Hertsmere Borough Council v Lovat

Under section 1 AA(3) of the Leasehold Reform Act 1967, “house” means the statutory house, namely the building, and does not include gardens or other premises let with it. “Adjoining land” is context-dependent. In this provision it means neighbouring land, whether or not it physically touches the building. This construction avoids the anomalies that would result from limiting “adjoining” to land touching the building. Where the statutory language is capable of that construction, the court should adopt it rather than correct the legislation as containing an obvious drafting error. Land beyond the boundaries of the leasehold grounds was therefore adjoining land, making the tenancy excluded and preventing enfranchisement.

Mrs Lovat held a long lease of a house and surrounding grounds in a designated rural area. The rent was not a low rent for the purposes of the Leasehold Reform Act 1967. She served notice seeking the freehold under section 1 AA. Hertsmere disputed her entitlement, relying on the exclusion for houses whose freehold is owned with adjoining non-residential land.

His Honour Judge Dight held that “house” meant the building alone and that “adjoining land” meant land physically touching it. He consequently found that the tenancy was not excluded. The central issue on appeal was the proper construction of those terms in section 1 AA(3).

Appeal allowed. Rimer LJ gave the judgment, with Warren J and Longmore LJ agreeing.

1. Meaning of “house”. The distinction drawn by sections 1(1)(a), 1 AA(1), 2(1) and 2(3) of the Leasehold Reform Act 1967 was deliberate. “House” meant the building as defined by section 2(1). Gardens and other land let with it were “premises” and formed part of the wider phrase “house and premises”. There was no safe basis for reading “house” in section 1 AA(3) as “house and premises”.
2. Drafting-error argument. Although limiting “adjoining” to touching produced apparent anomalies, the proposed correction would not remove all of them. The repeated use of “house”, alongside the separate statutory expression “house and premises”, made it unsafe to conclude that Parliament had made an obvious drafting mistake. The approach described in Inco Europe Ltd and Another v First Choice Distribution (a firm) and Others [2000] 1 WLR 586 did not justify substituting words in this case.
3. Meaning of “adjoining land”. The ordinary meaning of “adjoining” is flexible and must be determined from context, subject matter, scope and object. Cave and Another v Horsell [1912] 3 KB 533 and Cobstone Investments Ltd v Maxim [1985] QB 140 illustrated that “adjoining” may mean neighbouring rather than physically touching. In section 1 AA(3)(b), “adjoining land” therefore meant neighbouring land which might or might not touch the house.
4. Application and orders. The rural non-residential land beyond the boundaries of Mrs Lovat’s house and premises was adjoining land. Her tenancy was consequently an excluded tenancy, and she had no additional right to acquire the freehold. The judge’s order was set aside, save for the permission-to-appeal provisions. Hertsmere was awarded its costs below, assessed at £12,703, and its appeal costs, assessed at £9,102, payable within 14 days.

• Court of Appeal (Civil Division): In [2011] EWCA Civ 1185, the appeal was allowed and a declaration made that Mrs Lovat was not entitled to acquire the freehold.
• Central London County Court: His Honour Judge Dight held that the tenancy was not excluded and that Mrs Lovat had validly exercised her right to enfranchise.