Assethold Limited v 429 New Cross Road RTM Company Limited

In the statutory scheme for acquiring the right to manage, notices must be served in accordance with the address provisions in section 111(4) of the Commonhold and Leasehold Reform Act 2002. An address notified for future communications concerning a claim notice can cover a notice withdrawing that claim. The notification need not identify every type of communication in detail.

Where a statutory procedure confers a property or similar right on a private person, compliance with notice requirements is ordinarily assessed strictly. The court determines the consequence of non-compliance by interpreting the statutory scheme. Actual knowledge, absence of prejudice and the recipient’s understanding do not generally cure invalid service.

The respondent RTM company had served a claim notice on the appellant freeholder and received a counter-notice specifying an address to which future communications relating to the notice should be sent. After the First-tier Tribunal rejected the first claim, the RTM company purported to withdraw that claim and serve a second claim notice, but sent the documents to the appellant’s registered office rather than the notified address.

The FTT held that the withdrawal was effective and that the second claim could proceed. The appeal concerned whether the counter-notice had notified a different address under section 111(4) of the Commonhold and Leasehold Reform Act 2002, and the consequences of serving the withdrawal notice elsewhere.

1. Appeal allowed. The FTT’s decision was set aside. The RTM company was not entitled to acquire the right to manage.
2. The counter-notice’s statement that future communications relating to the subject matter of the claim notice should be sent to the solicitors’ address was an effective notification under section 111(4) of the Commonhold and Leasehold Reform Act 2002. It applied to a notice withdrawing the first claim notice. No express reference to withdrawal notices was required.
3. The FTT had misconstrued Gateway Property Holdings Ltd v Ross Wharf RTM Co Ltd [2016] UKUT 97 (LC). Gateway concerned the meaning and scope of the particular notification given in that case. It did not establish that section 111(4) required a detailed specification of every kind of communication covered by the notification.
4. The consequences of statutory non-compliance were governed by the approach in Natt v Osman [2014] EWCA Civ 1520. The right-to-manage procedure concerned the acquisition of a property or similar statutory right, so the notice either complied with the statutory requirements or it did not. Substantial compliance, the recipient’s actual knowledge and the absence of actual prejudice were insufficient.
5. The same strict approach applied to the withdrawal notice. Although the covering letter made the intended withdrawal clear, it had been served at the wrong address. The first claim notice therefore remained in force when the second claim notice was received, making the second claim ineffective. The RTM company could have rectified the defect by serving a fresh withdrawal at the notified address and starting again.
6. The Tribunal declined to determine the separate argument concerning service on the registered proprietor of the freehold because that point had not been raised before the FTT.

• First-tier Tribunal (Property Chamber): determined that the respondent was entitled to acquire the right to manage.
• Upper Tribunal (Lands Chamber): allowed the appeal, set aside the FTT’s decision and held that the respondent was not entitled to acquire the right to manage.