Case No: B2/2011/0191

Neutral Citation Number: [2011] EWCA Civ 1185
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
His Honour Judge Dight 
Claim No: OCL10182 
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 27/10/2011
Before :

LORD JUSTICE LONGMORE
LORD JUSTICE RIMER 
and
MR JUSTICE WARREN 
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Between :

	HERTSMERE BOROUGH COUNCIL	Appellant	
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	CAROLINE ANNE LOVAT	Respondent	

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(Transcript of the Handed Down Judgment of
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Ms Joanne Wicks QC (instructed by Hertsmere Borough Council) for the Appellant
Mr Anthony Radevsky  (instructed by Pemberton Greenish LLP) for the Respondent

Hearing date: 4 October 2011
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Judgment
Lord Justice Rimer: 
Introduction
1.	This appeal, against an order made by His Honour Judge Dight on 10 January 2011 in the Central London County Court, raises linked questions of construction arising under section 1AA(3) of the Leasehold Reform Act 1967 (‘the 1967 Act’). One question is whether the reference in it to the ‘house’ means precisely what it says and refers simply to the building; or whether such reference means ‘the house and premises’ and so refers also to the garden or other land within the curtilage of the building. The other question is whether the words ‘adjoining land’ mean land that abuts and physically touches the ‘house’; or whether such words are no more precise than a reference to land that, in relation to the ‘house’, is merely nearby or neighbouring. In this judgment I shall use the word ‘touching’ to refer to ‘adjoining land’ in the sense of the first alternative; and ‘neighbouring’ to refer to ‘adjoining land’ in the sense of the second alternative. 
2.	These questions arise in the determination of an issue as to whether the respondent, Caroline Lovat, who owns a leasehold house and grounds in Radlett, Hertfordshire is entitled to acquire the freehold from her landlord, Hertsmere Borough Council (‘Hertsmere’), the appellant. Judge Dight held that the answers are that the relevant reference to the ‘house’ means a reference only to the building; and that the reference to ‘adjoining land’ means land that touches the building. That dual outcome was favourable to Mrs Lovat because it meant, as Judge Dight held, that her tenancy was not an ‘excluded tenancy’ within the meaning of section 1AA(3) and that she had by her tenant’s notice dated 7 September 2007 therefore validly exercised her right to acquire the freehold of her house and premises. 
3.	Hertsmere, represented by Joanne Wicks QC, submitted to this court that the judge was wrong on both points (although it is sufficient for Hertsmere to show he was wrong on just one of them), with the consequence that Mrs Lovat is not entitled to acquire the freehold. Anthony Radevsky, for Mrs Lovat, submitted that the judge was right on both points. Both counsel also appeared before the judge. We had excellent arguments from them. The issues are novel ones upon which there is no authority. Judge Dight gave permission to appeal. As the proceedings before him were a CPR Part 8 claim, the appeal would normally lie to the High Court but in view of the novelty and general importance of the points that it would raise, he directed that it should be transferred to the Court of Appeal (see CPR Part 52.14(1)). 
The facts
4.	Hertsmere is the freehold owner of land in Radlett known as Shenley Park, Shenley. Shenley Park, an area of some 46.8 acres, was formerly the site of a hospital built in the 1930s. A house on the site, known as Porterslea, was occupied by staff employed at the hospital. In the 1990s the hospital was closed, parts of its grounds were sold for housing development and the remainder was retained as a rural park for public recreational purposes. Shenley Park comprises a wood, a cricket ground and other public amenity land and facilities. It also includes Porterslea. 
5.	By a lease dated 20 July 1993, Hertsmere leased Shenley Park to Shenley Park Trust, a charity, for a term of 150 years. By an underlease dated 28 July 1995, the Trust granted a long lease of Porterslea and its grounds to Mr and Mrs Lovat for a term of 125 years. The title to the lease is a registered one and Mrs Lovat has since 24 December 1997 been the sole registered proprietor. Porterslea’s grounds extend to some 1.4 acres and wholly surround the house. The grounds are bounded by the remainder of Shenley Park. 
6.	By the Housing (Right to Acquire or Enfranchise) (Designated Rural Areas in the East) Order 1997 (S1 1997 No. 623), made pursuant to powers conferred upon him by section 17 of the Housing Act 1996 and section 1AA(3)(a) of the 1967 Act, the Secretary of State for the Environment designated a long list of areas in several counties as ‘rural areas’ for the purposes of such sections. They included the parish of Shenley, which includes Shenley Park. The Order came into force on 1 April 1997. 
7.	On 7 September 2006 Mrs Lovat served a notice under the 1967 Act of her desire to have the freehold of Porterslea and its grounds. She served it on both Shenley Park Trust, the intermediate lessee, and Hertsmere, the freeholder. By its notice in reply dated 3 November 2006, Hertsmere disputed Mrs Lovat’s right to acquire the freehold. Its point was that her right to enfranchise depended upon her tenancy not being an ‘excluded tenancy’ within the meaning of section 1AA(3) of the 1967 Act, whereas Hertsmere’s assertion was that it was an ‘excluded tenancy’. That is the issue that came before Judge Dight. The explanation for the slow progress from that exchange of notices in 2006 to the determination of the issue by the county court in 2011 is that the proceedings were stayed pending the bringing into force of certain provisions of the Housing and Regeneration Act 2008 in case they should have a material bearing on the issue. In the event they did not. 
8.	The critical facts that have to be applied to the legislation I am about to summarise are these. Mrs Lovat’s house (i.e the building) is surrounded by the garden and other land within its curtilage that is also let to her. She occupies her house and land for residential purposes. No part of her house is on the boundaries of her land; it is exclusively the limits of her garden and other land within the curtilage of her house that mark such boundaries. Beyond such boundaries, and touching them, lie further parts of the designated ‘rural area’. The freehold of such parts is, like Mrs Lovat’s house and land, owned by Hertsmere; and Hertsmere has owned such freehold estates since 1 April 1997. Unlike Mrs Lovat’s house and land, those parts are not occupied for residential purposes. I turn to the legislation. 
The legislation
9.	Section 1(1)(a) of the 1967 Act confers upon a tenant holding a ‘long tenancy’ of a leasehold ‘house’ a right to acquire on fair terms the freehold or an extended lease of ‘the house and premises’. Section 2(1) defines a ‘house’. The definition is not without its complications but there is no need to cite it. There is no dispute that Mrs Lovat’s house at Porterslea is a ‘house’ within the definition. The important point, however, is that the gardens or other land let to a tenant with a ‘house’ are not part of the ‘house’ as so defined. They are the ‘premises’ in the phrase quoted above from section 1(1)(a), as is made clear by the separate definition of ‘premises’ in section 2(3). 
10.	A material condition of such right of enfranchisement is that the tenant’s tenancy is at a ‘low rent’, the meaning of which is to be found in section 4. There is no need to consider in detail the original or subsequent statutory material that applies for the purpose of determining whether the rent under a particular tenancy is or is not a ‘low rent’. I should, however, mention the Leasehold Reform, Housing and Urban Development Act 1993 (‘the 1993 Act’). That Act is concerned primarily with flats rather than houses. It entitled qualifying tenants of flats to acquire extended leases and also conferred upon flat tenants a right to collective enfranchisement by which they could acquire the freehold of their building. More relevantly for present purposes, it also inserted a new section 1A into the 1967 Act providing for an alternative ‘low rent’ test in cases where the rent exceeded the section 4 limits. 
11.	In the present case, Mrs Lovat’s lease, granted in 1995, includes a rent escalation provision in clause 2.2 directed at ensuring that her rent would never be a ‘low rent’ and, in turn, at preventing any right of enfranchisement. Section 1AA of the 1967 Act, to which I come in the next paragraph, was introduced by the Housing Act 1996 and thus after the grant of Mrs Lovat’s lease. If Mrs Lovat’s tenancy is not an ‘excluded tenancy’ within the meaning of section 1AA(3), then although her rent is not a ‘low rent’ the new section gave her a right of enfranchisement that Hertsmere plainly intended that she should never have. That last consideration is, however, of no relevance to the issues in the case. Insofar as the legislative amendments in 1996 conferred new rights of enfranchisement on tenants holding under leases already in existence, they did nothing different from what the 1967 Act did when it was first enacted. That too conferred enfranchisement rights on tenants under existing leases, being rights for which their landlords had not bargained, nor in many cases even foreseen. The only issue raised by the appeal is whether or not Mrs Lovat is entitled to enfranchise in reliance upon the provisions of section 1AA.
12.	The Housing Act 1996 introduced several amendments to the 1967 Act and the 1993 Act. Of central importance was section 106, headed ‘Low rent test: extension of rights’, which provided for Schedule 9 to have effect. Section 106 summarised that effect as making ‘provision for conferring an additional right to enfranchisement in relation to tenancies which fail the low rent test and for introducing an alternative to the low rent test in the case of the right to collective enfranchisement and the right to a new lease’. Schedule 9 then set out (inter alia) the new section 1AA to be inserted into the 1967 Act.
13.	The broad effect of section 1AA was, for enfranchisement purposes, to abolish the ‘low rent’ test for particularly long tenancies (generally those for terms of more than 35 years: see the original section 1AA(2)) except for those tenancies defined as ‘excluded tenancies’. That exception applied only to tenancies of houses: it did not also apply to tenancies of flats. Section 1AA was amended by the Commonhold and Leasehold Reform Act 2002 (‘the 2002 Act’) to the form in which it was when Mrs Lovat came to serve her tenant’s notice in September 2006. The effect of those amendments was to abolish the provisions of section 1AA(2) and to limit the class of excluded tenancies to (a) leases granted on or before the Housing Act 1996 came into force, or (b) leases for a term not exceeding 35 years granted after it came into force but before the 2002 Act did so. Those amendments therefore put a stop to the creation of further excluded tenancies. The Housing and Regeneration Act 2008 further amended the ‘low rent’ test but has no impact on the present case. 
14.	At the time that Mrs Lovat served her tenant’s notice in September 2006, section 1AA of the 1967 Act provided as follows:
‘1AA. - Additional right to enfranchisement only in case of houses whose rent exceeds applicable limit under section 4
(1)	Where –
(a) 	section 1(1) above would apply in the case of the tenant of a house but for the fact that the tenancy is not a tenancy at a low rent; and
(b)	the tenancy … is not an excluded tenancy,
this Part of this Act shall have effect to confer on the tenant the same right to acquire the freehold of the house and premises as would be conferred by section 1(1) above as if it were a tenancy at a low rent. 
…
(3)	A tenancy is an excluded tenancy for the purposes of subsection (1) above if –
(a)	the house which the tenant occupies under the tenancy is in an area designated for the purposes of this provision as a rural area by order made by the Secretary of State,
(b)	the freehold of that house is owned together with adjoining land which is not occupied for residential purposes and has been owned together with such land since 1st April 1997 (the date on which section 106 of the Housing Act 1996 came into force), and 
(c)	the tenancy either –
(i)	was granted on or before that date, or
(ii)	was granted after that date, but on or before the coming into force of section 141 of the Commonhold and Leasehold Reform Act 2002, for a term of years certain not exceeding thirty-five years.
…
(5)	The power to make an order under subsection (3) shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. …’
The judge’s judgment 
15.	With that protracted prelude, I can now identify the questions with which the judge was faced, which turned on the interpretation of section 1AA(3). The central question was whether or not Mrs Lovat’s tenancy is an ‘excluded tenancy’. If it is such a tenancy, the new right of enfranchisement conferred by section 1AA(1) is not open to her. She would in that event only be entitled to enfranchise if her rent is a ‘low rent’, which it is not.
16.	There is no dispute: (i) that Mrs Lovat’s ‘house’ is within a designated rural area for the purposes of section 1AA(3)(a); (ii) that the freehold of her ‘house’ and of the other land in the rural area that touches and lies beyond the boundaries of her ‘house and premises’ is owned by Hertsmere and has been so owned since 1 April 1997; (iii) that both her ‘house’ (the building) and the ‘premises’ let with it (her garden) are occupied for residential purposes; and (iv) that the rural area that touches and lies beyond its boundaries is not so occupied. The critical question which is in dispute is whether such rural area is ‘adjoining land’ within the meaning of section 1AA(3)(b).
17.	Mrs Lovat’s case is simple and is as follows. The primary meaning of ‘adjoining’ is touching and there is no context in subsection (3) sufficient to give it the wider meaning of neighbouring. The subsection therefore shows that a tenancy will only be an ‘excluded tenancy’ if the non-residential ‘adjoining land’ is land touching the ‘house’. Given the distinction that section 1(1)(a) draws between a tenant’s ‘house’ (the building) and his ‘house and premises’ (the latter including the garden) – a distinction also recognised in section 1AA(1) - there is no scope for interpreting ‘house’ in subsection (3) as other than a reference to the building alone and as not including the ‘premises’ (the garden) that surround it. It follows that Hertsmere’s non-residential rural ‘adjoining land’ does not adjoin Mrs Lovat’s ‘house’ because it does not touch it. The only land that it does touch, and therefore adjoins, is the garden ‘premises’ let with the house. Those premises are, however, occupied by Mrs Lovat for residential purposes and so are not ‘adjoining land’ within the meaning of subsection (3). Mrs Lovat’s garden therefore provides her with a moat-like defence from the impact of subsection (3), with the result that her tenancy is not an ‘excluded tenancy’ and she is entitled to enfranchise.  
18.	The correctness of that argument depends upon the section 1AA(3) reference to ‘house’ being a reference just to the ‘house’ as defined in section 2(1) and upon the word ‘adjoining’ meaning touching rather than neighbouring. In a careful and thorough judgment, Judge Dight accepted both propositions. He referred to several reported authorities on the sense of the word ‘adjoining’ in different contexts. He concluded from them that the true meaning of ‘adjoining’ in normal use was ‘contiguous to,’ ‘next to’ or ‘coterminous with’, in the sense that two parcels of land have boundaries which meet at some point (what I have called touching). He added that:
‘I accept that the modern approach to construction does not involve a consideration of primary and secondary meanings but in my judgment the starting point where a word has a clear meaning is that it is to be taken to have that meaning when used by draftsmen of legal documents or statutes unless the context suggests otherwise.’
He could, however, find nothing in the context of the legislation constraining him to give ‘adjoining’ a meaning other than its usual meaning. He could also find no basis for interpreting ‘house’ in section 1AA(3) as meaning other than a ‘house’ as defined in the legislation. The outcome was that he accepted that Hertsmere’s rural land does not adjoin Mrs Lovat’s house and that her tenancy of her house was therefore not an ‘excluded tenancy’.
The appeal
19.	Ms Wicks, for Hertsmere, focused first on the meaning of ‘house’ in section 1AA(3), her argument being premised on the basis that ‘adjoining land’ means what the judge held it mean, namely land that is touching whatever land it is said to adjoin. On that basis she submitted that the judge’s interpretation of the word ‘house’ leads to apparent anomalies and absurdities that should not readily be assumed to have been the intention of the legislature. If ‘house’ means the building alone and does not include its ‘premises’, the scope for tenancies of houses in rural areas to qualify as ‘excluded’ tenancies will be confined to a minority of cases with features that would be unlikely to reflect any policy that Parliament can have had in mind. Most houses in rural areas are likely to have outhouses, sheds and gardens; but the only tenancies of such houses that can be ‘excluded’ ones will be those where at least one flank wall of the house is built hard upon the boundary of the tenanted land so that it touches the ‘adjoining [non-residential rural] land’. Whilst Ms Wicks accepts that there will be such cases, they will be relatively rare. One type of case might, for example, be where the house shares a party wall with a barn on the ‘adjoining land’. The more common cases will, however, be those in which the house is, as in this case, separated from the ‘adjoining [non-residential rural] land’ by its garden, or perhaps by a pathway or roadway forming part of ‘the house and premises’. In such cases, the tenancy cannot be an ‘excluded tenancy’.
20.	There can, submitted Ms Wicks, be no good reason to conclude that Parliament intended the qualification for an ‘excluded tenancy’ to be so narrowly prescribed. Upon what rational basis could it made to depend upon whether or not there was an area of garden, or a pathway, between the house and the boundary? It would also result in curious anomalies. Ms Wicks instanced a case in which, say, six terraced houses, each with front and back gardens, are surrounded by non-residential land in a designated rural area, with the external flank walls of each of the two end of terrace houses touching that area. The tenancies of the two end of terrace houses would be ‘excluded’ tenancies and debarred from enfranchisement unless they could satisfy the ‘low rent’ test; whereas the tenancies of the other four houses would not be ‘excluded’ tenancies and a right of enfranchisement would be exercisable whether or not they satisfied the ‘low rent’ test. Why should the Act be interpreted as intending to discriminate between ostensibly like tenancies in such an apparently irrational way? 
21.	These considerations, submitted Ms Wicks, pointed to the conclusion that the court could be confident that in using the words ‘the house’ and ‘that house’ in section 1AA(3), Parliament had made an obvious mistake. It must in fact have intended to use the words ‘the house and premises’ and ‘that house and premises’. Ms Wicks referred us to Inco Europe Ltd and Another v. First Choice Distribution (a firm) and Others [2000] 1 WLR 586 in which Lord Nicholls of Birkenhead explained the circumstances in which, as part of the process of interpretation, it is open to a court to correct obvious drafting errors in legislation. He said, at 592E:
‘This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation: see per Lord Diplock in Jones v. Wrotham Park Settled Estates [1980] AC 105-106. In the present case these three conditions are fulfilled.’
22.	As for the first of Lord Nicholls’ conditions, Ms Wicks was unable to show us anything in the way of Ministerial statements on the occasion of the original promotion of what became section 1AA that disclosed the policy underlying the ‘excluded tenancy’ exception. She submitted, however, that as the purpose of the 1967 Act was to enable certain categories of tenants to acquire their freeholds on fair terms, it is inherently unlikely that Parliament can have intended, when enacting section 1AA, to draw distinctions between categories of tenants on grounds that depended upon there being such a precise location of their houses in relation to rural non-residential land as the judge had held. There can be no rational basis for an attribution to Parliament of an intention that a tenant’s enfranchisement rights can turn on whether his house is built right on the boundary of his land, or whether there is a narrow strip of garden land separating his house from the boundary. Those considerations pointed, said Ms Wicks, to the conclusion that the interpretation of ‘house’ favoured by the judge cannot have reflected Parliament’s purpose. It is apparent, she said, that there has been a mistake in the drafting and that the nature of the error and the method of its correction are obvious. 
23.	Mr Radevsky, in succinct submissions in response, pointed out that section 1(1) of the 1967 Act draws the clearest distinction between a ‘house’ and ‘the house and premises’, which are defined in section 2. Section 1AA(1) itself recognises the same distinction. It is, he said, inconceivable that in subsection (3) Parliament had overlooked the distinction and, in referring simply to ‘the house’ and ‘that house’ respectively, had made the suggested mistake. Moreover, whilst Ms Wicks’ proposed correction of subsection (3) might achieve the resolution of at least some suggested anomalies, it would not resolve them all. Mr Radevsky asked us to consider a residential housing estate surrounded by land in a non-residential designated rural area, with all the tenanted houses being surrounded by their own gardens. The tenancies of those houses on the perimeter of the estate, whose gardens touched the adjoining rural area, would be ‘excluded’ tenancies, whereas those of houses in the middle of the estate, whose gardens did not touch that area but touched the gardens of other houses, would not be. 
24.	The further submission advanced by Ms Wicks was that, contrary to the premise of her first submission, the correct sense of ‘adjoining’ in the context of section 1AA(3)(b) is not that it means ‘touching’, but that it means no more than neighbouring. On this basis, provided in any particular case the relevant non-residential rural area is sufficiently close to the house to be regarded as neighbouring it, the tenancy will be an excluded one. Ms Wicks recognised that construction as having the potential to give rise to factual disputes as to whether any particular piece of rural area is sufficiently proximate to be neighbouring. But it would avoid the irrational anomalies and apparent absurdities that she said were otherwise spawned by the legislation. Mr Radevsky submitted that there is no sufficient context in section 1AA(3)(b) justifying the interpretation of ‘adjoining’ as meaning other than touching.
Discussion
25.	If ‘adjoining’ means touching rather than neighbouring, I would agree with Ms Wicks that there is something apparently very odd about Parliament’s double use of the word ‘house’ in subsection (3), ‘house’ being defined as meaning no more than the building. Mr Radevsky himself, in his authorial capacity as editor of Hague on Leasehold Enfranchisement, 5th Edition, noted in footnote 131 to paragraph 3-20 that ‘[i]t is curious that the reference is not “house and premises” because most country houses will be surrounded by a garden’. On the premise aforesaid, I agree with Ms Wicks that it is difficult to identify a rational justification for treating a tenancy as an ‘excluded’ one in cases in which the house is built right on the boundary of the ‘adjoining land’ but as not ‘excluded’ if the house is separated from such boundary by, say, a narrow slice of garden or a pathway forming part of the ‘house and premises’. Mr Radevsky suggested that if the gap between house and boundary is small, there would be scope for the application of the de minimis principle in relation to the meaning of ‘adjoining’. I do not, however, understand why that should be. It was his argument that ‘adjoining’ means touching, not that it means ‘almost touching’; and if the legislative policy to be divined from section 1AA(3) is that ‘adjoining’ was intended to, and does, mean touching, I see no basis for a judicial modification of its meaning so as to read it as including ‘almost touching’.  
26.	On the premise that ‘adjoining’ means touching, an interpretation of ‘house’ as meaning ‘house and premises’ would, I consider, therefore go a good way towards removing the apparent irrationality of the legislative scheme. On the other hand, it would not go all the way. There remains Mr Radevsky’s example of the housing estate surrounded by non-residential rural land, in relation to which it might once again be thought that there would be no obvious policy reason for treating the tenancies of the houses on the perimeter as ‘excluded’ in contrast with those of the houses in the centre.
27.	This last consideration suggests to me that the conclusion that Parliament mistakenly used the word ‘house’ rather than the phrase ‘house and premises’ is less than safe: because so to read it will not remove all the anomalies which it might be thought could not have been part of Parliament’s intention. If one then adds to the mix the crucial consideration that in section 1AA(3) Parliament has twice used the word ‘house’, a word with a defined meaning that both section 1(1) and section 1AA(1) use in contradistinction to ‘house and premises’, I consider that there is no basis for a conclusion that its use was a mistake.
28.	Instead, I find myself driven to the conclusion that the key to the resolution of the interpretative problem may instead lie in the word ‘adjoining’. All the problems focused on Parliament’s use of the word ‘house’ are based on the premise that ‘adjoining’ means touching. If, however, it does not mean that, but means neighbouring, the supposed problems flowing from the use of the word ‘house’ in section 1AA(3) disappear. There will no longer be any need to identify a precise boundary line between the ‘house and premises’ and the non-residential rural land in order to see whether the ‘house’ is on the boundary and touches such land. The only question will be whether the non-residential rural land is ‘adjoining’ the house in the sense of ‘neighbouring’ it. There may in any particular case be a dispute as to whether it does or does not neighbour it, but that is a type of dispute which the court can resolve. The critical question is whether ‘adjoining’ is properly capable of being so construed.  
29.	We were referred to several authorities concerned with the meaning of ‘adjoin’ or ‘adjoining’ in different contexts. A fair general summary of them is that the cases raised disputes in which one side was asserting that the ordinary or conventional meaning of ‘adjoining’ is ‘touching’ whereas the other side was contending that it can also bear a wider meaning of ‘neighbouring’. The question for the courts was what ‘adjoining’ meant in the particular context in which it was used.
30.	I do not regard it as helpful to consider the authorities at any length or in any detail. Each turned on its own facts and none can provide a solution to the resolution of the particular problem with which we are faced. I shall, however, refer to just two of them, one old and one relatively modern, since I consider they well illustrate the potential for flexibility in the interpretation of the word ‘adjoining’. The first is the decision of the Court of Appeal in Cave and Another v. Horsell [1912] 3 KB 533. The defendant owned the Limes estate, which included five shops in Limes Parade, Nos 2 to 6. He leased No. 4 to the plaintiffs and covenanted that he would not at any time during the lease let ‘any of the adjoining shops belonging to him on the Limes estate’ for the purpose of particular businesses. He then let No 6 to another tenant for the purpose of one of the proscribed businesses. Had he breached the covenant? He said no, because No 6 did not adjoin No 4, it was merely a neighbouring shop. The plaintiffs said yes, because in the context of the covenant ‘adjoining’ plainly embraced all his shops on the Limes estate.
31.	I doubt if a court today would entertain any doubt that the plaintiffs’ argument, with which the majority of the Court of Appeal agreed, was right. The contrary approach, which appealed to Vaughan Williams LJ, who dissented, appears sufficiently from the following paragraph of his judgment ([1912] 3 KB 533, at 538):
‘The word “adjoining” in the present case is not a word which in its ordinary acceptation has more than one meaning, and that meaning is that it in fact adjoins or is contiguous to, in the ordinary acceptation of that word. The fact that a word is not infrequently misused does not alter either its strict and primary acceptation, or its grammatical and ordinary sense, or its primary acceptation, which are words intended in my opinion to express the same idea. Thus, in the present case, to give the word “adjoining” the meaning of “in the neighbourhood of” or “near to” is utterly inconsistent with the strict and primary acceptation of the word, in whatever form of words you express that idea.’
32.	I would respectfully regard that approach to the interpretative task before the court in Cave as alien to the modern approach to the exercise of interpretation, whether it be the interpretation of private documents or of legislation. It was an approach that, in the interpretative exercise, gave unbending primacy to the supposed ordinary meaning of ‘adjoining’ and refused to allow that meaning to yield to the particular context in which the word was used. 
33.	The majority judgments in Cave were delivered by Fletcher Moulton and Buckley LJJ. Both approached the question of construction in a way that is in harmony with the way in which the courts approach such questions today. Thus Fletcher Moulton LJ said, at [1912] 3KB 533, 541:
‘… we have not here to decide the abstract meaning of the word “adjoining” apart from the context. We are entitled and bound to bear in mind the surrounding circumstances, and then it is our duty to construe the words as a whole. We are entitled (among other things) to consider the object of the covenant. This is pointed out by Bowen LJ in his judgment in Lightbound v. Higher Local Board (1885) 16 QBD 577. He was there dealing with a section of an Act of Parliament, and he lays down that there is a broad rule of construction “that in construing the words you must look at the subject-matter of the section and see what is its scope and object.” This rule of construction is applicable also to the construction of contractual documents, and, applying it to the present case it is evident that the object of this clause has nothing to do with physical contact between the houses. … the language of the context is absolutely inapt to express such a restricted meaning as the defendant suggests [which he then elaborated]. …
It is pressed upon us that in thus deciding we are departing from the rule of construction laid down by Lord Wensleydale in his opinion in Grey v. Pearson 6 HLC 61, 106, that “in construing wills and indeed statutes and all written instruments the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity and inconsistency, but no farther.” In my opinion we are in no way departing from the rule of construction so laid down. The learned Lord is there dealing with the case of giving to words a meaning which they do not properly bear. But it is unquestionable (and indeed it was conceded in the argument on behalf of the defendant) that the word “adjoining” is normally used in the sense of “near to” as well as “in contact with.” Where a word has two proper and recognised meanings Lord Wensleydale’s canon of construction must be greatly modified, even if it applies at all. … The meaning of words is fixed by user alone, and, where the user of a word in more than one sense is established, the question in which sense it is used in a particular passage must be decided by the context and the surrounding circumstances, and no one meaning can be treated as having such paramount claims that it is to be adopted in preference to any other, unless its adoption would lead to absurdity or inconsistency.’
34.	Buckley LJ’s judgment also contains a valuable passage ([1912] 3 KB 533, at 543):
‘There are few words, if indeed there be any, which bear a meaning so exact as that the reader can disregard the surrounding circumstances and the context in ascertaining the sense in which the word is employed. Not even words expressive of number escape the ordeal. There are trades in which a dozen does not mean twelve nor a hundred five score.
There are words upon whose primary meaning there is no room for doubt. I may instance again the word “dozen.” But this is not true of all words. Many are not fixed, but of flexible, meaning. Such a word may have many primary meanings. It is for the reader, looking at the context, to say in which of those meanings it is employed. In making that determination, he must look at the subject-matter dealt with by the language in which the word occurs and see what is the scope and object of the instrument in which he finds it. …
There are three words, “adjoining,” “adjacent,” and “contiguous,” which lie not far apart in the meaning which they convey. But of no one of them can its meaning be stated with exactitude and without exception. As to “adjoining,” the expression “next adjoining” or “immediately adjoining” is common and legitimate. This expression at once conveys that two things may adjoin which are not next to each other. “Adjacent” conveys that which lies “near to” rather than that which lies “next to.” “Contiguous” is perhaps of all three the least exact. Any one of the three may by its context be shewn to convey “neighbouring” without the necessity of physical contact.’
35.	Buckley LJ’s summary of the potentially flexible meaning of the word ‘adjoining’ is, if I may respectfully say so, a sound one. Chapter 32 of Bleak House concludes with the description of Krook’s demise in his Rag and Bottle Warehouse by the phenomenon of spontaneous combustion. Chapter 33 describes the inquest, held at the Sol’s Arms, ‘a well-conducted tavern, immediately adjoining the premises in question [the warehouse], on the west side, and licensed to a highly respectable landlord, Mr James George Bogsby.’ Dickens penned those words some 60 or so years earlier than Buckley LJ penned his own in Cave. His words neatly illustrate the point that a user of the word ‘adjoining’ may not necessarily be using it as meaning ‘touching’. 
36.	The other authority to which I would refer is the more recent decision of the Court of Appeal (Dunn LJ and Wood J) in Cobstone Investments Ltd v. Maxim [1985] QB 140. It concerned the interpretation of the words ‘adjoining occupiers’ in Case 2 of Schedule 15 to the Rent Act 1977. The landlords had obtained an order for possession of a ground floor flat on the basis of Case 2, the main factual basis for it being the complaints of occupiers of the second, third and top floor flats, none of which touched the ground floor flat. The main issue in the Court of Appeal was whether or not these complaining occupiers were ‘adjoining occupiers’, the appellant tenant’s argument being that ‘adjoining’ did not mean ‘neighbouring’ and that Case 2 focused only upon occupiers of flats that touched the tenant’s flat. The court rejected that argument, holding that Case 2 was not so limited but extended to those occupiers who were sufficiently near by to be affected by the tenant’s conduct. (Another complainant was conceded to occupy a flat that did touch the appellant’s but it was said that his complaints alone could not have justified the possession order). 
37.	Dunn LJ, who delivered the leading judgment, decided the point on the basis that one meaning of ‘adjoining’ is ‘neighbouring’ and that the context of Case 2 required no more than that the premises of the adjoining occupier should be near enough to the tenant’s flat to be affected by the tenant’s conduct. Wood J agreed. He cited from Buckley LJ’s judgment in Cave and also from Bowen LJ’s judgment in Lightbound, to which Fletcher Moulton LJ had referred in Cave.  He then said, at [1985] QB 140, 151:
‘In my judgment if one did not give the wider meaning to the word “adjoining” there would be many cases which would amount to anomalies or total absurdities.’
He then gave two examples.
38.	Returning to the present case, and on the premise that ‘house’ in section 1AA(3) means the building, I have, with respect, considerable difficulty in interpreting the words ‘adjoining land’ in the way the judge did. Accepting, as I do, that the word ‘adjoining’ will commonly be used in the sense of touching, it is capable, in context, of being used as meaning no more than neighbouring. There cannot, I consider, be any presumption that Parliament has used the words ‘adjoining land’ as intending to convey just one of the possible meanings of ‘adjoining’. The exercise of interpretation requires them to be interpreted in the context in which they have been used. 
39.	That context is one in which the words ‘adjoining land’ have to be interpreted in relation to the word ‘house’, whose defined meaning is the building alone and which, for reasons I have endeavoured to explain, cannot safely be read as meaning ‘the house and premises’, a phrase with a different defined meaning. I accept that if ‘house’ means ‘house’, the interpretation of ‘adjoining land’ as meaning land that touches the house leads to anomalies and apparent absurdities of a nature that I am satisfied Parliament cannot have intended. The presumption is that Parliament does not intend to enact legislation whose application results in absurdities. That suggests to me that the interpretation of ‘adjoining land’ as meaning land that touches the house cannot be the right interpretation. The language of section 1AA(3) admits of an interpretation that would avoid such absurdities, by reading ‘adjoining land’ as meaning ‘neighbouring land’. That is in my view both a legitimate and a correct interpretation. Once it is adopted, the absurdities and anomalies fall away. The precise location of the ‘house’ in relation to the boundary of the ‘house and premises’ becomes unimportant. The only question is whether the relevant piece of rural non-residential land ‘adjoins’ the house in the sense of neighbouring it. If there is a dispute about it, the court can resolve it.
40.	I would therefore hold that ‘house’ in section 1AA(3) means ‘house’ as defined by section 2(1) and that ‘adjoining land’ in section 1AA(3)(b) means neighbouring land that either may or may not touch, or physically adjoin, the house. It was not suggested to us that, on that interpretation, the rural land that in this case lies beyond the boundaries of Mrs Lovat’s house and premises is other than ‘adjoining land’ within the meaning of section 1AA(3). 
Disposition
41.	I would allow the appeal, set aside Judge Dight’s order (save for paragraphs 2 and 3, relating to the giving of permission to appeal) and make a declaration to the effect that Mrs Lovat is not entitled to acquire the freehold of her house and premises. We also heard argument at the end of the hearing on the parties’ respective schedules of costs. In the court below, Hertsmere was ordered to pay Mrs Lovat’s costs, assessed at £19,400, including VAT, an order which falls to be set aside. I would award Hertsmere its costs below, which I would assess at £12,703 (which, Ms Wicks accepts is appropriate, does not include VAT). I would also award Hertsmere its costs of the appeal, which I would assess at £9,102 (again not including VAT). The costs must be paid within 14 days of the date of the court’s order. I would ask counsel to prepare an appropriate form of order.
Mr Justice Warren :
42.	I agree.
Lord Justice Longmore :
43.	I also agree.