Leasehold Reform, Housing and Urban Development Act 1993 – Lease extension – Leasehold Reform Act 1967 – Enfranchisement of house – Appellant holding lease of building – Notice to acquire new lease of one flat in building under section 42 of 1993 Act – Contractual term of lease expiring – Subsequent claim to acquire freehold of entire building under section 8 of 1967 Act – Whether appellants having existing lease of entire building so as to qualify under 1967 Act – Whether continuation of lease by para 5(1) of 1993 Act applying to entire lease or only flat subject to section 42 claim – Appeal dismissed
The appellants held a lease of a building in west London for a term of 50 years expiring in September 2001. The building contained five flats, in one of which the appellants lived, together with consulting rooms on the ground floor and storage in the basement. The respondents owned the freehold of the building. Between 2000 and 2002, the appellants made various leasehold enfranchisement claims, one of which was a claim to acquire a new lease of their flat. Notice of that claim, under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993, was served on the respondents in September 2001, a few days prior to the expiry of the existing lease. In April 2002, while that claim remained outstanding, the appellants gave notice of a further claim to acquire the freehold of the entire building under section 8 of the Leasehold Reform Act 1967.
The respondents objected to enfranchisement under the 1967 Act on the ground that, inter alia, the appellants were not at the time of making their claim tenants of the entire property, as the 1967 Act required, since their lease had by then expired by effluxion of time. The appellants contended that their lease had been extended by virtue of their claim under section 42 of the 1967 Act and the provision in para 5(1) of Schedule 12 to that Act that “the lease of the flat shall not terminate” during the currency of that claim. The judge rejected that submission and dismissed the 1967 Act claim.
On appeal, the appellants submitted that para 5(1) did not provide for the continuation of part only of a lease, such that the lease of the entire building had continued upon the service of the section 42 notice. The respondents contended that the lease continued only in respect of the flat since it was only those premises that the appellants sought to enfranchise by the section 42 notice.
Held: The appeal was dismissed.
The language of para 5(1) of the 1967 Act was clear. It continued the lease only of the flat in respect of which the section 42 claim was made. The appellants’ notice related solely to one flat and claimed a new lease of that flat only. Para 5(1) provided for the existing lease to continue only so far as it related to the flat in question, and did not apply to other flats or other parts of the building that might be comprised in the existing lease. The purpose of that provision was to preserve the position pending determination of the claim. Where a new lease of one flat was sought, it was unnecessary, pending determination of that claim, to continue the lease in so far as it demised other flats. To do so would give rise to inequity since, should the claim be effective, the landlord might be kept out of possession of the other flats for a number of years. That would be contrary to Article 1 of the First Protocol of the European Convention on Human Rights. Moreover, were the claim to be ineffective, the appellants would then have to pay compensation, under section 61A of the 1967 Act, calculated by reference to the market rent of the entire building.
Any alleged difficulties with easements and the like did not justify the court in resisting a proper construction requiring severance of the lease: Howard de Walden Estates Ltd v Aggio [2008] UKHL 44; [2008] 2 EGLR 57; [2008] 34 EG 94 applied; Malekshad v Howard de Walden Estates Ltd (No 2) [2003] EWHC 3106 (Ch); [2004] 1 WLR 862 distinguished.
Anthony Radevsky (instructed by Wallace & Partners) appeared for the appellants; Jonathan Gaunt QC and Edward Cole (instructed by Farrer & Co LLP) appeared for the respondents.
Sally Dobson, barrister
