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Court of Appeal Permission in 'Proper Purpose' Housing Case


Alice Richardson

The Court of Appeal has granted permission to appeal in Houldsworth Village Management Company Ltd v Mr Keith Barton Ref A3/2019/2750 on the correct approach to requests made to lessee-owned property management companies under s.116 Companies Act 2006 (‘the Act’).

Trinity Housing barrister, Alice Richardson represents the appellant landlord. Victoria Mill is a building in Stockport made up of 180 residential flats. The flats are let on long leases which are tripartite agreements between the landlord, the leaseholder and the Appellant, a lessee-owned management company. 

The Respondent is a leaseholder of one of the flats and is a member of the Appellant company.

On 3rd May 2019 the Respondent made a request to the Appellant company, under s.116 of the Act, to inspect the current register of members. 

The Respondent had previously made a request to another management company, Pandongate House Management Co Ltd, who had successfully obtained an order directing it not to comply with the Respondent’s request on the basis that the order was not made for a ‘proper purpose’ (Pandongate House Management Co Ltd v Barton [2019] L&TR 23).

The Appellant took the view, in reliance on the Pandongate case, that the Respondent’s request in the present case was also not made for a ‘proper purpose’ because he was (in part) attempting to further his rights as leaseholder rather than as a shareholder.

The Appellant therefore applied to the Court, pursuant to s.117 of the Act, for an order directing the Appellant not to comply with the request.

On 10th October 2019 His Honour Judge Hodge QC (sitting as a High Court Judge) dismissed the Appellant’s claim and ordered the Appellant to comply with the Respondent’s request.

The Judge declined to follow the Pandongate decision and, in consequence, there are now two competing High Court decisions on the ‘proper purpose’ test when a request is made to a lessee-owned management company, under s.116 of the Act, by a member of the company who is also a leaseholder, in an attempt to further his rights as a leaseholder. 

Granting permission to appeal on the papers Newey LJ reasoned that the appeal has a real prospect of success and that it was desirable for the Court of Appeal to review the contrasting decisions.

The appeal is to be heard before February 2021.

Alice deals with a wide range of housing law issues, including cases involving discrimination, human rights and public law/judicial review. Alice also undertakes regulatory work in the housing, property and local government sectors. She has particular experience advising on licensing schemes under the Housing Act 2004.

Alice is a member of the Attorney General’s Regional Panel of Counsel and is regularly instructed by the Government Legal Department. She has also been appointed to the Equality and Human Rights Commission Panel of Counsel.

 

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