Methuen-Campbell v Walters

JurisdictionEngland & Wales
Judgment Date21 June 1978
Judgment citation (vLex)[1978] EWCA Civ J0621-3
Docket NumberPlaint No: 7605490
CourtCourt of Appeal (Civil Division)
Date21 June 1978

In the Matter of the Leasehold Reform Act 1967


In the Matter of the Gables, Reynoldston, Gower

Christopher Paul Manser Methuen-Campbell
Applicant (Appellant)
Kate Evelyn Walters
Respondent (Respondent)

[1978] EWCA Civ J0621-3


Lord Justice Buckley

Lord Justice Roskill


Lord Justice Goff

Plaint No: 7605490

In The Supreme Court of Judicature

Court of Appeal

(Civil Division)

On Appeal from Swansea County Court

(His Honour Deputy Judge Michael Evans Q.C.)

MR. JULES SHER (instructed by Messrs. Dawson & Co., Solicitors, London WC2A 3RZ) appeared on behalf of the Applicant (Appellant).

MR. IAN EDWARDS-JONES Q.C. and MR. TREFOR HUGHES (instructed by Messrs. L.C. Thomas & Son, Solicitors, Neath) appeared on behalf of the Respondent (Respondent).


I have asked Lord Justice Goff to deliver the first judgment in this case.


This is an appeal from a judgment, or order, dated 19th August 1977 of His Honour Michael Evans Q.C, sitting as a. Deputy Circuit Judge in the Swansea County Court in a matter arising lander the Leasehold Reform Act 1967. Proceedings were commenced by an originating application dated 3rd August 1976, and the dispute between the parties is how much of the demised premises should be included in an enfranchisement under the Act. The applicant, who is also the appellant, is tenant for life under a settlement created by the will of Emily Charlotte Talbot, who died in 1918 and whose will and codicils were proved in the Principal Probate Registry on 10th January 1919. As such, he is the estate owner of the demised premises and his title is admitted.


The relevant lease is dated 27th August 1894 and is made between the same Emily Charlotte Talbot of the one part and Horatio Edward Rawling of the other part; it was assigned to the respondent to the originating application and this appeal by an assignment dated 31st October 1929. Her title is also admitted.


I must draw attention to a number of sections of the Act and read certain extracts therefrom. I start with section 1 (1) which says: "This Part of this Act shall have effect to confer on a tenant of a leasehold house, occupying the house as his residence, a right to acquire on fair terms the freehold or an extended lease of the house and premises where" - and then follow certain condition


Then I pass to section 2 (3), which is as follows: "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 topremises 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",


I pass on to section 8, which gives the right to enfranchisement: "(1) Where a tenant of a house has under this Part of this Act a right to acquire the freehold, and gives to the landlord written notice of his desire to have the freehold, then except as provided by this Part of this Act the landlord shall be bound to make to the tenant, and the tenant to accept, (at the price and on the conditions so provided), a grant of the house and premises for an estate in fee simple absolute, subject to the tenancy and to tenant's incumbrances, but otherwise free from incumbrances".


Section 9 is the section which determines the price. I need not read the whole of it but subsection (1), so far as material, and as amended retrospectively by section 82 of the Housing, Act 1969, is as follows: "Subject to subsection (2) below, the price payable for a house and premises oh a conveyance under section 8 above shall be the amount which at the relevant time the house and premises, if sold in the open market by a willing seller, (with the tenant and members of his family who reside in the house not buying or seeking to buy) might be expected to realise on the following assumptions:- (a) on the assumption that the vendor was selling for an estate in fee simple, subject to the tenancy but on the assumption that this Part of this Act conferred no right to acquire the freehold, and if the tenancy has not been extended under this Part of this Act, on the assumption that (subject to the landlord's rights under section 17 below) it was to be so extended". Section14 deals with the alternative option, the right of the tenant to take an extension of the lease instead of to acquire the freehold, and section 15 describes the terms of any extended lease. Subsection (1) of that section provides that it shall be a tenancy on the same terms as the existing tenancy but with such modifications as may be required or appropriate, and subsection (2) deals with the rent: "The new tenancy shall provide that as from the original term date the rent payable for the house and premises shall be a rent ascertained or to be ascertained as follows:- (a) the rent shall be a ground rent in the sense that it shall represent the letting value of the site (without including anything for value of buildings on the site) for the uses to which the house and premises have been put since the commencement of the existing tenancy, other than uses which by the terms of the new tenancy are not permitted or are permitted only with the landlord's consent". Those two sections, sections 14 and 15, further provide that the new tenancy shall be a 50-year tenancy, with one rent review.


So it will be seen that where the tenant exercises an option to take a new tenancy, the ground rent is fixed at the date of the expiration of the old tenancy; the landlord can, as I have said, have one rent review; and it is also provided that the tenant is to pay the costs varying from time to time of the landlord's liability for services or repairs. Further by subsection (7) the terms are subject to any agreement to the contrary between the parties.


The only other section of importance which I should read is section 10, which deals with the rights to be included on a conveyance of the freehold. Subsection (1) of that section is as follows: "Except for the purpose of preserving or recognising anyexisting interest of the landlord in tenant's incumbrances or any-existing right or interest of any other person, a conveyance executed to give effect to section 8 above shall not be framed so as to exclude or restrict the general words implied in conveyances under section 62 of the Law of Property Act 1925, or the all-estate clause implied under section 63, unless the tenant consents to the exclusion or restriction; but the landlord shall not be bound to convey to the tenant any better title than that which he has or could require to be vested in him.".


The expression "relevant time" is defined by section 37 (1) (d) as meaning: "… in relation to a person's claim to acquire the freehold or an extended lease under this Part of this Act, the time when he gives notice in accordance with this Act of his desire to have it".


It will be seen that the assumption required to be made under section 9 (1) (a) gives the tenant electing to call for a sale of the freehold the benefit of his right to a new lease, and although a under such a lease the landlord would get a modern, and therefore increased, ground rent with one, but only one, rent review, still obviously the price will be less, and I think substantially less, than it would be if the value of the. freehold were assessed as if it were subject only to the original lease, at all events where the. enfranchisement is near the end of the long term.


Mr. Edwards-Jones says, and says rightly, that this is not a penal provision, and he says that Parliament itself has declared that the prescribed terms are fair and, therefore, there should be no leaning on construction one way or the other. Mr. Sher, however, says that the Act is expropiatory and is giving a right of compulsory purchase, and that we ought therefore to construe it strictly.I think there is force in the latter submission. Too much weight should not be attached to it, but on the other hand we should not be too ready to give too liberal a construction to the words defining what the tenant is given a right to purchase.


I turn now to describe the property. It consists of a house and land now known as The Gables, Reynoldston, Gower in West Glamorganshire. Whether that is the original house which existed at the time of the demise, and whether, if so, it has been altered or to what extent, I do not know, for the lease contained a covenant by the tenant forthwith at his own expense to erect, alter and rebuild and (if specially required) according to plans, and elevations to be first approved of by the lessor; but nothing turns on that.


The house lies at the northern part of the demised premises. South of the house, and at a lower level, there is a garden, and still further south and also again at a lower level, an area of rough pasture which has been referred to as the paddock. There was at all material times a post and wire fence dividing the garden from the paddock, but originally it included a gateway - it was a wicket gate - giving access from the garden to the paddock, with concrete steps leading down from the one to the other. There are also a considerable number of trees along this fence on the cultivated garden side. On the plan to the lease the garden and part of the paddock were alike coloured pink. The southern part of the paddock was coloured blue, but there is no significance in that for present purposes. It represents an area over which the lease reserves to the landlord a right to re-enter, the rent being thereupon reduced by an amount calculated at the rate of £8.00 per acre.


The plan to the lease, however does show an unbroken linedrawn across the whole of the property, which appears to denote the...

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