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Stephen Acton secures victory for landlord in novel s42 dispute

Stephen Acton represented the successful landlord in a case called Ryan v Vambeck in which Mrs Recorder McAllister handed down judgment in Central London County Court on 25 January. The personal representatives of the deceased tenant had assigned the lease, and the assignee was seeking to acquire a new (90 year) lease of the premises pursuant to a notice which had been served by the personal representatives purportedly under s42 of the Leasehold Reform Etc Act 1993. The landlord sought to resist this on two grounds, which each raised a question of statutory construction on which there appeared to be no direct authority.

The first was whether the personal representatives were entitled to serve the notice more than two years after the date of their appointment notwithstanding s42(4A) of the Act which appeared to prohibit this. The new tenant argued that this two-year cut-off date applies only when personal representatives seek to exercise the “derivative” right based upon the deceased tenant’s previous two-year period as a qualifying tenant, and not to cases in which the representatives are exercising their own right as qualifying tenants, two years after themselves becoming tenants. This argument was supported by a footnote in Hague and statements of the promoter of the bill reported in Hansard.

The second ground raised the question whether a tenant can effectively assign the benefit of a s42 notice, when the notice is given by the tenant and the assignment is executed after the tenant assigns the leasehold interest but before the assignee is registered as the proprietor thereof, notwithstanding s43 of the Act which provides that if the lease is assigned without the benefit of the notice the notice is deemed withdrawn.

The s42(4A) issue was decided in favour of the landlord, and the s43 issue against him. The upshot was that no effective notice under s42 had been served so that the tenant had no right to a new lease under the purported notice. The landlord recovered 85% of its costs.

The tenant was given permission to appeal on the s42(4A) point, and the landlord permission to cross-appeal on the s43 point in the event that the tenant issued an appeal.