Summary

The phrase "designed or adapted for living in" in the Leasehold Reform Act 1967 s.2(1) required the court to consider the property as initially built and the purpose for which it was originally designed, and to consider whether any work had subsequently been done so that the original design had been changed. A property which had not been occupied for a number of years and had become internally dilapidated had nevertheless been originally designed for living in, and was thus, in the circumstances, a house within the meaning of the subsection.

Facts

The appellant (B) appealed against a decision ([2006] EWCA Civ 594, [2006] 1 WLR 2848) that it was not entitled to a declaration that it was entitled to acquire the freehold of a property under the Leasehold Reform Act 1967 s.1(1).

B was the lessee of a terraced property built in the eighteenth century as a single private residence and comprising six floors. Up until 1942 the property was used as a single residence but thereafter the three upper floors were retained for residential use while the lower floors were occupied for business use. By the time the notice under s.1(1) of the Act was served, both the commercial and residential uses had ceased and the property was vacant. The rooms on the three upper floors had been stripped back to their basic structure. Plaster had been hacked off the walls and some ceilings and floorboards had been removed. The Court of Appeal agreed with the judge at first instance that the property was not a house within the meaning of s.2(1) of the Act because it was not, as at the time the notice was served, "designed or adapted for living in".

G sought to uphold that decision, submitting that the property was not, as at the time the notice was served, "designed or adapted for living in" because it was not physically fit for immediate residential occupation.

Held

(1) As a matter of ordinary language, reinforced by considering other provisions of the subsection, and supported by the original terms of s.1(1) as well as by considerations of practicality and policy, the property was, as at the time the notice was served, "designed or adapted for living in" within the meaning of s.2(1). The fact that the property had not been occupied for a number of years and had become internally dilapidated and incapable of beneficial occupation did not detract from the fact that it had been designed for living in when it was first built. The word "designed" was concerned with the past, and the phrase "designed or adapted for living in" required firstly a consideration of the property as initially built and the purpose for which it was originally designed. The next consideration was whether work had subsequently been done to the property so that the original design had been changed. In asking each question, the ultimate concern was to decide whether the purpose for which the property had been designed or adapted was "for living in". The requirement that the property actually be in such a physical state that it could be lived in seemed valueless given that in s.1(1), as originally enacted, there was a requirement that it had actually been lived in. It was hard to see what policy considerations would have driven a requirement that a property be fit to live in before a tenant could enfranchise, especially if there was an actual residence requirement in any event. Furthermore, the issue of whether a property was fit for immediate residential occupation could easily lead to arguments and uncertainty and no such difficulties were likely to arise if the words were given their natural meaning. It was legitimate to consider s.1(1) as originally enacted, and the residence requirement originally contained therein was of assistance in construing s.2(1), Suffolk CC v Mason [1979] A.C. 705 and Attorney General v Lamplough (1878) 3 Ex. D. 214 applied. The legislature could not have intended the meaning of a subsection to change as a result of amendments to other provisions of the same statute when no amendments were made to that subsection, unless the amendment was to change the definition of an expression used in that subsection. (2) It was clear from s.2(1) that, in order to be a "house", a property need not be solely adapted for living in. Had it been argued that the property had been adapted for mixed residential and business use in 1942, that would have made no difference to the outcome of the case, the court inclining to the view that the original design of the property was what mattered in the instant case.

Appeal allowed