Westbrook’s artificial collective enfranchisement scheme succeeds in High Court

Westbrook’s artificial collective enfranchisement scheme succeeds in High Court

Can a scheme set up specifically to take advantage of the collective enfranchisement legislation succeed? The High Court decided that such a scheme did not fall foul of the wording of the legislation.

Original news

Westbrook Dolphin Square v Friends Life [2014] EWHC 2433 (Ch)

In Westbrook, the then parent company of Westbrook was anxious to acquire the freehold of Dolphin Square. It created a number of companies and transactions, to bring into existence underleases whose tenants could invoke the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993). Westbrook, as nominee purchaser, served an initial notice on the landlord, Friends Provident, in September 2007. Friends Provident served a counter-notice and Westbrook made an application to court. However, it later discontinued the proceedings due to a fall in the residential property market since the service of the initial notice.

In May 2010 it served a second initial notice. Again, Friends Provident served a counter-notice, challenging the validity of the notice and Westbrook’s entitlement to purchase.

Westbrook then applied to the High Court for a declaration that it was entitled to acquire the freehold.

What did the court decide?

The court decided that all challenges to Westbrook’s enfranchisement application failed and that it was entitled to its declarations as to its entitlement to enfranchise and other relief.

What was the main issue in the case?

There were a number of challenges to Westbrooks’ entitlement to enfranchise, but the main one – of wider application - was whether it was prevented from enfranchising as it had created the scheme (the leasehold and corporate structure) to provide an opportunity for enfranchisement which would otherwise not exist. Friends Life argued

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About the author:
Joanna is a commercial property specialist. Prior to joining the LexisPSL Property team, she was a transactional lawyer. She qualified in 1995 at Shoosmiths and subsequently worked at Nabarro, Charles Russell, Bircham Dyson Bell and Pemberton Greenish. She has wide-ranging experience of all non-contentious property transactions, with a particular emphasis on landlord and tenant work.