[2024] UKUT 204 (LC)

Our description of the Unit is taken from our own observation, and from the evidence of Mr Dumare and of Mr Thomas Tidy, a graduate valuer in the District Valuer Services within the Valuation Office Agency. Mr Dumare did not require Mr Tidy to attend the hearing.

The Unit is on Eagle Business Park, a retail and light industrial estate in Peterborough, of recent construction. It consists of a warehouse and mezzanine office, with a total floor area of 264.5 m²; the appellant’s case is that the warehouse and office are two separate hereditaments, the office being occupied by QPL and the warehouse by QNP Toys. The two companies run distinct businesses. QPL is engaged in the design, manufacture and marketing of kitchen equipment. It is a fairly new company, incorporated in 2019, and goods have been designed and produced but none have yet been sold. QNP Toys imports and sells children’s toys; it is operated by the appellant from home and the warehouse is used to receive toys and to dispatch them to customers when they are purchased. Neither business has any employees. QPL works with designers who have visited from time to time; temporary staff have been used by QNP Toys to receive or dispatch goods.

The appellant runs both businesses. Mr Dumare supports her and does whatever is needed, although he is neither an officer nor an employee of either company. The family lives in Harrow and generally it is Mr Dumare who attends the Unit as necessary, which is infrequent; he has been there twice this month but not for three or four months before that. The Unit has therefore been pretty much unattended for some time. There are almost no toys in the warehouse; Mr Dumare explained at the hearing that QNP Toys lost money some months ago and currently has no stock to sell. The impression we had is that both companies are relatively new and trying to grow their businesses.

Turning to the Unit itself, therefore: it is a semi-detached building of steel portal frame construction with internal blockwork walls. Four parking spaces outside are labelled “Quality and Price Limited”. The photograph below shows the front of the building and the sign above the warehouse shutters; the small logo, which to our eyes was illegible from the other side of the road, reads “QNP Toys”.

To the left of the frontage is a glazed pedestrian entrance with a reception area inside. Stairs lead up to the mezzanine office, which is nicely fitted-out with carpeted floors and pictures on the wall, three work-stations, a meeting table, a sofa, a wall-mounted television and a free-standing storage unit with microwave and minifridge. There is a toilet in the reception area which serves the office above. On the stairs and in the reception area we saw a number of boxes of kitchen items such as kettles, and some were on display on the table in the office. There is a landline telephone in the office.

The warehouse can be accessed from a door in the reception area, which is lockable but stood open when we visited. The warehouse extends to the full height of the right-hand half of the building (5.98 m to the eaves) and continues underneath the mezzanine floor on the left-hand side. In that area there is a kitchenette and a WC alongside it. A door from the full-height area gives access to a walk-in cupboard which contains personal items such as clothes on a stand.

When Mr Tidy visited in June 2022 there were boxes stacked on the floor of the warehouse, although as we said above there were very few left when we attended. At the rear of the warehouse is a fire escape; when we visited it was wedged shut with polystyrene blocks and had a pallet against it. Mr Dumare explained that this is the only access for staff attending the warehouse to deal with delivery and dispatch; it has an external handle, and staff are given a key and also a fob to turn off the alarm system. There is a single alarm system serving the entire property, controlled from a box at the front of the warehouse which also contains the meters for electricity and water, of which there is a single supply. There is a single security camera system, controlled remotely by the appellant and Mr Dumare on their mobile phones. There is no landline phone in the warehouse; Mr Dumare explained that there are several mobile numbers used by QNP Toys and by QPL.

As to the title to the Unit, as we said above QPL holds a ten-year lease granted in 2021 by P.J. Slater Scaffolding Services Limited; the lessee’s covenants include obligations not to “assign, underlet, charge, part with or share possession or occupation of this Lease or of the whole or part of the Property” (clause 18), except that it may assign or sub-let the whole of the Unit if it obtains the landlord’s consent in accordance with clauses 19 and 20. The lessee is required to keep the property in repair, and to decorate it inside and out.

The appellant does not suggest that QPL has assigned or sub-let the warehouse to QNP Toys. The hearing bundle includes a copy of a short document on QPL headed paper which states as follows:

The document is undated and Mr Dumare said at the hearing that he did not know when it was created.