John Lyon's Charity v London Sephardi Trust

In leasehold enfranchisement, a repeal and re-enactment of a price-assumption provision carries forward an existing statutory saving unless a contrary intention appears. A saving provision can be a distinct enactment, so section 17(2)(a) of the Interpretation Act 1978 can transfer its reference to the re-enacted provision. A contrary intention may in principle emerge from delegated legislation, but a later commencement order made under a general power will not readily establish it where it says nothing about the protected class. The statutory price was therefore to be assessed on the basis of the extended tenancy.

The parties were the landlord and tenant of a house subject to the Leasehold Reform Act 1967. The tenant had obtained an extended lease under section 14 before 5 March 1986 and later served a section 8 notice to acquire the freehold.

The First-tier Tribunal treated the relevant tenancy as the original lease, expiring in 2016. The Upper Tribunal allowed the tenant’s appeal and held that the extended lease, expiring in 2066, was relevant. The landlord appealed, arguing that amendments made by the Commonhold and Leasehold Reform Act 2002 had removed the benefit preserved by section 23(3)(c) of the Housing and Planning Act 1986. The central issue was whether section 17(2) of the Interpretation Act 1978 carried the saving forward to the re-enacted provision.

1. The appeal was dismissed. Briggs LJ delivered the judgment, with which Bean LJ and Arden LJ agreed. The freehold price was therefore to be determined on the assumption that the tenancy expired in 2066.
2. The 2002 amendments repealed and re-enacted the relevant rule in section 9(1A)(a) of the Leasehold Reform Act 1967. The wording migrated into section 9(1AA)(a). For a section 8 notice served before the original term date, the re-enacted provision had precisely the same substantive effect: an extended lease was disregarded for the assumed termination date.
3. Under section 17(2) of the Interpretation Act 1978, the saving in section 23(3)(c) of the Housing and Planning Act 1986 was a reference in one enactment to another repealed enactment. An enactment is not confined to an entire Act, part or section. A provision achieving a distinct objective may qualify, and a saving provision may be separate from the provision to which it operates as an exception. The court applied that approach, supported by Wakefield and District Light Railways Co v Wakefield Corporation [1906] 2 KB 140.
4. A contrary intention may in principle be discerned from any admissible material, including subordinate legislation, Hansard and travaux préparatoires. The Upper Tribunal had placed an unduly rigid interpretation on DPP v Inegbu [2009] 1 WLR 2327. However, the Commencement Order was made later under a general power and merely brought the amendments into force subject to stated transitional provisions. It said nothing about removing the rights of the protected class. R v Secretary of State for Education [1995] ELR 388 supported the absence of a rigid limit, but did not establish a contrary intention on these facts.
5. The argument based on vested rights, discussed by reference to Wilson v First County Trust (No 2) [2004] 1 AC 816, was inconclusive. Nevertheless, the rights would not lightly be taken away, particularly since the 2002 legislation was generally beneficial and the saving provision remained on the statute book.

1. Court of Appeal (Civil Division): On 29 June 2017, the court dismissed the landlord’s appeal. Citation: [2017] EWCA Civ 846.
2. Upper Tribunal (Lands Chamber): On 19 November 2015, the Tribunal allowed the tenant’s appeal and held that the freehold price was to be assessed by reference to the extended lease expiring in 2066.
3. First-tier Tribunal: On 4 September 2014, the Tribunal held that the relevant tenancy was the original lease expiring in 2016.