Court of Appeal Clarifies Right to Manage Provisions in Assethold Limited v Eveline Road RTM Company Limited: Acquiring RTM for Multiple Self-Contained Parts of a Building

Citation: [2024] EWCA Civ 187
Judgment on

Introduction

The Court of Appeal’s judgment in “Assethold Limited v Eveline Road RTM Company Limited” offers a detailed exposition on the interpretation of right to manage (“RTM”) provisions within the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”). This case concerns whether a single RTM company could acquire the right to manage a converted property comprising two separate terraced houses, each being a self-contained part of the building as defined under the Act.

Key Facts

The case revolves around 36 Eveline Road, Mitcham (“No 36”), which comprises four flats structured into two original terraced houses and functions as a singular entity for the purposes of management. The RTM company sought to acquire the RTM for No 36 as a whole, while Assethold Limited, the appellant, contended that separate RTM companies and claims were required for each terraced house. The Upper Tribunal had previously ruled in favour of the RTM company’s approach.

The following legal principles emerged from the Court of Appeal’s analysis of the case:

  1. Definition of “Premises”: The Act defines “premises” as a self-contained building or part of a building, with specific conditions. The case scrutinized whether No 36 as a unified structure or its constituent terraced houses individually constituted such “premises” under Section 72 of the Act.

  2. Single or Multiple RTM Companies: The decision in “Ninety Broomfield Road RTM Co Ltd v Triplerose Ltd” influenced the determination of whether a single RTM company could manage multiple premises. The Court of Appeal assessed whether the principles from “Triplerose”, involving multiple detached buildings, were applicable to the situation where the constituent parts of a single building both satisfy the definition of “premises”.

  3. Legislative Framework: The judges evaluated the RTM provisions within the broader context of the 2002 Act. They considered Sections 72, 73, 79, 80, and 81 alongside Schedule 6 para 2 of the Act for statutory interpretation, drawing upon implied legislative intent to resolve ambiguities.

  4. Precedent and Supreme Court Clarification: Although the “Triplerose” decision was discussed, the court clarified that each judgment must be interpreted in context and should not be applied rigidly to scenarios outside of its original scope. Furthermore, precedent from the Supreme Court case “FirstPort Property Services Ltd v Settlers Court RTM Co Ltd” was distinguished as addressing distinct issues.

  5. Statutory Interpretation: The principles of statutory interpretation played a pivotal role in determining the extent of an RTM company’s claim to premises under the Act, especially the physical test concerning the structure and separability of services.

Outcomes

Lewison LJ, delivering the lead judgment, held that:

  • An RTM company is entitled to acquire the right to manage the entirety of No 36 as a single set of premises per Section 72 of the 2002 Act.
  • The legislative framework does not preclude an RTM claim in respect of a self-contained part of the building that also contains self-contained parts.
  • The decision confirmed the reasoning of the prior Upper Tribunal ruling in the RTM company’s favour.

Phillips LJ and Andrews LJ concurred with Lewison LJ’s judgment.

Conclusion

In “Assethold Limited v Eveline Road RTM Company Limited”, the Court of Appeal elucidated the scope of RTM under the 2002 Act, holding that an RTM company could acquire the right to manage a single set of premises even if its constituent parts would independently satisfy the statutory definition. The judgment affirmed the legislative intent to facilitate lessee self-management without unduly compartmentalizing buildings or the RTM process itself. This judgment provides clarity on the interpretation of the RTM provisions and reinforces the principles of statutory interpretation in the context of leasehold reform.