Jewelcraft Ltd v Pressland and another

Leasehold Reform Act 1967 – Enfranchisement of house – Shop with self-contained flat above – Claimant seeking to acquire freehold under 1967 Act – Definition of “house” in section 2(1) of 1967 Act – Whether building a house “reasonably so called” – Claim dismissed The claimant was the long lessee of a building comprising a shop with living accommodation above in a traditional inter-war parade in Putney, London SW15. In 2010, it brought an enfranchisement claim against the defendant landlords, under the Leasehold Reform Act 1967, seeking to acquire the freehold of the building. An issue arose as to whether the building was a “house” within the definition in section 2(1) of the 1967 Act. The defendant accepted that the building was “designed or adopted for living in” but disputed that it was a house “reasonably so called” as at June 2010, when the claimant had first served notice of its claim. The parade of which the building formed part was set back slightly from the highway, with parking spaces in front. The ground floor of the claimant’s building was subject to a lease for use as a shop while the upper floor was let as residential accommodation. The shop had had a plate glass window onto the street and was used as a Martins newsagents, sweet shop and tobacconist. Behind the shop was a store room, a lavatory and separate room with a hand basin, and a small corridor. A former alleyway between the claimant’s building and the building next door had been covered over and enclosed. The rear external door to the ground-floor premises had a heavy-duty security door. The residential accommodation above comprised a self-contained flat with kitchen, bathroom, bedroom and sitting room, with its own separate entrance reached by an external open staircase in the yard to the rear of the property. Although there had originally been an internal staircase from the shop below, that had been removed when the self-contained flat was created in the 1970s. An issue arose as to whether the building was a “house” within the definition in section 2(1) of the 1967 Act; it was common ground that it was “designed or adopted for living in” but the … disputed that it was a house “reasonably so called”. The lower floor of the building was subject to a lease for use as a shop while the upper floor was let as residential accommodation. The defendants did not dispute that the building had originally been designed and constructed, and had been used in part, for living in, but contended that the building could not be described as a house reasonably so called as it was in June 2010. Held: The claim/appeal was dismissed. Although a building consisting of a shop with a flat above could be a house reasonably so called, it would not be so in every instance and the test had to be applied in context: Hosebay Ltd v Day [2012] UKSC 41; [2012] 3 EGLR 31; [2012] 43 EG 116 and Tandon v Trustees of Spurgeons Homes [1982] AC 755; [1982] 2 EGLR 73; (1982) 263 EG 349 considered. Whether a building was a house reasonably so called was a mixed question of fact and law in every case. The question was not whether it was possible to call the building a house, but whether it was reasonable to do so. Having regard to the history of the claimant’s property, its physical appearance and layout, the terms of the lease and the use of the premises over the years, the building could not reasonably be called a house. The starting point was that it did not look like a house, but was instead part of a parade of shops with living accommodation over it. It had not been built as a house but had originally been a shop within living accommodation above. It was not now a physically mixed unit since the shop and living accommodation had been separate for the last 40 years. The property was in the same category as a block of flats. Despite the initial intention of providing residential accommodation ancillary to the shop use, the building had been constructed as, and looked like, part of a parade of shops and not a house within a terrace of houses. The overwhelming character of the parade, and of the building, was of commercial premises. The dominant impression was of a parade of retail units designed to serve the housing estate behind it. User alone did not alter that conclusion. It was not possible or reasonable to call the building a “house”, according to the ordinary English meaning of that word. It followed that the criteria for enfranchisement in section 2(1) of the 1967 Act were not met and the claim failed: Earl Cadogan v Magnohard Ltd [2012] EWCA Civ 594; [2012] 2 EGLR 74; [2012] 28 EG 80 applied; Tandon distinguished. Thomas Jefferies (instructed by Maxwell Winward LLP) appeared for the claimant; Anthony Radevsky (instructed by Bishop & Sewell LLP) appeared for the defendants. Sally Dobson, barrister