England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WEST LONDON COUNT COURT
(HIS HONOUR JUDGE KRIKLER)

		Royal Courts of Justice Strand London WC2
		25 April 1996

LORD JUSTICE MILLETT:

1. The question in this appeal is whether an attic box storeroom on the sixth floor of a mansion block of flats forms part of the second floor flat to which it has been allocated. If it does, then the Respondent is entitled to have the storeroom included in the new lease of his flat to be granted to him under the provisions of Chapter II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993 ("the Act"). If it does not, then the storeroom will be excluded from the new lease and the Respondent's right to possession of the storeroom will come to an end in June 2003.
2. The Judge held that the storeroom was an "appurtenance" of the flat within the meaning of Section 62(2) of the Act. He rejected the Respondent's alternative argument that it was an "outhouse" within the subsection, from which decision the Respondent appeals by his Respondent's Notice. We gave leave to the Respondent to raise a yet further alternative before us, viz: that the storeroom was part of the flat as defined by Section 101(1) of the Act.

The Facts.

3. The facts are straightforward and are not in dispute. The Appellants are the freehold owners of a building known as The Willett Building in Sloane Square. This comprises commercial premises in the basement and on the ground and part of the first floors. The upper floors are divided into two linked buildings known as Wyndham House and Wellesley House, which are purpose-built mansion blocks of residential flats.
4. The Respondent is the tenant of Flat 3 Wyndham House. Wyndham House contains 10 flats, and Flat 3 is on the second floor. The Respondent holds the flat under a lease dated 12th. December 1977 for a term of 26 years less 10 days from 24th. June 1977 at an annual rent of £100. The term expires on 13th. June 2003.
5. The Respondent is also the tenant of storeroom No. 14 on the sixth or attic floor under an Agreement also dated 12th. December 1977 and for the same term as the flat at the annual rent of £1. Under the terms of the Agreement the storeroom may be used "for the storage of normal household goods and effects only" and may be assigned or sublet with the flat but not separately.
6. The Respondent has lived in the flat since 1969. The flats in Wyndham House are spacious but are old-fashioned and short of storage space. There are no built-in cupboards or wardrobes. For this reason, storage spaces in the attic on the sixth floor and in the basement were allotted to residents. The Respondent has had the use of storeroom 14 since 1969, though it was not included in a formal lease to him until 1977.In that year the Respondent purchased his current leasehold interest in the flat and on the same date entered into a separate agreement for the storeroom. The Respondent and his Wife use it for storing suitcases and seasonal clothing and bedding for which there is inadequate storage space in the flat.
7. In January 1994 the Respondent served a Notice under Section 42 of the Act claiming to exercise his right to a new lease of his flat "on the same terms as the present lease...but including the attic boxroom within the demise." The Appellants accept that the Respondent is entitled to a new lease of the flat but dispute his entitlement to have the boxroom included therein. In May 1994 the Appellants issued proceedings in the West London County Court for a declaration that the Respondent was not entitled to have the storeroom included in the new lease of his flat. On 26th. October 1994, after the case had been transferred to the Willesden County Court, Judge Krikler held that the Respondent was entitled to have the storeroom included in the new lease and dismissed the application.

The legislation.

8. Leasehold enfranchisement was introduced by the Leasehold Reform Act 1967 ("the 1967 Act"). This gave residential tenants of houses held on long leases at low rents the right to acquire either the freehold or an extended lease. The 1967 Act did not apply to blocks of flats, and because of the definition of "house" it excluded many residential properties in single occupation, such as the mews house partly built over a garage in different occupation, which would normally be regarded as houses. The Act was passed in order to extend the benefits of leasehold enfranchisement to tenants who were outside the protection of the 1967 Act. It conferred rights of collective enfranchisement on the tenants of blocks of flats who were collectively entitled to acquire the freehold of the premises in which their flats were contained, and individual rights on each of the tenants to acquire new 90 year leases of their own particular flats. The right to collective enfranchisement is conferred by Chapter I of Part I of the Act, and the individual right to acquire a new lease is conferred by Chapter II of Part I of the Act.
9. The individual right of a tenant to acquire a new lease of his particular flat is conferred by Section 39 of the Act. Section 39(2)(a) requires the tenant to be a qualifying tenant of the flat. Section 39(3) incorporates Sections 5, 7 and 8 of Chapter I. Section 5 defines "qualifying tenant" as a tenant of the flat under a long lease at a low rent. Section 7 defines "long lease." Section 7(6) provides:

"7(6) Where in the case of a flat there are at any time two or more separate leases, with the same landlord and the same tenant, and -

(a) the property comprised in one of those leases consists of either the flat or a part of it in either case with or without any appurtenant property), and

(b) the property comprised in every other lease consists of either a part of the flat (with or without any appurtenant property) or appurtenant property only, then in relation to the property comprised in such of those leases as are long leases, this Chapter shall apply as it would if at that time -

(i) there were a single lease of the property, and

(ii) that lease were a long lease;

but this subsection has effect subject to the operation of subsections (3) to (5) in relation to any of the separate leases."

"Appurtenant property" is defined by Sections 1(7) (applied to Section 7 by Section 7(7)). This reads:

"1(7) In this section -

"appurtenant property", in relation to a flat, means any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the flat;

"Low rent" is defined by Section 8.

For the purposes of Part I (that is to say, both Chapter I and Chapter II) "flat" is defined by Section 101(1). This reads:

"101(1) In this Part .......

"flat" means a separate set of premises (whether or not on the same floor) -

(a) which forms part of a building, and

(b) which is constructed or adapted for use for the purposes of a dwelling, and

(c) either the whole or a material part of which lies above or below some other part of the building; ..."

For the purposes of Chapter II only, "flat" is given an extended meaning by Section 62(2). This reads:

"62(2) Subject to subsection (3), references in this Chapter to a flat, in relation to a claim by a tenant under this Chapter, include any garage, outhouse, garden, yard and appurtenances belonging to, or usually enjoyed with, the flat and let to the tenant with the flat on the relevant date (or, in a case where an application is made under section 50(1), on the date of the making of the application)."

Subsection (3) is not material.

10. It is clear that a tenant who obtains a new lease of his flat is entitled to exercise the rights of passage over the common parts and to use the lift and to enjoy the other easements and advantages to which he was formerly entitled. This is not dealt with expressly in Chapter II of the Act, and there was some discussion before us whether such rights are "appurtenances" of the flat and so within the extended definition of the flat in Section 62(2), or come within Section 57(1) which entitles the tenant to a new lease "on the same terms as those of the existing lease." In the absence of any indication to the contrary, I would have expected them to be treated as "appurtenances"; the expression "the terms of the lease" would ordinarily refer to the covenants and conditions of the lease rather than the extent of the demise. But Section 57 (1) provides for the terms of the existing lease to be modified (inter alia) to exclude from the new lease property included in the existing lease but not forming part of the flat. This is an indication that the expression "terms of the existing lease" may need to be given a wider interpretation than would be usual. It is not, however, necessary to decide the point, and I prefer to leave it open for decision in a case where it is material to the result.

Principles of construction.

11. There was some discussion before us of the proper approach which should be adopted to the construction of the Act. Two particular questions were canvassed. The first was whether the Act, being expropriatory in nature, must be strictly construed. A man, it was said, is not to have his property compulsorily acquired except by plain language. Support for this proposition may be found in the judgments of all three members of this Court in Methuen-Campbell v Walters [1979] QB 525, which was a decision on the 1967 Act. This is not, however, the approach which has been adopted since. In Jones v Wrotham Park Settled Estates [1980] AC 74 at p. 113 Lord Russell said of this point

"I attribute minimal if any force to the point and regard only the statutory provisions."

Similarly in Manson v Duke of Westminster [1981] QB 323 at p. 332 Stephenson LJ said

"I would...regard the expropriatory nature of the Act as of little weight in construing its provisions."

I respectfully agree. 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.

12. The other question concerned the extent to which the Court may obtain guidance to the meaning of a word or phrase in a statute from judicial decisions on the same word or phrase in earlier legislation. The correct approach was laid down by Viscount Buckmaster in Barras v Aberdeen Steam Trawling and Fishing Co. Ltd. [1933] AC 402 at p. 411:-

"It has long been a well established principle to be applied in the consideration of Acts of Parliament that where a word of doubtful meaning has received a clear judicial interpretation, the subsequent statute which incorporates the same word or the same phrase in a similar context must be construed so that the word or phrase is interpreted according to the meaning that has previously been assigned to it" (my emphasis).

13. The rule has often been applied, but the qualification to which I have drawn attention is of the first importance. The rule is invoked by the Appellants in relation to the meaning of the word "appurtenances" in Section 62(2), and I shall return to the application of the rule when considering the meaning of the word in that subsection.
14. There is, however, one further matter which, although not raised by either party, is of general relevance when determining the effect of the statutory provisions which are under consideration in the present case. The tenant of a flat in a block of flats may have two distinct rights, an individual right under Chapter II to obtain a new lease of his particular flat and a right to join with the other tenants in exercising the collective right under Chapter I to acquire the freehold interest in the block. Even if all the tenants in a block exercise their individual rights to obtain new leases of their own flats, the landlord will retain the ownership of the common parts. If, on the other hand, the tenants exercise their collective right to acquire the freehold interest in the entire block, they will acquire the common parts. Given the close interrelation between Chapter I and Chapter II, I approach the statutory definition of the premises to be included in the new lease of an individual flat with a strong predisposition to assume that, if all the tenants were to obtain new leases of their particular flats under Chapter II, then with the sole exception of the common parts the landlord would not retain any part of the premises in which the flats are contained which he would not retain if they had exercised their collective right to acquire the whole premises under Chapter I.
15. Storage space and storage rooms which have been allocated to particular flats are not, of course, comprised in the common parts: see Section 4(2). It is not clear whether Wyndham House is within the definition of premises to which Chapter I applies, but the existence of the storerooms would not affect this question. If Chapter I does apply to Wyndham House and if sufficient of the tenants were to exercise their collective rights of enfranchisement, they would be entitled to acquire the freehold of Wyndham House and the storerooms in the attic and basement would be included in the property to be acquired.

Flat.

16. The first question is whether the storeroom on the sixth floor forms part of the flat on the second floor. This depends on whether it is part of the same "separate set of premises (whether or not on the same floor.)" The words in parenthesis make it clear that maisonettes are included, but they may have a wider effect than this. In my opinion the word "separate" suggests both "physically separate " or "set apart" and "single" or "regarded as a unit." The definition is concerned with the physical configuration of the premises. It was conceded by the Appellants that the rooms which form part of the flat do not have to be contiguous. Many sets of chambers in the Inns of Court are physically divided by a common staircase and landing but they would, I think, be regarded as a single "separate set of premises." The question is one of fact and degree, and must largely be one of impression. The degree of proximity of any part of the premises which is not contiguous is likely to be decisive. I have come to the clear conclusion that the storeroom on the sixth floor cannot be said to be part of the same separate set of premises as the rooms in the second floor flat. It was allocated to and let with the flat, but it does not form part of the flat.
17. I do not reach this conclusion because the storeroom is held under a separate lease, for Section 7(6) expressly contemplates the possibility of different parts of the same flat being let under separate leases. What is decisive to my mind is the absence of any natural or physical relationship between the flat and the storeroom. The storeroom could equally well have been allocated to and let with any of the other flats; just as any of the other storerooms could equally well have been allocated to and let with the flat. Section 7(6) covers the case of a single physical unit comprised in two leases. In the present case there are two physical units let together.

Outhouse.

18. The Respondent submits that the storeroom is (i) outwith the flat (ii) used in connection with the flat and ancillary to the flat and (iii) belongs to the flat in the sense that has been allocated to and let with the flat and may be assigned with the flat.
19. In my judgment these facts are not sufficient to make the storeroom an "outhouse". The essential characteristic of an outhouse is that is outside. The Shorter Oxford dictionary defines "outhouse" as

"a subsidiary building in the grounds of or adjoining a house, as a stable, barn, shed etc."

20. The Respondent argues that the question is whether the storeroom is an "outhouse" of the flat, not whether it is an "outhouse" of Wyndham House; that the principal building is the flat, not Wyndham House; and that it is sufficient if the storeroom is outside the flat even if it is inside Wyndham House.
21. I do not accept this. An "outhouse" is an outbuilding or outside building in the grounds of or adjoining a principal building. Neither Section 1(7) nor Section 62(2) requires the outhouse to be an "outhouse of the flat". It is sufficient if it is "an outhouse....belonging to, or usually enjoyed with, the flat..." In my opinion it is sufficient if the outhouse is an outhouse in the grounds of or adjoining Wyndham House. Any such outhouse which was enjoyed with and let to the tenant of a particular flat with his flat would come within Section 62(2) and so within the extended definition of the flat for the purposes of Chapter II.
22. But it must be an "outhouse", ie. outside any other building. Like the Judge, I cannot accept that a room within a building can properly be described as an "outhouse" of another set of rooms within the same building. It is simply not an "outhouse" at all.

Appurtenance

23. If the storeroom is an "appurtenance" of the flat within the meaning of Section 62(2) of the Act, then it is "appurtenant property" within the meaning of Section 1(7) which was "let with" the flat within the meaning of Section 7(6) and falls within the extended definition of "the flat" in Section 62(2).
24. The changing meaning of the word "appurtenance" is traced in the judgments of Goff and Buckley LJJ in Methuen-Campbell v Walters, [1979] 1 QB 525 at pp. 533-6 and 542-3 respectively. It was formerly a term of art. Strictly it did not include land but was restricted to incorporeal hereditaments; it was firmly established that land could not be appurtenant to other land: see Coke upon Littleton 18th. Ed. (1823) p. 123b section 184; Buszard v Capel (1828), 8 B. & C. 141 and other cases. This meaning, however, would yield to the context, and came in time to be replaced by another, viz: anything which would pass under a conveyance of the principal subject-matter without express mention: see Evans v Angell (1858), 26 Beav. 202 per Sir John Romilly MR at p. 205. The appurtenances of a house thus came to include the orchard, yard, curtilage and gardens of the house.
25. It was against that background that the Housing Act 1936 defined "house" as including

"any yard, garden, outhouses, and appurtenances belonging thereto or usually enjoyed therewith."

26. In Trim v Sturminster Rural District Council [1938] 2 KB 508 Slesser LJ said at p.516:

"..no case has been cited to us in which the word "appurtenances" has ever been extended to include land, as meaning a corporeal hereditament, which does not fall within the curtilage of the yard of the house itself, that is, not within the parcel of the demise of the house."

27. As Goff LJ observed in Methuen-Campbell v Walters at p. 535, this confined the word "appurtenances" to the curtilage of the house.
28. When in 1967 Parliament came to grant residential tenants under long leases at low rents the right to acquire the freehold or an extended lease of their houses, it adopted a similar but updated version of the same definition. Section 2(3) of the 1967 Act referred 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."

29. The main elements of the definition were unchanged except for the addition of the garage, but the qualifying words at the end of the definition were different. The words "belonging thereto or usually enjoyed therewith" were replaced by the words "let to him with the house and...occupied with and used for the purposes of the house or any part of it".
30. In Methuen-Campbell v Walters it was assumed that the word "appurtenances" was apt to include land. Buckley LJ suggested that the reference to occupation and use was sufficient to admit such an interpretation. But nothing could pass which was not within the curtilage of the house and so capable of passing under a conveyance of the house without express mention.
31. Section 62(2) of the Act reproduces the language of the definition of "house" in Section 2(3) of the 1967 Act, but the qualifying words at the end of the definition return to the formula employed in the 1936 Act. It is not, however, suggested that this is sufficient to exclude land from the ambit of the word "appurtenances". In my judgment it is too late now to suppose that Parliament has returned to the older and stricter usage in this context.
32. The Appellants, however, submit on the authority of Methuen-Campbell v Walters that the storeroom is not an "appurtenance" of the flat because (i) it is not within the curtilage of the flat and (ii) because it would not pass under an assignment of the flat without express mention. They invoke the principle of statutory construction to which I have referred, and submit that the context is the same, viz. the right of a residential tenant to acquire a new lease of the demised premises.
33. But the statutory context is not identical. There are two differences, one relatively minor and one more significant. The first is that the 1967 Act contained no equivalent of Section 7(6) of the Act. Given the presence of Section 7(6), which contemplates that appurtenant property may be contained in a separate demise and that the separate demise may contain appurtenant property only, I find it difficult to believe that Parliament can have intended to confine "appurtenances" to property which would pass under an assignment of the flat alone. I recognise that this is not a complete answer, for "appurtenant property" includes a garage or outhouse as well as "appurtenances" properly so called; but the point is not without significance. The essential qualification, it seems to me, is that the appurtenant property should "belong to, or [be] usually enjoyed with, the flat and [be] let to the tenant with the flat on the relevant date", not that it should be capable of passing under an assignment of the flat without express mention.
34. But the main change in the context in which the statutory language falls to be applied is that the 1967 Act applied to houses (as restrictively defined) and the Act applies to flats, including flats in mansion blocks of flats. The subject-matter of the 1967 Act was a house with its own curtilage. The subject-matter of Chapter II of the Act, however, is a flat, which may or not have a curtilage (for a garden flat may have a garden and a basement flat may have an area) but which also forms part of larger premises with their own curtilage. The "appurtenance" must be an appurtenance of the flat in the sense that it must belong to or be usually enjoyed with the flat and must be let with the flat. The question is whether it must also be within the curtilage (if any) of the flat or whether it is sufficient if it is contained within the premises of which the flat forms part or is situate within the curtilage of those premises.
35. I am of opinion that the latter is sufficient. I am influenced by two considerations. First, I find it difficult to believe that Parliament can have intended that storerooms allocated to particular flats which would have been acquired from the landlord if the tenants had exercised their collective rights should be excluded from the new leases of the particular flats to which they have been allocated and be retained by the landlord even if all the tenants were to exercise their individual rights. Secondly, Parliament cannot sensibly have intended to distinguish between a right to make use of a storage or other space and an actual demise of the space. If the Appellants' construction of the Act is right, a tenant of an upstairs flat who was granted the right to park his car in a numbered parking space in the forecourt of his block of flats would be entitled to have a similar right on the grant of a new lease of his flat; whereas a tenant who had an actual demise of a parking space would not. The absurdity of this is all the greater when it is remembered that if the tenant had a demise of a lock-up garage and not merely a parking space he would be entitled to have it included in the new lease.
36. The immediate context provides further support for the construction which I have favoured. Just as the "outhouse" must be in the grounds of the block of which the flat forms part, so in my opinion the "appurtenance", if consisting of land or a building, must be within the curtilage of the block but need not be within the curtilage (if any) of the flat. But whereas the "outhouse" must be outside the main building, the "appurtenance" may be within it.
37. In my judgment, this approach gives proper weight to the meaning which has been ascribed to the word "appurtenance" in the 1967 Act but has proper regard to the changed context in which the word is used in the Act. As I see it, it is necessary first to identify the separate set of rooms within the building which constitutes the flat; next to identify other areas within the building which or the right to enjoy which may be appurtenant to the flat; and finally to consider the grounds of the building in order to identify any garage, outhouse, garden, yard or other erection or land within the curtilage of the building which or the right to enjoy which is usually enjoyed and let to the tenant with the flat.

Conclusion.

38. I conclude that the storeroom is not part of the flat as defined by Section 101(1) of the Act and is not an "outhouse" within the meaning of Section 62(2); but that it is an "appurtenance" of the flat within the meaning of the latter subsection, and that accordingly the Respondent is entitled to have it included in the new lease of his flat. I would dismiss the appeal.

LORD JUSTICE THORPE:

I agree.

LORD JUSTICE WAITE:

I also agree.

ORDER: Appeal dismissed with costs; leave to appeal to the House of Lords refused.