Boss Holdings Limited (Appellants) v Grosvenor West End Properties and others (Respondents)

Under section 2(1) of the Leasehold Reform Act 1967, a building is a house if it was designed or adapted for living in and can reasonably be called a house. “Designed” directs attention to the building’s original purpose. “Adapted” concerns subsequent physical alterations.

Where the residential design remains, vacancy, internal dilapidation or stripping-out does not prevent the building from satisfying the first requirement merely because it is unfit for immediate occupation. The building need not have been solely designed or adapted for residential use. Later amendments to other provisions do not change the meaning of an unamended subsection unless the amendments expressly produce that result, for example by changing a relevant definition.

Boss Holdings Limited (Appellants) v Grosvenor West End Properties and others (Respondents) concerned a substantial eighteenth-century property originally built as a single residence. Its lower floors were later used commercially, while the upper floors remained residential. By the relevant date, the property was vacant and its upper floors had been extensively stripped, although its internal walls, staircases, joists and substantially residential layout remained.

The tenant served notice seeking the freehold under the Leasehold Reform Act 1967. Judge Cowell dismissed its application, holding that the property was not “designed or adapted for living in” because it was not fit for residential occupation. The Court of Appeal dismissed the tenant’s appeal in [2006] EWCA Civ 594, reported at [2006] 1 WLR 2848. The central issue before the House was whether present physical fitness for occupation was required for the property to be a “house” under section 2(1).

1. Appeal allowed unanimously. Lord Neuberger delivered the leading speech. Lord Hoffmann, Lord Scott of Foscote, Lord Rodger and Lord Walker expressly agreed with his reasons and the proposed disposition.

2. Per Lord Neuberger, section 2(1) of the Leasehold Reform Act 1967 imposes two cumulative requirements. The building must be “designed or adapted for living in” and must be reasonably capable of being called a house. Applying Tandon v Trustees of Spurgeons Homes [1982] AC 755, the property satisfied the second requirement.

3. The word “designed” requires consideration of the purpose for which the property was originally built. The word “adapted” concerns subsequent physical work which changes the original design and the purpose served by the resulting adaptation. The language elsewhere in section 2(1), particularly its reference to a building which “was or is” designed or adapted, reinforced this temporal distinction.

4. The courts below had therefore applied the wrong test by asking whether the property was physically fit for immediate residential occupation. Dilapidation, removal of plaster and floorboards, and the need for rewiring or replumbing did not erase the property’s surviving residential design. Immediate fitness would also introduce uncertainty about matters such as the absence or temporary refurbishment of kitchens and bathrooms.

5. The original residence requirement in section 1(1) supported that construction. It would have served little purpose for section 2(1) separately to require physical habitability when section 1(1), as enacted, already required actual residential occupation. Applying Suffolk County Council v. Mason [1979] AC 705, later amendments to other provisions could not change the meaning of section 2(1), which had remained unamended.

6. The building’s original residential layout had substantially survived. Even if the alterations in the 1940s amounted to adaptation for mixed commercial and residential use, section 2(1) did not require the building to be solely adapted for living in. The House left open whether a building originally designed for residential use would remain a house after being adapted, and continuing to be adapted, wholly for another purpose. The tenant was entitled to succeed because the property was designed or adapted for living in.

• House of Lords: In Boss Holdings Limited (Appellants) v Grosvenor West End Properties and others (Respondents) [2008] UKHL 5, the House unanimously allowed the tenant’s appeal.
• Court of Appeal: In [2006] EWCA Civ 594, reported at [2006] 1 WLR 2848, the court dismissed the tenant’s appeal and upheld the ruling that the property was not a house within section 2(1) of the Leasehold Reform Act 1967.
• Central London Civil Justice Trial Centre: On 16 May 2005, Judge Cowell dismissed the tenant’s application for a declaration of entitlement to acquire the freehold.