Landlord and tenant – Assured tenancy – Rent determination – Housing Act 1988 — Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 – First-tier tribunal determining rent for flat let by appellant to respondent on assured tenancy – Written reasons decision later corrected under r 50 of 2913 Rules – Whether correction changing substance of decision so as to exceed power under r 50 – Whether decision vitiated by procedural unfairness – Appeal allowed
The respondent was the tenant of a two-bedroom flat in Crumpsall, Manchester, under an assured tenancy from the appellant on terms that provided for the payment of a variable service charge in addition to the rent. By a notice served on the respondent under section 13 of the Housing Act 1988, the appellant proposed a rent increase from £77.90 per week to £80.31 per week with effect from September 2013. The appellant referred the matter to the first-tier tribunal (FTT), which determined that the rent should instead be reduced to £74.23 per week.
In written reasons for its decision, the FTT took as its starting point the asking rent for a comparable property which it had identified and, after making deductions for deficiencies or dilapidations which it had observed on inspecting the respondent’s flat, concluded that the market rent for the respondent’s flat was £81. No evidence of comparable properties had been advanced by the parties or referred to by the FTT at the hearing; moreover, the market rent mentioned in the FTT’s reasons was different from the rent which it had actually determined.
The FTTT subsequently issued a correction certificate, under r 50 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, indicating that corrections should be made to certain paragraphs in the original reasons, mainly by reducing the rental figure for the comparable property. However, in its amended reasons, which it attached to the certificate, it made no changes to those paragraphs but instead made a different change., explaining that a further reduction in the market rent for the respondent’s flat, from £81 to the £74.23 per week which it had determined was actually payable, was necessary in order to exclude the service charge which was included in the rent for the comparable property but was payable separately under the respondent’s lease.
The appellant appealed, contending that the amendments changed the substance of the FTT’s decision and therefore exceeded its power under r 50; further, the FTT had not been entitled to rely on its own researches to identify a comparable transaction without giving the parties an opportunity to comment on it.
Held: The appeal was allowed.
(1) Rule 50 of the 2013 Rules did not make provision for a correction certificate. All that it required was that the document in which the clerical mistake or other accidental slip appeared should be re-issued in an amended form. Toa void confusion, it was desirable that the amendments made to the original document were highlighted or underlined in the amended document and that the latter document included the date on which the correction was being made. The FTT had caused confusion in the instant case by adopting two different methods of explaining its thought processes, in its correction certificate and amended reasons respectively, without any warning that the methods were intended to be different, while at the same time giving the impression that the amended reasons incorporated the corrections in the certificate. Although the correction certificate and amended reasons did not change the substance of the FTT’s decision, which was that the rent for the respondent’s flat was £74.23, the FTT had caused confusion and doubt over what it intended by issuing two documents which were inconsistent with each other.
However, it was now apparent how the FTT had intended the documents to be read and understood; the FTT had indicated that the only difference between its two approaches was that one deducted the variable service charge at the commencement of the calculation and the other at the end. Read in that way, the amended reasons fell properly within the scope of r 50. The FTT’s decision recorded in the decision notice was that the rent should be £74.23 per week, but it had reissued its reasons, which had originally suggested a higher figure, by making an adjustment to the open-market rent to deduct the weekly service charge payable by the respondent. That correction was within the spirit of r 50.
Even if the correction did not fall within r 50, it would still fall within the FTT’s power in r 55(1) to review its decision and, having done so, to amend the reasons for the decision by including an explanation of the route by which it had adjusted the figure of £81 to arrive at its determination of £74.23.
(2) The FTT’s decision should nonetheless be set aside on the grounds of a procedural defect in making use of a specific piece of evidence, namely the comparable property to which it referred, without affording the parties the opportunity to comment on it. In proceeding in that way, the FTT had failed to comply with a fundamental requirement of natural justice. Where neither party had made representations or asked for a hearing, they might be taken to have consented to the FTT giving its decision without their input, but the position was different where the parties engaged with the process and there was a hearing or submissions were made. The FTT would often be aware of relevant evidence before the hearing commenced and, if so, it should tell the parties and give them the opportunity to comment. It was not permissible, in those circumstances, for the FTT to undertake further research of its own in order to make good deficiencies in the evidence after the hearing. It had to provide the parties with notice of the fruits of its investigations if they were to form any significant part in its reasoning. The parties had to be given the opportunity to comment on the evidence used by the FTT in arriving at its conclusion. In practice, therefore, the burden of supplementing inadequate evidence adduced by the parties with further material which might be readily available to the FTT should be undertaken before the hearing was concluded. The procedure adopted by the FTT in the instant case had deprived the parties of the opportunity to make any submissions in relation to the single comparable to which the FTT had attached significance in its reasons. The FTT’s decision would be set aside accordingly and the matter remitted to it for reconsideration: Arrowdell Ltd v Coniston Court (North) Hove Ltd 2013] PLSCS 278, Fox v PG Wellfair Ltd [1982] 2 EGLR 11 and Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 applied.
Nicholas Grundy (instructed by Devonshires) appeared for the appellant; the respondent did not appear and was not represented.
Sally Dobson, barrister
