Albion Residential Ltd v Albion Riverside Residents RTM Company Ltd

Factual and Procedural Background

This appeal concerns a dispute over the acquisition of the right to manage a block of flats known as the "Main Building" within a larger development called Albion Riverside, located in The City. The appellants, owners of the freehold interest in the development, challenged the respondent's entitlement to acquire the right to manage (RTM) on the basis that the Building was not a self-contained building as required by statute, contending it was not structurally detached from adjoining structures. The respondent, an RTM company formed by residents, had served a claim notice under the Commonhold and Leasehold Reform Act 2002 (the 2002 Act) asserting the Building was self-contained. The appellants served a counter-notice disputing entitlement on a different ground, not raising the structural detachment issue. The Leasehold Valuation Tribunal (LVT) ruled in favour of the respondent, allowing acquisition of RTM. The appellants appealed to the Upper Tribunal (Lands Chamber), which heard expert evidence and inspected the Building before issuing this decision.

Legal Issues Presented

1. Whether the appellants were entitled to dispute the respondent's claim to acquire the right to manage on the ground that the Building was not self-contained, despite that contention not being raised in the counter-notice (the counter-notice issue).
2. If the appellants were entitled to raise this issue, whether the Building was a self-contained building within the meaning of section 72(1) of the 2002 Act and thus capable of being subject to RTM (the premises issue).

Arguments of the Parties

Appellants' Arguments

• The Building is not a self-contained building because it is not structurally detached from the basement car park and adjoining Building 1, sharing integral structural elements.
• The LVT erred in law by concluding the Building was self-contained despite accepting it was not structurally detached.
• The statutory language in section 72(2) requires structural detachment, which was not present here due to continuous concrete slabs and integral cores.
• The appellants had not raised the structural detachment issue in their counter-notice but argued that the right to raise it should exist.

Respondent's Arguments

• The claim relates only to the part of the Building at or above ground level, excluding the basement car park and service cores, which should be treated as appurtenant property.
• The Building qualifies as a self-contained building under section 72(1) because appurtenant property need not be exclusive to the building.
• The LVT was correct to allow the appellants to raise the structural detachment issue despite it not being in the counter-notice, but they argued the Tribunal should have confined the dispute to points raised in the counter-notice.
• They relied on the Court of Appeal decision in Gala Unity v Ariadne Road RTM Co Ltd regarding appurtenant property, but agreed Gala Unity concerned different issues and did not uphold the LVT’s use of it.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first identified the statutory framework under the Commonhold and Leasehold Reform Act 2002, focusing on section 72 which requires premises to be a self-contained building or part thereof, with "self-contained" defined as "structurally detached." The court emphasized that the issue of structural detachment is a question of fact dependent on the nature and degree of attachment between the Building and other structures.

The appellants’ expert evidence established that the basement car park and Building 1 form a single structural entity with the Main Building, sharing integral concrete slabs, cores, and support columns. The Building cannot be structurally detached given these continuous and integral structural elements.

The court rejected the respondent’s argument that the claim relates only to above-ground parts of the Building and that the basement car park could be treated as appurtenant property. It held that even if the claim were so limited, the structural continuity between the above-ground structure and the below-ground elements meant the Building was not structurally detached.

The court distinguished the LVT’s reliance on Gala Unity, noting that Gala Unity concerned the treatment of appurtenant property shared by two self-contained buildings and did not address the issue of structural detachment relevant here. The court clarified that appurtenant property cannot cure a lack of structural detachment.

Regarding the procedural issue of whether the appellants could raise the structural detachment argument despite not having done so in their counter-notice, the court followed the reasoning in Fairhold. It held there is no statutory requirement to confine challenges to those raised in the counter-notice. The tribunal has jurisdiction to consider jurisdictional challenges if fairness is maintained and parties are given opportunity to respond.

Accordingly, the court concluded the appellants were entitled to raise the issue and that on the facts the Building was not a self-contained building as required by the 2002 Act.

Holding and Implications

The appeal is allowed.

The court held that the Building is not a self-contained building within the meaning of section 72(1)(a) of the Commonhold and Leasehold Reform Act 2002 because it is not structurally detached from adjoining structures, including the basement car park and Building 1. Consequently, the respondent RTM company is not entitled to acquire the right to manage the Building. The appellants were also entitled to raise this issue despite it not being included in their counter-notice.

The decision directly affects the parties by overturning the LVT’s determination in favour of the respondent. No new legal precedent beyond the application of existing statutory interpretation and procedural principles was established.