Jewelcraft Ltd v Pressland and another

IN THE CENTRAL LONDON COUNTY COURT No.  3CL10384         26 Park Crescent London W1B 1HT Thursday, 10th April 2014     Before:   HIS HONOUR JUDGE DIGHT     B E T W E E N :                                                                   JEWELCRAFT LIMITED                                             Claimant   –  and –                                                            PAUL PRESSLAND & Anor.                                     Respondent     _________     Transcribed by BEVERLEY F. NUNNERY & CO. Official Court Reporters and Audio Transcribers One Quality Court, Chancery Lane, London WC2A 1HR Tel:  020 7831 5627     Fax:  020 7831 7737 info@beverleynunnery.com   _________       MR. T. JEFFERIES (instructed by Maxwell Winward LLP) appeared on behalf of the Claimant.   MR. A. RADEVSKY (instructed by Bishop & Sewell LLP) appeared on behalf of the Defendant.     _________       J U D G M E N T (As approved by the Judge) HIS HONOUR JUDGE DIGHT:   1                  This is a claim under the Leasehold Reform Act 1967, which I will refer to as ‘the Act’.  The sole issue arising for determination is whether the subject property, 373 Upper Richmond Road, London SW15, which I will refer to as “the building”, is a house within the meaning of s.2(1) of the Act.    2                  The building forms part of a parade in Putney of shops with living accommodation over, running between numbers 349 to 393 Upper Richmond Road.  The lower floor of the building is subject to a lease for use as a shop.  The upper floor is let as residential accommodation.  The house, for the purposes of the Act, is defined in s.2(1) as follows:              “For the purposes 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 is not wholly designed or adapted for living in, or is divided horizontally into flats or maisonettes.”   3                  It is common ground that the building has been designed, or adapted, for living in.  The relevant parts of the definition, so far as the dispute before me is concerned, is the second part, namely, that comprising the words “and reasonably so called”.  The claimant tenant submits that the building is a house reasonably so called and that at all material times contained rooms designed and used for living in.  The defendant landlord, it has to be said, does not dispute that the building was originally designed and constructed, and has been used in part, for living in, but contends that the building could not be described as at the date of the service of the tenant’s notice, which was in June 2010, as a house reasonably so called.   4                  The proceedings before me to enforce the claimant’s alleged right to enfranchisement, which was started as long ago as September 2010, were put on hold while various decisions of this court relating to the definition of a house for the purposes of the Act worked their way through the appellate system culminating in a decision of the Supreme Court in Hosebay Limited v Day [2012] UKSC 41, which I will refer to as ‘Hosebay’ and which I will come to in due course.    THE BUILDING   5                  I had the benefit of a site visit and was able to view the building both internally and externally.  The building forms part of a traditional inter-war terrace or parade of shops with living accommodation over, set back slightly from the highway, being a main road, with designated parking spaces between the parade and the road itself.  The inference I draw from the materials that have been put before me is that the parade was designed to service the housing estate known as the Roehampton Estate, behind it, and that the parking spaces were intended at the time of construction of the building for those who made deliveries to the shops on the ground floor of the parade.   6                  The ground floor of the building, which has a plate glass window onto the street, is used for the business of Martins, the newsagents.  The front portion of the shop is laid out as a newsagents, sweet shop and tobacconists.  Behind the front door lies a store, and behind that a lavatory and a separate room with a hand basin, and a small corridor.  There  is a former alleyway between this building and the one next door (to the right as one looks into the building from the street), which appears to have been covered over, and one cannot tell from a visual inspection what the materials are that have been used to enclose it, but enclosed it has been.  The rear external door of the ground floor premises appears to be some type of heavy duty security door.    7                  The upper floor of the building is reached not through the ground floor shop but via an external open staircase in the yard at the rear of the property.  Access to the yard itself is gained through a wooden gate leading off an alleyway behind the parade.  The upper floor consists of a series of rooms, which running from the rear entrance to the front of the building are arranged as follows: a kitchen, a bathroom, a bedroom, and at the front a sitting room.  Within the bedroom there is an inaccessible oblong shaped boxed off area through which a staircase might once have emerged from the lower floor into the corridor from which the rooms on the upper floor are accessed, but there is now no evidence of any such staircase, landing, or entrance, and the upper floor accommodation is entirely self-contained.  I draw the inference from the evidence that has been put before me that it has existed in its present layout since approximately 1970.   8                  The history of the building is as follows.  It appears, as I have already said, to be part of the Roehampton Estate.  The parade, the plans of which I have seen, comprises standard variations of similar units.  I was shown some building plans in respect of which planning consent was granted, which show that the intention immediately prior to the grant of the lease in this case was to construct the building with the following layout.  So far as the ground floor is concerned, a large front room (shop), just behind that a kitchen, behind that a scullery containing a small basin and a separate WC accessed from the yard.  Within the rear of the front room there appears to have been provision for a staircase, which was to lead to the upper floor.  The upper floor, running from the front to the back, appears to have been tentatively laid out as a sitting room, a bedroom, a bathroom, and a rear bedroom, with the staircase coming out in the corridor between the first of the two bedrooms and the bathroom.    9                  The reasonable inference is that the premises were initially planned out in that way so that the kitchen and scullery downstairs at the rear serviced the two bedroom flat upstairs.  At the time of intended construction the two units (namely shop and residential) were not self-contained, and the shop led in two ways to the residential parts of the accommodation, through the rear of the ground floor into the kitchen, and through the staircase that I have mentioned.    10              I was shown the original notice of intention to build dated 20th October 1921, which described the premises as “new shop premises with living accommodation over”, and the plans that I have mentioned were those in respect of which the notice was given.  I was also shown extracts from Kellys Directory for the early years after the grant of the lease, which described the occupier of the building in 1923 as a tobacconist, in 1924 as a tobacconist and post office, and in 1927 as a post office and high class tobacconist and confectionary with fancy goods, newsagents etc.  I was also shown the rating lists for the early years, which in 1932 described the premises as a house and shop, a description which certainly obtained up until 1942.    11              The planning records for the works, which appear subsequently to have been carried out, dating back to the 1970s, show that on 4th June 1970 there was an application for a new shop front and the erection of an external staircase at the rear.  It seems to me fair to draw the inference from that material, and from the current layout of the site, that it was around the time, or shortly after the time, of the grant of that permission that the internal staircase was removed, that the ground floor kitchen was relocated upstairs, the scullery effectively disappeared, and the upstairs became a self-contained flat accessed from the external new staircase.  The new flat consisted of only one bedroom.  So far as the size of the two units are concerned, it is common ground that the size of the ground premises, and the size of the upper floor residential premises, are approximately equal.    12              I have also been taken to the title to the premises.  The lease of the whole of the premises, which is still running, is that dated 12th January 1923, by which the then landlords demised all:              “That piece of ground in the Parish of Wandsworth Borough in the County of London and situate on the south side of Upper Richmond Road and having a frontage thereon of 18 feet 9 inches and a width on the south side of 18 feet 9 inches and abutting towards the east to west of other land agreed to the leased to the lessor, and having a depth thereof of 65 feet 6 inches to the said several dimensions, a little more or less, which said piece of ground with the dimensions and boundaries thereof is more particularly delineated and coloured red on the plan drawn hereon, together with the messuage or tenement and shop lately erected by the lessor on the said piece of ground on which the said premises are known as number 373 Upper Richmond Road, Putney, in the Parish of Wandsworth Borough aforesaid, together also with such parcel and passageway at the rear of the said piece of ground leading into … as delineated and coloured blue on the said plan.”   13              That parcel is shown on the plan attached to the lease, but there is no assistance, it seems to me, to be gained from that plan in relation to the questions that I have to decide, save in so far as it shows the general arrangement and position of the plot relevant to the other features and the surrounding area.  The term granted by that head lease was of 99 years less one day from 25th March 1921.  There were no provisions within the lease which are said to be relevant to the matter that I have to determine.  There are no restrictive covenants which are said to be of assistance.    14              A sub-lease was granted on 10th October 1978 to Martin Newsagents Limited of the whole of the building for a term of 15 years from 25th June 1978.  In respect of this lease, my attention was drawn to the alienation provisions of the lease which read as follows:               “Not to assign, sub-let, or part with possession or part only of the demised premises provided always that the upper residential part of the demised premises may be occupied by an employee of the tenant and he will serve his occupancy agreement as part of his tenancy of employment by the tenant.”   15              My attention was drawn to the user provisions contained in sub-clause 3(s) which read as follows:              “Not to use the demised premises or suffer the same or any part thereof to be used for any noisy, obnoxious, offensive, or dangerous trade or business.”              It also contains a positive user obligation in the following terms:              “Not without the consent of the lessor in writing to use or permit the premises to be used otherwise than as a confectioner, book sellers, tobacconists, dealer in fancy goods, toys, records, tape cassettes, greeting cards, newsagents stationery, and/or sub post office, and as to the upper parts of the premises for residential purposes subject to the provisions of sub-clause (o) of this clause.”   16              That sub-lease was renewed on 24th March 1995.  The alienation provisions in amended form appear at clause 4(7)(a)(i).  There is a provision not to assign, sub-let, or charge any part of the demised premises as opposed to the whole.  Then, materially, in sub-clause (c):              “…provided always that the upper residential part of the premises may be occupied by an employee of the tenant under the service agreement as part of his terms of employment by the tenant.”              Then in sub-clauses 4(10) and (13), the user covenants, identifying the permitted user for the premises, and provided as follows:              “As to the upper part of the premises for residential purposes subject to the provisions of sub-clause (4)(7)(c).”   17              I was told that in accordance with those provisions on 9th June 2006 a licence was granted to a gentleman called Mr. S…, an employee of the sub-tenant, who was given permission to occupy the flat, presumably for the best performance of  his duties as an employee and therefore as a licensee.    18              On 21st March 2011 a further new underlease was granted for a term of years expiring on 21st March 2020.  It contained different user provisions, which, in so far as material read (clause 4.7.3):              “The upper residential part of the premises may be occupied by an employee of the tenant under a service occupancy agreement as part of his tenanted employment by the tenant or may be underlet on an assured shorthold tenancy for a period of one year or less without the landlord’s consent.”   19              When I visited the premises there was somebody upstairs who appeared to be living there, and the inference that I draw, having regard to the context, is that the upper part of the building has at all material times been used for residential purposes, initially in connection with the shop and subsequently independently.    20              I turn then to the law relating to whether a building is a house reasonably so called.  The claimant submits that this case is indistinguishable from the case of Tandon v Trustees of Spurgeons Homes [1982] AC 755, and rely on the commentary in the current edition of Hague on Leasehold Enfanchisement 5th Edition 2009, at para (?):              “However, it is settled, after considerable judicial disagreement, that even a purpose built shop with living accommodation above situated in a terrace of similar properties is normally a house reasonably so called.”   21              Mr. Jefferies, for the claimant, submits that that statement of law and that proposition has not been changed by the decisions of the appellate courts, reported in the last edition of Hague.  He submits that the construction of the building, with residential accommodation forming part of it, the terms of the lease permitting residential use, and the history of residential user, all bring this case within the guidance given by a majority in the House of Lords in Tandon.  He submits that it does not matter that the shop in this case, and the flat are self-contained units, or that a material part of the building is used for business, he submits that the property, as a whole, is designed for living in and it would be reasonable to call the building, a house.    22              On the other hand, the defendant’s primary submission is that the building is not a house reasonably so called in that it is not reasonable to call it a house at all, that this is a different factual case from Tandon, and that the building is, in fact, a purpose built shop.  Mr. Radevsky, for the defendants, relies principally on the following factors, namely, that the building was constructed as a shop, that the flat has been separated from the business part of the premises and used separately for more than 40 years, and that the fact that half of the building happens to be residential does not make it into a house.    23              It is common ground that the “reasonably so called” criterion is a separate element of the test to be applied in determining whether the tenancy is capable of enfranchisement, as is apparent from Lord Roskill’s speech in Tandon at 764G, a point which has been made by other judges in other cases.    24              In Hosebay Lord Carnwath, giving the judgment of the court, said at para.9:              “The two parts of the definition are in a sense “belt and braces”: complementary and overlapping, but both needing to be satisfied. The first looks to the identity or function of the building based on its physical characteristics. The second ties the definition to the primary meaning of “house” as a single residence, as opposed to say a hostel or a block of flats; but that in turn is qualified by the specific provision relating to houses divided horizontally. Both parts need to be read in the context of a statute which is about houses as places to live in, not about houses as pieces of architecture, or features in a street scene, or names in an address book.”   25              I was taken by both counsel to a number of different cases concerning the test to be applied.  In Lake v Bennett [1971] QB 663 two examples are given of residential properties which could not reasonably be called houses.   The property in that case was a building over four floors, the ground floor of which had been separately let to a bookmaker.  The upper floors were used for residential purposes.  At p.670C, having referred to the statutory definition, Lord Denning said:              “Some things are clear. First, the subletting of the ground floor does not take the case out of the Act; see Harris v. Swick Securities Ltd. [1969] 1 W.L.R. 1604. Second, the use of the ground floor for business purposes does not take it out of the Act. Several sections contemplate that part of a house may be used for business purposes. The only question is whether this is a ” house ” within the definition of a ” building designed or adapted for living in and reasonably so called ”   26              Then the Master of the Rolls considered the expression “reasonably so called” in para.G and H and following.  He says at H:              “It is quite plain that this building was a ” house” within all these earlier statutes. The point is: what is the limitation conveyed by the words “reasonably so called ” ? I would not pretend on this occasion to attempt to define the limitation. But it may be useful to give an illustration.  I do not think that a tower block of flats could reasonably be called a ” house.” But I think a four-storied building like the present one is reasonably called a “house.” Take it in stages. First, if the tenant occupied the building entirely by himself, using the ground floor for his shop premises, that would plainly be a ” house ” reasonably so called. Second, if the tenant, instead of using the ground floor himself for business purposes, sublets it, that does not alter the character of the building. It is still a ” house ” reasonably so called. And that is this case.”   27              Lord Justice Salmon gave the second reasoned judgment, in the course of which, at p.672C to F, he said:              “It is quite plain that the definition of “house” including “any building designed or adapted for living in ” must need some qualification. Otherwise it would apply to the Ritz Hotel and to Rowton House, and a large purpose-built block of flats, when quite obviously this Act was not intended to apply to such edifices. The words ” reasonably so called ” were, in my view, inserted in the section solely to exclude them. There are, I think, buildings which can be called and can only reasonably be called a house. There are other buildings which cannot reasonably be called a house and can only reasonably be called by some other appellation, for example, a block of flats. On the other hand, there are buildings-and this in my view is one of them-which can equally reasonably be called a house with its ground floor converted into a shop or a shop with upper part and basement. As long as the building can reasonably be called a house, as in my view this building can, it comes within the definition of a house in section 2 (1) of the Act. It is undisputed that before the ground floor was converted into a shop, this building was a house in a terrace of dwelling-houses. The judge has taken the view that anyone could reasonably now call this building a shop with an upper part and a basement. I agree with him.”   28              In his short judgment Lord Justice Cross (as he then was) said:              “The judge has held that No. 61, Gayton Road, could not reasonably be called a house. To my mind that is a conclusion to which he could not reasonably come and is wrong in law. No doubt this building could reasonably be described as a shop with living accommodation above, but it could equally reasonably be described as a house the ground floor of which had been made into a shop. I agree that this appeal should be allowed.”   29              In Tandon Lord Roskill, at p.766E expressly approved the decision of the Court of Appeal in Lake v Bennett, and the Supreme Court in Hosebay had cited it and did not disapprove it.  Tandon was itself a case where the House of Lords had to consider whether a shop with a flat above it, and a rear covered yard, was a house reasonably so called.  Counsel for the defendant produced in the course of the hearing before me a copy of the lease plan from the case lodged with the House of Lords on that appeal.  That plan shows that the ground floor of the building consisted of a shop and post office with a bathroom and WC, an internal staircase, an exterior yard and WC, a single storey store, and a stable.  The first floor, which appears on the plan, accessed via an internal staircase which led into a utility room, comprised also a kitchen, a landing, two bedrooms, and a sitting room, and above the stable, across the yard, there was a loft.    30              The facts of Tandon are contained within the judgment of Lord Roskill at p.763H and following, where he said:              “The property is clearly shown by the agreed plan, description and photographs which are before me. The site is a long narrow plot with a frontage of about 21 feet upon Mitcham Lane. The ground floor is a shop fronting the main road and is one of four identical shops with varying shop fronts. There is a first floor above containing three effective rooms in the main part of the building and a back addition. Behind this building there was originally a narrow open path running beside the back addition and behind that an open space leading to a two-storey stable which in turn gave access to a rear service road. At some uncertain time but certainly before 1962 when Mr. Kirkaldie inspected the premises a roof, treated for London building consent as temporary, was erected over the whole of the yard except an outside water closet. This roof runs from and is attached to the rear of the main building and extends right back to the stable. The doors are arranged so that there is internal communication from the shop in front through the original open space to the stable and service road at the back. The interior lay-out is that at the rear of the main building there is an opening to the right which forms the access to the upper part of the building and also to the combined bathroom and water closet at ground level. The stairs rise by a right angle to the right and open upon the first floor. At present the whole of the ground floor including the covered yard and stable are used as a shop and the first floor is residential. In 1962 the lay-out was the same but the first floor was used as offices.”   31              That passage was a citation from the judge’s findings.  Lord Roskill then said that the trial judge had made a slight error in the penultimate sentence:              “The combined bathroom and water closet at ground level to which he referred did not form part of the shop but formed part of the residential accommodation which was otherwise entirely on the first floor.”              He went on to ask:              “On those primary facts was the appellant as tenant entitled to acquire the freehold interest in the premises from his landlords, the respondents?”   32              The residential user of the building was 25% in that case.  Lord Roskill accepted four propositions put forward by counsel for the appellant: first, the question whether the premises were a house was a mixed question of fact and law, and, secondly, if the premises might be called something other than a house that fact alone did not prevent the premises from being a house reasonably so called.  Thirdly, in cases of mixed user, whether the premises fell outside the definition of a house is dependent upon the character of the premises in question.  His Lordship then looked at the question of character and said:              “The character of the premises at the time of the tenant’s notice will usually, though not perhaps invariably, reflects its history.  Recording the history will be relevant but certainly not conclusive.  The terms of the lease will also be relevant as will the proportion of the premises respectively used for residential and non residential purposes, and also could be used  … premises.”   33              It is apparent from the approach that his Lordship took to the issue before The House that the question of public policy, namely, protecting the interests of residential occupiers of such premises, was of considerable weight in taking him to the conclusions that he did.   He approved the decision of the Court of Appeal in Lake v Bennett, and then identified the following propositions of law, which are set out at p.767B:              “(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.”   34              With that decision Lord Scarman and Lord Bridge of Harwich agreed.  Lord Wilberforce and Lord Fraser, being in the minority, took a different view.  Lord Wilberforce, at p.760C said as follows:              “I do not think that it is contended that all mixed units are houses reasonably so called: if it were I should reject the contention: there is no warrant for it in the Act. Nor can I agree that there is any presumption that mixed premises are to be regarded as a house. The Act extends to dwellings: it does not extend to shops: there is no warrant for forcing one category into the other. Nor do I think it our task to prescribe a simple formula which will solve the judges’ problem for them. Certainty can always be purchased for the price of injustice, and I know of no rule which prevents different cases from being differently decided. To suppose that judges, if left without firm guide-lines, will give anomalous decisions seems to me to underrate their common sense. The judge has to decide each case using his knowledge and applying the Act, and unless he applies a wrong test the decision is decisive.”   35              The comments contained in that passage are plainly intended to rebut the argument of Lord Roskill to the effect that the question to be answered by a judge in my position ought to be an easy one to answer, and the principles easily applicable without the need, in Lord Wilberforce’s view, to exercise considerable judgment.    36              Lord Fraser came to the same conclusion as Lord Wilberforce, and said at p.762, between letters C and E, referring to Lake v Bennett:              “Both Salmon L.J. and Cross L.J. referred to the building having had its ground floor ” converted into ” or ” made into ” a shop, but I think they were only explaining the reason for the appearance of the building at the relevant date. If they meant to imply that the fact of conversion was relevant in itself, I would respectfully disagree. Some buildings which were designed and originally used solely as houses, but have had their ground floors converted into shops, retain most of their original character as houses. Others do not. The character of each building has to be considered separately, as a question of fact. Lake v. Bennett did not, in my opinion, decide as a matter of law that all buildings with shops on the ground floor and living accommodation above are ” houses” in the sense of the Act. If Parliament had intended that to be the law it could easily have said so, but it did not.”   37              I have cited those passages because of the discussion which takes place in Hosebay, to which I will return shortly.    38              I was also referred to a decision of the Court of Appeal in Prospect Estates v Grosvenor Estate Belgravia [2008] EWCA Civ 1281, a decision with which I am well familiar, bearing in mind it was my decision that the Court of Appeal overturned.  In that case the building in question was a typical flat fronted house on the Grosvenor Estate, which had for a considerable period of time being used largely as offices.  I came to the conclusion that it was, nevertheless, a house reasonably so called.  The Court of Appeal disagreed with me and overturned my decision.   39              In para.19 and following Lord Justice Mummery giving his reasons as follows:   “19      In my judgment, the judge applied Lord Roskill’s propositions without taking full account of all the relevant circumstances. The propositions are not a statutory text and were never intended to be understood or applied as such. The judge paid insufficient attention to the peculiar, even exceptional (to echo Lord Roskill’s language), circumstance of prescribed and predominant office use in compliance with the lease. That circumstance is, in my view, the only one decisive feature of this case.    20       The original design and the unchanged external and internal appearance of the building featured too prominently in the judges reasons. If he had given due weight to the prescriptive terms of the lease, the actual uses of the building and the relative proportions of the mixed use at the relevant date, he could only have come to one conclusion: that it was no longer reasonable to call the building a house within the 1967 Act.   21       I should add that the effect of the residence requirement in the 1967 Act, as originally enacted, was that the building would not have fallen within it or its policy of enabling a tenant of a long lease of residential property compulsorily to acquire the freehold. I do not, however, think that that policy has continuing relevance to this case. The non-exhaustive definition of a house has remained the same, but other amendments, particularly the abolition of the residence test, have enlarged the scope of the 1967 Act and significantly changed the direction of its original policy.”   40              Lord Justice Goldring, agreeing with Lord Justice Mummery, put it differently, in para.23:              “I agree. I would only add this. As Mr Gallagher accepted in argument, his submission can be encapsulated in the following proposition. This building can reasonably be called a house although no one can lawfully live in virtually 90% of it. As it seems to me, that cannot be right.”                                         In essence, although that property was built as a house, and looked like a house, it was no longer reasonable to call it a house because of the user.   41              In the Hosebay case, a conjoined appeal against a decision of my fomer colleague, Her Honour Judge Hazel Marshall QC, and another decision of my own, in two separate cases in this court, the Supreme Court was considering two properties, the first where a builder had constructed a house, which was subsequently used as a self-catering hostel, that being the Hosebay case, and the second where what had obviously been built as a house initially was used as offices, that being the Lexgorge case.  At first instance, both judges came to the conclusion that the buildings were houses, and reasonably so called.  Each of those first instance decisions was upheld by Lord Neuberger, who was then Master of the Rolls, and in the course of his judgment he suggested that Prospect ought to be confined to its own particular facts.  The decision of the Court of Appeal was overturned by the Supreme Court, which came to the conclusion that not only had Prospect been correctly decided by the Court of Appeal but Lord Neuberger had been wrong in the Court of Appeal in the case before the Supreme Court: they held that neither property was a house reasonably so called.    42              Lord Carnwath considered the relevant authorities in the section of his speech starting at para.20.  He turned to Tandon, para.23, where he said as follows:              “The reasoning of Lake v Bennett was adopted and extended by the House of Lords in Tandon v Trustees of Spurgeons Homes [1982] AC 755, which remains the leading House of Lords authority on this part of the definition. Unfortunately the reasoning of the single majority speech of Lord Roskill, although carrying the unqualified support of Lord Scarman and Lord Bridge, is not without difficulty. Further, the case needs to be read in its factual context. As in Lake v Bennett, the main problem was to reconcile the statutory recognition (under the “proviso”) that the building need not be “solely” designed or adapted for living in, with the need for the building as a whole to be a house “reasonably so called”. This is not a problem in the present cases.”   43              He went on to say at para.28:              “It may be that the real difference between the majority and the minority in Tandon came down to one of policy.”   44              Then para.29:              “Of more significance for present purposes is the relative lack of weight given by the majority to the appearance of the buildings as a factor in answering the second question. Lord Fraser of Tullybelton (in the minority) had regarded appearance as “the main element in the character of a building”: [1982] AC 755, 762. He attached particular weight to the photograph which showed “a shop in a row of shops”, in contrast with the “converted house” in Lake v Bennett; to him it was “obvious from the photograph” that the building could not reasonably be called a house (p 763). That, however, was not the approach of the majority. Lord Roskill had apparently accepted that in determining the “character” of the building for these purposes, physical appearance could be relevant, as also its history and the terms of the lease (p 766). However, those factors played no detectable part in the final decision. The determinative points were that the proportion of residential use, even if only 25%, was “substantial” (p 766), and that a tenant occupying such a building as his residence was within what was perceived to be the scope of the protection intended by Parliament (p 766). Those factors were enough to bring the case within the “principle” established by Lake v Bennett notwithstanding the differences from that case in relation to the original design and physical appearance of the respective buildings.”   45              On the facts of the cases before the Supreme Court, Lord Carnwath reached his conclusions in paras.43 and 45 as follows:   “43      I would allow the appeal in Hosebay on the grounds that a building which is wholly used as a “self-catering hotel” is not “a house reasonably so called” within the meaning of this statute. As appears from para 38 of their judgment (quoted above), the contrary view of the Court of Appeal turned on two main points: (i) the external appearance of each property as a town house; (ii) the internal conversion to self-contained units, with cooking and toilet facilities. I find it difficult with respect to see the relevance of the second point to this part of the definition, which only arises in relation to a building which is in some sense adapted for living in under the first part. It is not suggested that the building is divided in a way which comes within the proviso. The first point, for the reasons given in my analysis of Tandon, should not have been given determinative weight. The fact that the buildings might look like houses, and might be referred to as houses for some purposes, is not in my view sufficient to displace the fact that their use was entirely commercial.   45       In Lexgorge I would also allow the appeal on similar grounds. A building wholly used for offices, whatever its original design or current appearance, is not a house reasonably so called. The fact that it was designed as a house, and is still described as a house for many purposes, including in architectural histories, is beside the point. In this case no issue arises under the first part of the definition. It is unnecessary to consider whether the concession in that respect was rightly made, although it is possible that it was based on a wider interpretation of Boss Holdings [2008] 1 WLR 289 than my own analysis would have supported.”              Again, both of these properties were built as houses but subsequent user meant that it was no longer reasonable to call them such.   46              Mr. Jefferies submits that Tandon is, nevertheless, still good law in relation to shops with flats above and that I should apply it.  In my judgment, it is still good law but the test to be derived from the speeches of the majority has to be applied, as Lord Carnwath said, within its actual context, having regard to what he says in para.23  In my judgment, Lord Roskill’s test cannot be applied simply to every case of a building consisting of a shop beneath and flat above such that the result is a house reasonably so called in every instance.    47              There have been more recent decisions at the Court of Appeal, one before and one after Hosebay, to which my attention has been drawn.  The first Magnohard Limited v Cadogan & Anor [2012] EWCA Civ 594, and, secondly, Henley & Anor v Cohen [2013] EWCA Civ 480.  In the first of those the Court of Appeal was considering another appeal from my former colleague concerning a building adjacent to Sloane Square Underground Station which comprised what was essentially a block of flats with shops underneath.  Judge Marshall came to the conclusion that the building was not a house and the Court of Appeal agreed with her.    48              Lord Justice Lewison, who gave the leading judgment, said this at para.6 onwards:   “6        The judge was taken through a large number of authorities that have discussed the meaning of the word “house” in section 2 (1) of the Act. As she pointed out the point is in the end, a short one. She said that her task was to arrive at a conclusion about the character of the building. She said that if a building could equally reasonably be called “a house”, but could equally reasonably be called something else, then it fell within section 2 (1). But if you could only call it “a house” by straining the concept or straining the use of language, then it would not be reasonable to call it a house. In that event it would be outside the definition. Equally, she said, if there was an appellation which is so much more apposite than “house” that one does not feel comfortable using that word about a building, then it would not be reasonable to call the building “a house”. In paragraph 116 of her judgment she said:              “When I ask myself what this building is, my immediate reaction is: “it’s a block of flats”. It’s a block of flats with three shop units, but – it’s a block of flats. It is not a house divided into flats. It is constructed and it is used as a block of flats. As I know (and I do) what the features of the building are, if I were to ask someone “what would you call that building” and they were to respond “a house” my eyebrows would naturally rise and I would think this odd. I would not call this building a house naturally, but only possibly if I were pressed into [doing] so by argument that it was surely “possible”. In those circumstances, it is, in my judgment, not reasonable to call this building a “house” at all, let alone in ordinary parlance.”   7         Was the judge wrong?”   49              His Lordship then referred to a number of cases, and in para.9 of his judgment he said this:              “It is clear from all the authorities that the word “reasonably so called” are intended to be words of limitation: Lake v Bennett [1970] 1 QB 663, 670 (Lord Denning MR), 672 (Salmon LJ); Tandon v Trustees of Spurgeon Homes [1982] AC 755, 764 (Lord Roskill); Malekshad v Howard de Walden Estates Ltd [2002] UKHL 49 [2003] 1 AC 1013, 1028 (Lord Millett); Prospect Estates Ltd v Grosvenor Estate Belgravia [2008] EWCA Civ 1281 [2009] 1 WLR 1313, 1317 (Mummery LJ). Their purpose is to exclude buildings that would otherwise come within the other parts of the definition. The mere fact that a building might be called something other than “a house” is not sufficient to trigger the exclusion: Tandon v Trustees of Spurgeon Homes, 765 (Lord Roskill). As long as a building can reasonably called “a house” it is within the definition, even though it may also reasonably be called something else: Tandon v Trustees of Spurgeon Homes, 767 (Lord Roskill). Whether a building can reasonably be called “a house” or can only reasonably be called something else is a question of appellation: Malekshad v Howard de Walden Estates Ltd 1030 (Lord Millett). I agree with the judge that the question is not whether it is possible to call a building “a house”; the question is whether it is reasonable to do so. In the present case the structure and use of the building have hardly changed since it was first erected. That being so the extensive historical research that the parties undertook, although of great interest, is in my judgment largely irrelevant. In the case of a building predominantly used for residential purposes, whether it can reasonably be called “a house” will depend primarily on its external and internal physical character and appearance: Hosebay Ltd v Day [2010] EWCA Civ 748 [2010] 1 WLR 2317, 2330 (Lord Neuberger of Abbotsbury MR).”   50              Para.10:              “Many judges have given illustrations of what they thought the words of limitation would exclude. I give some examples:   i)                  A tower block of flats: Lake v Bennett 671 (Lord Denning MR);   ii)                The Ritz Hotel, Rowton House and a large purpose built block of flats, or a block of flats: Lake v Bennett 672 (Salmon LJ);     iii)               A block of flats or an office building with a residential penthouse suite: Malekshad v Howard de Walden Estates Ltd 1028 (Lord Millett);   iv)              A purpose-built hotel or block of flats: Malekshad v Howard de Walden Estates Ltd 1036 (Lord Scott of Foscote);     v)                A purpose built hotel, a hostel, a purpose built block of flats, a factory with caretaker’s accommodation or an office block with a penthouse suite: Prospect Estates Ltd v Grosvenor Estate Belgravia 1318 (Mummery LJ).”   51              Para.11:              “The clear consensus of judicial opinion is that a purpose built block of flats cannot reasonably be called “a house”. It is true that some judges have referred to tower blocks and others to large purpose built blocks, but in my judgment the underlying principle is clear. It is also true that none of these observations is binding ratio, but such is the strength and consistency of the consensus that it would in my judgment be wrong for us to depart from it. As Lord Roskill himself said in Tandon v Trustees of Spurgeon Homes (at 766-7) it is imperative that there should be not only uniformity of principle in the approach of the courts but also a broad consistency in the conclusions reached. In the present case there is the added feature that the building is not a wholly residential building but also includes the three shops.”     52              Lord Neuberger then delivered a judgment in which he agreed with the reasoning of Lord Justice Lewison.   53              The conclusion, therefore, in that case was that even though the predominant user was residential it was not reasonable to call the building in question a house.    54              Turning then to a Henley v Cohen.  The premises in question were said to be similar to the present premises, namely, a ground floor shop and upper flat.  His Honour Judge Cowell, sitting in this court, came to the conclusion that it was not a house reasonably so called and the Court of Appeal agreed.  In para.15 Lord Justice Mummery said:              “As appears from photographs in evidence and from the descriptions in the judgment the overall appearance of the Premises is that of a shop located in a parade of shops rather than of a house residing in a row of houses.”   55              He went through the authorities, which I have already mentioned.  He considered the submissions from each counsel in that case, and he came to his conclusions in paras.53 to 55.  He said at para.53:    “53      The question for decision at trial was a precise statutory one: are the Premises “a house reasonably so called” within the scope of s.2(1) of the 1967 Act? That is not the same as a more direct non-statutory inquiry as to whether the Premises are a house. Answering the specific statutory question involves a full exploration of the Premises from a number of different aspects and angles followed by an overall assessment of the entire situation. The various matters must be considered in the round before deciding whether it is reasonable to call the Premises a house. In my judgment, that is what HHJ Cowell took care to do before reaching his conclusion that the Premises were not “a house reasonably so called.”   54       Obviously that conclusion does not meet with the approval of the claimants. They have made an investment in the Premises. They bought the residue of the Lease and have spent money on the first floor conversion. So they think that the judge gave the wrong answer to the question. I do not share their view. The judge did not apply the wrong legal test or reach the wrong result. What something can reasonably be called is a relative question. There is no cut and dried answer to it in the sense that everyone who knows about these things would always agree upon the same answer. What matters for the purposes of this appeal is that the answer given by the judge was in fact amply supported by the evidence and was in law reasonably justified by the arguments relied on.   55       The Premises were neither adapted for residential use at the date when the Lease began nor were they ever used as such until the recent adaptation for living in, which was completed shortly before the claimants gave notice under the 1967 Act. The upper floor was a subsidiary part of the building, being smaller and previously used for non-residential purposes in connection with an adjoining building. The case is distinguishable from Tandon where the living accommodation above was physically connected with the shop unit below. In that case there was a bathroom at the rear of the shop, as well as a connecting staircase at the rear to the first floor. In this case there was no connecting access from the commercial unit on the ground floor to the flat on the first floor. On the contrary, the only means of access to the flat involved traipsing to the back of the building, climbing an outside metal staircase and then walking along a passageway. In my view, the judge was entitled to place the use of the upper floor relied on as at the date of the notice, upon which the claimants place such emphasis, into the proper setting of the use of it under the Lease during the preceding 70 plus years.”                       On that basis he came to the conclusion that Judge Cowell was right to conclude that the property was not a house.   56              Mr. Jefferies, on behalf of the claimant, submits that that case is distinguishable on a number of different bases.   He says that the physical access and arrangement of the premises is different, that the residential user in Henley v Cohen was new, that the user historically was different, the proportions different, and he also relied on the fact that the flat was only recently created as a result of unauthorised alterations, whereas in the present case the first floor has always historically been used in conjunction with the shop and has, in any event, always been used as a flat.   57              Mr. Radevsky, on the other hand, says that there is no material difference between the premises in that case and the current premises, and that by looking at the premises, externally and internally, it cannot reasonably be called a house.    58              In analysing the various authorities, Mr. Radevsky has made the following submission.  He says that one has to look at the question posed by s.2 in the light of the authorities in two different ways, as a result of which one can properly form the view that the authorities fall into two different categories.  First, he submits that where the premises are built as and look like a house there may be subsequent conversion or user which prevent the building from being a house reasonably so called and that that is the proper analysis of the decisions reached by the court in Hosebay, Lexgorge, and Prospect, where the Supreme Court and Court of Appeal said that commercial user prevented enfranchisement, but, by contrast, just because there is significant residential user, does not mean that it is reasonable to call a building a house.  That is the basis of the decisions in Magnohard Limited v Cadogan & Anor. and Henley v Cohen, the starting point being that if it does not look like a house then it cannot reasonably be called a house.   59              It is, in my judgment, a mixed question of fact and law in each case.  The judgment which I found most useful in considering the test that I have to apply (albeit derived from the various decisions of the House of Lords and the Supreme Court) is that of Lord Justice Lewison in Magnohard Limited v Cadogan & Anor.    60              The question that I have to address is not whether it is possible but whether it is reasonable to call the building in this case, a house.  I have had regard to the history of the property, the physical appearance of it, the layout, the terms of the lease, and the user of the premises over the years.  The starting point, as far as I am concerned, is that the building does not look like a house.  It is part of a parade of shops with living accommodation over it.  It was not, in my judgment, built as a house.  It was built as a shop with living accommodation over it.  The two elements are not as they were in Tandon.  It was not built as a house.  Nor is  it now a physically mixed unit.  The two units have been separate for the last 40 years.    61              There are interesting philosophical questions about the difference between houses that have been converted into maisonettes but which for the purposes of the Act remain houses, and blocks of flats which may contain maisonettes in a building which remains a block of flats rather than a house.  But the ordinary English meaning of the word “house”, it seems to me, has to be used in considering the question, first, whether it is possible to call it a house, and whether it is reasonable to call it a house.    62              I have come to the conclusion that the property in this case is in the same category as a block of flats, but perhaps not the Ritz Hotel.  Despite the initial intention of providing residential accommodation, in this case ancillary to the shop user, this building was constructed as and looks like part of a parade of shops, and not a house within a terrace of houses.  Any ordinary speaker of the English language would, in my respectful view, agree.  The overwhelming character of the parade, and of the building, is of commercial premises.  The dominant impression on the site visit was of a parade of retail units designed to serve the housing estate behind it.  User alone, having regard to the authorities, does not alter that conclusion.    63              In my judgment, it is not only not possible but not reasonable to call this a house.  For those reasons, I have come to the conclusion that the criteria within s.2(1) of the Act have not been satisfied, and the result is that the claim should be dismissed.      __________