Leasehold Reform Act 1967–Rateable value limits for acquisition by tenant of freehold–Power for county court to make a notional reduction of rateable value on account of tenant’s improvements–Determination of county court to be ‘final and conclusive’–Installation by tenant of full central heating–Refusal by county court judge of application for reduction–Whether decision capable of correction by certiorari–Section 107 of County Courts Act 1959–Important statements by majority of Court of Appeal on wide scope of jurisdictional error–‘Anisminic’ case–Held that by misconstruction of statutory provision judge exceeded his jurisdiction–Dissent by Geoffrey Lane LJ–Certiorari ordered to quash county court judge’s decision
This was a
tenant’s appeal against the refusal of the Queen’s Bench Divisional Court on
April 5 1977 to grant an order of certiorari directed to Bloomsbury and
Marylebone County Court in respect of that court’s dismissal of an application
by the tenant, Sidney Pearlman, for a notional reduction of the rateable value
of a dwelling-house for the purposes of the Leasehold Reform Act 1967. The
object of the tenant’s application was to bring the rateable value of the house
within the limits set by the Act for enfranchisement. The dwelling-house was 1
Vale Close, Maida Vale, London W9, the landlords being the Keepers and
Governors of Harrow School.
The tenant
contended that the decision of Judge Curtis-Raleigh in the present case
conflicted with a decision of Judge White in Pickering v Phillimore
in West London County Court in May 1976.
Lionel Read QC
and Matthew Horton (instructed by Fladgate & Co) appeared on behalf of the
tenant; Alistair Dawson QC and Joseph Harper (instructed by Enever, Freeman
& Co, of Ruislip) represented the landlords.
Giving
judgment, LORD DENNING MR said that the Leasehold Reform Act 1967, as amended
by section 118 of the Housing Act 1974, applied only to houses whose rateable
values (in the London area) did not exceed £1,500. But there were many cases
where a rateable value might exceed £1,500 just because of improvements made by
the tenant, so section 118(3) of and Schedule 8 to the Act enabled the tenant
to get the rateable value, for the purposes of the Leasehold Reform Act, reduced.
The procedure
was for the tenant to serve on the landlord a notice stating that he had made
improvements at his own cost, and that he wanted the rateable value reduced. If
the landlord disagreed, the matter would be referred to a county court judge
for his determination as to whether the tenant had a legitimate case for a
reduction; if so, the case would be referred to the valuation officer for him
to certify the amount of the reduction.
In the present
case the house was let on a long lease from 1933 for 88 years. The appellant
had occupied it as his residence for over 30 years. When he went there it had
an old-fashioned heating system, with a coal-fired boiler in the kitchen
supplying hot water for the sinks and baths, and two radiators serving the hall
and a landing. The rooms were heated by ordinary coal fires. In 1960 Mr
Pearlman scrapped that system, and installed a modern gas-fired full
central-heating system, with 18 radiators and hot water serving baths, sinks,
etc. The chimney was lined with asbestos, and pipes were laid through walls,
some of them load-bearing, and ceilings.
This work was
undoubtedly a great improvement to the house and went to increase its rateable
value. In the latest revaluation the rateable value of the house was £1,597. This
being over £1,500, Mr Pearlman asked the landlords to agree to a reduction in
the rateable value to £1,487. The landlords refused, and Mr Pearlman applied to
the county court judge who, on November 26 1976, also refused.
Paragraph 1(2)
in Schedule 8 to the 1974 Act required that, in order to qualify for a
reduction, an improvement must be an ‘improvement made by the execution of
works amounting to structural alteration, extension or addition.’ Those words had been interpreted differently
by different judges. It was said that, neither decision being unreasonable,
each decision should stand, and reliance was placed for this purpose on the
speech of Lord Reid in Brutus v Cozens [1973] AC 854.
His Lordship
could not accept this argument. As he pointed out in Dyson Holdings v Fox
[1976] QB 503 at p 510, when an ordinary word came to be applied to similar
facts in one case after another, it would be intolerable if half the judges
gave one answer and the other half another. It should be given the same
interpretation and applied in the same way; see the rating cases Cardiff
Rating Authority and Cardiff Assessment Committee v Guest Keen Baldwins
Iron and Steel Co Ltd [1949] 1 KB 385, at p 396, British Launderers
Research Association v Borough of Hendon Rating Authority [1949] 1
KB 462, at pp 471-2; and Woodhouse v Peter Brotherhood Ltd [1972]
2 QB 520, at pp 536-7.
His Lordship
was of opinion that the installation of full central heating to this house was
‘an improvement made by the execution of works amounting to structural
alteration or addition’ within the meaning of Schedule 8. It involved a good
deal of tampering with the structure by making holes and lining the chimney,
much more than would be involved in, for example, fitting cupboards or a modern
fire-place. This was confirmed by the practice of rating authorities, who had
always held the rateable value to be increased when central heating was
installed; and the increase would date from the date of installation on the
ground that it was a ‘structural alteration’ within sections 68(4)(b) and
79(2)(b) of the General Rate Act 1967. And in section 21(1)(a) of the Local
Government Act 1974 Parliament said that no increase was to be made in the
gross value by reason of the ‘structural alterations’ involved in installing a
central-heating system.
The contrary
view was supported by some cases under the Settled Land Acts 1882 and 1890,
such as Re Gaskell’s Settled Estates [1894] 1 Ch 485 and Re Clarke’s
Settlement [1902] 2 Ch 327, at p 331, affirmed in the Court of Appeal in Re
Blagrave’s Settled Estates [1903] 1 Ch 560 at pp 562-3. His Lordship found
no help in those cases, concerned as they were with a different statute, worded
differently, in a different context altogether.
There was,
however, the question of jurisdiction. Schedule 8, paragraph 2(2)(a), to the
Housing Act 1974 provided that
the county
court may on the application of the tenant determine that matter, and any such
determination shall be final and conclusive.
The words
‘final and conclusive’ had been considered by the courts a hundred times. It
had been uniformly held that they precluded any appeal in which a higher court
might substitute its own decision for that of the lower tribunal, see Westminster
Corporation v Gordon Hotels Ltd [1907] 1 KB 910, and Hall v Arnold
and others [1950] 2 KB 543. But those words did not preclude the High Court
from correcting errors of the lower tribunal by means of certiorari, which
could still issue for excess of jurisdiction, or error of law on the face of
the record, see R v Medical Appeal Tribunal ex parte Gilmore
[1957] 1 QB 574, at p 583; or the High Court could declare the law by which the
parties were bound (Pyx Granite Co v Ministry of Housing and Local
Government [1960] AC 260) or even consider a point of law by way of case
stated (Tehrani v Rostron [1972] 1 QB 182).
It was said,
however, that section 107 of the County Courts Act 1959 had taken away the
power to order certiorari to a county court. Section 107 provided that subject
to the provisions of any other relevant Act ‘no judgment or order of any judge
of county courts . . . shall be removed by . . . certiorari . . .’ In his Lordship’s view that provision applied
only to proceedings
108.
In Ex parte
Bradlaugh (1878) 3 QBD 509 at p 512, where there was a ‘no-certiorari’
provision, Cockburn CJ said:
I entertain
very serious doubts whether that provision does not apply only to matters in
respect of which jurisdiction is given by that statute, and not to matters in
which jurisdiction is given by subsequent statutes.
In post-1959
Acts, Parliament had expressly said whether there was to be an appeal (as in
the Building Societies Act 1962, section 72 (5)) or no appeal (as in the
Industrial and Provident Societies Act 1965, section 42(3)(b)). In both those
cases, Parliament used the words ‘final and conclusive,’ leaving the remedy by
certiorari or declaration unimpaired.
Thus his
Lordship would hold that certiorari lay where a county court judge went outside
his jurisdiction, or where there was an error of law on the face of the record.
Even if
section 107 applied here, it only excluded certiorari for error of law on the
face of the record. It did not exclude the powers of the High Court to issue
certiorari for absence of jurisdiction. It had been held that certiorari issued
to a county court judge if he acted without jurisdiction (R v Hurst,
ex parte Smith [1960] 2 QB 133). If he made a wrong finding on a matter on
which his jurisdiction depended, he made a jurisdictional error; and certiorari
would lie to quash his decision, see Anisminic v Foreign Compensation
Commission [1969] 2 AC 147, per Lord Wilberforce at p 208.
The
distinction between an error entailing an absence of jurisdiction, and one made
within jurisdiction, was very fine–so fine, that, if the High Court chose to
interfere, it could formulate its decision thus: ‘The court below had no
jurisdiction to decide this point wrongly as it did’; if, on the other hand it
chose not to interfere, it could say: ‘The court had jurisdiction to decide it
wrongly, and did so.’ Softly be it
stated, but that was the reason for the difference between the decision of the
Court of Appeal in Anisminic and the House of Lords. His Lordship
suggested that the distinction should now be discarded. The High Court had, and
should have, jurisdiction to control the proceedings of inferior courts and
tribunals by way of judicial review. It was intolerable that a citizen’s rights
in point of law should depend on which judge tried his case, or in what court
it was heard.
If he (his
Lordship) had held that certiorari did not lie, he would have held that the
tenant could appeal under section 108, because he would never accept a
situation where different judges on the same set of facts could come to
different conclusions on points of law. His Lordship would have held that
‘final and conclusive’ excluded appeal on the facts but not on the law.
Dissenting on
the question whether certiorari lay, GEOFFREY LANE LJ agreed that the county
court judge was wrong in deciding that the works carried out by Mr Pearlman
were not improvements ‘by the execution of works amounting to structural
alteration, extension or addition.’
‘Structural’ in this context meant, his Lordship believed, something
involving the fabric of the house as opposed to the provision merely of a piece
of equipment. It mattered not whether the fabric in question was load-bearing
or otherwise. If there was any substantial alteration, extension or addition to
the fabric of the house, the words of Schedule 8 were satisfied.
As to the
jurisdiction point, the words of section 107 were designed to deal with two
separate situations. First, a judgment or order which had already been given or
made by the court; and secondly, any proceedings which had not yet reached the
stage of judgment or order. The section removed the remedy of certiorari in
either case.
Section 115,
empowering the High Court to order removal into the High Court of proceedings
commenced in the county court, plainly applied only to proceedings which had
not reached judgment or order, and this conclusion was confirmed by section
117(1), which would be meaningless if completed proceedings were contemplated.
The Act had retained certiorari as a means for uncompleted actions, see Challis
v Watson [1913] 1 KB 547 per Lush J at p 549, and Lee v Hay’s
Wharf Ltd [1940] 2 KB 306. This action was not uncompleted, so neither of
these forms of certiorari were available to the tenant.
Mr Dawson, on
behalf of the landlords, had conceded that the Act had not affected the power
of the High Court in a proper case to remove and quash a decision of the county
court which was made in excess of that court’s jurisdiction. It must follow
that the only basis for an order of certiorari would be if the judge had acted
in excess of his jurisdiction.
As to whether
an appeal lay on a point of law, section 108 of the County Courts Act 1959 gave
a general right of appeal to the the Court of Appeal on a point of law to any
party who was dissatisfied with the judge’s determination. Section 109
specified the circumstances on which there might be an appeal on a question of
fact. None of them was applicable here.
The words of
Schedule 8, paragraph 2, that ‘such determination shall be final and
conclusive’ could only apply–since there was in any event no appeal on fact–to
appeals on questions of law. Thus the only circumstances in which the court
could correct what in his Lordship’s mind was the error of the county court
judge was if he were acting in excess of his jurisdiction. His Lordship was
unable to see that the judge went outside the proper area of his inquiry. The
question was not whether he made a wrong decision, but whether he inquired into
and decided a matter which he had no right to consider. He was not embarking on
some unauthorised or extraneous or irrelevant exercise. All he had done was to
reach what appeared to this court to be a wrong conclusion on a difficult
question.
His Lordship
took the view that no form of certiorari was available to the tenant.
Agreeing with
Lord Denning on both questions, EVELEIGH LJ said that Schedule 8, paragraph 2
(2), gave the county court judge a trenchant power. His determination on
certain matters was made final and conclusive, the finality affecting not only
the immediate parties but also their successors. By Schedule 8 he was given
arbitral power, but Parliament would look upon it in another light also: it had
imposed upon him a duty to answer certain questions. In so far as he answered
them, his decision was binding; in so far as he answered some other question,
he was not performing his duty, or exercising any power granted to him by
Parliament, and his decision was a nullity. This, his Lordship believed, was
the approach to the question indicated by the Anisminic case (supra)
at p 234.
Wade on
Administrative Law, 4th ed at p 232, stated that
the rule that a determination which was ultra vires might always be
challenged in the High Court was no more than the corollary of the main
principle of jurisdictional control, which ordained that no tribunal could give
itself jurisdiction which it did not possess. In other words, a tribunal could
not give itself jurisdiction to decide a question which Parliament had not
empowered it to answer. The absurdity of allowing the tribunal so to do was all
the more apparent when Parliament had made the answer of the tribunal binding on
other courts.
In Bunbury
v Fuller (1853) 9 Exch. 111, Coleridge J said at p 140 that it was a
general rule that no court of limited jurisdiction could give itself
jurisdiction by a wrong decision on a point collateral to the merits of the
case upon which the limits to its jurisdiction depended. In the present case
the tribunal had first to decide the meaning of the question it was required to
answer. This was a collateral matter on which the limits to jurisdiction
depended.
In his
Lordship’s opinion, the county court judge wrongly understood the meaning of
‘works amounting to structural alteration, extension or addition,’ and thus did
not answer the question he was asked. In Anisminic at p 194 Lord Pearce
said
circumscribed area of inquiry carved out from the general jurisdiction of the
courts, were entitled of its own motion to extend that area by misconstruing
the limits of its mandate to enquire and decide as set out in the Act of Parliament.
By certiorari the courts ensured that the right question was answered and that
the answer to the wrong question was not accepted, and thus ensured that a
decision was reached in accordance with Parliament’s intention.
One had to
determine what question the county court judge was required to ask himself. It
was whether the improvement specified in the notice was ‘an improvement to
which this schedule applies.’ He could
only answer that if he knew what it was to which the schedule applied.
His Honour
Judge White, in the preceding case of Pickering v Phillimore, had
suggested a definition of ‘structure’ as ‘appertaining to the basic fabric and
parts of the house as distinguished from its decorations and fittings’ and
concluded that it would be wrong to describe the central-heating system as
mainly fittings, for throughout the house the system became built into it and
became part of it in a layman’s sense. In his Lordship’s judgment, Judge White
had the right conception of what Parliament meant by ‘structural.’ Judge Curtis-Raleigh, in the present case,
did not, perhaps wisely, attempt a definition, but rejected the meaning adopted
by Judge White. From this it followed that he was proceeding upon some other
meaning of the word, and consequently asked himself the wrong question.
His Lordship
agreed that the central heating in this case came within the wording of the
schedule. The words ‘work amounting to . . .’ were used because one had to look
at the final result, and work which simply involved structural
alteration would not necessarily come within the definition.
His Lordship
had had some difficulty in persuading himself that there was no appeal on a
point of law from the county court judge, and had been inclined to treat the
judge’s determination as final and conclusive only on questions of fact.
However, he had been persuaded to the contrary view.
This was a
case where the court should order certiorari to quash the decision of the
county court judge.
Certiorari
ordered to go accordingly.
