[2024] UKUT 204 (LC)

First, we find that QPL is the lessee of the Unit and is in occupation of it.

In practical terms, the appellant runs two businesses from the Unit, and the impression we had when we visited was of a family-run retail enterprise with family making use of the whole building. But the legal position is different; the appellant has chosen to operate her businesses through limited companies and has arranged for QPL to take the lease of the Unit. Therefore QPL is in occupation of the Unit. The appellant has access to it as an officer of the company (although she rarely goes there), and as such is able to authorise others to access it, particularly Mr Dumare. But QPL is the occupier, and its lease prevents it from sharing or parting with possession of the Unit as a whole without the landlord’s consent and prevents it from sharing of parting with possession of part of it at all.

Second, we find that QPL and QNP Toys are separate businesses. The fact that they are in common ownership and management does not change that; nor does the fact that there is evidence of some loan or subsidy from one to the other (seen in QNP Toys’ bank statement). They are both retail businesses, but one is designing and marketing kitchen appliances while the other is selling imported toys. We have no difficulty in regarding them as separate businesses, and in finding that neither needs the other in order to function in practical terms; they are not operationally interdependent.

Third, we have no difficulty in finding that QNP Toys is in occupation of the warehouse; that is where it stores its stock when it has any. It is in occupation as a licensee of QPL; in so finding we do not place a great deal of weight on the “To whom it may concern” letter, it is just obvious on the ground that QNP Toys is in occupation and also that it does not have a lease and must be there by permission of QPL.

A further issue of fact is whether the two parts of the Unit are self-contained and independent of each other, as the appellant says and as the respondent denies. We find as a fact that the office and warehouse respectively are not self-contained, although they could (with some inconvenience) be made so. We do not think the shared postbox has any significance, nor the use of one or more shared mobile phone numbers. What is significant is that as things stand, the occupier of the office has to have access to the warehouse to attend to the utility meters and to the control panel for the alarm system and to comply with its covenants under the lease to maintain and decorate the property, and there is a connecting door for that purpose. The occupier of the office also has access to the warehouse and uses the walk-in store cupboard where personal belongings are stored, and is free to use the kitchen (and conversely it is hard to see why the warehouse needs a kitchen). Access is most conveniently gained to either half of the Unit via the reception area. Mr Dumare’s evidence was that temporary staff go round the back to the fire escape door, and Mr Ripley did not suggest to him that that was not true; but once the business is running again and there are regular deliveries and dispatches we do not think that that arrangement is realistic. There is no signage to direct staff round the back, and staff will want and need to use the access at the front close to where they park. There is no practical reason for them to go round the back and we do not believe that that arrangement could continue even if it has worked on an occasional basis in the past.

The two halves of the Unit could be made independent by providing a convenient separate access for the warehouse, perhaps some different partitioning so that the kitchen can be used with the office, separate metering for the utilities, independent security arrangements and – crucially – consent from the landlord for the lessee to part with possession of the warehouse. As things stand none of those arrangements is in place; physically this is one property shared by two businesses and legally QPL is in occupation and possession of the whole.