Lease of damaged post-war property – Tenant agreeing to carry out renovations – Tenant’s successor in title seeking to acquire freehold under provisions of Leasehold Reform Act 1967 – Judge finding landlord had satisfied burden of showing rent payable under tenancy exceeding two-thirds of letting value of property – Appeal dismissed.
In 1949 the plaintiff’s husband took a lease of 68 Cadagon Place, London, from the defendants’ predecessors in title which, on his death, had been assigned to his wife, the plaintiff. The lease was for a term of 45 3/4 years years from December 12 1949 for a premium of £250 and at a yearly rent of £100. The terms were agreed on November 14 1949 and imposed an obligation on the tenant to put the house, which was in poor condition following the war, into a good state of repair. In August 1950 the plaintiff’s husband arranged a mortgage of £4,000. Work took place to eradicate the dry rot and to renovate and repair the property. On November 5 1993 the plaintiff gave notice of her claim to acquire the freehold under the Leasehold Reform Act 1967. Until November 1 1993 the rateable value of the house had exceeded the financial limit imposed by the 1967 Act and the plaintiff had therefore been unable to claim to acquire the freehold on fair terms. The passing of the Leasehold Reform, Housing and Urban Development Act 1993 removed that limit. The judge decided that the letting value as at May 5 1950 was less than £150 pa and that the respondent landlords had discharged the burden of showing that the property was not let at a low rent. The plaintiff appealed contending that on the evidence available the judge had erred.
Held The appeal was dismissed.
1. The judge had made findings of fact as to the works of repair and renovation which were carried out before May 5 1950 and the effect which those works had on the letting value. The facts of the case were exceptional and the judge’s task could not be achieved by a mathematical exercise. Assessing the letting value of premises many years ago on the evidence available was a very difficult exercise, nevertheless the judge had been entitled: (i) to reject the submission that the evidence of the mortgage of £4,000 demonstrated that the letting value in May 1950 must have exceeded £150; (ii) to find that the value of the premium which the landlords could have charged in May 1950 would have doubled to £50; (iii) that the premium could not possibly have trebled during the four-month period; and (iv) that the respondents had discharged the burden of showing that the property was not let at a low rent.
2.The Court of Appeal was always slow to reverse a trial judge on findings of fact and although Hembry v Henry Smith’s Charity Trustees [1987] 2 EGLR 109 showed that the burden could be discharged in appropriate circumstances, this was not such a case.
Michael Driscoll QC (instructed by Mayhew & Co) appeared for the appellant; Anthony Radevsky (instructed by Lee & Pembertons) appeared for the respondent.
