Theodossiades v Smith & Ors [2015] EWCA Civ 566

Case No B2/2015/0296[2015] EWCA Civ 566
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
CENTRAL LONDON CIVIL JUSTICE CENTRE
(HIS HONOUR JUDGE GERALD)
Venue Royal Courts of JusticeDate Thursday, 23 April 2015
Strand
London, WC2A 2LL
Before
LADY JUSTICE KING
Between
THEODOSSIADESApplicantSMITH & ORSRespondent
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr Phillip Coppel QC (instructed by Landau & Cohen) appeared for ApplicantMr Nicholas Trompter (instructed by Mishcon de Reya) appeared for Respondent
Judgment
[1]This is the applicant’s application for permission to appeal an order made by His Honour Judge Gerald siting in the County Court in Central London on 16 January 2015 whereby it was ordered that:
“The Preliminary Issue (namely ‘Whether the intended development in respect of which permission was granted by the Secretary of State for Communities and Local Government ... on 8 August 2012 constitutes a “conversion” within the meaning of Section 610 of the Housing Act 1985’) be answered ‘no’.”
[2]An application for permission to appeal was refused by His Honour Judge Gerald and then by Lewison LJ on 4 March 2015 and is renewed today by Mr Coppel QC before this court. Background[3]The proposed appellant is and has been since 18 January 1985 the registered proprietor of freehold land known as Gaisgill. Gaisgill is subject to certain restrictive covenants imposed by a conveyance dated 12 August 1986 and the covenants can be summarised as follows:
“Not to erect on the property more than two private dwellinghouses... [...] Not to use or permit the property or any part thereof to be used … for any other purpose other than the erection of one private dwellinghouse or two private dwellinghouses.”
Not to use or permit the property or any part thereof to be used … for any other purpose other than the erection of one private dwellinghouse or two private dwellinghouses.”[4]When acquired by the applicant, Gaisgill comprised a large plot of land with a single substantial Victorian dwelling house built towards the front with a large garden at the back. By a transfer dated 15 April 1988, the applicant sold off the rear and part of the side part of Gaisgill and a single dwelling house was built on the transferred land which came to be known as Copperfields and is owned by the first and second respondents. It follows, therefore, that two dwelling houses exist on the land originally conveyed by the conveyance.[5]The applicant now wishes to develop Gaisgill and planning permission was granted on 8 August 2012.

The judge described the proposed development as follows:

“... it involves the complete demolition and removal from site of the existing building and its extensive rear terrace and the construction in its place of a much larger property which will have a basement extending 9.5 metres below the surface. There will be a total of three additional floors, being the ground floor, first floor and a second floor in the eaves of the new building. That new enlarged building will comprise six large two bedroom flats ... The orientation of the new building will be slightly different from the existing building. The basement footprint will be almost twice the size of the existing ground floor footprint. The new ground floor footprint will be almost twice the size of the existing ground floor footprint, although in the planning documentation it is represented that it will be more or less the same, but that is only achieved by treating the large rear terrace as being part of the ground floor which it is not.”
[6]It is common ground that the proposed development will breach both of the restrictive covenants; it was in those circumstances that having obtained planning permission, the applicant issued the present claim under section 610 of the Housing Act 1985 (as amended by section 88 of the Local Government and Housing Act 1989).[7]In his oral submissions to me today, Mr Coppel drew my attention to the fact that planning permission itself having been granted is not a determining factor, but that section 610 should not be used as an opportunity to re-run issues which have been raised by opponents to the planning permission at the planning stage. Section 610 is not concerned with the fact of planning permission, but the fact that planning permission can only be implemented if restrictive covenants which have, effected the land for decades, are removed. Mr Coppel further submitted that the judge did not like what Mr Coppel referred to as overdevelopment of the land, but the issue is not whether there will or will not be overdevelopment. Having read carefully the judgment of the judge, it does not seem to me that this judge was in any way attempting to subvert the planning permission that had been granted or, that he had formed a personal view that it represented over development and should be frustrated. The passages that I have just read out, in my judgment, are there not to express a personal view, but to show just how different the extent of the development in respect of which planning permission has undoubtedly been granted is from the site as it is at present.[8]Section 610 of the Act provides as follows: “(1) The local housing authority or a person interested in any premises may apply to the county court where:(a) owing to changes in the character of the neighbourhood in which the premises are situated, they cannot readily be let as a single dwelling-house but could readily be let for occupation if converted into two or more dwelling-houses, or(b) planning permission has been granted under Part III of the Town and Country Planning Act 1990 (general planning control) for the use of the premises as converted into two or more separate dwelling-houses instead of as a single dwelling-house, and the conversion is prohibited or restricted by the provisions of the lease of the premises, or by a restrictive covenant affecting the premises, or otherwise. (2) The court may, after giving any person interested an opportunity of being heard, vary the terms of the lease or other instrument imposing the prohibition or restriction, subject to such conditions and upon such terms as the court may think just.” (a) owing to changes in the character of the neighbourhood in which the premises are situated, they cannot readily be let as a single dwelling-house but could readily be let for occupation if converted into two or more dwelling-houses, or (b) planning permission has been granted under Part III of the Town and Country Planning Act 1990 (general planning control) for the use of the premises as converted into two or more separate dwelling-houses instead of as a single dwelling-house,[9]The respondent’s note prepared for this renewed hearing permission I am referred to the case of Lanturn Limited [2008] 1 WLR 2656 at 266(b) where Richards LJ explained that the underlying policy of this provision was to “facilitate the more intensive use of large dwelling houses” and he further said that the policy was aimed at “a perceived problem of large houses which have outlived their original purpose as single family dwellings.”[10]It can be seen that section 610 covers two possible scenarios; i. being where changes in the character of the neighbourhood mean that a single dwelling house cannot be readily let out as a single dwelling, but could be let out for occupation if converted into two or more dwellings; ii. the situation where planning permission has already been granted for the use of the premises as converted into two or more separate dwelling houses. If, in either case, the conversion anticipated is prohibited by a restrictive covenant that person may apply to the County Court to vary the terms and the court thereafter has a discretion in relation to such a variation.[11]The hearing before His Honour Judge Gerald dealt with a number of issues set out in his judgment, including the definitions variously of “premises” and of a “dwelling house”. Section 610 is only engaged where there is to be undertaken a “conversion” of premises, regardless of whether (a) or (b) is considered. The judge at the lower court stated [paragraph 16]:
“The question I have to answer is whether or not the proposed development constitutes ‘conversion’ of ‘the premises’, it being common ground that ‘the premises’ is the object of the ‘conversion’. This is a mixed question of fact and law.”

The judge, having considered the various authorities in his judgment, went on to say [paragraph 20]:

“Applying all of that to the Housing Act 1985 … it cannot be said that the words ‘the premises’ is intended to be used in the technical or conveyancer’s sense: there is nothing in the context which would indicate that. Therefore, in my judgment, the ordinary meaning would apply.And of course the ordinary meaning would include some sort of building. That is consistent with the natural meaning and usage of the word ‘conversion’, or indeed the verb ‘convert’, which tends to indicate that what is contemplated is a physical adaption to or of that which is already there rather than the creation of something which is completely new.”
And at paragraph 22:
“Where there is a wholesale removal of that which is already there and replacement of it by a completely new structure, in my judgment that cannot in any normal or natural use of the word ‘conversion’ or ‘converted’ be treated as a ‘conversion’ of ‘the premises’ or ‘the premises’ if or as ‘converted’.”

The judge concluded at paragraph 23:

“In truth, what is proposed is a complete re-development or demolition and re-development. Had Parliament intended that that would be embraced by section 610 rather different wording would have been used.”
[14]Lewison LJ, who had the benefit of the appellant’s helpful and detailed skeleton argument, having also considered the judge’s judgment, in giving reasons for his refusal to appeal said:
“It is not arguable that the demolition of an existing dwelling house and its replacement with a purpose built block of flats on a different orientation and with a much larger footprint is the ‘conversion’ of premises within the meaning of section 610 of the Housing Act 1985. The judge’s decision was plainly right.”
[15]It is against the decision of the judge at first instance which, on the face of it, seems so obviously correct and was regarded as such by Lewison LJ that the applicant renews their application for permission to appeal before me today. The focus of the helpful skeleton argument and oral submissions are, as it was before the judge, focused on the submission that section 610 is not concerned with whether the dwelling house will be converted and that the judge fell into error in the way he regarded “premises” and “dwelling house”. It is submitted that each of the paragraphs in s610 look to the conversion of a larger unit (that is say, the “premises” not the “dwelling” houses). It is further submitted that the applicability of section 610 is not to be decided by reference to orientation and footprint which would yield the wrong answer.[16]With great respect to Mr Coppel, who argues the case very persuasively before me today, drawing the court’s attention not just to the strict interpretation of section 610, but also the wider point of importance which he says is the need to implement planning permission once granted and to give effect to planning decisions, made often after extensive consultation and appeal, in circumstances where it is accepted that there is a significant housing shortage in this country.[17]In my judgment, however, the interpretation of section 610 does not go to any attempts to frustrate the planning permission. The planning permission has been granted; the question then is whether it fulfils the criteria to enable the restrictive covenant to be removed or varied. I cannot agree that the judge at first instance and Lewison LJ each made an identical interpretational error by equating the existing dwelling house with the premises or rather regarding premises as having included a dwelling house. The judge said in his judgment at 25:
“... I should say that whilst both counsel focused on the meaning of ‘the premises’, in my judgment the real focus of attention is on the word ‘conversion or ‘converted’ and what that means and whether or not, as a simple, straightforward matter of fact, that which is being proposed can properly be regarded as a ‘conversion’.”
[18]For that rather brief and somewhat simplistic reason, the proposed development, cannot sensibly be regarded as a conversion. In saying so,

the judge clarified his approach at paragraph 24 where he said:

“Putting it another way, it would be natural to describe the subdivision of, for example, the existing substantial single dwelling into six separate flats within that structure as a ‘conversion’, but it would not be natural to describe its complete demolition and removal from site and construction of something entirely new in its place as a ‘conversion’.”
[19]In my judgment, the interpretational error is made not by the judge or by Lewison LJ, but with great respect, by the applicant by their focus on whether the dwelling house should or should not be equated with their premises and their focus on premises to the neglect of the word “converted” or “conversion”; indeed I note that Mr Coppel, when he was making his oral submissions to me and was reading from the actual Act, omitted the word “converted” when dealing with section B. “Converted” is, in my judgment, as in the view of Lewison LJ and the judge at first instance, critical to any determination and interpretation of the section. For my part, therefore, I most respectfully adopt the conclusion reached by Lewison LJ that it is not arguable that the demolition of an existing dwelling house and its replacement with a purpose built block of flats is a conversion of premises within the meaning of section 610.[20]It follows that in my judgment, I agree with the judge that it would not be natural to describe this as a conversion allowing, therefore, the variation of the restrictive covenant sought and accordingly I dismiss the application for permission to appeal.

Order

Application refused.