The Court of Appeal has ruled that it is not necessary to work in a ‘live/work’ flat and that this phrase is very ambiguous. For those who reside in a live/work unit, this decision will come as a relief where such premises have solely been used for residential purposes.
The case of AHGR v Kane-Laverack [2023] EWVA Civ 428 centred around the meaning of the phrase ‘live/work’ in a 999-year lease. The premises were a leasehold flat in a development in Bermondsey consisting of 13 business units, 14 residential units, and one ‘live/work’ unit (the subject of the claim). The appellant, AHGR, was the freehold owner of the flat, and the respondents, Peter and Luke Kane-Laverack, were the leaseholders.
The lease of the unit in question contained a covenant against the use of the premises other than as a ‘live/work’ unit in accordance with the conditions of the relevant planning permission. AHGR brought proceedings against the Kane-Laveracks in 2019, arguing that they were in breach of this covenant. The court had to consider if the covenant placed an obligation on the leaseholders to live and work in the flat or if they were free to choose whether to live and/or work at the premises.
The Court of Appeal agreed with the decisions of the lower courts and concluded that there was nothing in the lease or planning permission requiring the leaseholder to occupy the flat for both uses. The freehold owner’s appeal was therefore dismissed.
The Background
As Lord Justice Dingemans set out in his judgment, the ‘live/work’ concept originated in the USA but has been used in London since the late 1990s to encourage mixed use developments and the development of unused buildings in areas designated as employment areas. It was highlighted that the most likely reason for the inclusion of a sole ‘live/work’ unit in this development was to avoid the requirement for the developer to sell 25% of the scheme as affordable housing.
Luke Kane-Laverack purchased the lease of this unit in 2009. The flat was used as a single-use dwelling until October 2013. And from 2014 on both Luke and Peter Kane-Laverack carried out some of their work from the flat. Peter (a barrister) worked at the flat as a free-lance writer and legal consultant, and Luke (a GP) provided triaging and phone consultations for his GP patients from the flat, amongst other tasks.
The Planning Permission and Supplementary Planning Guidance
Planning permission for the flat was granted in 2001. AHGR tried to rely on an old plan submitted as part of the planning application that showed two separate living and working spaces. However, a different plan drawing of the flat was submitted as part of the application at a later date. Although the first of these showed separate marked spaces for working and living, the second showed the whole premises shaded as a ‘live/work’ space.
AHGR’s claim also relied on a Supplementary Planning Guidance document (‘SPG’) approved by the London Borough of Southwark in 1999 entitled ‘Live/work development in Bermondsey Street’. This provided a list of criteria for live/work developments. AHGR argued that the court should rely on the SPG, which they believed supported their interpretation of the phrase ‘live/work’ as meaning ‘live and work’.
The Court of Appeal’s Decision
In relation to the SPG, Lord Justice Dingemans referred to the judgment in Trump International Golf v The Scottish Ministers [2015] UKSC 74, in which the Supreme Court stated there is limited scope for the use of extrinsic material in the interpretation of a public document such as a planning permission.
The court considered that a reasonable reader of the grant of planning permission would not have regard to the SPG as it was not referred to or incorporated into the grant of planning permission. The Court of Appeal therefore agreed with the lower courts and concluded that the SPG could not be relied upon.
The Court of Appeal also shared the same interpretation of the phrase ‘live/work’ as the lower courts. Lord Justice Dingemans gave the following three reasons for this conclusion:
The phrase ‘live/work’ is an ambiguous phrase that could mean ‘live and work’, ‘live or work’ or ‘live and/or work’.
The second plan submitted as part of the planning application superseded the first plan submitted. The only relevant plan therefore showed the entire flat shaded as ‘live/work’ space and did not divide the flat into separate living and working areas. As the leaseholder was free to decide where to live and where to work in the space, they were also free to decide whether to only live/only work/live and work at the premises.
The consequences of breaching the planning permission were potentially severe for the leaseholders (ie they could be the subject of criminal proceedings). Given the severity of these consequences, if the planning permission had required the leaseholder to both live and work on the premises, this would have been spelled out in much clearer and less ambiguous language.
Conclusion
This case highlights the courts’ reluctance to use extrinsic documents for the purpose of interpreting public documents such as grants of planning permission. It is another example of the courts interpreting ambiguous language in favour of tenants, emphasising the need for clear language in leases that leaves no room for alternative interpretations or ambiguity.
As the court concluded that the lease did not require the leaseholders to work at the premises, it was not considered necessary to examine what would be considered ‘work’ in this context. Lord Justice Dingemans stated that this question could be left to be answered as part of ‘an appropriate case for which it matters’. As working from home is now so commonplace, it will only be a matter of time before this question needs answering.
