Gala Unity Ltd v Ariadne Road RTM Company Ltd

Under the Commonhold and Leasehold Reform Act 2002, a structurally detached building is self-contained for right to manage purposes. It need not operate independently of shared facilities. Appurtenant property may include roads, gardens, bin areas and other amenities enjoyed with the building or flats, even where other premises also enjoy them. Exclusivity is unnecessary. Potential duplication or conflict between management bodies does not justify adding a qualification to clear statutory wording unless the consequences are sufficiently grave or the result manifestly absurd.

The appellant, the freehold owner, appealed against the decision of the Upper Tribunal (Lands Chamber), which had dismissed its appeal from a Leasehold Valuation Tribunal determination under the Commonhold and Leasehold Reform Act 2002. The determination held that the respondent RTM company was entitled to manage two blocks of flats in Swindon.

The central issue was whether the premises fell within section 72(1)(a), particularly whether structurally detached blocks had to function independently of shared facilities and whether shared roads, gardens, refuse areas and other appurtenances could be included.

Appeal dismissed. Sullivan LJ gave the judgment of the court. Patten LJ and Arden LJ agreed.

1. The two blocks were self-contained buildings within section 72(1)(a) of the Commonhold and Leasehold Reform Act 2002. The factual finding that they were structurally detached was not challenged. Section 72(2) defines a self-contained building by reference to structural detachment. It does not impose an additional requirement that the building function independently without using shared roads, parking, gardens or communal areas.
2. The independence criteria in sections 72(3) to 72(5) concern whether a part of a building is self-contained. They do not alter the statutory test for a structurally detached building.
3. All the estate common parts were appurtenant property within section 112(1). That definition includes appurtenances belonging to or usually enjoyed with the building, part of the building or flat. Gardens, yards, access roads and refuse areas may be enjoyed in common. The fact that the occupiers of other premises also use them does not exclude them from the definition.
4. There was no justification for reading section 72(1)(a) as requiring appurtenant property to appertain exclusively to the self-contained building. Parliament had used express language where a particular meaning was intended. The potential for dual management responsibility, duplication and conflict was not sufficiently grave, nor the result sufficiently absurd, to justify adding a gloss to the statutory wording.
5. The parties could agree arrangements to avoid duplication. The President’s reference to possible disallowance of overlapping maintenance costs under section 19(1) of the Landlord and Tenant Act 1985 also provided a possible practical means of resolving disputes.

1. Court of Appeal (Civil Division) dismissed the appeal: [2012] EWCA Civ 1372.
2. Upper Tribunal (Lands Chamber) dismissed the appellant’s appeal from the Leasehold Valuation Tribunal determination: [2011] UKUT 425 (LC).