Judgement:
LORD DENNING M.R.
This case concerns nos. 5 and 6 Gliddon Road, Baron's Court. In 1900 these two houses were the subject of two building leases. No. 5 Gliddon Road was let at a ground rent of £15 a year for 99 years. No. 6 was let at £12 10s. a year for 99 years. They were at that time completely separate houses. They continued separate for many years.
In 1957 Mrs. Wolf took an assignment of the leasehold interest of no. 5 Gliddon Road. She lived there and took in lodgers. In 1962 she bought the leasehold of no. 6 Gliddon Road. It was being used for paying guests. She then took steps to use the two houses together. She made an opening on the first floor of the houses from one to the other. Since that time she has used the two houses together and taken in girl students from a near-by ballet academy. She now claims to be entitled under the Leasehold Reform Act 1967 to buy the freehold of no. 5 Gliddon Road. Mrs. Wolf would dearly be entitled to buy the freehold of no. 5 Gliddon Road if she had not knocked the two into one. It would, if rated separately, have a rateable value of £326, well below the £400 in the Act. But the landlords reject her claim. They say that there are no longer two houses - nos. 5 and 6. There is only one house, the combined numbers 5 and 6. The rating authorities have rated the two as one house at over £600, that is, far in excess of £400, and so outside the Act.
Mr. Blum, for the landlords, made three points. First, he said that the two houses were to be taken together because of section 3 (6), which says that:
"Where at any time there are separate tenancies, with the same landlord and the same tenant, of two or more parts of a house, or of a house or part of it and land or other premises occupied therewith,"
they are to be taken together for the purposes of the Act. Mr. Blum says that here there are separate tenancies of a "house" and "other premises" occupied therewith. He says that no. 5 is the "house": and that no. 6 is the "other premises occupied therewith." So they should be taken together. But I think that Mr. Jacob gave the right answer. The word "premises" in section 3 (6) is not used in a wide sense, such as to include another house. It is used in a narrow sense to denote a garage or outbuilding, or such like, ancillary to the house. That is the meaning of "premises" when used in the combined phrase "house and premises": see section 2 (3). And I think the word "premises" when used in section 3 (6) has the same meaning. That is shown by reference to section 15 (1) (c) and (2), and by reference to the later words in section 3 (6) about the "tenancy comprising the house." So I do not think section 3 (6) means that nos. 5 and 6 Gliddon Road are to be taken together.
Secondly, Mr. Blum relied on the licence under which Mrs. Wolf joined up the two houses. He said that the licence made them one house It was a licence by deed dated July 1, 1965. By it the landlords gave permission for much more work than was in fact done. They gave permission for there to be means of access from one house to the other, both on the ground floor and on the roof. There were elaborate provisions about the use of the houses together for paying guests. There was to be one dining-room and one television room. There was to be a manager of the whole. In short, the licence contemplated the running of the two houses combined as one guest house. Mr. Blum submitted that the licence was equivalent to a surrender of the two previous leases and a grant of one lease for the whole. He also drew attention to the extensive work which was done at the time in the garden of no. 5. An electricity transformer chamber was installed with garages above it. And so forth.
I do not think the licence has the effect contended for by Mr. Blum. It recites expressly that "the said two leases ... subject to the licence hereby granted shall continue to subsist and bind the persons in whom the said leasehold interests created by the said two leases shall for the time being be vested." The remainder of the licence proceeds on the footing that the two leases continue separately. For instance, the lessee could underlet each of the houses separately without the consent of the owner. That is shown by the fact that consent was only required for an underletting during the last seven years. Again, if one house was out of repair and the other was in repair, there would be a right to forfeit the one and not the other. In these circumstances, I think that, despite the licence, there remained two separate leasehold interests in regard to nos. 5 and 6.
Thirdly, Mr. Blum relied on the physical connection. He said that nos. 5 and 6 were one house because a doorway was knocked through no. 5 into no. 6: and that they were used as one house. For instance, the bedrooms were numbered 1 to 20 straight through the two houses The cleaners used this doorway to get through to do the cleaning. Some of the young ladies used the doorway at that time to pass to and fro.
On this third point, we had a case last week of Peck v. Anicar Properties Ltd., The Times, October 15, 1970, when it was said that there were three things to be considered: (1) the leasehold interest; (2) the physical structure; (3) the use as a residence. Taking these three matters: First, the leasehold interest. Here there is a separate lease for no. 5 Gliddon Road. Second, the physical structure. No. 5 is structurally a separate house. Any ordinary person would say it was a house. The presence of a connecting door does not mean that it is not a house. Third, occupation as a residence. Mrs. Wolf occupies no. 5 as her residence. She has lived there for years. She does not occupy no. 6 as her residence. She could not buy up no. 6. But she is entitled to buy no. 5. I think, therefore, that, considering these three matters Mrs. Wolf comes within the Act in respect of no. 5 and is entitled to buy the freehold of it.
I may perhaps add that the present case was envisaged by myself in Lake v. Bennett [1970] 1 Q.B. 663, 670. I instanced a case where four houses had been knocked into one with 88 rooms let off as furnished rooms. I said that the four houses would not be within the Leasehold Reform Act 1967, but each one of the four might be. So here. The whole is not a house within the Act of 1967, but each of the two is.
I would, therefore, dismiss the appeal.
PHILLIMORE L.J. I entirely agree with the views expressed by Lord Denning M.R. in regard to the construction of section 3 (6), as to the effect to be given to the word "premises" there; and also, of course, I agree that Mrs. Wolf has used no. 5 as her residence for the requisite time. The point which has troubled me about this case - and I confess my mind has vacillated with regard to it - is whether it can be said that on the relevant date, which in this case was February 24, 1969, no. 5 was a house properly so called, as opposed to having become part of a larger structure by unification with no. 6. After all, Mr. Wolf is an architect and conducted the negotiations with the landlords on behalf of his wife, and made it perfectly clear in July 1963 in a letter which he wrote then to the landlords' agents that the plan which he desired to execute involved "the uniting of the above premises," namely, the uniting of nos. 5 and 6 Gliddon Road; and his original proposal involved openings in the existing party wall which divided these two houses vertically at various levels. When the licence was drawn up it clearly required a covenant on the part of Mrs. Wolf that in exercising her rights over the premises - namely both houses for the reception of paying guests, which is what she wanted to use them for, she would observe conditions which clearly required that the premises, the two houses, should be run as one. It is true that under the licence the openings to be made between the two houses were restricted to one at first floor level and another a good deal higher up, I think from the roof of no. 6 to the well of the staircase of no. 5, no doubt for safety purposes in the event of fire. But under the covenants which were stipulated in the licence it is quite clear that the intention to which she committed herself was to run these two houses as one; and there was evidence before the judge, as Lord Denning M.R. has already indicated, that the rooms in the two houses - 10 in each - were numbered consecutively from 1 to 20; and not only that, but shortly after the licence had been executed, the valuation officer visited the premises and as a result in April 1966, the licence having been signed in July 1965, he proposed a variation in the rating list under which these two houses, instead of being rated separately, should be rated as one. So far as the court is aware, there was no protest from either Mr. or Mrs. Wolf in relation to that variation which was duly carried into effect. What has troubled me, however, is this, that when this matter came before the judge, the evidence put before him was that of Mrs. Wolf and of her husband only. Mrs. Wolf in effect was saying:
"Well, I have not carried out all the covenants in that licence, and all that has really happened is that there has been this one doorway. I have not troubled with the one in the roof."
There was one opening made. It is kept locked except when it is necessary to open it for the staff to go through to clean; but otherwise it is not; and so the girls, instead of passing from one house to the other through the doorway, have to go round outside. And indeed Mr. Jacob has made no bones about it: he has said on her behalf that Mrs. Wolf quite clearly had not troubled to fulfil a number of these covenants, such as, for example, that relating to the provision of meals in the kitchen for all these girls, and a joint sitting-room for them, and so on; and, having heard her evidence and that of her husband, the county court judge came to the conclusion that it could not be said that in effect these two houses were so united as to constitute one house, or, at all events, as to make it impossible to refer to no. 5 as a house. Well, the landlords called no evidence: they did not even call the valuation officer, who no doubt could have explained exactly the situation as he found it and what it was that caused him to assume that this was all one dwelling. They did not call any of these girls. I suppose they could have given evidence. And so the matter had to be decided on the evidence of Mr. and Mrs. Wolf, and on their evidence as it stood I confess I find it impossible to differ from Lord Denning M.R., and I am bound to recognise that, in the light of that evidence, if it was true and was accepted by the county court judge, then no. 5 can properly be described as a house; and there was insufficient material here for the judge to make a finding that these two houses were so united that no. 5 had ceased to have a separate identity.
For those reasons I agree with the order proposed by Lord Denning M.R.
CAIRNS L.J. I agree with the judgment of Lord Denning M.R., and I would add only a few words of my own. For my part I feel no doubt, having heard the argument on both sides, that this appeal ought to be dismissed. The words that we have to construe are those at the beginning of section 2 (1) of the Act of 1967: "For purposes of this Part of this Act, 'house' includes any building designed or adapted for living in and reasonably so called. ..." Clearly no. 5 is a building designed or adapted for living in. Is it reasonably called a house? It was made clear by two of the judgments of this court in Lake v. Bennett [1970] 1 Q.B. 663, in passages at pp. 672-673, that it is not necessary to be able to say that the premises in question could only be described as a house, and that some other description would be inappropriate. The question is, can no. 5 reasonably be called a house? I agree with Lord Denning M.R. as to the three matters that have to be taken into account in testing the answer; and I agree with him that by all the tests the conclusion emerges that this can reasonably be called a house.
Just in relation to one of these three tests I add a few words more. One of the factors relied upon by Mr. Blum as indicating, in his submission, that nos. 5 and 6 together constituted a house was that there was a connecting door between them I think it is of importance to remember that that connecting door was not in connection with the use of any part of these premises by Mrs. Wolf as a residence: it was for the purpose of her business of letting out rooms to paying guests from the ballet school. It is quite clear that her residence was wholly in no. 5, and that the connecting door was for the purpose of enabling her to get through and do cleaning and housework by her own hands or by the hands of others in no. 6. It seems to me that the degree of connection between no. 5 and no. 6 is far less than was the connection which we had to consider recently in Peck v. Anicar Properties Ltd., The Times, October 15, 1970, where there was a shop which covered the ground floor of two houses separately occupied; and we held there that one house consisting of half the shop with the rooms above constituted a house for the purpose of the Act.
Finally, I would say with regard to the argument presented to us by Mr. Blum based on analogy with the Rent Acts 1965 and 1968 that it does not seem to me that one can usefully construe this present Act in the light of the Rent Acts, bearing in mind the different purpose of the two pieces of legislation and the different language used in them.
For these reasons, in addition to those given by Lord Denning M.R., I agree that the appeal fails.
ORDER Appeal dismissed with costs.
