England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BOW COUNTY COURT
(HIS HONOUR JUDGE BRADBURY)

		Royal Courts of Justice Strand, London, WC2A 2LL
		22nd February 2007

Lady Justice Arden:

1. The appellant, Miss Francine West, is the secure tenant of a property described in her tenancy agreement dated January 1991 as "74 Hameway", being a first floor maisonette of a property known as 74-76 Hameway, East Ham, London and the front and part of the rear garden to that property. The respondent is the landlord, the London Borough of Newham which I shall call "Newham". The lower maisonette and the remainder of the side garden are let to Miss Simpson, also under secure tenancy, and the property let to her is referred to as "76 Hameway". At an earlier stage in the proceedings, Miss Simpson was joined as a party. However, she did not want to take any part in the dispute and she was subsequently struck out as a party.

The Right to Buy

2. As long ago as 11 October 2000 Miss West exercised her "right to buy" 74 Hameway conferred by the Housing Act 1985 ("the 1985 Act"). Section 118 of the 1985 Act provides that a secure tenant of a flat has the right to buy a lease of that flat. It is common ground that Miss West met the conditions laid down in the 1985 Act for exercising the right to buy and, accordingly, we are not concerned with those conditions. What is relevant to this appeal is the statutory machinery for the implementation of the right which Miss West had exercised and it is to those provisions which I now turn.
3. Section 125 of the 1985 Act as supplemented by sections 125A-125C requires the landlord (here Newham) to give notice stating the price for the grounds of the lease and how it was arrived at. The provisions to be contained in the lease and the estimates and other information in relation to the service charge and improvement contributions.
4. By virtue of section 127 the price is the amount of the value of the flat at the relevant time on the basis set out in section 127, less the discount to which the tenant is entitled under sections 129-131 of the 1985 Act. If the tenant disputes the value of the flat, she may require the value to be determined by the district valuer. Under section 125D she must, after receiving the valuation of the district valuer, serve notice stating whether she intends to proceed with her claim.
5. Section 138 provides that, where the secure tenant has claim to exercise the right to buy, the right has been established and all matters relating to the grant have been agreed or determined, the landlord must grant to the tenant a lease of the flat. Section 181 confers on the county court jurisdiction to determine certain questions arising in relation to the right to buy. Sections 128, 138 and 181 are, so far as relevant, set out below.

The Dispute in this Case

6. In about 1999 a dispute arose between Miss West and Newham as to the extent of the rear garden comprised in her tenancy agreement. The dispute centred on a small strip of land approximately 2-foot wide and running most of the length of that part of the rear garden which was in her tenancy. That strip has been referred to in these proceedings as "a privacy strip" because Newham contends that the purpose of the strip is to provide privacy to the occupants of the lower maisonette. When the district valuer valued 74 Hameway for the purpose of the implementation of Miss West's right to buy, he treated the privacy strip as part of Miss West's garden and, accordingly, the figure he produced included that strip.
7. I shall explain a little more about the topography of the property. The issue before the judge was largely whether this strip had around it a fence. The fence went around the privacy strip and had no gate. The privacy strip was not accessible by Miss Simpson unless either she climbed out of the windows of the property let to her or she went through Miss West's front garden, round the side of the house and through her own garden and then through a gate into Miss West's garden. This gate was near Miss West's backdoor into her rear garden. Having passed through Miss West's gate, Miss Simpson would then be in front of Miss West's backdoor and the privacy began at the other side of Miss West's backdoor.
8. Miss West started proceedings against Newham arising out of the dispute as to the extent of her tenancy. Newham, for reasons which were never fully explained to this court, advanced in its defence a positive case that the garden let to Miss West did not include a 2-foot strip running along the rear of the lower maisonette.
9. The matter came before HHJ Bradbury sitting in the Bow County Court. He had to determine certain issues, the first of which was whether the privacy strip fell within Miss West's tenancy, and I will call this "the extent of the tenancy issue". If so, she would be entitled to purchase that strip under her right to buy.
10. The judge heard the case for two days, in the course of which he was taken through a substantial amount of correspondence and heard oral evidence. The judge found in favour of Newham and by his order dated June 2005 the judge made a declaration that the privacy strip was not included within Miss West's tenancy. The judge went on to dismiss Miss West's claim for damages and to make other consequential orders. The judge was not concerned with any question as to the rights which Miss Simpson had over the privacy strip as a result of his declaration.

The Issues on this Appeal

11. On this appeal Miss West puts at the forefront of her case her contention that the judge misdirected himself on the extent of the tenancy issue. As a fall back point she contends that as a matter of law since the privacy strip had been included in the valuation of 74 Hameway by the district valuer, in accordance with the statutory scheme governing the exercise of the right to buy, the judge had no jurisdiction to entertain the extent of the tenancy issue. I will call this fallback point "the jurisdiction issue" and, although it was advanced as a subsidiary argument, it logically comes first and therefore I will take it first.

The Jurisdiction Issue

12. I can deal with this issue shortly. I have summarised the statutory mechanics for implementing the right to buy above and I must now set out the relevant parts of material provisions.
13. Section 181 of the 1985 Act as amended by the Leasehold Reform Housing and Development Act 1993 (the 1993 Act) provides:

"(1) A county court has jurisdiction-

"(a) to entertain any proceedings brought under this part and

"(b) to determine any question arising out of this part or under [a conveyance or grant execute a pursuance of the right to acquire on rent to mortgage terms];

"but subject to sections 128 and 158 […] (which provide for matters of valuation to be determined by the district valuer).

"(2) The jurisdiction conferred by this section includes jurisdiction to entertain proceedings on any such question as is mentioned in subsection (1)(b) not withstanding that no other relief is sought than a declaration…"

14. The role of the district valuer is set out in section 128 of the 1985 Act. This, as now amended by the 1993 Act provides:

"128. — (1) Any question arising under this Part as to the value of a dwelling-house at the relevant time shall be determined by the district valuer in accordance with this section.

"(2) A tenant may require that value to be determined, or as the case may be re-determined, by a notice in writing served on the landlord not later than three months after the service on him of the notice under section 125 (landlord's notice of purchase price and other matters) or, if proceedings are then pending between the landlord and the tenant for the determination of any other question arising under this Part, within three months of the final determination of the proceedings.

"(3) If such proceedings are begun after a previous determination under this section—

"(a) the tenant may, by notice in writing served on the landlord within four weeks of the final determination of the proceedings, require the value of the dwelling-house at the relevant time to be re-determined, and

"(b) the landlord may at any time within those four weeks, whether or not a notice under paragraph (a) is served, require the district valuer to re-determine that value;

"and where the landlord requires a re-determination to be made in pursuance of this subsection, it shall serve on the tenant a notice stating that the requirement is being or has been made.

"(4) Before making a determination or re-determination in pursuance of this section, the district valuer shall consider any representation made to him by the landlord or the tenant within four weeks from the service of the tenant's notice under this section or, as the case may be, from the service of the landlord's notice under subsection (3).

"(5) As soon as practicable after a determination or re-determination has been made in pursuance of this section, the landlord shall serve on the tenant a notice stating the effect of the determination or re-determination and the matters mentioned in section 125(2) and (3)(terms for exercise of right to buy).

15. Miss West also relies on section 138(1) of the 1985 Act, which has also now been amended by the 1993 Act and which provides:

"(1) Where a secure tenant has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant . . . have been agreed or determined, the landlord shall make to the tenant—

(a) if the dwelling-house is a house and the landlord owns the freehold, a grant of the dwelling-house for an estate in fee simple absolute, or

(b) if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), a grant of a lease of the dwelling-house,


in accordance with the following provisions of this Part."

16. We did not call on counsel for Newham, Mr Jonathan Rushton, to make submissions about this argument. In my judgment, the jurisdiction issue fails for many reasons. First, there is nothing in the 1985 Act to the effect that the valuation of the district valuer is final and conclusive as to the extent of the flat which is the subject of the right to buy. Secondly, the effect of Mr Rainey's interpretation of the 1985 Act is that the jurisdiction of the court to adjudicate upon any dispute as to the extent of the property to be leased is ousted.
17. Mr Philip Rainey for Miss West does not suggest that there would be any circumstance in which the court could review the decision of the district valuer on this issue. This would mean that if the district valuer had in error included within his valuation property belonging to Newham but not within Miss West's tenancy, Newham would be bound to grant a long lease of that property to Miss West when her purchase was completed, and it would be bound to do this although the property within that part of the lease was not property to which the right to buy related. There would be no court or tribunal before which this dispute could be ventilated.
18. In my judgment, the 1985 Act does not bear the meaning sought to be placed on it by Mr Rainey. As sections 128 and 138 show, the function of the district valuer is to determine the value of the property; see in particular section 128(1). It is not his function to determine the extent of the property and he is not given any authority to determine that issue. Moreover, if there had been any doubt the court would have considered whether this submission was consistent with the Human Rights Act 1998. Article 6 of the European Convention on Human Rights confers a right of access to court where there is a dispute as to civil rights; see Golder v United Kingdom [1979-1981] EHRR 524. The civil rights in question here are Miss West's right to have granted to her long lease of the property within her tenancy and Newham's right to ensure that the conditions of the 1985 Act are followed, and that Miss West is granted a lease of the property within the right to buy and no other. As the European Court of Human Rights said in the Golder case, in civil matters what can scarcely conceivably be the rule of law without there being the possibility of access to the courts, the principle whereby a claim must be capable of being submitted to a judge ranks as one of the most universally recognised principles of law.
19. Mr Rainey has not suggested any reason why that fundamental right should be restricted in Newham's case in the dispute arising in this case. In those circumstances the court would be bound to give the 1985 Act an interpretation compatible with article 6. In my judgment, for the reasons already given, the 1985 Act does not exclude the right of either the secure tenant exercising the right to buy or her landlord from bringing any dispute as to the extent of the property which is the subject of the right to buy in accordance with the 1985 Act before the court. I also conclude that any such dispute would be a "question arising under this Part" for the purpose of section 181 of the 1985 Act, and the County Court was specifically empowered to decide the dispute, with any appeal being subject to the usual rules.
20. Accordingly, I would dismiss the appeal on the jurisdiction issue.

The Extent of the Tenancy Issue

21. There is no challenge to any of the judge's findings of primary fact. Mr Rainey, who did not appear before the judge, contends that the judge misdirected himself in applying the primary facts to the issue he had to decide. Moreover, it is important to note that this is not a case about adverse possession or about proprietary estoppel but about the extent of the property comprised in Miss West's tenancy agreement. In other words, the case is on analysis a case about the interpretation of the clause in the tenancy agreement; that is the parcel's clause stating the property let to Miss West. As Megarry J observed in St Edmundsbury & Ipswich Board of Finance v Clark no.2 [1973] 1 WLR 1572 affirmed [1975] 1 WLR 468:

"Parcels clauses and plans in the conveyance not infrequently give rise to disputes on the application of what appears on the piece of paper and what lies physically on the ground."

The same applies to parcel clauses in tenancy agreements. That is the nature of the dispute in this case and it is established that in the event of a dispute as to what a parcel clause means the court is entitled to take into account extrinsic evidence with the possible exception of subsequent acts of the parties into account.

22. The judge was not concerned with the jurisdiction issue and so his judgment is devoted to the extent of the tenancy issue. He began his analysis in what is unquestionably the right place by looking at Miss West's tenancy agreement. He found that this gave no assistance since there was no plan attached and no description of the garden let to her.
23. The judge then turned to the extrinsic evidence. In the course of his judgment the judge examined other official plans. He noted that there were no plans dating from the time when the maisonettes were built, even though they had been built by Newham as purpose built maisonettes -- that took place in the 1920s. The judge noted that some of the properties in the surrounding area appeared to have what might have been privacy strips but the plans did not make it clear whether those strips fell within the properties held by any particular tenant. Apart from the plan produced by the district valuer and the plan produced by Newham to be annexed to the draft lease to be excluded on the implementation of the right to buy, there appears to be no official plans showing the privacy fence around 76 Hameway. Accordingly, in the judge's judgment the plans did not throw light on the extent of the tenancy issue.
24. The judge also examined the correspondence between Newham on the one hand and Miss West or Miss Simpson on the other. It was clear from the correspondence in 1997 from Newham that Newham did not know in whose tenancy the privacy strip fell. The correspondence included an important letter written in about July 1999 from Miss Simpson to Newham complaining about the conduct of Miss West and in particular stating that Miss West had removed a fence around the privacy strip, and that Miss West was laying paving slabs up to the back of 76 Hameway. Miss Simpson's concern was about the reinstatement of the fence around the privacy strip. Miss West did not replace the privacy strip despite Newham's attempts to persuade her to do so.
25. There was other evidence about Miss West's use of the strip. She apparently stored items on the paving slabs, including items immediately below the windows of 76 Hameway.
26. There was further extrinsic evidence: photographs were produced; the judge particularly refers to a photograph from about April 1997 taken by a friend of Miss Simpson from the neighbouring property which shows a single one-barred trestle fence continuing from the neighbouring property into 74/76 Hameway.
27. The judge also had evidence from a Mr Prior, who was a tenant of 76 Hameway between 1993 and 1996. His evidence was that there was no privacy fence. The judge also heard evidence from Miss Simpson who gave evidence supporting the incident which she had reported to Newham in 1999.
28. Miss West's case before the judge appears to have been that the privacy fence was never there at the start of her tenancy and that she had not removed it in 1999. This was obviously a substantial issue of fact that the judge had to decide. The judge held:

"… this case for me has turned on the evidence of a photograph showing the neighbour, Wendy, and the oral evidence of the witnesses. Where there has been a direct conflict between the claimant and Miss Simpson as to the existence of a fence I prefer the more measured evidence given by Miss Simpson… The other strong evidence that does support the defendant's contentions that there is a privacy area in front of 76 Hameway came from the photograph that Miss Simpson produced… That photograph is conclusive and, in so finding, I have to reject the evidence of Mr Prior on the basis of his recollection of the description of the back garden area some years ago as wrong… I have to reject the claimant's evidence… I reject her evidence that she never had a privacy fence dividing her garden from the back wall of 74/76 Hameway. Therefore, in these proceedings, I make a declaration… [italics added]."

29. However, the privacy fence was only one item of evidence. Mr Rainey has persuasively argued in his submissions that there were many other items of extrinsic evidence as well; in particular, Miss Simpson would have had no access to the privacy strip, save by going across the property let to Miss West. He relied extensively on what he termed "the lie of the land". In addition, there was no strip at the front of the house, even though that was where Miss Simpson had her main bedroom and therefore, implicitly, also required privacy. It was, on Mr Rainey's submission, inherently unlikely that such a narrow strip of land would be let to the tenant of the lower maisonette since it would be too small for the tenant to want to maintain it properly and could constitute an eyesore for the tenant of the first floor maisonette when using her garden. If the function of the privacy fence was to preserve the privacy of the tenant of the lower maisonette, this could be done by some restriction on the tenant of the first floor maisonette going onto the privacy strip except when she needed to maintain it. In addition, Mr Rainey points out that the judge took no account of Mr Prior's evidence that while he was a tenant Miss West maintained the privacy strip. I should add that there is no evidence that Miss Simpson maintained this strip when she became the tenant. I should also add that Mr Rainey submitted that there would be an implied term restricting the tenant of 76 Hameway from going onto the privacy strip, save to maintain it.
30. On behalf of Newham, Mr Rushton responds that the judge came to a clear finding that the privacy strip was not included in Miss West's tenancy and he submits that the judge was entitled to come to this finding and that it cannot be set aside on appeal. In my judgment Mr Rainey is correct in his submission that the judge failed to analyse the extrinsic evidence properly.
31. To recap, the issue for the judge to determine was the meaning of the expression: "74 Hameway" in Miss West's tenancy agreement. It could theoretically include a part of 76 Hameway; however, to reach that conclusion involved consideration of all the relevant extrinsic evidence.
32. The difficulty in the judge's approach, highlighted by his use of the word "therefore" in the passage I have cited above, is that he treated the case virtually as concluded by the very existence of the privacy fence enclosing the privacy strip. It had been put to him in argument by Newham, in effect, that if the judge was satisfied that the privacy fence existed, it must follow that the privacy strip fell within Miss Simpson's tenancy and not that of Miss West's. The judge thus fell into the trap of thinking that, because the major factual issue related to the privacy fence, that would conclude the legal issue he was bound to decide.
33. Accordingly, in my judgment, the declaration made by the judge was made in error and must be set aside. The question then is whether this court should make any declaration in its place or direct a new trial. In my judgment, as I have said, all the elements of the extrinsic evidence enumerated above must all be examined. In my judgment they must be examined both severally and collectively. I propose to leave out of account the conduct of Miss West as the question whether any subsequent acts by her are admissible evidence has not been fully argued before us. The compelling point, in my judgment, is that it is inherently unlikely for the reasons given above that Newham would have wished to give a tenant of the lower maisonette a tenancy of the privacy strip without also giving him or her the means of accessing it, and also of regulating the use which she could make of it, for example whether she could build on it if she could obtain planning permission. There is nothing in the tenancy agreement about the means of accessing the privacy strip or how she could use it. Moreover, there is no evidence that Newham had any policy about the inclusion of a privacy strip in this land in the tenancy of the property which it abutted.
34. Looking at the matter as a whole it is, in my judgment, much more likely that the parties intended that the tenant of 74 Hameway should respect the privacy of the lower maisonette and that the line of the privacy fence should be treated as a notional line beyond which the tenant of 74 Hameway would not normally go. The evidence of Mr West as to the fact that he did not maintain a strip and to his understanding that it was let to Miss West and that he had access to it for such matters as cleaning his windows supports this conclusion.
35. In those circumstances, in my judgment the court should make a declaration to the opposite effect to that made by the judge, namely that the privacy strip is contained within the tenancy of 74 Hameway.

Lord Justice Mummery:

36. I agree.

Sir Peter Gibson:

37. I agree.

Order: Appeal allowed in Part.