Rent review — Rental value — Dispute — Expert surveyor appointed to determine rent review — Appellant contending that appointment invalid — Whether appointment complying with requirements of lease — Appeal dismissed
The appellant landlord owned premises in Jersey, consisting of a retail shop with a lengthy frontage, that were let to the first respondent tenant. The lease contained provisions for rent reviews and for the appointment of an independent chartered surveyor if the review rent could not be agreed.
In respect of the 2003 rent review, the first respondent contended that the premises should be treated as “a variety store” (that is, a large store), the rental value of which should be calculated by reference to an assessed figure multiplied by the gross internal area of the premises. The appellant contended that the property was “a prime retail store”, the rental value of which was to be assessed in zones.
In the absence of agreement between the parties, the president of the Royal Institution of Chartered Surveyors (RICS), the second respondent, concluded that the property was a variety store and appointed an expert surveyor to determine the rent review as provided in the lease. It was agreed that the appointed surveyor was well qualified in the letting and valuation of variety stores but that he had no experience of premises in Jersey or the other Channel Islands.
The appellant applied for a declaration that the appointment was invalid as being contrary to the terms of the lease. It submitted that there were suitable surveyors with experience in the valuation and letting of comparable Jersey properties, and that the terms of the lease required such persons to be appointed in preference to a surveyor from the UK who might lack such experience, as in the present case. The Royal Court of Jersey refused to declare the appointment invalid ([2004] JRC 092) and the appellant appealed to the Court of Appeal.
Held: The appeal was dismissed.
The president had properly identified and categorised the demised premises and, on the evidence, was entitled to conclude that the appointed surveyor, a chartered surveyor of recognised standing, had the relevant experience to determine the rental value.
If the decision that an appointee had the stipulated experience or standing was one that no reasonable President could have made, the court would find that he had departed from his instructions as set out in the lease. However, if the court was of the view that his decision was merely other than that which the court itself would have reached, it would not interfere.
If more than one person fitted the requirements of the lease, it was open to the president, in his discretion, to prefer a person who was a member of his panel, but it was not open to him to ignore the terms of the lease in order to select a person who was such a member.
An appointment by the president would be valid only if it accorded with the provisions of the lease. He was not otherwise concerned with the lease and was not a necessary party to any proceedings as to whether the appointment was valid. The dispute was between the landlord and tenant. However, it did not follow that the president was not a proper party to be joined where, as here, an exposition of his reasoning was vital to the court’s adjudication: United Co-operatives Ltd v Sun Alliance and London Assurance Co Ltd [1987] 1 EGLR 126 referred to.
Advocate Michael Preston appeared for the appellant; Advocate Kerry Lawrence appeared for the first respondent; Advocate Fraser Robertson appeared for the second respondent.
Eileen O’Grady, barrister
