Landlords instructing surveyor to set down matter for hearing before leasehold valuation tribunal — No dispute as to tenant’s entitlement to enfranchise — Agreement reached on stipulated figure — Whether tenant or landlords to pay surveyor’s fees — Interpretation of statutory language — First instance decision in tenant’s favour — Landlords’ appeal dismissed
The tenant lived at 90 Clodeshall Road, Alum Rock Birmingham. The two appellant respondents were respectively the freeholder and holder of the property’s headlease (“the landlords”). In 1993, the tenant served a notice under the Leasehold Reform Act 1967 seeking to acquire the property and there was no dispute as to his entitlement to obtain enfranchisement. The landlords instructed a surveyor, S, to set down the matter for hearing and their instruction was understood to relate to a reference to a leasehold valuation tribunal (“LVT”). S submitted that application and negotiations between the surveyors subsequently resulted in an agreement of a price of £5,000. The landlords demanded that the tenant should pay S’s fees of £249.69. The tenant agreed to pay the solicitors’ fees but not S’s fees and issued successful proceedings for specific performance of the statutory enfranchisement at a price which did not include S’s fees. The landlords appealed.
By section 9(4) of the 1967 Act, where a person gives notice of his desire to have the freehold of a house under the Act, “there shall be borne by him … the reasonable costs of … (e) any valuation of the house and premises”. Under para 5 of Schedule 22 to the Housing Act 1980, the costs which a person “may be required to bear under section 9(4) of the 1967 Act do not include costs incurred by a landlord in connection with a reference to a leasehold valuation tribunal”.
Held The landlords’ appeal was dismissed
1. Para 5 of Schedule 22 was primary legislation. The words of it had to be given their ordinary meaning and effect. Para 5 expressly referred to section 9(4) of the 1967 Act. It was an exclusionary provision.
2. By the plainest of language para 5 excluded landlord’s costs incurred in connection with a reference to a LVT.
3. Further para 5 required an objective inquiry viz whether the costs were incurred in connection with a landlord’s reference to the LVT.
4. On the issue of the facts, the landlords did not need a valuation to assess their position. They had given S the price they were contending for. That was the figure specified in the application so such work as S carried out was, in any event, done in connection with the impending reference to the tribunal. There was no error on the part of the judge on either the facts or the law.
David Stockill (instructed by Harris Cooper, of Solihull) appeared for the appellant landlords; Guy Fetherstonhaugh (instructed by Margetts & Ritchie, of Birmingham) appeared for the tenant.
