Triplerose Ltd v Ninety Broomfield Road

Under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002, each exercise of the right to manage must relate to one set of premises. Those premises must comprise a single self-contained building or qualifying part of a building.

An RTM company cannot acquire the right to manage more than one such building or part. This construction preserves the statutory membership rights of the qualifying tenants and landlords connected with the particular premises and enables the prescribed decision-making and claims machinery to operate coherently.

Three landlords appealed from a decision of the Upper Tribunal (Lands Chamber), [2013] UKUT 0606 (LC). The Upper Tribunal had decided that a single right-to-manage company could acquire management rights over multiple sets of premises, provided that each set independently satisfied the qualifying conditions.

The properties comprised, respectively, two detached blocks, two blocks with communal facilities, and seven blocks on a residential estate. Separate claim notices had been served for the individual blocks, but each respondent company sought to manage several blocks.

The central issue was whether Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 permits one RTM company to acquire the right to manage more than one self-contained building or qualifying part of a building.

1. The appeals were allowed unanimously. The Upper Tribunal had erred in deciding that a single RTM company could acquire the right to manage multiple sets of premises. Gloster LJ gave the judgment, with which Patten LJ and Sir David Keene agreed.

2. Sections 71 and 72 of the Commonhold and Leasehold Reform Act 2002 confine each set of qualifying premises to a single self-contained building, meaning a structurally detached building, or a qualifying self-contained part of a building. The expressions “premises”, “the premises” and “any premises” bear that same meaning throughout the relevant statutory machinery unless the Act expressly provides otherwise.

3. Sections 73 and 74, read with the prescribed model articles, establish an RTM company in relation to the particular premises. Only the qualifying tenants and, after acquisition, the relevant landlords connected with those premises are entitled to membership. The legislation creates no classes of membership, voting protections or ring-fencing arrangements by which members associated with different premises could protect their respective interests.

4. The participation, claim and voting machinery in sections 78–80 likewise operates by reference to the tenants, membership threshold and identification of one set of premises. Allowing a company to manage geographically distinct buildings, or even several blocks on one estate, would undermine that machinery and permit members associated with a larger block to dominate decisions affecting a smaller block.

5. A purposive construction could not justify a composite right to manage contrary to the statutory scheme. Separate RTM companies for blocks on the same estate may coordinate management by delegating functions to one company or appointing a common agent. The absence of composite acquisition therefore does not prevent coordinated estate management.

6. If ambiguity had existed, the consultation paper and Parliamentary debates confirmed that the legislation was designed to operate on a block-by-block basis. The analogous wording of section 3 of the Leasehold Reform, Housing and Urban Development Act 1993 provided further support.

7. Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] EWCA 1372 did not determine the present issue. That appeal concerned the meaning of appurtenant property, and the legitimacy of one company managing two blocks had not been argued or addressed.

1. Court of Appeal (Civil Division): In [2015] EWCA Civ 282, unanimously allowed the landlords’ appeals and held that one RTM company cannot acquire the right to manage more than one self-contained building or qualifying part of a building.

2. Upper Tribunal (Lands Chamber): In [2013] UKUT 0606 (LC), allowed the appeals concerning Ninety Broomfield Road and Garner Court and remitted Holybrook to the First-tier Tribunal. It held that one RTM company could manage multiple qualifying sets of premises.

3. Leasehold Valuation Tribunal: In the Ninety Broomfield Road and Garner Court proceedings, held that an RTM company could not acquire the management of more than one set of premises. Holybrook was determined by the Upper Tribunal in its first-instance capacity.