Council landlords extending wing of residential block creating extra bedroom for lessees of one of the flats – Abortive discussions on whether lessees should buy or rent additional room – Whether lessees entitled after four years’ occupation to claim room as part of property comprised in lease
The plaintiffs, a married couple who spoke little English, had bought under the right to buy scheme a long lease of their four-bedroom flat located on the ground floor of a four storey wing of a council-owned block in east London. The lease expressly reserved the landlords’ right to build on adjoining land. Three of the remaining four flats in the wing were let by the council on weekly tenancies. Presenting what the judge described as "an unusual conundrum for conveyancers" the council, by a letter dated July 5 1990, informed all five tenants that they proposed to extend the wing with a view to adding a fifth bedroom to each flat. In a letter dated September 14 1990, while work was in progress on the foundations of the new wing, the council offered the plaintiffs the chance of acquiring the fifth bedroom at a price to be fixed by reference to the building cost, failing which the extra space would be used by the council for other purposes.
On learning that the plaintiffs could not raise additional mortgage finance the council wrote again on October 17 1990 proposing that, subject to their obtaining consent from their mortgagee, they should rent the extension on terms to be agreed in due course. The plaintiffs did not reply to that letter but were content to allow the council to create the extra room by building a doorway into their outside wall and carrying out certain internal alterations for the provision of access. After moving into the new room, the plaintiffs attended two meetings with council officials in June 1991 at which Mr Ali expressed interest in renting the room while the council reiterated the need for mortgagee consent There was no further communication between the parties.
In 1995 the plaintiffs commenced the present proceedings claiming a declaration that the new room now formed part of the property demised by their long lease and that the title to the lease should be rectified accordingly. The basis of their claim was a presumption , applied in a line of cases going back to Kingsmill v Millard (1855) 11 Exch 313, that where a tenant encroaches upon neighbouring property he is taken to occupy that property as part of his holding.
Held The claim was dismissed
The presumption relied on by the plaintiffs was one of fact not law and could accordingly be rebutted on proof of a contrary intention on the part of either party. In the instant case (distinguishing Smirk v Lyndale Developments Ltd [1975] 2 EGLR 43) the landlords had made it quite clear, linguistic difficulties notwithstanding, that they wanted to be paid for the additional room even if it meant waiting until such time as the plaintiffs wished to sell the flat. The fact that the room had become physically incorporated into the flat did not of itself bring it within the leasehold title. The plaintiffs occupied the extra room as licensees of the council.
Philip Walter (instructed by Wallace Bogan & Co) appeared for the plaintiff lessees, Mr and Mrs Ali; Bryan McGuire (instructed by the solicitor to Tower Hamlets London Borough Council) appeared for the defendants.
