Basement incorporating area from property to rear of tenant’s demise — Whether basement below rear property “material part” for purpose of enfranchisement — Landlords’ appeal allowed
The respondent, B, was the tenant of 2 Kinnerton Street, London SW1, which formed part of the landlords’ Belgravia estate. It had been the mews to 2 Wilton Crescent before being converted into two dwellings. The main part consisted of three floors overlooking Kinnerton Street at the front and 2 Wilton Crescent at the rear. A basement area of 140 sq ft was incorporated into 2 Kinnerton Street; approximately 113 sq ft of which were below the rear of 2 Wilton Crescent. Although there was a doorway between B’s kitchen and the basement, it was not physically occupied by B as part of his residence. The landlords sought a declaration that for the purposes of the Leasehold Reform Act 1967, sections 1 and 2, a material part of 2 Kinnerton Street lay below a part of the structure not comprised in the premises, but that it none the less formed part of 2 Kinnerton Street. At first instance the judge found for the tenant on both points. The landlords appealed.
Held The appeal was allowed.
1. It was important to distinguish between section 1(1), by which the right of acquisition was conferred, and section 2(1), by which the building to be acquired was identified. The functions of the two provisions were quite different in that the requirement that the tenant should occupy the house as his residence ought not to have any influence on the identification of the house itself.
2. The correct construction was as follows: the first requirement of section 1(1) was that there should be a leasehold house held by the tenant. In order to find out whether that requirement was satisfied one went straight to section 2(1), which asked to identify a building held by the tenant and designed or adapted for living in; it did not need to be structurally detached nor solely designed for living in. If and when such a building was identified, the court then had to consider whether it was reasonable to call it a house. The question of whether the tenant was occupying the building as his residence did not need to be considered unless and until the requirements of section 2(1) were satisfied.
3. In the present case the building which was designed for living in was the whole of 2 Kinnerton Street including the basement area. That basement area was only capable of enjoyment with the main part of 2 Kinnerston Street as there was no access to it from 2 Wilton Crescent or elsewhere. The use which the tenant made of it was entirely beside the point.
4. Under section 2(2) of the Act, a tenant had no right to the enfranchisement of a house of which “a material part lies above or below a part of the structure not comprised in the house”.
5. The primary purpose of that section must have been to exclude from the operation of the Act houses in respect of which the inability of one owner to enforce positive obligations against successors in title of the other would be likely to prejudice the enjoyment of the house or another part of the structure.
4. “Material” therefore did not simply point the contrast with “trivial” or “insignificant”. It had to be of sufficient substance to have an effect of some kind viz the inability to enforce positive obligations against successors in title.
5. Applied to the basement area in the present case, it was obvious that it was a material part of 2 Kinnerton Street.
Robert Reid QC (instructed by Boodle Hatfield) appeared for the landlords; Paul Morgan QC (instructed by Jeffrey Green Russell) appeared for the tenant.
