A1 Properties (Sunderland) Limited v Tudor Studios RTM Company Limited
[2023] UKUT 27 (LC)
A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd
16 August 2024
[2024] UKSC 27
Supreme Court
A company tried to take over building management but forgot to tell one person. The court said it's not automatically a big problem if that person wasn't really involved and their concerns were addressed anyway. The oversight makes the takeover potentially undoable, but only if the forgotten person objects.
Key Facts
- •The case concerned the failure to serve a claim notice on an intermediate landlord under section 79(6) of the Commonhold and Leasehold Reform Act 2002 (CLRA).
- •The appellant argued that this non-compliance invalidated the right to manage transfer.
- •The respondent RTM company argued that the non-compliance did not invalidate the transfer because the intermediate landlord had no management responsibilities and the tribunal considered the objections.
- •The Court of Appeal cases of *Osman v Natt* and *Elim Court* were considered.
Legal Principles
The appropriate approach to a failure to comply with a statutory procedural requirement is to ask whether it was the legislature's purpose that an act done in breach of that provision should be invalid.
Soneji
A more flexible approach is required, focusing on the consequences of non-compliance and whether Parliament intended total invalidity.
Soneji (Lord Steyn)
The rigid mandatory/directory distinction is no longer appropriate.
Soneji (Lord Steyn)
In cases involving property rights, it's usually inferred that Parliament intends a reasonable degree of certainty and a fair opportunity to object before deprivation of rights.
Case judgment
The purpose of a statutory procedural rule and the specific facts of the case, including any prejudice caused, must be considered.
Soneji
A test of substantial compliance might be appropriate to balance competing purposes, but it's a conclusion rather than a test itself.
Case judgment
In the context of CLRA, the failure to serve a claim notice renders the transfer voidable, not void, at the instance of the affected party, unless the tribunal approves the transfer.
Case judgment
Outcomes
Appeal dismissed.
The Court held that the failure to serve the claim notice on the intermediate landlord did not invalidate the transfer of the right to manage because the intermediate landlord had no management functions, the tribunal considered the objections, and the appellant had not lost any significant opportunity to oppose the transfer.
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