QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
B e f o r e :
|THE QUEEN ON THE APPLICATION OF PARK LANE PROPERTIES (LEEDS) LIMITED||(CLAIMANT)|
|THE NORTHERN RENT ASSESSMENT PANEL||(DEFENDANT)|
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
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(Official Shorthand Writers to the Court)
MR J LITTON (instructed by THE TREASURY SOLICITOR) appeared on behalf of the DEFENDANT
Crown Copyright ©
Wednesday, 2nd July 2003
"(1) subject to section 23 and subsection (2) below, the tenant under an assured shorthold tenancy ... may make an application in the prescribed form to a rent assessment committee for a determination of the rent which, in the committee's opinion, the landlord might reasonably be expected to obtain under the shorthold tenancy".
I can pass over subsection (2). Subsection (3) reads as follows, in the relevant respects:
"(3) Where an application is made to a rent assessment committee under subsection (1) above with respect to the rent under an assured shorthold tenancy, the committee shall not make such a determination as is referred to in that subsection unless they consider --
(a) that there is a sufficient number of similar dwellings in the locality let on assured tenancies (whether shorthold or not); and
(b) that the rent payable under the assured shorthold tenancy in question is significantly higher than the rent which the landlord might reasonably be expected to be able to obtain under the tenancy, having regard to the level of rents payable under the tenancies referred to in paragraph (a) above".
It may be noted that the terms of subsection (3)(b) import an element of objectivity by use of the word "reasonably".
"An internal room with no window. It was a galley style and rather narrow. There was no space for eating".
There was then a description as to the fact that there are modern fitted units and other such matters. The three attic bedrooms, as they were described, were noted as having limited headroom because of internal roof beams at a height of about 5 feet. There is a description of the bath facilities and the furniture facilities. It was also stated that 6 Winstanley Terrace was off the Victoria Road and that was an area popular with students because of its proximity to the University.
"The Committee had only limited opportunity to go through these details in the presence of Mr N Ahmed and Mr S Ahmed. The majority of the details had been obtained from internet sites operated by landlords/agents specialising in the student market in Leeds, and it appeared that a degree of selectiveness in relation to price had been used. In relation to one letting agent or landlord, Aston Properties, it could be seen that a search had been done to find properties being let for a weekly charge per person of between £60 and £100. This may explain why the detailed supply did not, with the exception of a faxed letter from Oasis Properties, make any reference to properties being let at less than £60 per person per week".
They then directed themselves in terms by reference to section 22(3) of the Housing Act 1988. Then at paragraph 29, this was said:
"In coming to its decision the Committee had regard to the evidence supplied by the parties and the members' own general knowledge of market rent levels in the area of North Leeds. All three members of the Committee had a very high degree of familiarity with market rent levels in the area of North Leeds and in particular in the main student letting areas".
"In having regard to the details of properties submitted by the tenants and the landlord, the Committee had in mind that the rental figures referred to were figures which landlords were seeking for the academic year 2003 to 2004. They were rents sought, not rents achieved. In this sector of the market, increases in rent normally take place with each new letting. The Committee determined that it had to decide what rent the landlord might reasonably be expected to obtain for the property subject to a letting for the academic year 2002 to 2003".
I regard that approach as unexceptionable. It seems to me that the Committee were indeed required to consider the rental position with respect to the academic year 2002 to 2003. Moreover, so far as I can see, it is indeed the case, as the Committee said, that the comparables being put forward -- not only, I might add, by the landlord, but also by the tenants -- related to the forthcoming academic year.
"Having considered carefully the submissions put before it, and using the knowledge and experience of its members, the Committee found that the rent which the landlord might reasonably have been expected to obtain for the property was £52.50 per person per week.
The Committee then considered whether the rent at which the property was let (£58.50 per week) was substantially more than the landlord might reasonably have been expected to obtain. The rent charged was in excess of 10% more than the rent which the landlord might reasonably have been expected to obtain. The Committee took the view that an excess of more than 10% was significant".
Mr Manning, counsel appearing on behalf of the landlord before me today, does not dispute that an excess of more than 10 per cent could fairly be described as significant. Indeed, he went so far as to describe the consequent reduction as "a swingeing reduction".
What Mr Manning submitted in essence was that the existence of both higher and lower rents indicated no more than the contractual rent is in the middle of a range; and he submitted that the Committee in one sense had stated the point entirely the wrong way round: it is only, suggested Mr Manning, when the weight of the evidence indicated generally lower rents and when there was no evidence of similar or higher rents, that the contractual rent would, on the face of it, be significantly higher than the comparables. Putting it another way, says Mr Manning, the most relevant comparables are those which are as high as, or higher than, the contractual rent.
"For my part I am quite satisfied that this committee, that is to say a committee of this sort under a procedure which is clearly intended to be informal and not to be carried through with the precision of a court of justice, is fully entitled to act, as it has been said, on their own impression and on their own knowledge. It is idle in my view to think of gentlemen manning this committee and sitting maybe day after day without requiring experience and knowledge of conditions in the locality, and to say that they should shut their eyes to what they know of their own knowledge, and act only on such evidence as may or may not be put before them, seems to me to reduce the matter to absurdity".
Lord Parker CJ went on to cite with approval comments made by Lord Goddard CJ in the case of R v Brighton and Area Rent Tribunal ex parte Marine Parade Estates (1936) Limited  All ER 946, and said, with regard to his citation of those comments of Lord Goddard:
"It seems to me that every word of Lord Goddard in that case is equally applicable to proceedings before a rent assessment committee".
"The Committee relied on the experience of its members to assume that the appellants had because a professional landlord could be expected to do so. The Committee members have an expertise which they are entitled to use, but they should be careful to ensure that there is some basis in fact to enable any assumption to be applied. More particularly, they should be satisfied that there is no evidence pointing in another direction".
Founding himself on these various observations, Mr Manning, as I say, submits that the Committee here erred and approached the matter in the wrong and an improper way.
"For my part I am quite clear that whenever a new point emerges, something which might take a party by surprise or something which the committee have found out and of which the parties would have no knowledge, fairness would clearly dictate that they should inform the parties and enable them to deal with the points".
A striking example of this kind of approach, which vitiated a decision of a Rent Assessment Committee, can be found on the rather special facts in the unreported decision of Ouseley J in the case of Yeoman's Road Management Limited v The Chairman of the London Rent Assessment Committee, dated 19th April 2002.
What was in issue here was quite clear. The comparables were being put forward by both sides. The Committee were considering those comparables. As the Committee made clear, and as they were entitled to do, they were treating the comparables put forward by the landlords, not to reject them entirely, but with a degree of reserve, by reason, amongst other things, of the selectiveness in their deployment, and of the fact, amongst other things, that those comparables essentially related to the forthcoming year. I had great difficulty in following from Mr Manning's submissions just what it was that should have been put. He said that it was in essence, as I understood him, the local knowledge of the Committee which, so it was said, operated to displace the comparables put forward by the landlord. But there were other comparables being put forward by the tenants of a much lower order and, as I say, what the Committee were doing was also taking into account their local knowledge; not, that is to say, simply ignoring the comparables in favour of their own local knowledge.
It is clear, just from that recital alone, how different that position was from the present case. But in the course of his judgment, Latham J said this at page 1097:
"But it seems to me that a Rent Assessment Committee should not simply decline to take account of (as this Committee appears to have done) open market rentals which were put before it on the basis that adjustments had to be made such as to mean that those comparables were not close comparables, when it is perfectly prepared to accept, as of some assistance, a registered fair rent in respect of which very substantial adjustments must be made".
Again, one can see from that how fundamentally different that case is from the present because there the Rent Assessment Committee, as the judge viewed it, simply declined to take account of relevant market rentals; whereas there is absolutely no basis whatsoever in the present case for saying that this Committee had declined to take into account such matters. In fact, Latham J went on a little later on to say this:
"In my view the Committee should assess the evidence overall and make a proper value judgment on the whole of that evidence".
Again, in my judgment in the present case, one can see that that is what this Rental Assessment Committee in the present case did. In the Northumberland and Durham Property Trust Limited case, moreover, Latham J went on to point out on the facts that the figure of £200 per week appeared out of thin air without reasoned justification. That also is quite different from the present case. Indeed, in the Northumberland and Durham Property case, the position was actually conceded on behalf of the Rent Assessment Committee there concerned.
While it seems to me that the Northumberland and Durham Property Trust Limited case is an illustration of a case where lack of reasons (or reasoning) can be fatal, it is different from the present case where, in my view, the reasons given were sufficient.