MAHTABAN SALEHABADY v TRUSTEES OF THE EYRE ESTATE (2017) [2017] UKUT 60 (LC)

Summary

A leaseholder who is claiming a lease extension is bound by certain statutory time constraints, and the one that is arguably the most fateful is the deadline by which the leaseholder must apply to the First-tier Tribunal (“Tribunal”) in the event that the terms of acquisition have still not been agreed between the leaseholder and the landlord, or otherwise his claim is entirely deemed withdrawn. In this Upper Tribunal precedent, it was held that merely posting the application to the Tribunal was sufficient to satisfy the deadline requirements, even if the Tribunal had not actually received the application.

Facts

The leaseholder occupied a residential property and sought to claim a new lease (lease extension) under the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”). He served a notice as required by s.42 of the Act, and the landlord served a s.45 counter-notice in response. Therefore, the tenant had six months from the date the counter notice was received by him (21 April 2016) to file a s.48 notice of application to the Tribunal asking the tribunal determine the issues in dispute. Although the leaseholder sent a notice to the Tribunal, it was not received until after 21 April. The tribunal dealt with the question of its jurisdiction as a preliminary matter on the papers before it. Despite reading a letter from the claimant's solicitor asserting that he had posted the notice by first class post on 18 April, the Tribunal held that the application had been made out of time and therefore declined to deal with it.

The leaseholder appeal submitting that Firstly, the application had been made in time because, under the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the relevant date was the date of posting, not the date of receipt; and Secondly, the Tribunal had been wrong to reject his solicitor's assertion as to the date of posting without giving him the opportunity to file a formal witness statement.

Decision on appeal

It was held that pursuant to s.48(2) of the Act, the application had to be "made" within six months of the service of the landlord's counter-notice. The word "made" connoted a unilateral act by the applicant, who made the application by starting the proceedings. The application could be started in only two ways: by "sending" or "delivering" a notice of application to the Tribunal. It is important to note that neither the Act nor the Rules prescribed that the application had to be sent by recorded delivery. Therefore no particular form of proof of posting was required, and there was no deeming provision indicating the effect of "sending" the application. Either sending or delivering the notice was effective to start the proceedings, and by this reasoning the posting of a correctly addressed and sufficiently stamped notice of application to the tribunal was sufficient. The relevant date was thus the date of posting, not of receipt. The following authorities were applied:- Barnes v St Helens MBC [2006] EWCA Civ 1372, Chiswell v Griffon Land and Estates Ltd [1975] 1 W.L.R. 1181 and CA Webber (Transport) Ltd v Railtrack Plc [2003] EWCA Civ 1167.

It was remarked that the basis on which the tribunal had decided that it had no jurisdiction was not entirely clear. Paragraph 5 of its decision suggested that it had taken the date of receipt to be the relevant date. If that was the case then the Tribunal had applied the wrong test as previously seen. However, paragraph 6 of its determination suggested that the tribunal had applied the correct test (the date of posting) and had concluded that the tenant's solicitor had failed to establish that he had posted the application notice in time. If that was the case, it was procedurally unfair to the leaseholder by not affording them the opportunity to evidence to corroborate the statement.

There were a number of ways the date of posting could have been establish. A certificate of posting would have been the preferred, but not the only, method. The tenant's solicitor had written to the tribunal stating that he had posted the notice on 18 April. If the Tribunal doubted that statement, it could have tested it by requiring the solicitor to produce a witness statement and be subject to cross-examination. However, to simply reject the statement and assert that the notice had not been posted in time was procedurally unfair. Due to this, the Tribunal's ruling could be upheld and had to be set aside. The matter would be remitted for a fresh determination.

If the landlord accepts that the application notice had been posted in time, the tenant's application would then proceed on its merits. If, however, the landlord wished to challenge the solicitor's assertion, there would have to be a hearing at which the solicitor could be cross-examined to evidence the date of posting. In that case the tribunal would have to decide whether on the balance of probabilities whether the application notice had been posted before the expiry of the expiration of the deadline.

Comment

This decision is a useful reminder to practitioners of the changes to the procedural rules that have were brought in effect in 2013 which provides under Section 26(1) that the applicant “must start proceedings before the Tribunal by sending or delivering to the Tribunal” a notice of application.

The previous incarnation of the rules under The Residential Property Tribunal Procedures and Fees (England) Regulations 2011 does not contain a provision such as this, but various others that may imply that receipt of the application by the tribunal was required.

It causes one to wonder whether or not the same principles on the posting of applications would apply for the long-stop deadline under Section 48 whereby the leaseholder must apply to court before the elapse of a four month deadline following the date that all the terms of acquisition were agreed. The Act requires a similar requirement in that an “application must be made” before the deadline, but in that situation to the county court as opposed to the Tribunal. In this writer’s view, due to the fact that the County Court is governed by the Civil Procedure Rules, which specifies how proceedings may be commenced, it would appear that posting may be insufficient and that an application needs to be received by the Court in order for it to have been “made”.

On a purely practical note, it is therefore advisable that practitioners ensure that applications are made in good time and such postage that can be verified, by for example recorded or special delivery.

If you have any queries about this article please contact Daniel Tang on 0208 290 7373 or email dtang@judge-priestley.co.uk