Landlord and tenant – Leasehold enfranchisement – Notice – Claimant nominee purchaser serving notice to acquire freehold interest in flats – Claimant seeking declaration that participating tenants entitled to exercise right to collective enfranchisement – Whether notice invalid for failure to comply with the statutory requirements – Whether premises described in notice constituting single “building” for purposes of section 3 of Leasehold Reform, Housing and Urban Development Act 1993 – Claim allowed
The claimant was the nominee purchaser appointed by the participating tenants of flats in Palgrave Gardens, London, NW1, to acquire the freehold interest on their behalf. The defendant was the freehold owner of the property and the reversioner for the purposes of section 9 of the Leasehold Reform, Housing and Urban Development Act 1993. In addition to disputing the validity of the initial notice served on the defendant pursuant to section 13 of the 1993 Act, it sought to prevent the tenants from exercising their statutory rights to acquire the freehold on the basis that the premises did not qualify.
The development was built on a long, thin, roughly rectangular plot, tapering to the north-west and consisted of four curved residential blocks, each being eight to 11 storeys high, a single lenticular-plan residential block, a single-storey building containing two commercial units and a single-storey leisure centre. It was irregular in shape, and a single basement car park ran underneath the residential blocks extending underground beyond the footprint of those blocks.
The claimant sought a declaration pursuant to section 22(1) of the 1993 Act that the participating tenants were entitled to exercise the right to collective enfranchisement. It contended that the “building” for the purposes of section 3 of the 1993 Act comprised the blocks above ground, the underground car park and the land and airspace above the car park. It was a self-contained building in that it was structurally detached. The defendant opposed the claim, arguing that the blocks were not a single “building” for the purposes of section 3, but a series of independent, structurally detached buildings, and the tenants could not validly serve a single notice in respect of more than one building.
The questions for the court were: (i) whether the initial notice was invalid for failure to comply with the requirements of section 13(3) of the 1993 Act and, if so, whether the notice should be amended as sought by the claimant; and (ii) whether the participating tenants had the right to enfranchisement in relation to the specified premises as described in the notice, which required an assessment of what amounted to the “building” for the purposes of the claim.
Held: The claim was allowed.
(1) Although the initial notice had failed to make clear whether the specified premises included or excluded the basement car park, when construed logically, it was clear as a matter of common sense, that the notice was intended to include the underground car park. Accordingly, permission would be granted to amend the notice pursuant to para 15(2)(b) of schedule 3 to the 1993 Act to clarify what the specified premises included.
(2) The 1993 Act was, among other things, “An act to confer rights to collective enfranchisement and lease renewal on tenants of flats.” The word “building” was not defined by the Act, and there was very little guidance as to its meaning in the context of collective enfranchisement. Construing the 1993 Act in the manner contended for by the defendant would be likely to defeat the objective of enabling enfranchisement underlying that Act. The court should not construe the 1993 Act in a manner that would seem likely to defeat its purpose and render estates such as Palgrave Gardens unenfranchisable, or might lead to chaos in relation to the provision of services in the event that one block sought enfranchisement and another, or all the others, did not.
(3) The words of section 3 had to be construed in the context of the purpose of the 1993 Act. In that context, the court did not accept the defendant’s argument that the smallest identifiable self-contained unit was the largest premises enfranchisable under the 1993 Act. The Act did not so provide, and it would be inappropriate so to conclude in circumstances where there was, in Malekshad v Howard de Walden Estates [2003] 1 EGLR 151, House of Lords authority that a terrace of houses might in an appropriate context constitute a single building even though each house in the terrace also constituted a building in itself; and Court of Appeal authority, in Craftrule Ltd v 41-60 Albert Palace Mansions (Freehold) Ltd [2011] 2 EGLR 35 to the effect that the words “self-contained part of a building” in section 3(1) included premises which were capable of further division into smaller self-contained parts, and that there was no justification for putting a gloss on the clear statutory words so as to require that a self-contained part had to be the smallest possible self-contained part. It was necessary first to ascertain whether the premises were, as a matter of common sense, a building or part of a building. If so, the question arose whether they were self-contained. They need not, however, be the smallest self-contained unit it was possible to identify.
(4) In the present case, Palgrave Gardens was, to the eye of a non-engineer, a single, albeit very large, and irregularly shaped, building. It had been designed in such a way that it incorporated, behind a single continuous exterior, a number of self-supporting units, separated by narrow, but outwardly invisible, movement joints. However, the units formed part of a coherent building of consistent structural form and fabric, clearly designed as a single entity. The gaps inherent in the movement joints were invisible to an observer and did not detract from its appearance as a coherent structure. All the blocks within the development were built at one time, as part of a single development. As a matter of common sense, in the specific factual context of the present case, the blocks at Palgrave Gardens comprised a single building for the purposes of the 1993 Act: Cadogan v McGirk [1996] 2 EGLR 75, Malekshad, Majorstake Ltd v Curtis [2008] 1 EGLR 44, Earl Cadogan v Panagopoulas [2011] 1 EGLR 33, Craftrule and Day v Hosebay [2012] 3 EGLR 33 considered.
Jonathan Upton (instructed by William Sturges LLP) appeared for the claimant; Thomas Jefferies (instructed by Mills & Reeve LLP) appeared for the defendant.
Eileen O’Grady, barrister
