Curzon v Wolstenholme & Ors

In collective enfranchisement, an initial notice under section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that is not protected under section 97(1) does not bind a transferee of the freehold reversion. Once the transfer occurs, the original recipient ceases to be the statutory reversioner. The notice cannot remain dormant against that person and revive on a later re-transfer.

Section 13(11) is not an exhaustive code for every circumstance in which an initial notice ceases to have effect. Alternatively, an unprotected transfer falls within section 13(11)(c). The statutory scheme treats agreed terms as agreed subject to contract for its purposes. A party cannot generally reopen an agreed term; modification is available for a change of circumstances under section 24(4)(b)(i).

Long leaseholders served an initial notice seeking collective enfranchisement of a property. The freehold owner admitted their right but disputed the price and leaseback terms. After the price was agreed, the owner transferred the freehold to his wife without the notice being protected on the Land Register, and the freehold was later transferred back.

The First-tier Tribunal held that the notice remained effective against the original owner and that the agreed price could not be reconsidered. The Upper Tribunal dismissed his appeal. The Court of Appeal considered whether the notice revived on re-transfer and whether either party could reopen the agreed price. The first issue determined the appeal; the second was considered only if necessary.

Asplin J gave the leading judgment, with Moylan LJ and Gross LJ agreeing. The appeal was allowed on the Notice Issue.

1. An initial notice creates statutory rights which are not binding on a transferee of the freehold reversion unless protected in accordance with section 97(1) of the Leasehold Reform, Housing and Urban Development Act 1993. That was common ground in the appeal.
2. After an unprotected transfer, the original recipient ceases to be the statutory reversioner under section 9. He is no longer the person with whom the enfranchisement process can be conducted and cannot convey the freehold under a vesting order. A later re-transfer does not restore that status or reactivate the notice against him.
3. Section 13(11) is not intended comprehensively to identify every circumstance in which an initial notice ceases to have effect. If it were exhaustive, the circumstances would fall within section 13(11)(c), read with sections 19(2), 19(3) and 97(1). The contrary construction would create an impracticable dormant notice, procedural stalemate, delay before a fresh notice could be served, and adverse effects on other tenants and the new freeholder. Those consequences supported the approach in R (on the application of Edison First Power Ltd) v Secretary of State for the Environment [2003] 2 EGLR 133 and Scottish & Newcastle Plc v Raguz [2008] 1 WLR 2494.
4. The First-tier Tribunal therefore had no jurisdiction to determine the transfer terms after the notice had ceased to have effect, and the respondents’ application should have been dismissed.
5. The Disputed Price Issue did not arise. Had it been necessary to decide it, the court would have upheld the reasoning in City of Westminster v CH2006 Limited [2009] UKUT 174 (LC). Under sections 24(3) and 24(4), agreed and tribunal-determined terms acquire the same status for the statutory scheme before a binding contract is made. An agreed term cannot generally be reopened, although modification may be sought for a change of circumstances under section 24(4)(b)(i). Section 38(4) treats terms agreed subject to contract as agreed for the statutory scheme, without making them contractually binding. Burman v Mount Cook Land Ltd [2002] Ch 256 was not directly in point.

1. Court of Appeal (Civil Division) allowed the appeal on the Notice Issue and held that the First-tier Tribunal lacked jurisdiction. It would have dismissed the appeal on the Disputed Price Issue, but that issue did not arise. [2017] EWCA Civ 1098
2. Upper Tribunal (Lands Chamber) dismissed the appeal from the First-tier Tribunal on 7 April 2015.
3. First-tier Tribunal (Property Chamber) on 15 May 2014 held that the initial notice remained effective against the original freeholder and that the agreed purchase price could not be reconsidered.