Jewelcraft Ltd v Pressland & Anor

Whether premises are a “house” under s.2(1) of the Leasehold Reform Act 1967 is a question of law. The statutory condition that the building be reasonably called a house must be applied consistently with the Act’s policy. A purpose-built shop with residential accommodation above may qualify, even though part is used commercially. Ordinary description as a shop, external appearance, internal layout, or the absence of an internal staircase does not alone defeat qualification. The relevant inquiry includes whether a material part is designed or adapted for, and genuinely used for, residential purposes. Exceptional cases, such as a non-genuine conversion or an office block with only a caretaker’s flat, may fall outside the definition.

Jewelcraft Ltd held a long lease of premises comprising a ground-floor shop and first-floor residential accommodation. The premises formed part of a purpose-built parade of shops. In 1970 the internal staircase was removed, the shop became self-contained, and the first floor was accessed by an external staircase within the demise.

The Central London County Court, HH Judge Dight, held that the premises were not a “house” within s.2(1) of the Leasehold Reform Act 1967 and dismissed the claim to enfranchise. Jewelcraft appealed, contending that the judge had misapplied the statutory definition and the guidance in Tandon and Hosebay. The central issue was whether the altered physical arrangement prevented the premises from being reasonably called a house.

Appeal allowed. The court held that the question whether premises are a “house” under s.2(1) of the Leasehold Reform Act 1967 is a question of law. The statutory definition is purpose-made and must be applied consistently with the policy of the Act. The phrase “reasonably so called” is the critical limiting condition.

1. The majority decision in Tandon v Trustees of Spurgeon Homes [1982] AC 755, particularly Lord Roskill’s speech, established that mixed-use premises may be a house even though they may also reasonably be called a shop. Where a building is designed or adapted for occupation as a residence, only exceptional circumstances justify exclusion.
2. Hosebay Ltd v Day and Lexgorge v Howard de Walden Estate [2012] 1 WLR 2884 confirmed that the statutory definition concerns houses as places to live in. Use is material; external and internal physical appearance and lease terms are not, by themselves, determinative. The court also treated Prospect Estates Ltd v Grosvenor Estates Ltd [2009] 1 WLR 1313 as consistent with that approach.
3. The court doubted whether Henley v Cohen [2013] L.&T.R. 28 was correctly decided, particularly because of the weight given to physical appearance. Any distinction based solely on the absence of internal access or on the self-contained nature of the shop and flat was precluded.
4. The removal of the internal staircase did not change the legal character of the premises. The first-floor flat remained accessible by a staircase within the demise, and a material part of the building was designed or adapted for and used for residential purposes. The County Court had therefore applied the wrong legal approach.

1. Court of Appeal (Civil Division) In [2015] EWCA Civ 1111, the appeal was allowed. The court held that the premises qualified as a “house” under s.2(1) of the Leasehold Reform Act 1967.
2. Central London County Court HH Judge Dight held that the premises did not constitute a house within the statutory definition and that the claimant was not entitled to enfranchise.