The near-impossibility of defining a "house"

The recent decision of the Court of Appeal in Grosvenor v Merix International [2017] EWCA Civ 190 shows once again how difficult it is to assess whether, in any given case, a property qualifies for enfranchisement under the Leasehold Reform Act 1967.  At the relevant date the premises in question had been totally unused for 13 years.  Prior to this they had been used primarily as offices but with a degree of residential accommodation.  Following his site visit the trial judge said that “what was striking … was just how evident the residential character, identity and functionality of the building remained externally and internally”.  In his view, the circumstances most closely resembled those in Boss Holdings v Grosvenor [2008] 1 WLR 289, relating to similarly empty premises in the same London street, which the House of Lords decided were a “house” for the purposes of the Act. 

The Court of Appeal agreed with the trial judge that the premises could reasonably be called a house within the meaning of the Act and were accordingly enfranchiseable. In coming to that decision, the Court of Appeal acknowledged that “various types of building must be amenable to varying characterisation by trial judges, doing their best to apply the principles emerging from decided cases.  Any other solution is simply a recipe for an endless chain of appeals to the higher courts …” !  

The difficulty with this decision is that it appears to run counter to that of the Supreme Court in Day v Hosebay [2012] 1 WLR 2884 which held that actual user, rather than external or internal appearance, should be determinative.  Clearly, that principle is difficult to apply where premises are vacant and unused at the relevant date, but that begs the question of whether one ought then to have regard to the most recent use.  That is exactly what was done in Boss, but not in Merix.

This was the tenth occasion on which the Court of Appeal has had to consider what a house is for the purposes of the Act.  This time the Court seems to have acknowledged the near-impossibility of the task: “the law, in statute and decided cases, has not prescribed and cannot possibly prescribe a legal solution for every type of property.   … Where the trial court is faced with a property of a type not exactly similar to one previously characterised by the higher courts, it must surely do its best to apply the law to the facts as found and decide whether the property in question is or is not a house, with the benefit of its own evaluation.”

As long as the higher courts are unwilling or unable to provide general guidance as to how, as a matter of law and in the interests of consistency, all such cases ought to be approached, there may be no end of “house” cases taking up their time.

This article was written by Jeremy Hudson and Lauren Fraser. For more information please contact Jeremy on +44 (0)20 7427 6452 or jeremy.hudson@crsblaw.com or Lauren on +44 (0)20 7427 6418 or lauren.fraser@crsblaw.com