8
JAMES AND OTHERS v. THE UNITED KINGDOM JUGDMENT
terms. The Bill will be based on the principle that the land belongs in equity to the
landowner and the house belongs in equity to the occupying leaseholder. It follows
that the leaseholder will have the right to retain his house after the lease expires and
the right to enfranchise his lease."
The White Paper contained details of the Government’s proposals to
allow certain qualified leaseholders to acquire the freehold or obtain a fiftyyear extension of their existing lease. The Government’s proposals as to the
terms of enfranchisement were explained as follows in paragraphs 11 and
12 of the White Paper:
"11. Subject to provision for special cases, a qualified leaseholder will have the right
at any time during the original term of the lease to acquire the freehold by buying out
the landlord compulsorily. It is important to ensure that the price paid for
enfranchisement is a fair price. But present market prices reflect the position under the
present law which is inequitable to the leaseholder, and the price for enfranchisement
must accordingly be based not on present market values but on the value of the land
itself, including any development value attaching to it. The price of enfranchisement
must be calculated in accordance with the principle that in equity the bricks and
mortar belong to the qualified leaseholder and the land to the landlord.
12. It follows, and the Bill will so provide, that where there is no development value
(and often there will not be) the fair price for enfranchisement will be the value of the
freehold interest of the site, subject to the lease and its extension of 50 years. This will
completely disregard the value of the building on reversion."
19. Thereafter, following their re-election in 1966, the (Labour)
Government introduced a Bill into Parliament to give effect to their
proposals. During the Parliamentary proceedings, the (Conservative)
Opposition accepted the principle, enunciated in their 1966 Election
Manifesto, that there should be legislation "to allow ground leaseholders to
buy or rent their houses on fair terms except where the property is to be
developed", but they opposed the terms in the Bill as being confiscatory.
They argued that the case for basing the price of enfranchisement solely on
the site value rested on a wholly false argument that the house belonged to
the leaseholder. In fact, he had only purchased a right to live in it for a
specified period. Market prices should be paid for what belonged to the
landlords.
In the parliamentary debates on the Bill, members of all political parties
expressed the view that the 1954 Act, which provides security of tenure (see
paragraph 16 above), had not succeeded in relieving the hardship or
injustice caused to tenants at the expiry of long leases. Two of the reasons
given were the continuing liability of the tenant to pay freshly assessed rents
and the potential burden of heavy claims for dilapidations which some
landlords used as a means of persuading tenants to give up their statutory
right of possession.
One criticism which was made of the provisions of the Bill was that it
did not distinguish between "deserving" and "undeserving" tenants and did
not provide machinery for a court or tribunal to determine whether it was