England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice The Strand London WCA 2LL
		20th December 2002

MR. JUSTICE PARK:

Overview

1. This is an appeal from a decision of His Honour Judge Dean given in the Central London County Court on 25^th January of this year. The case concerns a hotel at 24-27 Bedford Place, London WC1, the St. Margaret's Hotel. I will quote a passage from the beginning of the judge's judgment which gives a brief overview of the hotel.

"Numbers 24-27 form part of an elegant Georgian terrace characteristic of London townhouses of the period. Bedford Place was designed and built by James Burton in the early 1800s as part of the development of the Bedford Estate. Externally, the facing parallel terraces on each side of Bedford Place have retained many of their original features and all the houses are Grade 2 listed buildings. Internally, the houses have been substantially altered upon conversion to business use, in many cases as hotels, such as the St. Margaret's. The houses have a basement, ground floor and three upper storeys serviced by stairs. At numbers 24 to 27, although some original internal features have been retained, the original rooms have been sub-divided and partitioned in order to provide about 60 bedrooms and some public rooms, together with kitchen and laundry facilities in the basement. The majority of the bedrooms are small, with a hand washbasin. About ten rooms have their own showers, but most guests share communal bathrooms and lavatories."

2. The business of operating the hotel is owned by Mr. and Mrs. Marazzi, who are the Claimants in this case. They do not own the property itself, but over the years have had tenancies of it. For many years they have been the tenants of the Bedford Estate and, as tenancies have expired, they have been renewed. However, in 1999 the Bedford Estate granted to Global Grange Limited, the Defendant in this case, a long lease of the reversion. Therefore Global Grange is now Mr. and Mrs. Marazzi's immediate landlord.
3. In 1999 Mr. and Mrs. Marazzi were in occupation under a lease which had originally been a 12 years' lease and which was due to expire on 24^th March 2001. Global Grange has not been prepared to grant to them a new tenancy, and so they have invoked the rights of business tenants under the Landlord and Tenant Act 1954 to be granted new tenancies. There are, of course, exceptions to the rights of business tenants to new tenancies. Global Grange maintains that one of them applies here. It is the exception in Section 30(1)(f), which reads as follows:

"On the termination of the current tenancy, the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises, or to carry out substantial work of construction on the holding or part thereof, and that he could not reasonably do so without obtaining possession of the holding."

4. Global Grange plan works to the property, of which more later. It will still be a hotel but will be aimed at a higher slot in the market. At present the St. Margaret's is a two-star hotel with 60 bedrooms, most of which have hand basins but not en-suite bathrooms. Under Global Grange's plans the hotel will become a four-star hotel. There will be 38 bedrooms, all with en-suite bathrooms. Some works are also planned for the basement, where the kitchen is situated. A lift is to be installed at one point in the building. Global Grange has planning permission and funding and definitely intends to proceed. It could not do the works with Mr. and Mrs. Marazzi still in occupation.
5. The effect of those points is that Global Grange meets all the statutory conditions for refusing a new tenancy, except the point in dispute before Judge Dean and on this appeal, that point being whether it "intends to demolish or reconstruct…a substantial part of those premises or to carry out substantial works of construction on the holding or part thereof".
6. Mr. and Mrs. Marazzi did not accept that those conditions of paragraph (f) applied, and they persevered with their claim for a new tenancy. The County Court made a direction that there be tried as a preliminary issue whether Global Grange was entitled to invoke paragraph (f). The preliminary issue was tried by Judge Dean. He held that paragraph (f) did not apply. Global Grange appeals against his decision.
7. I am going to dismiss the appeal, essentially on the ground that the decision which the judge reached was properly open to him. Thus I cannot say that his decision was wrong. It does not necessarily follow that, if he had found that paragraph (f) did apply, that finding would have been wrong. There is an area, sometimes referred to as a grey area or, in the words of Lord Simon of Glaisdale in Ransom v. Higgs [1974] 50 Tax Cases at 96, as a "no-man's land of fact and degree", within which a decision either way would not be wrong.
8. Mr. Thom, who appears on behalf of Global Grange, has presented to me very clear and forceful submissions on the basis of which I can well imagine that, if the question before me had been the question before Judge Dean, I might have been persuaded that the conditions of paragraph (f) did apply. However, as I will explain later, the nature of the question with which I am concerned is not the same as the nature of the question which the judge had to decide.

Paragraph (f) of section 30 of the Landlord and Tenant Act 1954: the two limbs.

9. I will now say a little about the formal legal background to this case. I have already quoted paragraph (f), and I point out now that there are two limbs to the paragraph. The first limb is contained in these words: "The landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises." The second limb is contained in the subsequent words: "The landlord intends…to carry out substantial work of construction on the holding or part thereof."

The nature of the present appeal

10. Moving for the moment from the Landlord and Tenant Act to the provisions regulating the appeal, I quote certain extracts from Part 52 of the Civil Procedure Rules. Rule 52.11(1) reads:

"Every appeal will be limited to a review of the decision of the lower court unless [conditions not present in this case exist]."

Rule 52.11(3)(a) reads as follows:

"The Appeal Court will allow an appeal where the decision of the lower court was – (a) wrong…"

11. The effect of this has been considered by Clarke L.J. in Assicurazioni Generali SpA v. Arab Insurance Group [2002] ECA Civ 1642, a recent decision delivered on 13^th November 2002. I am particularly grateful to Mr. Thom for drawing my attention to this decision. Clarke L.J points out that appeals can raise questions of various kinds. One sort of appeal is an appeal against the exercise by a first instance judge of a discretion (not this case). In an appeal of that nature, it has long been accepted, before the Civil Procedure Rules as well as after them, that the appellate court is slow to interfere.
12. Clarke L.J referred to the earlier judgment of Brooke L.J. in Tanfern Ltd v Cameron-MacDonald [2000] 1 WLR 1311. In that judgment Brooke L.J. himself quoted a passage from the speech of Lord Fraser in G v G [1985] 1WLR 647 at 652. Part of the quotation reads as follows:

"…the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible."

13. That passage specifically referred to an appeal about a discretionary decision. The present appeal is not an appeal against a discretionary decision on the part of Judge Dean, but it is nevertheless similar in some respects and it should be approached in a similar way. I quote Clarke L.J. in paragraph 16 of his judgment in Assicurazioni Generali SpA v. Arab Insurance Group:

"Some conclusions of fact are, however, not conclusions of primary fact of the kind to which I have just referred. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges may legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way."

14. The present case involves an evaluation of the facts. As I have said, it is not a case about an exercise of discretion by the judge, but it is a case about an exercise of judgment by him. There is no dispute about what Global Grange's proposed works are. The questions are whether, if Global Grange carried them out, it would thereby either, within limb 1, demolish or reconstruct a substantial part of the premises or, within limb 2, carry out substantial work of construction on the holding or part of it. Those questions are questions in the nature of an evaluation and are precisely the kind of questions Clarke L.J. had in mind in the passage which I have just quoted.
15. The effect is that I can only interfere with Judge Dean's decision if either (1) he has misstated the law, or (2) he has misunderstood in a material way some point of fact about what the proposed works are, or (3) while correctly stating the law and correctly understanding the facts, he has nevertheless come to a conclusion which cannot be right. The third case would be a conclusion outside what Lord Fraser in G v. G referred to as "the generous ambit within which a reasonable disagreement is possible", and outside what Lord Simon in Ransom v. Higgs referred to as "the no-man's land of fact and degree." Mr. Thom's submissions to me on this appeal have been based on the third of those three possible ways in which a decision of this sort can be challenged.
16. I should add that, for appeals which raise questions under Section 30(1)(f), the approach which I have described is not really a new approach brought about by the Civil Procedure Rules. Several earlier cases have made the point that the issue raised by the words in paragraph (f) is essentially one for the first instance judge. I will give some examples of this since it is an important point and since it is the central ground of my decision that the appeal should be dismissed. From Bewlay (Tobacconists) Ltd v. British Bata Shoe Company Ltd [1959] 1WLR 45 I will simply quote the holding summarised in the headnote:

"…there was evidence to support the judge's findings of fact and…he had applied the correct test. He was entitled to look at the totality of the work which was proposed to be done in order to decide whether, as a matter of fact and common sense, these proposals came within the scope of paragraph (f)…"

In Percy E. Cadle & Co Ltd v. Jacmarch Properties Ltd [1957] 1QB 323, Denning L.J said (at page 328):

"Whether there is work of that character and to such a degree is primarily a matter for the County Court judge."

Hodson L.J said:

"I think that on consideration of these facts the County Court judge arrived at a conclusion which he was entitled to reach on the evidence."

In Cook v. Mott [1961] 178 Est.Gaz. 637, Ormrod L.J said:

"I have come to the conclusion that this is largely a matter of degree depending on the circumstances of each particular case… It is in my view, as I have said, largely a matter of first impression and a question of the facts and circumstances of each particular case."

In Romulus Trading Company Ltd v. Henry Smith's Charity Trustees [1990] 2 EGLR 74, I quote first a short passage from the judgment of Farquharson L.J:

"In my judgment, this court has to be careful not to review the findings of the trial judge as to what constitutes work of construction or reconstruction unless he is plainly wrong. Thus, internal walls might be properly so described in the setting of one building, but not in another. Courts might well come to different conclusions on this basis."

I also quote a pithy observation from the judgment of Mustill L.J:

"Ultimately it is a jury question."

17. There are cases where decisions of first instance judges about whether paragraph (f) is satisfied or not are reversed, for example, Joel v. Swaddle [1957] 1WLR 1094, but reversals are exceptional.

The judge's summary of paragraph (f)

18. Turning to the substance of paragraph (f), the cases to which I have referred and other cases have explored the critical words in the paragraph. What sort of things are contemplated by "demolish or reconstruct the premises or a substantial part of those premises"? What sort of things are contemplated by the words "carry out substantial work of construction on the holding or part thereof"?
19. Judge Dean was referred to the relevant authorities, as I have been. He summarised the effect of them in paragraphs 10 to 12 of his judgment. Mr. Thom accepts that his summary is broadly accurate, and I will read the relevant extract from it.

"The consistent approach manifested in the authorities has been to emphasise that the section is dealing with building works of some substance affecting the structure of buildings as opposed to matters such as fittings, fixtures, decoration, or plant or internal reorganisation, which does not form part of the essential structure of the premises. In this context structure does not necessarily mean load-bearing elements."

The judge then referred specifically to a number of the authorities. I will not set out what he says verbatim, but, extracting a few observations, he notes from the Cadle case that the court emphasised that the important consideration was the physical work itself. "Reconstruction" required something in the nature of a rebuilding. Further, in the Cadle case the court considered that the word "reconstruction" meant a physical reconstruction of the premises. It meant "a substantial interference with the structure of the premises and then a rebuilding, probably in a different form, of such part of the premises as had been demolished by reason of the interference with the structure." (That last formulation is based on the judgment of Ormerod L.J in the Cadle case.) The judge also referred to the important judgment of Stocker L.J in Barth v. Pritchard [1990] 20 EG 109. The learned Lord Justice said that the work must be considered as a whole rather than by way of isolated consideration of individual items, and added a number of further important observations, to some of which I will return later. Mr. Thom does not suggest that the judge, in his summary of the effect of the cases, has misstated the law. Thus there is no appeal before me on the ground that the judge showed that he misunderstood the basic law which it fell to him to apply.

Global Grange's planned works

20. The judge, having summarised the law, describes the existing structure of the hotel in more detail than in the brief summary which I quoted earlier. He describes the proposed work to it. I will not repeat those parts of the judgment here, although I will refer to particular aspects from time to time as this judgment progresses.
21. An important point which I will explain here concerns internal partition walls. The three upper floors of each of the four adjoining houses which together constitute the hotel were accessed by staircases rising to landings at the central area of each floor. There were then rooms to either side of the landing. It seems likely to me that originally, when the houses were first erected, there would have been two principal rooms on each floor, one to the street side of the house and one to the rear of the house. However, all of the rooms are now divided into a larger number of smaller rooms. The divisions have been effected by stud partition walls. Originally these (subsequently inserted) dividing walls did no more than divide the space into more rooms than one. They did not have any load-bearing purpose or function. The experts are agreed that over time some of the inserted partition walls may have come to perform a load-bearing function. The plans which Global Grange has involve changing the hotel from one of 60 rooms, many of them quite small, to one of 38 rooms, generally of larger size. Therefore, the plans necessarily involve the removal of the stud partition walls which typically divided one original room into two or more. The installation in the new larger bedrooms of en-suite bathrooms means that Global Grange's proposals include the installation of some new partition walls which are not in the hotel as it now is. There are some other layout changes, especially creating a corridor running along the third floor across all four houses, which involve further new partition walls being put in place. These proposals relating to partition walls – removal of some existing walls and insertion of some new ones – play an important part in the argument.
22. Judge Dean summarised the evidence of the witnesses. I will not go into this, but I will repeat a short quotation which he gave from the report of a chartered surveyor who gave evidence on behalf of Mr. and Mrs. Marazzi. The judge evidently accepted that this quotation encapsulated the essence of Global Grange's proposals:

"The structural works arising from the proposed alterations are such that they do not include the remodelling, substantial demolition or reconstruction of the structure, but can be defined from the documentation as general building works to form openings, partitions and similar removals and construction of new partitions and enclosures to revise the existing layout…"

The judge's conclusions: paragraphs 28 and 29 of the judgment

23. The judge outlined the parties' submissions and then came to his conclusions in two paragraphs of the judgment, paragraphs 28 and 29. Paragraph 29 expressly says that it is directed to the second limb of paragraph (f). Paragraph 28 does not specifically state that it is directed to the first limb of paragraph (f), but I think it is clear that it is so directed. In the circumstances, I will consider first paragraph 28 of the judgment. I mention that there are specific grounds of appeal set out in the notice of appeal. Later I shall say something about them individually. At this stage, however, I wish to consider in a more general way paragraph 28 of the judge's decision, and I shall do so against the background of what I see as the general thrust of Mr. Thom's submissions. I will come to paragraph 29 later.
24. I preface what I say by reminding myself of the terms of the statute so far as the first limb of paragraph (f) is concerned:

"The landlord intends to demolish or reconstruct the premises comprised in the holding, or a substantial part of those premises."

The "holding" is the tenancy of the hotel. The premises are the whole of the hotel, numbers 24 to 27 taken together. The landlord, Global Grange, does not intend to demolish or reconstruct the whole of the premises, so the question is whether the landlord intends to demolish or reconstruct a substantial part of the premises. I think Mr. Thom would say that Global Grange intends to do both of those things, i.e. both to demolish and to reconstruct a substantial part of the premises, but perhaps the emphasis in his submissions is on reconstructing a substantial part of the premises.

25. Mr. Tanney, who appears for Mr. and Mrs. Marazzi, submits, and I accept, that the correct approach established by the authorities, especially Stocker L.J. in Barth v. Pritchard supra, is to identify the components in the proposed works which in some way affect the structure of the building, internal or external, and to take those works together with any works which do not affect the structure but are ancillary to works which do. Those works which might be viewed as structural and ancillary works are to be taken together in the exercise of evaluating whether the landlord, here Global Grange, intends to demolish or reconstruct a substantial part of the premises. A further and important aspect of this analysis is that the court, in carrying out the evaluation exercise, does not take account of works which, though they are part of the landlord's entire project, do not themselves in any significant way affect the structure of the building, and are not ancillary to works which do.

The judge's findings on the first limb of paragraph (f) of section 30(i); paragraph 28 of the judgment

26. I turn now specifically to paragraph 28 of the judgment, and I begin by quoting a sentence at the beginning of it:

"For the avoidance of doubt, I will make it clear that I proceed on the basis that 'structure' is not confined to load-bearing elements, but includes the basic fabric of the building which gives it its essential form and character as a building, i.e. the building itself."

I confess that I find the latter part of that sentence rather obscure, but it is only introductory to the central reasoning of the judge which follows, and to which I will now turn. He goes on to identify those elements in Global Grange's intended works which, in his view, do involve demolition and reconstruction.

"There are some works which can be said to involve demolition and reconstruction, notably the removal of the basement wall and its replacement by the steel beam; the installation of the lift involving floor timbers and the removal of part of the roof and the building of the overrun; the removal and restoration of part of the staircase in number 25 and the opening up of access in party walls."

Despite the word "notably" in that passage, I consider that it gives what is almost the judge's exhaustive list of works which he considered truly to involve demolition and reconstruction. That can, I think, be seen from a sentence in paragraph 29, which reads:

"…some of the proposals include work of construction, i.e. in the basement kitchen, lift shaft, party wall openings, staircase restoration, opening and restoration of one external door and window."

The only item listed there which is not in the sentence in paragraph 28 is the opening and restoration of one external door and window.

27. Returning to paragraph 28, the judge, having specified the items which he considers would involve demolition and reconstruction, goes on to say this:

"Taking all these together, the proposed work does not affect a substantial part of the premises."

I draw specific attention to "taking all these together". Mr. Thom submitted that the judge took a piecemeal view. In my judgment, however, he did not. Mr. Thom's real complaint is not that the judge failed to consider the collective impact of the items which he thought it right to consider; his complaint rather is that the judge ought to have thought it right to consider more items than he did.

28. The judge then proceeded to say why the proposed work for the items which he did take together, though having a structural impact, would not affect a substantial part of the premises. I do not need to read this part of the judgment. The point in itself is not disputed. As I have said, the real criticism is that the judge should have taken together more items than he did. It is submitted that, if he had done that, he would have concluded that the greater quantity of items did affect a substantial part of the premises.
29. Continuing in paragraph 28 the judge identified items of work which he considered would not affect the structure of the premises sufficiently for them to be taken into account. This seems to me to be an important part of his reasoning, given the nature of the argument before me.

"I do not consider that some levelling of floors on two storeys with the incorporation of plywood, nor the removal and replacement with the incorporation of plywood of non-original party walls, even when they may have acquired some non-designed load-bearing qualities over the years, is 'demolition or reconstruction' of a substantial part of the premises within Section 31(f), as interpreted in the authorities."

In that sentence I suspect that the reference to "non-original party walls" is a slip for "non-original [internal] partition walls". The sentence deals with two matters: (1) levelling of floors, and (2) removal and replacement of some internal partition walls. As to floors, I should first deal with the judge's reference to levelling of floors on two storeys. Mr. Thom said, and I think Mr. Tanney was prepared to accept, that the judge had misunderstood the evidence. Floors would be levelled on three storeys, not two. In my judgment that makes no real difference. As I read the sentence, the judge's salient point is not that floors were going to be levelled on only two storeys, and that that would not be enough to amount to a substantial part of the premises; his salient point, in my view, is rather that levelling of floors was not demolition or reconstruction at all. I point out that in the sentence which I have quoted he placed quotation marks around the words "demolition and reconstruction", thus demonstrating, as it seems to me, that the essential point he was making was the one which I have identified. The substance of the matter so far as the floors are concerned is this. The evidence was that some floors were uneven, as would be inevitable in a building which is 200 years old. The plan is to level them, and a number of techniques for levelling them appear to have been canvassed in evidence. It seems that the one likely to be adopted would be to lift the floorboards from the joists, to install a sheet of plywood, and then to nail the floorboards back down again. The judge found that that operation was not demolition or reconstruction. It seems to me that it was plainly open to him so to find, and I would probably have made the same finding myself.

30. I turn to what the judge says about partitions:

"The partitions are stud partitions, and while not so temporary or insubstantial as the partitions commonly found in modern office buildings, fulfil an essentially similar function of making convenient divisions to enable use of the building to suit the particular requirements of the occupier or tenant, rather than being part of the essential structure of the premises. Their historical installation for the purposes of the Claimants' business, and their proposed new placement for the more upmarket business which Global contemplate, demonstrate both their function and their nature."

On the limited point about the addition of plywood to stiffen the partition walls, I do not think that the judge can be faulted for finding that that element of the proposed works could not be regarded as "reconstruction". The major point, and I believe the foremost element in Mr. Thom's forceful submissions, is that the judge erred in law in considering that the removal of some existing partitions and the installation of some new partitions was not demolition or reconstruction in the sense of paragraph (f). I can imagine that a different judge might have taken a different view on this, but I cannot accept Mr. Thom's submission that the view which Judge Dean took was outside the range within which there was legitimate room for differences of opinion.

31. I will add an observation of my own, though it reflects my own thoughts and is not specifically based on anything said in the judgment. The statute refers to demolition or reconstruction of "a substantial part" of the premises. In my view Mr. Thom's submissions in relation to the partitions may be in difficulty if one considers carefully what is or are the part or parts of the premises contended to have been demolished or reconstructed by the removal of some old partition walls and the installation of some new ones. I think Mr. Thom says that the parts of the premises are the partitions themselves. This is on the basis that everything which is in a building and which is a fixture is a part of it. In a formal sense that is correct, but I incline to the view that that is not what the draftsman had in mind by referring to "part" of the premises. I think that he had in mind a specific area of the premises, such, for example, as a particular floor. Let me take as an example the third floor of the hotel. Global Grange intends to remove some partition walls in the third floor, but it does not intend to demolish the third floor. It intends to install some new partition walls in the third floor, but I would not describe that as "reconstructing" the third floor (that floor being a "part" of the hotel). It seems to me to be more in the nature of altering the internal layout within the third floor, something which, to my mind, is not the same thing as reconstructing the third floor. The same applies to any other area of the building in relation to which similar questions may be considered: changes to the partitioning alter the lay-out of the area but do not reconstruct it.
32. I do accept that there can be a question of degree here. If the plans were to gut the whole interior of the hotel and rebuild the interior, that obviously would be reconstruction. But in the actual case, excellent and substantial though Global Grange's plans are, the essence of the internal structure remains. There are basement, ground, first, second and third floors. There are the four houses, still recognisably distinct but operating as one hotel. There are the external walls. There are the party walls, which were the party walls between the four houses. All of those features will remain.
33. The basic layout of rooms on the ground floor appears to me from the plans to be similar, though not identical, on a "before and after" basis. I am sure that the ground floor rooms are intended to be upgraded substantially and that there will be some changes of functions between the rooms, but the layout does not appear to me to be markedly different.
34. On the upper floors, as the hotel now is there is an internal partition wall running the length of the building between rooms on the street side and rooms on the back side of the hotel. A division of that nature would, in general, continue under Global Grange's plans, though with some minor divergences of detail, especially on the third floor. The significant difference on the upper floors would be that the front and rear original rooms on those floors, which are currently sub-divided into smaller rooms, would in most cases not be sub-divided any more and would have en-suite bathrooms built into them. There would definitely be changes, and I do not underestimate the attractions of them or their importance to the nature of the hotel as Global Grange visualises it. However, I doubt whether the changes are enough to say that the various parts of the hotel would be "reconstructed". Certainly it is my opinion that it was open to the learned judge to reach his evaluation that the parts of the hotel concerned would not be reconstructed.
35. That is what I want to say on the major point in paragraph 28 of the judgment concerning the changes to internal partition walls. The judge makes a few other points in paragraph 28. I will refer only to one of them. He says this:

"The renewal modernisation, rearrangement and extension of the utility services does not amount to structural work and is, at best, ancillary to the general refurbishment."

I can see no error of law in what the judge says there. Mr. Thom criticises the judge for not attaching significance to Global Grange's intention to construct a larger drain from the basement than the drain which the hotel presently has. I do not agree with this. I agree with Mr. Tanney that the drain would be an installation to the hotel, or a service to the hotel, rather than be part of the structure of the building. The larger drain would be needed because there might be greater discharges brought about by the installation of a significant number of new en-suite bathrooms, and also new and larger toilets in the public areas on the ground floor. Mr. Tanney would accept, and so would I, that if the installation of the en-suite bathrooms and the new toilets were themselves works of reconstruction, it would be right to take account of the new and larger drain on the basis that it was work ancillary to works of reconstruction. Since, however, I am not prepared to reverse the judge's view that the installation of the bathrooms and toilets would not be themselves works of reconstruction as such, this point does not arise.

36. That is all that I wish to say on paragraph 28 of the judgment.

The judge's findings on the second limb of paragraph (f) of section 30; paragraph 29 of the judgment

37. I move now to paragraph 29 of the judgment, which relates to the second limb of paragraph (f):

"The landlord intends….to carry out substantial work of construction on the holding or part thereof."

It is worth pointing out that the adjective "substantial" at this point goes, not with "the holding or part thereof" (compare the first limb, where "substantial" goes with "a part of the premises"), but with the phrase "work of construction". The questions are (1) whether Global Grange intends to carry out work of construction on the premises or part of them and, if so, (2) whether the work will be substantial.

38. The judge began by saying that the question was "by its nature and upon the authorities a question of fact and degree upon which I recognise opinions may well differ". He noted that Global Grange's programme of works would be costly, in excess of £2 million, and that it would take quite a long time, about 12 months. Those factors might suggest substantial work, but the judge added, correctly in my opinion:

"Although time and money are relevant, the ultimate issue is the true character of the physical work."

39. He returned, now in the context of the second limb, to partitions. He quoted the following observation of Stocker L.J. in Barth v. Pritchard (p.111 of the report), about the meaning of "work of construction":

"If it is necessary to decide whether or not in any given case it is necessary for works to involve directly the structure of the building in some way, my own view would be that this is implicit in the generality of s.30(1)(f). In other words, that some form of building upon the premises which involves the structure is required. I would not consider wooden partitions, however extensive, as falling within the definition of 'construction', but such a situation would have to be reviewed in accordance with the facts of any given case."

Judge Dean added:

"I do not read this statement as one of law settling the fate of partitions in every case… Nonetheless, this observation does highlight the important distinction between work affecting the essential structure, even when non load-bearing, and less fundamental operations, even if they are extensive in terms of time and expense."

40. He does not specifically spell out what I say now, but I think it is clearly implicit in what he does say that in his view Global Grange's proposals for removing some partition walls and installing others, even though "extensive in terms of time and expense", are less fundamental operations than "work affecting the essential structure". For that reason he did not regard them as "substantial work of construction on the holding or part thereof" within the meaning of the second limb of paragraph (f). For essentially the same reasons as I gave earlier when considering partitions in the context of the judge's paragraph 28, my opinion is that the judge's finding was at least within the ambit of findings which he could make without being wrong.
41. He continues in paragraph 29 to say that those of the proposed works which in his view were construction would not be "substantial" in the context of the physical extent of these premises and Global's overall proposals. I do not understand that finding to be challenged in itself. I think Mr. Thom tacitly accepts that, if the only works to be considered are those which the judge thought it appropriate to consider, they would not be sufficiently substantial. Mr. Thom's point is that the judge, on the second limb as on the first limb, ought to have considered more works to be works of construction, especially the works affecting some of the internal partition walls. However, as I have said, I am unable to say that the judge was wrong in that respect.
42. I do not need refer to any other detailed points in paragraph 29, but I will read the concluding sentence:

"Although initially I did not find the decision on this aspect of the case straightforward, having given the matter prolonged thought and approaching it as directed in a broad common sense way, as would a jury, against the background of the statutory policy of protecting existing business tenants, I have come to the firm conclusion that Global have not satisfied me that the proposals contained in either the approved or the revised scheme constitute work of demolition or reconstruction of a substantial part of the premises or substantial work of construction on the holding or part of it."

In my judgment, that approach cannot be held to be wrong on an appeal by way of review against a decision which involved an exercise of judgment and evaluation.

43. It remains for me to consider the individual grounds of appeal in the appellant's notice.

The grounds of appeal in the appellant's notice.

Ground 1

44. I will not read this in extenso. Essentially it attacks the point at the beginning of paragraph 28, where the judge said:

"'Structure' is not confined to load-bearing elements, but includes the basic fabric of the building which gives it its essential form and character as a building, i.e. the building itself."

I repeat what I said earlier on this. The second part of the judge's sentence is obscure, but his essential reasoning, in my view, comes later. I do not think that one unsatisfactory sentence would justify me in setting aside the decision.

Ground 2

45. I need read only the opening part of this ground.

"In paragraph 28 of the judgment, the learned judge wrongly treated the proposed works to stiffen, i.e. strengthen, the floor timbers as restricted to the second and third floors, whereas they extended also to the first floor."

I have dealt with this. The critical point which the judge was making was not that the stiffening of floors was not happening on enough storeys to matter; rather his critical point was that it was not "demolition or reconstruction". I repeat my point that the judge placed quotation marks around those two words.

Ground 3

46. "The learned judge erred in paragraph 28 in excluding from consideration the proposed works to internal partition walls and floors." As to this, I refer to my earlier observations, which I will not repeat. In my judgment, it was at least open to the judge to take the view which he did about the proposed works to partition walls and to floors.

Ground 4

47. "The learned judge erred in paragraph 28 in excluding from consideration the new underground drainage system and enlarged public sewer connection." Again, I have dealt with this earlier and I will not repeat what I have said.

Ground 5

48. "The learned judge erred in paragraph 28 in posing the question whether each particular aspect of the scheme amounted to demolition or reconstruction of a substantial part of the premises. Having found that there was demolition and reconstruction he should have looked at the works as a whole to see whether a substantial part of the premises was affected." This is in essence the submission that the judge adopted a piecemeal approach. As I have said, I do not think that he did. I refer to the words "taking all these together" in a sentence which I quoted earlier. I make again the point which I have made on a number of occasions, that Mr. Thom's real complaint is not that the judge looked in a piecemeal way at the matters which he thought it right to consider; the complaint is that he ought to have looked at more items than he did.

Ground 6

49. "The learned judge erred in paragraph 29 in that he wrongly excluded the proposed works to internal partition walls and floors and the new underground drainage system and enlarged public sewer connection." This essentially repeats in relation to paragraph 29 grounds 3 and 4, which themselves related to paragraph 28. For the reasons which have led me not to accept grounds 3 and 4, I am not able to accept this ground 6 either.

Ground 7

50. I will not set this out in full, but the ground points out that the works will take 12 months and cost in excess of £2 million. In my opinion, the judge dealt fairly with this point in paragraph 29. He had acknowledged that the cost and duration of the works suggested that they would be substantial, but he correctly said that although time and money were relevant, the ultimate issue was the true character of the physical work. I would at this point like to add one thing to what I have myself said earlier about this. In the judgment of Sir Michael Kerr in the Romulus case, supra, he said this:

"As it seems to me, if one considers the nature and amount of the work to be done to this building, at a cost of some £420,000 and over a period of 50 weeks, it would not be at all surprising, let alone unreasonable, to conclude that it involved both 'reconstruction' and 'substantial work of construction' on and to the premises."

Sir Michael does refer to the cost and time involved, but, reading the sentence carefully, it is not those items which make it not surprising or unreasonable to conclude that the works involved reconstruction and substantial work of construction; rather, it is "the nature and amount of the work to be done to this building". The same applies here. The judge looked at the nature and amount of work to be done. He concluded, particularly it seems to me with regard to the nature of the work, that though costly and lengthy, the work did not involve reconstruction or substantial work of construction on the premises. I cannot hold that he was wrong to reach those conclusions.

Ground 7A

51. Ground 7A has been overtaken by events, and no issue now arises under it. In the circumstances I will not say anything about it.

Conclusion

52. I have no other observations to make. The result is that the appeal is dismissed.
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