First-tier Tribunal Upholds Right to Manage Claim Despite Procedural Flaw

OUTCOME: Allowed

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00AU/LRM/2022/0030 HMCTS code (paper, video, audio) : P: PAPER REMOTE Property : 478–482 [ADDRESS] [POSTCODE] Applicant : [redacted] Limited Representative : [COMPANY] Respondent : [redacted] : [COUNSEL] [COMPANY] of application : In relation to the denial of the right to manage Tribunal members : [NAME] [NAME] B [NAME] : Remote Date of decision : 15 November 2022

DECISION

Covid-19 pandemic: description of hearing: This has been a remote paper hearing , which had not been objected to by the parties. The documents the Tribunal referred to are in a single bundle comprising 217-pages submitted jointly by the parties.

Determination 1. The Tribunal has determined the right to manage Claim Notice served on the Freeholder on 28th April 2022 is valid.

2. The application fee paid to Tribunal amounting to £100 be reimbursed by the Respondent within 28 days of the date of this decision. Application 3. This is an application relating to a right to manage Claim Notice served pursuant to Chapter 1, Commonhold & Leasehold Reform Act 2002 (‘the 2002 Act’) seeking rights to manage 478-482 [ADDRESS] [POSTCODE] (“the Property”). Background 4. The Applicant, the 478-[ADDRESS] ([COMPANY]) [APPELLANT] ('[COMPANY]') made an application dated 15 July 2022 to seek a determination that on the relevant date, [COMPANY] was entitled to acquire the right to manage the Property.

5. The Property comprises a recently constructed block of twelve self-contained apartments each sold on long leases. 6. [COMPANY] issued a Notice of Invitation (NOI) to Qualifying Tenants to participate in [COMPANY], dated 15 December 2021. [COMPANY] issued a Notice of Claim dated 28 April 2022 on [RESPONDENT] ('the Respondent'). Appended to the Notice of Claim were copies of the Memorandum & Articles of Association and Certificate of Incorporation of [COMPANY].

7. The Freeholder's agent served a Counter Notice dated 1 June 2022. This alleged the Notice served by [COMPANY] was invalid, because: i. [COMPANY] had not given notice of the claim to acquire the right to manage the property on each qualifying person as required by the Act. ii. The Notice of Invitation to participate was not given to each qualified tenant as required by the Act. 8. [COMPANY] made an application to the Tribunal on 15 July 2022 for this matter to be Determined.

9. Directions dated 2 August 2022 were issued by the Tribunal. These identified a single issue to be decided, namely, whether on the date on which the Notice of Claim was served [COMPANY] was entitled to acquire the right to manage the premises specified in the Notice.

10. The Directions identify failures alleged in section 78(1) of the 2002 Act. Legislation The relevant legislation is as follows: Commonhold and Leasehold Reform Act 2002 Section 78(1): (1) Before making a claim to acquire the right to manage any premises an [COMPANY] must give notice to each person who at the time when the notice is given: (a) is the qualifying tenant of a flat contained in the premises, but (b) neither is, nor has agreed to become a member of [COMPANY]. Section 79(2): (2) The claim may not be given unless each person required to be given a Notice of Invitation to participate has been given such a notice at least 14 days before.

The Facts 11. The issue is whether a Notice of Invitation (‘NOI’) to participate in the right to manage company was given to one of the two joint registered proprietors of the leasehold interest in flats 10-12. These are shown as [COMPANY] and [COMPANY]. There is no dispute that [COMPANY] was given a jointly addressed NOI.

12. The Tribunal are told that [COMPANY] and [COMPANY] are Associated Companies. The evidence submitted to the Tribunal confirm they have the same registered office which is [NAME] and the same sole Director [NAME] [NAME] [NAME]. 13. [NAME] [NAME] is also the person declared as the individual with significant control of both companies in the [NAME] register.

14. It is accepted by both parties that the NOI was jointly addressed to [COMPANY] and [RESPONDENT] at the registered office, [NAME]. The Respondent points the Tribunal to the failure of the Applicant to address the covering letter included with the NOI to [COMPANY] at the registered address.

15. It is the contention of Assethold that for this reason the joint registered proprietor [COMPANY] did not receive a copy of the NOI. They claim

this was a fatal error in the statutory process as defined in section 78(1) and 79(2) of the 2002 Act.

16. The Respondents say in their statement of reply that there is no evidence provided to support the assumption that the NOI was given to [COMPANY]. They emphasise the burden of proof of delivery rests with the Applicant.

17. The Applicant’s rely on the close association of [APPELLANT] and [COMPANY] to justify their assertion that both registered proprietors were aware of the notice of invitation to take part in the right to manage application.

18. They also emphasise that the sole Director [NAME] [RESPONDENT] [NAME] is known to the Respondent and may have association with other properties held by the freeholder.

19. They claim there is overwhelming evidence that the NOI given by Recorded Delivery to [COMPANY] was received by [COMPANY] and that [COMPANY] has duly acquired the right to manage. Discussion and conclusion 20. The Tribunal notes that it is agreed between the parties that a jointly addressed NOI was delivered to [APPELLANT] by recorded delivery. The applicant acknowledges that the covering letter sent with the jointly addressed NOI was not addressed to [RESPONDENT] only to [RESPONDENT]. The Respondent argues this failure to jointly address the covering letter invalidates the claim procedure because a qualifying tenant was not advised of the RTM claim and they were not given the NOI.

21. Having considered the submissions there is much evidence provided to Tribunal of an association between [COMPANY] and [COMPANY]. There is prima facie evidence that the person with significant control of both companies is [NAME] [NAME] [NAME]. They have the same registered office. [NAME] [NAME] is the person named as the individual with a controlling interest in the Companies at [NAME].

22. It is not disputed that [NAME] [NAME], the sole Director of both [COMPANY] and [COMPANY] received a copy of the NOI. Any reasonable and diligent person would identify on reading the NOI delivered by registered post to [COMPANY] was jointly addressed to [COMPANY]. The Tribunal note that there is no witness statement from [NAME] [NAME] that tells them he did not receive the NOI or he did not understand on receipt of the NOI it was being given to both registered proprietors under a single covering letter.

23. The Tribunal note the comments made by the Respondent about the burden of proof of delivery but in these particular circumstances they conclude that on the balance of probabilities the jointly addressed NOI was given to the relevant parties in accordance with the statutory procedure through the delivery of the covering letter to [COMPANY].

24. It is for this reason that the Tribunal conclude that the failure to jointly address a covering letter to [COMPANY] and [COMPANY] is not a fatal flaw in the statutory procedure. They conclude that [COMPANY] satisfy the requirements of Section 78(1) and 78(2) and the Tribunal therefore determines the Notice is valid. Costs 25. In its application, the Applicant applies for a refund of the fees of £100 that he had paid in respect of the application pursuant to Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013. In the light of our decision, the Tribunal orders the Respondent to refund any fees paid by the Applicant within 28 days of the date of this decision. Name: [NAME]: 15 November 2022

Valuer Chairman

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

ANNEX – RIGHTS OF APPEAL i. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First- tier Tribunal at the Regional office which has been dealing with the case. ii. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. iii. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit. iv. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking.