Collins v Howard de Walden Estates Ltd

Acquisition of freehold — Meaning of “house” — Vertical division — Respondent wishing to acquire freehold of two mews units — Whether vertically divided property can constitute single house — Appeal dismissed The respondent held a long lease of nos 11 and 12 of a mews building, and wished to acquire the freehold from the appellant pursuant to the Leasehold Reform Act 1967. The terms of the respondent’s lease required her to occupy the demised premises “as a single private dwelling”, with the exception of the first floor of no 12, which constituted a separate, self-contained flat that was let on an underlease granted by the respondent’s predecessor. The lease also provided that a garage forming part of the ground floor of no 12 should be used “ancillary to the use only of… number 11”. Numbers 11 and 12 had originally been entirely separate, but a communicating door had subsequently been constructed in a party wall from the patio of no 11 into a utility room at the rear of no 12, and thence into the garage. The respondent sought a declaration that she was entitled to acquire the freehold. The central issue in the proceedings was whether nos 11 and 12 together constituted a single “house”, reasonably so called, within the meaning of section 2 of the 1967 Act. The judge found that they did, and attached weight to the requirement in the lease to use them as a single dwelling. He considered that the limited access arrangements did not detract from that view. In reaching his conclusion, he was guided by the Court of Appeal decision in Malekshad v Howard de Walden Estates Ltd [2001] EWCA Civ 761; [2001] 3 EGLR 47. Following the House of Lords decision in Malekshad [2002] UKHL 49; [2002] 3 WLR 1881, the appellant appealed, contending that: (i) the facts of that case were analogous; and (ii) the vertical division between nos 11 and 12 meant that they were excluded from the definition of a house by section 2(1)(b) of the 1967 Act, the door in the party wall being insufficient to convert the two houses into one. Held: The appeal was dismissed. Applying the principles set out in Malekshad, nos 11 and 12 satisfied the first test, in section 2(1), of being a building that had been designed and adapted for living in. Accordingly, the outcome of the appeal depended upon whether, because of the vertical division, they were excluded from constituting a single house by section 2(1)(b). The finding in Malekshad, that the property under consideration was not, for that reason, a single house, did not decide that issue in the present case because the facts were very different. A vertical division along the lines contemplated by the appellant would not divide the property into two residential units, as contemplated in Malekshad. It would result in no 11 forming a house, with its premises including the garage and the utility room in no 12. That would produce just the effect that section 2(1)(a), in excluding horizontally divided units such as flats, was designed to avoid, since it would turn the flat in no 12 into a flying freehold. That difficulty would be avoided if the real position were accepted, namely that the utility room and garage of no 12 were part of no 11 both in practice and by design. The correct view was that nos 11 and 12 were not vertically divided in the manner contemplated by section 2(1)(b). Judith Jackson QC and Timothy Harry (instructed by Speechly Bircham) appeared for the appellant; Anthony Radevsky (instructed by Lawrence Graham) appeared for the respondent. Sally Dobson, barrister