part of the first floor of the Building known as 30c Staverton Road … , the floor plans of which are shown edged red on Plan 1 and as described in Schedule 1” Schedule 1 The Property “The part of the first floor of the Building known as 30C Staverton Road … , the floor plans of which are shown edged red on Plan 1 including: (a) the internal plaster, plasterboard and surface finishes of all walls; (b) the whole of any internal, non-load bearing that are entirely within the Property; (c) – (h) … ;and (i) all additions and improvements to the Property (if any)” The Lease Plan 1 is at [50]. It shows the extent of the demised premises edged red and within that edging it shows the internal layout of the flat. Mr Granby accepted that the plan was not a plan ‘for the purposes of illustration only’. Schedule 4 Tenant Covenants Sets out a number of covenants on the part of the tenant to include: “8. Alterations 8.1 Not to make any external or structural alteration or addition to the Property or make any opening in any boundary of the Property or cut or maim any structural parts of the Building. 8.2 Not to make any internal, non-structural alteration or addition to the Property, or alteration to the plan, design or elevation of the Property without the prior written consent of the Landlord, such consent not to be unreasonably withheld or delayed. 8.3 Not to install …” Schedule 5 The Regulations Sets out a number of regulations to be observed and performed by the tenant to include: “17. Not to live in the Property unless all floors (other than the kitchen and bathroom) are covered in good quality carpeting and underlay.” The alterations 18. It was not in dispute that some alterations have been carried out. 19. One alteration was the removal of an internal part-glazed partition which divided what was laid out as a galley kitchen and a room which was used as a living room. The effect of that alteration was to create an open plan living/dining area. That alteration was not mentioned in the respondents’ counter-notice and it was not in issue before the tribunal. 20. The other suite of alterations was the removal of the internal wall dividing the lavatory and the bathroom so as to create a bathroom/wc and an associated relocation of a cupboard containing a boiler or water tank. These alterations were summarised as ‘variation to the bathroom’ in the landlord’s counter-notice. We were invited to infer that use of the expression ‘unauthorised variation’ in that counter-notice should be interpreted as an objection to the ‘new’ lease plan and a counter-proposal that the plan to be annexed to the new lease should be a copy of the existing lease plan. 21. The counter-notice also asserted that the ‘new’ lease plan shows “… extension of the demise to common parts, (the stairway).” Mr Granby said that that position was no longer asserted by the respondents. 22. It was not in dispute that the ‘new’ lease plan at [9] accurately shows the extent of the demised premises edged red and it reasonably accurately shows the internal layout of the flat as it now is. The rival submissions The terms of acquisition in dispute - the lease plan and jurisdiction 23. S48 of the Act makes provisions for an application to the tribunal where, after a certain period of time, ‘any of the terms of acquisition’ remain in dispute. The expression ‘terms of acquisition’ is defined in s48(7) to mean: “… the terms on which the tenant is to acquire a new lease of his flat, whether they relate to the terms to be contained in the lease or to the premium … payable … or otherwise.” 24. Mr Harrison submitted that the format of the lease plan to be annexed to the new lease was a term of acquisition and that if the format of that plan was in dispute the tribunal had jurisdiction to determine what the format of it should be. In support of that submission Mr Harrison relied upon Greenpine Investment Holding Limited v Howard De Walden Estates and anor [2016] EWHC 1923 (Ch) a decision of Mr Timothy Fancourt QC (as he then was) sitting as a deputy judge of the Chancery Division. The relevant paragraphs are 29 – 37 in which the judge summarises the scheme of the Act and how ‘terms of acquisition in dispute’ are to be identified. With no disrespect to the parties or to Fancourt J (as he now is) our working summary of what is explained is that: 1. The starting point is that the tenant must set out his position in his notice of claim. S42(3)(d) provides that the notice must: “specify the terms which the tenant proposes should be contained in any such [new] lease;”. 2. The next step is the landlord’s counter-notice. In essence s45 requires the counter-notice to identify those terms which are accepted by the landlord and those which are not; and in relation to those which are not accepted what his counter-proposals are. In paragraph 31 of his judgment the judge said: “31. Given that the terms of the new lease are firmly based on the terms of the existing lease, it seems clear that the terms of acquisition that are in dispute are contemplated by the draftsman to arise from the terms of the tenant’s notice and the landlord’s counternotice. That is why section 48(1) refers to any terms of acquisition that remain in dispute 2 months after the counternotice and why the Tribunal is given jurisdiction to determine those matters in dispute …” The judge went on consider that other matters in dispute may arise during the process of the grant of the new lease, but said it was unclear whether those can be ‘terms of acquisition’. Having considered other authorities the judge concluded it makes obvious sense that the terms of acquisition (which are not the same as the exact wording of the new lease) are defined by the notice and counter-notice – against the backdrop of the provisions s57. He held that if not so defined it is difficult to see how all the terms of acquisition are identifiable as such, rather than as issues to be dealt with in the drafting of the new lease, and what (if any) time limit there is on raising further terms of acquisition before the Tribunal has finally determined the matters in dispute. In paragraph 37 the judge made clear that terms of acquisition to be agreed or determined by the tribunal are the proposals contained in the respective notices that remain in dispute at the relevant time. 25. As regards the subject case, Mr Harrison submitted that the format of the lease plan to be annexed to the new lease was raised by the applicants in their notice of claim and it was objected to by the respondents in their counter-notice and that it can be inferred the respondent’s counter-proposal was that the existing lease plan should be annexed to the new lease. In those circumstances he submitted that the format of the lease plan was ‘a term of acquisition in dispute’ which the tribunal had jurisdiction to determine. 26. Mr Granby argued for a wider approach to the meaning of ‘terms of acquisition’ and submitted they should be considered more akin to Heads of Terms (HoTs). In support of that proposition Mr Granby relied upon Bolton v Godwin-Austen & ors [2014] EWCA Civ 27. Mr Granby drew attention to paragraph 9 where McCombe LJ equated ‘terms of acquisition’ with HoTs and that the form of lease is drafted by the landlord to give effect to the terms of acquisition, as either agreed between the parties or determined by a tribunal. Once the ‘terms of acquisition’ are agreed or determined, regulations provide for the landlord to draft the new lease and for the tenant to respond to the details of the draft. Mr Granby equated the lease plan to be annexed a drafting point and not a term of acquisition. 27. We note that the facts of Bolton were different to those in Greenpine as explained by Fancourt J in paragraph 35 of his judgment. In Bolton the landlord set out his counter-proposals in his counter-notice in very general and compendious terms and form, mostly by reference to several sections of the Act. The tenant accepted those counter-proposals and so that they were not ‘terms of acquisition in dispute’. The landlord submitted a draft new lease, the tenant objected to some of the provisions. The issue before the Court was the forum to determine the drafting items in dispute. If the drafting items were ‘terms of acquisition in dispute’, jurisdiction lay with the tribunal. If they were not, jurisdiction lay with the county court. Because the tenant had accepted the counter-proposals (albeit in very general terms) so they were held not to be ‘terms of acquisition in dispute’ and so the tribunal did not have jurisdiction to determine the drafting items. The judgment makes it clear that if the tenant had not accepted the counter-proposals they would have been ‘terms of acquisition in dispute’ and jurisdiction would have been vested in the tribunal. 28. In the present case it is quite plain that the lease plan is an integral part of the lease. It is not an illustrative plan and it is not a plan which merely identifies the extent of the demised premises. The original parties to the lease clearly intended it should be a floor plan showing not only the extent of the demised premises but also the internal layout of them. We infer this was intended to set a marker as to the internal lay-out at the commencement of the term which would inform the tenant’s obligations going forward and as a reference point as to any future alterations that might be contemplated. 29. We find that the applicant’s notice of claim clearly proposed that the plan to be annexed to the new lease should reflect reality and the position on the ground as regards to the current internal layout of the flat. The landlord rejected that proposal and (in effect) made a counter-proposal that the plan to be annexed to the new lease should be the same plan as annexed to the existing lease. The applicant did not accept that counter-proposal. In those circumstances we prefer the submissions made by Mr Harrison and supported by Greenpine that the format of the lease plan to be annexed to the new lease was a ‘term of acquisition in dispute’ and that this tribunal had jurisdiction to determine what the format of that plan shall be. The format of the lease plan – construction of the statute 30. S57 of the Act sets out the terms on which the new lease is to be granted. In brief the starting point is that it shall be on the same terms as the existing lease subject to certain provisions. Material to this case is s57(1)(b) and 57(6). As regards s57(1)(b), in paragraph 16 above we have highlighted the issue in contention and that Mr Granby submits that as drafted the section is unclear and might lead to ambiguity such that the word ‘lawful’ should be implied to make it clear what the draftsman had in mind. In support of his argument Mr Granby relied upon a passage from Bennion – paragraphs 764-765 to the effect that where a statute was confiscatory, for example the Leasehold Reform Act 1967, if there is any doubt as to its meaning, it should be construed in favour of the party who is to be dispropriated. Evidently support for that proposition was said to be found in Methuen-Campbell v Walters [1979] QB 525. 31. Mr Harrison made rival submissions and drew attention to the more recent Supreme Court decision in Hosebay Ltd v Day & anor [2012] UKSC 41, where in paragraph 6 Lord Carnwath said: “6. Although the 1967 Act like the 1993 Act is in a sense expropriatory, in that it confers rights on lessees to acquire rights compulsorily from their lessors, this has been held not to give rise to interpretative presumption in favour of the latter.” Lord Carnwath then cited with approval a passage from a judgment of Millett LJ where, as regards the 1993 Act, he said: “It would, in my opinion, be wrong to disregard the fact that, while the Act may to some extent be regarded as expropriatory of the landlord’s interest, nevertheless it was passed for the benefit of tenants. It is the duty of the court to construe the 1993 Act and with a view, if possible, to making it effective to confer on tenants those advantages which Parliament must have intended them to enjoy.” 32. We reject Mr Granby’s submission that s57(1)(b) is unclear such that we should imply the word ‘lawful’ which he contended for. We have given careful consideration to the rival arguments. We prefer the submissions of Mr Harrison. We find that s57(1)(b) applies to all alterations made to the property since the grant of the lease. Where those are lawful, in the sense that where written consent of the landlord is required and has been given, there will be no argument. Where alterations are unlawful in the sense that written consent is required but has not been given, the landlord may or may be in a position to enforce the covenant or obtain a remedy. The landlord may not have any view or objection, or the landlord may have waived the obligation on the tenant to obtain a written consent or some other form of estoppel may inhibit the landlord from obtaining a remedy. 33. Mr Granby submitted that s57(1)(b) should be construed as to apply only to lawful alterations, and thus the respondents are entitled to insist the lease plan to be annexed to the new lease shall be the same lease plan that was annexed to the existing lease. If that were to happen it would expose the applicants to risk and prejudice and would be contrary to the position on the ground and so not reflect reality or the marker as to the floor plans which the parties as the original landlord and tenant clearly intended. 34. Mr Harrison submitted that where a tenant may have carried out alterations which were not lawful is the sense the written consent was not given, the landlord is free to take such steps as he sees fit to obtain a remedy. Where a new lease is sought, it is open to the landlord to make a counter-proposal in his counter-notice to the effect that the new lease is to contain a covenant to reinstate the premises to the original lay-out within a specified period. If that were to be contentious it would amount to ‘a term of acquisition in dispute’ and there is a process to determine it. Mr Harrison said that in the present case the respondents were plainly aware of the alterations in question because reference was made to them in the counter-notice, but the respondents did not see fit to require the new lease to contain a reinstatement provision. He submitted it was now too late for the respondents to do so. Mr Harrison also observed that the respondents have not, to date, taken any steps to pursue any remedy in respect of the alterations which they contend are unlawful. 35. In these circumstances we determine that the format of the lease plan to be annexed to the new lease shall be in the format contended for by the applicants and appended to their notice of claim. For avoidance of doubt a copy of that plan is appended to this decision. 36. Having come to this conclusion on the statutory construction we gave careful consideration as to whether we should make findings of fact on the contentious issue of whether the respondents had given oral consent to the alterations and/or had unreasonably failed to give a written consent within a reasonable time such that written consent was no longer required. Such findings may have been helpful if, on appeal, the Upper Tribunal held that our construction of the Act was in error. 37. We were conscious that the tribunal has not given directions for the serving of written statements of witnesses of fact. The applicants had served a statement quite close to the hearing. The respondent had responded quickly on the footing that something was better than nothing, but Mr Granby made clear Mrs Ahluwalia’s statement in answer was rushed. Plus, it appeared that the respondents might wish to contend that part of the alterations affected the structure. 38. We concluded that if the question was whether the subject alterations were lawful or unlawful, was an important question of significance, that question ought to be determined on the basis that both parties had a full and considered opportunity to prepare and put forward all of the evidence they wised to rely upon. The downside to this approach was that if the Upper Tribunal were to set aside this decision it will probably remit the question of whether the alterations were lawful or not back to this tribunal. If that occurred it would put the parties to further costs, expense and delay. 39. We shared our preliminary views with the parties. Following a short adjournment to consider the point and take instructions, both counsel informed us that they were content that we should not proceed to hear the rival evidence as is stood and make findings of fact on it. We therefore confirmed that we would not do so. The drafting point 40. In the event only one drafting point remained in issue. It concerned paragraph 17 of Schedule 5. In the existing lease it reads: “17. Not to live in the Property unless all floors (other than the kitchen and bathroom) are covered in good quality carpeting and underlay.” The applicant proposes to insert two words (which we have shown in bold) so that it should read [78]: “17. Not to live in the Property unless all floors (other than the kitchen and bathroom) are covered in good quality [sound deadening/ carpeting and] underlay.” The drafting proposed does not seem to be too good. 41. Mr Harrison submitted that when the lease was granted wooden or laminate flooring was laid in part of the flat and the proposed amendment was simply to reflect that factual position. 42. Mr Granby opposed that position. He submitted there was no factual evidence before the tribunal as what floor covering was in place at the time of the grant of the lease. He also submitted that the proposed amendment did not fall within s57(6)(a) or (b). Mr Granby cited paragraph 31-10 in Hague: Leasehold Enfranchisement Sixth Edition to the effect that words such as ‘defect’, ‘convenient’ and ‘necessary’ should be given a strict or narrow construction, and that the onus is on the person proposing the change to show that there are grounds for modifying the term in question. Mr Granby also relied upon Burchell v Raj Properties Ltd [2013] UKUT 443 (LC). 43. We prefer the submissions of Mr Granby on this point. There was no factual evidence before us either as to the floor covering in place at the time of the grant or that the proposed change is necessary to remedy a defect or that it would be unreasonable not to modify the term. If it is the case that paragraph 17 of Schedule 5 did not reflect the understanding or agreement of the parties at the time of the grant of the lease such, that a mistake, whether common or unilateral, has occurred, the applicants will have remedies elsewhere. 44. Accordingly, we have made a determination that paragraph 17 of Schedule 5 shall not be modified in the new lease as proposed by the applicants. LON/00AE/OLR/2018/0637