[2024] UKUT 109 (LC)

Grand Union Village is a substantial residential development adjoining the Grand Union Canal in West London. It was completed in about 2009 and comprises at least 30 named blocks of flats as well as a number of freehold houses and commercial units.

The premises with which this appeal is concerned comprise three of the named blocks. Two of them, Harborough House and Saltley House, are connected and comprise a single block with two separate entrances. The block is approximately L-shaped with Harborough House, containing 44 flats, forming the shorter and part of the longer limbs with Saltley House, containing 27 flats, as the rest of the longer limb. The third building, Brecon House, is entirely detached from the other two blocks at ground level and above. It too is an L-shaped block, comprising 46 flats.

Harborough/Saltley House (as I will now refer to them) and Brecon House form three sides of a quadrangle. The fourth side is formed by another block of flats called Fazeley House which is also detached from the others at ground level and above. The centre of the quadrangle comprises an open recreation area at ground level, beneath which there is a large underground car park. The car park is used by the residents of all three buildings (and possibly also by residents of Fazeley House, but there is no evidence about that).

The appellant RTM company was incorporated on 19 May 2022. At that time its articles of association identified its objects as being the acquisition of the right to manage Harborough/Saltley House only.

On the same day a separate RTM company, Brecon House RTM Co Ltd, was also incorporated, its object being the acquisition of the right to manage Brecon House alone.

On 13 July 2022 the RTM companies submitted claim notices asserting their entitlement to acquire the right to manage. The appellant claimed the right to manage Harborough/Saltley House and Brecon House RTM Co Ltd claimed the right to manage Brecon House.

The Management Company disputed the appellant’s entitlement to acquire the right to manage Harborough/Saltley House on the grounds that the freehold interest in Saltley House was vested in Notting Hill Genesis, the third respondent, which retained responsibility for its management, whereas at Harborough House management was the responsibility of the Management Company. Those facts were said to disentitle the appellant from acquiring the right to manage the combined block.

The Management Company also disputed the Brecon House claim notice. It relied on section 72(1)(a) of the 2002 Act and asserted that “the premises is not a self-contained building of part of a building by virtue of its attachment to an underground car park (which also serves other blocks) and shared pump room with Harborough House.”

On considering the counter-notices given by the Management Company, the appellant and Brecon RTM Co Ltd decided to withdraw their original claims. Their solicitor communicated that decision to the respondent on 27 September 2022 in a letter in which she said that she agreed that the three blocks were joined by the underground car park.

On 27 September 2022 the appellant passed a resolution at an extraordinary general meeting replacing its articles of association with new articles. These identified the objects of the company as being the acquisition of the right to manage Harborough/Saltley House and Brecon House.

On 7 February 2023 a new claim notice was given by the appellant, this time asserting its right to acquire the right to manage all three blocks. The claim notice explained that the 2002 Act applied to the premises because “they consist of a self-contained building or part of a building with or without appurtenant property”. The Management Company’s counter-notice gave three reasons for disputing the appellant’s claim. These were, first, that the acquisition of the right was prohibited because the premises were not a self-contained building or part of a building and so did not satisfy the requirement of section 72(1)(a), 2002 Act. Secondly, it was said that the appellant is not an RTM company in relation to the three blocks because Brecon House RTM Co Ltd remains in existence with the object of acquiring the right to manage Brecon House and in those circumstances section 73(4), 2002 Act prohibits any alternative claim. Thirdly, it was said that the appellant had failed to give a notice inviting participation in the company to one qualifying tenant of a flat in Brecon House, contrary to section 78(1).