Magnohard Ltd v (1) The Right Honourable Charles Gerald John Earl Cadogan (2) Cadogan Estates Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Lewison,The Master of the Rolls,Lord Justice Longmore
Judgment Date04 May 2012
Neutral Citation[2012] EWCA Civ 594
Docket NumberCase No: B2/2011/3147

[2012] EWCA Civ 594

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE

HER HONOUR JUDGE MARSHALL QC

ICL10040

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Master of the Rolls

Lord Justice Longmore

and

Lord Justice Lewison

Case No: B2/2011/3147

Between:
Magnohard Limited
Appellant
and
(1) The Right Honourable Charles Gerald John Earl Cadogan
Respondents
(2) Cadogan Estates Limited

Mr Stephen Jourdan QC (instructed by Payne Hicks Beach) for the Appellant

Mr Philip Rainey QC (instructed by Pemberton Greenish LLP) for the Respondents

Hearing date: 2 nd May 2012

Lord Justice Lewison
1

The word "house" is one of the 200 most frequently used words in the English language, and one of the 20 most frequently used nouns. The sole issue in this case is whether the building comprised in a lease of 1 Sloane Gardens and 2, 4 and 6 and 6B Holbein Place is a house for the purposes of section 2 (1) of the Leasehold Reform Act 1967 ("the Act"). HH Judge Marshall QC decided that it was not, but gave permission to appeal. It is regrettable that an issue of this kind involves analysis of many decisions of this court and of the House of Lords; and in the present case has also involved an extensive historical investigation into the initial construction and subsequent use of the building.

2

Section 2 (1) of the Act provides:

"(1) For 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, or is divided horizontally into flats or maisonettes; and—

(a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate "houses", though the building as a whole may be; and

(b) where a building is divided vertically the building as a whole is not a "house" though any of the units into which it is divided may be."

3

It is common ground that the building in the present case was designed or adapted for living in. It is also common ground that it is divided horizontally into flats or maisonettes (although it includes shops as well). Thus the issue can be narrowed further: is the building "reasonably called" a house?

4

The building itself occupies a corner site opposite Sloane Square Underground station. The site on which it is built is a quadrant (i.e. a quarter circle). It was built in 1888 and demised by a lease of that year. The overall square footage of the building is some 20,000 square feet. It consists of a basement, ground and five upper floors. As built it consisted of six residential suites, one on each floor; one housekeeper's flat, and three small shops. The housekeeper's flat has since been converted into another flat. All the flats are served by a communal entrance hall, although the former housekeeper's flat had its own separate street entrance. There have also been alterations to the internal layout of the building which have resulted in the creation of an additional flat; so that there are now eight flats in all. The shops each have a separate entrance from Holbein Place. The retail component of the building is just under 7 per cent of its total area. The building was constructed of red brick with stone facings (although these are now painted white). The judge described it as having been built in "the fairly elaborate Victorian style that is commonplace, and might reasonably be considered to be the vernacular in this locality of buildings that were being built in the late 1880s and 1890s." Having heard evidence the judge decided that the building could be adapted (at no little cost) into a single dwelling, although that had not in fact been done.

5

The lease under which the tenant claims to be entitled to acquire the freehold was granted in 1986. The parcels clause (repeating words that had been used in the original lease of 1888) described the property as a "piece or parcel of land and the messuage tenement and premises thereon". The lease contained a covenant that the residential parts of the building were not to be used "otherwise than … each self-contained flat and maisonette to be used as a single residence in one occupation only". No 1 Sloane Gardens was to be used as six self-contained flats and two self-contained maisonettes. There were also restricted uses specified for each of the three shops.

6

The judge was taken through a large number of authorities that have discussed the meaning of the word "house" in section 2 (1) of the Act. As she pointed out the point is in the end, a short one. She said that her task was to arrive at a conclusion about the character of the building. She said that if a building could equally reasonably be called "a house", but could equally reasonably be called something else, then it fell within section 2 (1). But if you could only call it "a house" by straining the concept or straining the use of language, then it would not be reasonable to call it a house. In that event it would be outside the definition. Equally, she said, if there was an appellation which is so much more apposite than "house" that one does not feel comfortable using that word about a building, then it would not be reasonable to call the building "a house". In paragraph 116 of her judgment she said:

"When I ask myself what this building is, my immediate reaction is: "it's a block of flats". It's a block of flats with three shop units, but – it's a block of flats. It is not a house divided into flats. It is constructed and it is used as a block of flats. As I know (and I do) what the features of the building are, if I were to ask someone "what would you call that building" and they were to respond "a house" my eyebrows would naturally rise and I would think this odd. I would not call this building a house naturally, but only possibly if I were pressed into [doing] so by argument that it was surely "possible". In those circumstances, it is, in my judgment, not reasonable to call this building a "house" at all, let alone in ordinary parlance."

7

Was the judge wrong?

8

We have been referred to eight cases in the Court of Appeal on the meaning of the word "house" in section 2 (1), and three cases in the House of Lords. The last of the cases in the Court of Appeal is itself on the way to the Supreme Court, where the appeal is due to be heard in a few weeks' time.

9

It is clear from all the authorities that the word "reasonably so called" are intended to be words of limitation: Lake v Bennett [1970] 1 QB 663, 670 (Lord Denning MR), 672 (Salmon LJ); Tandon v Trustees of Spurgeon Homes [1982] AC 755, 764 (Lord Roskill); Malekshad v Howard de Walden Estates Ltd [2002] UKHL 49 [2003] 1 AC 1013, 1028 (Lord Millett); Prospect Estates Ltd v Grosvenor Estate Belgravia [2008] EWCA Civ 1281 [2009] 1 WLR 1313, 1317 (Mummery LJ). Their purpose is to exclude buildings that would otherwise come within the other parts of the definition. The mere fact that a building might be called something other than "a house" is not sufficient to trigger the exclusion: Tandon v Trustees of Spurgeon Homes, 765 (Lord Roskill). As long as a building can reasonably called "a house" it is within the definition, even though it may also reasonably be called something else: Tandon v Trustees of...

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