Leasehold Reform Act 1967 — Enfranchisement — Mews house containing flat and garage — Whether mews house enfranchisable with main house — Whether garage part of ‘house and premises’
By a lease
dated March 25 1960 the applicant tenant held a term of 57 years of premises
consisting of two buildings; a substantial house on five floors and, to the
rear, a mews house consisting of a garage and flat above. The tenant used the
garage of the mews house for his motor car and the flat above for the purposes
of an antiques’ business. On August 12 1994 the tenant gave notice under the
Leasehold Reform Act 1967 to purchase the freehold of the premises. The
respondent landlord contended that the tenant was not entitled to acquire the
mews house.
the garage only of the mews house. The main house and the mews house taken
together are not ‘a house’ within the meaning of section 291 of the Act.
However the main house and the garage in the mews house fall within the
expression of ‘house and premises’. The flat above the garage cannot be
regarded as an outhouse or appurtenance so as to fall within the expression
‘premises’.
The following
cases are referred to in this report.
Methuen-Campbell
v Walters [1979] QB 525; [1979] 2 WLR 113;
[1979] 1 All ER 606; (1978) 38 P&CR 693; [1978] 2 EGLR 58; 247 EG 899, CA
St
Thomas’ Hospital (Governors of) v Charing Cross
Railway Co (1861) 1 John & H 400; 30 LJ Ch 395; 25 JP 771; 7 Jur NS
256; 9 WR 411
Anthony
Radevsky (instructed by Lee & Pembertons) appeared for the applicant; Frank
Hinks (instructed by Boodle Hatfield) represented the respondent.
Giving
judgment, Mr Recorder Russell said: By this application dated May 18 1995 the
applicant seeks an order that he is entitled by virtue of the provisions of
Part I of the Leasehold Reform Act 1967 to acquire the freehold house and
premises at 4 Wilton Crescent and 6 Kinnerton Street, London SW1.
The
respondent’s answer dated July 17 1995 denies that the applicant is entitled to
the order sought on the grounds set out, namely that: (1) 6 Kinnerton Street
does not constitute premises as referred to in subsection (3) of section 2 of
the Leasehold Reform Act 1967; and (2) that on the date when the applicant’s
notice was received he was not occupying 4 Wilton Crescent as his only or main
residence and had not been occupying such property as his only or main
residence for the requisite period.
I heard this
matter on April 1, 2 and 3 1996 and at the end of counsel’s argument reserved
judgment. At the outset of the hearing (or at a very early stage) counsel for
the respondent abandoned the second ground of opposition so far as it concerned
4 Wilton Crescent and accepted that (subject to formal requirements) the
applicant would be entitled to enfranchise 4 Wilton Crescent and its garden, so
that the arguments before me related entirely to 6 Kinnerton Street and whether
the applicant was entitled (as he claimed and the respondent denied) to acquire
the freehold thereof.
In this
judgment, I propose to call the applicant ‘the tenant’ and the respondent ‘the
landlord’; and in referring to page numbers will be referring to the
corresponding page of the agreed bundle of documents.
The landlord
is the freeholder of a property known as 4 Wilton Crescent and 6 Kinnerton
Street, London SW1, which by a lease dated March 25 1960 was demised for a term
of 57 years, expiring on Midsummer Day 2015, which term has been vested in the
tenant since September 1963.
The
subject-matter of the demise is described as being:
all that
piece of land situate on the west side of Wilton Crescent fronting towards the
east on Wilton Crescent which said piece of land with the dimensions thereof is
delineated and coloured in the plan in the margin hereof, together with the
messuage and buildings thereon erected and known as No 4 Wilton Crescent and No
6 Kinnerton Street.
As is apparent
from the plan there are two buildings on the land demised, namely 4 Wilton
Crescent which is a substantial house on five floors in a curved terrace of
houses, and 6 Kinnerton Street which is a mews house on two floors in a terrace
of mews houses. 4 Wilton Crescent and 6 Kinnerton Street are separated by the
garden but joined on either side by garden walls, which are of a lesser height
than the two buildings. The relation between these buildings to their
surroundings is shown on the plan at p33, and there is a picture of the
frontage of 4 Wilton Crescent at p31 and of the frontage of 6 Kinnerton Street
at p25. 6 Kinnerton Street consists of a garage or garages on the ground floor
and of a residential flat on the first floor. Access to 6 Kinnerton Street can
be gained from Kinnerton Street and also from 4 Wilton Crescent via a door from
the garage leading to the garden.
The lease in
clause 2(x) contains a covenant as to ‘user’ which provides that the demised
premises shall be kept and used only as follows:
(a) 4 Wilton
Crescent as a private dwelling-house in the occupation of one household only;
(b) the garage
at the rear of 4 Wilton Crescent as a private garage for the housing of private
motor cars only;
(c) 6
Kinnerton Street as a private dwelling in the occupation of one household only,
with a private garage on the ground floor for the housing of private motor cars
only.
It is not
disputed that the reference in (b) to ‘the garage at the rear of 4 Wilton
Crescent’ relates to either the whole of the ground floor of 6 Kinnerton Street
or to the larger half of the garage which has the door into the garden. I have
come to the conclusion that it refers to the whole of the ground floor. There
never has been any other garage at the rear of 4 Wilton Crescent.
Property as
valuable as the property with which this case is concerned was only brought
within the ambit of leasehold enfranchisement by an amending Act passed in
1993. On August 12 1994 the tenant gave notice of his claim to purchase the
freehold to which the landlord’s solicitors responded by a notice in reply
dated November 3 1994, para 3 whereof set out the landlord’s contentions.
Thereafter in May of 1995 the present proceedings were commenced by the tenant.
For the tenant
evidence was given by his wife and by Mr Simon Marr-Johnson [frics]. The tenant himself did not give
evidence, on account of his poor state of health.
For the
landlord I heard the evidence of Mr John Lindgren [frics], a surveyor employed by the landlord, and of Mr George
Pope [arics].
All these
witnesses were cross-examined, but I do not think it necessary to refer to the
answers given in cross-examination in any detail. I am satisfied that all the
witnesses I heard were completely truthful. To the extent that the experts were
expressing their own views of the law as it impinged on the facts of this case,
I found this helpful; although I have always borne in mind that all decisions
as to law are for me and not for them.
The landlord
accepts that the tenant has at all material times occupied 4 Wilton Crescent as
his main residence. But in relation to 6
has been an issue between the parties.
In relation to
6 Kinnerton Street I find that the tenant has proved, to my satisfaction, that
he has at all the material times been in occupation of the whole of the mews
house, and that he has occupied it together with 4 Wilton Crescent. I further
find as proved that the ground floor of 6 Kinnerton Street was at the material
date (that is to say, on August 12 1994) and at all other relevant times used
by the tenant for the purposes of 4 Wilton Crescent, namely in order to garage
one or more of the tenant’s motor cars and to house a freezer which it was
convenient to keep in the garage.
However, in
relation to the flat on the first floor of 6 Kinnerton Street, I find that at
all material times it was being used for the purposes of the business of Wilton
Antiques Ltd, a company controlled by the tenant and his wife. While I accept
Mrs Dugan-Chapman’s evidence that some furniture and a few pictures belonging
to the tenant remained in the flat, I do not consider it sufficient to
constitute ‘use for the purposes of 4 Wilton Crescent’. If I am wrong in that
view, then I consider that such use was de minimis and can be
disregarded. In taking this view I have taken into account that the outgoings
of the flat such as rates, electricity, telephone and gas have been met
entirely by the company, although this has only been one of the factors which
have led me to the conclusion stated.
This brings me
to an important decision which I have to make, which is either a matter of pure
law or possibly mixed fact and law: namely, whether 4 Wilton Crescent and 6
Kinnerton Street can together be treated as ‘the house’ within the meaning
ascribed to that expression by the Leasehold Reform Act 1967. Under this Act
the right to enfranchise is given to a tenant of a leasehold house who occupies
it as his only or main residence. There are other preconditions which are not
relevant in this case and to which I therefore need not refer. Such a tenant is
given the right to acquire the freehold of the house and premises —
(emphasis supplied).
The meaning of
‘house and premises’ is defined by section 2 of the Act. By section 2(1)
‘house’ includes any building designed or adapted for living in and reasonably
so called … and (b) where a building is divided vertically the building as a
whole is not ‘a house’, though any of the units into which it is divided may
be. Flats in buildings of which a material part lies above or below another
building are expressly excluded by section 2(l)(a) and section 2(2).
I am of the
clear view that 4 Wilton Crescent and 6 Kinnerton Street, the buildings which
form part of the property demised are, looked at objectively and in a
common-sense way, two houses and not one.
This raises the
question whether it is possible to construe the words ‘any building’ where it
occurs in section 2(1) as including the plural, as if it read ‘any building or
buildings’. Whether one can do so depends on the context in which the words
occur. I bear in mind that under other statutes several buildings, sometimes
adjoining, sometimes detached from each other, have together been held to
constitute a house, or a house let as a separate dwelling: see the cases of Governors
of St Thomas’ Hospital v Charing Cross Railway Co (1861) 7 Jur NS
256 and Whitty v Scott-Russell [1950] 2 KB 32.
But I also
bear in mind that it has been held that decisions under other Acts (and in
particular under the Rent Acts) are no reliable guide to the construction of
the Leasehold Reform Act, because its objectives are not the same.
It is also
clear on the authorities cited to me that 6 Kinnerton Street could on its own
be ‘a house’ within the definition, but this, in my view, is by no means
conclusive. What to my mind indicates the correct answer is the fact that the
whole context of the relevant subsection indicates that the draftsman of the
Act did not include the plural when using the words ‘any building’. When one
asks whether several freestanding buildings can be ‘a house reasonably so
called’, I think that the answer is ‘No’. Equally, the provisions of section
2(1)(b) which relate to a building which is divided vertically and state that
the whole building is not a house, suggests a fortiori that two separate
buildings or houses are not ‘a house’ within the definition of section 2(1). I
do not overlook the fact that the word used in the definition is ‘includes’;
but I am satisfied nevertheless that anything that is outside the definition
cannot be ‘a house’.
For these
reasons I am driven to conclude that 4 Wilton Crescent and 6 Kinnerton Street
taken together are not ‘a house’ within the meaning of the Act.
I therefore
now turn to see whether 4 Wilton Crescent and 6 Kinnerton Street are ‘a house
and premises’ within the Act. By subsection (3) of section 2 of the Act:
the reference
to premises is to be taken as referring to any garage, outhouse, garden, yard
and appurtenances which at the relevant time are let to (the tenant) with the
house and are occupied with and used for the purposes of the house or any part
of it by him or by another occupant.
The landlord
accepts that in the present case the garden falls within the above definition,
but denies that the mews house (that is to say 6 Kinnerton Street) does so. The
tenant argues that the ground floor of 6 Kinnerton Street is patently a garage,
that it was let to him with the house, and that it has been occupied and used
by him for the purposes of the house, namely to garage his motor car or cars
and to store food in the freezer. The landlord concedes that the ground floor
of 6 Kinnerton Street is a garage, but argues that it was not let to the tenant
with the house, either because it was let to him with another house — namely 4
Wilton Crescent — or alternatively that a garage which is part of a separate
house and outside the curtilage of the relevant house cannot be a garage within
the definition of ‘premises’.
I think that
on this issue the arguments of the tenant are to be preferred, and I hold that
the ground floor of 6 Kinnerton Street is a garage let with the house, namely 4
Wilton Crescent, and falls fairly and squarely within the expression ‘house and
premises’ used by the Act. It was urged on me by the landlord that this
conclusion could lead in some cases to absurd results, but I found this
argument unconvincing.
Turning to the
first-floor flat at 6 Kinnerton Street, the tenant argued that it passed
automatically with the freehold on the ground floor or, if it did not, the
whole of 6 Kinnerton Street (or alternatively the flat alone) came within the
words ‘outhouse or appurtenances’ in subsection (3) of section 2. The landlord
argued that if 6 Kinnerton Street was properly to be regarded as ‘a house’ it
could not be ‘an outhouse’; and that, as it was outside the curtilage of the main
house (namely 4 Wilton Crescent) — which may be debatable — then it could not
be ‘an appurtenance’: see Methuen-Campbell v Walters [1979] QB
525*.
*Editor’s
note: Also reported at [1978] 2 EGLR 58
I reject the
argument that the first floor passes with the ground floor automatically. I do
not think that can be right.
It seems to me
that 150 years ago when this property was originally erected, the mews were
probably for stabling on the ground floor, and that the first floor was used
for the storage of hay or other stable equipment or for the accommodation of
domestic staff, so that it would have been reasonable to regard the entity (and
by that I mean the composite entity) of 4 Wilton Crescent and 6 Kinnerton
Street as one domestic household or establishment. So that at that time 6
Kinnerton Street could have been an outhouse or appurtenance of 4 Wilton
Crescent. But when this lease was granted and when the tenant’s notice was
served the social conditions in London were so different that anyone describing
the subject-matter of this lease would have said that it demised two houses and
a garden and not just one house with an outhouse or appurtenance of a mews.
I have
therefore decided that the landlord’s arguments are to be preferred on this
issue, and that 6 Kinnerton Street (or the first-floor flat therein) cannot be
properly regarded as an outhouse or appurtenance of 4 Wilton Crescent.
Moreover, even if this were wrong, it is clear from my findings of fact that
the user of the first-floor flat of 6 Kinnerton Street was not for the purposes
of 4 Wilton
For the reasons set out above, I have decided that ‘the house and premises’
which the tenant is entitled to enfranchise under the provisions of the Act
includes 4 Wilton Crescent, the garden and the ground floor of 6 Kinnerton
Street, but does not include the first-floor flat of 6 Kinnerton Street. In
coming to this conclusion I have not overlooked the fact that the Act clearly
seeks to avoid the creation of ‘flying freeholds’, with all the difficulties
that these are known to involve. But it seems clear that the draftsman of the
Act included subsections (4), (5), (6) and (7) of section 2 in order to
overcome some of these very problems.
In the result,
having regard to the terms of the tenant’s notice the tenant is not entitled to
the order sought and this application fails. If there is an application for
leave to amend the notice pursuant to para 6 subpara (3) of the Third Schedule
to the Act, I am willing to consider it, but shall require further argument
from the parties before making any decision on whether leave should be given,
and, if so, on what terms. I also propose to hear the parties on the issue of
costs.