Hemphurst Limited v Durrels House Limited
Decision date: 5 January 2011
Neutral citation: [2011] UKUT 6 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether a nominee purchaser under the Leasehold Reform, Housing and Urban Development Act 1993 may acquire only part of premises demised by a single lease (elective severance) or must take the whole lease. The Upper Tribunal held that ss.2(1)(b) and 2(3) can be read to permit acquisition of only those parts of a leasehold interest reasonably necessary for proper management or maintenance of common parts/appurtenant property. The Tribunal also found the Leasehold Valuation Tribunal had decided a whole-lease point that was not properly before it and allowed the landlord’s procedural/jurisdictional appeal. Both appeals were allowed and the matter was remitted to the LVT for further proceedings consistent with the UT’s guidance.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The ratio is that section 2(1)(b) read with section 2(3) of the 1993 Act can permissibly be construed to allow a nominee purchaser to acquire only part of a demised leasehold interest where that part is what is reasonably necessary for the proper management or maintenance of the common parts or appurtenant land; related statutory provisions (including s.2(4) and s.21(4)) provide mechanisms to address potential unfairness or unmanageability arising from partial acquisitions and support such a construction.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed (obiter) that the practical difficulties of elective severance (plans, notices, valuation and conveyancing) are not insuperable and are comparable to those arising under mandatory severance; that drafting differences between s.1 and s.2 do not decisively preclude a construction permitting partial acquisition; and that s.21(4) can operate to constrain abuse (for example “cherry picking”) by enabling landlords to require acquisition of otherwise unusable or unmanageable parts.