[2024] UKUT 109 (LC)

Section 72(1)(a), 2002 Act provides that Chapter 1 of Part 1 applies to premises if they consist of a self-contained building or part of a building, with or without appurtenant property. Section 72(2) provides that a building is self-contained if it is “structurally detached”.

In Albion Residential Ltd v Albion Riverside Residents RTM Co Ltd [2014] UKUT 6 (LC) the Tribunal considered the availability of the right to manage in the case of a seven storey building with a car park extending beneath it and continuing below another adjacent building. It explained that before considering whether premises are a building which is structurally detached it is first necessary to identify the premises to which the claim relates. In that case the claim related to the whole of the building including the service core and structural columns which extended below ground level into the car park and through the basement concrete slab. The Tribunal decided that the building was not structurally detached from the floor or ceiling of the underground car park, saying this, at [33]:

“We agree with Mr Rainey that the car park itself would not ordinally be regarded as part of the building (although that part of it which lies beneath the structure of the building probably would be); but that is not the issue. The issue is whether the building is structurally detached from the car park and from any other structure. In circumstances where continuous concrete structures – the ground and basement floor slabs – are major and integral components of the building and of the car park, the piazza and building 1, it is not possible in our judgment to regard the building as structurally detached.”

More recently, in Consensus Business Group (Ground Rents) Ltd v Palgrave Gardens Freehold Co Ltd [2020] EWHC 920 (Ch), Falk J determined that five attached residential blocks together with the whole of a basement car park beneath them and extending underground beyond the ground level footprint of the blocks were “structurally detached” and therefore comprised a self-contained building for the purposes of the right to collective enfranchisement under Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (the material terms of which are indistinguishable from those of the 2002 Act).

On behalf of the appellant, Mr Fain submitted that the FTT had been wrong to hold that the three named blocks did not comprise a single self-contained building simply because Brecon House was vertically divided above ground from Harborough/Saltley House and each block had its own separate entrance. On the contrary, taken together with the car park, the three blocks comprised a single building which was structurally detached and therefore self-contained within the meaning of section 72(1)(a) and (2).

Mr Fain acknowledged the absence of evidence concerning the construction of the blocks and their attachment to the underground car park. He accepted that the degree of overlap, if any, between the buildings above ground and the car park below ground was not apparent from the inadequate plans included in the two sample leases. Nevertheless he relied on four points to demonstrate that the proposition that the three blocks were structurally attached to the underground car park had not been in dispute.

Two of these points concerned the previous abortive claim by Brecon House RTM Co Ltd. The Management Company’s own case in response to that claim had been that Brecon House was not a self-contained building or part of a building by virtue of its attachment to the underground car park which also served other blocks. The appellant’s solicitors, in their letter of 27 September 2022, had agreed that all three of the blocks were joined by the underground car park and it was on that basis that the appellant’s articles of association had been amended to include Brecon House as part of the premises over which the appellant sought the right to manage. When the Management Company came to respond to the current application its statement of case pointed out that Brecon House was vertically divided above ground from the other two blocks, but it said nothing at all about the underground car park. Mr Fain also relied on the assertion in the appellant’s statement of case that all three blocks were joined by the underground car park, which had not been disputed by the Management Company in its response.

Against that background Mr Fain submitted that the FTT had been entitled to make the finding of fact in paragraph 13 of its decision that “there is a car park that runs continuously below the three blocks”. It had failed to appreciate the consequence of that arrangement, which was that all three blocks were a structurally detached, self-contained building.

For the Management Company Mr Bowker relied on the FTT’s acknowledgement that there was a car park running continuously below the three blocks and on its conclusion, notwithstanding that fact, that the three blocks were not “a single building for the purposes of the Act”. He accepted that there was little or no evidence on which the FTT could base a decision on the construction of the buildings and he acknowledged that the Management Company, having originally asserted that Brecon House was structurally attached to the car park, had then pleaded no case in response to the appellant’s assertion that the three blocks were all structurally attached below ground. The Management Company had had no positive case on that issue and Mr Bowker did not consider that he was in a position to explain why the FTT had reached the conclusion it did.

The FTT’s conclusion in paragraph 13 that the subject premises do not form a single building for the purposes of the Act was, on one view, an acceptance of the Management Company’s counter-notice which asserted that the premises were not a self-contained building. However, the FTT did not explain its conclusion and did not direct itself by reference to the statutory test. Section 72(1)(a) requires that a building must be “self-contained”. Section 72(2) explains that a building is a self-contained building if it is “structurally detached”. The FTT did not refer to the issue of structural detachment anywhere in its decision. The question it addressed in paragraph 13 was whether the subject premises formed “a single building for the purposes of the Act”. It then proceeded to describe what could be seen of the blocks above ground level describing them as “vertically divided above ground … notwithstanding there is a car park that runs continuously below the three blocks.” The FTT failed to say what it made of the presence of the car park. I accept Mr Fain’s submission that it must be taken to have found that the car park runs continuously below the three blocks. It was therefore necessary for it to come to a conclusion on the extent of the structural connection between the car park and the blocks themselves. If the blocks and the car park (alone) formed a single structurally detached unit then they were a self-contained building for the purpose of the Act, but the FTT did not address that question. If it considered that question and reached a conclusion against the appellant for some specific reason, it failed to state what that reason was. On either basis, its decision cannot stand.

I am unable to accept Mr Fain’s submission that it was not in dispute before the FTT that the three blocks and the car park comprised a self-contained building. The Management Company had asserted the contrary proposition in its counter-notice, and in its statement of case, although the only reason it gave was that Brecon House was vertically divided above the ground from Harborough/Saltley House. It did not refer to the underground structures, but nor were those structures referred to in the notice of claim which simply identified the subject of the claim In the claim notice the premises identified as the subject of the claim were described simply as Harborough House, Saltley House, and Brecon House, with the postal address of each being given but no indication of the extent of what was intended to be included or excluded below ground level. Nor did the Management Company abandon its general assertion that the blocks did not comprise a self-contained building. The solicitors’ letter of 27 September 2022 purported to agree something which had not been asserted by the Management Company, namely that all three buildings were structurally attached to the car park; the only point it made was that Brecon House was structurally attached.

It was for the appellant to lead the necessary evidence to demonstrate that the right to manage could be acquired in respect of all three blocks together. The only material provided to the FTT is before me and I do not think it is possible, on the basis of that material alone, to form any conclusion on the critical question. The specific difficulty I have is in interpreting the basement level floor plans in the two sample leases. I find it impossible to be satisfied that the four sides of the quadrangle which I earlier described can be divided into one self-contained building comprising Harborough/Saltley House and Brecon House, and another separate self-contained building comprising Fazeley House alone. The Fazeley House lease plan suggests that it is at least as attached to the underground car park, and therefore to the whole of the subject of the application, as Saltley House which is also shown on the same plan.

The conclusion I have reached is that, on the information available, it is not possible to determine whether the structures described in the claim notice are a self-contained building, or part of a building, or whether they are three self-contained buildings or part of a larger self-contained building comprising all four blocks and, if so, whether the three blocks are a self-contained part of that larger structure. The reasons given by the FTT in paragraph 13 of its decision for its determination that the statutory pre-condition was not met did not engage with the issues and did not support its conclusion.