Grosvenor (Mayfair) Estate and Another v Merix International Ventures Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice McCombe,Lord Justice Flaux,Lord Justice McFarlane |
| Judgment Date | 30 March 2017 |
| Neutral Citation | [2017] EWCA Civ 190 |
| Docket Number | Case No: B2/2016/0091 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 March 2017 |
[2017] EWCA Civ 190
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON
His Honour Judge Gerald
A10CL318
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice McFarlane
Lord Justice McCombe
and
Lord Justice Flaux
Case No: B2/2016/0091
Jonathan Gaunt QC and Anthony Radevsky (instructed by Boodle Hatfield) for the Appellants
Edwin Johnson QC (instructed by VMA Solicitors) for the Respondent
Hearing dates: 7–8 March 2017
Approved Judgment
(A) Introduction
This is an appeal by Grosvenor (Mayfair) Estate and Grosvenor West End Properties (which I will call together "Grosvenor", save where the difference matters), brought with permission granted by David Richards LJ by order of 30 March 2016, from an order of 18 December 2015 of HH Judge Gerald made in the County Court at Central London. By his order Judge Gerald declared that the property known as 41 Upper Grosvenor Street ("41 UGS") and 41 Reeves Mews, London W1 ("the Mews") (together "the Property") comprised a house and premises within the meaning of s.2 of the Leasehold Reform Act 1967 and that the respondent, Merix International Ventures Limited ("Merix") was entitled to acquire the freehold and reversionary interests pursuant to a notice served on 23 December 2013 ("the relevant date") under Part 1 of the 1967 Act.
This is yet another case raising the question whether a particular building is or is not "a house" within the partial definition of that term in s.2 of the 1967 Act. If the Property was a house at the relevant date Merix is entitled to enfranchise, if not, not.
It will be necessary to set out a rather more detailed factual summary below. However, in short, this case involves a large London townhouse (here with an annexed mews building) which, following residential use until shortly after the Second World War, was used at times partially for office purposes with residential accommodation on an upper floor or upper floors and in the Mews. The unusual feature, compared with other cases of this genre, is that the Property here was left totally unused for 13 years prior to the relevant date. Merix says that on that date the building was a house, admittedly with traces of former office user, but nonetheless a house. Grosvenor says that the building was a disused office building with some ancillary residential accommodation and, therefore, not a house. The judge decided it was a house; Grosvenor argues that he was wrong to do so.
I think it is safe to say that none of the very experienced counsel who appeared before us, deploying their highly impressive arguments, could say that the present conundrum is precisely resolved by any of the many previously decided cases, concerning the definition of "a house" in s.2(1) of the Act, in the House of Lords/ Supreme Court or in this court.
(B) Background Facts
In the court below and before us there were some small differences between the parties as to the factual background to the case but, to my mind, the points of dispute made little difference to the merits of the important arguments on either side. The helpful agreed chronology used before Judge Gerald and on the appeal, with a few additions, together with the judge's findings, gives a sufficient overview of the history.
The chronology recites the construction of the Property between 1912 and 1914 and the grant of the first lease of it by Grosvenor for a term of 90 years from 1912. It summarises the residential occupation up to 1946, including residential occupation in the very last years of the War by the Envoy and Minister Plenipotentiary and by the Ambassadors of Yugoslavia and, finally and briefly, by the deposed King Peter II of that country. The chronology then continues as follows:
| "1946–1948 — | Property unoccupied. |
| 1948–1961— | Use of the lower floors of 41 Upper Grosvenor Street as offices by miscellaneous companies. Use of 41 Reeves Mews as a residential flat over a garage. The Claimant's case is that the third and fourth floors of 41 Upper Grosvenor Street were used as flats/maisonette during this period. This use of the third and fourth floors during this period is not admitted by the Defendants. |
| 25 th March 1958— | The 1914 Lease assigned to Covent Garden Properties Limited. |
| 1962–1963 — | Property unoccupied. |
| 1963–1969 — | Use of 41 Upper Grosvenor Street as offices. Part office and part residential use of 41 Reeves Mews, with garage. |
| 8 th June 1964 — | 1914 Lease surrendered. Lease of the Property granted by Grosvenor to Covent Garden Properties Company Limited for a term of 44 years from 1958 ("the 1964 Lease"). |
| 1969–1987 — | Property unoccupied. |
| 1981–1982 — | Refurbishment of the Property. Two flats created on the third and fourth floors of 41 Upper Grosvenor Street. Three flats created in 41 Reeves Mews, together with a garage. |
| 21 st October 1987 — | Grant of underlease of the Property to J. Henry Schroder Wagg & Co. ("the Underlease") |
| 1987–1995 — | Office use of lower four floors of 41 Upper Grosvenor Street. Residential use of 41 Reeves Mews. The Claimant's case is that there was residential use of the third and fourth floors of 41 Upper Grosvenor Street during this period. This use of the third and fourth floors during this period is not admitted by the Defendants.. |
| 1996–2000 — | Office use of lower five floors of 41 Upper Grosvenor Street. Part residential use and part staff use of fourth floor of 41 Upper Grosvenor Street. Residential use of 41 Reeves Mews. |
| 1 st August 1996 — | Lease of the Property granted by Grosvenor (Mayfair) Estate to European Prime Properties SA for a term of 125 years from 24 th June 1996 ("the Lease"). The 1964 Lease is assumed to have been surrendered. |
| 28 th January 1999 — | Deed of variation of the Lease. |
| 27 th December 2000 — | Surrender of the Underlease. |
| 27 th December 2000 — | The occupier of the Property, Schroder Asseily and Company, vacates the Property. |
| December 2000-present day — | Property unoccupied." |
Mr Gaunt QC for Grosvenor was anxious to bring to our attention the agreed features of description of the Property from the historical experts, which can be found principally in paragraph 1.33 of their joint statement as follows:
"1.33 From our respective inspections of the building, we are agreed that it has the following characteristics and appearance:
1.33.1 The external appearance of the property has been little altered and externally it has retained the character and appearance of an Edwardian town house with its coachhouse or motor house and stabling at the rear.
1.33.2 Internally, the basic plan form on the principal floors (ground and first) has been retained, but the basement and second to fourth floors have been subdivided with modern partitions. The ornate main staircase and secondary staircase remain, although part of the balustrading of the main staircase has apparently been replaced following its theft in c1975.
1.33.3 The basement, which extends beneath 41 Reeves Mews, has retained some historic features, but there are also modern fire doors with vision panels, partitions, suspended ceilings, and modern sanitary fittings and a server room from its use as offices.
1.33.4 The ground floor has retained its original proportions, plan form and most of its ornate decoration apart from the chimneypieces which have been stolen. There is a reception desk in the main entrance hall and other indicative features of office use include fire doors set within original architraves, some modern lighting, alterations to some walls and the floors to run services, cabling and sockets, and modern sanitary fittings.
1.33.5 The first floor has likewise retained its original proportions and plan form including one particularly grand room stretching from front to rear. Most of the original decoration has likewise survived, although damaged in places, and minus some chimneypieces. As on the ground floor, there have been alterations for office use including fire doors in original architraves, sockets, suspended and emergency lighting, alterations to the floors for cable runs, and modern sanitary fittings which appear suited to office use. In addition, there are some partitions, which, however, stop short of the ceiling and do not interfere with its decorative features.
1.33.6 The second floor has for the most part retained its original proportions and plan form and some decorative features. There have been alterations for office use, including the insertion of some partitions, fire doors, sockets, and lighting, alterations to the floors for cable runs, and modern toilets in the closet wing.
1.33.7 The third floor also retains its original proportions and some original features, although its plan form has been altered to create a residential flat. There are some indications of office use in the form of cable runs and floor sockets and partitions, as well as wc's suited to office use.
1.33.8 The fourth floor has been altered to create a residential flat, although certain fixtures and fittings such as lighting, partitions and viewing panels in doors appear more suited to office accommodation.
1.33.9 The interior of 41 reeves Mews, above basement level, has been altered to create a modern garage and three flats."
It is to be noted that it is the lease of 1 August 1996, of which in 2007 Merix became the registered proprietor, which gives such right as there may be in Merix to enfranchise and to acquire the superior interest(s).
To the bare bones of the chronology, Mr Gaunt added in argument certain additional factual features which were, so far as they went, largely uncontentious.
The 1996 Lease contained a...
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