Summary

Unless a notice of claim for leasehold enfranchisement, which claimed too much or not enough, was amended appropriately, it would be invalid. The Leasehold Reform Act 1967 Sch. 3 para.6(3) made it clear that a necessary amendment to a notice could be refused and whether an amendment was allowed was a matter for the court, as was the question of the terms on which the amendment was to be allowed.

Facts

The defendant landlord (H) appealed against a decision that a notice of claim for leasehold enfranchisement did not need to be amended where it indicated the desire to acquire the freehold property that was not a "house" under the Leasehold Reform Act 1967. M served a notice of claim on H indicating his desire to acquire the freehold in a property comprised of a main house and a mews house. M resided in a flat in the main house. H challenged M's claim. Consequently M applied for a declaration that he was entitled to acquire the freehold pursuant to the Act. Ultimately the House of Lords decided that the two houses taken together were not a "house" within the meaning of the Act (Malekshad v Howard de Walden Estates Ltd (2002) UKHL 49, (2003) 1 AC 1013) however M could in principle enfranchise the main house, although not the mews. M later served a second notice of claim, after the contractual term date of the lease, seeking to enfranchise the mews house. By the instant proceedings M sought permission to amend his first notice of claim so as to delete the reference to the mews house. H argued three conditions should be imposed on the amendment: (i) that the valuation date for the freehold of the main house should be amended from the date when the first notice was served to the date when it was amended; (ii) that M should be required to withdraw the second notice; and (iii) that M should be required to pay a rack rent in relation to the mews house. The judge decided that the first notice did not require amendment and in any event declined to impose any of the conditions for amendment suggested by H. H submitted that unless the notice was amended M could not enfranchise the main house because there was no notice seeking to enfranchise the main house and amendment should only be permitted subject to the conditions that were suggested to the judge. M argued that he was entitled to rely on the first notice unamended, the reference to the mews house did not invalidate that notice and amendment of the first notice was little more than a "tidying up operation".

Held

1) The claim under the first notice undoubtedly extended "to property not properly included in the house or premises". It was implicit in the second part of Sch.3 para.6(3) of the Act that unless a notice of claim, which claimed too much or not enough, was amended appropriately, it would be invalid. Therefore the first notice of claim required amendment to be effective. (2) Amendment of the first notice would not be a purely administrative act. (3) Schedule 3 para.6(3) of the Act made it clear that a necessary amendment could be refused and whether it was allowed and the terms on which it was allowed was a matter for the court. Where a statutory provision appeared to give the court a wide and unfettered discretion it was inappropriate to lay down any rules, other than of the most general nature, as to how that discretion was to be exercised. Generally speaking: (i) a court should normally grant amendment without conditions except where amendment was required due to dishonesty and unless the landlord could establish any relevant prejudice as a result of the amendment; (ii) relevant prejudice was the prejudice that reasonably arose from the fact that the landlord was served with the invalid notice, which was now to be validated, rather than having been served with a valid notice initially; (iii) even when a landlord could show relevant prejudice it could be appropriate to permit an amendment without conditions; (iv) when considering what conditions to impose, a court would normally be restricted to compensating the landlord for some or all of the relevant prejudice suffered. (4) Amendment of the first notice should not be subject to any of the conditions suggested by H. The judge was right, for the reasons he gave, to refuse to impose the condition as to the valuation date. If M had served a notice of claim relating only to the main house, the effect of Sch.3 para.3(1) would nonetheless have been to continue the tenancy, not merely in respect of the main house, but also in respect of the mews house. M was entitled to serve the second notice while his tenancy was being continued by Sch.3 para.3(1), DUKE OF WESTMINSTER & ORS v ODDY Times, March 27, 1984, Malekshad considered.

Appeal dismissed.