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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Malekshad v Howard De Walden Estates Ltd  EWCA Civ 761 (23 May 2001)
Cite as:  QB 364,  38 EG 190,  L & TR 8,  3 WLR 824,  HLR 24,  23 EGCS 157,  EWCA Civ 761,  3 EGLR 47,  1 P & CR 10
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY
COURT (HH JUDGE RYLAND)
Strand, London, WC2A 2LL
Wednesday 23rd May 2001
B e f o r e :
LORD JUSTICE SEDLEY
MR JUSTICE LIGHTMAN
|- and -
|HOWARD DE WALDEN ESTATES LIMITED
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Miss Judith Jackson QC and Mr Timothy Harry (instructed by Speechly Bircham for the respondent)
Crown Copyright ©
LORD JUSTICE ROBERT WALKER:
The statutory provisions
"(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.
"All that piece or parcel of ground with the messuage or dwelling house garage building and all other erections thereupon ..."
with an identification of the two postal addresses and a reference to a plan. The plan shows number 76 as "residential premises" and number 27 as "private garage buildings" with a detailed depiction of the intervening area as built on (apart from two small open areas) up to ground level or (on the south side) to the extent of one further storey (or two where there is a sort of small apse projecting over a staircase).
"In her statement which was before me, although she was unable through illness to attend the hearing, Dr Gomez said that she had taken an assignment of Dr McKenzie's underlease which ran from 25 December 1959 to 1 April 1997. She had occupied the Mews as her main residence until September 1996 and thereafter she or a friend had returned there approximately three times a week to see that everything was all right. This was until March 1997 when her friend had found the locks changed. The premises let to her comprised a flat on the first floor to which the only means of access was in Weymouth Mews, two garages on the ground floor and two basement storerooms. The only access to the storerooms was through the smaller garage. Just above the ground floor level of the Mews there was a doorway in the wall between 76, Harley Street and 27, Weymouth Mews. It was at the top of three or four steps leading up from the garage. The door clearly had not been used for years as it was very dirty and there were many cobwebs on it. There were neither a door handle nor hinges visible on the Mews side of the door. During the period of her occupation she had retained control of the garages, using the smaller one for her own purposes and letting the larger one."
"If the Harley Street house were to be enfranchised and the Mews house were to revert to the Respondent the position would be that the Mews house would continue to depend for its support on those parts of the basement of 76, Harley Street which were delineated on the plans. If the basement parts of 76, Harley Street were to be permitted to fall into disrepair by the Applicant or his successors in title, or the rear wall of the Mews house otherwise fell into a state of disrepair, the rear part of the Mews property would collapse. Clearly, the Respondent could not enforce any provision requiring the Applicant to keep the load bearing part of the basement in repair. I am satisfied that the overhanging by the Mews property is material."
The statutory meaning of "house": the main authorities
"Small corner shops and terrace shops combined with living accommodation are to be found in almost every town and village in England and Wales. Parliament plainly intended that a tenant who occupied such premises as his residence should have the benefit of the Act if the building could reasonably be called a "house". It is imperative, if the law is to be evenly and justly administered, that there should be not only uniformity of principle in the approach of the courts to the question but also a broad consistency in the conclusions reached. The question must not, save within narrow limits, be treated by the courts as a question of fact: for the variations of judicial response could well be such as to give rise to unacceptable, indeed unjust, differences between one case and another. This could lead to the statute being applied to two practically identical buildings one way by one judge and another by another - an echo of equity and the length of the Chancellor's foot. For this reason, the Court of Appeal's decision in Lake v Bennett  1 QB 663 was welcome as stating a principle and confirming the question of fact to a narrow area. I deduce from it the following propositions of law: (1) as long as a building of mixed use can reasonably be called a house, it is within the statutory meaning of "house", even though it may also reasonably be called something else; (2) it is a question of law whether it is reasonable to call a building a "house"; (3) if the building is designed or adapted for living in, by which as is plain from section 1(1) of the Act of 1967, is meant designed or adapted for occupation as a residence, only exceptional circumstances, which I find hard to envisage, would justify a judge in holding that it could not reasonably be called a house. They would have to be such that nobody could reasonably call the building a house."
The other members of the House of Lords (Lord Wilberforce and Lord Fraser dissented not as to the meaning of s.2(1) (see at pp.760 and 761) but as to the correctness of the first-instance judge's assessment of the facts.
"It would, in my opinion, be wrong to disregard the fact that, while the Act may to some extent be regarded as expropriatory of the landlord's interest, nevertheless it was passed for the benefit of tenants. It is the duty of the court to construe the Act fairly and with a view, if possible, to making it effective to confer on tenants those advantages which parliament must have intended them to enjoy."
"In my view the correct approach to the construction of sections 1(1) and 2(1) is as follows. The first requirement of section 1(1) is that there should be a leasehold house held by the tenant. In order to find out whether that requirement is satisfied you go straight to section 2(1), which invites you to identify a building held by the tenant and designed or adapted for living in; it need not be structurally detached, nor solely designed or adapted for living in. If and when you have identified such a building you must consider whether it is reasonable to call it a house. If it is, then you go back to the other requirements of section 1(1) and consider next whether the tenant is occupying the building as his residence. You do not consider that question unless and until the requirements of section 2(1) are satisfied."
"From section 2(1) it appears, and indeed it is well known, that the Act was intended to provide "enfranchisement" for dwelling houses but not for flats. Flats, as are "strata" in other systems, are units which arise by horizontal division of a building, and by this criterion they are excluded by paragraph (a). On the other hand, the Act evidently intended to allow enfranchisement of terrace houses and dwellings arising by vertical division. This is effected by paragraph (b). If one seeks a reason for this different treatment, it may lie in the difficulty, in relation to units arising by horizontal division, of providing, after they become freehold by enfranchisement, for the enforcement of necessary positive covenants - a difficulty which did not exist while they were leasehold. Possibly there were other reasons for the discrimination: at any rate it was clearly made in section 2(1) of the Act.
Then it was necessary to make provision for mixed cases, where units were separated by a broken vertical line, or as it might be expressed, partly vertically and partly horizontally. This I take to be the purpose of subsection (2) and it uses as the discrimen the lying of a material part above or below a part of the structure to which the house is attached. It was necessary to confine the exemption to cases of structural attachment, in order not to include within it cases of mere projection, over or under another structure, without attachment."
Lord Wilberforce was particularly familiar with the problems of making positive covenants run with freehold land since he had chaired an official committee which reported on the problem in 1965 (Cmnd 2719). Since then there have been further reports by the Law Commission and others (The Law of Positive and Restrictive Covenants (1984) Law Comm. no.127; Commonhold: a consultation paper (1990) Cm 1345) but no legislative action.
"In ordinary legal parlance "material", used adjectivally, is not found in a vacuum. It imports a reference to something else. The thing to which it is applied must be material to some inquiry or for some purpose. It must be of sufficient substance or significance to have an effect of some kind. So Parliament must have intended that the part of the house, in order to be material, would be of sufficient substance or significance to have an effect of some kind. What might that effect be? Bearing in mind the primary purpose of section 2(2), I think it must be prejudice to the enjoyment of the house or another part of the structure caused by enfranchisement, in particular by reason of the inability of one freehold owner to enforce positive obligations against successors in title of the other.
I would therefore hold that if the part of the house which lies above or below a part of the structure not comprised in it is of sufficient substance or significance to make it likely that enfranchisement will prejudice the enjoyment of the house or another part of the structure, whether by reason of the inability of one freehold owner to enforce positive obligations against successors in title of the other or otherwise, then it is a material part of the house within section 2(2). In practice it may be found that that test will exclude from the operation of the Act houses of which little more than a trivial or insignificant part lies above or below a part of the structure not comprised in it. But that is not a reason for rejecting the only test that Parliament can reasonably be supposed to have intended."
The first issue: "reasonably so called"
"whether or not 76 Harley Street and 27 Weymouth Mews constitute one house or two houses."
Mr Morgan criticised this, saying that the judge was asking himself the wrong question. There is force in that criticism. Even when the redundant "or not" is disregarded the judge was posing the question on the unspoken assumption that the building or buildings could not simultaneously be one house and two houses. After referring to Birrane (with a citation from the judgment of Nourse LJ including the passage set out in para 25 above) he repeated that he had to decide "whether the two structures form a house or two houses", determining it on a common sense and objective approach. He then went on to what he called the secondary issue of whether the two houses (as he found them to be) were nevertheless a (single) house "reasonably so called".
"Two reasonable parents can perfectly reasonably come to opposite conclusions on the same set of facts without forfeiting their title to be regarded as reasonable. The question in any given case is whether a parental veto comes within the band of possible reasonable decisions and not whether it is right or mistaken. Not every reasonable exercise of judgment is right, and not every mistaken exercise of judgment is unreasonable. There is a band of decisions within which no court should seek to replace the individual's judgment with his own."
The same point was made by Salmon LJ in one of the earliest cases on the 1967 Act, Lake v Bennett,  1QB 663, 672.
"This could reasonably be called a building divided horizontally into two flats or maisonettes, but to my mind it is quite plain, looking at the photographs, that it can also reasonably be called a house notwithstanding that it has two front doors and two back doors. I do not regard the fact that there are the two front doors as meaning that this is not a house and some longer circumlocution has to be used to describe it."
"I accept that it matters not if one can describe the two parts of the building as something else if one can still describe them reasonably as a house. In my view, it would be illogical and incorrect to describe these two buildings as a house. Each one is a house in its own right. I do not consider that the purpose of the Act was to enable Applicants to seek to unite two houses together and to make the united whole fit into the description of a house. I consider that by using the word "building" in the singular in section 2(1) the draftsman of the Act was envisaging one house and not two as constituting a house reasonably so called. It follows that I do not think that any other person could reasonably call the structure a house nor do I consider that the two buildings can reasonably be called a house."
The second issue
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
Section 3 provides as follows:
"(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.
(2) This section -(a) applies to primary legislation and subordinate legislation whenever enacted;
(b) does not affect the validity, continuing operation or enforcement of any incompatible primary legislation; and
(c) does not affect the validity, continuing operation or enforcement of any incompatible subordinate legislation if (disregarding any possibility of revocation) primary legislation prevents removal of the incompatibility."
In J A Pye (Oxford) Ltd v Graham  EWCA Civ 117 (6 February 2001) this court held that it should apply section 3 on any appeal heard after the section came into force, even if it did not apply at the making of the decision which is appealed from.
LORD JUSTICE SEDLEY:
MR JUSTICE LIGHTMAN: