Avon Freeholds Limited (Respondent) v Cresta Court E RTM Company Limited (Appellant)

Case summary

Case ID

UKSC/2025/0170

Parties

Appellant(s)

CRESTA COURT E RTM COMPANY LIMITED

Respondent(s)

AVON FREEHOLDS LIMITED

Issue

(1) Is the lessee under an unregistered long lease a qualifying tenant within the meaning of s75 Commonhold and Leasehold Reform Act 2002, so that they should be served with a ‘participation notice’ before a right to manage company claims the right to manage the block of flats? (2) Does the failure to serve a participation notice on a qualifying tenant invalidate a claim notice served by the right to manage company?

Facts

In 2002, Parliament passed legislation (the Commonhold and Leasehold Reform Act 2002) (“the CLRA”), which allows qualifying tenants living in a block of flats to acquire the right to take over the management of their block of flats through the formation and interposition of a right to manage (“RTM”) company. The appellant (“Cresta Court Co”) is a RTM company which was formed to acquire the right to manage a self-contained part of a block of flats at Cresta Court, Hanger lane, London W5, consisting of Flats 7 to 26. The respondent (“Avon Freeholds”) is the registered freeholder of the property. The CLRA sets out a procedure which regulates the acquisition by RTMs of the right to manage. The procedure allows the RTM to claim the right to manage by giving notice of the claim (a ‘claim notice’). However, at least 14 days before issuing a claim notice, the RTM must give a ‘participation notice’ to anybody who at that time is the qualifying tenant of a flat contained in the premises, but neither is nor has agreed to become a member of the RTM company. On 21 January 2022, Cresta Court Co issued a claim notice in respect of Flats 7 to 26 Cresta Court. At the time of the claim notice, the tenant of Flat 17 Cresta Court was Ms O’Connor. She held the flat under a lease granted directly to her by Avon Freeholds for a term of 150 years from 1 January 2015. However, her leasehold title was not registered at HM Land Registry until after the claim notice was served. Her title was subsequently registered, and backdated to 15 July 2021. Cresta Court Co did not give a participation notice to Ms O’Conor, even though she held a long lease of Flat 17 and neither was nor had agreed to become a member of the RTM company. Had Ms O’Connor been issued with a participation notice, she would not have objected to the proposed scheme: she was content with Cresta Court Co acquiring the right to manage. Avon Freeholds responded to the claim notice with a counter-notice alleging that the claim notice was invalid because Cresta Court Co had not given a participation notice to Ms O’Connor. Cresta Court Co applied to the First-Tier Tribunal Property Chamber under s84(3) of the CLRA 2002, seeking a “determination that it was on the relevant date entitled to acquire the right to manage the premises.” The First-Tier Tribunal upheld the validity of the claim notice. Avon Freeholds appealed to the Upper Tribunal. The Upper Tribunal (UT Judge Elizabeth Cooke) held that Ms O’Connor was a qualifying tenant, but that nevertheless the failure to give her a notice of invitation to participate did not invalidate the claim notice. Avon Freeholds appealed the Upper Tribunal’s decision to the Court of Appeal. The Court of Appeal upheld the Upper Tribunal’s decision that Ms O’Connor was a qualifying tenant, but allowed Avon Freehold’s appeal on the basis that the failure to give Ms O’Connor a participation notice did invalidate the claim notice. Cresta Court Co now appeals to the Supreme Court.

Date of issue

25 September 2025

Case origin

PTA

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