Rendall v Duke of Westminster and others

Leasehold enfranchisement — Leasehold Reform Act 1967 — Appeal by leaseholder from decision of county court judge that leaseholder was not entitled to the freehold under Part I of the Act — Whether rateable value on the appropriate day was not more than £1,500, so as to qualify — Rateable value of appellant’s house had been £1,597, but as a result of a claim under Schedule 8 to the Housing Act 1974 a reduction (attributable to improvements) of £88 had been certified — This still left the rateable value above the limit, but, pursuant to a proposal on June 8 1984, the valuation list was further amended on January 14 1985 by the alteration of the description of ‘house’ to ‘house and garage’ and by a reduction of rateable value from £1,597 to £1,547 — If this reduction could be dated back to April 1 1973, then, having regard also to the certified reduction of £88, the value would be below £1,500 — Held, however, that, as the county court judge decided, there was no provision which would enable the reduction to £1,547 to be back-dated to April 1 1973 — Whether under section 79 of the General Rate Act 1967 or under section 37(6) as amended, the alteration made in January 1985 to £1,547 could be related back only to April 1 1984 — This result was in line with the decisions in MacFarquhar v Phillimore and Rodwell v Gwynne Trust Ltd — An alternative argument by the appellant, based on taking the appropriate day as January 14 1985, when the rateable value was reduced to £1,547, was also rejected — Appeal dismissed The following cases are referred to in this report. MacFarquhar v Phillimore [1986] 2 EGLR 89; (1986) 279 EG 584, CA Rodwell v Gwynne Trusts Ltd [1970] 1 WLR 327; [1970] 1 All ER 314, HL This was an appeal by John Lewis Rendall from a decision of Judge Oddie, at West London County Court, declaring that he, as leaseholder of the house known as 74 Eaton Terrace, London SW1, was not entitled to the freehold under the provisions of the Leasehold Reform Act 1967. The respondents were the Duke of Westminster, John Nigel Courtenay James and Patrick Geoffrey Corbett. The appellant appeared in person; Nigel Hague QC (instructed by Boodle Hatfield & Co) represented the respondents. Giving the first judgment at the invitation of Lawton LJ, DILLON LJ said: Mr Rendall appeals against the decision of His Honour Judge Oddie in the West London County Court whereby it was ordered and declared that he, as leaseholder of the house and premises known as 74 Eaton Terrace, London SW1, was not entitled to the freehold pursuant to Part I of the Leasehold Reform Act 1967. The Leasehold Reform Act 1967 provided in its original form by section 1(1) that that Part of the Act should: have effect to confer on a tenant of a leasehold house, occupying the house as his residence, a right to acquire on fair terms the freehold or an extended lease of the house and premises where — (a)  his tenancy is a long tenancy at a low rent and the rateable value of the house and premises on the appropriate day is not (or was not) more than £200 or, if it is in Greater London, than £400; . . . As the Act originally stood, it could not have applied to 74 Eaton Terrace because the rateable value was too high. However, the section was amended by the Housing Act of 1974. That provided: In subsection (1)(a) above, ‘the appropriate day’, in relation to any house and premises, means the 23rd March 1965 or such later day as by virtue of section 25(3) of the Rent Act 1977 — I interject that that replaced an earlier Act referred to in the amendment of 1974 — would be the appropriate day for purposes of that Act in relation to a dwelling-house consisting of that house. Then by subsection (6) it was provided: If, in relation to any house and premises, — (a)  the appropriate day for the purposes of subsection (1)(a) above falls before 1st April 1973, and (b)  the rateable value of the house and premises on the appropriate day was more than £200 or, if it was then in Greater London, £400, and (c)  the tenancy was created on or before 18th February 1966, subsection (1)(a) above shall have effect in relation to the house and premises as if for the reference to the appropriate day there were substituted a reference to 1st April 1973 and as if for the sums of £200 and £400 specified in that subsection there were substituted respectively the sums of £750 and £1,500. There is no doubt that the tenancy under which Mr Rendall holds 74 Eaton Terrace was a tenancy granted before February 18 1966 and97 was a long tenancy at a low rent within the meaning of the Leasehold Reform Act. The crucial question is whether, to satisfy section 1(6), Mr Rendall can say that at April 1 1973, or at the appropriate day if that is later, the rateable value was not more than £1,500. In point of fact, if the new valuation list which came into force on April 1 1973 had been looked at that date, it would have shown 74 Eaton Terrace under the description of ‘house’ with a rateable value of £1,597. Subsequently, on a claim made by Mr Rendall under Schedule 8 to the Housing Act 1974, the valuation officer in May 1981 certified a notional reduction in rateable value for the purposes of the 1967 Act of £88.*  That means that it was established that, of the rateable value of £1,597, £88 is to be treated as attributable to tenant’s improvements previously made and is, therefore, for the purposes of the 1967 Act, to be disregarded in considering whether the rateable value exceeded £1,500. However, the £88 reduction from a rateable value of £1,597 is not enough to bring Mr Rendall below £1,500. *Editor’s note: This matter was the subject of a decision of the Court of Appeal reported at [1986] 1 EGLR 163; (1986) 278 EG 1090. Then, pursuant to a proposal made by Mr Rendall on June 8 1984, the valuation list was further amended on January 14 1985: first by altering the description ‘house’ to ‘house and garage’ and, second, by reducing the rateable value to £1,547. If Mr Rendall can pray that reduction in aid as dating back to April 1 1973, he can, in view of the £88 which I have already mentioned, say that the rateable value at April 1 1973 was below £1,500 and that he qualifies. His alternative argument is to say that, because of the alteration of description in 1985 from ‘house’ to ‘house and garage’, the appropriate day for the purposes of his case is January 14 1985 when the rateable value was reduced to £1,547 from which the £88 has to be taken away and not April 1 1973. I will deal with the second point first because it can be dealt with very shortly. The property demised to Mr Rendall by the lease was described as a piece of land delineated and coloured in the plan together with the messuage garage and buildings erected thereon and known as 74 Eaton Terrace. The plan shows that the property was at the junction of Eaton Terrace and Graham Terrace. The house was the last house in a terrace of houses. The garage was at the rear with its entry from Graham Terrace; it did not have a second entrance from the house and garden of 74 Eaton Terrace, though it was contiguous with the house and garden. The house was in fact built, Mr Rendall has told us, as long ago as 1820, and the garage was originally described as a ‘cart shed’. To see what is meant by ‘house’ in the valuation list as it stood at April 1 1973 it is necessary to have recourse to extrinsic evidence to explain the entry and, even though evidence of the intention of the valuation officer is not admissible, it is palpable, from looking at what was occupied by the then lessee, because Mr Rendall was not at that time on the scene, and from looking at the site, that the description ‘house’ included the garage. In fact, when the alteration was made to refer to ‘house and garage’ in 1985, that was referred to as a mere alteration in the description of the same hereditament. Mr Rendall seeks to say that the appropriate day was the day when the entry was made and he refers to section 25(3) of the Rent Act 1977 because that is what is mentioned in section 1(4) of the 1967 Act as amended. Section 25(3) provides: In this Act ‘the appropriate day’ — (a)  in relation to any dwelling-house which, on 23rd March 1965, was or formed part of a hereditament for which a rateable value was shown in the valuation list then in force, or consisted or formed part of more than one such hereditament, means that date, and (b) in relation to any other dwelling-house, means the date on which such a value is or was first shown in the valuation list. I have no doubt at all that, in relation to this dwelling-house consisting of the hereditament being the house and garage, the rateable value was shown in the valuation list in force on March 23 1965. Therefore, that is the appropriate day for the purposes of section 1(1) and, whether or not the rateable value exceeds £1,500 has to be tested as at April 1 1973 under section 1(6). I would, therefore, reject Mr Rendall’s second point. As to his first point, he says that the reduction made pursuant to his proposal of June 8 1984 was made because he had submitted, and it was accepted, that the original valuation in the valuation list which took effect on April 1 1973 was excessive when his house and garage was compared with various other comparable properties in the neighbourhood. Therefore, he says that the alteration should be retrospective to when the valuation list came into force. His difficulty is that the statutory provisions which have been made to deal with this situation do not so provide. Section 79 of the General Rate Act 1967 provides that, subject to various provisions which are not material to the present case, where an alteration is made in a valuation list, then, in relation to any rate current at the date when the proposal in pursuance of which the amendment so made was served on the valuation officer, or where the proposal was made by the valuation officer current at the date when notice of the proposal was served on the occupier of the hereditament in question, that alteration shall be deemed to have had effect as from the commencement of the period in respect of which the rate was made and shall, subject to the provisions of this section, have effect for the purposes of any subsequent rate. That means that, for rating purposes at any rate, the alteration made in January 1985 reducing the rateable value to £1,547 only related back to April 1 1984. The position does not, however, rest there because section 37(6) of the 1967 Act as amended provides that section 25(1), (2) and (4) of the Rent Act 1977 shall apply to the ascertainment, for purposes of this Part of the 1967 Act, of the rateable value of a house and premises or any other property as they apply to the ascertainment of that of a dwelling-house for purposes of that Act. Section 25(4) of the 1977 Act provides that where, after the date which is the appropriate day in relation to any dwelling-house, the valuation list is altered so as to vary the rateable value of the hereditament of which the dwelling-house consists, or forms part, and the alteration has effect from a date not later than the appropriate day, the rateable value of the dwelling-house on the appropriate day shall be ascertained as if the value shown in the valuation list on the appropriate day had been the value shown in the list as altered. Subsection (1) provides that, in effect, the rateable value of a dwelling-house is to be ascertained for the purposes of the Rent Act 1977 on the basis of what is shown as the rateable value in the valuation list. It follows — and this is in line with the decision of this court in the case of MacFarquhar v Phillimore* as decided on May 19 1986, and the decision of the House of Lords in Rodwell v Gwynne Trusts Ltd [1970] 1 WLR 327 — in view of the interrelation of the Rent Act 1977 and the provisions of section 79 of the General Rate Act 1967, that the reduction in the rateable value by the amendment of January 1985 can, for purposes of the Leasehold Reform Act as amended and the Rent Act of 1977, relate back only to April 1 1984, and that is not good enough for Mr Rendall’s purposes. *Editor’s note: Reported at [1986] 2 EGLR 89; (1986) 279 EG 584. Mr Rendall seeks to pray in aid the provisions of earlier legislation, and particularly of section 38 of the Local Government Act 1948, subsection (6) of which says that the list for any rating area, settled, signed and sent to the rating authority, shall, as from the date when it comes into force and subject to any alterations made in accordance with the relevant Part of that Act, be the valuation list for the rating area. Any failure on the part of a valuation officer to complete any proceedings with respect to the preparation, revision or settling and signing of the list within the time required by the Part of the Act, or any omission from the list of any matters required by law to be included therein, shall not of itself render the list invalid and, until the contrary is proved, the list shall be deemed to have been duly made in accordance with the provisions of the Part of the Act. Mr Rendall points to a note in Halsbury’s Statutes to the effect that the reference to alterations made would seem to refer to all alterations made during the life of the list rather than to alterations made between the date of settling the list and the date of its coming into force. But subsection (6) is not concerned at all to deal with when an alteration made subsequently to the settlement of the list is to be treated as coming into force. That was dealt with by section 42 of the Local Government Act 1948. Nor is it concerned with the position under the Rent Act 1977 or the Leasehold Reform Act 1967 as amended. It cannot help Mr Rendall. I agree entirely with the conclusions of Judge Oddie and the substance of the reasons which he gave in his very careful judgment and, accordingly, I would dismiss this appeal. I should mention that there was a further reduction of the rateable value from £1,547 to £1,538 later than the amendment of January 14 1985, but that is not material to this appeal. It is not of itself enough to bring the rateable value below £1,500 at April 1 1973, and, in any event, for the same reasons that the reduction to £1,547 cannot relate98 back to April 1 1973, so that to £1,538 cannot relate back. LAWTON and RALPH GIBSON LJJ agreed that the appeal should be dismissed for the reasons given by Dillon LJ, and did not add anything. The appeal was dismissed with costs. Leave to appeal to the House of Lords was refused