Pensioners lose leasehold right to manage application for the third time

Leasehold pensioners in Plymouth have failed for the third time to break free from London managing agent Joseph Gurvits, LKP was informed yesterday.

Elim Court’s third right to manage application in the past 18 months was thrown out at the Leasehold Valuation Tribunal owing to a mistake in the application.

The decision is a bitterly disappointing set-back for the pensioners, who have been struggling to achieve right to manage since June 2011. Within months of Gurvits’s associate Israel Moskovitz buying the freehold through Avon Freeholds, and Gurvits being appointed the property’s managing agent through Y and Y Management, Elim Court residents have sought to exercise their right to manage themselves.

Gurvits is better known to London leaseholders as the proprietor of the managing agents Eagerstates, which figures in numerous LVT rulings.

To achieve right to manage, the residents engaged the Right to Manage Federation, an RTM facilitator whose fees are paid for in the event of a successful RTM by commissions from the new incoming managing agent.

The case was heard on December 11, and Gurvits employed for the task barrister Justin Bates, who unsuccessfully represented the freeholder against pensioners in the controversial Oakland Court case in Worthing last April. In the House of Commons, Sir Peter Bottomley condemned the legal stratagems involved as “legal torture”.

The Elim Court case illustrates the considerable difficulties pensioners in retirement developments face when trying to exercise their right to manage in the face of a freeholder determined to resist it.

Some of the original members of the RTM company have died, others have gone into care, and some have changed their minds and withdrawn from the application.

Bates argued against the RTM application on five grounds:

1. The notice claims were signed by Dudley Joiner, of the RTMF,  with the words “RTMF Secretarial, Company Secretary”, so the form was signed by a company on the applicant company’s behalf. Therefore, it was not validly signed.
2. RTM notice was given too early to be valid as eight qualifying tenants had told the freeholder that they had withdrawn from the application.
3. One flat was held on a long lease from ReAssure, which had not been given notice of the RTM application.
4. The eight qualifying tenants were not members of the company (the complex argument is best read in the full LVT judgement below).
5. Under the Companies Act, the memorandum of association and the articles of association needed to be open for inspection at a specified place in England or Wales for “periods of at least two hours on each of at least three days (including a Saturday or a Sunday or both) within the seven days beginning with the day following that on which the notice is given”.

On every point, Bates’s arguments failed except the fifth.

Here solicitor Margarita Madjirska-Mossop, representing the residents and employed by the RTMF, argued that because the words “Saturday or Sunday or both” were in brackets in the Companies Act, this provision was discretionary.

Bates tore this apart by pointing out that the Companies Act also states “specify a place (in England and Wales) at which the memorandum of association and articles of association may be inspected”.

Did this mean that England and Wales were an option, allowing inspection of a  company’s memorandum of association and articles of association “anywhere, even a foreign country”?

The tribunal agreed.

“The requirement relating to inspection provision is clearly mandatory and, equally clearly, it was not complied with, and for that reason alone the procedure adopted by the applicant did not follow the statutory requirements. Accordingly, the Applicant’s claim must necessarily fail.”

Elim Court and the Right to Manage Federation are now considering their options.

The open question is who will pay the freeholder’s legal costs, which will be several thousand pounds.

The full ruling can be read here: ElimCourtLVT