Case No. UKUT-26-(LC)-UTLC-Case-Numbers:-LC-2022-346

of the Commonhold and Leasehold Reform Act 2002IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)BETWEEN:ASSETHOLD LIMITED Appellant -and- EVELINE ROAD RTM COMPANY LIMITED RespondentRe: Flats A, B, C and D,36 Eveline Road,Mitcham,CR4 3LEMr Justice Edwin Johnson, The PresidentDecision Date: 2nd February 2023Justin Bates, instructed by Scott Cohen Solicitors, for the appellantStan Gallagher, instructed by Direct Access for the respondent© CROWN COPYRIGHT 2023The following cases are referred to in this decision:Ninety Broomfield Road RTM Co. Ltd v Triplerose Ltd [2015] EWCA Civ 282 [2016] 1 WLR 27541-60 Albert Palace Mansions (Freehold) Ltd v Craftrule Ltd [2011] EWCA Civ 185 [2011] 1 WLR 2425Settlers Court RTM Co. Ltd v FirstPort Property Services Ltd [2022] UKSC 1 [2022] 1 WLR 519Introduction1.This is an appeal and cross appeal against a decision of the First-tier Tribunal Property Chamber (Residential Property) dated 19th May 2022. The appeal and cross appeal concern the ability of the Respondent to acquire the right to manage the property known as 36 Eveline Road, Mitcham CR4 3LE (“the Property”) pursuant to the right to manage provisions in the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”).2.The Property comprises four flats, known as Flat A, Flat B, Flat C and Flat D, each of which is let on a long lease. The Appellant is the freehold owner of the Property. As both parties are appealing the decision of the First-tier Tribunal (“the FTT”), it is convenient to refer to the Appellant simply as “Assethold”. The Respondent is the company formed to acquire the right to manage the Property. It is convenient to refer to the Respondent as “the RTM Company”, but this expression is used subject to the question, which falls to be answered in this decision, as to whether the RTM Company does qualify as an RTM company, within the meaning of the right to manage provisions in the 2002 Act, in relation to the Property. 3.By their decision (“the FTT Decision”) the FTT decided that the RTM Company was entitled to acquire the right to manage the Property. Assethold says that the FTT were wrong in this decision, because the Property did not qualify as premises to which the right to manage provisions in the 2002 Act applied, within the terms of Section 72 of the 2002 Act. The RTM Company does not accept that the FTT were wrong in their decision. If the FTT were wrong, the RTM Company contends, by its cross appeal, that the Property still qualified as premises to which the right to manage provisions applied.4.As matters have developed the single point, or issue on which the appeal and cross appeal turn is a question of statutory construction. Specifically, the question is whether a part of a building can qualify as a self-contained part of a building, within the meaning of Section 72(3), if that part of the relevant building includes within it a part of the building which also qualifies as a self-contained part of the relevant building, within the meaning of Section 72(3). There appears to be no direct court or tribunal authority on this question. In any event, no such direct authority was cited to me.5.The appeal and cross appeal are made with the permission of this Tribunal (The Deputy President – Martin Rodger KC) granted on 22nd July 2022. The Deputy President directed that the appeal and cross appeal be heard by way of a review of the Decision, with a view to a rehearing.6.Unless otherwise indicated, all references to statutory provisions in this decision are references to the right to manage provisions in the 2002 Act. Where appropriate, I will use the initials “RTM” to refer to the right to manage, as the right to manage is identified and established in Chapter 1 of Part 2 of the 2002 Act. Italics have been added to quotations in this decision.The Property7.The Property stands at one end of a terrace of properties which front on to Eveline Road, running from west to east. The Property is the last property at the eastern end of the terrace (“the Terrace”). At each end of the Terrace there is a gap between the end of the Terrace and the neighbouring building, so that the Terrace, taken as a whole, is structurally detached from the neighbouring buildings. The last property on the western end of the Terrace appears to be numbered 46. 8.The Property now comprises the four flats referred to above. There are two adjacent ground floor flats (A and C), and two first and second floor maisonettes above (B and D). Flats A and C each have an area of yard or garden immediately to their rear. Beyond that there are further areas of garden which are demised with, or at least enjoyed with, respectively, each of Flats B and D. Access to these areas of rear garden is obtained by a side gate from the path leading down the east side of the Property.9.A photograph of the front of the Property which I have seen demonstrates that the Property has the appearance of a pair of semi-detached houses, with each house having different external decoration. This division is maintained through the remainder of the Property, in the sense that, on the western side, there is a Flat A, with Flat B above, while on the eastern side there is Flat C, with Flat D above. It is convenient to refer to these two parts of the Property, collectively, as “the Parts”, and to refer to the parts, individually, as the “the Western Part” (Flats A and B) and the “Eastern Part” (Flats C and D). 10.The history of the Property is not entirely clear. Planning permission was granted in September 2014 for various works, comprising the erection of a single storey rear extension, a two storey side extension including rear roof extensions, and the creation of the four Flats. Given the different appearance of the frontages of the Parts and looking at both the terms of the planning permission and the photographs of the Property which I have seen, what I infer, and find to have happened is as follows. The Property originally comprised only the Western Part, which was a single house. Pursuant to the planning permission the Eastern Part was then added, the ground floor rear extension was constructed to both Parts, the roof was extended upwards to create a second storey to the Property, and the four Flats were created within the extended envelope of the Property.11.The freehold title to the Property is registered under three separate registered titles. The registered proprietor of each of these titles is Assethold. Assethold acquired the freehold titles to the Property in 2018, and was registered as proprietor of the freehold titles on 25th February 2019. The registered freehold titles disclose that the existing long leases of the Flats were granted in 2014/2015, with the exception of the lease of Flat A, a copy of which I have seen, which was granted on 4th March 2016. The dates of the grant of these leases are broadly consistent with the extension and conversion of the Property into flats pursuant to the planning permission granted in September 2014. Section 7212.In order to understand the issues in the appeal and the cross appeal, and in order to understand the proceedings in the FTT, it is necessary to have in mind the terms of Section 72, which identifies the premises to which Chapter 1 of Part 2 of the 2002 Act (the RTM provisions) applies. Section 72 is in the following terms:“(1) This Chapter applies to premises if—(a) they consist of a self-contained building or part of a building, with or without appurtenant property,(b) they contain two or more flats held by qualifying tenants, and(c) the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.(2) A building is a self-contained building if it is structurally detached.(3) A part of a building is a self-contained part of the building if—(a) it constitutes a vertical division of the building,(b) the structure of the building is such that it could be redeveloped independently of the rest of the building, and(c) subsection (4) applies in relation to it.(4) This subsection applies in relation to a part of a building if the relevant services provided for occupiers of it—(a) are provided independently of the relevant services provided for occupiers of the rest of the building, or(b) could be so provided without involving the carrying out of works likely to result in a significant interruption in the provision of any relevant services for occupiers of the rest of the building.(5) Relevant services are services provided by means of pipes, cables or other fixed installations.(6) Schedule 6 (premises excepted from this Chapter) has effect.”13.For present purposes it is sufficient to note that, subject to the exemptions set out in Schedule 6, the RTM provisions apply to two categories of premises, provided that the conditions in sub-paragraphs (b) and (c) of subsection (1), concerning tenants and flats, are met. The first category of premises comprises self-contained buildings, which are required, by subsection (2), to be structurally detached. The second category of premises comprises self-contained parts of buildings, which are required to meet the physical criteria set out in sub-paragraphs (a), (b) and (c) of subsection (3). 14.I will use the expression