Martin Rodger QC, Deputy President
By Part 2, Chapter 1, Commonhold and Leasehold Reform Act 2002, qualifying long leaseholders of flats are entitled to establish and join a “Right to Manage company” (“RTM company”) through which – if sufficient leaseholders join the company – they may take over management of their building. The process starts with the RTM company serving a “notice of invitation to participate” on all qualifying long leaseholders, informing them of their right to join the company (s.78). Assuming sufficient participation, the RTM company may, not less than 14 days after service of that notice, serve a claim notice on the landlord, informing him that it intends to acquire the right to manage (s.79). A landlord who wishes to oppose the claim must serve a counter-notice (s.84). If a counter-notice is served, the First Tier Tribunal (Property Chamber) has jurisdiction to determine whether the RTM company is entitled to acquire the right to manage.
Procedure in the FTT is governed by the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The overriding objective (r.3(1)) is to ensure that cases are dealt with fairly and justly. To this end, parties are under a duty to help the Tribunal to further that objective (r.3(4)).
The appellant was the freeholder of a block of flats. Some of the leaseholders of those flats formed the respondent company and sought to acquire the right to manage the block. The appellant asked the respondent to provide proof that the notice of invitation to participate had been properly served on all the leaseholders. The respondent did not respond to this request and so the appellant served a counter-notice which put the respondent to proof on that point.
The respondent issued proceedings in the FTT, seeking a determination that it was entitled to acquire the right to manage. The respondent eventually provided proof that the notices had been sent, but so late in the proceedings that the appellant was unable to respond with any evidence or argument. The FTT determined that the respondent was entitled to acquire the right to manage.
The Upper Tribunal held that r.3(4) included a duty on the parties to cooperate with each other so as to prepare the case for hearing. The approach of the respondent – failing to provide documents until the last minute – was not compatible with r.3(4). Moreover, in determining the application without giving the appellant the chance to respond to the documents when they were eventually produced, the FTT had itself adopted an unfair procedure.