Supreme Court to hear Avon Freeholds Ltd v Cresta Court E RTM Company Ltd

On 7 July 2026 the Supreme Court is due to hear the appeal in Avon Freeholds Ltd v Cresta Court E RTM Company Ltd, a significant case concerning the proper interpretation of legislation and the consequences of failing to comply with procedural requirements.

The appeal arises in the context of the right to manage regime under the Commonhold and Leasehold Reform Act 2002, but the judgment will be of impact far beyond property law as it addresses fundamental principles of statutory interpretation.

Under the 2002 Act, certain long leaseholders of certain buildings can take control of how their building is managed, usually taking away that control from their landlord. The Act sets out how this right is acquired. Materially, s.78(1) of the Act requires a notice called a “Notice of Invitation to Participate” (“NIP”) to be served on particular tenants. Section 79(2) provides that a notice to acquire the right to manage (a “Claim Notice”) “may not be given unless” those particular tenants have been served with the NIP at least 14 days before the Claim Notice is served.

In this case, one particular tenant required to be served with the NIP was not, in fact, served. The question for the Supreme Court is whether the failure to serve that tenant with the NIP invalidates the subsequently served Claim Notice. The Court of Appeal held that it did, reversing the decision of the Upper Tribunal (Lands Chamber) that it did not.

The Supreme Court will consider whether s.79(2) constitutes an express sanction for failing to comply with the requirement to serve the NIP. If it does, then a determination that the Claim Notice is invalid appears to follow from an earlier Supreme Court decision on the right to manage addressing a different instance of procedural non-compliance: A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2024] UKSC 27. If s.79(2) is a sanction, Parliament’s intention is clear in the express wording and the claim must fail.

If s.79(2) is not an express sanction, then according to A1 Properties a more fact-sensitive analysis must be undertaken to ascertain whether Parliament would have intended invalidity to follow from non-compliance in that specific case.

As such, this appeal will consider the question which arises logically prior to that addressed in A1 Properties: how do we tell if a section in a statute contains an express sanction?

Justin Bates KC and Sophie Gibson (instructed by Lorraine Scott, Scott Cohen Solicitors), continue to represent Avon Freeholds Ltd in the Supreme Court, having represented the landlord in previous proceedings.

Watch the short video below in which Justin Bates KC and Sophie Gibson explain the key issues at the heart of the case ahead of the Supreme Court hearing on 7 July.