Slamon and Another v Planchon
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lord Justice Longmore,Lord Justice Peter Gibson |
| Judgment Date | 26 June 2004 |
| Neutral Citation | [2004] EWCA Civ 799 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2003/2536 CCRTF |
| Date | 26 June 2004 |
[2004] EWCA Civ 799
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON CIVIL
JUSTICE CENTRE
HH Judge Wakefield
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Peter Gibson
Lord Justice Rix and
Lord Justice Longmore
Case No: B2/2003/2536 CCRTF
CHY03159
Mr Michael PRYOR (instructed by Bircham Dyson & Bell) for the Appellant
Mr Daniel BROMILOW (instructed by Avadis & Co) for the Respondent
This appeal concerns the exception in favour of a "resident landlord" built into the collective enfranchisement provisions of the Leasehold Reform (Housing and Urban Development) Act 1993 as amended by the Commonhold and Leasehold Reform Act 2002 (the "Act") .
The claimants are long leaseholders of two flats in a house known as 50 Woodsome Road, London NW5 (the "house") . They seek to acquire the freehold of the house pursuant to section 22 of the Act. The defendant is the freeholder of the house. Her mother is the occupier of a third flat in it. The defendant seeks to resist collective enfranchisement of the house in reliance on the resident landlord exception set out in sections 4(4) and 10 of the Act. She relies on her mother's occupation over the year prior to the claimants' notice under the Act, together with her own interest in the freehold of the house over a long period stretching back to before the time of its conversion into flats.
It is common ground that, subject only to the adequacy of the defendant's interest in the freehold over the period back to the house's conversion, the conditions for the application of the resident landlord exception are met. This appeal concerns the remaining dispute about the adequacy of that interest: Does it meet the particular requirements of the statutory test? The issue turns on a pure point of statutory interpretation.
At trial HH Judge Wakefield decided that issue in favour of the defendant. The claimants appeal.
Section 1 sets out the basic right of collective enfranchisement (the "right") conferred on qualifying tenants to acquire the freehold of the premises in which their flats are situated at a price to be determined in accordance with the provisions of the Act. Section 3 describes the premises to which that right applies, eg self-contained buildings in which the qualifying tenants hold at least two flats and at least two-thirds of the total number of flats (as here the claimants hold two out of the three flats in the house) . Section 3, however, is made subject to section 4, which lists premises excluded from the right. Section 4(4) contains the exception relevant to this case, the resident landlord exception:
"(4) This Chapter does not apply to premises falling within section 3(1) if the premises are premises with a resident landlord and do not contain more than four units."
Section 10 is headed "Premises with a resident landlord" and sets out the relevant conditions for the applicability of this exception. As amended in 2002 it provides as follows:
"(1) For the purposes of this Chapter any premises falling within section 3(1) are premises with a resident landlord at any time if –
(a) the premises are not, and do not form part of, a purpose-built block of flats;
(b) the same person has owned the freehold of the premises since before the conversion of the premises into two or more flats or other units; and
(c) he, or an adult member of his family, has occupied a flat or other unit contained in the premises as his only or principal home throughout the period of twelve months ending with that time.
(4) Where the freehold of any premises is held on trust, subsection (1) applies as if –
(a) the requirement in paragraph (b) were that the same person has had an interest under the trust (whether or not also a trustee) since before the conversion of the premises, and
(b) paragraph (c) referred to him or an adult member of his family."
The Act provides for the service of a notice in which the qualifying tenants make their claim upon the reversioner (section 13) and for the reversioner's counter-notice (section 21) . Section 1(8) defines "the relevant date" in relation to any claim to exercise the right to collective enfranchisement as "the date on which notice of the claim is given under section 13". Section 10(1) might well have referred to "the relevant date" but does not. Nevertheless it is common ground that the section 10(1) requirements of continuous ownership and twelve months' occupancy have to be met as of a period ending with the giving of the section 13 notice.
The notices
The claimants, who are long leaseholders of the ground and second/third floor flats, served their notice addressed to the defendant on 6 November 2002. The proposed purchase price was £1,500 on the basis that the defendant would require a leaseback of the third flat, which was on the first floor of the house. If a leaseback was not required the proposed purchase price was £175,000.
The defendant's counter-notice dated 9 January 2003 did not admit the claimants' right to enfranchise, and relied on the resident landlord exception. The counter-notice specified her mother's occupation of the first floor flat for the twelve months' prior to the claimants' notice. There is no dispute about that. Indeed, the judge found that the mother has lived at the house since about 1982 and has lived there ever since, although in different parts of it. It was to emerge, however, that there was a dispute about whether the defendant could bring herself within section 10(1) (b) and/or 10(4) relating to the necessary continuity of the reversioner's interest since before the time of conversion.
The facts relating to the defendant's interest in the house
The defendant, Nicole Planchon, has since 9 September 1999 subject to the two long leases been the legal and beneficial owner of the house. She had previously held the whole beneficial interest under a declaration of trust made by her mother on 7 April 1998. On 9 September 1999 her mother transferred to her the legal title as well, and she became the registered proprietor. She remained so at the date of the claimants' notice under the Act.
The history of the defendant's (and her family's) interest in the house is as follows.
The defendant has two siblings, a brother Neil and a sister Dana. Her mother's name is Linda. The mother and her three children appear to have been the relevant family unit. On 18 July 1980 the house was bought and, it seems, taken in the name of the defendant's mother, brother and sister, although it appears from the judgment below that only the brother and sister may have been registered as proprietors on 4 August 1980. At that time the defendant was a minor. It appears to have been the intention at the time of purchase that the three siblings, including the defendant, should share in the ownership of the house. At any rate on 4 December 1980 a declaration of trust was signed by the mother, brother and sister (the "trustees") recording that the house was transferred to them on 18 July 1980 as beneficial joint tenants but that they had agreed to sever the joint tenancy and to hold the house as tenants in common in equal shares. The deed said that as from 18 July 1980 the trustees would hold the house on trust to sell and to hold the net proceeds of sale in trust for the trustees as tenants-in-common in equal shares. Moreover the mother declared that she held her share in the house on trust for the defendant.
So at least from 18 December 1980 the defendant held a one-third beneficial interest in the house under a trust. But she was not at that time a legal proprietor of the house.
In 1982 the defendant came of age and thereafter on 6 July 1984 the freehold title was transferred into the names of the defendant and her sister. I am not sure what her beneficial interest would have been at that time, but I suppose it would have been a half. Whatever it was, the defendant was then both a legal and beneficial co-owner of the house.
The judge found that the conversion work started after 1980 but before 1984, but was not completed until 1987 at the earliest or 1991 at the latest. The judge took the completion of the conversion works as the relevant time for the purpose of the statutory test of "since before the conversion", and it has not on this appeal been submitted that he was wrong to do so. Thus at the time of conversion the defendant was a legal and beneficial co-owner of the house. Moreover, at this time, because there were co-owners, the freehold of the house was necessarily "held on trust" (to refer to the words in section 10(4)) .
Following the transfer in July 1984 there was no change to the defendant's interest in the house until 30 March 1998, when the two sisters transferred the house into their mother's sole name "in consideration of natural love and affection". Both sisters appear at that time to have been living in the USA, for the defendant's signature is witnessed in California, and her sister's signature in Indiana. In the meantime the 125-year lease on the ground floor flat had been created for a term commencing on 29 September 1996 by an instrument dated 16 October 1996.
On 7 April 1998, that is to say eight days after the transfer of the house by the daughters to the mother on 30 March 1998, the mother executed a further declaration of trust. The deed was executed by both the defendant and her mother: in it the defendant was described as the "donor" and the mother as "trustee". It referred to the "conveyance of even date with this deed" (presumably a reference to...
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