Leasehold Enfranchisement Update – Curzon v Wolstenholme

Curzon v Wolstenholme [2015] UKUT 173 (LC)

A freeholder continued to be bound by an unregistered notice notwithstanding a conveyance of the freehold away from him and a further conveyance back. Further the freeholder could not resile from terms once they were agreed.

Issues

The issues in the case were as follows: (1) Where an initial notice served under s. 13 of the Act has not been protected by being noted on the Land Register, can the freeholder who received the notice defeat the right of the participating tenants to acquire the freehold by collective enfranchisement by the simple expedient of transferring the freehold to his wife followed, shortly thereafter, by its transfer back to him? (2) If the price for the freehold is agreed unconditionally between the freeholder and the nominee purchaser, may either of them subsequently resile from that agreement and require that the price be determined by the appropriate tribunal?

First Instance

On the first issue the FTT determined that the initial notice remained effective as against the freeholder. On the second issue the FTT concluded that it was not open to either party to seek to go behind the agreement on price and to have the price determined by the tribunal.

Decision on Appeal

On the first issue Martin Rodger QC held that the notice continued to bind the original freeholder notwithstanding the transfer away and transfer back to him. On the second issue parties could not resile from agreed terms – City of Westminster v CH 2006 Ltd [2009] UKUT 174 (LC) followed.

Comment

Sequential agreement on price and terms of acquisition represents a trap for the unwary as it is not uncommon for the terms to have an effect on price. It was emphasised in City of Westminster v CH 2006 Ltd [2009] UKUT 174 (LC), and it was common ground in this appeal, that parties are free to give themselves added flexibility by stipulating that agreement on any of the terms of acquisition is conditional on agreement on them all, or that agreement on, for example, the price is conditional on agreement on other specific terms. Obviously that represents best practice to avoid unexpected price sensitive disagreements once the price had been agreed.