Malekshad v Howard de Walden Estates Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROBERT WALKER,LORD JUSTICE SEDLEY,MR JUSTICE LIGHTMAN |
| Judgment Date | 23 May 2001 |
| Neutral Citation | [2001] EWCA Civ 761 |
| Docket Number | Case No: B2/2000/0396 CCRTF |
| Court | Court of Appeal (Civil Division) |
| Date | 23 May 2001 |
[2001] EWCA Civ 761
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY
COURT (HH JUDGE RYLAND)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Robert Walker
Lord Justice Sedley and
Mr Justice Lightman
Case No: B2/2000/0396 CCRTF
Mr Paul Morgan QC (instructed by Mischon de Reya for the appellant)
Miss Judith Jackson QC and Mr Timothy Harry (instructed by Speechly Bircham for the respondent)
Introduction
This is an appeal from an order of His Honour Judge Ryland made on 28 February 2000 in the Central London County Court. The judge had heard some preliminary issues in an application for leasehold enfranchisement under the Leasehold Reform Act 1967 ("the 1967 Act") made by the tenant, Mr Nasser Malekshad ("the applicant"). The respondent was the freehold owner, Howard de Walden Estates Ltd ("the freeholder"). The judge decided the preliminary issues adversely to the applicant and in consequence he dismissed the application with costs (had he decided any of the preliminary issues the other way, further issues would have had to be tried). The applicant appeals to this court with permission which I gave on paper on 14 April 2000.
The statutory provisions
The relevant statutory provisions are in Part I of the 1967 Act. For the purposes of the issues which the judge had to decide most of the relevant provisions are in a single section, section 2 (meaning of "house" and "house and premises" and adjustment of boundary). These are brought into play by section 1(1), which confers on a tenant of a leasehold house, occupying the house as his residence, a right to acquire the freehold on fair terms. Section 1(1) (as amended and extended, in particular by the Leasehold Reform, Housing and Urban Development Act 1993) goes on to lay down valuation limits and time limits (for the duration of the tenant's occupation). The valuation provisions are extremely complex but they are not material to the preliminary issues. Section 1(2) provides that a tenant satisfies the condition of occupying a house as his residence if he is occupying the house (in whole or in part) as his only or main residence.
Then come the provisions of section 2, which are all-important to this appeal. The section has given rise to a good deal of litigation, with at least two appeals going to the House of Lords. Subsections (1) to (5) are in the following terms:
"(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.
(2) References in this Part of this Act to a house do not apply to a house which is not structurally detached and of which a material part lies above or below a part of the structure not comprised in the house.
(3) Subject to the following provisions of this section, where in relation to a house let to and occupied by a tenant reference is made in this Part of this Act to the house and premises, the reference to premises is to be taken as referring to any garage, outhouse, garden, yard and appurtenances which at the relevant time are let to him with the house and are occupied with and used for the purposes of the house or any part of it by him or by another occupant.
(4) In relation to the exercise by a tenant of any right conferred by this Part of this Act there shall be treated as included in the house and premises any other premises let with the house and premises but not at the relevant time occupied and used as mentioned in subsection (3) above (whether in consequence of an assignment of the term therein or a subletting or otherwise), if -
(a) the landlord at the relevant time has an interest in the other premises and, not later than two months after the relevant time, gives to the tenant written notice objecting to the further severance of them from the house and premises; and
(b) either the tenant agrees to their inclusion with the house and premises or the court is satisfied that it would be unreasonable to require the landlord to retain them without the house and premises.
(5) In relation to the exercise by a tenant of any right conferred by this Part of this Act there shall be treated as not included in the house and premises any part of them which lies above or below other premises (not consisting only of underlying mines or minerals), if -
(a) the landlord at the relevant time has an interest in the other premises and, not later than two months after the relevant time, gives to the tenant written notice objecting to the further severance from them of that part of the house and premises; and
(b) either the tenant agrees to the exclusion of that part of the house and premises or the court is satisfied that any hardship or inconvenience likely to result to the tenant from the exclusion, when account is taken of anything that can be done to mitigate its effects and of any undertaking of the landlord to take steps to mitigate them, is outweighed by the difficulties involved in the further severance from the other premises and any hardship or inconvenience likely to result from that severance to persons interested in those premises."
Subsections (6) to (7) are not directly relevant to the appeal.
Mr Paul Morgan QC (who appeared in this court, but did not appear below, for the applicant) drew the court's attention to some other provisions in Part I of the 1967 Act which show how it works in practice. Sections 8, 9 and 10 of the Act are machinery provisions for giving effect to a claim for enfranchisement. Section 8 prescribes in general terms the rights and obligations resulting from a valid claim. Section 9 (as greatly elaborated by subsequent amendments) provides for the ascertainment of the purchase price. Section 10 provides for matters of conveyancing, including (in subsection (2)) a provision that a transfer of an enfranchised house shall (as regards rights of support and other similar easements and rights) have effect to grant with it, but also to make it subject to, all such easements and rights as are necessary to reproduce, as nearly as possible, rights and obligations in respect of adjacent property as they were before enfranchisement.
The facts
This case is concerned with a building or buildings in a fashionable part of central London. (In order to avoid pedantic repetition of 'a building or buildings' I shall use the plural form in the rest of this narrative, but that does not in any way prejudge the first main issue in the case.) The buildings have from time to time since 1775 and most materially, on 2 and 4 April 1997 when the applicant's solicitors served notices under the 1967 Act occupied a rectangular piece of land running from Harley Street, London W1 at the west to Weymouth Mews, London W1 at the east. The ground slopes slightly from the west down to the east. At the Harley Street end is a substantial terraced residential building, 76 Harley Street. At the Weymouth Mews end is what many would call a mews cottage, 27 Weymouth Mews. 76 Harley Street has a basement, ground floor and four upper floors. 27 Weymouth Mews has a basement, ground floor and one upper floor. Between the two main buildings, and in some way forming part of them, are further built structures at basement and ground floor level.
The judge had a good deal of evidence about the history of the buildings. This had been derived from researches either undertaken or commissioned by the applicant's architect, Mr Bryan Green. The judge discounted some of this evidence as conjectural. In any event the details of building development and domestic or other use in the fairly remote past would rarely (if ever) be of central importance. In relation to the first 160 years or so since the main buildings were built in 1775 it is sufficient to say that they were an integrated residential unit, in the sense that the owner and his family (or possibly, after the Married Women's Property Act 1882, the owner and her family) lived in the house and the family's horses and carriage were kept in the mews, with one or more grooms or coachmen occupying living accommodation over the carriage house. (This layout of the ground floor of the mews, with two small loose boxes at the south side of the carriage house, can still be seen in an architect's drawing made in 1935.)
During the whole of this period the two main buildings were physically linked by a basement running all the way from Harley Street to Weymouth Mews. At first this was covered by an open yard, which was later (probably in the 1850's) built over at ground level on the south side (but left open on the north side). The tradesmen's entrance to the main residence, and the route for disposal of its waste, was through the mews. Whether or not the entire property was a single house, it was until the 1930's adapted to the needs of a single prosperous household and its servants.
The architect's drawing already mentioned shows that in 1935 or thereabouts 27 Weymouth Mews was modified so as to create a more or less self-contained unit. On the ground floor the loose boxes were removed and a second garage was formed...
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