Two London tenants have successfully challenged a High Court ruling that they were not entitled to acquire the freehold of their flats.
Christopher Slamon and Richard Ward claimed that, because landowner Nicole Planchon had not held a continuous interest in the property following its conversion from a single house into three flats, she could not rely upon a statutory exception to their right of collective enfranchisement.
The county court dismissed their action on the basis that Planchon had held the premises for the requisite period, initially under a family trust and then as the freehold owner, and was able to “blend” her two types of interest.
However, the Court of Appeal has now overturned the ruling, holding that a property owner was able to rely upon only one interest, which had to be continuous throughout the whole period.
The court acknowledged that their interpretation of section 10 of the Leasehold Reform, Housing and Urban Development Act 1993 would “give rise to anomalies”, such as had occurred in this case, but stated that it was under a duty to “give effect to the intention of the legislature”.
Planchon became the freehold owner of 50 Woodsome Road, London NW5, in 1999. Prior to that date, she had held a beneficial interest in the land under a family trust. The claimants, Slamon and Ward, held long leases of two of the flats, and Planchon’s mother occupied a third.
On appeal, the court ruled that the changes in Planchon’s interest over the relevant period were fatal to her attempt to fall within the “resident landlord” exception in section 10.
Lord Justice Longmore said: “On a proper reading, whatever interest is relied upon has to be continuous; there is no indication that the interests can be mixed with each other to result in a continuous whole.”
Lord Justice Peter Gibson, added that the court could “only assume that parliament had intended a simple test”, namely that the owner had either owned the freehold or had been a beneficiary under the same trust prior to the conversion.
He said that parliament must have been aware that “so unsophisticated a test” would give rise to anomalies, but maintained: “That is the test that was enacted and the courts must give effect to it.”
Slamon and another v Planchon Court of Appeal (Peter Gibson, Rix and Longmore LJJ) 25 June 2004.
Michael Pryor (instructed by Bircham Dyson Bell) appeared for the claimants; Daniel Bromilow (instructed by Avadis & Co) appeared for the defendant.
References: EGi Legal News 25/06/04