Majorstake Ltd v Curtis

For the redevelopment exception to a long leaseholder’s right to a new lease, any premises in which the flat is contained is a broad composite expression. It is not confined to the whole building, a self-contained part, or an existing recognisable unit. Adjacent flats, whether vertically or horizontally contiguous, may together be the relevant premises if the tenant’s flat is contained within them and the statutory requirements for substantial redevelopment and possession are met. The landlord must show a genuine and realistic intention to carry out substantial works which cannot reasonably be undertaken without possession. The statutory balance, rather than an instinctive view of the landlord’s motives, governs the construction.

A qualifying tenant of Flat 77 served a notice under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 claiming a new lease. The landlord admitted the right but served a counter-notice under section 45 and applied under section 47, relying on a plan to combine Flat 77 with adjoining Flat 74 into a duplex and carry out substantial construction works. The Central London County Court, before His Honour Judge Cowell, construed the relevant premises as the building as a whole or a self-contained part of it. The appeal asked whether two adjacent flats could constitute premises in which the tenant’s flat was contained, or whether the expression required an existing recognisable unit.

Majority (Moore-Bick LJ and Neuberger LJ). The appeal was allowed.

1. Section 47 had to be read in its statutory context. The word premises has different meanings in the Act. Section 41(4)(a) could not control sections 45 and 47 because it concerned information about collective enfranchisement and was narrowed by its link to section 13 and the conditions in section 3.
2. The composite expression was broad. It could include part of a building smaller than a self-contained block, including two adjacent flats combined into one redevelopment, whether horizontally or vertically contiguous. A recognisable-unit test would produce arbitrary results and uncertainty. The relevant premises were the flats taken together, and the proposed works affected substantially the whole of them.
3. Section 47 balanced the tenant’s security of tenure against the landlord’s redevelopment interests. The landlord had to establish that the lease would end within five years of the relevant date, that it had a genuine and realistic intention to demolish, reconstruct, or carry out substantial works on the whole or a substantial part of the relevant premises, and that the work could not reasonably be done without possession. Section 47(2) was closely modelled on section 30(1)(f) of the Landlord and Tenant Act 1954, so broadly similar principles applied.
4. The broad construction did not permit reliance on the tenant’s flat alone. The surrounding solid structure could not be treated as separate merely because it enclosed the flat. An adjacent box room or other additional space could in principle qualify, although such cases were likely to be rare and the substantial-works requirement remained decisive. The court distinguished Cozens v Brutus [1973] A.C. 854, since this was a technical statutory construction issue rather than the interpretation of an ordinary word in isolation.

Neuberger LJ treated Maunsell v Olins [1975] AC 373 as providing only limited assistance because its wording and statutory context differed. May LJ dissented. He would have required an existing recognisable unit and regarded the two flats, taken together, as an artificial unit which did not satisfy section 47. He would have dismissed the appeal.

1. Court of Appeal (Civil Division): In [2006] EWCA Civ 1171, Moore-Bick LJ and Neuberger LJ allowed the appeal; May LJ dissented.
2. Central London County Court: His Honour Judge Cowell construed the premises in section 47 as the building as a whole or a self-contained part of it, leading to the landlord’s unsuccessful redevelopment application.