Joseph Donovan v Prescott Place Freeholder Limited & Others
[2024] EWCA Civ 298
S Franses Limited & Anor v Block 6 Ashley Gardens Roof Gardens Limited & Ors
20 November 2023
[2023] EWHC 2880 (Ch)
High Court
Imagine some neighbors secretly got the right to use the building's roof without letting everyone else know first. The other neighbors found out and said that wasn't fair! The court decided the neighbors were right, but it also ensured those who secretly got the roof space didn't lose out completely. The court will decide how much those neighbors need to pay to keep their roof space.
Key Facts
- •S. Franses Limited (D1) and James William Ramsey (D2) appealed an order requiring them to transfer leases of roof space to Block 6 Ashley Gardens Roof Gardens Limited (C), a nominee company of qualifying tenants (QTs).
- •The leases were granted by Block 6 Ashley Gardens Ltd (D4), owned by the building's tenants, without offering QTs a right of first refusal under the Landlord and Tenant Act 1987.
- •The leases were granted for a nominal premium (£1) but involved significant works by D1 and D2 to the roof and common parts of the building.
- •The Judge found valid Purchase Notices and Default Notices were served, entitling C to acquire the leases, but determined the purchase price should reflect D1 and D2's expenditure.
- •The appeal challenged the validity of the Default Notices, the Judge's discretion, procedural fairness of the order, and the Judge's consideration of various factors, including Human Rights Act 1998 arguments.
Legal Principles
Landlord and Tenant Act 1987 (LTA 1987) Part I grants qualifying tenants (QTs) a right of first refusal on relevant disposals of leased premises.
LTA 1987, sections 1, 5, 10A, 11A, 12B, 19
A Default Notice under s19(2) of the LTA 1987 need not follow a specific form; it must only convey the requirement to make good the default.
Jones v Mahmut [2018] 1 WLR 6051
Section 19 of the LTA 1987 grants the court discretion to order a party to make good a default. This discretion is not unlimited and requires a consideration of whether it's inequitable to not enforce the statutory duty.
LTA 1987, section 19; Michaels and another v Harley House (Marylebone) Ltd [2000] Ch 104
Contracts for the sale or disposition of an interest in land must be in writing (Law of Property (Miscellaneous Provisions) Act 1989, s2(1)). However, unenforceable oral agreements can still be considered 'terms' under s12B(2) of the LTA 1987 when determining the purchase price.
Law of Property (Miscellaneous Provisions) Act 1989, section 2(1); LTA 1987, section 12B(2)
The Human Rights Act 1998 can inform the exercise of discretion under s19 of the LTA 1987, balancing competing rights.
Human Rights Act 1998; Artist Court Collective Ltd v Khan [2016] EWHC 2453
Outcomes
Appeal dismissed.
The Default Notices were valid. The Judge's discretion was not flawed, and his consideration of the various factors, including the HRA, was appropriate. The Judge's decision to refer matters to the FTT was procedurally fair.
Respondent's notice dismissed.
The unenforceable oral agreement regarding common parts contributions was a relevant 'term' under s12B(2) of the LTA 1987. The covenant to perform works was also a relevant 'term' and should be considered in determining the purchase price. The purchase price should reflect the actual cost to D1 and D2, not just the value to D4.