On its proper interpretation the statutory scheme of the Leasehold Reform, Housing and Urban Development Act 1993 required the court to hold that a purported notice under section 13 claiming the right to collective enfranchisement was invalid by virtue of the non-compliance with section 13(3)(e) in failing to identify all the qualifying tenants and to state their addresses in the property. The intention of the legislature as to the consequences of non-compliance with the statutory procedure had to be ascertained in the light of the statutory scheme as a whole.

The Court of Appeal so held when dismissing the appeal by the tenants, Gurmeet Kaur Natt and Malkit Singh Natt, from the order of Judge Dight sitting in the Central London County Court on 12 September 2013 whereby he declared that a notice dated 17 June 2010 served on the freeholder owners of the property, Zulfiqar Ali Osman and Shahida Ali, was invalid and a nullity because it failed to comply with section 13(3)(e) of the 1993 Act.

Section 13 provides: “The initial notice must … (e) state the full names of all the qualifying tenants of flats contained in the specified premises and the addresses of their flats, and contain in relation to each of those tenants, (i) such particulars of his lease as are sufficient to identify it, including the date on which the lease was entered into, the term for which it was granted and the date of the commencement of the term.”

SIR TERENCE ETHERTON C said that where a statute laid down a process or procedure for the exercise or acquisition by a person or body of some right conferred by the statute, and the statute did not expressly state what was the consequence of the failure to comply with that process or procedure, the consequence used to be said to depend on whether the requirement was mandatory or directory. That approach was now unsatisfactory. The modern approach was to determine the consequence of non-compliance as an ordinary issue of statutory interpretation, applying all the usual principles of statutory interpretation. It invariably involved, therefore, among other things according to the context, an assessment of the purpose and importance of the requirement in the context of the statutory scheme as a whole. The modern approach was elegantly stated in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, para 93. The court was referred to two broad categories of cases, namely, those cases in which the decision of a public body was challenged, often involving administrative or public law and judicial review, or which concerned procedural requirements for challenging a decision whether by litigation or some other process, and those cases in which the statute conferred a property or similar right on a private person and the issue was whether non-compliance with the statutory requirement precluded that person from acquiring the right in question. In the first category of cases, in accordance with the more recent interpretative approach, the courts had asked whether the statutory requirement could be fulfilled by substantial compliance and, if so, whether on the facts there had been a substantial compliance even if not strict compliance. In the second category the Court of Appeal cases showed a consistent approach in relation to statutory requirements to serve a notice. In none of them had the court adopted the approach of “substantial compliance”. The court had interpreted the notice to see whether it actually complied with the strict requirements of the statute; if it did not, then the court had, as a matter of statutory interpretation, held the notice to be wholly valid or wholly invalid. On that approach, the outcome did not depend on the particular circumstances of the actual parties, such as the state of mind or knowledge of the recipient or the actual prejudice caused by non-compliance on the particular facts of the case. In some cases the court had held in favour of invalidity where the notice or the information which was missing from it was of critical importance in the context of the scheme. By contrast the court had held in favour of validity where the information missing from the statutory notice was of secondary importance or merely ancillary. In the present case it was not in dispute that there was a failure to comply with section 13(3)(e). It was not possible to interpret the notice so as to hold that there was compliance. The statutory scheme pointed clearly in favour of the invalidity of the notice by virtue of the non-compliance with section 13(3)(e) in failing to identify all the qualifying tenants and to state their addresses in the property. Those matters went to the very heart of the right to collective enfranchisement since the information was intended to disclose on the face of the section 13 notice the number of qualifying tenants in the premises (section 3(1)(b)), whether the total number of flats held by the qualifying tenants was not less than two-thirds of the total number of flats in the premises (section 3(1)(c)) and whether the section 13 notice had been given by qualifying tenants of not less than half of the number of flats contained in the premises (section 13(2)(b)). Parliament had specifically provided in paragraph 15 of Schedule 3 to the 1993 Act for the section 13 notice not to be invalidated by certain inaccuracies and for the notice to be capable of amendment in certain circumstances. The assumption had to be that Parliament intended other errors in the section 13 notice to render it invalid. There was no restriction on the service of a new notice at any time after an invalid notice.

PATTEN and GLOSTER LJJ agreed.