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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Coker, R (on the application of) v London Rent Assessment Panel & Anor [2006] EWHC 2367 (Admin) (19 May 2006) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2006/2367.html Cite as: [2006] EWHC 2367 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		19th May 2006

1. JAMES GOUDIE QC: This is an appeal under section 11 of the Tribunal and Inquiries Act 1992; that is, it is an appeal "in point of law". The appeal is brought against a decision of the London Rent Assessment Panel ("the Panel"). The Panel itself has not participated in the appeal. However, the legal chair of the panel, Mr Julian Deaner, has made a witness statement dated 6th April 2006 going to an allegation, not now pursued, of bias on the part of the surveyor member of the Panel. The other party to the proceedings before the Panel, Lawnpond Limited ("Lawnpond"), have resisted the appeal.
2. The decision of the Panel was made as long ago as 24th February 2005, with extended reasons given on 6th August 2005. The background is as follows. Mr Coker is, and has been since May 1992, the tenant and Lawnpond is, and has at all material times been, the landlord of the first floor flat at 7 Corsham Street, London, N1 ("the flat"). On or about 12th October 2004, Lawnpond served on Mr Coker a notice of increase of rent. This purported to be under section 13 of the Housing Act 1988 ("the 1988 Act"). Section 13 relates to increases of rent under assured periodic tenancies. The rent was £950 per month. The notice proposed an increase to £1,400 per month, with effect from 1st December 2004.
3. On 15th November 2004 Mr Coker referred the notice of increase to the Panel. This was under section 14 of the 1988 Act. The Panel inspected the flat. They concluded that the rent at which the flat might reasonably be expected to be let on the open market would be £1,120 per month. They stated as follows:

"In accordance with the terms of section 14 Housing Act 1988, the Committee proceeded to determine the rent at which it considered that the subject property might reasonably be expected to be let on the open market by a willing landlord under an assured tenancy. In so doing, the Committee, required by section 14(1), ignored the effect on the rental value of the property of any relevant tenant's improvements as defined in section 14(2) of that Act. In coming to its decision, the Committee had regard to the evidence supplied by the parties and the member's own general knowledge of market rate levels in the area of Hoxton, and concluded that an appropriate market rate for the property would be £1,120 per month."

The Panel also stated as follows:

"The Committee took account of the comparable evidence supplied by the parties and noted that the floor area was not in dispute. They considered that the best evidence was that relating to first floor flats of the adjoining buildings, but they should take into account the work carried out by the tenant and the matters still requiring attention."

I add that these are matters that they had referred to earlier in their reasons.

4. The Panel also considered an argument on behalf of Mr Coker that the landlord's notice was invalid, on the ground that a court order on 4th October 2004, a Tomlin Order, amounted to a new tenancy by way of surrender and regrant, and so not susceptible to any rent increase until a year thereafter. The Panel stated that they were not persuaded that the amendment created by that order could amount to a new tenancy as they were, in the Panel's view, not sufficiently fundamental.
5. The Tomlin Order states that the terms of the schedule to the Tomlin Order are in full and final settlement of all the parties' present claims against each other. The schedule to the Tomlin Order was as follows:

"(1) The claimant and the defendant agree that --

(a) the defendant has an assured tenancy for Flat 1, 7 Corsham Street, London, N1;

(b) the current rent is £950 per month and is susceptible to increase pursuant to section 13 of the Housing Act 1988;

(c) the defendant is not obliged to pay insurance rent and the claimant will not seek to enforce against the defendant clause 3 of the tenancy agreement dated 1st May 1992 signed by the defendant;

(d) the defendant's rent account presently has a nil balance (being neither in credit nor in arrears).

(2) By 1st November 2004 the claimant will, as regards the defects identified in the schedule to the memorandum of the parties' experts dated 30th September 2004 --

(a) remedy the defects numbered;

(b) [various numbers are then set out] . . .

(c) if and in so far as any defect may remain within item 1.3.2, remedy the same, and in any event produce a new gas safety record;

(d) use reasonable endeavours to remedy the defects numbered 1.51 and 1.52.

(3) The claimant and the defendant agree, save as regards clause 3 of the aforementioned tenancy agreement which is not to be enforced, the relationship of the parties is governed by the terms of the tenancy agreement dated 1st May 1992 in so far as these terms are consistent with the status of the defendant tenancy as an assured tenancy and the claimant is subject to the repair liability to the landlord under section 11 of the Landlord and Tenant Act 1985.

(4) It is further agreed that clause 4E of the said agreement is modified as follows --

(E)(1) make any structural alteration whatsoever to the premises;

(2) make any non-structural alteration whatsoever to the premises

without the previous written consent of the landlord such consent not to be unreasonably withheld."

6. Clauses 3 and 4E of the tenancy agreement had been as follows:

"(3) The tenant shall pay on demand by way of further or additional rent the sum or sums equal to the amount which the landlord may expend upon insuring the premises against the usual perils and two years loss of rent, and fulfil all the requirements demanded by the insurance company. In case of the premises not being separately insured, then the tenant shall pay such proportion of the cost of insuring the said building as the landlord in the landlord's absolute discretion would consider fair and reasonable.

(4E) The tenant shall not make any alteration whatsoever to the premises."

7. The first ground of appeal disputes the Panel's conclusion, going to their jurisdiction, that there was no new tenancy. In other words, that it was not expressed in the Tomlin Order that there was an implied surrender; a surrender by operation of law rather than a variation of an existing tenancy.
8. The second ground seeks to attack the Panel's conclusion as to the amount of the rent on the basis that they unreasonably regarded the best evidence as being that relating to first floor flats. In my judgment, that does not approach being Wednesbury unreasonable or otherwise unlawful. There is nothing whatsoever in that point.
9. Reverting to the first ground, Woodfall in "Landlord and Tenant" deals with surrender by operation of law or implied surrender and regrant from paragraph 17.018. Paragraph 17.026 states:

"Whether a purported variation of a lease takes effect as a surrender and regrant depends on the nature of the variation. If the variation cannot be effected without the grant of a new lease, then it will take effect as a surrender and regrant. However, in the absence of an increase in the premises demised or the length of the term, either of which would change the legal estate and work a surrender and regrant, there will usually be no surrender. So also the substitution of one suite of rooms for another operates as a surrender and regrant. Similarly it is not possible to convert an existing estate in land into a different estate by adding more years to it, so that the effect of an agreement to that effect is the implied surrender of the existing lease and the grant of a new lease for the longer term. But a mere increase in rent does not have this effect, unless the variation is oral and the tenancy cannot be varied orally. A reduction in rent is no surrender but if the reduction in rent is accompanied by giving up possession of part of the property a surrender and regrant may be inferred. An apparent surrender and regrant may take effect as a mere surrender if in all the circumstances it cannot be inferred that the parties both intended to create a new tenancy on different terms from the old."

I respectfully accept that as being a correct statement of the law, and indeed do not understand that to be in contention before me.

10. The authorities referred to by Woodfall in the footnotes of that passage include Friends Provident Life Office v British Railways Board [1996] 1 AER 336 in the Court of Appeal ("Friends Provident") where the rent was changed and covenants as to alterations were introduced but no surrender occurred. In Friends Provident, Beldam LJ, with whom Waite LJ and Sir Christopher Slade agreed, said at page 345 A to C:

"In the absence of an increase in the extent of the premises demised or of the terms for which they are to be held, both of which would change the legal estate, I can see no reason why the lessor and assignee could not achieve the change they desired in the terms of the lease without the law implying its surrender and a regrant for the remainder of the term of the lease."

At page 350 D to G, Sir Christopher Slade, with whom Waite LJ also agreed, added:

" . . . the authorities establish that where a landlord and tenant enter into an agreement which varies the terms of the subsisting tenancy but shows a clear intention not to create a new tenancy, the court will give effect to such intention, unless the only way by which the law can give effect to the arrangements made between the parties is to imply the surrender of the new tenancy and the creation of a new one . . . .

I for my part doubt whether this exceptional situation can ever arise save . . . where the parties wish either a single term for an extended period to come into being, or further land to be added to the existing holding."

11. In the case before me there was no increase in the premises demised, nor was there any increase in the length of the term. The absence of both these features means, however, not that there will "never" be a surrender but that there will only exceptionally be a surrender. A change in the rent alone or alterations in covenant, or both, will not, at any rate usually, produce a surrender and regrant.
12. Mr Gifford, for Mr Coker, refers to the form of the tenancy agreement, to the pleadings in the County Court proceedings begun in July 2003 that ended with the Tomlin Order, and in particular the references there to insurance premium and insurance rent and to the terms of the Tomlin Order and its schedule, which he submits amounts to a fresh start between the parties unencumbered by any collateral contract or estoppel for any liability for insurance premiums or rent. He submits that there were dynamic shifts in the relationship of the parties constituted by fundamental changes in the terms of the tenancy.
13. I reject this submission. As at the date of the Tomlin Order, and indeed at the time of the commencement of the County Court proceedings, it was common ground, as it had been for many years (at any rate since 1999) that Mr Coker had an assured tenancy rather than business tenancy. It followed that the landlord's repairing covenants, as described by sections 11 and 12 of the Landlord and Tenant Act 1985 were applicable. This was accepted by the landlord well before the Tomlin Order by paragraph 13 of the defence counter-claim dated 3rd October 2003.
14. The disputes that were resolved by the Tomlin Order related to three matters. First, whether insurance rent was payable; secondly, what was the passing rent: £650 per month or £950 per month, which involved consideration of whether or not the landlord or his agent had agreed not to increase the rent; thirdly, whether there were outstanding repair works. The only variations to the tenancy agreement were the agreement by the landlord not to enforce clause 3, the so-called insurance rent, and the modification of clause 4, the covenant against alteration. Mr Gifford has attached little or no weight to the latter, at any rate as a factor on its own.
15. These, in my judgment, come nowhere near, individually or cumulatively, to being sufficient to imply a surrender and regrant. References to collateral contracts and estoppel do not, in my judgment, assist the tenant's case. There is a point of law on this appeal on which I should form -- and have formed and give effect to -- my own view, but it is, as the Panel found and the reasons they gave, a bad one. The appeal is therefore dismissed.
16. MR PARTRIDGE: My Lord, I would ask my Lord to order that the appellant pay the second respondent's costs of the appeal, following the event in the usual way. The appellant has been in receipt of public funding since 24th November 2005 and therefore the order should be for payment of the appellant's costs up to and including 23rd November 2005 and, as regards the respondent's costs thereafter, such amount thereof is payable pursuant to section 11 of the Access to Justice Act to be determined.
17. My instructing solicitors have prepared a schedule of costs covering those two periods. If your Lordship were minded summarily to assess the full costs payable, I would invite your Lordship to do so. Otherwise, your Lordship could order a detailed assessment of the second respondent's costs.
18. JAMES GOUDIE QC: Yes. I do not have a costs schedule so I will hear Mr Gifford first.
19. MR GIFFORD: My Lord, I am just trying to establish if we have the right day for when Legal Aid commenced. Apparently it is. My Lord, I cannot quarrel with the overall proposition that the appellant should be ordered to pay the second respondent's costs of the appeal, at least for such period as the appellant was publicly funded. I would obviously ask you to make an order that such costs are not be enforced without leave of the court. I am looking at what would really be reasonable for the period up to 23rd November. Could I suggest that detailed assessment probably is the right way to go.
20. JAMES GOUDIE QC: So far as the later period is concerned, after 24th November last year, could I assess those costs in any event or would those have to go to detailed assessment?
21. MR PARTRIDGE: Your Lordship can assess the full costs, avoiding the need for a detailed assessment, but then the direction must be that the appellant pays only the amount thereof which is payable pursuant to section 11 to be determined, and there will have to be a separate determination of the amount of costs. The full costs themselves can be assessed by your Lordship or referred to detailed assessment.
22. JAMES GOUDIE QC: Can I see the schedule?
23. MR GIFFORD: Yes. (Handed).
24. JAMES GOUDIE QC: Thank you.
25. MR PARTRIDGE: My Lord, my client company is registered for VAT so VAT has to be taken off. If I can summarise two stages, taking out the VAT, the sum of costs up to and including 23rd November, solicitors and counsel, is £2,232.50. The total full costs for the subsequent period, excluding VAT, are £7,024.50.
26. JAMES GOUDIE QC: Yes. I am minded to say that it should go to a detailed assessment. I am not inclined to assess the costs. The detailed assessment would be in relation to --
27. MR PARTRIDGE: The order would be that the second respondent's costs of the appeal be subject to detailed assessment and the Costs Office or the judge shall certify the amount of those costs up to 23rd November and the amount of those costs thereafter. The order will then proceed to say that the appellant shall pay the costs first certified. As regards the amount of costs second certified, such amount as is payable in respect thereof pursuant to section 11 to be determined. If it would assist, I will draft it.
28. JAMES GOUDIE QC: It may be helpful if you could draft something out and perhaps email it to the associate or whatever is convenient. Thank you both.