Cloisters Business Centre Management Company Limited v Hamid Anvari & Anor

Lord Justice Lewison: Introduction

1. The issue on this appeal is whether the lessees of Unit 6, Priory House, Cloisters Business Centre in Battersea (“Unit 6”) are the lessees of a “dwelling” so as to entitle them to the benefit of statutory controls over the levying of service charges. The essential facts

2. Priory House, in which Unit 6 is situated, was originally a Victorian Convent, which was converted into units in about 1987. Unit 6 is on the top floor of the building. It consists of a suite of rooms which include a kitchen and shower room. The lease of Unit 6 (described in the lease as a “self-contained unit”) was dated 28 June 1989. It created a term of 999 years from 29 September 1987. Clause 2.4 contained a covenant by the lessee to pay a service charge. Clause 3 contained a covenant by the lessee to comply with the obligations in the Second Schedule to the lease.

3. There are two particularly relevant obligations in the Second Schedule. The first, in paragraph 10, is an obligation to use the Unit for the purposes specified in paragraph 6 of Part I to the First Schedule. The purpose specified is: “Offices (and ancillary residential use)”

4. The second, in paragraph 16.12 is (in part): “Not at any time to use the Demised Premises or any part thereof or permit or suffer the same to be used [for residential purposes or as sleeping accommodation] …”

5. It is common ground that the square brackets are of no legal significance.

6. The current use of the Unit appears to be as storage. The proceedings below

7. In the county court sitting at the Mayor’s and City of London Court both DDJ Gill and HHJ Hellman decided that Unit 6 was a “dwelling” with the consequence that the question of the recoverability of the service charge was transferred to the First Tier Tribunal.

8. Newey LJ granted the landlord permission to bring this second appeal. The point of principle that he identified was whether section 18 of the Landlord and Tenant Act 1985 applied to “mixed-use” premises. The Landlord and Tenant Act 1985

9. The issue raised by the appeal ultimately turns on the meaning of the word “dwelling” as defined in section 38 of the Landlord and Tenant Act 1985 (“ the 1985 Act ”). The section is headed “Minor definitions” and opens with the words “In this Act ” before setting out the various defined terms.

10. Before delving into the details, I think it is pertinent to say something about the 1985 Act as a whole. It was a consolidation Act incorporating something of a rag bag of provisions originally drawn from a variety of different sources, and it has been extensively amended since it was first passed.

11. Sections 1 to 3A require certain information to be provided to “the tenant of a dwelling”. But section 32 (1) disapplies those sections in the case of a tenancy to which Part II of the Landlord and Tenant Act 1954 applies (i.e. business tenancies). I will refer to this as Part II of the 1954 Act . Section 4 of the 1985 Act requires the provision of a rent book to a tenant who has the right “to occupy premises as a residence” at a weekly rent.

12. Section 9A implies into certain types of lease “of a dwelling in England” a covenant that the dwelling is and will remain fit for human habitation. Section 9B applies section 9A to a lease under which “a dwelling is let wholly or mainly for human habitation” for a term of less than 7 years, subject to certain exceptions.

13. Section 11 imposes repairing obligations on a landlord under a lease to which that section applies. Section 13 provides that section 11 applies “to a lease of a dwelling-house” granted for a term of less than 7 years; again, subject to exceptions. Section 32 (1) disapplies section 11 in the case of a tenancy to which Part II of the 1954 Act applies. Section 16 (b) provides that in sections 11 to 15: “(b) “lease of a dwelling-house” means a lease by which a building or part of a building is let wholly or mainly as a private residence, and “dwelling house” means that building or part of a building”

14. Section 18 introduces the statutory control of service charges: “In the following provisions of this Act “service charge” means an amount payable by a tenant of a dwelling as part of or in addition to the rent” [for services etc and which varies according to the cost]

15. The relevant part of section 38 provides: “In this Act “dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling…”

16. It can be seen from this quick tour that there are a variety of different definitions contained in different parts of the Act . In some cases, the definition is restricted to a lease granted wholly or mainly for residential purposes, although the precise wording varies (section 9B and section 16 (b)). In other cases (sections 1 and 18) it is not.

17. Mr Loveday submitted that the definition in section 38 does not expressly permit mixed use. Where Parliament intended to protect mixed use, it said so expressly. Thus, a building or part of a building intended to be occupied for a mixed use does not fall within the definition in section 38 , although merely incidental non-residential use may be disregarded as de minimis .

18. I consider that this argument looks at the matter from the wrong end of the telescope and ignores the substantial case law on the meaning of “dwelling” in the context of landlord and tenant to which I refer below. In my view the starting point is that where Parliament intended to restrict protection to tenants whose use of property was predominantly residential it said so. Where there is no such express restriction, mixed use property is not excluded because of that fact alone. Moreover, in the case of sections 1 and 11 it would not have been necessary for section 32 to have disapplied those sections in the case of tenancies to which Part II of the 1954 Act applied if a letting for a mixed use fell outside the definition of “dwelling” in section 38 . Section 38 , by contrast with other parts of the Act , contains no requirement that occupation as a dwelling should be the whole, or even the main, form of occupation. Nor is section 38 explicitly inapplicable to a business tenancy.

19. This plethora of definitions shows clearly that when Parliament intended to give protection to residential tenants as opposed to business tenants, it said so. The evolution of protection relating to service charges

20. Rights in relation to service charges were first introduced by the Housing Finance Act 1972 . That gave tenants rights to request information. Section 90 (1) conferred those rights on “the tenant of a flat.” Section 90 (12) defined “flat” as meaning: “a separate set of premises, whether or not on the same floor, constructed or adapted for use for the purposes of a dwelling and forming part of a building from some other part of which it is divided horizontally, being a set of premises occupied wholly or mainly as a private dwelling.”

21. Thus occupation wholly or mainly as a private dwelling was a prerequisite of protection. Even so, occupation for some other purpose (as long as it was not a main purpose) did not remove protection. Those rights were extended by section 124 of the Housing Act 1974 so as to restrict service charges to sums reasonably incurred for services carried out to a reasonable standard. Those rights were limited to tenants of flats, using the same definition. They were replaced by Schedule 19 to the Housing Act 1980 (retaining the same definition of flat) and then consolidated by the Landlord and Tenant Act 1985 in sections 18 to 30. Section 30 of that Act (as originally enacted) contained a definition of flat: “ “flat” means a separate set of premises, whether or not on the same floor, which— (a) forms part of a building, (b) is divided horizontally from some other part of the building, and (c) is constructed or adapted for use for the purposes of a dwelling and is occupied wholly or mainly as a private dwelling”

22. Again, occupation wholly or mainly as a private dwelling was a prerequisite of protection. The next major change was effected by the Landlord and Tenant Act 1987 . Section 41 introduced amendments extending sections 18 to 30 of the Landlord and Tenant Act 1985 to “dwellings other than flats.” The 1985 Act as it stood at the time contained a number of potentially available definitions. Paragraph 1 of Schedule 2 to the 1987 Act provided: “In section 18(1) of the 1985 Act , for “flat” substitute “dwelling”.”

23. In consequence the definition of “flat” in section 30 as originally enacted was repealed. As mentioned, that left the definition of “dwelling” in section 38 as the operative definition. The policy behind the provisions relating to service charges

24. The word “dwelling” does not have a precise or fixed meaning. Its meaning depends upon context; and in particular the policy of the enactment in which it appears: R (N) v Lewisham LBC [2014] UKSC 62 , [2015] AC 1259 at [45] (ii).

25. Whereas the policy underlying the grant of security of tenure to residential tenants is to protect them in their homes, that is not the policy underlying the restrictions on the levying of service charges. The underlying policy is to provide a tenant with a way of challenging unreasonable service charges levied by his landlord. It is to protect him in his pocket rather than in his home. There is thus no requirement that the tenant himself must be in occupation of the dwelling, or that the dwelling be the only property contained in the tenancy: Ruddy v Oakfern Properties Ltd [2006] EWCA Civ 1389 , [2007] Ch 335 .

26. Observations in cases concerned with whether a tenant has security of tenure (such as Uratemp Ventures Ltd v Collins [2001] UKHL 43 , [2002] 1 AC 301 , which concerned an entirely different issue) cannot be simply read across to the definition in section 38 . The meaning of a definition in an Act of Parliament depends crucially on what is the purpose of the Act : see Q Studios RTM Co Ltd v Premier Grounds Rent No 6 Ltd [2020] UKUT 197 (LC) , [2021] L & TR 9 at [70]. In Uratemp , for example, Lord Millett cited the decision of Bovill CJ in the franchise case of Thompson v Ward (1871) LR 6 CP 327 as examples of rooms which could properly be considered to be dwelling-houses: “The following may also be mentioned as familiar instances of parts of houses being considered houses, viz chambers in the Albany, chambers in the Inns of Court , rooms in the colleges at the universities, shops in the Burlington Arcade , flats in Victoria Street, apartments in Hampton Court Palace.” (emphasis added) The effect of the new definition

27. Until the substitution of “dwelling” for “flat” the protection relating to service charges contained a physical element and a use element. The physical element was that the flat had to be a “separate set of premises” constructed or adapted for use for the purposes of a dwelling. The use element was an express restriction to flats occupied “wholly or mainly” as a private dwelling. That restriction has gone. It is in my view clear from the structure of the definition that the question whether the premises were “separate” was a physical question, not a question about their use. The question whether a dwelling is “separate” depends on whether the tenant shares living accommodation with anyone else. The courts developed elaborate rules under the Rent Acts for determining that question. In JLK Ltd v Ezekwe [2017] UKUT 277 (LC) , [2017] L & TR 29 Martin Roger QC (Deputy President of the Upper Tribunal Lands Chamber) explained the history of those rules. But here, since Unit 6 is self-contained, that question does not arise. If it is a dwelling at all, it is a separate dwelling.

28. The new definition directs attention to whether the premises are “occupied or intended to be occupied as a separate dwelling.” These two limbs of the definition are, in my view, alternatives. Either the premises are occupied as a separate dwelling, or they are intended to be occupied as a separate dwelling. In either case there is no requirement that they be wholly or mainly occupied as a dwelling or intended to be occupied wholly or mainly as a dwelling.

29. Again, in my judgment whether a dwelling is “separate” is a physical question, not a question of use. A part of a building that is self-contained (i.e. which shares no living accommodation with another part of the building) will be separate for this purpose: see, for example, JLK Ltd v Ezekwe and Q Studios at [76] to [80].

30. In JLK Ltd v Ezekwe the Deputy President said at [32]: “Whether a building or part of a building is “occupied or intended to be occupied as a separate dwelling” requires a consideration of the objective purpose for which it is occupied or intended to be occupied. That purpose will often be apparent from the design of the unit itself but, as in this case where occupation for any purpose other than as or incidental to a private dwelling is prohibited, the terms of the letting may also be significant.”

31. I agree with this, but in the case of mixed-use property I would place more emphasis on the terms of the letting, which is the objective manifestation of the parties’ mutual intention, although plainly the physical configuration of the leased property will always be relevant. That has always been the approach of the court in determining whether property was “let as a dwelling” for the purposes of the Rent Acts: see Wolfe v Hogan [1949] 2 KB 194 (cited in Tan v Sitkowski to which I refer below). It is well known, for instance, that many buildings built as houses in the 19 th century, particularly in central London, have been let for many years as offices, embassies or as medical suites. Even if such buildings are capable of being occupied as a separate dwelling, because of the design of the premises, the terms of the letting may prohibit such use. In such a case I would not regard them as being “intended to be occupied” as a dwelling. The Deputy President went on to hold that there was no requirement imported by the word “dwelling” that the premises had to be someone’s home. I agree.

32. In fact, to the extent that the design of Unit 6 is concerned, the judge found (and Mr Loveday accepted) that it was capable of use as a dwelling. Mixed premises in principle

33. Mr Loveday relied heavily on the decision of this court in Tan v Sitkowski [2007] EWCA Civ 30 , [2007] 1 WLR 1628 . That case concerned a letting of property described as a “shop flat and premises” in Battersea. The tenant carried on business on the ground floor and lived in the flat upstairs. The issue before the court was whether, on ceasing to carry on his business, the tenant was entitled to the protection of the Rent Act 1977 . Section 1 of that Act provided: “A tenancy under which a dwelling house (which may be a house or part of a house) is let as a separate dwelling is a protected tenancy for the purposes of this Act .”

34. The argument for the landlord was that if a tenancy is granted for mixed business and residential use and is accordingly subject to Part II of the 1954 Act at the inception of the tenancy, the tenant cannot, simply by unilaterally ceasing the business use, arrogate to himself protection under the 1977 Act . In such a case, the tenancy in question is not to be treated as being one of “a separate dwelling” within the meaning of section 1 of the 1977 Act .

35. Neuberger LJ carefully analysed the history of the Rent Restriction Acts. He identified the critical change in the statutory scheme at [34]: “Effectively by reference to the previous Rent Restriction Acts, the 1965 Act conferred protection of a tenancy if it was of a “dwelling house … let as a separate dwelling”. However, the position with regard to mixed business and residential use tenancies was changed, so that the law applicable to regulated tenancies was different from that applicable to controlled tenancies. Section 3(3) provided that the 1965 Act would not apply in a case where the 1954 Act applied. In other words, in the case of mixed business and residential use premises, at least so long as the tenant continued to use part of the premises for business purposes, the 1954 Act would apply, and the 1965 Act would not apply.”

36. He referred to a line of pre-1965 cases in which it had been held that a letting for a mixed use did not prevent property being “let as a separate dwelling.” The first of these was Epsom Grand Stand Association Ltd v Clarke (1919) 35 TLR 525. That case concerned a property let and used as a public house on the ground floor, with a flat above. The question was whether it fell within the ambit of the Rent and Mortgage Interest (War Restrictions) Act 1915. Bankes LJ (with whom Scrutton and Atkin LJJ agreed) said that the property “was a dwelling house, and none the less so because it was also a public house”. His reasoning was that: “The object of the legislature was to include all houses which were occupied as dwelling houses … irrespective of whether the premises were also used for some other purpose. They came within the statute, although part of the premises might be used for other purposes.”

37. The legislation was subsequently amended. Section 12 (2) (ii) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 provided: “The application of this Act to any house or part of a house shall not be excluded by reason only that part of the premises is used as a shop or an office or for business, trade, or professional purposes.”

38. In Hicks v Snook (1928) LGR 175 Scrutton LJ (with whom Greer and Sankey LJJ agreed) said that the effect of the amendment appeared to him “to affirm in statutory form what the Court of Appeal had decided [in the Epsom Grand Stand case]”. In other words, Parliament endorsed the meaning of dwelling house given to it by the courts.

39. Neuberger LJ then considered more recent cases in this court, the reasoning in some of which he found incomprehensible or flawed. But he commended the decision of this court in Wellcome Trust Ltd v Hamad [1998] QB 638 in which it was held that: “we must test the question whether property demised by a superior tenancy constitutes ‘premises’ by asking whether it is a dwelling house within the extended meaning indicated by this court in the Epsom Grand Stand case … and thereafter perpetuated in the cases to which we have referred, albeit reinforced by statute from time to time in the form of the provisos.”

40. He referred also to Patel v Pirabakaran [2006] EWCA Civ 685 , [2006] 1 WLR 3112 . The issue in that case was whether the tenant of a shop with living accommodation above was entitled to protection under the Protection from Eviction Act 1977 . Section 2 of that Act applied to premises “let as a dwelling.” As Wilson LJ explained at [4]: “So, more focused, the question becomes whether premises let partly for residential purposes and partly for business purposes are “let as a dwelling” within the meaning of section 2 of the 1977 Act .”

41. Having conducted a review of the case law, Wilson LJ concluded at [34]: “I conclude that the phrase “let as a dwelling” in section 2 of the 1977 Act means “let wholly or partly as a dwelling” and so applies to premises which are let for mixed residential and business purposes. I am convinced that, when its precursor was introduced as section 31 of the 1965 Act, such was understood to be the established meaning of the phrase, contained, as it had been, in a series of prior enactments and so construed, as it had been, in a series of judgments of this court. If such is what the phrase then meant in section 31 of the 1965 Act, such is what it must now mean in section 2 of the 1977 Act : for the words are identical and lie on the page without any later qualification, direct or indirect. Their meaning cannot in my view have fluctuated with the tides which have ebbed and flowed in this court in relation to the meaning of the phrase in other contexts.”

42. In Tan v Sitkowski what carried the day, in Neuberger LJ’s view, was the change in legislative policy following the introduction of the Rent Act 1965 . He explained that at [67]: “The reason is attributable to a change in the legislative policy, and is justified on the following basis. Under the earlier legislation, premises could be treated as “let as a dwelling” if they were let for mixed residential and business purposes, because the 1915, 1920 and 1939 Acts applied to premises let for mixed business and residential uses. However, from 1965, the Rent Acts no longer applied to premises used for such mixed purposes, and applied only to premises used for purely [used for] residential purposes, so premises should not be treated as “let as a dwelling” unless they were let for purely residential purposes.” Although they appear in the report, the words in square brackets seem to be redundant

43. He also considered the policy ramifications of any other interpretation; and considered them to be undesirable. The same policy underlies the Housing Act 1985 which precludes a tenancy from being a secure tenancy if it is one to which Part II of the 1954 Act applies. That is why, in Lane v London Borough of Kensington [2012] EWHC 4185 (QB) , Mr James Goudie QC, sitting as a High Court judge, was correct to say that a tenancy for mixed business and residential use was not a secure tenancy.

44. As I have said, the Landlord and Tenant Act 1985 disapplies certain of its provisions to leases or tenancies to which Part II of the 1954 Act applies. That is the same policy to which Neuberger LJ referred. But, crucially, section 18 is not among them. There is nothing, therefore, which expressly precludes the application of sections 18 to 27A to tenancies protected by Part II of the 1954 Act . As Wilson LJ said in Patel , the established meaning of “let as a dwelling” was “let wholly or partly as a dwelling;” and so a definition in those terms applies to premises which are let for mixed residential and business purposes. As I have said, where Parliament wished to impose a test of predominant residential use or to deny protection to business tenants, it said so expressly.

45. In my judgment, therefore, we too must test the question whether property amounts to a “dwelling” by asking whether it is a dwelling in the extended sense indicated by this court in the Epsom Grand Stand case. That case, and those which followed it, clearly establish that a “mixed use” property may be a “dwelling”. It is also worthy of note that in Ruddy v Oakfern at [74] Jonathan Parker LJ seems to have contemplated that a tenant of mixed property, part of which was residential and part of which was commercial, was entitled to the protection of the 1985 Act against excessive service charges.

46. During the course of his oral submissions, I understood Mr Loveday to accept that a lease of a shop with a residential upper part would, in principle, be a dwelling in the established meaning of that word.

47. I must now consider the extent of the non-residential use. Vickery v Martin [1944] KB 679 concerned property used as a guesthouse. The tenant lived in the property, but the main use was as a guesthouse. The question was whether the tenant was entitled to protection by the Rent Restriction Acts then in force. The argument for the landlord was that Section 12 (2) (ii) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 (and its re-enactment as section 3 (3) of the Rent and Mortgage Interest Restrictions Act 1939 ) was not intended to extend the protection of the Act s to premises where the business use is substantial and the dwelling, if any, is merely ancillary to it. It is to be particularly noted that the argument for the landlord (as reported) sought to deny the protection of “mixed-use” property to cases where the residential use was merely “ancillary” to the business use: the very word that is used in the covenant in the present case. This court rejected that argument. Lord Greene MR said at 683: “Mr. Raeburn says that s. 3 , sub- s. 3 , of the Act of 1939 cannot be read literally, but that something must be read into it. He contends that it must be construed as if it read: “shall not be excluded by reason only that a non-substantial part of the premises is used as a shop or office or for business, trade or professional purposes.” His argument is that in the present case the substantial user of these premises was for business purposes and that such use as this is excluded from the Act . I can find no justification for reading anything into this part of the sub-section. It was enacted when the legislature had before it the decision of this court in Epsom Grand Stand Association v Clarke . The legislature repeated precisely the same language when it had before it the decision of this court in Hicks v Snook . It is unthinkable that the legislature can have intended that such a word as “non-substantial” should be read into the sub-section by judicial interpretation. I can see no reason for doing such violence to the language.”

48. Megarry on the Rent Acts (11 th ed) describes this at p 112 as the “doctrine of Vickery v Martin ” and that it applies even if the letting is mainly for business and only to a minor degree for residence.

49. In principle, therefore, I consider that “mixed-use” premises are capable of being a dwelling, even where the residential use is ancillary to the business use. To conclude otherwise would reinstate part (c) of the definition of “flat” which Parliament deliberately repealed. That, to my mind, is the answer to the point of principle that Newey LJ identified. Other provisions relating to service charges

50. My conclusion thus far does not mean that a tenant of “mixed-use” property is entitled to all the protection given to purely residential tenants. For example, section 81 of the Housing Act 1996 prevents enforcement of a right of forfeiture in a lease of a dwelling for non-payment of service charge unless the amount has previously been determined or admitted. But section 81 (4) provides that the reference to premises let as a dwelling does not include a tenancy to which Part II of the 1954 Act applies. So, the tenant of “mixed-use” property does not have this protection.

51. Section 167 of the Commonhold and Leasehold Reform Act 2002 precludes forfeiture for non-payment of small amounts of service charge in the case of long lease of a dwelling. But section 167 (4) provides that a “long lease of dwelling” does not include a tenancy to which Part II of the 1954 Act applies. So, the tenant of “mixed-use” property does not have this protection either.

52. Again, this shows that where Parliament wished to deny protection to business tenants, it said so expressly. Is Unit 6 a dwelling?

53. It is necessary at this point, I think, to look at the lease in a little more detail. The lease itself consists of six clauses which cross-refer to a number of schedules to the lease. Most of these schedules are in standard form. But Part 1 of the First Schedule contains defined terms particular to this lease. They include: the name of the landlord; the name of the tenant; the demised premises; the consideration for the grant; the use and the number of cars permitted to be parked. It is this part of Schedule 1 that contains the description of the permitted use, namely: “Offices (and ancillary residential use)”

54. Schedule 2 contains the tenant’s covenants. Paragraph 10 is the covenant to use the property for the purpose specified in the First Schedule. Paragraph 16.12 reads: “Not at any time to use the Demised Premises or any part therefore or permit or suffer the same to be used [for residential purposes or as sleeping accommodation] for betting and gaming nor for any public exhibition or entertainment nor for any sale by auction nor for any illegal immoral or improper purpose nor for any noisy noxious or offensive trade manufacture or business nor in any way so as to create a nuisance or annoyance to the Landlord or any other neighbouring occupier.”

55. Mr Loveday argued that since the permitted use under the lease meant that Unit 6 had to be used as offices, with or without ancillary residential use, it could never be a “separate” dwelling. In my judgment that submission addresses the wrong question. Unit 6 is a self-contained set of premises forming part of a building. If, therefore, it is a dwelling at all it is a “separate” dwelling.

56. Moreover, Mr Loveday’s submission was that, in effect, every square centimetre of the space enclosed by Unit 6 had to be used as offices, so that it was not open to the tenant to partition off a small part of the Unit for residential use, even if that residential use was ancillary to the office use. That, to my mind, is a wholly unrealistic interpretation. As Danckwerts J said in Levermore v Jobey [1956] 1 WLR 697 : “A lease is not intended to be either a mental exercise or an essay in literature; it is a practical document dealing with a practical situation.”

57. In addition, as Mr Morris submitted, whether a tenant is in breach of a use covenant is to be judged by looking at the leased property as a whole.

58. As I have said, there are two limbs to the definition. One limb asks whether the part of the building in question is “occupied … as a separate dwelling”. Since the current use of Unit 6 is as storage, this limb of the definition is not satisfied.

59. The second limb asks whether the part of the building in question is “intended to be occupied as a separate dwelling.” The answer to that question depends mainly upon the terms of the lease. In some cases, the lease may permit limited activities residential in character but not residential use. Permission for limited activities residential in character may not be enough to conclude that property has been let as a dwelling. Macmillan & Co Ltd v Rees [1946] 1 All ER 675 (where the use covenant was “not to use the said suite for any other purpose than as offices for the tenant’s business of Travel and Buying Service … The tenant and Mrs. Mittler may, however, sleep upon the premises should they so require.”) is one example. But that is not this case because the covenant permits ancillary “residential use”. Residential use, whether ancillary or not, encompasses all residential activities.

60. HHJ Hellman noted at [40] that there was a tension between paragraph 6 of Part I to the First Schedule providing for use as “Offices (and ancillary residential use)” and paragraph 16.12 of the Second Schedule which provides that the Unit must not be used “for residential purposes or as sleeping accommodation”. He noted astutely at [8] that the likely explanation was that paragraph 16.12 was a boiler-plate clause in which square brackets were used to indicate that the words within them were optional, and that the person preparing the lease simply overlooked the need to remove them. Mr Loveday did not challenge that.

61. It is a well-established principle of contractual interpretation that where there is an apparent conflict between a general clause and a specific clause, the width of the general clause may have to be given a more restricted meaning than its words, taken on their own, might suggest. In Apache North Sea Ltd v Ineos FPS Ltd [2020] EWHC 2081 (Comm) Foxton J put it thus: “[21] I would add to these observations that the process of construing a clause in a contact in context may involve interpreting wording which, viewed in isolation, might be regarded as wide, in a way which is consistent with, and does not undermine, other, more-focussed, provisions of the contract. As Hoffmann LJ observed in William Sindall Plc v Cambridge County Council [1984] 1 WLR 1016 , 1024: “It is, of course, a principle of construction that words capable of a very wide meaning may have to be given a narrower construction to reconcile them with other parts of the document. This rule is particularly apposite if the effect of general words would otherwise be to nullify what the parties appear to have contemplated as an important element in the transaction”. [22] A particular application of this principle is invoked when, on one reading, a general or subsidiary clause in a contract would significantly detract from a benefit apparently conferred by one of the principal clauses. In this context, it is sometimes said that the secondary clause will be construed by reference to the principle of non-derogation from grant: Esso Petroleum Co Ltd v Addison [2003] EWHC 1730 (Comm) , [47]-[49] and Johnston & Sons Ltd v Holland [1988] 1 EGLR 264 (CA).”

62. In this case, I consider that it is plain that the description of the permitted use in the First Schedule is the principal description of the permitted use and the restrictions in paragraph 16.12 are subsidiary. One can see this by considering, for example, the prohibition in the latter paragraph on use for “any noisy noxious or offensive … manufacture.” In a case in which use is restricted to offices and ancillary residential use, it is hard to see the necessity for that prohibition.

63. Nevertheless, HHJ Hellman went on to find an interpretation which accommodated both paragraphs. He held that paragraph 16.12 was intended to preclude use solely for residential or sleeping purposes which he considered tied in with the permitted use which included “ancillary residential use”. He concluded, therefore, that the Unit could be occupied as a secondary residence provided that it was also used as an office.

64. Mr Loveday attacked that reasoning. He argued that it failed to give sufficient weight to the description of the permitted residential use as “ancillary”. The primary dictionary definition of “ancillary” is “subordinate, subsidiary”. Mr Loveday submitted that the permitted residential use is use as subordinate or subsidiary to use as an office. Although Mr Loveday equated “ancillary” use with “incidental use” in my view the two concepts are different.

65. I will assume his submission that the residential use must be subordinate or subsidiary to use as offices to be correct. But if a self-contained Unit is let predominantly for office use and subordinately for residential use, does that preclude it from being a dwelling? Under the “doctrine of Vickery v Martin ” I consider that the answer is no. Factual context

66. Mr Loveday also relied on what he described as the factual context. He submitted that the configuration of the Unit was a pointer to the outcome. But since the Unit contained a kitchen and a shower room this is not a strong point; and certainly not strong enough to displace the terms of the lease. Next, he submitted that the original tenants were trustees of business pension fund. But the identity of the tenant is irrelevant. If trustees of a pension fund invested in a long lease of a flat in a purpose-built block of flats they would be just as much entitled to protection against excessive service charges as any other leaseholder, as Ruddy v Oakfern demonstrates. He also pointed out that the Unit was located in the “Cloisters Business Centre”. But the fact that the building is described as a “business centre” is also of no significance.

67. There is, in my view, nothing in the factual context which would undermine the conclusion that I have reached. Result

68. I would dismiss the appeal. Lord Justice Baker:

69. I agree. Lady Justice Elisabeth Laing:

70. I also agree.