The Court of Appeal has found that London premises that comprise a ground floor shop with a self-contained first floor flat constitute a “house” for the purposes of enfranchisement law.
The court allowed an appeal against a Central London County Court ruling that the premises on Upper Richmond Road, London SW15 did not qualify as a house within the meaning of section 2(1) of the Leasehold Reform Act 1967. Judge Dight had ruled that the claimant company, Jewelcraft, was not entitled to enfranchise.
However, allowing Jewelcraft’s appeal, Patten LJ ruled that, following House of Lords authority in Tandon v Trustees of Spurgeon Homes [1982] AC 755; [1981] 1 EGLR 66 and the Supreme Court decision in Day and another v Hosebay Ltd; Howard de Walden Estates Ltd v Lexgorge Ltd [2012] UKSC 41; [2012] 3 EGLR 33 this was not the case.
Giving the court’s decision, he said: “In our view the endorsement and explanation of the decision in Tandon by the Supreme Court in Hosebay as one turning on user means that claims to enfranchise buildings comprising shops with accommodation above should not be dismissed for non-compliance with the reasonably so called condition in s2(1) either because the building is, as a matter of ordinary speech, best described as a shop or because the accommodation is not linked internally to the remainder of the building.
“Tandon establishes that shops with accommodation above are, as a matter of law, reasonably to be described as houses for the purposes of s2(1) provided that a material part of the building is designed or adapted for and used for residential purposes on the relevant date.”
In this case, he said, the building was not taken outside the scope of what could reasonably be called a house under s2(1) because of the removal of an internal staircase and the construction of an external means of access to the first floor flat.
He added: “County Court judge will doubtless be adept at dismissing cases where the conversion of part to residential user is not genuine or substantial or where the premises are not of the type which, as a matter of policy, Parliament intended to fall within the 1967 Act.”
He cited a block of offices with a caretaker’s flat as being such a case, but said that there ought to be “no warrant from now on for distinguishing between similar types of building solely on the basis of their external appearance or their internal layout”.
Jeremy Hudson, a partner at Charles Russell Speechlys LLP, warned that the decision creates uncertainty and will lead to further litigation.
He said that the court asserted that the question of whether a particular property is a house has been “authoritatively recognised to be a question of law, not a purely factual issue for the judge”, and that the policy of the Act dictates that there should be consistency of treatment.
However, he continued: “It is a pity, therefore, that the Court of Appeal has declined to provide general guidance as to how as a matter of law and in the interests of consistency all such cases ought to be approached. Given the emphasis on consistency, it is even more surprising that the court in this case should have come to the opposite view to that of the Court of Appeal in Henley and another v Cohen [2013] EWCA Civ 480; [2013] PLSCS 91, the facts of which were broadly similar.
“This judgment will inevitably create uncertainty and lead to yet more litigation. Following this decision, and in the absence of such guidance, it will be almost impossible for landlords or tenants and their advisers to assess whether, in any given case, a mixed use property qualifies for enfranchisement.”
He added that it would be “desirable” for the Supreme Court to address the issue and explain what considerations should rule out or rule in mixed-use buildings.
Jewelcraft Ltd v Court of Appeal (Patten, Tomlinson & Vos LJJ) 29 October 2015
Stephen Jourdan QC and Tom Jefferies (instructed by Maxwell Winward LLP) for the appellant
Anthony Redavsky (instructed by Bishop & Sewell LLP) for the respondents
