Day v Hosebay Limited; Howard de Walden Estates Limited v Lexgorge Limited (2012)
Properties used entirely for commercial purposes were not "house[s] reasonably so called" for the purposes of the Leasehold Reform Act 1967 s.2(1), whatever their original design or current appearance, or the fact that they might look like houses and might be referred to as houses for some purposes.
In conjoined appeals against a decision ( EWCA Civ 748), the court was required to determine the question of what constituted a "house" for the purpose of the Leasehold Reform Act 1967 s.2(1).
The tenant in the first appeal had acquired long leases on three terraced properties that had been fully adapted to provide several individual rooms for letting, and were used as short-term accommodation for tourists and other visitors, described in court as a "self-catering hotel". The premises were originally constructed and occupied as houses. The tenant in the second appeal had also acquired a long lease on a property that was designed, built and initially used as a town house residence for a single family. The property maintained its physical appearance externally, but was being solely used as offices at the relevant date. The tenants gave notice to acquire the freeholds of the properties under the Leasehold Reform Act 1967 s.8. Those notices were resisted by the appellant landlords on the basis that the premises were not houses under s.2(1) of the Act as they could not be described as a "house reasonably so called". The first tenant's notice was also resisted on the basis that the premises were not a "house" as they were not "designed or adapted for living in". In each case, the courts held that the premises were houses under s.2(1).
(1) A building wholly used, as in the first appeal, as a "self-catering hotel" was not "a house reasonably so called" within the meaning of s.2(1). The contrary view of the Court of Appeal in the instant case turned on, firstly, the external appearance of each property as a town house. That should not have been given determinative weight. That the buildings might look like houses and might be referred to as houses for some purposes, was insufficient to displace the fact that their use was entirely commercial. Whilst Lord Roskill in Tandon v Trustees of Spurgeons Homes  A.C. 755 accepted that physical appearance could be relevant to determining the "character" of the building, the determinative points in that case were the proportion of residential use and the occupation of such a building by a tenant as his residence, Tandon explained. The Court of Appeal's view turned, secondly, on the internal conversion to self-contained units. It was difficult to see the relevance of that point as the point only arose in relation to a building which was in some sense "adapted for living in" under the part of the definition of "house" in s.2(1) subsequent to that being considered (see paras 29, 41, 43 of judgment). A building wholly used for offices, as in the second appeal, whatever its original design or current appearance, was not a house reasonably so called, Grosvenor Estates Ltd v Prospect Estates Ltd  EWCA Civ 1281,  1 W.L.R. 1313 approved. That it was designed as a house, and was still described as a house for many purposes, including in architectural histories, was beside the point (paras 41, 45). (2) Although it was unnecessary in the circumstances for the court to reach a concluded view on the application of the phrase "designed or adapted for living in" in the first appeal, the court considered that "living in" meant something more settled than "staying in", and that the present use of the premises did not qualify as such. There was more room for debate, however, as to whether the premises were to be taken as "adapted" solely for such use, to the exclusion of longer term occupation (para.44). (3) (Per curiam) The view expressed in the Court of Appeal in the instant case by Lord Neuberger, that a building originally designed for living in, but adapted for some other purpose, was not "designed or adapted for living in" within s.2(1), unless subsequently re-adapted for that purpose, was to be preferred to the view he expressed inBoss Holdings Ltd v Grosvenor West End Properties Ltd  UKHL 5,  1 W.L.R. 289 in respect of that phrase, Boss Holdings considered (paras 33-34).
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10 Oct 2012
Lord Phillips, Lord Walker, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption, Lord Carnwath
UKSC 41 10 October 2012