Summary

On a proper construction of the Leasehold Reform, Housing and Urban Development Act 1993 s.2, a nominee purchaser could acquire only those parts of a leasehold interest that it needed.

Facts

The appellant (D), the nominee purchaser in respect of a claim for the collective enfranchisement of a block of flats, appealed against a decision of the leasehold valuation tribunal that it was not possible, under theLeasehold Reform, Housing and Urban Development Act 1993 s.2, to acquire only specific parts of premises demised by one leasehold interest. The respondent freehold owner (H) cross-appealed against the tribunal's finding that D was entitled to acquire the whole of a particular lease. The dispute between the parties related to a 999-year lease granted by H to a third party of the surface and air space on the roof of the block of flats. Planning permission was obtained to construct a four-bedroom flat and terrace on the roof. D did not seek to acquire the "development envelope" or to try to prevent the development. Its aim was to acquire, as a common part, only that part of the roof-space lease which was not going to form part of the demise of the flat. The leasehold valuation tribunal concluded that that was not possible under the 1993 Act. The main issue was whether, on a proper construction of s.2, the nominee purchaser entitled to acquire a leasehold interest had to acquire all or none it or whether Parliament's intention was that the nominee purchaser might acquire those parts of the leasehold interest that it needed and leave the rest.

Held

(1) A nominee purchaser could acquire only those parts of a leasehold interest that it needed. The language of the Act was not conclusive. However, to read s.2 as enabling the nominee purchaser to acquire as much of the leasehold interest as was needed and wanted but not insisting that all of it would be acquired was much more consistent with the purpose of conferring on the tenants those advantages Parliament must have intended them to enjoy. Instead of a rigidity that seemed pointless, such an interpretation produced a sensible flexibility that was no more likely to create difficulties in practice than the interpretation arrived at by the leasehold valuation tribunal (see para.34 of judgment). (2) In stating that the roof lease had to be acquired in its entirety, the tribunal had dealt with a point that was not properly before it. H was therefore entitled to succeed in its cross-appeal (para.36).

Appeal allowed, cross-appeal allowed