Evidence – Useable area of site – Claimant tenant applying for new lease of business premises – County court determining rental value by reference to useable site area derived from earlier determination of surveyor on contested rent review – Whether judge entitled to attach weight to earlier award of surveyor – Appeal allowed
The claimant carried on a vehicle-dismantling business from a site in Leicester that it held on a lease from the defendant landlord. On a contested rent review in 1991, the open market rental value of the site had been determined by a surveyor at £7,500 pa. At that time, the claimant had not yet been incorporated as a company and operations from the site were still being conducted as an unincorporated business. The surveyor’s determination, although no reasons were given for it, was consistent with the contention of the then tenant’s expert that the site had a useable area of 3,333 square yards. The defendant had contended for a useable area of 4,800 square yards.
In 2008, the claimant applied for a new tenancy to be granted under the Landlord and Tenant Act 1954 and that matter was referred to the county court. In relation to valuation, the claimant advanced expert evidence on useable area from the same expert that had acted for the tenant in 1991. The county court judge determined that the site had a useable area of 3,330 square yards, with an annual rental value of £5 per square yard, producing a rental value of £16,665 pa. In reaching that conclusion, she took into account the determination on the 1991 rent review.
The defendant appealed, contending that the evidence did not justify the county court judge’s conclusion on useable area. He contended that the judge had erred in attaching weight to the 1991 rent review determination, rather than preferring the evidence of one party’s expert or the other, in circumstances where the surveyor who made that determination had not been heard or cross-examined as a witness, he had given no reasons for his earlier decision and there was no evidence that he had measured the site himself.
Held: The appeal was allowed.
Earlier authorities established a principle that the judgment, verdict or award of another tribunal was not admissible evidence to prove a fact in issue or a fact relevant to the issue in other proceedings between different parties: Hollington v F Hewthorn & Co Ltd [1943] KB 587 and Land Securities plc v Westminster City Council (No 1) [1992] 44 EG 153 considered. The instant case was distinguishable from those authorities in so far as the surveyor had made his determination as an expert rather than an arbitrator. In that capacity, he had given a determination that represented his opinion, rather than being obliged to act solely on the evidence adduced by the parties. Moreover, the objection that an earlier award amounted to hearsay had been reduced since the removal of the rule against hearsay evidence in civil proceedings by section 1(1) of the Civil Evidence Act 1995.
However, the fact that evidence was hearsay was still likely to affect its weight. In addition, there were still objections to conducting a collateral inquiry as to whether a previous decision-maker had come to the right conclusion. Such an inquiry was insufficiently relevant to justify undertaking it in the instant case. The 1991 determination simply provided evidence that the surveyor had considered the site to have had a particular rental value as at a particular date, which, of itself, was of no assistance. The determination was unreasoned and the surveyor was not available to confirm whether he had indeed assumed the useable area to be 3,333 square yards or, if so, to explain his reasons. There was no evidence that he had attempted to measure the site himself, rather than simply adopting the tenant’s view. The tenant’s expert was before the court to give and justify his views for himself and it was incumbent on the judge to assess them. The fact that the surveyor had found them persuasive on an earlier occasion would, by itself, have been of no real importance even if the surveyor had appeared as a witness in the instant proceedings. In those circumstances, the judge had not been entitled to attach any substantial weight to the surveyor’s determination. Since she had regarded it as central to her decision on the useable area of the site, that decision should be set aside and the matter remitted to the county court for rehearing.
Christine Cooper (instructed by Crane & Walton, of Leicester) appeared for the claimant; Stephen Taylor (instructed by Douglas Wemyss Solicitors LLP, of Leicester) appeared for the defendant.
Sally Dobson, barrister
