Majorstake Limited (Respondents) v Curtis (Appellant)

For the redevelopment exception to a long leaseholder’s right to acquire a new lease, “any premises in which the flat is contained” means an existing, objectively recognisable physical space. Its extent is determined from the building’s physical state when the tenant gives notice, not from a unit selected by the landlord to fit a proposed development.

Whether works affect a “substantial part” of those premises depends on context. The court may consider both the intrinsic size, weight or importance of the affected part and its significance relative to the whole. Works substantial within individual flats do not necessarily affect a substantial part of the containing premises.

The appellant held a long lease of a flat in Block B of Boydell Court. He claimed a new lease under Chapter II of the Leasehold Reform, Housing and Urban Development Act 1993. The freeholder served a counter-notice and sought an order under section 47(1), relying on a plan to combine the appellant’s flat with the flat immediately below into a duplex apartment.

The Central London County Court dismissed the landlord’s application. A majority of the Court of Appeal allowed the landlord’s appeal in [2006] EWCA Civ 1171, [2007] Ch 300; May LJ dissented. The issue before the House was whether the two vertically adjoining flats were “any premises in which the flat is contained” for section 47(2)(b), and whether the proposed works affected the whole or a substantial part of the relevant premises.

1. Appeal allowed unanimously. Baroness Hale delivered the principal speech, with which Lord Hope and Lord Walker expressly agreed. Lord Scott and Lord Carswell also concurred in allowing the appeal. The landlord’s section 47(1) claim was dismissed and its counter-notice was declared ineffective.
2. Per Baroness Hale, the words “any premises in which the flat is contained” in section 47(2)(b) of the Leasehold Reform, Housing and Urban Development Act 1993 require an objectively recognisable physical space. A landlord cannot define the premises subjectively by drawing a boundary around the flat and whichever adjoining property it proposes to develop. Such a construction would allow comparatively minor works to frustrate the statutory right to a new lease and would deprive the requirement concerning a “substantial part” of useful meaning.
3. Per Lord Hope, the present tense in “is contained” directs attention to the physical state visible when the tenant serves notice. The intended development must extend to the whole or a substantial part of the independently identified premises. The development plan cannot itself determine those premises.
4. Per Baroness Hale and Lord Scott, the two flats on different floors did not constitute the premises containing the appellant’s flat. On the physical facts, the objectively recognisable premises were Block B. Lord Carswell agreed that the proposed combination was an artificial unit, while reserving his opinion on how small a recognisable part of a building might qualify in another case.
5. Per Baroness Hale, “a substantial part” involves comparison with the whole. Both the intrinsic size, weight or importance of the affected part and its significance relative to the whole may be relevant. Although the proposed works were substantial within each flat, two flats out of the 50 in Block B were not a substantial part of the premises. Lord Scott had doubts on that point but concurred because it had not been properly argued below. Lord Carswell expressed no concluded view.
6. By section 47(4), the landlord was obliged to serve a further counter-notice. That step had already occurred, so the process for granting the new lease could proceed.

1. House of Lords: Allowed the tenant’s appeal unanimously, dismissed the landlord’s section 47(1) claim and declared the counter-notice ineffective: [2008] UKHL 10.
2. Court of Appeal: By a majority, reversed the county court’s decision and accepted that the two contiguous flats could be premises containing the tenant’s flat. May LJ dissented: [2006] EWCA Civ 1171, [2007] Ch 300.
3. Central London County Court: Judge Cowell dismissed the landlord’s application, holding that the relevant premises were Block B or a qualifying vertical division of it.