Triplerose Ltd v Ninety Broomfield Road

The Court of Appeal held that the right to manage under Chapter 1 of the Commonhold and Leasehold Reform Act 2002 applies to a single set of "premises" as defined in section 72, meaning a single self-contained building or part of a building. A right to manage company (an RTM company) is an RTM company only in relation to specific premises and its membership and model articles must relate to that single set of premises. The court concluded that the statutory scheme, read together with the model articles in the Regulations, does not permit one RTM company to acquire the right to manage multiple, separate self-contained buildings or geographically distinct premises.

Accordingly the Court allowed the appeal from the Upper Tribunal, which had held that an RTM company could acquire management of more than one set of premises. The Court relied on the text of sections 71–79, 84, 96 and 105, the model articles (Regulation 3 and articles 1, 4, 6, 26–27 et seq.), and practical considerations about membership and voting, to conclude the Upper Tribunal was wrong.

Background and parties.

• The appeals were brought by the freehold owners against an Upper Tribunal decision ([2013] UKUT 0606 (LC)) which had held that a single RTM company could acquire the right to manage more than one set of premises. Three appeals were considered together: Triplerose Ltd (owner of 90 Broomfield Road), Freehold Managers (Nominees) Ltd (Garner Court) and Proxima GR Properties Ltd (Holybrook estate). Each respondent RTM company had served separate claim notices in respect of multiple self-contained blocks or sought an estate-wide right to manage.

Nature of the remedy sought. The respondents sought declarations from the appropriate tribunal that their RTM companies were entitled to acquire the right to manage the relevant premises; the landlords served counter-notices denying entitlement. The Upper Tribunal allowed the appeals in part and remitted one case for determination.

Issues framed.

• Whether the statutory concept of "premises" in section 72 and the wider Chapter 1 framework permits an RTM company to acquire and exercise the right to manage more than one self-contained building or part of a building (including geographically separate premises).
• Whether the model articles and the membership and voting rules are consistent with a multi-premises RTM company.
• Whether extrinsic material (consultation paper and Parliamentary debates) supported either construction.

Court's reasoning.

• The court analysed Chapter 1 of the Act and concluded that the acquisition and exercise of the right to manage are in relation to "premises" which in section 72(1)(a) are expressed as "a self-contained building or part of a building". That language points to a single set of premises for each exercise of the right.
• Section 74 limits membership of an RTM company to qualifying tenants of the flats "contained in the premises" and relevant landlords. The court held that the statutory scheme contemplates membership tied to that one set of premises and does not provide for separate classes of members for different premises within a single RTM company.
• The model articles (Regulation 3 and articles such as 1, 4, 6, 26–27) describe and treat "the Premises" in the singular and prescribe membership procedures which make sense only if the company relates to a single set of premises. Allowing one company to cover multiple disparate premises would undermine member voting, appointment of directors and the statutory machinery for notice and claims.
• The court accepted that, if leaseholders of different blocks wished to manage together, they could achieve practical cooperation by agreement or delegation between separate RTM companies or by appointing common agents; but that contractual or corporate arrangements are a different matter from statutory entitlement to acquire the right to manage multiple premises in one RTM company.
• The court considered the consultation paper and Parliamentary debates: if any ambiguity existed they would support the interpretation that the right was intended on a block-by-block basis and that earlier attempts to enact an estate-wide right were considered but rejected or left for later reform.

Conclusion. The Court allowed the appeal: an RTM company cannot acquire the right to manage more than one self-contained building or part of a building under the 2002 Act; the Upper Tribunal's contrary decision was wrong.

This was an appeal. The Court of Appeal allowed the appeal. The court held that under Chapter 1 of the Commonhold and Leasehold Reform Act 2002 "premises" in section 72 and related provisions denotes a single self-contained building or self-contained part of a building, and that an RTM company is an RTM company only in relation to that single set of premises. The model articles and the statutory scheme do not permit one RTM company to acquire the right to manage multiple separate self-contained buildings or geographically distinct premises; the Upper Tribunal decision to the contrary was therefore wrong.

The matters came from decisions of the Leasehold Valuation Tribunal/First-tier Tribunal and were determined by the Upper Tribunal (Lands Chamber) which decided [2013] UKUT 0606 (LC) that an RTM company could manage more than one set of premises. The landlords were granted permission to appeal to the Court of Appeal, which in this judgment allowed the appeal ([2015] EWCA Civ 282).