Leasehold Reform Act 1967 – Enfranchisement of house – Appellants’ premises comprising ground-floor shop and first-floor flat above – First-floor flat recently converted from storeroom used in conjunction with adjacent property – No internal access between ground floor and first floor of appellants’ premises – Appellants held not to be entitled to acquire freehold from respondent under 1967 Act – Whether premises a house “reasonably so called” within section 2(1) – Whether conversion to flat in breach of covenant precluding enfranchisement – Appeal dismissed
In 2004, the appellants acquired the residue of a 99-year lease, dating from 1935, of premises that formed part of a parade of 1920s two-storey buildings with shops on the ground floor. The ground floor of the appellant’s building was used as a greeting card shop. The first floor had been used throughout the currency of the lease as a storeroom in conjunction with the property next door; the only internal access to it was through that next-door property. In 2008, the respondents blocked up that access; they proceeded to convert the first floor into a flat, accessed by an external metal staircase leading to the flat roof of the shop, from which a fire door gave onto the first floor. The works were carried out in order to adapt the first floor for living in with a view to seeking enfranchisement of the property under Part 1 the Leasehold Reform Act 1967. The respondent landlord had expressly refused consent for the works.
In 2009, the appellants served notice on the respondent of their claim to acquire the freehold of the premises under Part 1 of the 1967 Act. The respondent served a counternotice in which he disputed the appellants’ entitlement to enfranchise. The appellants applied to the county court for a declaration that they were so entitled.
Dismissing that claim, the judge held that the building did not qualify for enfranchisement since it was not a house “reasonably so called” within the second limb of the definition of “house” in section 2(1) of the 1967 Act. In reaching that conclusion, he took into account that the ground and first floors were independent units, without internal communication and with entrances in different parts of the premises, and that there was no history of residential occupation until shortly before the giving of notice to enfranchise. He further held that the respondent’s consent had been required for the conversion works under the terms of the lease and that the appellants were not entitled to rely on those unauthorised works, carried out in breach of covenant, to claim the right of enfranchisement. The appellants appealed.
Held: The appeal was dismissed.
A building could be designed and adapted for living in yet not, in all the circumstances, a house reasonably so called. Whether premises were a house reasonably so called required a full exploration of the premises from a number of different aspects and angles followed by an overall assessment of the entire situation in the round. The county court judge had followed that approach in concluding that the appellant’s premises were not reasonably called a house. He had not applied the wrong test or reached the wrong result. What something could reasonably be called was a relative question and not everyone would always agree on the answer. What mattered was that the answer given by the judge was amply supported by the evidence and justified in law by the arguments relied on.
The appellants’ premises had been neither adapted for residential use nor ever used as such until the conversion was carried out shortly before the appellants gave notice under the 1967 Act. The first floor was a subsidiary part of the building, previously used for non-residential purposes in connection with an adjoining building, and with no connecting access from the commercial unit on the ground floor. The judge had been entitled to place the residential use of the first floor relied on at the date of the notice into the proper setting of the use of it under the lease for the preceding 70 years and more. That was sufficient to hold that the building was not a “house” for the purposes of the 1967 Act: Tandon v Trustees of Spurgeons Homes [1982] AC 755; [1982] 2 EGLR 73; (1982) 263 EG 349 distinguished; Hosebay Ltd v Day [2012] UKSC 41; [2012] 1 WLR 2884; [2012] 3 EGLR 31; [2012] 43 EG 116 applied.
Per curiam: In light of the above, it was unnecessary to decide whether, if the conversion works had made the premises a “house”, the appellants would have been disentitled from enfranchisement by reason of having carried out the works in breach of covenant. However, in the view of the appeal court, the judge had correctly found that the works had been carried out in breach of covenant in the absence of the landlord’s consent. Having so found, he had been justified in concluding that the appellants were not entitled to rely on those unauthorised works to assert that part of the premises had been “adapted for living in”. The benefit of the enfranchisement provisions of the 1967 Act was not available to a long leaseholder in such circumstances. As a matter of statutory construction, parliament could not have intended to give the lessee the right to enfranchise by making, in breach of covenant, the very adaptation of the building for living in that was necessary to exercise that right. The appellants sought to enforce a right acquired by committing a wrong, which, in general, the law should not and did not allow.
Philip Rainey QC and Stan Gallagher (instructed by WGS Solicitors) appeared for the appellants; Adam Rosenthal (instructed by Peter Brown & Co Solicitors LLP) appeared for the respondent.
Sally Dobson, barrister
