1. Appeal allowed unanimously. Chadwick LJ, with whom Sir Murray Stuart-Smith agreed, held that the purported counter-notice did not comply with section 45 of the Leasehold Reform, Housing and Urban Development Act 1993. The tenant was entitled to a new lease under section 49 on the terms proposed in her notice.

2. The validity inquiry begins with the statute, rather than with the recipient’s understanding of the notice. The court must identify what the statutory provision requires and then determine whether the notice, properly construed, meets those requirements. The reasonable-recipient approach associated with Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 may address an evident error where the governing provision concerns the meaning to be communicated. It cannot dispense with information or a form which the statute makes indispensable.

3. Section 45(2) and (3) uses mandatory and specific language because the counter-notice controls the statutory timetable and identifies the procedural route which follows. A notice relying on section 45(2)(a) must state that the landlord admits the tenant’s right as at the relevant date. Read with section 45(3), it must also state which tenant proposals are accepted and rejected, and specify a counter-proposal for every rejected proposal. These requirements ensure that entitlement and the matters remaining in dispute are defined without uncertainty.

4. The notice did not contain the required admission or state whether the non-premium proposals were accepted. Although an admission may arise from the true construction of a notice without formulaic wording, no permissible construction supplied the missing statements here. Rejecting the premium was consistent with an intended section 45(2)(a) response, but partial provision of information required by a valid notice could not cure the omissions. Nor did the notice become valid under section 45(2)(a) merely because it was invalid under paragraphs (b) and (c).

5. The order below was set aside. A new lease was ordered under section 49 on the terms in the tenant’s notice. The landlord was ordered to pay the costs of the appeal and the proceedings below, and permission to appeal to the House of Lords was refused.

1. Court of Appeal: The tenant’s appeal was allowed unanimously. The declaration that the counter-notice was valid was displaced, and a new lease was ordered under section 49 on the tenant’s proposed terms.

2. Central London County Court: His Honour Judge Knight QC dismissed the tenant’s claim and declared the landlord’s notice to be a valid and effective counter-notice under section 45(2)(a) of the Leasehold Reform, Housing and Urban Development Act 1993.