Summary

An assignment of the benefit of a notice to enfranchise which was made independently of or before an assignment of the tenancy in breach of s.5 Leasehold Reform Act 1967 was of no effect whatsoever. It did not serve to deprive the tenant of the right to enfranchise.

Facts

Application by the claimant ('S') for summary judgment on her claim for specific performance of the statutory obligation on the part of the defendants ('the trustees'), constituted by the service by S of a notice to enfranchise under the Leasehold Reform Act 1967, to sell and transfer to S the freehold of her home ('the property'). The price payable by S was subsequently determined at #2,395,000. S then entered into a contract for the subsale of the property at a substantially higher figure and assigned the benefit of the notice to the subpurchaser. That assignment was made independently of and before the assignment of the tenancy, contrary to s.5 of the 1967 Act. The trustees subsequently refused to complete the transfer of the property, contending that the assignment of the notice without the contemporaneous assignment of the tenancy effected a severance of the tenancy, such that S lost her statutory right to purchase the property. S brought this action in the High Court to enforce that right. The trustees initially challenged the jurisdiction of the High Court to entertain the action, contending that it ought to have been brought in the county court, pursuant to s.20(2)(c) County Courts Act 1984. However, they did not pursue the challenge at the hearing of this application.

Held

(1) As the issue of jurisdiction had been raised, it was appropriate to adjudicate upon it. The court agreed with the trustees that exclusive jurisdiction regarding the subject matter of the action was conferred upon the county court by s.20(2)(c) of the 1984 Act such that this court was bound under s.40 of the Act to transfer the action to the county court. However, this court also had jurisdiction under s.41 of the 1984 Act to transfer any county court proceedings into the High Court. The court was satisfied that this was an action that was suitable for such transfer and so it would order the action to be transferred back to the High Court for determination. (2) S was right to assert that an assignment of the right to enfranchise made independently of or before an assignment of the tenancy to which it related was of no effect. The trustees' construction would produce a wholly unjust enrichment of the landlord at the expense of the tenant.

Summary judgment for S.