Leasehold Reform Act 1967 — Questions of substance and procedure — Whether property was a ‘house’ for the purpose of enfranchisement having regard to the exclusion in section 2(2) of the Act — Whether applicant’s notice was invalidated by inaccuracies within the meaning of Schedule 3, para 6(3) — Property was a terrace-type house with the structural peculiarity that part of it extended across a tunnel with a barrelled brick roof above which were steel and wooden joists — It was submitted by landlords that the property was not a ‘house’ as it was not structurally detached and a material part of it lay above ‘a part of the structure not comprised in the house’, namely, the barrelled brick structure forming an arch over the tunnel space — Held by the Court of Appeal, rejecting this submission and upholding the view taken by the county court judge, that the demise included all the structure, including the bricks underneath the first floor, above the tunnel space — The court also rejected the landlords’ submission that certain omissions in the tenant’s notice under Part I of the 1967 Act were not ‘inaccuracies’ of the kind which were exculpated by para 6(3) of Schedule 3 — Some observations by the Master of the Rolls on the limits of the concession made by para 6(3) — Landlords’ appeal dismissed
This was an
appeal by landlords, the Duke of Westminster and other trustees of the will of
the late second Duke, from a decision of Judge Harris QC at West London County
Court upholding a claim by the present respondent, Simon Cresswell, to be
entitled to enfranchise under the Leasehold Reform Act 1967 a property held by
him on long lease at 96 Eaton Terrace, London SW1.
David
Neuberger (instructed by Boodle Hatfield & Co) appeared on behalf of the
appellants; Nicholas Wood (instructed by Withers) represented the respondent.
Giving
judgment, SIR JOHN DONALDSON MR said: This is an appeal from a decision of His
Honour Judge Harris given in the West London County Court on March 26 1984
whereby he upheld a claim by Mr Simon Cresswell to be entitled to require his
landlords, the Duke of Westminster and others, to sell him the property which
he held on a long lease at 96 Eaton Terrace, London. Two points were canvassed
before the learned judge, and they are quite separate points. The first
concerns whether the Leasehold Reform Act 1967 applies to these premises. The
second point concerns whether Mr Cresswell had complied with the necessary
formalities when he claimed the right of enfranchisement.
The house
itself is shown in a photograph. Suffice it to say that it is a West End
terrace-type house on three floors — ground floor, first floor and second floor
— with the peculiarity that, looking at it from the street, on the left-hand
side there is a passageway, which is big enough to take vehicles, leading to a
mews behind. So there is, in effect, a tunnel through the house on the
left-hand side and the house extends across the tunnel on the first and second
floors. That is described in the parcels clauses of the lease as follows:
HEREBY
DEMISES to the Lessee — All that piece of land situate on the South West side
of Eaton Terrace in the Parish of the City of Westminster in the County of
London which said piece of land with the dimensions thereof (be the same little
more or less) is delineated and coloured light and dark pink and blue in the
plan in the margin hereof together with the messuage and buildings thereon
erected And together with the rooms and premises on and above the first floor
of the building erected over the land shown by yellow colour on the said plan.
All which said land and premises hereby demised are now known as No 96 Eaton
Terrace And together with the right for the Lessee in common with the Landlord
and all other persons having a like right of ingress egress and regress in over
and upon Palace Mews saving and excepting the railway and tunnel under any part
of the demised premises made and constructed by the Metropolitan District
Railway Company
and so on.
I will return
to that when I have referred to the relevant section of the Act which has given
rise to the argument. That section is section 2, which defines ‘house’ for the
purposes of the Act — the right of a tenant being limited to enfranchising a
house within the meaning of the Act. It is conceded that these premises are a
house subject to the effect of section 2(2), which provides:
References in
this Part of this Act to a house do not apply to a house which is not
structurally detached and of which a material part lies above or below a part
of the structure not comprised in the house.
This house is
not structurally detached and a material part lies above something which quite
clearly was not included in the demise, namely the land. But the question is
whether it also lies above a part of a structure not comprised in the house.
What is said by the landlord is that some part of the structure forming the
tunnel — which has a barrelled brick roof, above which are rolled steel joists,
above which are wooden joists, above which is the first floor — was excluded
from the demise in the words that I have read, and in particular Mr Neuberger
relies upon the words ‘together with the rooms and premises on and above the
first floor of the building.’ He says
that the bricks above the air space which is above the land leading to the mews
are not on the first floor; still less above the first floor. They are above
and form the ceiling of the ground-floor space below.
For my part, I
am quite unable to accept that argument. It seems to me that one only has to
look at the house in the photograph and ask what was demised, and the answer
must be the first floor and all that the first floor stands on including the
bricks underneath. It all forms part of that floor.
Mr Neuberger
had a most attractive argument to the effect that the bricks are the ceiling of
the ground-floor room. Of course it is not a room. It is merely a passage, and
there is absolutely no reason why a tunnel or a passage should have a ceiling.
If it happens that somebody occupies premises above, you do not need a ceiling;
you just use their premises as a ceiling. That, in my judgment, is precisely
what the position is here.
Mr Neuberger
did refer us to the case of Sturge v Hackett [1962] 1 WLR 1257,
where the issue concerned the liability of underwriters who had protected and
assured in respect of occupier’s liability, and subsequently he had set fire to
a decorative cornice outside on the external wall of his flat. That case is
authority for the proposition that external cornices, provided that they are
not on somebody else’s premises, are part of the wall. For my part, I would
have interpreted that case as assisting the applicant rather than the landlord,
because it seems to me that, although the brick vaulting is in a horizontal plane,
it is indistinguishable from an external wall in a vertical plane, there being
no premises underneath other than the land itself. Of course, as a matter of
law, the air is retained in the right of the landlord, but so is the air which
adjoins a vertical wall if the landlord owns the land. The learned judge found
that the demise included all the structure above the land coloured yellow, and
I cannot see any error in that finding. That disposes of the first point.
The second
point is quite separate. Under para 6 of the Third Schedule to the Act a tenant
who wishes to enfranchise his property must give a notice and that notice has
to contain certain particulars which are set out in the paragraph. The
Schedule, which contains the particulars, calls for the address of the house;
particulars of the house and premises sufficient to identify the property to
which the claim extends; the rateable value of the house at the material time;
particulars of the tenancy; the date on which the claimant acquired the tenancy;
and, in para 6, periods for which in the last 10 years and since acquiring the
tenancy the claimant (i) has not occupied the house as his residence, (ii) has
occupied the house as his residence; and, in the case of periods stated under
(ii) (a) what parts (if any) of the house have not been in his own occupation
and for what periods, and (b) what other residence (if any) he has had and for
what periods, and which was his main residence.
In order to
qualify for enfranchisement within the rules as they existed at the relevant
time, all that Mr Cresswell had to show was that he occupied this house as his
main residence for periods aggregating five years in the previous 10 years.
That he could do without the slightest difficulty. Unfortunately, when filling
in the part of the schedule relating to occupation, he said that there had
been no periods during the previous 10 years when he had not occupied the house
as his residence, whereas in fact he had lived in Paris for six months. If he
had mentioned the period of six months when he was in Paris, it would have
meant that alterations would have had to be made to all the answers in that
section bringing in a reference to the fact that he had let the house during
that period.
Complaint is
also made of the fact that he did not say he had another residence, namely a
cottage in Dorset owned by his mother. Whether or not on the facts of this case
it is arguable that he did not have another residence, because the cottage was
owned by his mother, is neither here nor there as nobody has suggested that it
was his main residence.
So we have a
notice which is not entirely in accordance with the facts, if I may put it in
that neutral way, and this introduces the problem which arises under para 6(3)
of the Schedule. That provides as follows:
The notice
shall not be invalidated by any inaccuracy in the particulars required by this
paragraph or any misdescription of the property to which the claim extends; and
where the claim extends to property not properly included in the house and
premises, or does not extend to property that ought to be so included, the
notice may with the leave of the court, and on such terms as the court may see
fit to impose, be amended so as to exclude or include that property.
Mr Neuberger
says that that paragraph does not help Mr Cresswell, because this is not an
inaccuracy; it is a complete omission. I think that that involves a
misconstruction of para 6(3), because it is talking about inaccuracies in the
particulars as a whole. The fact that there is an omission in part of the
particulars does create an inaccuracy in the particulars as a whole. A failure
to give any particulars at all would not, I should have thought, have been an
inaccuracy in the particulars as a whole; it would simply be an omission. The
notice having been given substantially correctly, I do not think there is
anything in the argument that a distinction can be drawn between partial
omission and inaccuracies. But there is undoubtedly a problem as to what is
meant by ‘any inaccuracy’. Mr Wood for the tenant boldly states that it really
does not matter: anything that is accurate fully complies with the statute;
anything that is inaccurate, whether it is due to fraud, innocent
misrepresentation or negligence is all just an inaccuracy. For my part, I am
not prepared to accept that for one moment.
In this case
let it be made absolutely clear that there is no question of fraud, bad faith
or anything of that sort. We do not have to decide whether it was negligence:
we do not even know whether it was Mr Cresswell himself who filled the form in.
All we do know is that the notice did not represent the facts in the respects
which I have mentioned. The learned county court judge said that this was an
inaccuracy within the meaning of the paragraph and should not invalidate the
notice. For my part, I entirely agree with that view. It may be that there is a
line to be drawn, but I would hesitate to define it. During the argument Neill
LJ drew my attention to the fact that the words ‘any inaccuracy in the
particulars required by this paragraph’ are followed by ‘any misdescription of
the property’, and I would agree with the suggestion that both phrases are
concerned with the same degree of deviation from full accuracy.
In the end I
suspect that a court has to ask itself: ‘Looking at the facts as they were and
what was stated in the notice, can this fairly be said to be an inaccuracy, or
is it simply a notice which does not on a fair view relate to the facts?’ Where we draw the line I do not know, and I
doubt whether it is in anybody’s interests that I should attempt to draw that
line. Many cases will answer the question themselves on their own facts. In my
judgment this case answers itself on its own facts, the answer being that given
by the county court judge.
For the
reasons which I have sought to express and for the reasons which the learned
county court judge accepted I would dismiss the appeal.
Agreeing,
NEILL LJ said: I would only add a few words on the first point in deference to
Mr Neuberger’s careful argument. The relevant part of the lease contains these
words:
And together
with the rooms and premises on and above the first floor of the building
erected over the land shown by yellow colour on the said plan.
Mr Neuberger
drew particular attention to the words ‘on and above the first floor’ which, he
submitted, indicated a dichotomy between the part on and above the first floor
and the remainder of the building erected over the yellow land. The remainder
of the building, he suggested, consisted of the barrelled roof.
I see the
force of that argument, but in the context I am unable to accept it. It seems
to me to be quite plain that the words ‘on and above the first floor’ in this
part of the clause were introduced merely by way of an additional description
and did not have the effect of excluding the roof from the premises demised.
For those
reasons and for the reasons given by my lord I, too, would dismiss the appeal.
Also agreeing,
NOURSE LJ said: I also would like to add a few observations on the first point.
In my view, it is impossible without a special context to describe a ceiling of
an external arch at ground-floor level, above which there is another part of
the structure, as being part of the ground floor. As my lord the Master of the
Rolls pointed out in argument, it is one of the external walls of the premises
above. As such, it is part of the first floor. Therefore there can be no doubt
that it is part of ‘the premises on the first floor of the building’ within the
parcels of the lease in this case.
The appeal
was dismissed with costs.
