Housing Act 1957–Appeal to Court of Appeal by local authority against quashing of demolition order by county court judge–Question whether or not house was capable of being rendered fit at reasonable expense–Comparison to which regard must be had under section 39(1) of 1957 Act–Meaning of ‘value’ in that subsection–Judge’s decision challenged on the ground that he considered the carrying out of repairs to be justified but did not support this conclusion with figures–Contention that he should have expressly compared the cost of repairs with the difference between the value of the house unrepaired and its value after completion of repairs–Held by Court of Appeal that judge had taken account of the factors in section 39(1)–No error of law–Dicta approving statement by Geoffrey Lane LJ in Hillbank Properties Ltd v Hackney London Borough Council–Appeal dismissed
This was an
appeal by Sefton Metropolitan Borough Council against the decision of Judge
Edward Jones at Liverpool County Court quashing a demolition order in respect
of a house at 50 Beechwood Road, Litherland, Merseyside, owned by the
respondents, Dudlow Estates Ltd.
N F Riddle
(instructed by Sharpe, Pritchard & Co, agents for J R M Heppell,
Metropolitan Borough of Sefton) appeared on behalf of the appellant council; A
T Sander (instructed by Benjamin, Kay & Co, of Prescot, Lancs) represented
the respondent company.
Giving the
first judgment at the invitation of Megaw LJ, BROWNE LJ said: This is an appeal
by the Metropolitan Borough Council of Sefton (to whom I shall refer as
‘Sefton’) from a decision of Judge Edward Jones in Liverpool County Court,
which was given on November 23 1977, by which he quashed a demolition order
made on October 25 1976 by Sefton in respect of a house at 50 Beechwood Road,
Litherland, in Merseyside. That house was owned by Dudlow Estates Ltd, to whom
I shall refer as ‘Dudlow.’ The house is
the end house of a terrace. It was built about 1900. It is a two-storey house,
with two living rooms and a kitchen on the ground floor, and two bedrooms and a
bathroom with a wc in it on the first floor. That bathroom, as I understand,
had been converted some years ago from a bedroom. The tenants of the house at
all material times were Mr and Mrs Hughes, who paid a rent of £2.50 a week.
I think that
in order to make the case intelligible it is convenient to refer straight away
to the relevant statutory provisions, which are all contained in Part II of the
Housing Act 1957. Part II is headed ‘Provisions for securing the repair,
maintenance and sanitary condition of houses.’
Section 4 defines the matters which are to be taken into account in
determining whether a house is or is not unfit for human habitation. Part II
then goes on to provide, so far as relevant for present purposes, for two
alternative ways in which local authorities can deal with unfit houses. First,
there is a group of sections beginning with section 9, which provides, by
subsection (1):
Where a local
authority, upon consideration of an official representation, or a report from
any of their officers, or other information in their possession, are satisfied
that any house is unfit for human habitation, they shall, unless they are
satisfied that it is not capable at a reasonable expense of being rendered so
fit, serve upon the person having control of the house a notice–(a) requiring
him . . . to execute the works specified in the notice. . . .
That is
followed by provisions enabling the local authority to do the work themselves
and charge the owner if it is not done, and various other ancillary provisions.
That group of sections is dealing with the position where the local authority
is not satisfied that the house is not capable at reasonable expense of being
rendered fit for human habitation.
The second
group of sections, which is the one with which we are directly concerned in
this case, begins with section 16. That is dealing with the situation where the
local authority considers that the house is not capable at a reasonable cost of
being rendered fit for human habitation.
Section 16(1)
provides:
Where a local
authority, on consideration of
certain
information
are satisfied
that any house–(a) is unfit for human habitation, and (b) is not capable at a
reasonable expense of being rendered so fit, they shall serve upon the person
having control of the house
or various
other persons
notice of the
time . . . and place at which the condition of the house and any offer with
respect to the carrying out of works, or the future user of the house, which he
may wish to submit will be considered by them.
Subsection
(2):
Every person
upon whom such a notice is served under subsection (1) of this section shall be
entitled to be heard when the matter is so taken into consideration.
Subsection
(3):
A person upon
whom such a notice is served under subsection (1) of this section shall, if he
intends to submit an offer with respect to the carrying out of works . . .
serve upon the authority notice in writing of his intention . . . and . . .
submit to them a list of the works. . . .
Subsection
(4):
The local
authority may, if after consultation with any owner or mortgagee, they think
fit so to do, accept an undertaking from him, either that he will within a
specified period carry out such works as will in the opinion of the authority
render the house fit for human habitation, or that it shall not be used for
human habitation until the authority, on being satisfied that it has been
rendered fit for that purpose, cancel the undertaking.
Subsection (5)
provides that
Nothing in
the Rent Act 1968, or the Rent (Agriculture) Act 1976, shall prevent possession
being obtained of any premises by any owner thereof in a case where an
undertaking has been given under this section that those premises shall not be
used for human habitation.
Then section
17(1):
If no such
undertaking as is mentioned in the last foregoing section is accepted by the
local authority . . . then, subject to the provisions of this section, the
local authority shall forthwith make a demolition order for the demolition of
the premises to which the notice given under the last foregoing section
relates: Provided that if in the case of any house the local authority consider
it inexpedient to make a demolition order having regard to the effect of the demolition
of that house upon any other house or building, they may make a closing order
as respects that house instead of a demolition order.
Then
alternatively they have a power of purchase under subsection (2).
Section 20
gives the right of appeal to the County Court.
Section 20(1):
Any person
aggrieved by–(a) a demolition . . . order made under this Part of this Act . .
. may, within twenty-one days after the date of the service of the order . . .
appeal to the county court within the jurisdiction of which the premises to
which the order . . . relates are situate, and no proceedings shall be taken by
the local authority to enforce any order . . . in relation to which an appeal
is brought before the appeal has been finally determined.
Subsection
(3):
On an appeal
to the county court under this section the judge may make such order either
confirming or quashing or varying the order . . . as he thinks fit and may, if
he thinks fit, accept from an appellant any such undertaking as might have been
accepted by the local authority. . . . Provided that the judge shall not accept
from an appellant upon whom such a notice as is mentioned in subsection (1) of
section 16 of this Act was served an undertaking to carry out any works unless
the appellant complied with the requirements of subsection (3) of that section
which, it will
be remembered, required him to give notice to the authority making an offer of
what he was prepared to do.
There are
further provisions as to purchase notices which can be given by the local authority,
to which I need not refer. I think that the only other section that I need read
is section 39(1), which provides that:
In
determining for the purposes of this Part of this Act whether a house can be
rendered fit for human habitation at a reasonable expense, regard shall be had
to the estimated cost of the works necessary to render it so fit and the value
which it is estimated that the house will have when the works are completed.
I do not think
it is necessary to go in great detail into the earlier history of this matter.
The history goes back to 1973, when the house in question was in the area of
another local authority, the Litherland Urban District Council, and Dudlow
applied to them for an improvement grant. As a result of the local government reorganisation,
Sefton became the local authority responsible. It is enough to say, I think,
that at one stage the local authority was prepared to make an improvement
grant, but Dudlow were not prepared to take up that grant, which was a good
deal less than Dudlow had asked for, because they took the view that the whole
of the grant would be taken up with one particular piece of work on the gable
of this house.
I think I can
begin with the document which is what counsel called a ‘time and place’ notice:
in other words, a notice under section 16(1) of the Housing Act. It is
addressed, not to Dudlow, but to another company which was an associated
company which acts as managing agent and was therefore a proper person on whom
the notice could be served. That notice stated that Sefton
are satisfied
that 50 Beechwood Road is unfit for human habitation and is not capable of
being made fit at reasonable cost, and that the condition of the house, and any
offer with respect to the carrying out of works, or the future use of the
house, which you may wish to submit will be considered by the Council . . . on
December 18 1975.
We were told
that no offer was made by Dudlow.
The demolition
order is dated October 25 1976.
Whereas the
Borough Council of Sefton being satisfied that the house known as 50 Beechwood
Road, Litherland, is unfit for human habitation and is not capable of being
made fit at reasonable cost, have complied with the provisions of section 16 of
the Housing Act 1957, in relation to the house; And Whereas no such undertaking
in relation to the house as is mentioned in the said section 16 has been
accepted; Now Therefore the Council, in pursuance of section 17 of the Housing
Act 1957, hereby order as follows: (1) the house shall be vacated within
twenty-eight days from the date on which this order becomes operative; (2) the
house shall be demolished within six weeks from the expiration of the
last-mentioned period, or, if it is not vacated before the expiration of that
period, within six weeks from the date on which it is vacated.
Dudlow
appealed to the county court against that order. I do not think I need refer to
their notice of appeal in detail. The only issue before the county court was
whether or not the house was capable of being rendered fit for human habitation
at reasonable expense.
The matter, we
were told, first came before the county court on February 4 1977. The matter
was adjourned on that day, and negotiations took place between the parties
which resulted in an agreement which appears in our papers as ‘Draft Heads of
Agreement’ but which we are told in fact did lead to a final agreement.
However, it turned out to be impossible for that work to be carried out
because, as I understand it, of the attitude of the tenants, who were
thoroughly obstructive.
Between
February 4 1977 and November 7 1977, when the matter came before the county
court again, Dudlow made three offers of alternative accommodation to the
tenants, who refused them all for one reason or another. The local authority
also made an offer of alternative accommodation at some stage, and they refused
that too. So the appeal came back before the county court. In that interval
between the two hearings something else had happened, which was that Dudlow had
done some of the work which had been scheduled to the heads of agreement as
being work which was necessary to be done. As I understand it, that was all
external work, which could be done without the agreement of the tenants; and
the evidence was that that work had cost something like £400, although there
was also evidence that some of the work was not satisfactory.
The matter was
heard before Judge Edward Jones on November 7 and 8 1977; and he viewed the
house. Eventually, on November 23 he gave a reserved judgment allowing the
appeal and quashing the demolition order. Having referred to the fact that the
order had been made over a year ago and that negotiations had been going on, he
went on as follows:
In
particular, it is agreed that the house is capable of repair so as to make it
fit for human habitation. The issue for my decision is whether this can be done
‘at a reasonable expense’ as is required by section 16 of the Act. In deciding
this issue section 39 requires that ‘regard shall be had to the estimated cost
of the works necessary to render it so fit and the value which it is estimated
the house will have when the works are completed.’ The authorities lay down that such value must
take into account that there is a sitting tenant.
Pausing there,
it was also admitted that the house in its present state is unfit for human
habitation. So that the position was that it was common ground before the
county court that the house was not then reasonably fit, that it was capable of
being made fit, and, as will be seen later on, there
The judge goes
on:
The first
point taken was that on the appeal I was confined to considering whether the
authority had properly exercised a discretion which was theirs, and in
particular whether they had omitted to consider any matter they should have
taken into account or whether they had acted in bad faith. I cannot agree. The
Act, in section 20(3), is clear in my view. I have to make up my own mind, on
the evidence the parties adduce before me, as to whether I consider the order
should be confirmed, quashed or varied.
Mr Riddle very
properly conceded that he could not renew in this court that submission which
he had made to the county court judge. It is enough, I think, in this
connection to refer to the decision of this court in Victoria Square
Property Co Ltd v Southwark London Borough Council [1978] 1 WLR 463.
I need not read the passage, but I refer to the judgment of Bridge LJ at p 472
G to 473 E, where he said quite clearly that it is for the county court judge
himself to consider all the circumstances and make his decision in the light of
his views about the matter.
The judge then
went on to reject a suggestion, made, I take it, by Dudlow, that he might
accept an undertaking from them. He decided that he had no power to do that, in
which, if I may say so, he was plainly right, having regard to the proviso to
section 20(3), because Dudlow themselves had not made any offer of any
undertaking to the local authority when they could have done so under section
16.
The judge then
described the property and said that it had been agreed that:
in its present
state it is unfit for habitation. The tenants are quite unco-operative and will
not help in getting the necessary repairs done. My view is that they are
holding everyone to ransom with the object of getting a council house in the
area of their own choice. They seem to have acted unreasonably in respect of
offers of alternative accommodation both by the owner and local authority. The
cost of putting the house in a state which would make it fit for habitation is
agreed at £1,400-£1,500. I consider the costs of demolishing the house with all
the works necessarily incidental thereto at about £500. The council would have
me accept the house has only a nominal value. I do not agree. Some of the work
has already been done, some perhaps not altogether satisfactorily. For an
expenditure of no more than £1,000 this house can be made fit for a small
family to live in it. It must have some real value.
I am a little
surprised that the local authority was not prepared to be more flexible in
order to have one more home available in the face of the known serious housing
difficulties. It is suggested that their decision stems first from an original
estimate, now agreed to be far too high, of the cost of the necessary work, and
secondly from the attitude of the tenant which they felt made demolition the
only way to dispose of the matter. It is also suggested that originally they
took a much more serious view of the bowing in the gable end. Their agreement
now that tie-bars will remedy the position is a material concession. It is said
that the proposed expenditure is not justified. The owner disagrees. For an
expenditure (beyond the cost of demolition) of £1,000 he will have a house,
producing a rent which can be reviewed every three years and with the chance,
very real in this case, that the tenant may well move out. She has been offered
one council house which she refused, and she has very recently had a third
baby.
Doing the
best I can with the figures before me I consider the expenditure involved is
justified even if only the value of the house with a (not even this) sitting
tenant is to be taken into account. There are a number of other considerations
which it was suggested I should have regard to, such as the fact that the money
was not being provided by the local authority, that a commercial landlord
thought it worthwhile, as well as the matters adverted to earlier in my judgment.
My judgment does not require recourse to those other considerations, but they
do reinforce and confirm my view that as a financial proposition, purely and
simply, the carrying out of the agreed repairs is justified.
I have
visited the house. There are many houses in the immediate vicinity, and in the
same terrace, which look very comfortable and good little homes from the
outside. Now that I know that technically the house with which I am concerned
can be put into habitable condition I have no hesitation in finding that it has
all the possibilities of adding to the area another attractive little home.
Much may depend on the tenants, and they are far from the best as I had reason
to observe, but a real potential is undoubtedly there.
I had hoped
that I should be able by my judgment perhaps to control in some way the doing
of the work and to decide what should happen to the house. Much depends, in the
first place, on obtaining vacant possession of the property, as it is agreed,
and obvious, that no real work can be done with tenants in possession. I am
quite satisfied this demolition order should be quashed.
The powers and
duties of this court on an appeal from the decision of a county court judge in
a matter under the Housing Act have recently been stated by this court in the
case to which I have already referred, Victoria Square Property Co Ltd v
Southwark London Borough Council. At page 473E of the report Bridge LJ
said:
In this court
the judge’s discretionary decision can only be attacked if it is shown to be
erroneous in point of law. Having regard to the nature of the discretion
exercised, this burden could only be discharged by showing that the judge acted
on some wrong principle, failed to take account of relevant matters, took
account of irrelevant matters, or reached a conclusion so manifestly
unreasonable that it could not properly have been reached by a reasonable judge
correctly directing himself in law.
My Lord,
Waller LJ, said, at p 475H:
Whether the
grounds on which he
[that is the
judge]
said he would
have exercised the discretion in the way he did are clear or not, this is a
matter on which the judge has a wide discretion, and, provided that he has not
misdirected himself, or taken into account considerations which he ought not to
have taken into account, this court cannot interfere.
Finally, my
Lord, Megaw LJ, at the bottom of p 476H, said:
The
jurisdiction of this court on appeal from the county court is statutory. The
only statutory provision conferring jurisdiction which could be relevant in
this case is section 108 of the County Courts Act 1959. It provides for an
appeal on a point of law. An exercise of a discretion by the judge of a county
court may, it has long since been held, involve a question of law. It will do
so if the discretion has been exercised on a wrong principle. It will have been
exercised on a wrong principle if it appears that the judge in exercising his
discretion has taken into account some matter as being material which he ought
not to have taken into account, or has failed to take into account some matter
which would have been material and which he ought to have taken into account,
or that, although no such error can be specifically identified, the exercise of
the discretion is so unreasonable that it can be explained only on the basis
that the judge must have erred in principle. This court’s jurisdiction, as
given by Parliament, in a case such as this, is thus much less extensive than
the jurisdiction given by Parliament to the county court, when it is dealing
with the first appeal to the courts, by the very wide words of section 20(3) of
the Act of 1957.
Mr Riddle
frankly accepts that that is the burden which he has got to take upon himself
in this court. He submits that he can discharge it. What he described, I think,
as his basic submission was that the judge had failed to take into account, or
had failed sufficiently to take into account, the provisions of section 39(1).
He submitted that what the judge had to do in every case of this sort was to
make in his own mind, even if he did not include a specific statement in his
judgment, a mathematical calculation on these lines. He said that the judge
ought first to take the value of the property as it stood in its unrepaired
state. Then he should determine what the value would be if it was repaired. He
should then deduct the present value from the repaired value and see whether
the difference was greater or less than the cost of repair. He submitted that
in the present case the judge had not done this. There are various other
grounds of appeal, but I do not think I shall be doing Mr Riddle any injustice
if I do not go through the other grounds in detail. The section 39 point, as I
understood it, was the fundamental criticism of the judge’s decision, although
it brings in various other factors.
Mr Riddle said
that if one looks at the judgment there is no such calculation, and that when
the judge said that he did not accept the view that the house only had a
nominal present value, there was no evidence to support that because the only
evidence before him was the evidence called by Sefton that it had only a value
of £50. That evidence of Mr McClennan, of Sefton, was, as I understand it, the
only evidence of the value of the house with a sitting tenant in it. Mr Allan
Jones, the witness called by the owners, took into account the possibility of a
vacant possession value. What Mr McClennan said was this. He first of all said:
‘Value, with regulated tenancy at rent of £2.50 per week, poor state of
repair–£50 nominal. Because repairs above normal.’ Then he said that if the repairs specified in
what he called the ‘February’ schedule–that is, the schedule to the agreement
which had been reached but which it was not possible to carry out–had been
carried out, it would be ‘£1,000 or thereabouts. Fair rent £4 per week’–that is
to say the £2.50 existing rent increased to £4–less certain expenses, taking
six years’ purchase, ‘£990 rounded up to £1,000.’ Mr Riddle says that there you have an
increase of £950 as a result of repairs; the cost of the repairs was £1,400 or
£1,500, and therefore the judge’s answer cannot be right.
It seems to me
that, although the judge did not give any figures, what he is doing is carrying
out the exercise which Mr Riddle says ought to be carried out. As Mr Sander
says, the key paragraph is the one in which he says: ‘Doing the best I can with
the figures before me I consider the expenditure involved is justified even if
only the value of the house with a sitting tenant is to be taken into account.’ So there he is taking the worst possible case
against the owner. If he took something more than a nominal value, as counsel
points out, it makes the case less favourable to the owner. The only evidence
of the repaired value with a sitting tenant was the evidence of Mr McClennan,
to which I have referred. The cost of repair was agreed. It seems to me that,
approaching it on the basis on which the judge did look at it, that is to say
the worst case from the point of view of the owner, the judge cannot be said to
have been wrong in law in the result at which he arrived. In my view it is not
necessary, in every case certainly, for the judge in his judgment to set out
specific figures of the mathematical calculations suggested by Mr Riddle. It is
quite enough, it seems to me, if it is apparent from the judgment that he has
taken into account the factors which section 39(1) requires to be taken into
account. Section 39(1) only says that the court shall have regard to those two
factors. Mr Riddle rightly concedes that that does not mean that those are the
only factors which can be looked at. Indeed I think there is authority of this
court to this effect.
What seems to
have happened is that the judge in fact took the council’s figures and said
that, even taking those figures and on the worst assumption against the owner
that it must be valued with a sitting tenant, he still thought that the
expenditure was reasonable. On that basis the cost of the repairs, having
regard to the fact that £400 worth had already been done, leaving £1,000, and
the repaired value of the house of £1,000 very nearly balance. It seems to me
that the judge was entitled also to take into account, as tipping the balance,
if it needed tipping, the expense of demolition. It seems to me that when a
court is considering whether it is reasonable for the owner to spend the money
necessary for repairs it must be a relevant factor that by spending £1,000 on
repairs he will avoid having to pay £500 for demolition. I am inclined to agree
with what I think counsel said in argument, that the cost of demolition does
not come in strictly under section 39. But it seems to me that it is clearly
one of the relevant circumstances to which the court is entitled to have regard
under section 20.
The judge, as
I have said, gave his decision on the basis that he should only consider the
value with a sitting tenant. He said: ‘The authorities lay down that such value
must take into account that there is a sitting tenant.’ That, I take it, was based on what Somervell
LJ had said in Bacon v Grimsby Corporation [1950] 1 KB 272 at p
282. Somervell LJ said this: ‘I have come to the conclusion that the county
court judge was right in taking, as he did, the value of the house spoken of in
subsection (3) to be the freehold value, on the basis that these houses
contained, as they did, tenants who had the right to claim the benefits of the
Rent Restrictions Acts.’
We were told
by counsel that that sentence has been taken as laying down a principle. But in
point of fact, when one examines that case and sees what the point was, it was
entirely an obiter dictum. The problem did not directly arise in that
case. That has been pointed out in this court in the recent case of Hillbank
Properties Ltd v Hackney London Borough Council [1978] 3 WLR 260, by
Lord Denning MR.
The judge
having approached the matter as he did, that he would only look at the sitting
tenant value, and there being no cross-notice, it is not necessary for us in
this case to consider what the position would be if we were considering it afresh
or if there had been a cross-notice. I do not think it is desirable to try to
lay down any hard-and-fast rule about it. But that is obviously a matter which
is going to be of great importance, and I think it would be a mistake for me to
say anything about it which would only be an obiter dictum, beyond this:
that, as at present advised, if the point had to be considered I should agree
with what was said by Geoffrey Lane LJ in the Hillbank Properties case,
at p 272 F. He said:
There are in
the present cases, as there usually will be, two different house values for
comparison. The ‘sitting tenant’ value, which is less than the cost of the
repairs, and the ‘vacant possession’ value, which is a great deal more. The
reasonableness or otherwise of the local authority’s notice to repair may
largely depend upon which of those two values one selects for purposes of
comparison. It may be that evidence is available to show that the tenancy is
unlikely to come to an end in the foreseeable future, in which case the landlords
should adduce it; it may be that there is evidence to the contrary, in which
case the local authority should do the same.
[That was a
case under section 9, not section 16.]
If there is
no evidence one way or the other, as was the case here, what is the judge to
do? It seems to me that in such a case
it is wrong to take either the tenanted value or the vacant possession value
without qualification as the standard of comparison. In those circumstances any
disparity between the cost of repairs and the value of the property will have
much less weight, because one of the figures is necessarily imponderable.
As I
understand it, what Geoffrey Lane LJ is saying there is really in substance
what Megaw LJ said in the course of the argument, that when one is talking
about value one is talking about open market value, and that when you are
considering open market value you must consider all the factors which would
influence the mind of the willing seller and the willing purchaser; and
obviously the possibility of getting vacant possession and the strength of that
possibility is one of such factors.
To summarise
the matter, it seems to me that in this case the judge did approach the case
having regard to the provisions of section 39, and that, although he did not
set out any mathematical computation, it is impossible to say that he went
wrong in law in the decision at which he arrived. Accordingly, in my judgment
this appeal should be dismissed.
WALLER LJ
agreed.
Also agreeing,
MEGAW LJ said: I would only add two observations. The first is that in the
passage which my Lord has read from the judgment which I delivered in Victoria
Square Property Co Ltd v Southwark London Borough Council I was
dealing with a case where the learned judge in the county court had exercised
his discretion to accept an undertaking. That, having regard to the provisions
of section 16 of the Housing Act 1957, coupled with the provisions of section
20(3), is I think undoubtedly correctly described as being a matter of
discretion. It might be said that the sort of case with which we are dealing
here, where it is not a question of the acceptance or non-acceptance of an
undertaking, is not strictly to be described as the exercise of a discretion.
However, on the whole I think that, in relation to the issues in the present
case, that is a matter of words rather than of substance. It is to my mind
clear that, whether it be called exercise of discretion or not, the judge
exercising his functions under section 20(3) of the Housing Act 1957 has got to
act judicially. If evidence is adduced before him, he has to consider that
evidence, and he has to arrive at a conclusion on the basis of his assessment
of any relevant evidence that is adduced before him on the one side or the
other. If it were shown to this court that the county court judge had reached a
decision to found which there was no evidence at all, or evidence which was so
plainly insufficient that no reasonable court could have acted on it, this
court would be entitled to interfere, the question then being a question that
properly would be described as one of law. This court also is entitled to
interfere, on the basis of error of law, if it appears that the judge has taken
into account some material factor which he should not have taken into account,
or has taken into account as being material some factor which he ought not to
have taken into account. This court is also entitled to interfere if the
decision is so unreasonable that the court can only reach the conclusion that
some such error must have occurred. One of the matters which the judge by
statute has got to take into account is the matter referred to in section
39(1).
For the
reasons given by Browne LJ, it appears to me that it cannot be said here that
the learned judge arrived at a conclusion in respect of which there was no
evidence on which he could act or that the conclusion which he reached is
plainly inconsistent with evidence which was before him. On the contrary, when
the figures which were given in the evidence are looked at, bearing in mind
that they cannot purport to be accurate figures but are merely assessments with
a greater or lesser degree of accuracy, it appears to me that what the judge
decided was well within the principles in accordance with which he had to act.
The other
matter on which I desire to say something is that the learned judge in his
judgment in the present case adopted the basis that he had to look at the
question posed in section 39(1) on the assumption that the house had in it a
sitting tenant; and, as I understand it, that was the basis on which he did
approach his decision. The view which I take on that matter is that which was
expressed in the decision of this court in Inworth Property Co Ltd v Southwark
London Borough Council (1978) 76 LGR 263. As is set out in the headnote in
that case, this court there decided that ‘value’ in section 39(1) of the
Housing Act 1957 meant ‘open market value.’
In the assessment of the open market value, those facts and future
possibilities, including facts and future possibilities as to a sitting,
protected tenant, would be relevant–which would be likely to be relevant in the
minds of a willing buyer and of a willing seller in negotiating for the
purchase and sale of the property. It is unnecessary in this case to go further
into that matter, for the reasons given by Browne LJ. But, like him, I take the
view that the manner in which Geoffrey Lane LJ dealt with the question in his
judgment in Hillbank Properties Ltd v Hackney London Borough Council
[1978] 3 WLR 260 at p 272, is, if I may say so with great respect, entirely
correct. It is, however, unnecessary, on the facts of the present case, to say
anything further as to any difference of opinion that may exist on that
question.
I agree that
the appeal should be dismissed.
The appeal
was dismissed with costs.
