Leasehold enfranchisement – Leasehold Reform, Housing and Urban Development Act 1993 – Procedure – Lease including right of way on foot only to demised garage – First-tier Tribunal deciding restriction on right of way was defect capable of correction in new lease – Permission to appeal refused on mistaken understanding of facts – Request for review treated as application to set aside refusal under rule 54 of Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 – Whether conditions for set aside satisfied – Whether FTT right to treat restricted right of way as defect – Refusal set aside – Permission to appeal granted – Appeal allowed
The respondents held the lease of a first floor flat at 89 St Luke’s Road, Bournemouth, a converted house on two floors. In 1983 the flat was demised to the respondents’ predecessor for 99 years. The appellant owned the freehold of the house. The flat on the ground floor had never been the subject of a lease and was held by the appellant as freeholder.
A tarmac drive at the side of the building provided access to the rear garden and two small detached lock-up garages. Access to one of the garages with a vehicle was difficult. That garage and the driveway leading to it were both within the appellant’s freehold title. Although the lease of the first floor flat included one of the lock-up garages, the right of way granted to the leaseholders over the driveway was a right of way on foot only. Thus, the respondents could not use their garage to park a vehicle, nor did they have any right to park on the driveway itself.
Where the tenant of a flat exercised the right to acquire a new long lease under the Leasehold Reform, Housing and Urban Development Act 1993, section 57(1) provided that the new lease was to be on the same terms as the existing lease. Section 57(6)(a) allowed either party to require that any term of the existing lease should be excluded or modified from the new lease in so far as it was necessary to remedy a defect in the existing lease.
The respondents made a claim to acquire a new lease under section 42 of the 1993 Act. The parties were unable to agree and the respondents applied to the First-tier Tribunal (FTT) to determine the terms of acquisition. The FTT was satisfied that the restriction of the right of way to access on foot only was a defect within section 57(6)(a) and that the respondents were entitled to have the right modified in their new lease to permit access with vehicles.
Permission to appeal was refused. The appellant’s request for a review of that decision was treated as an application to set aside refusal under rule 54 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. The application for permission to appeal and the appeal itself were considered in a single “rolled up” hearing.
Held: Refusal of permission was set aside. Permission to appeal was granted. The appeal was dismissed.
(1) The facts of this case engaged rule 54(2)(b) of the 2010 Rules as the decision to refuse permission was made on an incorrect assumption which could be demonstrated to be incorrect by information already supplied by the appellant before the decision was made but of which the tribunal was unaware at the appropriate time, i.e. the submission made to the FTT that the restricted right of access was explicable by reference to the practical difficulty of obtaining access to the second garage. The point was thus not a new one when it was relied on in support of the application for permission to appeal. It was in the interests of justice to set aside and remake the refusal of permission to appeal. It would be unjust to the appellant if, in the circumstances of this case, he was not able to have his application for permission to appeal considered in the terms in which it was advanced to the FTT and in which he finally presented it to the Upper Tribunal. In all the circumstances, it was in the interests of justice to set aside the decision the refusal and grant permission to appeal.
(2) Section 57(6)(a) permitted a modification of the existing lease only where it was “necessary to do so in order to remedy a defect”. It was not sufficient that the proposed variation might be convenient or consistent with current practice. It had to be necessary to correct a defect, which meant a shortcoming below an objectively measured satisfactory standard. It was not sufficient for a provision to be a defect only when viewed from the standpoint of one party. The court did not easily accept that people made linguistic mistakes in formal documents. Any tribunal asked to find that a lease contained a defect capable of being remedied under section 57(6) had to proceed with caution: Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 and Gordon v Church Commissioners for England (2007) LRA/110/2006 considered.
From the standpoint that the relevant terms of the lease accurately expressed what the parties intended concerning the extent of the right to be enjoyed by the lessees of the first floor flat, the right granted was a right in common with the lessor and the owners and occupiers of the other flat in the property and all others having the right. It permitted the leaseholder “to pass and repass at all time (on foot only)” for all reasonable purposes in connection with the use and enjoyment of the premises. It was exercisable over and along the common driveway. The clause contained no ambiguity, inconsistency or other difficulty of interpretation. As a matter of language and meaning there was no reason to suppose that the clause contained any mistake or defect which would enable section 57(6) to be relied on.
(3) Although there were two garages at the end of the driveway, one of them was relatively inaccessible and there was insufficient space on the driveway for two vehicles to pass. The physical constraints of the property meant that for the lessee of the first floor flat to be granted a right of way with vehicles over the driveway, or a right to park on the driveway, would make it very difficult for the freeholder or the tenant or lessee of the ground floor flat to make any use of the driveway without risking interfering with that right. The right was granted in deliberately restricted terms, and contained no indication of a mistake or defect. The grant of a right of way to a lessee “in common with the lessor … and all others having the right” did not signify any intention on the part of the lessor to restrict the use which they made of their own land except to the extent necessary to enable the lessee to exercise the right granted to it.
(4) The FTT had left out of its assessment the explanation given by the appellant for the imposition of the restriction, namely that it was to reserve the use of the driveway with vehicles to the landlord to avoid the landlord’s use interfering with the right granted to the lessees. That provided a sufficiently coherent explanation for the right over a driveway leading to a garage being agreed in such restricted terms. The new lease was to be granted on the same terms concerning access as in the existing lease.
The appellant appeared in person; Daniel Bromilow (instructed by Preston Redman Solicitors, of Bournemouth) appeared for the respondents.
Eileen O’Grady, barrister
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