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A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd UKSC 2023/0047
Yesterday, the Supreme Court heard argument in the second ever “leapfrog” appeal from the Upper Tribunal (Lands Chamber). The appeal concerns a long-standing issue in statutory interpretation: where a statute lays down a procedural framework for exercising a statutory right, but is silent as to the consequences of a failure to comply with that framework, how should the court ascertain what Parliament intended should follow from non-compliance?
In this appeal, the non-compliance concerned the procedure to acquire the “right to manage” under the Commonhold and Leasehold Reform Act 2002. That right, once acquired, transfers numerous rights held by a landlord under a lease to the tenants’ nominee company, as well as modifying a number of the landlord’s statutory duties and obligations. The Respondent, a nominee company established to acquire the right, failed to serve a claim notice on the Appellant (an intermediate landlord with no management responsibilities) contrary to s.79(6)(a) of the 2002 Act.
The 2002 Act is silent as to the consequences of non-compliance with to s.79(6)(a). The Court of Appeal (Elim Court RTM Co Ltd v Avon Freeholders Ltd [2018] QB 571) has previously decided that Parliament did not intend non-compliance to be fatal to the claim to acquire the right where the intermediate landlord has no management responsibilities. The Supreme Court will consider whether that case was correctly decided, and whether Parliament’s intention might differ where (unlike Elim Court) the failure to serve the intermediate landlord was intentional.
The appeal also has implications beyond the 2002 Act. It is well-established that in determining what Parliament intended should follow from non-compliance with a statutory framework where the relevant Act is silent as to the effect of non-compliance, “the emphasis ought to be on the consequences of non-compliance, and posing the question whether Parliament can fairly be taken to have intended total invalidity”: R. v Soneji [2006] 1 A.C. 340 (HL), [23].
However, the approach in Soneji principally developed in the public law context. This appeal is the first occasion on which the Supreme Court has had to consider how the Soneji approach applies in the context of a statutory scheme which re-allocates private property rights. Is Parliament more likely to intend invalidity to follow from non-compliance with such a scheme? To what extent can actual, subjective prejudice caused by the non-compliance be taken into account in determining Parliament’s intention? And how should the court impute an intention to Parliament without impermissibly re-writing the statute? The appeal is likely to mark a significant development in the law as relating to property notices and the effects of non-compliance with statutory procedure to acquire a right in the private law context.
Justin Bates and Harley Ronan acted for the Appellant, instructed by Roger Hardwick and Emma Bush of Brethertons.
In a video available on Landmark Chambers' YouTube channel, Landmark barristers sum up the key issues in A1 Properties v Tudor Studios. To access the video, click here.
