Penman v Upavon Enterprises Ltd

Under section 24 of the Leasehold Reform, Housing and Urban Development Act 1993, a court may make a vesting order only after all terms of acquisition have been agreed or determined by a leasehold valuation tribunal. A tribunal decision may be final as to matters decided without being final as to an issue which was properly referred but left unresolved.

The tribunal may determine outstanding issues sequentially. Where it does so, the appropriate period for seeking a vesting order begins when its last necessary decision becomes final, unless it fixes another period when making its determination. Waiver or estoppel concerning an outstanding term should first be raised before the tribunal.

The tenants of Belle Court served a collective enfranchisement notice under the Leasehold Reform, Housing and Urban Development Act 1993 and appointed the claimant as nominee purchaser. The landlord required the conveyance to contain an indemnity covenant. The leasehold valuation tribunal determined the purchase price but did not determine the disputed indemnity term.

District Judge Sonnex subsequently made a vesting order. On appeal, His Honour Judge Bishop dismissed the application because all terms of acquisition had not been agreed or determined. The nominee purchaser appealed, contending that the tribunal's decision was final, that the tribunal could not revisit the proceedings, and that the landlord was estopped from pursuing the indemnity. The central issue was whether the County Court had jurisdiction to make a vesting order while the referred indemnity issue remained undetermined.

1. Appeal dismissed unanimously, with the order varied. Lady Justice Arden gave the leading judgment, with which Lord Justice Tuckey agreed. The County Court lacked jurisdiction to make a vesting order because an acquisition term properly referred to the leasehold valuation tribunal remained neither agreed nor determined.

2. Section 24(3) of the Leasehold Reform, Housing and Urban Development Act 1993 makes agreement or determination of all terms of acquisition a condition precedent to every order available under section 24(4). The disputed indemnity was a term of acquisition because it was a provision proposed for inclusion in the conveyance within section 24(8)(e).

3. Section 24(6) must be construed consistently with section 24(3). Where only some terms are referred to the tribunal, the reference to “any” terms means all terms which the tribunal has to determine. Where several referred issues are decided sequentially, the relevant “decision” under section 24(6)(b)(i) is the last decision needed to complete the tribunal's task. The appropriate period therefore does not begin merely because the tribunal has decided one of several referred issues.

4. A tribunal may decide issues in stages. It may issue provisional rulings followed by one final determination, or it may use section 24(6)(b)(ii) to fix another period when making its determination. Here the tribunal was not being asked to review or alter its decision on price. It could determine for the first time the indemnity issue already placed before it but left undecided. As Lord Justice Tuckey explained, a decision may be final as to what it decided, but it cannot be final as to what it did not decide.

5. Waiver and estoppel could be raised before the tribunal, but the Court of Appeal could express no view because it had no evidence about the earlier hearing. To protect the tenants if the tribunal concluded that the landlord could no longer pursue the indemnity, the existing County Court application was left on the file and stayed without a return date. If necessary, it could be restored and a vesting order made without an indemnity clause. The court also indicated that a protective application may prudently be issued whenever commencement of the statutory period is uncertain.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously, but the order was varied so that the existing County Court application remained on the file and was stayed without a return date.
2. High Wycombe County Court, His Honour Judge Bishop: Allowed the landlord's appeal and dismissed the application for a vesting order because an acquisition term remained undetermined.
3. High Wycombe County Court, District Judge Sonnex: Made a vesting order in favour of the nominee purchaser under section 24 of the Leasehold Reform, Housing and Urban Development Act 1993.