In 159-167 Prince of Wales RTM Co Ltd v Assethold, the Court of Appeal has considered a number of important points of law concerning estoppel and the nature of an equitable interest in land pending registration.
The appeal concerned the Commonhold and Leasehold Reform Act 2002, which gives long leasehold tenants of residential flats a right to take over the management of the building of which their flats form part through the medium of a company known as the RTM company. If the claim to acquire the right to manage is disputed (as it usually is), it falls to be determined by the First-Tier Tribunal under section 84(3) of the 2002 Act. Section 88(1) provides that the RTM company is liable for reasonable costs incurred by certain specified persons, which include the costs of the FTT proceedings if the RTM company’s claim is dismissed. One of the persons specified in section 88(1) is a ‘landlord under a lease of the whole or any part of the premises’.
In this case, the RTM company applied to the FTT under section 84(3) but the claim did not proceed to a hearing and was dismissed by consent. Assethold, the successful respondent, then applied for its costs under section 88(1). It lost in the FTT on the ground that it was not a ‘landlord’ for the purposes of section 88(1). This was because Assethold claimed to have acquired its interest in the property from the legal owner, Millcastle, on 10 October 2019, but the purchase had not been registered and Assethold could therefore have had only an equitable interest in the property, which the FTT held is not sufficient to make it a ‘landlord’ within the meaning of section 88.
The Upper Tribunal allowed Assethold’s appeal on the ground that the RTM company was estopped from disputing its status as a landlord by reason of having commenced proceedings naming Assethold as a landlord. The further appeal to the Court of Appeal raised a number of complex points of law, notably the principle that the statutory jurisdiction of a court or tribunal cannot be enlarged by agreement or estoppel.
The Court of Appeal has now allowed the RTM company’s appeal and restored the FTT’s decision. The judgment contains valuable guidance (1) as to the nature of the equitable interest of a purchaser of land pending registration; (2) the meaning of the word ‘landlord’ in the 2002 Act; and (3) the ingredients of estoppel by representation and estoppel by convention and, in particular, the requirement that there must be a causal connection between the making of a representation and the action that causes detriment. Since the RTM company succeeded on these points, it was unnecessary to determine a further ground of appeal, namely that the possibility of an estoppel was altogether excluded by the 2002 Act because the effect of an estoppel would be to enlarge the statutory jurisdiction of the FTT. The Court of Appeal observed that this is a ‘difficult question’ and that ‘it would be preferable to leave a decision on that issue to a case where the result matters’: [76].
The judgment is available here; and a recording of the hearing is available here.
Niranjan Venkatesan (with Armando Neris of 33 Chancery Lane Chambers) acted for the successful appellant, instructed by Mayer Brown International LLP.