Landlord and tenant – Common parts – Caretaker’s flat – Leases

Earl Cadogan & Anor v Panagopoulos & Anor [2010] EWCA Civ 1259: CA (Civ Div) (Sir Andrew Morritt (chancellor), Lords Justices Carnwath, Hughes): 11 November 2010

The appellants (C and E) appealed against a decision ([2010] EWHC 422 (Ch), (2010) 3 WLR 1125) that a caretaker’s flat formed part of the common parts of a building.

C was the freehold owner of the building. The respondent tenants (T) had served a notice upon C to acquire the freehold. However, before the terms of the acquisition had been determined by the leasehold valuation tribunal, C granted a lease of a caretaker’s flat in the basement of the property to E. T’s leases contained a legally enforceable right to the services of a caretaker, and one lessee had a specific right to require a resident caretaker living in the caretaker’s flat.

The issue to be determined was whether the caretaker’s flat was liable to acquisition under section 2(1)(b) of the Leasehold Reform, Housing and Urban Development Act 1993. That required the court to consider: (i) whether the caretaker’s flat consisted of or included "common parts" of the premises and if so; (ii) whether the acquisition of the interest was "reasonably necessary for the proper management or maintenance of those common parts" on behalf of T.

C argued that common parts were parts of the building to which the lessees had access. C also submitted that statutory acquisition of the caretaker’s flat was not necessary because terms could be negotiated to make it available, or another flat could be used for that purpose.

Held: (1) The definition of common parts in section 101(1) impliedly assumed an ordinary meaning which was extended or clarified by specific reference to firstly, the structure and exterior of a building, and secondly, any common facilities within the building. Section 4(2) suggested that garages and storage areas were ­common parts if they were available for shared use, but not if used in ­conjunction with a particular dwelling. That accorded with the ordinary meaning of the word "common", namely for shared, rather than ­individual, use or benefit, Marfield Properties v Secretary of State for the Environment 1996 SC 362 IH (1 Div) applied.

The caretaker’s flat had been identified as a distinct part of the building with a distinct function. Some of the lessees had the right to the services of a resident caretaker. While the common benefit consisted principally of the services of the caretaker as a person, rather than the use of the flat itself, a resident caretaker required a flat designated for that purpose. Together they could reasonably be regarded as representing a "facility" within the definition. Access was not necessary; it was sufficient that the lessees shared the benefit of the caretaker’s flat by enjoying the services for the purposes of which it was provided (see paras 14, 16-24 of judgment), Oakwood Court (Holland Park) Ltd v Daejan Properties Ltd [2007] 1 EGLR 121 CC (Central London) considered and McGuckian’s Appeal, Re Unreported January 3, 2008 Lands Tr disapproved.

(2) The willingness of the freeholder to negotiate alternative terms could not be relevant in determining the extent of T’s statutory right. Once the flat had been identified as "common parts", the only issue was whether acquisition of that part was necessary for its management. The fact that the service could be provided from elsewhere was irrelevant. The judge had been correct to find that it was reasonably necessary for T to acquire the caretaker’s flat for the proper management or maintenance of the common parts (para 26).

Appeal dismissed.

Kenneth Munro (instructed by Pemberton Greenish) for the appellants; Andrew Walker (instructed by Bircham Dyson Bell) for the ­respondents.