Sheppey Beach Villas Ltd v Courtney Taylor & Ors

A building substantially damaged by accidental fire may remain a “house” for enfranchisement purposes where it retains sufficient physical identity, was designed for living in, and its damaged condition is temporary with an intention to reinstate it. The statutory concept is not determined solely by physical appearance at the notice date.

Where the Commonhold and Leasehold Reform Act 2002 provides that “dwelling” has the same meaning as in the Landlord and Tenant Act 1985, the meaning cannot be adjusted by reference to the different policy of the later Act. A holiday home may therefore be a dwelling. A contractual agreement permitting permanent occupation may support an intention that a property be occupied as a dwelling, but is not essential where that intention is otherwise established.

The appellant freeholder appealed from an order of HHJ Parker in the County Court at Canterbury. The order declared that Iris McCloughey was entitled to acquire the freehold of a leasehold property under the Leasehold Reform Act 1967 and dismissed forfeiture proceedings.

The property had been substantially destroyed by fire after the leaseholder served an enfranchisement notice. The appeal concerned whether the damaged structure remained a “house” under section 2 of the 1967 Act and a “dwelling” for section 168 of the Commonhold and Leasehold Reform Act 2002, so that section 146 notices required a prior determination of breach. Issues concerning good faith and fresh evidence were left for a later hearing.

1. Ground 1 dismissed. At the date of the enfranchisement notice the property remained a “house” within section 2(1) of the Leasehold Reform Act 1967. It had been built and used as living accommodation and retained sufficient identity notwithstanding the fire.
2. The phrase “house reasonably so called” was not to be assessed solely by reference to the structure’s temporary wrecked appearance. The fire was accidental, there was no abandonment, the lease required reinstatement, and the property was intended to be restored. It could reasonably be described as a ruined or burnt-out house. The reasoning in Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5 and the policy approach in Hosebay Ltd v Day [2012] 1 WLR 2884 supported that conclusion.
3. Ground 4 dismissed. The property was a “dwelling” for section 168 of the Commonhold and Leasehold Reform Act 2002. Section 169(5) expressly incorporated the meaning of “dwelling” in section 38 of the Landlord and Tenant Act 1985. That wording required the same meaning in both Acts and left no room to alter it according to the different statutory policies.
4. Following Phillips v Francis [2010] L&TR 28, a holiday home could fall within the statutory definition of a dwelling. The property’s ruinous state did not prevent it being a building, and the intention to occupy it as a dwelling continued despite its temporary uninhabitability.
5. Ground 5 dismissed. The 2009 agreement permitting permanent occupation was a relevant supporting factor in assessing intention, although the same conclusion would have been reached without it.
6. The appeal was dismissed on Grounds 1, 4 and 5. The good-faith issue and the appellant’s fresh-evidence application were reserved for a separate hearing.

• High Court, Chancery Division: Appeal from the judgment and order of HHJ Parker in the County Court at Canterbury dated 23 April and 29 May 2024. The appeal was dismissed on Grounds 1, 4 and 5.