The Court of Appeal came to the rescue of an RTM Company in respect of “trivial defects” made when exercising the right to manage in the recent case of Elim Court RTM Co Ltd v Avon Freeholds Limited  EWCA Civ 89.
It was the RTM company’s third attempt to invoke the right to manage under the Commonhold and Leasehold Reform Act 2002. It appealed the decision of the Upper Tribunal which had determined that various procedural defects in the notices served in the statutory process caused the claim to fail.
The appeal was allowed, the Court of Appeal considering that the failure to comply with every trivial detail in either the statutory notices or the procedure will not always invalidate notices. The decision demonstrates the shift away from the classification of statutory requirements as either “mandatory” or “directory”. Following the principles laid down in the case of Natt v Osman  EWCA Civ 1520, the Court focused on the substance of the statute and the consequences of non-compliance. It considered whether Parliament had intended that a landlord should succeed in obstructing the acquisition of rights by relying on what it considered to be minor defects.
The Court acknowledged that whilst it had been Parliament’s intention that the statutory procedures should have been as simple as possible, in fact the procedures in place have far from eliminated the scope for dispute. L J Lewisham considered that the existing procedure contained “traps for the unwary” which served to provide landlords the opportunity to take objections based on technical points which he considered to be of no significant consequence but which “bedevilled” the right to manage.
Whilst leaseholders may be relieved at the Court of Appeal’s finding in this case, best practice dictates that compliance with the law and procedure is still required to avoid potential disputes and the uncertainty, delays and costs that may flow.