Leasehold Reform Act 1967–Premises a ‘house’ within Act though within the five-year occupation period they were combined with a room taken from the adjoining property–Strip of land running behind houses not however ‘let with’ relevant premises–Tenant gets freehold of house but not of strip
This was an
appeal by Mr Joseph Gaidowski, of 6 Harvey Road, Cambridge, from a judgment of
Judge Connolly Gage in the Cambridge County Court on April 29 1974 dismissing
his application for a declaration that he was entitled, under the terms of the
Leasehold Reform Act 1967, to require the respondents, the Master, Fellows and
Scholars of Gonville & Caius College, Cambridge, to convey to him the
freehold of 6 Harvey Road. By a cross-notice, the respondents appealed against
the judge’s conclusion that a strip of land running behind the gardens of 5 and
6 Harvey Road was let to the appellant with no 6.
Mr M Barnes
(instructed by Seaton Taylor & Co, agents for Vintners, of Cambridge)
appeared for the appellant, and Mr N Hague (instructed by Francis & Co, of
Cambridge) represented the respondents.
Giving the
first of the reserved judgments, ORMROD LJ said: This is an appeal from a
judgment of His Honour Judge Connolly Gage, sitting at Cambridge County Court
on April 29 1974, dismissing an originating application by Mr Gaidowski, the
appellant, for a declaration that he was entitled, under the Leasehold Reform
Act 1967, to require the freeholders, the Master and Fellows of Gonville &
Caius College, to convey to him the freehold of 6 Harvey Road, Cambridge,
together with a strip of garden running parallel to Harvey Road and lying at
the foot of the back gardens of the houses in that road. No 6 is one of a pair
of semi-detached Victorian houses, the other being no 5, which were built about
1880 by an architect, Mr Morley, on land belonging to the college. In 1883 the
college granted a lease to the late Mr J N Keynes, a former Fellow of Pembroke
College, for a term of 99 years from December 25 1881, of nos 5 and 6 together
at an annual rent of £30. Mr Keynes and his family occupied no 6, but except in
one respect, which is highly material to this case, there was no evidence as to
the occupation or use of no 5. The important fact was that at some date prior
to 1958 an opening was made in the wall separating the adjoining ground-floor
front rooms of nos 5 and 6, and the doorway leading from the hall of no 5 into
this room was bricked up. This extra room appears to have been used as a
library by Mr and Mrs Keynes. After the death of Mr and Mrs Keynes the
unexpired portion of the lease of nos 5 and 6 was transferred to Mr Gaidowski
by their personal representative, Sir Geoffrey Keynes, by an assignment dated
December 5 1958. Mr Gaidowski has lived in no 6 ever since, but in 1972 he
filled up the opening in the wall between nos 5 and 6 and reopened the doorway
into the hall of no 5, replacing the original door which had been stored in the
cellar. Nos 5 and 6 were, therefore, restored to their original condition.
By a notice of
application dated January 12 1973 Mr Gaidowski claimed the freehold of ‘All
that house garage and garden premises as shown on the attached plan,’ that is
of 6 Harvey Road and the garden strip already referred to. On June 7 1973 the
college gave a notice in reply disputing Mr Gaidowski’s claim on the grounds
‘that during part of your five-year period of residence you have not occupied
(in whole or in part) a ‘house’ as defined by the Act, in that the relevant
building included the ground-floor front room of no 5 and was not a ‘house’ by
reason of section 2 (2); and that, in respect of the garden strip, this was not
‘let with’ no 6 and so was not part of the premises as defined by section 2
(3).’ It was common ground in this court
and in the court below that the appellant fulfilled all the other criteria
prescribed by the Leasehold Reform Act. He was at the date of his notice of
application the tenant of a leasehold house on a ‘long’ lease and at a ‘low’
rent, as defined in the Act, and the rateable value of no 6 was £182 per annum,
that is, within the prescribed limit of £200. The sole issue on this part of
the case was, and is, whether he can fulfil the remaining requirement, namely,
that he had occupied the house as his only or main residence for at least five
years immediately preceding the date of his notice. Mr Hague, for the college,
concedes that if no 6 had never been altered by the taking in of the front room
of no 5, there would have been no answer to Mr Gaidowski’s claim. He also
concedes that after the expiry of five years from the time of what he calls the
‘re-conversion’ or reinstatement of nos 5 and 6, the college could not resist
Mr Gaidowski’s claim to enfranchise no 6. The real question in this case,
therefore, is the effect of alterations to the premises during the five-year
period, or, put in another way, how does the Act apply to premises which have
been altered, as these premises have been altered, during the crucial five-year
period.
Mr Hague’s
main submission, both here and below, is that so long as no 6 consisted of the
original house plus the additional room taken in by the Keynes’s from no 5, the
house was not a ‘house’ within the Act, because it was caught by section 2 (2),
and that therefore Mr Gaidowski could not prove that he had occupied a ‘house’
which was within the Act during the requisite period of five years, the
alterations having been done in 1972, barely a year before the date of the
notice of application. Mr Barnes’ contention on behalf of the appellant is, and
was, that no 6 could at all times reasonably be called a ‘house’ with the use
of an additional room which did not form or could reasonably be regarded as not
forming a part of no 6. If that is so, it would not be caught by section 2 (2).
That subsection reads as follows:
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.
The additional
room certainly lay above and below a part of the structure not comprised in no
6, and therefore, if it is to be treated as an integral part of no 6 before the
reinstatement, no 6 would be excluded by the subsection from the operation of
the Act so long as this situation remained unchanged. The learned county court
judge rejected Mr Barnes’ submission that the additional room was not part of
the house and his alternative submission that it was not a material part, and
accordingly dismissed the originating application. The issue therefore turned
on the meaning to be given to the word ‘house’ for the purposes of the Act.
Section 2 (1) contains what Mr Barnes called the basic definition of a house
and reads as follows:
For the
purposes of this Part of this Act, ‘house’ includes any building designed or
adapted for living in and reasonably so called, notwithstanding that it is not
structurally detached. . . .
This is a
fairly elastic definition. All that has to be shown is that the premises might
reasonably be called a house. The fact that they might equally well be called
something else will not take them out of the Act (Lake v Bennett
[1970] 1 QB 663). Mr Hague’s contention leads to an anomaly which ought, if
possible, to be avoided. It was agreed by both counsel, who have great
experience in this field, that the only practical reason for the conclusion in
the Act of subsection (2) of section 2 is a conveyancing one. ‘Flying
freeholds,’ or ‘freehold in the air,’ give rise to peculiarly difficult
conveyancing problems. These are obviated by this subsection, which simply
excludes from the provisions of the Act any premises the enfranchisement of
which would lead to difficulties of this kind But no such difficulties can
arise in this case, because the notice of application is confined to no 6 in
its original form. No attempt is being made here to secure the freehold of the
front room of no 5, and the only result of accepting Mr Hague’s submission
would be to postpone the enfranchisement of no 6 until 1977, at some additional
expense to the tenant. Mr Barnes’ contention also is not free from difficulty,
in that it makes his client’s claim to the freehold of no 6 depend on what must
be an impressionistic conclusion as to what can or cannot reasonably be called
a ‘house.’
With all
respect to the two very experienced counsel who argued this case with the
utmost care and lucidity, I cannot suppress my doubt whether on the facts of
this case this problem actually arises at all. If one begins with section 1,
the Act confers on the tenant the right to acquire the freehold of ‘the house
and premises.’ I ask myself, what house
and premises? The answer must be, the
house and premises identified in the notice of application, that it, 6 Harvey
Road in its condition at the date of the notice. This house is a leasehold
house, let on a long lease, at a low rent, and of a rateable value below £200.
Now comes the crucial part, that is, paragraph (b) of subsection (1), which
reads: ‘at the relevant time . . . [the applicant] has been . . . occupying it
as his residence for the last five years. . . .’ I find it difficult to understand why ‘it’
should not refer to the leasehold house identified in the notice of
application, that is no 6 in its condition at that date. If this is correct,
the fact that for some part of the five-year period no 6 was connected to the
front room of no 5, which was cut off from no 5, becomes irrelevant. I very
much doubt whether the draftsman of the Act could have intended subsection (2)
of section 2 to apply to the house referred to as ‘it.’ If it does, it leads to the curious result
that by altering the property at any time before making his application the
tenant can reduce the rateable value to a figure within the £200 and so bring
it within the Act, but cannot eliminate the effect of section 2 (2), which has
ceased to have any practical effect. However, this point was not taken in the
court below, and this court must therefore deal with the case on the basis of
the arguments addressed to the learned judge.
But for
authority, the learned judge would have accepted Mr Barnes’ contention that
before the reinstatement what was occupied was the house, no 6, together with
the extra room. I too think that even with the extra room attached, references
to the ‘house’ in this case could reasonably be taken to mean no 6 by itself.
The matter can be tested by asking how a reasonable man looking over the
property would describe it. If he attached more importance to structure than to
use, I think he would say that the extra room was obviously the front room of
no 5 and that no 6 was the house. If he were thinking of purchasing no 6, he
would probably at least inquire whether the extra room was to be included in
the sale of no 6. If he were more impressed by use, and he found the extra room
carpeted and curtained to match the adjoining room in no 6, and fully
furnished, he might describe the whole as no 6 into which an extra room had
been incorporated. If he found it undecorated, unfurnished, and used simply as
a storeroom for unwanted furniture, he might have his doubts. To some
observers, much might depend on how easy or otherwise it would be to restore
these two houses to their original condition. Had the occupant of no 6 been
content to lock the door into no 5 and stand a bookcase against it, the mere
fact of making an opening in the wall between the two houses could not be said
to have made this room part of no 6. In the present case the door frame leading
into the hall of no 5 was still in place and the door itself was still available,
so that all that was required by way of reinstatement was to remove the bricks
from the doorway, close the opening between the houses and rehang the door.
Quite a different situation may arise where two or more cottages are converted
into a single house. Party walls may be removed, front doors eliminated, one or
more staircases may be taken out, so that the identity of the original cottages
completely disappears. My conclusion, therefore, is that the ‘house’ in this
case was always no 6 as it was originally built, and that it could reasonably
be called a house whether or not the communication with the front room of no 5
was opened or bricked up. It is accordingly unnecessary to consider Mr Barnes’
second point, that in any event the additional room was not a ‘material part’
of no 6, although I would be inclined to think that if it was a part of no 6,
it was a material part. Certainly if it was to be included in the conveyance of
the freehold to Mr Gaidowski, the conveyancing difficulties which section 2 (2)
seems designed to avoid would arise.
Turning now to
the two cases referred to by the learned judge, Peck v Anicar
Properties Ltd [1971] 1 All ER 517 and Wolf v Crutchley
[1971] 1 All ER 520, I think, contrary to the judge’s view, that Peck’s case
helps rather than hinders Mr Barnes. In that case, as in the present case, the
application was limited to that part of the premises which did not lie above or
below a part of the structure not comprised in the house. The only question was
whether the ‘house’ must be taken to include the ground floor of the adjoining
house which had been joined to the ground floor of the premises sought to be
enfranchised, forming together a single shop. It was held that the word ‘house’
could reasonably be applied to the building consisting of one half of the shop
and the living accommodation above. It is to be observed that consequently no
conveyancing problem arose in that case, because the application was restricted
to that part of the property which was affected by section 2 (2). I do not
think that the fact that the ground floor was used as a shop rather than as
part of a residence is sufficient to distinguish that case on its facts from
the the present. We are concerned with a reasonable description of a building,
and if the structure in Peck’s case could reasonably be called a house,
I think that the present case is, if anything, stronger. No 6 is to all
appearances a ‘house.’ The extra room
does not, in my opinion, make it inappropriate to refer to no 6 by itself as a house.
In Wolf v Crutchley the question was whether 5 Gliddon Road could
reasonably be called a house in itself, notwithstanding
the applicant for letting out rooms. Cairns LJ attached importance to the fact
that no part of the adjoining house was used as part of the applicant’s
residence, which was wholly in no 5. Lord Denning MR made the same point, but
also emphasised the fact that no 5 was ‘structurally a separate house.’ In the present case no 6 is and was
structurally a separate house, and as I have said, the extra room could
reasonably be described, in structural terms, as the front room of no 5.
(Interestingly, it was so described by the respondents themselves in their notice
in reply.) Domestically, for reasons
which I have given, this extra room was used by Mr Gaidowski only as a place to
store some surplus furniture. For these reasons, I do not think that there is
anything in these two cases which should have caused the judge below to have
departed from his primary impression. I would accordingly allow this appeal in
so far as the application relates to 6 Harvey Road as described in the original
lease.
I now turn to
the second part of the case, which concerns the strip of garden lying across
the end of the gardens of these houses, which is the subject-matter of the
respondents’ notice in this court. This strip of land was not included in the
original lease to the late Mr J N Keynes, and came into Mr Gaidowski’s possession
as the result of an entirely separate series of transactions. To succeed in his
application to acquire the freehold of this strip Mr Gaidowski must rely on the
terms of section 2 (3), which are as follows:
Subject to
the following provision of this section, where in relation to a house let to
and occupied by a tenant reference is made in this Part of the Act to the house
and premises, 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 him with the house and are occupied with and used for the purpose of the
house or any part of it by him or by another occupant.
The history of
this strip is as follows. The freehold of it is, and at all material times was,
in the college, and it was leased to Mr Morley for a term of 99 years at about
the same time as the lease of nos 5 and 6 was granted to Mr Keynes, possibly
with a view to providing access to the rear of a house which Mr Morley was
building in Harvey Road. It never was so used, and seems to have remained in Mr
Morley’s possession until his death. In 1938 his executors, Lloyds Bank Ltd,
granted an underlease of it for the residue of the term of the original lease,
less one day, to the late Mrs Keynes. She appears to have used it as a garden,
connected by a gate or in some other way with the garden of no 6, until her
death, and it was included in the assignment of nos 5 and 6 to Mr Gaidowski by
Sir Geoffrey Keynes, although described in a separate schedule. So at that time
it was let by Lloyds Bank or their successors in title to Mr Gaidowski. It was
certainly not then ‘let with’ nos 5 and 6, since the lessors were different
persons. Eventually, in 1964, the college took an assignment of the residue of
the lease from two ladies in whom it had become vested subject to the
underlease which had been assigned to Mr Gaidowski. Accordingly, the college
became the lessor of the strip to Mr Gaidowski as the lessee.
The question,
therefore, is whether as a result of this series of transactions the strip
could properly be said to be let at the relevant time, that is, the date of the
notice of application, to Mr Gaidowski ‘with the house.’ All that can be said is that at the relevant
time the lessors and the lessee of no 6, and the lessors and the lessee of the
strip, had become the same persons. In my judgment, this is not enough to
establish that the strip is ‘let with’ no 6. There is no direct authority on
the point, but Mr Barnes referred us to a passage in Megarry J’s book on the
Rent Acts (10 ed, p 99 and following), and to cases there cited. For my part, I
doubt whether these cases are of any assistance in the present case because the
purposes of the Act with which we are concerned are quite different from those
of the Rent Acts. Cairns LJ in Wolf’s case rejected a similar submission
on this ground, and I respectfully agree with the view which he expressed. The
matter may be tested in this way. Suppose the college had granted a weekly
tenancy of the strip as a vegetable garden to Mr Gaidowski a week or so before
the notice of application had been served. Could it possibly be argued that the
strip was ‘let with’ the house in such circumstances? If the question were to be answered in the affirmative,
Mr Gaidowski would be entitled to acquire a potentially valuable piece of
freehold land merely because he had become a weekly tenant of the same
landlord. In my judgment, ‘let with’ implies some reasonably close connection
between the transactions of letting the house and letting the strip. The
learned judge expressed the opposite view, but with respect I cannot agree with
him. In my view the respondents therefore succeed on the contention put forward
in their notice, and I would accordingly exclude the strip from the declaration
to which the appellant is entitled in respect of the house.
SIR GORDON
WILLMER: The appellant, Mr Gaidowski, is the tenant of a leasehold house at no
6 Harvey Road, Cambridge, which he occupies as his residence. He claims to be
entitled under the Leasehold Reform Act 1967 to acquire the freehold of the
house. It is not in dispute that the house is let to him on a long tenancy at a
low rent, and that the rateable value of the house is within the limits
specified in the Act. But the claim is resisted on the ground that during part
of the period of five years preceding the date when he gave notice of his
claim–and, indeed, at all material times up to 1972–he also occupied a room
within no 5. The room in question is the ground-floor front room of no 5. Prior
to 1972 this room was connected to the front of no 6 by an access doorway.
Moreover, until 1972 this room in no 5 was separate from the rest of the house,
the connecting doorway having been blocked up. It was not in dispute that this
front room of no 5 lay below a part of the structure not comprised in no 6, in
that it lay below the upper part of no 5. It is therefore contended on behalf
of the respondents that Mr Gaidowski’s claim is excluded by section 2 (2) of
the Act. Mr Gaidowski gave evidence, which was not challenged, that prior to
1972, when he bricked up the connecting doorway between no 6 and the room in no
5 and reopened the doorway from that room into the rest of no 5, he used the
room in question solely as a storeroom. Can it be said, therefore, that he
occupied this room as part of his residence?
Bearing in
mind the words of Lord Wilberforce in Parsons v Trustees of Henry
Smith’s Charity [1974] 1 WLR 435 at 440C, that in this jurisdiction the
issue is one ‘which must be largely factual and one of commonsense,’ I would
say, as a matter of commonsense, that he did not. He certainly never resided in
the room in question. Had he used the room for the purpose of carrying on a
business or profession, or had he simply left it empty, it could hardly be said
that he occupied it as part of his residence. It seems to me that the same
applies to a mere storeroom. The importance of occupation as a residence was
emphasised by Lord Denning MR in Peck v Anicar Properties Ltd
[1971] 1 All ER 517. He indicated three matters to be looked at in determining
what is the ‘house’ in any given case, namely, (1) the lease itself, (2) the
portion occupied as a residence, and (3) the physical condition of the
structure. In the present case the lease itself does not help, for it is a
lease of both houses, nos 5 and 6. As to the physical condition of the
structure, this was at the material time as I have described it. But as to the
second matter, if one looks at the portion occupied as a residence, one can
only come to the conclusion that the portion so occupied was no 6 itself
without the addition of the room in no 5. In Peck’s case the Court of
Appeal had no difficulty in concluding that the tenant claiming the benefit of
the Act was not defeated by the mere fact that on the ground floor under his
residence there was a shop which
between that case and this. In my view, it is conclusive in favour of Mr
Gaidowski in the present case. I think that the learned judge came to a wrong
conclusion, and that the appeal should be allowed so far as concerns the house.
There remains
for consideration the subsidiary question whether Mr Gaidowski’s right to
acquire the freehold extends also to the garden strip at the back of the
houses. In order to bring himself within section 2 (3) of the Act Mr Gaidowski
must show that at the date when he gave notice of his claim this garden strip
was (a) ‘let to him with the house,’ and (b) ‘occupied with and used for the
purpose of the house.’ Mr Gaidowski no
doubt satisfies the second of these requirements, but I find difficulty in
saying that the garden strip was ‘let to him with the house.’ The conveyancing history which led to his
becoming the tenant of the college in relation to the garden strip was quite
different from that in relation to the house, no 6. The mere fact that he now
occupies both properties as tenant of the same landlord is clearly not
sufficient of itself. Effect must be given to the requirement that the garden
strip must also be ‘let to him with the house.’
I do not go so far as to say that the properties must both be let to him
as part of the same transaction. But there must, in my view, be at least some
connecting link between the letting of the one property and the letting of the
other. No such link exists in the present case. On the contrary, the only link
between the letting of the garden strip and any house is with no 8. In the
circumstances, I do not think that Mr Gaidowski brings himself within section 2
(3) in relation to the garden strip, and I do not agree with the view expressed
obiter by the learned judge in relation thereto. It follows that in my
judgment, while Mr Gaidowski has the right to acquire the freehold of the
house, No 6, he does not enjoy the same right in relation to the garden strip.
BAKER P: It is
perhaps worth adding a word about 5 Harvey Road. The only evidence about its
occupation is that a Professor Tilly lived there for two or three years, but it
must be an inevitable inference that in Cambridge no 5 did not remain empty
either before or after Mr and Mrs Keynes bricked up the doorway from the hall
of no 5 to the disputed room. The availability of purchasers or sub-tenants,
the requirements of individuals at any particular time, the price or rent
obtainable, the length of time for which a prospective occupier wanted the
premises and other factors could each and all have a bearing on whether Mr and
Mrs Keynes, or later Mr Gaidowski, would, in the light of their own need for or
use of the room, want to part with the whole or only the truncated portion of
no 5 if it became vacant. For example, a family with children would, I should
think, inevitably want the front room (that is, the disputed room), which
measures 23 ft 4 in by approximately 15 ft. All this, coupled with the known
facts, and especially that the door frame was in place and the door kept in the
cellar, leads me to the conclusion that the disputed room always remained an
integral part of no 5, and that no 6 as it was originally built was a ‘house.’
By the
underlease on sale dated September 19 1938, Lloyds Bank, as executors of Mr
Morley, disposed of the residue of the lease of the ‘garden strip,’ less one
day, to Mrs Keynes for the sum of £300 at the rent of one shilling a year. I
think this nominal rent may have tended to confuse the issue. Suppose the rent
to be substantial, and that Mr Gaidowski had failed to pay, any proceedings by
the college for payment or forfeiture of the garden strip would have to be
separate from and irrespective of their rights in nos 5 and 6 Harvey Road. I
would prefer, like Sir Gordon Willmer, to reserve my opinion on whether
properties must both be let as part of the same transaction to fall within
section 2 (3) of the Act, but I am satisfied that on the facts and history of
this case the garden strip was not at the relevant time let to Mr Gaidowski
with the house. Having had the opportunity of reading the judgments which have
just been delivered, I would add that I entirely agree with all that my Lords
have said.
The appeal was
allowed to the extent of a declaration that the appellant was entitled to
acquire the freehold of the house, but was not entitled to acquire the freehold
of the garden strip. The appellant was awarded three-quarters of his costs both
in the Court of Appeal and below. Leave to appeal to the House of Lords was
refused.
