Landlord and Tenant Act 1954, section 30(1)(f) — Application for new tenancy — Opposition by landlords under para (f) — Whether landlords intended to carry out ‘substantial work of construction on the holding’ — Whether works fell within the meaning of ‘construction’ — Whether, if so, they were ‘substantial’ — Appeal from decision of county court judge in favour of tenant
of the applicant consisted of the first and fourth floors of a building which
consisted of a basement, ground floor and four upper floors — The applicant was
also the tenant of the whole of an adjoining building and had, by licence, made
openings at first- and fourth-floor levels between the two buildings, using the
total accommodation thus provided for his business as a solicitor — When his
tenancy of the two floors was due to expire he requested a new tenancy and was
given notice by his landlords, the present appellants, that they would oppose
the grant under section 30(1)(f) — The judge decided a preliminary issue as to the landlords’
entitlement under section 30(1)(f) in the tenant’s favour, whereupon the landlords appealed
landlords’ proposed works so far as the building as a whole was concerned
included resiting a staircase, rewiring the whole building, provision of new
and resiting old toilets, installation of central heating, stripping and
restoring the main roof, rebuilding walls removed to allow access from
adjoining building at first- and fourth-floor levels, as well as complete
redecoration — So far as the tenant’s holding was concerned, which was the
critical matter for section 30(1)(f), the works comprised blocking up the access
from the adjoining building on the two floors, rewiring as part of the rewiring
of the whole building, resiting of toilets from the third to the fourth floor,
with construction of new cubicles, and provision of a new gas-fired boiler and
construction of a boiler room on the fourth floor — The judge concluded that
most of the work carried out on the tenant’s holding could not be regarded as
work of construction at all; the blocking of the access on the first and fourth
floors to the adjoining building affected structure, but could not be regarded
as ‘substantial’ (it was pointed out on appeal that it was in any case the
tenant’s responsibility to reinstate the walls) — Accordingly, the judge
decided that the landlords were not entitled to oppose a new tenancy under
section 30(1)(f)
of Appeal the landlords criticised the judge’s decision and cited a number of
authorities on the meaning of ‘construction’, including Joel v Swaddle, Percy E
Cadle & Co Ltd v Jacmarch Properties Ltd and Cerex Jewels Ltd v Peachey Property
Corporation plc — Stocker LJ expressed the view that, to come within the second
limb of section 30(1)(f), which was relevant here, some form of building which involved
structure was required — He did not consider that work on the first floor came
within the definition — The plasterboard partitions to the toilets and the
boiler room on the fourth floor might be classified as construction, but they
could equally be regarded as part of the installation — He would not consider
wooden partitions as within the definition of ‘construction’ — In any case, if
any construction was involved it was not ‘substantial’ — The works involved
would be more properly classified as works of ‘refurbishment’ or ‘improvements’
— Referring to the authorities mentioned above, Stocker LJ said: ‘I do not read
those authorities as indicating that proposed works, considered as a whole,
could amount to construction if none of the items considered separately could
be so regarded’ — The judge below had reached the right conclusion — Appeal
dismissed
The following
cases are referred to in this report.
Cadle
(Percy E) & Co Ltd v Jacmarch Properties Ltd
[1957] 1 QB 323; [1957] 2 WLR 80; [1957] 1 All ER 148, CA
Cerex
Jewels Ltd v Peachey Property Corporation plc
(1986) 52 P&CR 127; [1986] 2 EGLR 65; 279 EG 971, CA
Housleys
Ltd v Bloomer-Holt Ltd [1966] 1 WLR 1244;
[1966] 2 All ER 966, CA
Joel v Swaddle [1957] 1 WLR 1094; [1957] 3 All ER 325, CA
This was an
appeal by the landlords, Brian Justin Prichard and Peter Temple Hamlyn, from a
decision of Judge Oddie, at the Mayor’s and City of London Court, holding, on
the trial as a preliminary issue, that the landlords were not entitled to
oppose under section 30(1)(f) of the Landlord and Tenant Act 1954 the
application of the tenant, Thomas Martin Barth, for a new tenancy of the first
and fourth floors of 7 Bell Yard, London WC2.
David
Neuberger QC and Miss Jane McNeill (instructed by Rooks Rider) appeared on
behalf of the appellant landlords; Richard Fernyhough QC and Edwin Prince
(instructed by Thomas M Barth & Co) represented the respondent tenant.
Giving the
first judgment at the invitation of O’Connor LJ, STOCKER LJ said: This
is an appeal by landlords from a decision of His Honour Judge Oddie given on
February 7 1989 in the Mayor’s and City of London Court whereby he adjudged
that they were not entitled to oppose the tenant’s application for a new
tenancy. The matter came before the learned judge pursuant to an order of Mr
Registrar Myer dated October 27 1988 that there should be tried as a
preliminary issue ‘whether the respondents are entitled to oppose a grant of a
new tenancy of the property on the grounds set out in section 30(1)(f)
of the Landlord and Tenant Act 1954′.
The premises
concerned are situated at, and known as, 7 Bell Yard, London WC2. The premises
consist of six floors — namely a basement, ground floor and four upper floors.
The building is a narrow one and on each of the upper floors the accommodation
consists of a front and back room on either side of a central staircase, the
total net space in each case being about 260 sq ft, the front room being about 12
ft by 10 ft and the back room 14 ft by 10 ft. Some variations may exist on the
fourth floor owing to a mansard roof. At the material time the basement and
ground floors were occupied as shop premises, but the tenant is not seeking a
new lease of his holding. The first and fourth floors are occupied by the
applicant and the second and third floors by a tenant who carried on his
practice (as a dentist) from that accommodation. (The latter sought a new
tenancy, but his application has been brought in the Westminster County Court
and has not yet been determined. Similar issues to those which arise in this
case will arise in the case of this tenant.)
The applicant
is a solicitor and is tenant of the whole of the adjoining premises at 8 Bell
Yard. Pursuant to a licence granted by the landlords’ predecessor in title the
applicant was permitted to, and did, make openings in the wall between nos 7
and 8 and thus to create doorways at first- and fourth-floor levels from one
building to the other. The evidence was that he used the accommodation on the
first
practice as a solicitor. On the third floor of the premises there were toilets
available for use by all the tenants in the building. There was toilet
accommodation in no 8 and the evidence was to the effect that the applicant
gained access to the offices on the first and fourth floors of no 7 by way of
the offices in no 8. Thus he did not need to use the staircase of no 7. It is
unnecessary to recite in this judgment the various leases, assignments and
subleases pursuant to which the occupations of these various floors of no 7
were achieved, since it is common ground that the relevant ‘holding’ of the
applicant consisted of the first and fourth floors.
The
applicant’s tenancy was due to expire on June 24 1989 and by notice dated June
27 1988 he requested a new tenancy. The landlords gave notice on July 16 1988
that they would oppose the grant of a new tenancy on the grounds set out in
section 30(1)(f) of the 1954 Act. The applicant, accordingly, applied to
the Mayor’s and City of London Court for a new tenancy to be granted, which was
opposed by the landlords on the grounds stated. Hence the order that the
question whether or not the landlords were entitled to oppose the grant of a
new lease was to be tried as a preliminary issue. The learned judge determined
this issue in favour of the tenant. The issue which arises upon this appeal
accordingly is whether his decision was correct as a matter of law or as a
matter of fact and law. His findings of fact are not themselves challenged.
I therefore
turn to consider the issues raised on this appeal. Section 30(1)(f)
reads:
that on the
termination of the current tenancy the landlord intends to demolish or
reconstruct the premises comprised in the holding or a substantial part of
those premises or to carry out substantial work of construction on the holding
or part thereof and that he could not reasonably do so without obtaining
possession of the holding;
There are
clearly two limbs to para (f). The first limb relates to the landlord’s
intention to demolish or reconstruct the premises comprised in the holding or a
substantial part of those premises. The second limb relates to his intention to
carry out substantial work of construction on the holding or part thereof. This
appeal is concerned with the second limb only, since there was no intention to
demolish or reconstruct.
Both limbs
require that the work could not reasonably be done without obtaining possession
of the whole building. In this context a new section 31A was added to the 1954
Act by the Law of Property Act 1969, section 7(1). In effect it restricts the
landlord’s right to carry out a work of reconstruction or construction if the
tenant agrees to the inclusion of a term in the new tenancy that the landlord
shall have access to the holding for the purpose of carrying out the works. No
reliance was placed upon this section by the applicant.
The judge
found in favour of the landlords that they did have the requisite intention. He
necessarily made this finding without hearing the case concerning a similar
application on behalf of the dentist tenant of the second and third floors, but
the respondents do not challenge that finding on this or any other ground and
no issue therefore arises on this appeal concerning the landlords’ intention,
the judge’s finding being accepted.
The parties
are agreed that only two questions arise for decision on this appeal: (1) did
the works which the landlords intended to carry out fall within the description
of ‘work of construction’ and (2) if they did, were such works ‘substantial’?
Before turning
to consider the arguments put forward by the parties on the judge’s finding
upon these two issues, it is necessary to set out in outline the nature of the
proposed works which the appellant landlords intended to carry out. They are
set out in detail in the schedule of works contained at pp 13-27 of the core
bundle and in two plans. In substance, but without any extensive detail, they
amounted to this: in general, the scheme to which the works related involved
resiting the staircase from ground floor to basement and rewiring the entire
building; the provision of new toilets in the basement and the resiting of the
toilets on the third floor to a new location immediately above on the fourth
floor and the provision of new toilet fittings for this purpose; the
installation of central heating, stripping and restoring the main roof and
retiling the main roof; the complete redecoration and carpeting of the interior
of the building and the rebuilding of the walls where they had been demolished
to provide access from the first and fourth floors to the respondent’s offices
in 8 Bell Yard. There were other detailed works which do not seem to bear on
the issues raised on this appeal.
Specifically,
and more relevantly, the works which the landlords intended to carry out on the
respondent’s holding involved the following: on the first floor — to block up
the existing opening to no 8 and clear away the existing door and frame;
rewiring of that floor as part of the rewiring of the whole building. On the
fourth floor — to provide and fix the sanitary fittings for two toilets and to
construct timber-framed, plasterboard-faced partitions to form new cubicles; to
provide and fix a new gas-fired boiler and to construct a new boiler room in
timber-framed plasterboard, rated for half an hour’s fire protection; and to
brick up the opening and remove the doors on this floor through to 8 Bell Yard.
The relevant
part of the judge’s findings on the issues identified was as follows. On p 9 of
the judgment the judge said:
When the
question of whether the work was ‘substantial’ or not was considered the court
had to consider the quality of the work as a whole — which was a matter of fact
and degree. It also had to consider the work in relation to the premises. Here,
more than 25% of the holding was affected by the works which were to be done.
On p 10 the
judge said:
Perhaps the
approach to the consideration of whether works amounted to ‘reconstruction’ or
not in Joel v Swaddle [1957] 1 WLR 1094 could be adapted for use
in considering whether any particular works were substantial works of ‘construction’
or not. In that case, Romer LJ said that ‘It seems to me that the proper way of
ascertaining whether what is proposed to be done will be work of
‘reconstruction’ of premises is to look at the position as a whole and compare
the results on the premises of carrying out the proposed work with the
conditions and state of the premises before the work was done; in other words,
you want to regard the whole position as one total or entire picture.’ I conclude from a consideration of these
authorities that ‘works of construction’ mean ‘building works’. ‘Building
works’ is a wide term, and is sometimes used to cover a variety of ancillary
work connected with erecting a building. I consider that, for the purposes of
section 30(1) (f), where construction work on an existing office block
or house is concerned, ‘construction’ includes building work which involves
some kind of structural work to the existing building. It would not, therefore,
include mere decoration work, or installing fittings within an existing
structure. I think it could cover partitioning in some circumstances, if
installed in conjunction with new building works affecting the structure of the
holding as a whole. But in my judgment it would not on the facts of the present
case. In considering whether work is substantial or not, the court has to
consider the absolute amount of work involved as well as the relative substance
of the work in relation to the holding in question, and so a relatively small
amount of building work could be substantial if carried out to a small holding.
In this case I accept the argument of Mr Prince for the applicant. I conclude
that installing two lavatories and a central heating boiler on a floor where
there was none before does not amount to ‘structural’ work. It involves the
installation of fittings and equipment within an existing building. It does not
involve any work to that structure, or add any new structure to the building
which was there before. In my judgment it was not work of ‘building’ at all. It
does not amount to work of ‘construction’ within the meaning of section 30(1)(f).
The blocking up of the doors is ‘structural’ work, but, neither of itself, nor
in the context of any other work, could it be said to be ‘substantial’ for the
purposes of section 30. The general work of installing pipe work and cables put
underneath and through the floors, and, in casing along the wall, and, in cut
and chased gulleys in the plaster work, does not, in my judgment, amount to
work of ‘construction’. In the case of the floors themselves, while the
interference with them might amount to structural works falling within the
definition, the works by themselves or in conjunction with the blocking of the
doorways would not be ‘substantial’. The same goes for the new soil pipes. I
would not regard the partitions as falling under the definition. But, if I were
wrong and they did, I do not consider that the work of installing them, whether
either on their own or together with the blocking of the doorways or the
cutting of the floor or installation of the soil pipe, would amount to
‘substantial’ work. Accordingly, I accept Mr Prince’s argument that the
landlords’ intended works do not amount to substantial work of construction on
the holding or part thereof.
Accordingly
the learned judge held that the landlords were not entitled to oppose the grant
of the new tenancy.
Mr Fernyhough,
on behalf of the respondent, supports the judge’s finding and his reasons, but
also points out, and relies upon, the fact that the bricking up of the opening
between nos 7 and 8 Bell Yard on the first and fourth floors was an obligation
which fell upon the tenant in accordance with the terms of the licence pursuant
to which the openings were made and that the appellant landlords were entitled
to serve, and have in fact served, a notice upon the respondent to reinstate
the holding to its former condition. This aspect of the proposed works which
might fall within the ambit of section 30(1)(f) is not work which the
appellant landlords need to perform if their scheme is carried out.
Mr Neuberger,
for the appellants, criticises the judge’s reasoning in a number of respects.
First, he says that although on p 9 of the
problem, he did not in fact apply it but considered each item of the work in
isolation. He cites the judgment of Slade LJ in Cerex Jewels Ltd v Peachey
Property Corporation plc [1986] 2 EGLR 65 at p 69F. Slade LJ cites from
Romer LJ in Joel v Swaddle [1957] 1 WLR 1094 at p 1101 as
follows:
It seems to me
that the proper way of ascertaining whether what is proposed to be done will be
work of ‘reconstruction’ of premises is to look at the position as a whole and
compare the results on the premises of carrying out the proposed work with the
condition and state of the premises before the work was done; in other words,
you want to regard the whole position as one total or entire picture.
Looking at
the position as a whole and making this comparison of the results on the
demised premises, in the present case I think that the totality of the work
described under the learned judge’s heads II, III and IV is work of demolition
or reconstruction or substantial construction of the demised premises or a
substantial part of them falling within ground (f) and I would so hold.
However, for reasons which will appear, I do not accept that the whole of this
work constitutes ‘the intended work’ for the purposes of section 31A(1)(a).
It is to be
observed, however, that the main point in issue in this case arose under the
provisions of section 31A. Moreover, Slade LJ in an earlier passage in his
judgment had identified the works under heads II, III and IV, which in general
terms can fairly be described as works of construction, the electrical rewiring
involved being related to the works on the ground floor and basement and in
that sense concerned with the construction works. Slade LJ cited, in the
context referred to, Joel v Swaddle [1957] 1 WLR 1094 where Lord
Evershed at p 1099 said:
. . . in
cases of this kind it is apt to be dangerous to take each individual item
entirely in isolation, and then to say that each item so taken cannot itself be
work of reconstruction or a substantial work of reconstruction. One must look
at the whole work which is proposed, and then say, in regard to it: Does it
amount to a substantial work of reconstruction?
I think that what is here proposed — and there is no question as to the
facts — does, when you view it in that way, amount, within the meaning of the
paragraph, to a work of reconstruction of a substantial part of the premises.
This was a
case which on the facts clearly did involve the demolition and reconstruction
of the tenant’s holding, and thus turned primarily on the first limb of section
30(1)(f), though consideration was given also to the second limb in
terms which seem to have been, at times, confused.
I do not, for
my part, consider that the judge did apply the wrong approach. The dicta in Cerex
and in Joel v Swaddle above cited (together with the passage from
the judgment of Romer LJ, in the latter, cited by the judge) in my view
required the ‘position as a whole’ to be considered in so far as works, not
themselves works of construction, are directly related to or are ancillary to
works which do amount to works of construction. I do not read those authorities
as indicating that proposed works, considered as a whole, could amount to
construction if none of the items considered separately could be so regarded.
It is only in the context of works which are, or might be, properly regarded as
construction works that other works which are not themselves construction fall
to be considered when the works are regarded as a whole.
I therefore
reject the submission that the judge applied the wrong approach.
This still leaves
the question whether or not the relevant works to be carried out on the
respondent tenant’s holding regarded individually or in the light of other
works associated with them can properly be classified as ‘construction’ works.
Mr Fernyhough cites, and relies upon, the case of Percy E Cadle & Co Ltd
v Jacmarch Properties Ltd [1957] 1 All ER 148, where Denning LJ, at p
149 G-H, said:
In my
judgment, the word ‘reconstruct’ in this subsection is not satisfied by a
change of identity; there must be substantial work of construction. The word
‘reconstruct’ here is best expressed, I think, by the synonym ‘rebuild’. There
must be in effect a rebuilding of the premises or (of course) of a ‘substantial
part’ of those premises. Whether there is work of that character and to such a
degree is primarily a matter for the county court judge. In the present case
the county court judge looked on the work to the basement floor as a work of
repair, and the putting in of the new internal staircases as work of
improvement. He thought that there was not a ‘reconstruction’. I think that he
was right.
This was a
case concerned with the first and not the second limb and it seems to me plain
that different considerations may arise where demolition and rebuilding are
concerned than arise under the phrase ‘works of construction’, though I feel
there is some force in the submission that the basis of this judgment and that
in a case such as Housleys Ltd v Bloomer-Holt Ltd [1966] 1 WLR
1244 (a case which in the main was concerned with the meaning of the word
‘demolish’) indicate that the tenor and purpose of section 30(1)(f) is
related to ‘building works’ affecting in some way the structure of the building
itself, either internal or external.
One of the
difficulties which is necessarily presented on this appeal, and in the cases
cited, is that there is no statutory definition of the word ‘construction’ and
dictionary definitions such as ‘to build up’, ‘compile’, ‘put together the
parts of’ (Chambers) or ‘to make or form by fitting the parts together’,
‘to frame, build, erect’ (Shorter Oxford) beg rather than resolve the
problem. A bookcase, purpose built in situ, would fall within these definitions,
but it is not contended that to erect such a bookcase would constitute
construction for the purpose of section 30(1)(f). It seems to me that
the works to be carried out on the first floor, except perhaps the fitting of
fire lobbies for doors giving access to the central staircase, and perhaps the
chasing or cutting work associated with the rewiring, could possibly fall
within the definition of ‘construction’ and I would exclude both from such
definition. On the fourth floor the fixing of the boiler and the toilets, in my
opinion, are works of installation and not construction. The problem arises
over the timber-framed plasterboard partitions to the toilets and the ‘boiler
room’ of similar materials (which cannot be more than a few feet square). These
can, within the dictionary definitions, be classified as construction, though
it seems to me that each can equally be regarded as part of the installation of
the toilets and boiler respectively. The works necessary to seal up the
openings to no 8 are to be performed by the tenant and not by the landlords.
I consider
that whether or not works fall within the definition of ‘construction’ must
depend upon the facts in each case in which the problem falls to be considered.
In my view, the relevant works which might be regarded as construction (in
conjunction with such other works as arise in connection with them) are not
within the general purposes or purview of section 30(1)(f). If it is
necessary to decide whether or not in any given case it is necessary for works
to involve directly the structure of the building in some way, my own view
would be that this is implicit in the generality of section 30(1)(f). In
other words, that some form of building upon the premises which involves the
structure is required. I would not consider wooden partitions, however
extensive, as falling within the definition of ‘construction’, but such a
situation would have to be reviewed in accordance with the facts of any given
case.
My conclusion
is that the judge was correct in holding that the works to be carried out on
the relevant holding were not works of construction. I do not derive any
assistance from definitions of the word ‘construction’ derived from other Acts
of Parliament dealing with different subjects. The works involved in this case,
in my view, would be more properly classified as works of ‘refurbishment’ or
‘improvements’. If, as has been submitted, in the social and economic
conditions of the times it is desirable in the public interest that buildings
should be released from existing tenancies to permit such refurbishment or
improvement, then this is a matter for the consideration of those concerned
with policy. In my view, they do not fall within the ambit of section 30(1)(f).
If my view
that the works concerned on this building are not works of construction be
incorrect, then I am firmly of the view that the works were not ‘substantial’.
There is little I can add by way of reasoning to the findings of the learned
judge, save to say that I agree with his conclusion.
For these
reasons I would dismiss this appeal.
O’CONNOR LJ
and SIR DENYS BUCKLEY agreed and did not add anything of their own.
The appeal
was dismissed with costs; an application for leave to appeal to the House of Lords
was refused.
