Leasehold enfranchisement — Leasehold Reform Act 1967 — Meaning of “house” — Enfranchisement of two adjoining mews houses — Whether premises “house… reasonably so called” — Whether tenant entitled to enfranchise
The claimant tenant held a long lease of two adjoining mews houses, nos 11 and 12, granted in 1977. By the provisions of the lease, the tenant was obliged to use the premises as a single, private dwelling-house, although the use of the first floor (above the garage) of no 12 as a separate self-contained flat was permitted. In 1983, an underlease was granted of the first-floor flat at no 12. The external appearance of each of the two mews houses was different. Internally, the flat on the first floor of no 12 remained in use as such. The access between nos 11 and 12 was by way of a patio and storeroom. The claimant sought to enfranchise the premises under the Leasehold Reform Act 1967. The defendant landlord contended that the premises were not a “house… reasonably so called” within the meaning of section 2(1) of the 1967 Act.
Held: Numbers 11 and 12 were a “house… reasonably so called”, and the tenant was entitled to enfranchise under the 1967 Act. The description in the headlease of the two properties as representing one dwelling-house was an important and determinative factor. The existence of the separate self-contained flat did not derogate from that position. The decision in Malekshad v Howard de Walden Estates Ltd [2001] EWCA Civ 761; [2001] 3 EGLR 47 required the court to look at the entirety of the premises demised with the knowledge of their actual use.
The following cases are referred to in this report.
Dugan-Chapman v Grosvenor Estates [1997] 1 EGLR 96; [1997] 10 EG 152
Duke of Westminster v Birrane [1995] QB 262; [1995] 2 WLR 270; [1995] 3 All ER 416; [1995] 1 EGLR 89; [1995] 11 EG 141; (1995) 27 HLR 321
Malekshad v Howard de Walden Estates Ltd [2001] EWCA Civ 761; [2002] QB 364; [2001] 3 WLR 824; (2002) 1 P&CR 10;[2001] 3 EGLR 47; [2001] 38 EG 190; HLR 24
Malpas v St Ermin’s Property Co Ltd (1992) 64 P&CR 436; [1992] 1 EGLR 109; [1992] 17 EG 112; 24 HLR 537; [1992] RVR 68
Sharpe v Duke Street Securities NV (1987) 55 P&CR 331; [1987] 2 EGLR 106; 283 EG 1558; 19 HLR 506, CA
Tandon v Trustees of Spurgeons Homes [1982] AC 755; [1982] 2 WLR 735; [1982] 1 All ER 1086; (1982) 44 P&CR 307; [1982] 2 EGLR 73; 263 EG 349, HL
Anthony Radevsky (instructed by Lawrence Graham) appeared for the claimant; Timothy Harry (instructed by Speechly Bircham) represented the defendant.
Giving judgment, Judge Hallgarten QC said:
1. In this case, I am concerned with an application under Part 8 of the CPR for a declaration that the claimant is entitled, under section 22 of the Leasehold Reform Act 1967, to acquire, on fair terms, 11 and 12 Devonshire Mews South, London W1, pursuant to a notice served on 5 September 2000.
2. Briefly, the facts affecting the properties are as follows. As the word “mews” suggests, historically, it may be deduced that they were connected with the corresponding substantial houses at nos 11 and 12 Upper Wimpole Street. At a time when the upper-middle classes had larger establishments, there is a high probability that the servants, horses and carriages from the Upper Wimpole Street houses were accommodated in the corresponding properties in Devonshire Mews South.
3. In terms of hard evidence as to the structure and layout of the respective properties, it may be said that they comprise part of a mixed terrace, nos 11 and 12 being adjacent properties, each on two floors with a shared party wall. Number 11 has a small patio area at the rear, whereas, so far as one can judge, the rear of no 12 abuts directly against the rear of no 12 Upper Wimpole Street.
4. As far as alterations and structure and layout of the affected properties are concerned, one can, I believe, begin in 1975, at which time the entrance to no 11 was in the centre of the ground floor with a garage to the left and the living room to the right, there being a proposal approved by the defendant whereby the garage was converted to living space and the entrance door moved to the left.
5. As to no 12, the position at that date was that living accommodation was confined to the first floor, access being by an entrance door and steps to the left of the house, with the rest of the ground floor being almost entirely devoted to garage spaces, accessed through double doors, albeit with interior access between the two spaces. At the left-hand rear of the space, there was a small, enclosed storage area.
6. As at 11 November 1976, the position was that there were separate interests involved as tenants or subtenants of nos 11 and 12, but, by a deed dated 15 November 1976, these were superseded by an agreement whereby one Anita Rose, inter alia, was to acquire a headlease of both properties for 99 years from 29 September 1976, provided that she would, at her own expense and in a good and workmanlike manner, carry out the alterations in order to combine nos 11 and 12 Devonshire Mews South into a single, private residence in accordance with drawing no 2063/11 attached hereto [not reproduced here], such works to be completed to the entire satisfaction of the landlord.
7. Drawing no 2063/11 showed a new connecting door being created through the party wall between nos 11 and 12 from the patio at no 11 into the enclosed storage area of no 12, that location being now referred to on the plan as a “garden store”.
8. The grant referred to in the agreement was put into effect by means of a lease dated 9 February 1977, whereby the defendant demised to Anita Rose “all that piece of ground with buildings erected thereon” at nos 11 and 12 Devonshire Mews South, in the London borough of the City of Westminster, and it excluded the vault under no 11 Devonshire Mews South. The period of that particular lease was for 99 years from 29 September 1976.
9. Two clauses of the document are of particular materiality. First of all, clause 15, setting out tenant’s obligations, which reads as follows:
(a) To use and occupy the demised premises as a single, private dwelling house provided this shall not prevent the flat on the first floor of the part of the premises known as number 12 Devonshire Mews South from being used as a separate self-contained private residential flat in the occupation of one household or family.
(b) As to the part of the ground floor of number 12 Devonshire Mews aforesaid comprising garage accommodation to be used as the garaging of private motorcars ancillary to the use only of that part of the demised premises known as number 11 Devonshire Mews South.
10. The second clause was clause 24(c), which was, so to speak, complementary to clause 15, and reads as follows:
Not at any time during the said term to underlet any part of the demises premises, here meaning a portion only and not the whole thereof, but this shall not prevent the sub-letting of the flat on the first floor of the part of the demised premises known as number 12 Devonshire Mews South, subject always to the provision of sub-clause 23 of this clause in paragraphs E and F of this sub-clause 24.
11. That has to be under one of those subprovisions, subject to the approval of the defendant.
12. It would appear from the recital to an underlease made between Anita Rose and Susan Green, dated 10 May 1983, that, on 27 September 1982, the lease of 9 February 1977 — wrongly referred to as 1982 — was varied, although it is not entirely clear to what effect,|page:62| but the evidence of Mr Godliman, a director of the defendant, which was not challenged, was to the effect that such was for the purpose of making the underlease, and I apprehend that that may well have been in reference to clause 24(e).
13. In the event, by that underlease, Anita Rose let to Susan Green the flat on the first floor of no 12, including the roof over the rear of no 12, until 2075. That roof had originally been pitched with a valley gutter, but, at some stage, it was altered, and — possibly as late as 1985 — the layout of no 12 was completely remodelled, with, in particular, the entrance door being moved from the left- to the right-hand side, with the double garage being moved correspondingly to the left.
14. The claimant and her husband came onto the scene on 1 April 1985, when they acquired, from Anita Rose, the lease of nos 11 and 12, the claimant becoming solely interested as beneficial owner by reason of a deed of gift made by her husband, dated 17 January 1992.
15. With counsels’ encouragement, I took advantage of having a view of nos 11 and 12. It transpired that that view was entirely consistent with the plans. There are certain observations that may be made arising from the view, much of which can also be discerned from the photographs that I was shown. Those observations are as follows:
16. (1) There was no suggestion that the user of the premises is otherwise than as stipulated in the lease, nor could it be said that the lease involves an unnatural user.
17. (2) So far as the so-called garden store is concerned, this contains a number of items, including, in particular, a washing machine, that render it, as it seems, to be more of a general utility room.
18. (3) The appearance of nos 11 and 12 is different, from a purely cosmetic point of view. They are painted in different colours. Furthermore, the height and style of the windows and ironwork is different, and there has been no attempt to create continuity, eg by use of a uniform lintel across the entire length of nos 11 and 12. I have no idea whether planning permission or, indeed, listed building permission might be available to create uniform height and style of windows. I rather suspect it would not.
19. (4) The claimant has not, as she might have done, sought, with the agreement of the tenant of the flat, to change the identity of the flat, no 12, to no 11A.
20. Those being the primary facts, I turn now to the law, and I think it appropriate to set out section 2(1) to (3) of the Act, as follows:
(1) For purposes of this Part of this Act, “house” includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; and —
(a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate “houses”, though the building as a whole may be; and
(b) where a building is divided vertically the building as a whole is not a “house” though any of the units into which it is divided may be.
(2) References in this Part of this Act to a house do not apply to a house which is not structurally detached and of which a material part lies above or below a part of the structure not comprised in the house.
(3) Subject to the following provisions of this section, where in relation to a house let to and occupied by a tenant reference is made in this Part of this Act to the house and its premises, the reference to premises is to be taken as referring to any garage, outhouse, garden, yard and appurtenances which at the relevant time are let to him with the house and are occupied with and used for the purposes of the house or any part of it by him or by another occupant.
21. I interpose that no point was taken on section 2(2), although it would appear as if part of the garden of no 11 is above a vault belonging to no 11 Upper Wimpole Street. Presumably, this protrusion is regarded as immaterial.
22. It was not, of course, disputed that nos 11 and 12 were designed or adapted for living in, and the essential question that arises is whether they (or it) can reasonably be called a house.
23. Guidance in relation to that issue is principally available from two authorities, each applied in the recent case of Malekshad v Howard de Walden Estates Ltd [2001] EWCA Civ 761; [2001] 3 WLR 824*. First is the speech of Lord Roskill, giving the decision of the majority in Tandon v Trustees of Spurgeons Homes [1982] AC 755 , which involved a tenant seeking to invoke section 2(1) of the Act in relation to premises comprising a shop with living accommodation above, described in the lease in question as: “All that messuage, dwellinghouse and shop.”
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* Editor’s note: Also reported at [2001] 3 EGLR 47
Editor’s note: Also reported at [1982] 2 EGLR 73
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24. In finding in favour of the tenant, Lord Roskill made the following series of observations at p764G:
My Lords, looking only at the words of this subsection and regardless of any authority upon its construction, two points seem to me clearly to emerge. First, though the definition of “house” is expressed to be inclusive and not exhaustive, the words “any building… reasonably so called” are intended as words of limitation, for clearly premises are not to be treated as a “house” within the subsection merely because they are a building designed or adapted for living in unless they can also in ordinary parlance be reasonably called “a house”. Secondly, premises are not to be treated as without the definition merely because the building is not structurally detached or “was [not] or is not solely designed or adapted for living in.” Nothing in the present case turns upon “not structurally detached,” for these premises were not structurally detached. But the latter words which I have italicised suggest to my mind that Parliament was intending in certain circumstances to extend the benefits and privileges of the Act of 1967 to tenants of premises not exclusively designed or adapted for living in for residential purposes. If that approach be correct, the next question is what are the circumstances in which the tenant of such premises can successfully assert a claim to those benefits and privileges?
…
My Lords, learned counsel for the appellant advanced three propositions from which learned counsel for the respondents did not dissent. First, the question whether the particular premises were a “house” within the definition was a mixed question of fact and law, so that if there were no evidence upon which a particular conclusion one way or the other was reached that conclusion could be reviewed on appeal. Secondly, if the premises might also be called something other than a “house” within the definition, that fact alone did not prevent those premises from being a “‘house’… reasonably so called.” Thirdly, it was implicit from such previous decisions as there have been upon this question that premises used for nonresidential as well as for residential purposes could in law be a “house” within the definition and that it depended upon the character of the premises in question whether by reason of their mixed user they fell within or without the definition.
My Lords, in agreement with both learned counsel I accept these propositions as correct, but they restate the question rather than resolve it. How is the “character” of the premises to be determined? It is tempting to look at the history of the premises, and having regard to the language of the original demise which I have already quoted learned counsel for the respondents naturally urged your Lordships so to do. As already stated, these premises were built in 1881 as a “dwelling-house and shop.” I think it clear, having regard to the definition of “relevant time” in section 37(1)(d) of the Act of 1967, that the question must be resolved as at the time of the tenant’s noticeunder the statute. The character of the premises at that time will usually though not perhaps invariably reflect its history. Accordingly the history will be relevant though certainly not conclusive. The terms of the lease will also be relevant as will be the proportion of the premises respectively used for residential and non-residential purposes, and also the physical appearance of the premises.
…
… For this reason, the Court of Appeal’s decision in Lake v Bennett [1970] 1 QB 663 was welcome as stating a principle and confirming the question of fact to a narrow area. I deduce from it the following propositions of law: (1) as long as a building of mixed use can reasonably be called a house, it is within the statutory meaning of “house” even though it may also reasonably be called something else; (2) it is a question of law whether it is reasonable to call a building a “house”; (3) if the building is designed or adapted for living in, by which, as is plain from section 1(1) of the Act of 1967, is meant designed or adapted for occupation as a residence, only exceptional circumstances, which I find hard to envisage, would justify a judge in holding that it could not reasonably be called a house. They would have to be such that nobody could reasonably call the building a house.|page:63|
25. The second authority is more recent, namely Duke of Westminster v Birrane [1995] QB 262*, which involved the question of whether, in respect of a mews house at no 2 Kinnerton Street, which once appertained to 2 Wilton Crescent, such came within section 2(1) of the Act. Nourse LJ stated as follows at p268D-F:
In my view the correct approach to the construction of sections 1(1) and 2(1) is as follows. The first requirement of section 1(1) is that there should be a leasehold house held by the tenant. In order to find out whether that requirement is satisfied you go straight to section 2(1), which invites you to identify a building held by the tenant and designed or adapted for living in, it need not be structurally detached, nor solely designed or adapted for living in. If and when you have identified such a building you must consider whether it is reasonable to call it a house. If it is, then you go back to the other requirements of section 1(1) and consider next whether the tenant is occupying the building as his residence. You do not consider that question unless and until the requirements of section 2(1) are satisfied.
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* Editor’s note: Also reported at [1995] 1 EGLR 89
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26. Malekshad is an important case — on facts, quite similar to Birrane — not least because it directs one away from a question that otherwise, like the learned judge at first instance in that case, I would have been tempted to pose, namely whether nos 11 and 12 constitute one house or two houses. This question could be posed only upon the assumption that the building, or buildings, could not simultaneously be one house or two houses, which Robert Walker LJ, at p835, stated to be the wrong approach.
27. What Robert Walker LJ stated was that the judge “should have begun by looking at the entirety of the property demised by the head lease and asked himself whether it could reasonably be called a house”.
28. In approaching this question, at one point it seemed to me that it was conclusively determined by the very words that the defendant and Anita Rose had used in the agreement and lease quoted above. Both parties were at pains to describe the demised premises and nos 11 and 12 as a single, private dwelling-house, with garage use at no 12 limited to those occupying no 11. How can the defendant now say that nos 11 and 12 are not a house, let alone cannot reasonably be so called?
29. Mr Anthony Radevsky did not seek to put his case so high, and I believe that he was wise not to do so because the true construction of the language of a statute cannot be affected by the dictionary meaning that parties choose to adopt in a private agreement. None the less, the words “house” and “dwelling-house” are words in ordinary use, and, in my view, in the circumstances that the parties saw no difficulty in describing the two properties as a single, private dwelling-house, represents a factor supporting the claimant’s contention: see per Dillon LJ in Malpas v St Ermin’s Property Co Ltd [1992] 1 EGLR 109 at p112.
30. As at February 1977, had Anita Rose chosen to use the flat at no 12 as a studio or storage space, the circumstances that such flat was physically separated and could only be entered through its own front door would not, so far as the language of clause 15(a) goes, have derogated from the description of nos 11 and 12 as a single, private dwelling-house.
31. One question that arises, therefore, is whether the circumstance that Anita Rose’s enjoyment of the demised premises is, in fact, subject to user by a different household (the proviso to clause 15A), encompassed in a sublease (clause 24(c), which right or power has been exercised), means that, taking all relevant circumstances into account, it was not, or is no longer, reasonable to describe nos 11 and 12 as a house?
32. The burden of establishing that nos 11 and 12 can reasonably be called a house is for the claimant to discharge, but the way in which the matter has been approached by the courts is to view the purported exercise of powers by tenants benevolently. Thus, adopting what Lord Ruskill said in Tandon, the question is not whether, objectively, nos 11 and 12 are a house, but whether they “can reasonably be called a house”.
33. Tandon was applied in Sharpe v Duke Street Securities NV [1987] 2 EGLR 106, where a property was divided into two separate maisonettes, and it was held by the Court of Appeal to have been a house within the meaning of section 2(1), which decision was followed and applied in Malpas above, where the facts were similar to Sharpe, with the additional circumstance that one of the maisonettes was subject to a long sublease. The conclusion that Robert Walker LJ stated in Malekshad, at p837C, was as follows:
34. Miss Jackson referred to these two cases not because they directly assisted her, but to distinguish them as being concerned with the express references to flats and maisonettes in section 2(1). However section 2(1) and (2) cannot be treated as a series of integers to be understood and applied separately. They must so far as possible be read as a coherent whole. Sharpe’s case is a case of some significance since it shows that two residential units may constitute a single house although they were purpose built for separate occupation and have always been in separate occupation, with no internal communication at all.
34. Such being the relevant principles, can nos 11 and 12 reasonably be called a house? ln my view, they can, and I summarise my reasons as follows.
35. (1) I think that the description of the two properties in the headlease as representing one dwelling-house is, and remains, an important, albeit not determinative factor: see Malpas at p110E-F.
36. (2) The storeroom, or, as I have more appropriately considered it, the utility room, and garage on the ground floor of no 12 comprise an important part of the overall facilities enjoyed by those living at no 11. I do not attach weight to the circumstance that access from no 11 to no 12 was and is to be gained only via the patio and storeroom. The distance is small, and the storeroom has a strong feel of being part and parcel of no 11, rather than some separate property.
37. (3) The existence of a separate, self-contained flat on the upper floor of no 12 does not, in my view, derogate from the position. The authorities make it clear that the mere fact that part of the building is in separate occupation does not prevent that building from being called a house.
38. (4) Had the two properties had their facades altered or painted in the same way as to give the impression of continuity, the position described in the previous subparagraph would have been clear, really, beyond all doubt. For my part, while I accept that appearance is a factor that it is appropriate to take into account, it is not one to which, in the end, I feel it is necessary to attach substantial, let alone decisive, weight.
39. (5) While I quite accept that because the two properties retain their separate appearance and numbers, it is possible to refer to them as two houses (cf Dugan-Chapman v Grosvenor Estates [1997] 1 EGLR 96), directing myself, as I must, in the light of the judgment in Malekshad, and looking at the entirety of the properties demised with the knowledge of their actual use, I have come to the conclusion that such property viz nos 11 and 12 can reasonably be called a house. I have to say, however, that I reach this conclusion with a degree of unease. I am conscious that the approach that I have adopted gives a very wide meaning to the word “house”, as compared with “house and premises” in section 1.
40. The above matter was the only issue before me, but, prior to the conclusion of the case, Mr Radevsky, for the claimant, sought leave to amend his application so as, if necessary, to claim that, in so far as the claimant was wrong, she might, in the alternative, seek enfranchisement of no 11 alone, together with the garage and storeroom of no 12, on the basis of those being premises within the meaning of sections 1(1) and 2(3) of the Act.
41. This question does not, of course, now arise, but, had it arisen, I would have allowed leave to amend, subject to further consideration of the issue being adjourned until after the defendant had had the opportunity to raise issues bearing on hardship or inconvenience under section 2(v) of the Act.
