Lease extension — Schedule 13 of Leasehold Reform, Housing and Urban Development Act 1993 — Determination of premium to be paid by appellant tenant — Appeal by tenant from decision of leasehold valuation tribunal (LVT) — Whether respondent landlords able to contend for higher premium than that determined by LVT — Appeal allowed
The appellant was the lessee of a three-bedroom flat, one of several converted out of two townhouses in London SW1 owned by the respondent landlords. The lease was for a term of 64 years from 1959 at a fixed annual ground rent of £100. The appellant applied, under the leasehold enfranchisement provisions of Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993, for a lease extension of 90 years beyond that of the existing lease. The leasehold valuation tribunal (LVT) determined the premium payable to the respondents for the new lease at £1.154m.
The appellant appealed against that determination, contending for a figure of £801,317. The respondents did not appeal, but argued that the price should be increased to ££1.182m. The appellant submitted that the respondents were not entitled to argue for a higher figure where they were not themselves appealing.
Held: The appeal was allowed.
There might be situations in which a party to an LVT decision did not itself wish to appeal, despite the fact that it had not been entirely successful in its arguments before the LVT, but would wish to resurrect its arguments in the event that the other party took the matter to the Lands Tribunal. There was no provision under the rules for a cross-appeal, and by the time a respondent was aware that the appellant had been granted permission to appeal, it would almost certainly be too late for the respondent itself to seek such permission: Arrowdell Ltd v Coniston Court (North) Hove Ltd [2007] RVR 39 considered. Taking those matters into consideration, the respondents in the present case should be able to contend for a result more favourable to them than the LVT’s decision. Their arguments had been made clear in their statement of case, so that there was no question of the appellant being taken by surprise. There was no prejudice to the appellant in allowing the respondents to contend for a higher figure than that decided by the LVT. However, the respondents could not argue for a higher figure than they had put before the LVT.
On consideration of the valuation evidence, the appropriate premium to be paid by the appellant was £1.055m. That valuation was reached on the basis that hope value was to be excluded: Earl Cadoganv Sportelli[2007] 1 EGLR 153 applied. Even if the decision in Sportelli were reversed by the Court of Appeal, no adjustment would be needed to the valuation in the present case since the respondents had not proved the existence of any hope value, still less that it could be represented by some ascertainable sum.
Edwin Johnson QC (instructed by Forsters LLP) appeared for the appellant; Mark Sefton (instructed by Pemberton Greenish) appeared for the respondents.
Sally Dobson, barrister
