Smith and another v Jafton Properties Ltd

Leasehold enfranchisement – Leasehold Reform, Housing and Urban Development Act 1993 – Collective enfranchisement – Serviced apartments – Claim to enfranchise building containing four flats let as serviced apartments – Whether right to collective enfranchisement applying – Section 101 of 1993 Act – Whether serviced apartments “flats” within meaning of section 101 – Whether occupied for residential purposes within section 4 The two claimants held long leases of four flats in a four-storey building with a basement in London EC1. The defendant owned the freehold. The flats had been created by extensive refurbishment works carried out by the claimants’ company between 2004 and 2006 to convert the building into spacious “loft”-style apartments, with fully fitted kitchen and bathroom facilities, to be let out as serviced apartments for use by the business community. The company held underleases of the flats and the rest of the building, which was one of several in which it had serviced apartments. The company’s computer booking system allowed the customer to express a preference for accommodation in a particular building but did not guarantee that location. The bookings were frequently made by the employer rather than the individual who was to be accommodated. The company greeted new occupants on arrival, gave them a welcome pack and provided a cleaning and laundry service during their stay. Although it supplied a standard tenancy agreement for a three-month assured shorthold tenancy, the court found that this was a mere formality and did not in fact regulate the terms of occupation. In practice, most bookings were for less than one month, although the company had initially hoped for longer lettings. The claimants sought to exercise the right to acquire the freehold of the building by collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993. The defendant disputed that entitlement and the claimants applied to the court for a declaration of their rights. A preliminary issue, as to whether the claimants were qualifying tenants within section 5 of the 1993 Act, was decided in their favour on appeal: see [2011] EWCA Civ 1251. The main issues remaining in dispute were whether: (i) the four flats fell within the statutory definition of a “flat” in section 101(1) of the Act as premises “constructed or adapted for use for the purposes of a dwelling”; and, if so (ii) enfranchisement was none the less excluded by section 4(1)(a)(i) on the ground that the flats were not “occupied, or intended to be occupied, for residential purposes”. In determining the issues before it, the court considered the judgments of the Court of Appeal and Supreme Court in Hosebay Ltd v Day; Lexgorge Ltd v Howard de Walden Estates Ltd ([2010] EWCA Civ 748; [2010] 3 EGLR 66; [2010] 38 EG 106 and [2012] UKSC 41; [2012] 1 WLR 2884; [2012] 3 EGLR 31; [2012] 43 EG 116), dealing with the definition of a “house” in the enfranchisement provisions of the Leasehold Reform Act 1967; it sought to determine the ratio of those decisions and their applicability to cases under the 1993 Act. Held: The claim was dismissed. (1) The decision of the Supreme Court in Hosebay/Lexgorge was important but not determinative in interpreting the definition of “flat” in the 1993 Act. So far as it decided that the wholly commercial use of premises excluded them from being “houses” within the 1967 Act, that reasoning does not apply to the 1993 Act, which is different in its terms and does not exclude commercial investors from its scope. Furthermore, the Supreme Court had been concerned solely with the second limb of the definition of “house” in section 2(1) of the 1967 Act, as to whether premises were a house “reasonably so called”, which has no equivalent in the 1993 Act. Although differing from the Court of Appeal on the outcome, the Supreme Court had not reversed the Court of Appeal’s decision on the first limb of the definition of “house”, namely whether the premises were “designed or adapted for living in”. The Court of Appeal’s approach to that issue was therefore of persuasive effect, and binding authority, in construing the materially similar definition of a flat in section 101 of the 1993 Act. (2) The concepts of “living in” and “dwelling”, in the 1967 and 1993 Acts respectively, import no requirement that the premises in question be the “home” or the “main or only residence” of the occupant. (3) Section 101 of the 1993 Act requires a consideration of whether, at the time when the premises were constructed or adapted, the work had created a physical space for use for the purposes of a dwelling, which in turn involves considering both the physical characteristics of the premises and their subsequent and current use. The definition of “flat” describes the use for which the construction or adaptation made the premises suitable. The use to which the premises are actually put will be influential, and often conclusive, evidence as to the purpose of construction or adaptation. Although the construction or adaptation need not make the premises capable of occupation that is sufficiently permanent as to qualify as some kind of home, they must make them capable of occupation that amounts to more than simply staying there for a time. Where the physical characteristics of the premises are capable of accommodating both a transient population and those who wish to stay longer, then the intended or actual use will be relevant in deciding the purpose for which the premises were constructed or adapted. (4) The concept of “residential purposes” in section 4 of the 1993 Act is synonymous with that of a “dwelling” in section 101. The difference is that section 4 relates only to current use, whereas section 101 points to a combination of the physical characteristics, the purpose of the works of construction or adaptation and the historic or current use. Accordingly, a two-stage approach is required to determine, first, whether premises are a “flat” and, second, whether the flat is none the less excluded from enfranchisement by section 4. (5) Applying those principles, the four flats in the claimants’ building were not “flats” within section 101(1), although the decision was finely balanced. The flats had been constructed or adapted to have the potential to provide the facilities necessary for the purpose of occupation with a sufficient degree of permanence to come within the definition of a dwelling. The commercial undertaking being conducted by the claimants’ company did not necessarily take the premises out of the scope of collective enfranchisement. However, the deciding factor was the nature of the relationship between the company and the occupant. The fact that the relationship was regulated in all cases only by the booking and its terms and conditions, that no formal longer-term relationships had ever been created, and that the booking system and general pattern of occupancy was more akin to that of a hotel, indicated that the claimants had not adapted the premises for use for the purposes of a dwelling. (7) For similar reasons, the flats were not occupied, or intended to be occupied, for residential purposes as required by section 4. The claimants’ company provided places to stay that were similar to rooms and flats provided by hotels and aparthotels. That kind of occupation is outside the scope of the 1993 Act. This was the hearing of a claim by the claimants, David Smith and Jonathan Dennis, against the defendant, Jafton Properties Ltd, to acquire the freehold of a building by collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993. Stephen Jourdan QC (instructed by Forsters LLP) appeared for the claimants; Zia Bhaloo and Oliver Kalfon (instructed by Trowers & Hamlins LLP) represented the defendant. Giving judgment, Judge Hand QC said: 1. This is a claim, which started in CPR Part 8 form, for a declaration pursuant to a notice given under section 22 of the Leasehold Reform, Housing and Urban Development Act 1993 (“LRHUDA”) that the Claimants are entitled to exercise a right of collective enfranchisement in respect of Newbury House, 10–13 Newbury Street, London EC1 and that the defendant’s counter notice of 11 September 2009 disputing that entitlement is of no effect. 2. By paragraph 1 of the directions given by District Judge Lightman on 16 April 2010 he ordered the claim to continue as if the Claimants had not used the Part 8 procedure and since then it has proceeded, in effect, as a witness action. District Judge Lightman gave other directions, one of which was for the trial of a preliminary issue as to whether the Claimants were qualifying tenants within the meaning of section 5 of LRHUDA. That issue was heard before His Honour Judge Dight and he decided it in favour of the Defendant by his judgment of 10 January 2011. On 2 November 2011 the Court of Appeal (Civil Division) allowed an appeal and reversed the judgment. 3. Obviously, therefore, I am no longer concerned with that issue. Nor am I concerned with what Mr Stephen Jourdan of Queen’s Counsel, who appeared on behalf of the Claimants, called in his skeleton argument “the Flats Issue” but which I think could equally have been called “the Planning Permission Issue”. Ms Zia Bhaloo of Queen’s Counsel, who, together with Mr Olivier Kalfon of counsel, appeared on behalf of the defendants, conceded that issue a short time before the hearing was due to start. 4. I should mention that at a hearing on 2 November 2012 the parties had agreed that there was inadequate time to prepare for trial, that the time estimate of two days had been wrong and that the trial would take four days and ought to be vacated. His Honour Judge Gerald refused to vacate but he re-listed the hearing for four days. 5. I am not clear whether one result of the trial not being vacated was the late instruction of Ms Bhaloo QC and Mr Kalfon but they certainly had to master a good deal of material in a short time. They did so most impressively because there had been rather more than the usual flurry of immediate pre-trial activity in this case. This took the form of further witness statements and further documents produced both on the morning of trial and also after the trial began. Ms Bhaloo QC had to ask for some time to consider the new documents and inevitably this led to some slippage in the timetable and it seemed at one point that it might not be possible to complete the hearing within the time allocated. Thanks to sensible agreement between counsel and between the experts, however, the oral evidence was cut short and the hearing completed within the timetable. At the end of the hearing I reserved judgment. It has taken a very long time to complete and I apologise to the parties for the very considerable delay. 6. I was very grateful to counsel for their mutual cooperation and their economic and lucid presentation of the remaining issues. These are: (i) whether the four self contained flats in Newbury House are “flats” within the statutory definition in section 101(1) of LRHUDA and thus within the scope of section 3 of LRHUDA? (ii) If so whether these flats are not “occupied for residential purposes” so that section 4 operates to exclude section 3? (iii) if some part of the premises is “occupied for residential purposes” and another part is neither “occupied for residential purposes” nor comprises the common parts, whether that residue exceeds 25% of the internal floor area (minus the common parts) of Newbury House taken as a whole, so that section 4 operates so as to exclude the operation of section 3? The facts (i) The occupation of the flats 7. I visited the site on the first afternoon of the hearing and so I can add my own observations to the documentary and other evidence. Newbury House is a four storey building, with a basement underneath, very close to the ancient church of St Bartholomew the Great and not very far from Smithfield Market. In 1926 the freeholder was Mrs May Rose and she, as landlord, entered into a lease dated 26 January 1926 made between herself and Mr Harold Walter Wagstaff, as tenant, for a term of 99 years from 24 June 1924. Mr Wagstaff is described as a builder but I do not know whether he rebuilt or refurbished the premises. Mr Blooman, the Defendant’s expert, who was present on the site visit, thought that the basement, at least, had been used for storing pigs’ carcases, which had been slid down into the basement via chutes, the remnants of which can still just be made out. Given the proximity of Smithfield Market this seems plausible. At all events it seems likely that historically some part, at least, of the building had been used for commercial as opposed to residential purposes but as to the purposes for which it was constructed, there has been no evidence. At some point or, possibly, at several points, the freehold has changed hands. Since 8 April 1983 the Defendant has been registered at HM Land Registry under title number 314960 as the sole proprietor of the freehold of 13 Newbury Street and under title number 314961 as the sole proprietor of the freehold of 10-12 Newbury. 8. In October 2004 the Lease was purchased by the Claimants at auction and assigned to a company called City Apartments Ltd (“CAL”). The Claimants own 75% of CAL’s shares and have at all material times been its only directors. At the time of acquisition of the Lease by CAL the Property was in a dilapidated condition (the precise state being a matter of contention between the parties) but over the next two years CAL carried out substantial works of refurbishment, creating four separate flats, numbered one to four, which are configured as spacious open plan “loft” style areas with modern furnishings and fully fitted kitchen and bathroom facilities and which were ready for use by the summer of 2006. According to their standpoint in this litigation the parties have used the expression units, apartments and flats. At paragraph 10 of his skeleton argument Mr Jourdan QC, whilst observing that anyone looking at them would call them flats, opted for what he described as the “neutral expression “apartments””. But this careful choice of descriptive nouns seems to me to be unnecessary. Because they looked like flats to me when I saw them I do not think it impinges on my neutrality to use that ordinary English word and so I will call them flats in this judgment. Whether they are “flats” as defined by the LRHUDA is a different question and, as set out above, one of the main issues I have to decide. 9. On 27 May 2008 CAL transferred the registered titles to Flat 1, together with lower ground floor storage space, and Flat 2, together with lower ground floor storage space, to Mr Smith, the first Claimant (see pp272 to 278 of the bundle); on the same day there was a similar transfer by CAL of the registered titles to Flat 3, together with lower ground floor storage space, and Flat 4, together with lower ground floor storage space, to Mr Dennis, the second Claimant (see pp279 to 285 of the bundle). Finally, CAL transferred the rest (ie those parts not already transferred) on the same day to the Claimants jointly. Then, also on the same day, Mr Smith entered into an underlease with CAL granting possession up to and including 21 June 2023 of Flats 1 and 2 and the associated basement storage as “serviced residential apartment plus storerooms for use in conjunction with such apartments” (see p117 of the bundle) and Mr Dennis entered into an underlease with CAL on similar terms in respect of Flats 3 and 4. Both Claimants also granted CAL an underlease of the rest of the premises on the same day on similar terms to the leases granted in respect of Flats 1 to 4 with the use of those areas to be “[a]s common parts of the Building for the proper use and enjoyment by the occupiers for the time being and from time to time of the residential flats within the Building”. 10. In his witness statement, at paragraph 9, the second Claimant, Mr Dennis, describes CAL as “an independent full-service short-term provider of residential accommodation”, which “has more than 130 well-appointed apartments in key locations in the City of London and the West End” and which “specialises in working directly with the international business community to provide comfortable fully-furnished apartments to their employees coming to London—whether for an extended business trip, a long-term project or while relocating” (see p9 of the bundle). This is very similar to what is said on www.cityaparts.com, which is the website of CAL. 11. There, under the heading “You know the City as a commercial powerhouse. We call it home” the following statements are made: “We specialise is (sic) working directly with the international business community to provide comfortable fully-furnished apartments to their employees who are coming to London for an extended business trip, a long- term project or perhaps relocating here. City Apartments’ offering is simple and straightforward: high-quality serviced accommodation including hotel-standard comfort within the ambience of a private residence, and at a fraction of the cost of a hotel. (p245 of the bundle) “To City Apartments, excellent customer service means exceeding its clients and guests expectations every time. The service delivery philosophies are based on first-hand experiences as both guests and operator of the growing serviced apartment concept, with innovative thinking and cost-saving services fundamental to its forward thinking approach. Indeed, City Apartments regard superior technology, combined with friendly, professional and individual attention, as its hallmark. All our guests are met by one of our full-time staff and their apartment will be stocked with loads of fresh essentials and all necessary linen. A weekly cleaning/laundry services standard with a more frequent service is available on request. Exact requirements can be agreed on arrival or selected any time by contacting us by any means you wish.” (p247 of the bundle) “A recent government mandate has declared that in order to work with the recognised UK tourist boards, all serviced accommodation in the UK must be graded and inspected by an independent body. Unlike for hotels, until recently there was no grading system that accurately reflects the services and quality of a serviced apartment operator.” (p248 of the bundle) 12. In his oral evidence Mr Smith distinguished Newbury House from what is nowadays called an “aparthotel”. This was, he said an emerging and evolving concept, often sharing premises with an existing hotel and often having been converted from part of the hotel premises with the facilities of an added kitchenette being the feature distinguishing the new from the old. He told me CAL now has 148 apartments spread over 10 buildings located in the City of London and in the central London area. Both Claimants work as “hands on” directors of CAL, which is administered from offices next to Newbury House, where 10 of its 25 or so employees are located. The work force comprises a variety of tradesmen, a house keeping team, a booking team and several managers, including a guest services manager, a buildings manager and a housekeeping manager or managers. The cleaning is done by two teams of sub-contractors, who each clean five buildings. Another contractor provides a laundry service. 13. A high degree of logistical organisation is necessary. “Welcome packs” for incoming occupants have to be organised. New occupants have to be greeted and installed, even outside normal office hours. The flats have to be cleaned after each occupant vacates and before another occupant takes over and then are cleaned once a week during the occupation. Defects have to be attended to. Appliances have to be repaired or replaced. Some of the necessary equipment, spare parts, paint, tools for carrying out repairs, and some replacement equipment, including bulky items such as “white goods”, are stored in the basement of Newbury House. On the site visit there were a considerable number of “Sky Boxes” (although I understood that to have resulted from some sort of aberration on the part of the supplier) and some washing machines were being stored in the basement. Such appliances are used across all the CAL properties and are not just for use in Newbury House. As is so often the way, the area was being used as a staging post for items that were no longer of use for instance, there were a lot of files, which Mr Smith had been surprised to see there and which should have been thrown away. The series of photographs in the hearing bundle at tab 15 of volume 4 (pp1524 to 1528, 1531 to 1556, 1560, 1563, 1590 1634 1644 to 1653) give a comprehensive impression of the state of the basement. 14. Bookings are frequently made by the employer of the person to be accommodated at the flat; less often by that individual directly. Attempts are made to satisfy preferences but it is not always possible to locate those, who express a preference for Newbury House at Newbury House, at least immediately. There was some controversy, never entirely resolved, as to whether or not the terms and conditions permitted CAL to move somebody from one flat to another without their consent. Ms Bhaloo QC submitted in her closing speech that had been the effect of the evidence, a point not accepted by Mr Jourdan QC in his reply. I was not prepared at that late stage to re-open the evidence and start recalling witnesses because my understanding of the Claimant’s evidence was that occupants of the flats might be asked if they were willing to move to a different flat, although that would be very unusual; no instance of refusal was recollected and in the event of refusal the Claimants did not regard themselves as entitled to compel anybody to move. That is not the same as there being a right to compel occupants to move and I find that the Claimants never asserted any such right. 15. CAL uses a “bespoke” computer software booking programme called “Workspace Reservations”. A record in the form of a schedule taken from this programme and giving information relating to the occupation of the flats between April 2006 and July 2009 was exhibited by Mr Smith to his first witness statement as DES 1 (pp341–359). He said that the table at para 7 of his first witness statement (see pp335–336) was the key to it. Ms Bhaloo QC quickly established at the beginning of her cross examination that the key was not consistent with the schedule. Mr Smith’s explanation was that he had been looking at a different schedule when he made the witness statement and had not checked which document had been exhibited. He also exhibited as DES 2 (see pp360–511) a schedule of information about the bookings history taken from another computer programme called Sage, which I understand to be “off the peg” book keeping/accounting software. 16. Information from these different records was amalgamated in a further schedule DES 3, which is at pp512 to 516. Mr Smith made a further witness statement on 9 November 2012 (see pp516A–516C) and to it he exhibited DES 5, which updates DES 3 (see pp516L to 516P). He then made a third statement on 12 November 2012 (see pp1 and 2 of hearing bundle 1A), which produced DES 6 (see pp4 to 116 of bundle 1A), a schedule in a similar format to DES 2. By the second day of the hearing Exhibit DES 1A had been produced in place of DES 6. I regard this sequential reiteration of the data presented throughout the hearing by the claimants as unimpressive. Mr Jourdan QC supplied an analysis of the data in DES5, divided into three categories with a bar chart of the information contained in it (see pp51Q to 516T) the defendant’s counsel also produced a series of schedules analysing the claimant’s data. 17. At para 4 of his second witness statement the second claimant, Mr Dennis, said this: “In this case we were not intending to use the property for lets of less than 90 days and had not applied for permission to do so. Following receipt of this letter we contacted the City of London Planning Officer by telephone and confirmed that we were not using or intending to use the building for lettings of less than 90 days. In view of this, no planning permission was required since there was no change of use. We have heard nothing further from the City Planning Officer since this (sic) we informed them of this.” This, of course, was directed to the “planning permission issue”, which is no longer pursued but it is also some evidence of the intention at the outset. It did not accord, however, with the history of occupation, as set out in the various schedules referred to at paragraphs 15 and 16 above and it was corrected by the third witness statement of Mr Dennis, which is dated 9 October 2012 (see page 331 of the bundle): “On review of paragraphs 4 and 5 of my second statement dated 25 January 2010 I can see that, whilst it was certainly not my intention to mislead, those paragraphs give a rather misleading impression. It is true that our intention in relation to 10–13 Newbury Street was to attract longer-term occupiers, but we have not really succeeded in doing so.” 18. Paragraphs 15 and 16 of the first witness statement of Mr Smith, also dated 9 October 2012, are to similar effect: “15.The trend amongst financial institutions over the past 10 years has been to do less and less “relocating” and more and more project-based work – bringing their experts from around the world together in order to execute various projects such as corporate bids, complex legal transactions etc. Since 2006 the average length of the tenant’s stay has therefore decreased. 16. In the case of Newbury house, when we developed these, we developed them as rather more up-market, larger and more luxurious properties with the expectation that they will be rented out an a longer term basis due to their size/space being more appropriate to long term tenants. Whilst we have a number of tenants who stay for a year or more in these flats the market effects discussed earlier have resulted in these flats, whist (sic) being used for longer periods on average when compared to the rest of the portfolio, still not being as long as we expected.” In his oral evidence Mr Smith said that the Claimants had this decrease in mind when Newbury House was developed but even so had thought it “would play well to longer stays”, which he regarded as being six months or more. He pointed to one person, who he said had been there for two years (in fact I think the figures show it was 18 months but the point would still be the same). Nevertheless he accepted that his earlier thoughts had been proved wrong; the majority of stays were no longer stays by his own definition of “longer stays” as six months or more. 19. I have reached the conclusion that the claimant’s developed Newbury House so that it had the facilities to accommodate those who wished to stay for long periods; in the event it seems that there were not very many who did. The plethora of evidence about the length of stay at each flat in Newbury House over the period since 2006 was tested effectively, with determination and great forensic skill, by Ms Bhaloo QC, when she cross examined Mr Smith and Mr Dennis. The average shown in the summary at the foot of the table on p516S of the bundle is 18, well short of the 90-day expectation. 20. Some of the data was incomplete. Invoices were not kept in paper form and only a few copies of signed Assured Shorthold Tenancy Agreements relating to the period covered by the Schedules referred to at para 16 were produced. At para 9 of Mr Smith’s first witness statement he said that: “Once an occupier has vacated, we do not keep a copy of the assured shorthold tenancy agreement which they signed. Every so often (once a year or so) these are bagged up and sent for shredding.” 21. There is a pro forma Assured Shorthold Tenancy Agreement (“the Agreement”) at pp260 to 263 of the hearing bundle but how that could be adapted to fit the varying periods of occupancy disclosed by the different schedules is beyond me. At Tabs F and G of Volume 3 of the hearing bundle are twenty one Assured Shorthold Tenancy Agreements; some are signed and some are not signed. Eight of these (pp1244, 1248, 1252, 1256, 1260, 1264, 1268 and 1272) are signed by both parties and date from a period of about a year from May 2011 to April 2012; all are for a period of three months but it is impossible to know what the actual period of occupation was because there are no associated documents such as invoices and their dates are outside the period covered by the Schedules referred to at para 16 above. 22. Not surprisingly Ms Bhaloo QC did not ask anything about those Agreements. She did ask, however, about some of the rest. These dated from 2006 and 2007 and so had apparently missed the shredder referred to by Mr Smith. It was in an answer to questions from Ms Bhaloo QC about these that Mr Smith conceded the three months period of the Assured Shorthold Tenancy Agreement “was entirely fictional”. 23. Mr Gooley (the agreement at p1290 is unsigned) had booked (see p1287) and stayed for 20 days, Ms Masters-Kan (see p1296) had stayed only one day, Ms Payne (see p1304) had stayed for 14 days, Mr Hing (see p1316) had stayed for 29 days and Ms Murphy (see p1321) had stayed at Newbury House for 19 days and then moved to London House (another of the premises operated by CAL) for a further 15 days (see pp1317 and 1318). Ms Bhaloo QC did not investigate the cases of Mr Moats (the agreement at p1308 is unsigned), who stayed for four days, Mr Hurn (the agreement at p1308 is unsigned), who stayed for six days, Mr Matthews (the agreement at p1327 is unsigned), who stayed for 21 days, Mr Macek (see page 1333), who stayed for five days, Mr Oag (see p1337), who stayed for eight days, Mr O’Brien (see p1339), who stayed for 90 days, Mr Gavin (the agreement at p1343 is unsigned), who stayed for 72 days, and Mr Park (see p1350), who stayed for seven days. 24. Only in the case of Mr O’Brien does the period stipulated in the agreement bear any relationship to the period of occupation. It seems to me most unlikely that the Shorthold Tenancy Agreement bore any relationship to the reality of the occupation in the vast majority of cases and even in those cases, where it approximated to or even extended beyond the period stipulated in the Agreement, I do not regard the document as having any legal significance. On any view of the data about 40% of the stays were for a week or less and about 80% were for a month or less. In those circumstances I find it hard to believe there could be any point in signing such an Agreement or, that if signed, it had any legal effect. 25. Mr Smith told me that the Agreement was to protect CAL against the activities of the tenant. He said the majority would sign such an agreement and in the cases of the large number of people only staying a few days the Agreement would have been adapted to seven days’ notice or a payment in lieu would have been taken. It seems to me Mr Smith’s evidence was marked by what I might call “breezy optimism” and his evidence on this issue was a paradigm of that approach. His evidence and that of Mr Dennis on this point was not consistent. Mr Dennis said that the agreement was an unimportant formality and I have reached the conclusion that is much nearer the reality than Mr Smith’s evidence. I think Mr Smith was expressing what he hoped might have happened. 26. Not many documents have been produced. I bear in mind that Mr Smith says they were routinely shredded, although if they were important I cannot understand why they were not kept. If they were regularly shredded the fact that they were destroyed seems to me to support the attitude of Mr Dennis that they did not matter. The collection presented to the court suggests to me a random approach not consistent with any determination to create a formal legal framework for the occupation and my conclusion is that these documents did not regulate the relationship between the parties. 27. Mr Dennis had a very uncomfortable morning in the witness box on the third day of the hearing. It was cavalier and careless, to say the least, of Mr Dennis to have got the first sentence of para 17.2(a) of his first witness statement (see p12 of the hearing bundle) so completely wrong, as he accepted he had. The figures show that flats were unoccupied for longer than four days (on 46 occasions) and that each flat had not been occupied on average for 323 days but closer to 280 days per annum. He said that he must have got the figures from the “Workspace” programme but given that all the other figures come either from that source or from the Sage programme, it is very hard to understand how they could be so wrong. The evidence of each Claimant seemed to me to suffer more from an acute form of wish fulfilment rather than any actual dishonesty or intention to mislead. I think a prime example is para 17.2(b) of his witness statement (also at p12 of the hearing bundle), which reads: “The vast majority of people who stay in CAL’s apartments regard their apartment as “home” for the duration of their stay, and although there may be the odd person who does not, in general given the significantly larger size of the apartments Newbury House (900 sq ft) they are particularly suited to longer staying guests. Some people use CAL’s apartments as somewhere to live for the duration of long-term projects or while the process of being relocated, the majority of whom regard their flat as the place where they live for the duration of their stay.” To my mind that is the position as he would have liked it to be but the data does not really bear that out. (ii) Characterisation of the internal floor area 28. The other main area explored in the course of the oral evidence was the controversy about the percentage of the internal floor area of Newbury House, which was neither occupied for residential purposes nor was within the “common parts” of the building. Mr Robert Horner FRICS, a chartered building surveyor, prepared a report dated 14 September 2012 on behalf of the Claimants; Mr Mark Blooman BSc MRICS, a chartered building surveyor, prepared a report dated 26 June 2012 on behalf of the defendants. Each prepared a plan and a schedule, or rather, a series of schedules. Very helpfully during the course of the hearing they managed to reach further agreement about some of the issues that had been in contention. The parties indicated that they did not wish to cross examine the experts and after the hearing produced a very helpful Scott Schedule, which was sent to me explaining their respective positions in respect of areas where agreement could not be reached. I append it to this judgment as “Appendix 1”. I am very grateful to the parties for the way in which they cooperated in reaching this point. The references in the Scott Schedule to particular features at Newbury House can be understood by reference to a sketch plan prepared by Mr Horner, which is at pp1705B to1705F of the hearing bundle. 29. Some of the contentious areas were the subject of oral evidence given by Mr Smith and Mr Dennis. One of those is the bin store, which is to be seen in photographs taken by Mr Smith at p516G of the hearing bundle. Both he and Mr Dennis ride motorcycles and in April 2012 three motorcycles were to be seen parked in this area. There was some cross examination about this but I need not go into it further because it is now agreed that this bin store is a common part. 30. Unhappily there has been no such agreement about the basement. It was put plainly and bluntly that the storage areas allocated to each flat in the basement, which I saw on the site visit, had never been used by any of the occupiers of the flats and have been “concocted” for the purpose of the litigation. Photographs of the area appear at p516D and also in the pages of Tab 15 of volume 4 of the hearing bundle referred to above at para 13 of this judgment. Both claimants denied that the storage areas had been produced only for the purposes of this litigation. Mr Smith accepted that the storage areas may not have had locks on the doors in 2009 and that the locks may have been added later but he said that the areas had been built at the time of the renovation and conversion of the building in 2006; they had not been built simply for the purposes of this case. 31. It was accepted that, from time to time, employees of CAL might have temporarily used the storage areas allocated to the flats, or part of them, to store materials required for Newbury House and for use in other premises occupied by CAL. Mr Smith agreed that the literature did not refer to keys for the storage area and he agreed it may have been the case that few availed themselves of the facility. He was adamant, however, that the keys to these storerooms were kept behind the doors of each flat and their use was explained to the occupants. It was submitted by Ms Bhaloo QC in the course of her closing submissions that the keys had been placed behind the doors for the purposes of the litigation. Mr Jourdan QC took exception to that proposition on the basis that it had not been put and that his clients had had no opportunity to deal with it. It seems to me, however, that, in general terms, it had been put that even though there had been a physical division of the basement and a demarcation of areas of storage, I should not accept the Claimant’s evidence on this point. Consequently I have concluded that I cannot simply exclude the point from consideration. 32. A plan had been drawn up in January 2006 by the Claimant’s architect in connection with a change of use on an application for planning permission. Mr Smith said this was before the question of collective enfranchisement had arisen and I accept his evidence on this. At a late stage I was shown an e-mail thread from 2 May 2006 and 10 May 2006. I have marked it as C1. If the purpose of showing it to me was to persuade me that collective enfranchisement was under active consideration at the time of planning permission was obtained, I do not think that a passing reference to it in the context of the reiteration of an offer to buy the freehold can support that suggestion. 33. The plan showed storage areas in the basement labelled as storage for each flat. These proposed storage areas were in the area now occupied by the locked CAL storage area (contrast p985 with p1705B) and so not in the same position as the storage areas which I saw. The application for change of use was from B8 (storage) to B1 (office). In the event this change was never pursued and when asked why, if it had been the intention to have some residential use in the basement, the Claimants had applied for planning consent for office use and not for residential use, Mr Smith thought there might have been an intention to use much of the basement as an office but this had not proved feasible. Also he recollected that the Claimants had been given some advice about what use to apply for and the terms of the application reflected that advice. It had always been the intention, however, to have storage areas for the flats in the basement 34. I have reservations about the care taken by the Claimants as to the accuracy of their evidence but I think Mr Smith’s evidence derives some support from the plan at page 985 and rather more support from the terms of the leases and the underleases, which all refer to storage areas for each flat. Consequently, if it is being asserted, as I think it is, that these storage areas have been created just for this litigation I do not find that to be the case and I accept the evidence of Mr Smith that they were built where they are now when the conversion and renovation works took place. 35. The other areas of dispute were the basement generally (items 1, 2a, 4, and 5 in Appendix 1), an area in flat 1, which is the top of the bulkhead (Area 6 in Appendix 1), the ground floor stairs and landing (Area 14 in Appendix 1) an area in Flat 1, which is only accessible from the bathroom and which is not used (Area 15 in Appendix 1), the linen cupboard (Area 17 in Appendix 1) and a variety of walls and columns (in Areas 1, 2a, 13 and 16 of the Appendix). No oral evidence was given in relation to these and I will come back to them when I discuss the question of categorisation of the internal floor area below. The statutory provisions 36.  Lessees of flats in a block of flats have been able collectively to acquire the freehold of the block since the LRHUDA came into force in 1993. It has been amended twice, firstly by the Housing Act 1996 and secondly by the Commonhold and Leasehold Reform Act 2002. Mr Jourdan QC submitted that the extension of the ambit of the LRHUDA by the subsequent amendments was of significance to this case. The relevant provisions are to be found in sections 1 to 38 of the LRHUDA, which is Chapter 1 of Part 1 of the Act; the title of the Chapter is “Collective enfranchisement in case of tenants of flats”. 37. The right of “collective enfranchisement” is a right given to “qualifying tenants of flats contained in premises” to which Chapter I applies to acquire the freehold of those premises (section 1(1)) and also any interest that the tenant has under any lease superior to the lease held by the qualifying tenant and any interest under any lease of common parts, which is not a superior lease (section 2(1)(a), (2) and (3)). By section 5(1) persons are qualifying tenants if they are tenants under a long lease (21 years or more—section 7(1)(a)) provided it is not a “business lease” (section 5(2)(a)), as defined by section 101(1), namely a “tenancy to which part II of the Landlord and Tenant Act 1954 applies”. The premises in this case are Newbury House and the Claimants are said to be “qualifying tenants” by virtue of the leases granted to them by CAL. 38. “Flat” is defined in section 101 as meaning: “… a separate set of premises (whether or not on the same floor) – (a) which forms part of a building, and (b) which is constructed or adapted for use for the purposes of a dwelling, and (c) either the whole or a material part of which lies above or below some other part of the building.” 39. Although this case is not concerned directly with the terms of section 2(1) of the Leasehold Reform Act 1967 (“the LRA”) that section contains similar wording to that used in (b) above, namely: “‘house’ includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in …”. The main difference in purely physical terms between a flat and a house as defined above is that whilst there may or may not be buildings adjacent to a house there will be nothing above or below it. In terms of purpose the words “designed or adapted for living in” are used in respect of a “house” in the LRA and the words “constructed or adapted for use for the purposes of a dwelling” are used in the LRHUDA. In the LRA there is a second stage because “house” is qualified by the words “reasonably so called” whereas there are no words of qualification associated with “flat” in the LRHUDA. The use of the adverb “solely” in the LRA indicates that mixed use will not prevent premises from having the character of a “house” but there is nothing in the LRA like the provisions of section 4(1) of the LRHUDA, which set a proportionate threshold for mixed user. 40. The origin of the phraseology of the definition of “house” in the LRA is investigated and explained in the judgment of the Supreme Court in Hosebay Ltd v Day; Lexgorge Ltd v Howard de Walden Estates Ltd [2012] UKSC 41; [2012] 1 WLR 2884* by Lord Carnwath at [20] and [21] of the judgment: “20. … I find it helpful to start from an authority in a different statutory context, Lord Denning MR’s judgment in Ashbridge Investments Ltd v Minister of Housing and Local Government [1965] 1 WLR 1320. The case related to compulsory acquisition of two properties for the purpose of slum-clearance under the Housing Acts. The level of compensation would vary significantly depending on whether the property was or was not a “house”. In the absence of the statutory definition of “house”, Lord Denning MR adopted the following formula: “a building which is constructed or adapted for use as, or for the purposes of, a dwelling”: p1324. In Lake v Bennett [1970] 1 QB 663, 670 he suggested that the draftsman of the 1967 Act definition had “adopted these words, but added the limitation “reasonably so called”.”21. The Ashbridge case … itself concerned two adjoining buildings in the same terrace, which had been designated for compulsory purchase, the first (No 17) as an unfit “house”, the second (No 19) as a building other than a house. The buildings are very similar in appearance; both had been designed as shops with rear living rooms and living quarters above, but neither was in current use for living purposes. No 17, which had undergone no structural alterations was held by the Minister to have “retained its identity as a dwelling”. No 19, by contrast, was held to have “lost its identity as a dwelling”, following structural alterations involving the extension of the shop into the rear living area: p1325. The latter decision was described in the Court of Appeal as “extraordinary” (p1327, per Harman LJ), but that did not undermine the validity of the decision in relation to No 17. Lord Denning MR’s formula can be seen as his way of expressing the present “identity” (in the inspector’s words), or perhaps function, of a building not currently in use, defined by reference to the purpose of its construction or subsequent adaptation.” 41. Dwelling has a variety of meanings, according to the statutory context in which it is to be found. A familiar context is that of section 1 of the Housing Act 1988, where the statutory phrase is “a dwelling house … let as a dwelling”. This was the subject of the well-known decision of the House of Lords in Uratemp Ventures Ltd v Collins [2001] UKHL 43; [2002] 1 AC 301** (see the speech of Lord Millett at paras 30, 31 and 38). There the issue was whether a long term resident of a hotel room without cooking facilities could be occupying it as a “dwelling” and the definition of dwelling was variously expressed as: “”Dwelling” is not a term of art, but a familiar word in the English language, which in my judgment in this context connotes a place where one lives regarding and treating it as home.” (per Lord Irvine at [3]) and “… the concept is clear enough; it describes a place where someone dwells, lives or resides.” (per Lord Bingham at [10]) and “In both ordinary and literary usage, residential accommodation is “a dwelling” if it is the occupier’s home (or one of his homes). It is the place where he lives and to which he returns and which forms the centre of his existence.” (per Lord Millett at 310H). 42. But “dwelling” does not always mean “home” or “main residence”. In the context of planning law a “weekend holiday chalet” was held to be a dwelling by McCullough J in Gravesham Borough Council v Secretary of State for the Environment (1984) 47 P&CR 142, at p146, because it had the distinctive characteristic of affording “the facilities required for day-to-day private domestic existence”. This was approved by the Court of Appeal in Moore v Secretary of State for the Environment (1999) 77 P & CR 114. Also in another context in Phillips v Francis [2010] L.&T.R. 28*** the High Court concluded that the word “dwelling” in section 38 of the Landlord and Tenant Act 1985 did not require that a holiday home must be a main residence in order for the Act to apply. 43. There is another decision on “holiday homes”, however, that takes a different view. In the decision of the Court of Appeal in Walker v Ogilvy (1974) 28 P&CR 288****, occupation of a holiday home from time to time did not make it a ” residence”, as was required by section 3 of the Rent Act 1968 if the protection of the Act was to apply. 44. Perhaps the position is best summed up by the President of the Lands Tribunal, Mr George Bartlett QC, in King v Udlaw Ltd [2008] L.&T.R. 28; [2008] 20 EG 138***** when, after examining a number of authorities, he said (at paragraph 21): “The basic distinction between these two sets of authorities is that in some statutory contexts “dwelling” may imply use as a home, whereas in others there is no such implication. It is a matter therefore, of examining the statutory context and the policy behind the statutory provisions in order to see whether “dwelling” is used with or without the implication of use as a home.” 45. In Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5; [2008] 1 WLR 289******, where there was no issue as to whether the premises were a house “reasonably so called”, the issue under consideration was whether the premises were “a house” because they were “designed or adapted for living in” pursuant to section 2(1) of the LRA. The House of Lords held it was the physical nature of the premises at the time of construction or adaption that had to be considered. The building had been designed and constructed as a house over 200 years before but in 1946 there had been a lease of the upper three floors for residential use and the three lower floors for commercial use for a dress making business. Residential use of the three upper floors had probably ended in 1995 and by the time of the notice seeking to acquire the freehold in 2003 they had been stripped back to their basic structure; the business use had ended in 1990 since when the lower three floors had been empty. Lord Neuberger said at para 17 (see 293D–E) that in deciding whether a building had been designed or adapted for living in “one is largely concerned with the physical state of the property” and with consideration of the position when the house was built. As will be seen below, some of his reasoning has been revised. Nevertheless the physical nature of the premises is one important factor. 46. In Tandon v Trustees of Spurgeons Homes [1982] AC 755******* the House of Lords decided narrowly, by a 3:2 majority, that a flat above a shop could be a house “reasonably so called”. The issue in Tandon was as to the correct approach to deciding the character of premises with mixed use. At pp764E–765D Lord Roskill said this: “It was throughout common ground that the appellant could satisfy all the requirements of the Act of 1967 save one. But the respondents contended that these premises were not a “house” within the definition of that word in section 2 (1) while the appellant contended that they were. This is the issue for decision by your Lordships. The relevant part of the definition in section 2 (1) reads thus: “For the purposes of this Part of this Act, “house” includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in…” My Lords, looking only at the words of this subsection regardless of any authority upon its construction, two points seem to me clearly to emerge. First, though the definition of “house” is expressed to be inclusive and not exhaustive, the words “any building… reasonably so called” are intended as words of limitation, for clearly premises are not be treated as a “house” within the subsection merely because they are a building designed or adapted for living in unless they can also in ordinary parlance be reasonably called a “house”. Secondly, premises are not to be treated as without the definition merely because the building is not structurally detached or “was [not] or is not solely designed or adapted for living in.” Nothing in the present case turns upon “not structurally detached”, for these premises were not structurally detached. But the latter words which I have italicised suggest to my mind that Parliament was intending in certain circumstances to extend the benefits and privilege of the Act of 1967 to tenants of premises not exclusively designed or adapted for living in for residential purposes. If that approach be correct, the next question is – what are the circumstances in which the tenant of such premises can successfully assert a claim to those benefits and privileges? My Lords, learned counsel for the respondents did not seek to argue that the mere fact that part of the premises was used as a shop constituted a complete bar to the successful assertion of such a claim. Learned counsel for the appellant did not seek to argue that such a claim could be successfully asserted in every case of mixed user, that part of the user which was non-residential being wholly ignored. Each learned counsel therefore avoided the extreme argument possibly open to him and in my view one only has to look at the definition in section 2 (1) to see that each was right so to do. The definition clearly contemplates some mixed user but leaves it to the courts to determine whether the particular premises fall within or without the definition, bearing in mind that it is the residential tenant of a “house” as defined for whom the benefit and privileges of the statute are intended.” 47. “Mixed user” in the LRA context has proved problematic. This can be illustrated by contrasting the outcome in Tandon with the Court of Appeal’s judgment in Prospect Estates Ltd v Grosvenor Estate Belgravia [2008] EWCA Civ 1281; [2009] 1 WLR 1313 (per Mummery LJ at paras 8 and 13 to 20) which reversed the judgment of Judge Dight sitting at this court. Believing he was directing himself in accordance with Lord Roskill’s judgment in Tandon Judge Dight concluded, largely by consideration of the physical appearance of the premises, that what was under consideration was a “house”, the Court of Appeal accepted the criticism that he had not given “due weight to the prescriptive terms of the lease, the actual uses of the building and the relative proportions of the mixed use at the relevant date” (per Mummery LJ at [20]). Thus the decision as to the issue of “mixed use” or the similar issue of “current use”, according to the Court of Appeal in Prospect Holdings involves the court in a balancing exercise. 48. It was against this background of authority that the Supreme Court decided the cases of Hosebay/Lexgorge. There the issue for decision was not mixed use but the problem of “the present identity” of premises not currently being used for the purpose for which they were originally designed or subsequently adapted. The facts of Hosebay were similar in some respects, and different in other respects, to those of Lexgorge. In both cases the long lessees sought to acquire the freehold under the provisions of the LRA and succeeded both at first instance and in the Court of Appeal. 49. In Hosebay, which was decided at first instance by Judge Marshall at this court, three buildings in a terrace, 29, 31 and 39 Rosary Gardens, South Kensington, London SW7, had been constructed originally as houses but had been adapted to provide rooms with en-suite shower, WC and self-catering facilities for use as “short term accommodation for tourists and other visitors to London”. They were described by Judge Marshall as a “self-catering hotel” (see para 13 of the judgment of Lord Carnwath—[2012] 1 WLR 2889 at page 2889C–D). The long leases of numbers 29 and 39 were subject to covenants as to use as “16 high class self-contained private residential flatlets” (see para 10 of the judgment of Lord Carnwath—[2012] 1 WLR 2884 at p2888H). The long lease of number 31 was “subject to a covenant restricting its use to that of “a single- family residence” or “a high-class furnished property for accommodating not more than 20 persons” (para 10 of the judgment of Lord Carnwath—see [2012] 1 WLR 2884 at p2888H–2889A). Although it seems to have been impossible to say whether the adaptation took place before or after the relevant long leases were granted, it was common ground that the current usage was in breach of the covenant. 50. In the latter, Lexgorge, which was decided at first instance by Judge Dight sitting at this court, the long lease of a building, in a terrace of what had been built as substantial houses, was acquired by a company, which used all four storeys of the building as offices; commercial usage could be dated back to 1888 and the building was still being used as an office when the relevant notice was served. However by the date of the trial the top two floors were in use for residential purposes although the lower floors continued to be used as offices. The relevant “long lease” dated from 1951 and described the property as a “messuage or residential and professional premises” and restricted its use (subject to the landlord’s consent) to “self-contained flats or maisonettes” on the upper two floors, professional offices on the first and ground floors, and in the basement “storage … and lavatory … in connection with other parts of the demised premises.” (see para 18 of the judgment of Lord Carnwath—[2012] 1 WLR 2884 at p2890E). The office use of the upper floors at the time of the relevant notice was in breach of the terms of the lease. Judge Dight concluded that the premises were a house reasonably so called. 51. In the Court of Appeal ([2010]EWCA Civ 748; [2010] 1 WLR 2317) Lord Neuberger, in effect reiterating his analysis in Boss, regarded the issue of whether a building was “a house … reasonably so called” as largely to be resolved by “physical appearance and character” (see para 47 of the judgment at p2330C) and the court dismissed both appeals “with no particular enthusiasm” (see para 56 of the judgment at p2332A) and being mindful of the result as an unintended consequence of the amendments to the LRA (see para 57 of the judgment at p2332). 52. The Supreme Court rejected that approach holding that the determinative factor was use of the premises not their physical appearance. The judgment of the court was given by Lord Carnwath. In para 1 of the judgment he identified the paradox created by the County Court and the Court of Appeal supporting enfranchisement under the LRA in the factual circumstance of the two cases: “The Leasehold Reform Act 1967 is on its face a statute about houses, not commercial buildings. The buildings with which we are concerned were originally designed and used as houses, but at the relevant date were used entirely for commercial purposes, one for offices, the other (in the judge’s words) as a “self-catering hotel”. In both cases the courts below felt constrained to hold that they were “houses” within the meaning of the 1967 Act, with the consequence that the lessees were entitled to “enfranchise”, that is, to acquire the freeholds compulsorily from their lessors on the terms fixed by the Act.” 53. He then considered the legislative history and the “Draft Bill and Consultation Paper Commonhold and Leasehold Reform” (Cm 4843) and said this at para 5 of the judgment: “There is no evidence then or thereafter of any ministerial or parliamentary intention to extend the scope of the Act more generally, or in particular to confer statutory rights on lessees of buildings used for purely non-residential purposes.” 54. Considering section 2(1) of the LRA he said at paras 8 and 9: “8. In the present cases, nothing turns directly on the qualifications introduced by the word “notwithstanding” (which I shall refer to as “the proviso”). We are concerned with the main part of the definition, which raises two separate but overlapping questions: (i) is the building one “designed or adapted for living in”? (ii) is it a “house … reasonably so called”? Both questions remain live in Hosebay; in Lexgorge the first has been conceded in favour of the lessees. 9. The two parts of the definition are in a sense “belt and braces”: complementary and overlapping, but both needing to be satisfied. The first looks to the identity or function of the building based on its physical characteristics. The second ties the definition to the primary meaning of “house” as a single residence, as opposed to say a hostel or a block of flats; but that in turn is qualified by the specific provision relating to houses divided horizontally. Both parts need to be read in the context of the statute which is about houses as places to live in, not about houses as pieces of architecture, or features in the street scene or names in an address book.” 55. In the Court of Appeal in Hosebay/Lexgorge Lord Neuburger MR had had “second thoughts” about one aspect of Boss; he now though that “a building originally designed for living in, but adapted to some other purpose, was not “designed or adapted for living in”, unless subsequently re-adapted for that purpose: para 40″ (see para 33 of the judgment of Lord Carnwath—[2012] 1 WLR 2884 at p2894H). 56. Lord Carnwath explained how he thought the phrase “designed or adapted for living in” must be interpreted at paras 34 to 36 of the judgment in Hosebay as follows: “34. I have no doubt, with respect, that Lord Neuburger MR’s second thoughts on this point were correct. Context and common sense argue strongly against a definition turning principally on historic design, if that has long since been superseded by adaptation to some other use. However, that approach may also have implications for the earlier part of his grammatical analysis in the Boss Holdings case: see para 31 above. The expression “was or is designed or adapted” is, as he says to be read “distributively”: that is, as equivalent to “was designed or is adapted”. While that may support the view that the word “designed” is directed to the past, the same cannot be said of the expression “is adapted”. Nor (pace Lord Scott) is that grammatically the same as “was most recently adapted”. Logically that expression can only be taken as directed to the present state of the building. 35. Once it is accepted that a “literalist” approach to the definition is inappropriate, I find myself drawn back to a reading which accords more closely to what I have suggested was in Lord Denning MR’s mind in Ashbridge [1965] 1 WLR 1320, that is a simple way of defining the present identity or function of the building as a house, by reference to its current physical character, whether derived from its original design or from subsequent adaptation. Furthermore, I would not give any special weight in that context to the word “adapted”. In ordinary language it means no more than “made suitable”. It is true that the word is applied to the building, rather than its contents, so that a mere change of furniture is not enough. However, the word does not imply any particular degree of structural change. Where a building is in active and settled use for a particular purpose, the likelihood is that it has undergone at least some physical adaptation to make it suitable for that purpose. That in most cases can be taken as the use for which it is currently “adapted”, and in most cases it will be unnecessary to look further. 36. That interpretation does not of course call into question the actual decision in the Boss Holdings case [2008] 1 WLR 289. The basis of the decision, as I understand it, was that the upper floors, which had been designed or last adapted for residential purposes, and had not been put to any other use, had not lost their identity as such, merely because at the material time they were disused and dilapidated. It was enough that the building was partially “adapted for living in”, and it was unnecessary to look beyond that: see para 25. That reasoning cannot be extended to a building in which the residential use has not merely ceased, but has been wholly replaced by a new, non- residential use.” 57. Lord Carnwath also commented on the Prospect Holdings case at para 41 of his judgment in Hosebay as follows: “As will be apparent from my earlier analysis of the Tandon case, I cannot agree that Lord Roskill regarded “external and internal physical character and appearance” as the determining factors. I agree with Lord Neuburger MR that the terms of the lease as such should not have been treated as the major factor. However, in so far as Mummery LJ treated the use of the building, rather than its physical appearance, as determinative, his approach was in my view entirely consistent with the reasoning of the majority in the Tandon case as I have explained it. I consider that the Prospect Estates case [2009] 1 WLR 1313 was rightly decided, and that the ratio need not be limited in the way Lord Neuburger MR proposed.” 58. The actual decision of the Supreme Court in Hosebay/Lexgorge is to be found at paras 43 to 45 of the judgment, which I quote in full rather than attempt a summary: 43. I would allow the appeal in Hosebay on the grounds that a building which is wholly used as a “self-catering hotel” is not “a house … reasonably so called” within the meaning of this statute. As appears from para 38 of their judgment(quoted above, at para 15), the contrary view of the Court of Appeal turned on two main points: (i) the external appearance of each property as a town-house; (ii) the internal conversion to self-contained units, with cooking and toilet facilities. I find it difficult with respect to see the relevance of the second point to this part of the definition, which only arises in relation to a building which is in some sense adapted for living in under the first part. It is not suggested that the building is divided in a way which comes within the proviso. The first point, for the reasons given in my analysis of the Tandon case, should not have been given determinative weight. The fact that the buildings might look like houses, and might be referred to as houses for some purposes, is not in my view sufficient to displace the fact that their use was entirely commercial. 44. In these circumstances I find it unnecessary to reach a concluded view on the application of the first part of the definition in this appeal. I agree with the appellants (and the judge) that “living in” means something more settled than “staying in”; and that the present use does not qualify as such. There is more room for debate, however, whether the premises are to be taken as “adapted” solely for such use, to the exclusion of longer term occupation. The Court of Appeal, as I understand it, were influenced not only by the consideration that the rooms might be used (for example) for longer term student occupation, but also that their current layout probably dates from earlier adaptation to the uses described in the leases, which could well be regarded as sufficiently settled to qualify as “living in”. One of the values of the two-part definition is that it becomes unnecessary to resolve such narrow factual issues. 45 In Lexgorge I would also allow the appeal on similar grounds. A building wholly used for offices, whatever its original design or current appearance, is not a house reasonably so called. The fact that it was designed as a house, and is still described as a house for many purposes, including in architectural histories, is beside the point. In this case no issue arises under the first part of the definition. It is unnecessary to consider whether the concession in that respect was rightly made, although it is possible that it was based on a wider interpretation of the Boss Holdings case [2008] 1 WLR 289 than my own analysis would have supported.” 59. I have mentioned above that the LRHUDA had been amended twice since it was enacted. The consequence of these amendments was considered by the House of Lords in Howard de Walden Estates Ltd v Aggio; Earl Cadogan v 26 Cadogan Squre Ltd [2009] UKHL 44; [2009] 1 AC 39.******** In the Howard de Walden case all or most of a building in Upper Wimpole Street had been leased on a long lease, which had been acquired by the defendants. At some point the property had been converted into five self-contained flats, one to each storey; the upper three were under let on long underleases; the two on the lower floors were let on assured shorthold tenancies. In the Cadogan case all or most of a six storey building in Cadogan Square had also been leased on a long lease, which had been acquired by the Defendant. At some point this property had become offices on the lower three floors, part of which had been under let and the upper three floors had been converted into a maisonette, which had been let on an assured shorthold tenancy, although it was vacant when the relevant notice was given. 60. In each case the long lessees sought a new lease under Part II of LRHUDA, which contains what are called “the individual enfranchisement provisions”; in the Cadogan case the notice related to a new lease of the maisonette and in the Howard de Walden case the notice related to a new lease of the basement and ground floor flats. The issue was whether each of the head lessees was a qualifying tenant of a flat. At first instance at this court both His Honour Judge Collins in the Howard de Walden case and His Honour Judge Lindsay QC in the Cadogan case held in their favour. Those decisions were reversed by the Court of Appeal. In the House of Lords Lord Neuberger concluded, as a matter of statutory interpretation, that the words of the statute meant that the head lessees in both cases were “qualifying tenants”. He then turned to what he characterised as the “policy argument” and said this at [36] and [37] (see pp50H to 51E). “36. The respondents contend that, as a matter of policy, it cannot have been intended that property investors, whether public companies or private individuals, should normally be able to benefit from the provisions of Chapter II [having quoted part of the opinion of Baroness Hale dealing with the policy of the Act in Majorstake Ltd v Curtis [2008] 1 AC 787 he goes on]… 37. That formulation of the statutory policy does not appear to provide much assistance for the respondents’ argument that a lessee of a block of flats should not be entitled to a new lease of individual flats, which have no under-lessee who is a qualifying tenant. The policy described by Baroness Hale can be said to apply as much to lessees who are commercial investors, as in the Cadogan case, or will trustees, as in the Howard de Walden case, as to those who are residents. Furthermore, the notion that the 1993 Act was not intended to benefit any lessee of the resident occupier cannot be justified now that the residence requirement, contained in the original section 39(2)(b), has been removed by the 2002 Act.” So, as a matter of policy, commercial investors are not excluded from the scope of the legislation. 61. Another issue in this case relates to the exclusion of some premises from section 3 by the provisions of section 4 of the LRHUDA. Some part of that mechanism relates to “common parts”, which are defined in these terms in section 101: “… in relation to any building or part of the building, includes the structure and interior of that building or part and any common facilities within it.” 62. In Panagopoulos v Earl Cadogan [2010] EWCA Civ 1259; [2011] Ch 177********* one of the issues was whether a caretakers flat was a “common part”. Carnwath LJ said at [14] of his judgment at p203 E-F that the “common parts” definition in section 101: “…is inclusive in form, rather than exhaustive. Thus it impliedly assumes an ordinary meaning of the expression “common parts”, which is extended or clarified by specific reference to, first, the structure and exterior of the building, and, secondly,, any “common facilities” within the building.” He referred at [16] to section 4(2) giving “[s]ome inferential help” and says at [16], [17], [18] and [19] at pp203H to 204H: “…This suggests, unsurprisingly, that such things as garages and storage areas are “common parts” if available for shared use, but not if used in conjunction with a particular dwelling. 17. That seems to me to accord with the ordinary meaning of the word “common”: that is, for shared, rather than individual, use or benefit. That hardly needs authority, but it is supported by the decision of the Inner House of the Court of Session in Marfield Properties v Secretary of State for the Environment 1996 SCLR 749. The lease contained a definition of “common parts”, which, having referred to a list of particular features (such as car parks and the service yard) included “all other parts… which are common to the premises…” the Lord President (Hope) said, at p 752: “The adjective “common” stands on its own. This suggests that it has been used more generally, to include anything that is shared between the premises and other parts of the development or in some other way benefits or is of concern to the occupiers of them.” Although the issues were quite different, that seems to be a useful authority on the ordinary meaning of the word “common parts” in a context such as the present. 18. The other words of the definition present no great difficulty. The word “part” in the context of a building connotes a physical division, whether a particular area within the building (such as a garage), or a particular section of its physical constituents. “Facilities” seems to me to be designed to extend the definition to include such things as plant or equipment (for example, a lift or a boiler). That accords with the dictionary definition in the Oxford English Dictionary of “facilities” as the “physical means or equipment required for doing something, or the service provided by this.” 19. The Oxford English Dictionary formulation permits a reasonably broad, common sense approach, which would tie in with the guidance as to interpretation: see para 6 above. For example, the “facility” represented by a boiler is not just the physical structure, but also the service of hot water provided from it. If the lessees have the right to obtain hot water from a common boiler, then, whether or not they have access to the boiler room, it can in my view properly be regarded as a “common facility”, and therefore within the common parts. On the other hand, the service cannot be one which is entirely detached from the building or some physical object attached to the building. Otherwise it is hard to see how it can be said to be “included in the demised premises” under the relevant lease, so as to come within section 2. 20. Applying the same approach, I have little difficulty in agreeing with the judges below on the narrow issue raised by the appeal, at least on the facts of this case. The caretaker’s flat has been identified as a distinct part of the building with a distinct function, at least since 1966. It is referred to as such in two of the current leases, which also give the lessees rights to the services of a resident caretaker. It is true that the common benefit consists principally in the services of the caretaker as a person, rather than the use of the flat itself. However, a resident caretaker requires a flat designated for the purpose. Taken together they can reasonably be regarded as representing a “facility” within the definition.” 63. The first appeal in Panagopoulos had been heard by Roth J ([2011] Ch 177). He dealt with the role that the obligations in the lease might play holding, at [45] of his judgment (p191D), it was not necessary that “the part must be devoted to this purpose as a matter of obligation in the residents’ leases.” In the Court of Appeal Carnwath LJ, whilst seeing the force of this approach, thought the issue did not arise for decision (see [22] at p205C-D). 64. Turning now to the section 4 exclusion, it reads as follows: “(1) This Chapter does not apply to premises falling within section 3 (1) if – (a) any part or parts of the premises is or are neither – (i) occupied, or intended to be occupied, for residential purposes, nor (ii) comprised in any common parts of the premises; and (b) the internal floor area of that part or of those parts (taken together) exceeds 25% of the internal floor area of the premises (taken as a whole). (2) Where in the case of any such premises any part of the premises (such as, for example, a garage, parking space or storage area) is used, or intended for use, in conjunction with a particular dwelling contained in the premises (and accordingly is not comprised in any common parts of the premises), it shall be taken to be occupied, or intended to be occupied, for residential purposes. (3) For the purposes of determining the internal floor area of a building or any part of a building, the floor or floors of the building or part shall be taken to extend (without interruption) throughout the whole of the interior of the building or part, except that the area of any common parts of the building or part shall be disregarded.” 65. There have been two judicial summaries/restatements of the mechanism of the section 4 exclusion. Both lay claims to simplicity. At [52] of his judgment on the first appeal in Panagopoulos Roth J summarises section 4(1) and (3) at 192H to 193A as follows: “Put in simple terms, this section serves to exclude from the right to collective enfranchisement premises where the ratio of business to residential use exceeds 1:3. It thus excludes premises where a significant part is devoted to offices or retail use. In making that calculation, the residential and common parts are aggregated, so as to arrive at the remaining area that is presumed devoted to such business use.” 66. This is cited, presumably with approval, by Carnwath LJ. There is another and more extensive re-statement of the mechanism provided by the combination of section 4(1)(a) and section 4(3) in the judgment of His Honour Judge Cooke sitting in this court in the case of Indiana Investments Ltd v Taylor [2004] 3 EGLR 63; [2004] 50 EG 86 where at 64F–J he provides his own analysis of section 4 in answer to that put forward by counsel: ” (3)… How it [section 4(1)(a)] works is very simple: its object, clearly expressed in its words, is not to aggregate anything but to identify “business”, and it does so by asking two questions: (i) is it residential?; and (ii) is it common? If the answer to both questions is “no”, it is what I have called, for want of a better term, “business”. The words “neither/nor”, which are disjunctive, are there to identify the two separate tests; (4) it is “business”, that is, that which is neither residential nor common, that is then compared in area with the total internal floor area, however; (5) under section 4(3), the internal floor area for the purposes of the calculation is defined as excluding common parts. (In actual fact, because of section 4(3), the relevant internal area is the aggregate of business and residential); (6) the reason why the double question is asked in section 4(1)(a) is, to my mind, quite obvious when one looks at the ultimate scheme. Residential parts need to be clearly identified because they form part of one side of the ratio. Common parts need to be identified because they have to be excluded from the calculation. Business requires to be identified because it needs, in effect, to be aggregated with residential to form the one side of the ratio and has to stand alone to form the other side of the ratio. To my mind, this analysis is not only gives effect fully and properly to the words of the section but also creates a logical scheme. What is intended to be done is to arrive at the ratio that business bears to residential, even though it is not expressed in those terms. For this purpose, common parts that are neither business nor residential are treated as irrelevant in two ways: (i) as not being part of the definition of either business or residential, and therefore not part of the “part” that is comprised in the “whole”; and (ii) as not being comprised in the “whole” with which the “part” is compared. In short you leave it out of both sides of the calculation so that, in reality, what is compared is business: aggregate of business and residential.” Mr Jourdan QC invited me to follow the approach of Judge Cooke’s rather more expansive restatement of the statutory scheme. I did not understand Ms Bhaloo QC to disagree and that is how I will approach this aspect of the case. The claimant’s submissions 67. Mr Jourdan QC submitted that the four flats in Newbury House were flats as defined by section 101 and, therefore, fell within section 3 of LRHUDA. Each was clearly “a separate set of premises”, forming “part of a building” (ie part of Newbury House) and each lying “above or below some other part of the building”. None of that was controversial. The part of the definition in section 101 upon which the Defendant had fastened was that in sub-para (b); “[a separate set of premises] constructed or adapted for use for the purposes of a dwelling”. and Mr Jourdan QC acknowledged that the word “dwelling” is also to be found in section 4(2): “Where in the case of any such premises any part of the premises (such as, for example, a garage, parking space or storage area) is used, or intended for use in conjunction with a particular dwelling contained in the premises …”. 68. He did not accept, however, that it had the meaning contended for by the Defendant. The Defendant’s argument was that “dwelling” in this context had the same meaning as given to it by the House of Lords in Uratemp Ventures Ltd (see above at para 41 of this judgment). 69. This transplanting of meaning from one statutory context to another, submitted Mr Jourdan QC, is an erroneous approach to the interpretation of the definition in section 101 of LRHUDA. Firstly by concentrating only on “a dwelling” it isolated those words from the preceding rubric “constructed or adapted for use for the purposes of”. As the House of Lords had made clear in Boss when considering the definition of “a house” in section 2(1) of the LRA, the physical nature of the premises either at the time of construction or at the time of adaptation fell to be considered. Lord Neuberger had said at [17] (see 293D–E) that in deciding whether a building had been designed or adapted for living in “one is largely concerned with the physical state of the property”. Although Mr Jourdan QC accepted that there were important differences between the two statutes, the same must apply to the very similar rubric “constructed or adapted for use for the purposes of a dwelling”. He accepted that although much of what Lord Neuberger had said in Boss had been revised both by himself in his judgment in Hosebay/Lexgorge in the Court of Appeal and by the judgment of the Supreme Court in the same case, the physical nature of the premises was still the relevant consideration in relation to “constructed or adapted for use for the purposes of a dwelling”, even if the Supreme Court had decided it was not the only consideration in relation to the question of whether it was reasonable to call a building a “house”. 70. Secondly, the transplantation was by no means axiomatic because “dwelling” does not always mean “home” or “main residence”. He referred me to the holiday home cases Gravesham Borough Council, Moore, Walker and Phillips (see above at [37] of this judgment)) as providing examples of differing views of the meaning of dwelling in different statutory contexts and he relied on what was said by the President of the Lands Tribunal, Mr George Bartlett QC, in King v Udlaw (at [21]) (quoted above at [44] of this judgment). 71. Therefore one cannot simply read across the approach adopted in one statute into another and that is so even where the two statutes deal with very similar topics in very similar language. Differences between the two regimes may be crucial and that was certainly the case as between LRHUDA and the LRA. Dwelling may imply use as a home or main residence but it may not and it does not do so here. The definition of flat in section 101 of LRHUDA is identifying the characteristics and potential of a physical space; it is not concerned with the use to which it is being currently put. 72. Thirdly, although there had been subsequent amendments to LRHUDA, section 101 had not been amended and its wording had to be interpreted by reference to the original statutory regime (see para 23 of the speech of Lord Neuberger in Boss). One of the key alterations was that the residence condition formerly to be found in sections 6 and 13 had been removed. This made it less likely that in the original context Parliament had intended “dwelling” to mean home. Such a meaning would have duplicated the residence conditions in sections 6 and 13, which had required at least half of the participating tenants to have occupied their flats for the previous 12 months (or for three years out of the previous ten years) as their only or principal home. It was these provisions that were concerned with user; sections 3 and the definition of “flat” in section 101 were concerned with the nature of the physical space. Once the residence condition was abolished that left only provisions as to physical space. 73. So, Mr Jourdan QC submitted, the flats in Newbury House were “flats” (ie “premises” falling within section 3(1) of LRHUDA). “Residential purposes” in section 4(1)(a) of LRHUDA means used for the purposes of ordinary living activities, submitted Mr Jourdan QC, but it contains no requirement for any particular degree of permanence nor does it imply any. There is no direct authority on section 4, although the provisions contained in section 72(1) and paragraph 1(2) of Schedule 6 of the Commonhold and Leasehold Reform Act 2002 (relating to the right to manage) are very similar to section 4(1); section 4(1)(a) and para 6(2)(a) are identical. Therefore the decision of the Lands Tribunal as to the latter in Gaingold Ltd v WHRA RTM Co Ltd [2006] 1 EGLR 81 is directly applicable. The issue there was the proportion of residential premises to commercial premises and the question was whether the basement of a restaurant, in which there was living accommodation for the staff, was residential or commercial. The terms of the underlease were that the restaurant and basement was to be used “as a licensing victualling house only with subsidiary dwelling accommodation” and it was argued that the occupation of the basement living accommodation was for the purposes of the restaurant. 74. The President, Mr George Bartlett QC said this at [12] (p83): “Three matters arise for consideration in this appeal: (i) the meaning of ‘occupied, or intended to be occupied, for residential purposes’… On the first matter, Mr Gallagher submitted that the broad purpose of the exclusion for which para 1 provides is to distinguish between commercial and residential occupation and to exclude from the right to manage premises where the commercial element exceeds the prescribed area. It does not seem to me that this is either an accurate or a helpful analysis. The distinction for which para 1 expressly provides is between the residential and the non-residential parts of the premises, and I can see no justification for substituting “commercial” for “non- residential” as an aid to understanding its effect. The question to be asked is whether the basement is occupied, or is intended to be occupied, for residential purposes. If it is not, it is a non-residential part of the premises. If part of the premises is, in fact, used for residential purposes, those living there are appropriately referred to as occupiers or occupants (as, indeed, Mr Gallagher referred to those living in the basement) and the part of the premises can appropriately be said to be occupied for residential purposes. I can see no justification in the provision for ignoring the occupation of these occupiers and treating as the sole occupier of the basement the person operating the restaurant business, or for reading into the provision the qualification that it is the underlying purpose of the person providing the residential accommodation that must be treated as the determinant of whether the part is occupied for residential purposes.” So the “purposes” of the provider of the premises are not conclusive as to whether the premises are “occupied, or intended to be occupied, for residential purposes”. 75. Moreover, the question also arises as to who is occupying the premises? In Gaingold this was not addressed but Mr Jourdan QC indicated that if it was necessary to do so in the instant case he would rely on the decision of this court made by Judge Cooke in Smith and others v Titanate Ltd [2005] 2 EGLR 63; [2005] 20 EG 262. The facts bear some resemblance to the instant case. A house in Mayfair, which had been converted into six flats and a small office, had been leased to the Defendant, which conducted the business of letting the flats via its agent, whose employee attended the premises daily and carried on the day to day lettings business from the office. The duration of the lettings varied from a few weeks in some case to several months in other cases and cleaning and changes of linen were provided by the Defendant. The defendant wished to acquire the right to manage and the issue was whether the defendant occupied the building as a business tenant. Judge Cooke concluded that the defendants were not occupying the flats and Mr Jourdan QC submitted I should reach the same conclusion in this case. 76. A helpful authority on the correct approach to statutory interpretation in this context, submitted Mr Jourdan QC, is the judgment of the Court of Appeal in Owen v Elliott (Inspector of Taxes) [1990] Ch 786. There the issue was whether the phrase “residential accommodation” (a concept close enough to “residential purposes”) in section 80(1) of the Finance Act 1980 covered the letting of rooms to paying guests in a hotel. Before the Commissioners and on appeal to the High Court the taxpayer lost; it was held that the phrase imported the concept of “home”. The Court of Appeal reversed those decisions. Fox LJ said this at 790B-F: “Let it be accepted that section 101 is concerned with dwelling houses that can reasonably be called “homes”. In section 101, it seems to me, the dwelling house acquires that status by language which bears no resemblance at all to that in section 80. The draftsman of section 101 achieves his purpose by referring to a dwelling house “which is, or has at any time during his period of ownership, been his only or main residence.” It seems to me that those words, taken together, are what achieve the concept of a home in section 101 and there is nothing at all which resembles them in section 80(1) of the Finance Act 1980. Mr Moses said that the concept of a home is conveyed by the word “residence” alone. I do not feel able to accept that. A person may well have a residence or several residences which are not his home. The language of section 101 plainly, it may be said, indicates a home. In any event one must read the whole of the language of section 101. I see nothing corresponding to it in section 80(1). Section 101 nowhere used the expression “residential accommodation” and I see nothing in its provisions to displace the admitted meaning of the words “residential accommodation” as a matter of the ordinary use of the English language. If the draftsman of section 80 wanted to introduce a requirement of a home as a basis for the granting of the relief in respect of the relevant letting, I find it impossible to believe that he would not have used language which made that plain. And I find it impossible to believe that he was relying on the wholly different language of section 101 of the Act of 1979 to achieve it for him, more particularly when he, in section 80, uses words which, according to their ordinary meaning in English, have a totally different meaning and effect.” 77. In the now repealed sections 6(2), 13(3)(e)(iii), 39(2)(b) and 42(3)(b)(iv) and in the still in force section 10(1)(b)(i) the draftsman had no difficulty in using the phrase “his only or principal home”. Therefore in the statute as originally enacted, the contrast of a reference to residential occupation in one section with the more specifically defined occupation in other sections, now repealed, was directly analogous to Owen and the analysis of Fox LJ applied in the above passage is also applicable here. 78. Nor could it be argued that the appearance of the word “dwelling” in section 4(2) added anything to the phrase “residential purposes”. Neither concept implied “home”; that was so whether each was considered separately or they were added together. Even by that addition the whole cannot be greater than the sum total of its parts. 79. Nor was there anything odd about the removal by repeal of the concept of user. Whether or not something might or might not be regarded as a “home” is a difficult factual topic often requiring detailed factual investigation in order to provide the answer as pp235 to 251 of the 11th edn of Megarry’s The Rent Acts demonstrate. There might be very real practical difficulties attached to such an investigation; the participating tenants might have no information about some of the non-participating tenants. The right conclusion was that Parliament intended a broad approach to the issue of “qualifying tenant” and not a detailed factual investigation of the intentions and circumstances of each individual. This was consistent with the rubric of the statute as well as the policy of the Act, which was correctly stated at pp29 to 30 of Clarke’s Leasehold Enfranchisement—the New Law published in 1994 when the Act took effect. The author had correctly summarised the original “10% rule” (now 25%) as reflecting the view that it might be inappropriate for residential owners to acquire the reversion to a lease of premises unless the commercial element of those premises was small by comparison to the residential element. The exclusion in section 4 was intended to act as a “gatekeeper” in that respect but it had never been intended to operate by focussing attention on the nature of the usage of the individual residential premises. 80. Mr Jourdan QC’s primary submission was that the words of the statute and their interpretation were clear and unambiguous. But, lest I was not attracted to that proposition, he had an alternative submission, namely that any ambiguity was resolved by considering the parliamentary history as sanctioned by the judgment of the House of Lords in Pepper v Hart [1993] AC 593 and in paras 100 and 101 of his skeleton argument he set out the ministerial statements made in the House of Commons and in the House of Lords in February and March 1993, which he submitted made clear that section 4 was directed towards ensuring that commercial premises could not be the subject of collective enfranchisement unless their area fell below the stipulated threshold (originally 10%). This was reinforced by the subsequent amendment in 2002 whose purpose was clear from Cm 4843, which Mr Jourdan summarised and quoted at para 52 of his skeleton argument. So the policy of the Act was as Clarke had stated it to be in 1994, namely only to allow residential owners to acquire the reversion to commercial premises where to do so would not make them substantial commercial landlords 81. Consideration of the amendments also brought Mr Jourdan QC to the judgment of the House of Lords in Howard de Walden Estates/Earl Cadogan (discussed above at paras 59 and 60 of this judgment). As a matter of policy if commercial investors in property were not disqualified from individual enfranchisement what logic was there in disqualifying them from collective enfranchisements on reasoning rejected by the House of Lords in those conjoined cases? 82.. That in turn leads to the fundamental argument, which was central to the Defendant’s case, namely that the Claimants were operating a business. Mr Jourdan QC submitted that if the commercial investor in property was not disqualified, as the passage at paras 36 and 37 of Lord Neuberger’s speech in Howard de Walden/Earl Cadogan (quoted above at [60] of this judgment) makes clear, then it could make no difference that the “business plan” was for the premises to be operated as serviced apartments. As De Walden Estates showed it was immaterial that the Claimants were commercial investors, who sublet to others. As Gaingold demonstrated it did not matter that the “purpose” of the Claimants was to lease to a company, which would, in turn, lease the flats on a variety of shorter or longer lettings, so long as “occupation for residential purposes”, as opposed to commercial occupation, was the purpose of those lettings and as Smith demonstrated neither the claimants nor CAL were occupying as business tenants. The services provided by CAL were quite insufficient for CAL to be regarded as being in occupation of the flats. In any event the underleases to CAL excluded the 1954 Act. 83. Nor was this case to be determined by the judgment of the Supreme Court in Hosebay/Lexgorge on the question of the approach to the words “a house … reasonably so called”. Putting his argument at its simplest, Mr Jourdan QC submitted this was because Hosebay/Lexgorge was a case decided under the LRA, a different Act, involving somewhat different principles. The LRHUDA does not deal with issues of use by a character-based test nor does it employ a double question test, as is the case with the LRA. The Supreme Court had decided what “a house … reasonably so called” meant but it specifically did not decide, because it did not have to, what “designed or adapted for living in” meant (see paragraph 44 of the judgment quoted above at paragraph 58 of this judgment). 84. Even if “dwelling” did envisage something more than day to day habitation, these flats had been “constructed or adapted for the purposes of a dwelling” and were “occupied, or intended to be occupied, for residential purposes”. There were profound factual differences between this instant case and Hosebay/Lexgorge; the flats in Newbury House were not an hotel; for those who stayed for the longer periods the flats were the equivalent of a home. All statistical evidence can be split up in different ways; here what should be compared was the proportion of long and short stays rather than just counting the number of stays. Looked at broadly, as one must, if minute statistical analysis is to be avoided (and, to my mind, that is the only desirable approach), there were enough long stays to show actual occupation of sufficient duration to amount to the flat being a “dwelling”. If the factual conclusion was that the flats were available to be used as a home, had the potential to be used as a home and, in effect, were sometimes used as the equivalent of a home, then the premises were flats for the purposes of section 3 and were not excluded by section 4 unless the non-residential element exceeded 25% of the internal floor area less the common parts. 85. Mr Jourdan QC submitted that the section 4(1) exclusion argument really turned on the storerooms. If they were intended to be occupied in conjunction with the flats then they were residential whether or not they were much used or, even, whether they were ever used at all. Whether or not I was prepared to place any credence on the evidence of Mr Blooman that he had seen things stored there that must have related to CAL or that locks had been place on the doors after the litigation had started, unless I concluded that there were no storage areas, it must follow that not only were those areas in the basement residential but also the access to the storage areas must make the route down the stairs to the basement and across the basement a shared facility so as to be “common parts” (see Panagopoulos). It was only if the whole of the basement was treated as non-residential that more than 25% of the internal floor would be non-residential. The other disputed areas would not then matter. If they did, the two areas in Flat 1 were both residential and the linen cupboard must be a shared facility. 86. Finally, Mr Jourdan QC addressed the VAT issue, which arose because hotel and holiday accommodation is an exception to the general rule that value added tax is not charged on property. This arises because of Article 135(2)(a) of Council Directive 2006/112/EC, which according to the European Court of Justice in the case of Blasi v Finanzamt München Case C-346/95 [1998] ECR I-481, “should be broadly construed”. He submitted that European tax legislation was not an aid to the interpretation of sections 3 and 4 of the LRHUDA. The defendant’s submissions 87. Ms Bhaloo QC submitted that the answer to this case was simple and straightforward. It was a case about “use”. The kind of use to which these premises were being put had been characterised by the Supreme Court in Hosebay/Lexgorge as commercial use and the legislation operated in favour of residential use. It did not include commercial use. The question was whether, standing back, the result should be any different under the LRHUDA than it had been under the LRA in Hosebay/Lexgorge? 88. She and Mr Jourdan QC both agreed that the removal of the residence qualification could make no difference to the original meaning of the words of the Act. Nor, she submitted, could that amendment make a difference to the policy of the Act. The issue under the LRHUDA was really the same issue as under the LRA, namely whether the enfranchisement provisions could apply to purely non-residential user. She accepted, of course, that the language of the LRA was different but the issue was the same and so the judgment of the Supreme Court in Hosebay/Lexgorge was applicable also in the context of the LRHUDA. This interconnection between the two was confirmed by paras 100 and 101 of the speech of Lord Scott in the decision of the House of Lords in Malekshad v Howard de Walden Estates [2003] 1 AC 1013, which, submitted Ms Bhaloo QC, indicates that the two Acts are dealing with the same concepts. If they are dealing with the same concepts, that gives weight to the proposition that there is a common purpose tying the two pieces of legislation together. 89. At first instance in Hosebay Judge Marshall QC said this at [76] and [77]: “76. Construed in their full context, I find that the words “living in” do bear the meaning which Mr Johnson urges upon me, ie they connote occupation for living in with some degree of permanence, not merely as a transient occupier. In effect, they mean using the property as some kind of a “home”, as contrasted with merely a convenient place to meet an immediate human need for shelter and sleep. HH Judge Cowell in Boss at first instance described the concept as being “Somewhere to sleep, to cook to wash, and simply to be when one is not at work or out otherwise and, depending on the size of the place, that is commonly provided by a bedroom, a bathroom and WC and maybe a living room of some kind”. This was cited with apparent approval by Lord Neuburger in Boss at [16]. 77. The removal of the residence test simply removes the requirement of the Act for a personal qualifying condition to be met by an applicant. That removal does not change or affect the nature of property which qualifies to be the subject of rights under the Act. Whilst non-residents, and even investors or speculators, may now be able to take advantage of rights conferred by the Act, their investment or speculation still has to be in properties which are “residences” or “homes” in themselves.” Ms Bhaloo QC submitted that this passage had, in effect, been adopted as correct by [44] of the judgment of the Supreme Court. 90. In her submission the text of section 4(1)(a) “occupied or intended to be occupied for residential purposes” was pointing even more clearly than that of the LRA in the direction of the requirement for the premises to be used for long term occupation. Moreover the words did not mean “occupiable” or “having the potential to be occupied”. The Act was concerned with actual occupation of the premises or the intention for actual occupation not merely the possibility of occupation. In other words the Act is not concerned with the theoretical possibility of occupation. The rubric of section 4(2)—”with a particular dwelling contained in the premises”, when connected with that of section 3(1)(b)—”contain two or more flats” and the definition of “flat” and “dwelling” in section 101(1), emphasises that the occupation has to be occupation of the premises as a dwelling. 91. Ms Bhaloo QC accepted that context is determinative of meaning but here the context favoured “dwelling” as meaning something more than the kind of transient occupation disclosed by the facts of the case. The difficulty faced by the Claimants was that the interpretation they advanced clearly went beyond what Parliament intended to be the scope of enfranchisement. It was the Claimants, who were relying on different statutory contexts such as planning law, regulation of tenancy and taxation. Hosebay/Lexgorge was a decision of the Supreme Court to the effect that the outer limit of enfranchisement in the case of a house stopped short of premises not currently occupied as a dwelling. The same should also apply here where the flats had never been occupied for residential purposes as a dwelling. 92. The user here was clearly non-residential and there was no need to inquire further into the factual detail of each case. In particular it was not necessary to look at the individual detail of each different occupation. It was possible, however, to gauge the character of the Claimant’s purposes without detailed examination. Their objective was clearly a commercial one. They had leased the premises from CAL for business purposes and they had underlet the premises to CAL for business purposes. The fact that the Landlord and Tenant Act 1954 was expressly excluded by the terms of the lease could not alter the essential character of the use of the premises as being commercial and non-residential and section 3 cannot apply because section 4 excludes commercial and non-residential premises from the right to enfranchise. 93. As to the facts Ms Bhaloo QC submitted it was clear that CAL provides short-term and temporary accommodation for visitors who come to the United Kingdom for business reasons. Under CAL’s terms and conditions it was possible to cancel a booking up to 24 hours before, something which resembled the terms and conditions and practice in relation to hotel bookings. Although preference for a particular location might be fulfilled where it was possible, there was no guarantee. Moreover, although it may not happen very often, there was also a possibility for an occupant to be asked to move to another flat. The occupants of the flats are here on a temporary and transient basis and the length of stay varies greatly. On average the length of stay is 18 days, which is not substantially different to the five days average in Hosebay. 94. In many cases the agreement was made with the corporate employer and not with the individual, who was going to stay at the premises. Ms Bhaloo QC submitted that in reality there was no tenancy. The Shorthold Tenancy Agreement, which had been produced during the hearing, bore no resemblance to reality, no copies of signed agreements had been produced and Mr Dennis had said that they were not important; Ms Bhaloo QC suggested I should accept that evidence. 95. As to the scope of the non-residential areas, Ms Bhaloo QC submitted that, having regard to the scale of services provided to occupiers a great deal of access by third parties must be necessary. The picture was of people, who had their own keys, coming and going all the time and this was not restricted to employees of CAL; for example a laundry service, which had a contractual relationship with CAL, had access to all the flats by having been provided with keys. This confirmed the overall picture that the flats, with their shifting and floating population of occupants, were essentially non-residential. 96. In any event it was certain that the basement was essentially non-residential. It was used not in connection with the specific needs of Newbury House but as a storage area for the CAL business generally; the “white goods”, the Sky Boxes and other items were for further deployment across the whole of CAL’s estate. As to the specific storage areas, there was no evidence to show that the guests were even aware of them, let alone that they use them. No mention was made of it in the documentation and even if I accepted that there was a conversation between guest services and an incoming occupant about the possibility of storage, the overwhelming likelihood is that this amounted to no more than an offer by CAL to store the goods on behalf of the occupant. As I indicated above, there was some dispute as to the extent to which it had been put to the Claimants that there had ever been any usage of the storage areas and that these were largely a fictional construct for the purposes of the litigation. Even if I was not prepared to go that far, Ms Bhaloo QC submitted that I should not accept the evidence of the Claimants in relation to the basement Discussion and conclusion 97. At paras 7 to 30 above I have set out the facts of this case and, in areas of controversy, my conclusions. I can summarise them as follows: (i) Flats 1 to 4 in Newbury House are spacious living and sleeping areas with fully fitted kitchens and modern bathroom facilities and it was the intention of the Claimants that the flats should be capable of accommodating people who might wish to occupy them for long periods; (ii) on any visual inspection of their appearance the obvious noun, which comes to mind, is “flat”; (iii) an examination of the lettings history shows that in a large majority of instances the duration of occupation was less than a month; (iv) irrespective as to whether the parties signed Assured Shorthold Tenancy Agreements, none of the relationships between CAL and the occupants were governed by formal tenancies; (v) the description by the Claimants of the nature of the occupation owes more to their own marketing rhetoric than reality and there is no independent evidence of any occupant regarding the flat as his or her home; (vi) having regard to their dimensions and fittings, the flats were capable of providing comfortable accommodation for long periods of time; (vii) each flat had been occupied for differing periods, a few but not very many of which were of considerable duration; (viii) each flat had available to it a designated storage area in the basement; (ix) these storage areas were little used by the occupants of the flats and may have been used occasionally be employees of CAL; (x) these storage areas were not a “concoction” for the purposes of this litigation. Sub-paragraphs (i) to (vii) above relate to issues i) and ii) (as identified above at para 6 of this judgment); sub-paras (viii) to (x) relate to issue (iii). 98. It seems to me there is very considerable overlap between issues (i) and (ii). Issue (i) is whether each of the flats can be a “flat” as defined by section 101 of the LRHUDA. If not then these are not premises within section 3 of the LRHUDA and collective enfranchisement does not apply. If they are “flats”, issue (ii) arises; that asks whether they are “occupied, or intended to be occupied, for residential purposes”. Issue (iii) is very obviously distinct. Consequently, although it is arguable the first two issues are merely different sides of the same coin, I propose to consider each issue in turn. Issue (i) – are these “flats” as defined by section101(1)? (a) Hosebay/Lexgorge 99. Mr Jourdan QC submitted that Hosebay/Lexgorge was hardly relevant and certainly not determinative of the issues that I have to decide; Ms Bhaloo QC submitted that, in effect, it decided this case. It seems to me, therefore, that I must start by identifying what it is that Hosebay/Lexgorge decided? 100. Neither the Hosebay nor the Lexgorge cases were concerned directly with the words of what might be called the proviso part of section 2(1) of the LRA, which starts with the word “notwithstanding” (see paragraph 8 of the judgment of Lord Carnwath set out above at paragraph 54 of this judgment). In the Court of Appeal in Hosebay/Lexgorge Lord Neuberger MR had reconsidered what he had said in the House of Lords in Boss Holdings about the effect of the use of different tenses in verbs in the wording of the “proviso” on the definition as a whole and Lord Carnwath discussed this at paragraph 34 of the judgment (quoted above at para 56 of this judgment). To that extent it can be said that the whole of the definition was under consideration in Hosebay/Lexgorge but the issues in the cases themselves were confined to that part of the definition coming before the proviso—ie “any building designed or adapted for living in and reasonably so called”. 101. At para 9 of the judgment (see above at paragraph 54 of this judgment) Lord Carnwath analysed the statutory wording—”any building designed or adapted for living in and reasonably so called”—as being a two part definition, which was “in a sense ‘belt and braces’: complementary and overlapping, but both needing to be satisfied” and set in the overall context of “houses as places to live in”, which, although he did not say so, seems to me to be connected to his opening remarks in para 1 of the judgment that the LRA is on its face about “houses, not commercial buildings” (see above at para 52 of this judgment). 102. The first part of the definition is concerned with “the identity and function of building based on its physical characteristics”, which is to be considered not by reference to “historic design” but “by reference to its current physical character, whether derived from its original design or from subsequent adaptation” (see paragraphs 34 and 35 of the judgment set out above at paragraph 56 of this judgment). The second part (“house …reasonably so called”) “ties the definition to the primary meaning of ‘house’ as a single residence, as opposed to say a hostel or a block of flats” (see para 9 of the judgment set out above at para 54 of this judgment). In Lexgorge it had been conceded that the premises had been designed or adapted for living in and the Supreme Court did not have to address that issue so only the latter was under consideration whereas in Hosebay both parts of the definition were at issue. 103. As I explain below, the judgment of the Supreme Court, however, did not decide the issue as to the first part of the definition in Hosebay. It concluded in both cases that the external and internal physical appearance of premises cannot be the determinative factor when deciding whether premises are “a house … reasonably so called”. The reasoning combines the character of the legislation (para 1 of the judgment), the structure of the definition in that context (paras 8 and 9), its judicial origin (paras 20 and 21), the conclusion on statutory interpretation that the definition could not turn on historic design but depended on the current identity or function of the building by reference to its present physical character (paras 34 to 36) and the analysis that the majority of the House of Lords in Tandon had decided that the building was a house reasonably so called by reference to use and policy rather than external physical appearance (see para 29 of the Hosebay/Lexgorge judgment at [2012] 1 WLR 2893D-G). All of this led to the actual decision in the Hosebay case that the premises were not within the scope of the LRA because a building which is wholly used as a “self catering hotel” is not “a house… reasonably so called” within the meaning of the statute (para 43 of the judgment set out above at paragraph 53 of this judgment) and to the similar decision in Lexgorge that a building “wholly used for offices, whatever its original design or current appearance, is not a house reasonably so called” (paragraph 45 of the judgment also set out above at paragraph 58 of this judgment). Putting it in another way (and thus bringing together the beginning and the end of the judgment), whatever their historical origins, premises used as a self-catering hotel and as offices are not houses if their current use is “entirely for commercial purposes” (see paragraph 1 of the judgment set out above at para 52 of this judgment). 104. Strictly speaking that is all Hosebay/Lexgorge decides, although the judgment covers more ground than just that. The discussion at paras 34 to 36 of the judgment reflects on the meaning and significance of the words “designed or adapted” in the first part of the two part definition before the “proviso”. Moreover at para 44 of the judgment the Supreme Court was prepared to go further and say something about the rest of that part of the definition – i.e. “for living in”. There Lord Carnwath accepted that “‘living in’ means something more settled than ‘staying in’; and that the present use does not qualify as such”. 105. In the context of adaptation at para 35 of the judgment Lord Carnwath said that where a building is “in active and settled use for a particular purpose, the likelihood is that it has undergone at least some physical adaptation to make it suitable for that purpose” and “[t]hat in most cases can be taken as the use for which it is currently “adapted”, and in most cases it will be unnecessary to look further.” As I explain below I am not entirely clear as to the scope of this focus on current use but I am confident that the Supreme Court did not make any decision as to the first part of the definition in section 2(1). On the contrary at para 44 of the judgment Lord Carnwath having accepted that “‘living in’ means something more settled than “staying in”; and that the present use does not qualify as such” stopped at that point, leaving further discussion of the first part of the definition open because “there is room for debate, however, whether the premises are to be taken as “adapted” solely for such use” (para 44 of the judgment set out above at para 58 of this judgment). 106. What Lord Carnwath has to say about “living in” seems to me to be something said in the context of a point at issue in the Hosebay case that was never decided and therefore what he said is, strictly speaking, obiter dictum. Be that as it may, it is of the highest persuasive authority and Ms Bhaloo QC relies on it as determinative in this case. 107. I cannot accept her proposition that the judgment of the Supreme Court in Hosebay/Lexgorge has determined that issue in the instant case. It did not determine that issue in Hosebay itself and it does not determine it in this case. Paragraphs 43 to 45 of the judgment illustrate that, although Lord Carnwath regarded the nature of current user as determinative of the second part of the definition, he did not regard it as determinative of the first part on the facts of the case. Had he done so there would have been no point in further debate; that there was room for further debate suggests to me there was something further to be decided. The something further to be decided was whether, the current use notwithstanding, the premises had been solely “adapted for” use as a self-catering hotel or whether they had also been adapted for “living in” and that involved considering factors other than their current use. What it seems to me the Supreme Court decided is that although the premises might be currently used as a self-catering hotel if they had the physical capacity to be used as more permanent accommodation, then that might be a relevant consideration in deciding whether they were “designed or adapted for living in” but it was not necessary to decide that because current use meant that the premises were not a “house … reasonably so called”. 108. That there was more to be considered on the issue is also illustrated by Lord Carnwath’s reference to what had been said in the Court of Appeal. There Lord Neuberger MR had said this at [33] to [36]: “33. I turn to the third argument. Assuming that the works carried out to convert 29, 31 and 39 were works which “adapted” each of the three properties, it seems to me that, despite Mr Johnson QC’s argument for the landlords to the contrary, the works adapted the three properties for living in. My primary reason for that conclusion is that, in order to determine whether the premises are adapted for living in, one looks at the most recent works of adaptation and assesses objectively, whether they resulted in the property being adapted for living in. 34. I emphasise in that last sentence the words “works of adaptation” and “objectively”. One looks at the effects of the works which altered the buildings, not furnishings or furniture; they are not works of adaptation, a view supported by the reasoning in the Boss Holdings case. It also seems to me that the subjective intention of the person responsible for the works, so far as the intended use is concerned, will rarely, if ever, be of any relevance: one is concerned with how the building was adapted, not why it was adapted. Thus in the Boss Holdings case [2008] 1 WLR 289, para 17, when considering the expression “designed or adapted for living in”, it was said that “for present purposes one is largely concerned with the physical state of the property”. 35. The actual or intended use of the building may, however, sometimes have some relevance. For instance, if the building was intended to be, and was actually, used for living in immediately after the works were completed, it may help undermine the argument that it was not adapted for living in. Also of little if any relevance, in my view, is the use to which the building is actually put at the date of the tenant’s notice. Again that use could conceivably be relevant, but it appears to me to be even more unlikely to be of any significance, as it is a use which ex hypothesi occurs after, possibly many years after, the works of adaptation. 36. In this case, I consider that the effect of the most recent works of conversion to the three properties, if they were works of adaptation, adapted those properties for living in. Ignoring one or two rooms, each room in the three properties is a self-contained unit of accommodation, with its own basic small shower room/WC, and its own even smaller and more basic cooking facilities. As Moore-Bick LJ pointed out in argument, the rooms are entirely appropriate for letting to students on three year degree courses, and, as Mr Johnson rightly accepted, if they had been, all the rooms, and therefore the three buildings, would have been used for living in. Even if, as Mr Johnson argued and I am prepared to assume without deciding, the current use of the property is not for living in, that certainly does not mean that, viewed objectively, the three properties were not adapted for living in.” 109. Whilst the Court of Appeal’s emphasis on the physical state of the premises and its minimisation of the significance of current user in para 35 above has been disapproved by the judgment of the Supreme Court in Hosebay/Lexgorge, it seems to me that the other factors referred to in the passage set out above would have been the basis of the further debate had the Supreme Court wished to undertake it. As it is, the Supreme Court has decided the case without any discussion as to whether Lord Neuburger MR was right or wrong as to his approach to the other considerations to be taken into account in relation to the issue of whether the premises were “designed or adapted for living in”. 110. So it seems to me that in the result, Hosebay/Lexgorge decided that each building was not “a house … reasonably so called” and, although the Court was prepared to go so far as to say that “living in” means “something more settled than “staying in”” it decided nothing more. Therefore, so far as this Court is concerned, at the very least, some of the above passage from the judgment of the Master of the Rolls in the Court of Appeal must be of persuasive effect and arguably I may be bound to adopt the approach suggested there; I will come back to this later. 111. If the above analysis is correct then it seems to me Ms Bhaloo QC’s argument that the present case has effectively been determined by the judgment of the Supreme Court in Hosebay/Lexgorge faces considerable difficulty. In paragraphs 100 and 101 of his speech in Malekshad (see above at [88] of this judgment) Lord Scott referred to the “dovetailing” of the definition of “flat” in section 101 LRHUDA and the definition of “house” in section 2(1) of the LRA so that a “dwelling” must either be a house or a flat. But in her argument that this interconnection means that the two Acts are more or less interchangeable, to my mind Ms Bhaloo QC places more weight on the passage from Lord Scott’s speech than it can bear. He was talking specifically about the “dovetailing” of vertical and horizontal division and not about the definitions generally. The context was whether the premises were a house or a flat not whether they were neither and he was not considering whether the premises were inside or outside the scope of enfranchisement nor was he considering the difference in structure between the two statutory definitions in section 101 of the LRHUDA and section 2(1) of the LRA. 112. The two statutory defintions are juxtaposed above at paras 33 and 34 of this judgment and clearly there are some differences. Section 2(1) of the LRA defines a “house”; it comprises a two part definition with the second part complementing and qualifying the first part and both parts subject to a “proviso” requiring that aspects of structure and purpose of user should not be regarded as conclusively negative. The definition of “flat” in section 101 contains nothing equivalent to the “belt and braces” structure of section 2(1) of the LRA. There is not a hint of a qualification along the lines of a “flat reasonably so called” and I cannot see any reason for implying any such qualification to the existing definition. 113. Nor is the policy of the LRA a sure guide to the LRHUDA. It seems to me that the judgment of the Supreme Court makes the phrase “a house … reasonably so called” an emblem of the policy of the LRA but there is nothing like that kind of policy reference in section 101 of the LRHUDA. Moreover, I am far from confident that the policy of the LRHUDA is necessarily identical to that of the LRA. Mr Jourdan QC has pointed out in his submissions, that, as decided by the conjoined cases of Howard de Walden Estates v Aggio; Earl Cadogan v 26 Cadogan Square Ltd (see above at paras 59 and 60 of this judgment), since the residential qualification was removed by amendment, the commercial property investor (individual or corporate) has not been excluded from the scope of individual enfranchisement under the LRHUDA even though he, she or it is not resident in the flat and has created sub leases in order to derive income from the flat. Accordingly, he argued that the same must be true of the collective enfranchisement provisions. 114. I agree and, on that basis alone, therefore, I do not regard the judgment in Hosebay/Lexgorge as compelling the conclusion in this case that the commercial nature of the undertaking being conducted by the Claimants as directors of, and shareholders, takes this case outside the scope of collective enfranchisement under the LRHUDA. Nor do I regard the policy of the LRA as axiomatically indistinguishable from, and equally applicable to, the LRHUDA. That is not to say, however, that they do not share some common themes and I accept the two statutory definitions may have a common origin. It seems to me that the similarity in the wording of part of the respective definitions suggests that the origin of the definition of “flat” in section 101 is just as much Lord Denning MR’s judgment in Ashbridge Investments Ltd v Minister of Housing and Local Government, as Lord Carnwath thought it was the origin of the definition of “house” in section 2(1) in the LRA (see paragraphs 20 and 21 of the judgment in Hosebay/Lexgorge quoted above at para 40 of this judgment). Indeed, the wording of section 101(b) is closer to Lord Denning’s formulation in Ashbridge Investments than the wording of section 2(1) and so the resemblance is even more striking in the LRHUDA than it is in the LRA. 115. Thus, having regard to those common themes and the common origin, I think it is right to treat “designed or adapted for living in” and “constructed or adapted for use for the purposes of a dwelling” as sufficiently similar to be regarded as equivalents. In my view the differences between the two are slight and not significant and so I accept that “living in” and “dwelling” must involve similar considerations. 116. In his elegant and detailed submission Mr Jourdan QC emphasised the contextual approach supported in King (see above at para 44 of this judgment) and steered me towards an interpretation of the words “use for the purposes of a dwelling” as meaning use for day to day habitation without any degree of permanence. Ms Bhaloo QC in her clear and compact submissions sought to persuade me that “dwelling” means living in as “some kind of a home”, by which she really means living in as the main or only residence, and, therefore, each of the flats in Newbury House could not be a “flat” within the meaning of section 101 of the LRHUDA because they had not been “constructed or adapted for use for” the purpose of living in as the main or only residence or, at least as some kind of home. The underlying premise of her argument was that, in effect, the Supreme Court had adopted paras 76 and 77 of the judgment of Judge Marshall (set out above at para 89 of this judgment). 117. I do not accept that is the effect of para 44 of the judgment of the Supreme Court. Certainly Lord Carnwath said that “living in” requires a greater degree of permanence than “staying in” and that the current use (as a self-catering hotel) in the Hosebay case did not disclose a sufficient degree of permanence to amount to “living in”. Undoubtedly that constitutes approval of the first sentence of paragraph 76 of Judge Marshall’s judgment. But it seems to me the Supreme Court stopped short of embracing any other part of her conclusions. 118. To my mind Lord Carnwath certainly did not endorse the proposition that the premises must be occupied as “some kind of a home”, let alone that they should be “the main or only residence”. Had the Supreme Court been deciding that the occupation must be as “some kind of home” I feel confident that Lord Carnwath would have said so. Nor would I draw the conclusion that His Honour Judge Cowell’s description in Boss Holdings of the concept of “living in” quoted by Judge Marshall at [76] of her judgment supported her conclusion that the occupation must be as “some kind of a home”. I would accept that in Boss Holdings Judge Cowell was describing the physical qualities of premises necessary for occupation with some degree of permanence but I do not accept that is necessarily the equivalent of occupation “as some kind of a home”. If he intended that to be his conclusion with great respect I would not agree with him; it follows that I do not agree with Judge Marshall’s conclusion. 119. It also follows from the discussion above that I do not accept the submission that this case has been directly determined by the judgment of the Supreme Court. However, nor do I accept Mr Jourdan QC’s argument that the judgment is not relevant at all and I shall endeavour to explain that conclusion in the discussion, which follows as to the wording and interpretation of the statutory definitions of “dwelling” and “flat”. (b) “Dwelling” and “Flat” 120. According to section 101 of the LRHUDA “dwelling” means: “… any building or part of a building occupied or intended to be occupied as a separate dwelling” The definition of “flat” is set out above at para 33 but it might be convenient for the reader if I set it out again; a “flat” is: “… a separate set of premises (whether or not on the same floor) – (a) which forms part of a building, and (b) which is constructed or adapted for use for the purposes of a dwelling, and (c) either the whole or a material part of which lies above or below some other part of the building.” The introductory words and paras (a) and (c) are concerned with physical structure. Paragraph (b) is concerned with both the physical structure and the purpose or intention of the physical structure. 121. The definition of “dwelling” is concerned with actual or potential occupation. “Occupied”, conventionally a past participle, is, in my judgment, used here as a present tense. That it is the current occupation, which is under consideration is clear from the use of the present infinitive “to be” in the alternative formulation “or intended to be occupied”. Reading back from this the silent or missing auxiliary verb(s) before “occupied” in the first limb of the alternative must either be “is”, which would form the present passive “is occupied” or “is being”, which would form the present passive continuous “is being occupied”. In either case the tense is present and not past and the definition requires consideration of the current state of affairs. Therefore wherever “dwelling” appears in the LRHUDA the decision as to whether premise are a “dwelling” requires consideration of the nature of the present occupation unless the noun appears in a context, which changes that perspective. Likewise the alternative formulation “or intended to be occupied” requires consideration of present intention unless the context requires otherwise 122. One does not have far to go to find the word “dwelling” used elsewhere in the statute. It appears in paragraph (b) of the definition of “flat” in section 101: “(b) which is constructed or adapted for use for the purposes of a dwelling”. At one point in her argument, with the object of demonstrating the emphasis, which she submitted is given by the statute to the concept of “dwelling”, Ms Bhaloo QC combined the definition of “dwelling” in section 101 with the definition of “flat” in section 101(b) and arrived at this restatement: “flat means a separate set of premises forming part of a building and which is constructed or adapted for use for the purposes of being occupied as, or for the purposes of intended occupation as, a separate dwelling”. I doubt that this or, for that matter, any other combination of the two definitions provides the emphasis suggested by Ms Bhaloo QC or provides an easier route to comprehension than separate consideration of the individual definitions. However, what the combination by Ms Bhaloo QC seems to me to demonstrate is the importance of the phrase “for use for the purposes of” as the link between “constructed or adapted” and “dwelling”. It seems to me that this link somewhat alters the chronology. The focus, when considering whether something is a “dwelling”, is not only actual or intended current occupation but whether, at the time the premises were “constructed or adapted”, the building work (of construction or adaptation) created a physical space “for use for the purposes of a dwelling”. To my mind, deciding that involves considering both the physical characteristics of the premises and their subsequent and current use. In other words it involves consideration of a period of time, not just a snapshot taken at the time of the Notice or at the time of the hearing. 123. I take that view firstly because it seems to me consistent with the language used by the draftsman. I accept that like “occupied” in the definition of “dwelling” the composite verb “is constructed” can be classified as the present passive tense but unlike the use of that syntax in the definition of “dwelling” I doubt this can be regarded as a conventional usage referring only to a perspective current at the time of Notice or hearing. The building work referred to by “is constructed” must be an historic event in almost all, if not all, cases. Whilst I suppose it is theoretically possible for there to be cases where enfranchisement is being sought during actual construction, I cannot think of any practical examples. So, seeking to elucidate meaning by an auxiliary verb substitution for “is” in “is constructed” would not result in “is being constructed” rather it must be “has been constructed”. In my judgment, here the composite verb “is constructed” has the sense of encompassing past historical events creating a state of affairs continuing into the present. 124. My second reason is that this perspective is reinforced by the phrase “for use for the purposes of”, which I think must send one back to the historical date when the premises were constructed to ask what was the purpose of use for which the premises were constructed. In the context of the use of the phrase “designed… for living in” in section 2(1) of the LRA, at para 34 of his judgment in Hosebay/Lexgorge (see above at para 56 of this judgment) Lord Carnwath said: “Context and common sense argue strongly against a definition turning principally on historic design, if that has long since been superseded by adaptation to some other use.” But later in the paragraph he said: “While that may support the view that the word ‘designed’ is directed to the past, the same cannot be said of the expression ‘is adapted’” 125. To my mind this is not a complete rejection of Lord Neuberger’s interpretation in Boss Holdings in respect of the similar word “designed”. Whilst it affirms the revised view that Lord Neuberger had accepted in the Court of Appeal in Hosebay/Lexgorge, namely that historic design cannot trump later adaptation, I do not read para 34 of the judgment of the Supreme Court as proposing a different reference point for “designed” than the time in the past when the design was executed; on the contrary in the second extract from para 35 quoted above Lord Carnwath accepts the correctness of that perspective. What he says about “designed” seems to me to apply equally to “constructed”. Nor do I read para 35 as contradicting that view of “designed”. 126. It has not been argued that I am concerned only with “constructed” and so I should approach the case on the basis that the building works in 2006 were adaptation and not construction. However para 35 treats “adapted” differently. The last two sentences of para 35 seem to me to suggest that the critical question will be what is “the use for which it is currently “adapted””? Clearly Lord Carnwath thought that will mostly be answered by ascertaining the purpose to which it is currently put. I must say that without this guidance I would have regarded current use as no more than evidence, albeit powerful evidence, relevant to ascertaining the purpose of construction or adaptation. The reasoning of Lord Carnwath at [35] of Hosebay/Lexgorge is that one might easily infer adaptation from “active and settled use” and say that, therefore, if at the relevant time there is non-residential user then the premises must have been adapted to non-residential use. 127. I can see limits to this. Suppose there is a block of sixteen flats built some 40 or 50 years ago in the centre of a large City. After they were built all were occupied for residential purposes but gradually, after no significant adaptation, six of them have become used as consulting rooms for doctors. They have not been lived in at all for varying periods, the least of which is not less than ten years, and during that time they have been used solely for the carrying on of the practice of medicine. Lord Carnwath would say that there is no difficulty because they must have been adapted for non-residential use and so the intention at construction has been supplanted. But further suppose that not so much as a plug point had been changed since construction. If Lord Carnwath’s approach is to apply in those circumstances it seems to me to amount to deeming that current user demonstrates adaptation where there has been none. 128. The difficulty with that, as it seems to me, is that mere user is not adaption. But I do not think Lord Carnwath intended his remarks to travel so far. Firstly he recognises in para 35 that a mere change of furniture is not adaptation; I would presume that the same should apply to removal of furniture. Secondly, on the facts of Hosebay/Lexgorge, as I have already pointed out, Lord Carnwath did not regard current use as disposing of the issue of adaptation; it was one of those cases where it was necessary “to look further” and consider not just the actual use but whether that demonstrated the building was “”adapted” solely for such use” (see para 44 quoted above at [58] of this judgment). It seems to me that whilst this must involve consideration of the physical characteristics of the building as well as its current use it can only do so as evidence relevant to the question of what was the purpose of the adaptation? 129. To my mind the above discussion demonstrates that far from being irrelevant to the interpretation of the definition of “flat” in section 101 (b), Hosebay/Lexgorge is of considerable importance. Ms Bhaloo QC’s alternative to her submission that Hosebay/Lexgorge had direct application to the instant case was that the definition of “flat” in the LRHUDA when it referred to “for use for the purposes of a dwelling” should be interpreted as requiring the degree of permanent occupation necessary for characterisation as “some kind of a home” or as “the main or only residence”. Even if she could not support that directly by the judgment of the Supreme Court in Hosebay/Lexgorge that must be the meaning of “dwelling” and, therefore, of “flat” in the LRHUDA. 130. I do not accept that submission because not only was the interpretation of the LRHUDA not in issue in Hosebay/Lexgorge but also the Supreme Court did not decide that “house” in section 2(1) of the LRA had that meaning. I would also reject that interpretation on the basis that it is not desirable the words should bear that meaning. “The main or only residence” would exclude the second home, the holiday home or the pied à terre and I can see no reason as to why such premises should not be within the scope of the enfranchisement provisions. “Some kind of a home”, strikes me as an elastic and imprecise concept and one which would require the investigation of subjective intention. This is something, which, if it cannot be excluded altogether, should be kept to a minimum in what is already a difficult area. 131. My conclusion on the definition of a “flat” in section 101 is that in addition to having the physical attributes of being separate premises forming part of a building and lying above or being below other parts of the building it must have been originally constructed or subsequently adapted to be used for the purpose of occupation on a specific basis. The difficulty is in defining that basis. 132. It seems to me that the definition is describing what the construction or adaptation has made the premises suitable for. What the premises are actually being used for will be influential, often conclusive, evidence as to the purpose of construction or adaptation. I have rejected the need for the construction or adaptation to make the premises capable of occupation so permanent as to qualify as a “main or only residence” or so as to be “some kind of a home” but I accept that the construction or adaptation must make the premises capable of occupation that amounts to more than simply staying there for a time. I regard all of this as deriving indirectly from Hosebay/Lexgorge. I accept that the description of the physical characteristics of such premises by Judge Cowell in Boss Holdings as: “Somewhere to sleep, to cook, to wash, and simply to be when one is not at work or out otherwise and, depending on the size of the place, it is commonly provided by a bedroom, a bathroom and WC and maybe a living room of some kind” is a useful starting point. One might add to it that the premises should be capable of accommodating social intercourse and even a modest social gathering but other contextual matters might be the nature of the occupant; Moore-Bick LJ’s student might need more modest accommodation than someone in higher paid professional employment but the use to which the premises were put might well be the same. Indeed the heart of the problem raised by the issue never decided in Hosebay/Lexgorge and the fundamental issue in the instant case is that the physical characteristics of the premises are capable of accommodating both a transient population and those who wish to stay longer. 133. In such circumstances deciding on the purposes of use for which the premises were constructed or adapted seems to me to involve the consideration of both the physical characteristics and the intended and actual use. In my judgment the answer is likely to be found by evaluating and balancing a number of factors and to depend on deciding whether the adaptation was solely for the purpose of providing temporary and short term accommodation to a transient population or was also for the purpose of providing more permanent accommodation, if the occupants wished to stay longer. This is the “solely adapted” question raised by Lord Carnwath but never decided in Hosebay/Lexgorge. But before going on to make that evaluation I first propose to turn to the second issue because I think it is helpful to consider the extent to which this is a separate issue and also important to work out how the definition in section 101 and the exclusion in section 4 relate to each other. Issue (ii) Not “occupied for residential purposes”? 134. Section 101 refers to actual or intended occupation as “a separate dwelling” or to the premises being “constructed or adapted for use for the purposes of a dwelling” whereas section 4 excludes premises that are not “occupied or intended to be occupied for residential purposes”. In my judgment “dwelling” and “residential purposes” are synonymous. Section 4(2) deems any part of the premises “used, or intended for use, in conjunction with a particular dwelling contained in the premises” as a “storage area” to be “occupied or intended to be occupied for residential purposes”. The draftsman did not say “occupied or intended to be occupied for the purposes of that dwelling” but in my view that is because “residential purposes” is used in section 4(1). The fact that the phrase “for the purposes of a dwelling” was not used there is not significant. I cannot see why the draftsman would have used both “dwelling” and “residential purposes” in section 4(2) if they had different meanings. 135. Section 4 is exclusionary. It excludes premises where the proportion of the non- residential is greater than that stipulated by Parliament and does so on the basis of present not past use. So I think it is clear that section 4 is dealing with present occupation; section 4(1)(a) uses the present passive “is occupied”. This is a conventional use of the present passive in the circumstances of a section that to my mind obviously deals with current use. 136. If so the difference between the definition in section 101 and section 4 is that the latter refers only to current use whereas the former points to a combination of physical characteristics, purpose of the works of construction or adaptation and historic and current use. So it seems to me there is a two-step approach. The first is to consider whether the premises are a “flat” by definition and thus within section 3; the second is to consider whether the “flat” nevertheless is excluded from enfranchisement as a result of section 4. 137. The process has a different sequence to that under the LRA. Under that statute, as Hosebay/Lexgorge illustrates, the enfranchisement claim can fail because, without any need to consider whether the premises had been designed or adapted for living in, it is possible to say it is not reasonable to call the premises a house. Under the LRHUDA unless the premises can be considered to have been constructed or adapted for use for the purposes of a dwelling, then enfranchisement will not apply. 138. This leaves out of account, however, how one is to interpret the phrase “intended to be occupied” used as an alternative to “occupied” in both sections? One circumstance in which that alternative might be relevant would be where the premises are not occupied at all; in other words, empty or vacant. Another would be where there was occupation but not for the purpose of use as a dwelling. It seems to me that in section 4 “intended to be occupied” can only be an alternative to “occupied” in the former sense. The present tense of the verb “is” must be distributed to “intended” so that the alternative applies to the present intention at the time of the Notice under the LRHUDA and not past intention at the time of construction. In any event, repeating what Lord Carnwath says (on the basis that this is now also Lord Neuberger’s position) at [34] of the judgment in Hosebay/Lexgorge: “Context and common sense argue strongly against a definition turning principally on historic design, if that has long since been superseded by adaptation to some other use.” 139. That section 4 is not concerned with a historic perspective is confirmed by considering the purpose of the section. It is about the proportion of non-residential to residential; its purpose is to exclude from enfranchisement premises where the non-residential forms too large a part by setting a threshold so as to ensure that as a result of collective enfranchisement residential long leaseholders do not find themselves responsible for too great a proportion of commercial premises as compared to residential premises. Only if the premises are vacant does one need to consider the past history of construction, adaptation and occupation and the subjective statements of intention of the long leaseholders (albeit inevitably these might have considerably less weight attached to them) in order to reach an objective conclusion about a present intention as to the nature of future occupation. Where the premises are occupied the alternative does not arise because one need only consider the nature of the current occupation. 140. Finally, it would be an absurd result, defeating the whole purpose of section 4, if premises, which are currently not occupied for residential purposes, must be regarded as so occupied because such occupation was the historical intention at construction. For that reason also I am of the view that section 4 is concerned with either current occupation or current vacancy. 141. It seems to me the same approach of construing the statutory alternative “occupied or intended to be occupied” as being an alternative between that which is occupied and that which is vacant should be taken also in the context of the definition of “dwelling” in section 101 By contrast with section 4(1)(a), in section 101 the draftsman has omitted the third person singular present tense “is” but in my judgment that does not change the tense from present passive to past. What is under consideration is the present status of the premises. Conclusion on issue (i) 142. In the context of the LRHUDA, current user is only one of a number of factors. In some cases it might provide the complete answer as to whether premises were or are “constructed or adapted for use for the purposes of a dwelling” but in others it might well be outweighed by other factors. This was the approach of Lord Neuberger in the Court of Appeal in Hosebay/Lexgorge and it might be described as multifactorial. 143. It is an approach, which I think I am bound to adopt because it was the approach adopted by the Court of Appeal. That part of the decision of the Court of Appeal was not reversed by the Supreme Court and, even though that was in the context of the LRA, by virtue of the similar concept in the LRHUDA and by parity of reasoning, it applies also in the present context. If I am wrong in that analysis, nevertheless it seems to me the only approach, which can be sensibly adopted. There are different factors, which bear on the decision and it is for the Court to consider, evaluate and balance them in order to decide whether the premises are a “flat” so defined. 144. It seems to me the physical characteristics of these flats are those of premises that have been constructed or adapted to have the potential to provide the facilities necessary for the purpose of occupation with a sufficient degree of permanence to come within the definition of dwelling. It was acknowledged by Lord Carnwath that arguably the rooms in Hosebay might have such characteristics in the sense that they were not “solely adapted” for transient occupancy and I think that the Court of Appeal decided that they did. As I said at the outset the physical appearance of each of numbers 1 to 4 Newbury House is that of a “flat”. To my mind they are spacious and comfortable enough to fulfill Judge Cowell’s specification for premises that can be lived in as opposed to stayed in. If the rooms in Hosebay had, at least the potential for long term occupation, then so had these. 145. But I think the physical attributes of premises need to be considered with care because taken alone they are unlikely to be conclusive. After all, a suite at a luxury hotel may well afford all the space, comfort and facilities for a stay of several years but, to my mind, that would not make it a dwelling. There might be a degree of permanence to the occupation but the premises would not have been constructed or adapted for use for the purposes of a dwelling. They would be constructed or adapted for use for the purposes of an hotel. 146. I accept that this case is factually different to Hosebay/Lexgorge; whilst some of the occupation of the flats was transient, other occupants did stay for some time but even so I do not regard current user alone as demonstrating, of itself and without more, the degree of permanence necessary, to enable one to say that the premises were “constructed or adapted for use for the purposes of a dwelling”. Although, not of itself conclusive, the pattern of the occupancy is nevertheless of importance. Most occupants stay only for short periods; those occupants are similar to the transient population described in Hosebay by Judge Marshall. But a smaller number remain for considerably longer; some (a yet smaller number) have remained in occupation for periods that might be equivalent to periods under a tenancy. To my mind the use to which evidence about past and present use should be put in the context of issue (i) is to provide evidential support for the proposition that the premises are capable of use for longer term occupation. Here I think it does so. 147. Like Lord Neuberger, I think that the intention of the constructor or adaptor is of some relevance. Such evidence needs to be approached with care; it is likely to come from those applying to enfranchise and that suggests the need for careful scrutiny. It will be recalled that I had some reservations about the evidence of the Claimants. Nevertheless I accept what the Claimants hoped might be the case about longer term occupancy (see above at para 17 of this judgment). 148. The occupants have not been asked to supply their subjective views; consistent with what I said above I regard this as no bad thing. Had there been such evidence, along the lines that during their sojourn there some had come to regard the premises as a “home” or “a home from home” I would have given it little weight. I give no weight to the marketing material published by or on behalf of CAL. 149. So far the balance favours deciding that the premises were “flats”. But there is one factor that causes me to pause and that is the nature of the relationship between the occupant and CAL. There is a centralised booking system, which allows for preference, but provides no guarantee of specific choice. I may ask to have Flat 1 but I cannot be guaranteed it. Moreover, the relationship between the occupant and CAL is regulated in all cases only by the booking and the terms and conditions of the booking. I have found that the vast majority of occupancies were not regulated by any tenancy agreement and that, if any agreements were ever signed, they were meaningless. Whilst I accept that a formal tenancy is not needed before deciding that premises can be characterised as a “dwelling”, this seems to me evidence that bears on the question of the intention of the Claimants at the time of construction or adaptation. The fact that no formal longer term relationships have ever been created and that the booking system and general pattern of occupancy is more akin to that of an hotel seems to me to indicate that the adaptation did not create premises for use for the purposes of occupation with a sufficient degree of permanence to say that the occupant was either “living in” the flat or using it as a “dwelling”. This is, however, a finely balanced decision. If all that I should be concerned with in relation to issue (i) are the physical characteristics of the premises, their potential for use for long term accommodation and a willingness on the part of the Claimants to allow such long term accommodation, then the premises would be “flats” as defined. As it is I have decided that there are other factors to be considered at this stage and these have caused me to decide that the Claimants did not adapt the premises for use for the purposes of a dwelling. Conclusion on issue (ii) 150. As discussed above I regard section 4 as being concerned with current use. By that I do not mean a snapshot at the date of hearing; I think the perspective should be broad enough to cover contemporary use around the time of the service of the Notice and up to the hearing. In the instant case it makes no difference because the pattern of occupancy has been the same since the adaptation took place. To my mind the relevant question is what is the character of the occupation now? 151. This question is also to be answered by balancing various factors but these are fewer in number than those that needed to be considered at the issue (i) stage. I do not accept Ms Bhaloo QC’s submission that if the use to which the premises are put is commercial then the occupation cannot be residential. I have already accepted the submission of Mr Jourdan QC that the commercial investor in property is not excluded from the scope of LHRUDA and I can see no difference in principle between those whose income comes from longer term occupation of their property by others and those who derive an income from shorter term occupation, always providing that the occupation is residential. Nor do I think that the position as to Value Added Tax carries any weight. 152. As I have already pointed out it seems to me the difference between section 101 and section 4 is the difference between the potential for occupation as a “dwelling” and the nature of the actual occupation. For the reasons advanced above in relation to my conclusion on issue (i), I have decided that the occupation of the flats in Newbury House was not “residential occupation”. I accept that a minority of occupants stayed for longer than some people stay in flats that they might call a “home” or a “residence” for the time that they are there. But despite that it seems to me the balance is tipped against residential occupation by the booking system and the general way in which CAL operated. This provided places to stay similar to rooms and flats provided by hotels and aparthotels. In my judgment this kind of occupation is outside the scope of the LRHUDA. Issue (iii)—the residential and non-residential proportions 153. If I am wrong as to issue (ii) then issue (iii) falls to be considered. The controversial areas are identified in Appendix 1, which sets out the competing contentions. The most hotly contested area was the storage area in the basement (Area 5 in Appendix 1), designated for the use of occupiers of the Flats. I have found that this area was not created for the purposes of the litigation and has always been available for use by the occupiers. It seems to me that even if it is little used, Mr Jourdan QC is correct to say that it falls squarely within section 4(2) and its use is, therefore, residential. I also agree that the need to gain access to the storage area makes other parts of the basement (Areas 1, 2a, and 4 in Appendix 1) either a common part, a common facility (see Panagopoulos discussed earlier in this judgment at [62] and [63]) or, at least, a shared facility, as I think is the case with the CAL storeroom. Mr Jourdan QC’s contentions are set out with clarity in Appendix 1 and I prefer them to those of the Defendant. It also follows that the ground floor stairs and landing (Area 14 in Appendix 1), which lead to the basement, must also be common parts. 154. I think that conclusion is, itself, enough to reduce the proportion of non-residential to significantly below 25% but for the sake of completeness I should say that I regard the top of the bulkhead in flat 1 (Area 6 in Appendix 1) as being residential user. It is far from a dead space; it forms a shelf or platform area that could be used for books, audio or video equipment; to my mind it is clearly residential. Another area in Flat 1, which is only accessible from the bathroom and which is not used (Area 15 of the Scott Schedule) and its only current purpose is to convey the soil stack from the bathroom of Flat 1. I agree with Mr Jourdan QC that this attaches it sufficiently to Flat 1 to make its use residential. The linen cupboard (Area 17 in Appendix 1) is to my mind a common facility. That leaves sundry walls and columns (in Areas 1, 2a, 13 and 16 of the Appendix), the area of which cannot make any significant difference to the proportions; for the sake of completeness I accept Mr Jourdan QC’s submissions, as set out in Appendix 1, in relation to them. 155. In the result, therefore, on balance, I conclude that the Flats are not “flats” as defined by the LRHUDA, although were I to be wrong as to the factors to be taken into account and the section 101 issue took account only physical characteristics and intention at the time of construction or adaptation then they would be within the definition. But, in any event, I conclude that they are excluded from the scope of the LRHUDA by section 4 because they are not currently occupied for “residential purposes”. If I am wrong as to that then section 4 does not exclude them because the non-residential area is less than 25%. Claim dismissed. * Editor’s note: Also reported at [2012] 3 EGLR 31; [2012] 43 EG 116. ** Editor’s note: Also reported at [2001] 3 EGLR 93. *** Editor’s note: Also reported at [2010] 2 EGLR 31; [2010] 24 EG 118. **** Editor’s note: Also reported at [1975] 1 EGLR 47; (1974) 234 EG 279. ***** Editor’s note: Also reported at [2008] 2 EGLR 99; [2008] 20 EG 138. ****** Editor’s note: Also reported at [2008] 1 EGLR 51; [2008] 15 EG 174. ******* Editor’s note: Also reported at [1982] 2 EGLR 73; (1982) 263 EG 349. ******** Editor’s note: Also reported at [2008] 2 EGLR 57; [2008] 34 EG 94. ********* Editor’s note: Also reported at [2011] 1 EGLR 33; [2011] 02 EG 76.