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Willingale v. Globalgrange Ltd (2000) 18 EG 152
In this case the question which arose was whether the "initial notice" served by the tenant(s) on the landlords giving notice of their desire collectively to enfranchise was a valid notice for the purposes of the Leasehold Reform (etc.) Act 1993. Briefly, the notice was served on the landlord suggesting a price for the freehold of £7,000 and a price for the intermediate leasehold interests of £1,000, and requiring that the landlord respond to the initial notice within the period of two months as specified by S.21 of the 1993 Act. The landlord failed to respond to the initial notice, so the tenants through their nominee applied to the County Court for an order determining the terms on which they would be entitled to acquire the freehold and the intermediate leasehold interests; at this stage the landlord did respond, by opposing the application on the grounds that the initial notice was not a valid notice (apparently on the basis that it should have included provision for the acquisition of certain easements necessary to provide for means of escape in case of fire), and alternatively that the notice was not a proper notice on the basis that the price suggested for the acquisition of the freehold interest was only half of the actual market value of that interest. The County Court judge dismissed both of the landlords' objections and the landlords appealed. The Court of Appeal dismissed the appeal, holding that, the landlords having failed to respond to the tenants' initial notice within the period allowed, there was no residual discretion vested in the court to consider further the issues, such as the requirement of easements for the fire escape which could properly have been raised in the landlords' counter-notice. As regards the landlords' suggestion that the initial notice was not a proper one because it may have under-stated the proper value of the landlords' reversion, the court distinguished the earlier case of Cadogan v. Morris (where the initial notice suggested an acquisition price of only £100 for a reversionary interest which was apparently worth between £100,000 and £300,000 and where it had been held that the initial notice was invalid because the sum therein suggested had been entirely unrealistic, and not a sum which the tenant could be said actually to have intended to pay). The court agreed that the tenants' proposals must be realistic, but if they were the court had no further discretion to modify, for example, the price to be paid: as the landlords in this case had failed to respond to the tenants' initial notice, the sum of £7,000 therein specified was the price at which they were entitled to acquire the landlords' reversion.