First Cross Ltd v Teasdale and others

Rent Act 1977 — Statutory appeals against decisions of a rent assessment committee — Tribunals and Inquiries Act 1971 — Appeal against decision in respect of tenancies of furnished flats raised question as to true construction of a covenant by tenants to keep the flats ‘in good and tenantable condition’ — Appeal in respect of tenancies of unfurnished flats raised questions of importance as to the application of section 71(4) of the 1977 Act (cases where a rent may be entered in the register as a variety amount) — ‘Tenantable condition’ — Tenants’ liability under covenant held to be equivalent to the duty of using the premises in a tenant-like manner as explained in Warren v Keen — Landlord’s appeal in respect of tenancies of furnished flats dismissed — In the case of the unfurnished tenancies the committee, claiming to exercise a ‘residual discretion’ under section 71(4), refused to direct that the rents should be registered as variable — Committee considered that the variation provisions would result in unfairness as between tenants of different flats and that tenants could be called upon in a single year to contribute to heavy capital expenditure, such as rewiring and replacement of lifts, boilers and other major items — Judge rejected committee’s reasoning and conclusion — Judge considered that committee were wrong in claiming a residual discretion to look beyond the contract between a particular landlord and tenant; that they were wrong in regarding the list of items which might give rise to variable contributions as part of the ‘terms as to the variation’, which referred only to provisions for the assessment and payment of contributions; and that the committee had produced no calculation of the costs of repairs and maintenance — The judge expressed the view that the provisions in Schedule 19 to the Housing Act 1980 were relevant in considering whether terms as to variation were reasonable — Appeal in relation to the unfurnished tenancies allowed and matter remitted for reconsideration — Decision upsets some existing assumptions in regard to the determination of variable rents These were appeals under section 13 of the Tribunals and Inquiries Act 1971 from decisions of a committee of the London Rent Assessment Panel in respect of furnished and unfurnished flats at Park West, Edgware Road, London W2. The appellants were Firstcross Ltd, the landlords of the flats in question. In the case of the furnished flats there were nine tenants who were respondents; in the case of the unfurnished flats, five tenants were respondents. Mota Singh QC and J Thom (instructed by C M Alfille & Co) appeared on behalf of the appellants; Paul Morgan (instructed by W J Jones) represented the respondents, J A Teasdale, R O’Connor, G Markstein and D Wong; A Eker appeared in person; Simon Brown (instructed by the Treasury Solicitor) appeared as amicus curiae. Furnished flats Giving judgment on March 29 1982 in relation to the furnished flats, McNEILL J said: These are appeals under section 13 of the Tribunals and Inquiries Act 1971 against decisions of the rent assessment committee of the London Rent Assessment Panel in two classes of case relating to tenancies in the same premises. The appellants are the landlords of self-contained flats in a purpose-built block, dating from the 1930s, called Park West, Edgware Road, London W2. The two classes of case are these. The first class is cases where the tenancies are tenancies of furnished flats and the second class is cases where the tenancies are tenancies of unfurnished flats. The first class may conveniently be described as the furnished case and there are nine respondents in all, the first of whom is Mr Garas. There are five respondents in the second class, the first of whom is Miss Teasdale. It is right to say that the case of Mr Falgas, who is in the second class, is not an effective matter as proceedings were not served upon him. The two classes of case were heard consecutively by the rent assessment committee and were then heard together, by consent, before this court. I deal first with the first class, which is the furnished tenancies. The standard form of tenancy between the appellants’ predecessors and each of the respondents in this class provides for a short let of three months or less at a fixed rent. The letting included, as is obvious from the class title, the use of items of furniture and furnishings and the benefits of services and amenities provided by the landlords. The only issue for consideration in this class of case is the proper construction of the provisions of the tenancy in so far as they deal with repair. Clause 1 of the written agreement reads as follows: The Tenant hereby agrees and warrants as follows: . . . (n) To keep the flat and the said fixtures fittings appurtenances and items at all times in good and tenantable condition throughout the said term (allowing only for reasonable use thereof and damage by accidental fire) and not to cut maim or injure the same or any part thereof nor to make any alteration or addition thereto. Clause 1(r) is also material. It reads as follows: At all times during the said term to permit the Landlords and its workmen agents and others duly authorised to enter the Flat in order to examine the condition thereof or of anything therein or the use to which the same may for the time being be put and in order to do any work of repair or other works thereto or to the Building or for any other reasonable and proper purpose. For completeness, I will read clause 8 of the ‘General Regulations Relating to the Building,’ which are annexed to the agreement. It reads: If any damage shall be done to the Flat, passages, landings, stairs, passenger or service lifts or entrance hall by the carrying in or removal of goods to or from the Flat, the Tenant shall pay for making good the same and also for any damage done to other tenants of the Building. When the rent assessment committee proceeded to determine the fair rent of the furnished lettings, they applied section 70(1) of the Rent Act 1977, which reads as follows: In determining, for the purposes of this Part of this Act, what rent is or would be a fair rent under a regulated tenancy of a dwelling-house, regard shall be had to all the circumstances (other than personal circumstances) and in particular to (a) the age, character, locality and state of repair of the dwelling-house, and (b) if any furniture is provided for use under the tenancy, the quantity, quality and condition of the furniture. I ought to interpolate that it is conceded that the tenancies in both classes are regulated and, in each case, the dwelling-house is a flat in Park West. 88 Section 70(3) provides: There shall be disregarded — (a) any disrepair or other defect attributable to a failure by the tenant under the regulated tenancy or any predecessor in title of his to comply with any terms thereof. That also applies for disregarding improvements carried out and, indeed, improvements to furniture. The essential issue which arose for determination by the committee in these cases was the extent, if any, of the repairing obligations of landlord and tenant under the respective agreements with the respondents. In paragraph 47 of their conclusions and reasons, the committee said this: In arriving at their determination in respect of the subject flats, the committee had regard to all the relevant factors including floor level, aspect, layout, provision of furniture and state of repair and the fact that section 32 of the Housing Act 1961 applied to all the tenancies. They also had regard to the terms of the tenancy agreements which have been interpreted differently in practice by each of the landlord’s witnesses and the tenants. The agreements did not provide for any specific repairing or decorating liability on the part of the landlord. All were agreements for periods of well under six months thereafter renewable from month to month. Counsel for the landlord argued that clause 1(n) in the standard form of agreement, in the absence of any express liability, placed an obligation on the tenant to put the flats into tenantable repair and decoration. The precise term in clause 1(n) put an obligation on the tenant ‘to keep the flat and the said fixtures, fittings appurtenances and items at all times in good tenantable condition throughout the said term (allowing for reasonable use thereof and damage by accidental fire) . . . ‘ etc. The committee did not think the cases cited by counsel could be applied directly to the subject case. The judgment in Proudfoot v Hart (1890) 25 QBD 42 dealt with the interpretation of a term within a three-year lease to keep a house in ‘good tenantable repair’. In that case a common law principle was confirmed that a term did not make a tenant bound to do repairs which were merely decorative unless the decorations had worn out to such an extent that the condition of the premises had become such as not to satisfy a reasonably minded tenant of the class that would be likely to take the premises, that the property was no longer reasonably fit for occupation. Again in the case of Warren v Keen [1953] 2 All ER 1118 it was stated that apart from express contract a weekly tenant owed no duty to the landlord to keep the premises in repair. In arriving at their decision, the committee had to look at the original terms of the tenancy agreement, which by their nature were not intended to be of long duration. The fact that the original nature of the tenancies had altered, because they were or had become regulated tenancies, did not in the committee’s view alter the situation in relation to any of the terms in the agreements. They therefore based their assessment of the fair rent having regard to the state of repair and decoration of the flats in the absence of any express obligation on either party to the agreement to carry out internal repairs and decorations but having regard to the tenants’ common law liability to keep the premises in a tenant-like manner and the landlord’s liability under section 32 of the Housing Act 1961. Basing themselves upon those considerations in relation to repairing liabilities on the one side and the other, if any, they arrived, taking into account all the other relevant circumstances, at the fair rent which was registered for the premises. Section 32 of the Housing Act 1961 places upon the lessor of a dwelling-house, in circumstances which apply here, various obligations such as, for example, the repair of the structure and exterior of the dwelling-house, the keeping in repair and proper working order of installations for the supply of services, such as water, gas, electricity, sanitation, space heating and so on. Without reciting them in detail, those are the obligations to which the committee referred when dealing with the landlords’ responsibilities. It was sought to be said on behalf of the landlords that clause 1(n) places upon the tenants an obligation to keep ‘in repair’. I put those words in inverted commas because I shall have to explain how the matter was put in a little more detail. It was set out fairly by the committee in the words I have already read, which are: ‘Counsel for the landlord argued that clause 1(n) in the standard form of agreement, in the absence of any express liability, placed an obligation on the tenant to put the flats into tenantable repair and decoration.’ Therefore, the question is this: Can those words in clause 1(n) ‘to keep . . . in good and tenantable condition throughout the said term’ be read as ‘to put the flats into tenantable repair and decoration’? Mr Mota Singh and Mr Thom, each of whom addressed me on behalf of the landlords on this particular aspect of the case, reminded me that in Proudfoot v Hart (1890) 25 QBD 42 the words ‘to keep in good tenantable repair’ also imply an obligation to put the premises into good tenantable repair and seek to extend that to a clause in the terms of clause 1(n), whether it has the meaning contended for or some lesser meaning. I do not, on the view I have formed of clause 1(n), find it necessary to decide whether clause 1(n) is a ‘put and keep’ provision or simply a ‘keep’ provision. The case of Proudfoot v Hart (supra) was a case where the agreement was to keep the premises in good tenantable repair and to leave the same at the expiration of the term. The Court of Appeal took the view that the tenant’s obligation was to put and keep the premises in such repair as, having regard to the age, character and locality of the house, would make them reasonably fit for the occupation of a tenant of the class likely to take them. The matter was considered by Lord Esher MR in a passage at p 53, where he deals with the extent of the obligation to put and keep premises in tenantable repair, and by Lopes LJ at p 55. I think it is sufficient to take one sentence from the judgment of Lopes LJ to illustrate the meaning of ‘good tenantable repair’. He said: That expression appears to me to mean such repair as, having regard to the age, character, and locality of the house, would make it reasonably fit for the occupation of a reasonably minded tenant of the class who would be likely to take it. I do not say that there is anything new in this definition; but it appears to me a good definition as the result of the authorities which have been referred to by the Master of the Rolls. The matter was further considered in the case of Warren v Keen [1954] 1 QB 15 where the Court of Appeal were concerned with a weekly tenant. They came to the conclusion that a weekly tenant is not under a general covenant to put and keep the premises in repair. His only duty is to use the premises in a husband-like or tenant-like manner. I think that it will be immediately clear from that citation that a distinction is to be drawn in law between a phrase such as ‘good habitable repair’ and the phrase used here which is ‘good tenantable condition’. Denning LJ, as he then was, dealt with the meaning of the phrase ‘husband-like or tenant-like’ as it fell to be considered in the course of his judgment. He said: Apart from express contract, a tenant owed no duty to the landlord to keep the premises in repair. The only duty of the tenant is to use the premises in a husband-like, or what is the same thing, a tenant-like manner. That is how it was put by Sir Vicary Gibbs CJ in Horsefall v Mather (1815) 5 C & P 239 and by Scrutton LJ and Atkin LJ in Marsden v Edward Heyes Ltd [1927] 2 KB 1. But what does ‘to use the premises in a tenant-like manner’ mean?  It can, I think, best be shown by some illustration. The tenant must take proper care of the place. He must, if he is going away for the winter, turn off the water and empty the boiler. He must clean the chimneys, when necessary, and also the windows. He must mend the electric light when it fuses. He must unstop the sink when it is blocked by his waste. In short, he must do the little jobs about the place which a reasonable tenant would do. In addition, he must, of course, not damage the house, wilfully or negligently; and he must see that his family and guests do not damage it: and if they do, he must repair it. But apart from such things, if the house falls into disrepair through fair wear and tear or lapse of time, or for any reason not caused by him, then the tenant is not liable to repair it. That seems to me to be an apt description of the sense of clause 1(n) of the relevant agreement. The obligation there placed on the tenant seems to conform precisely with those illustrations of the duty set out by Lord Denning in the passage to which I have just referred. Also, the words of exemption seem to me to accord with those illustrations because the tenant, under this agreement, is not to be liable for conditions which arise through reasonable use of the premises as tenant; nor through damage by accidental fire and he has put on him under clause 8 of the general conditions, a specific obligation which, in my view, it would not have been necessary to impose if there were a general obligation, under clause 1(n), to put and keep in good tenantable repair. Although both Mr Mota Singh and Mr Thom have sought to say that these words impose or imply a higher duty than that which was canvassed by Lord Denning in Warren v Keen and that some support can be found for such a wider duty in the words of Somervell LJ in the same case, I find it difficult to spell out of what is at best a reservation of a possibility by Somervell LJ, at p 18, any contention strong enough to support what Mr Mota Singh and Mr Thom contend. The realities in this case are short and simple. It was suggested by the landlords’ surveyor that, in the cases of certain flats, there were certain deficiencies in the decorative condition of the rooms. Paragraph 12 of the landlords’ surveyor’s report is really the nub of the criticism on this point. Paragraph 11 introduces the matter by saying: ‘The tenants are responsible for keeping the interiors of the89 flats and the furniture provided (fair wear and tear excepted) in good and tenantable repair and condition subject to the provisions of section 32 of the Housing Act 1961.’  I have commented on what I regard as the inappropriate insertion of the word ‘repair’. Paragraph 12 says: Whilst carrying out my inspections I found that the internal decorations in some of the appeal flats have not been carried out for several years and this gave a misleading impression of the standard of the accommodation. The committee will no doubt be able to see the significant difference between these flats and those where the tenants have complied with their decorating covenants. I have therefore undertaken my valuations on the basis that the tenants have complied with their repairing covenants and that the demised premises, the furniture provided and the fixtures and fittings therein are in good and tenantable repair and condition but subject to section 32 and section 33 of the Housing Act 1961. However, any improvements carried out by the tenants otherwise than in pursuance of an obligation to the landlords under the terms of their leases have been disregarded in my fair rental valuation. That is the foundation of the two sides to the landlords’ submission here. I have already dealt with the first one, which is that there is a repair obligation. The second submission, which is the other side of the coin, is that under section 70(3)(a) one of the disregarding matters is disrepair or other defect attributable to a failure by the tenant, under the regulated tenancy to comply with the terms of the tenancy. Having expressed a view that there is no term requiring repair, disrepair does not fall to be disregarded. In my view, on the whole of the material which is available, there is no ground for saying that the committee was in error or rendered itself subject to review in relation to the furnished tenancies. I ought to say that in respect of those matters, in addition to the submission of Mr Morgan for certain of the tenants in both classes of case, and Mr Brown, as amicus, I heard submissions from Mr Eker, the second respondent in this appeal. I have dealt with the matter in this way to indicate that, on this part of the case, I have come to the conclusion that the decision of the committee was not erroneous and ought not to be reviewed and will not be set aside. I have come to the decision in that way so that those who are tenants in furnished accommodation can have an immediate answer to the question. So far as the unfurnished tenants are concerned, I think it would be right to reserve my decision on that part of the case and give it at a later date. Unfurnished flats Giving judgment on April 6 1982 in relation to the unfurnished flats, McNEILL J said: The second class of case, that is to say the unfurnished tenancies, creates greater difficulties. Here again there are written agreements. The flats in question were let for terms of years, for example, in the first, fourth and fifth respondents’ cases for 71/2 years from June 4 1961, December 25 1962 and September 29 1965, these respondents thereafter holding over. In the second respondent’s case the agreement was for 51 years from September 9 1960. Each agreement provided for the payment of rent and for further sums described as ‘further and additional rent’. I read the relevant clauses from the first respondent’s agreement. Paragraph 2, so far as material, reads: THE Lessee HEREBY COVENANTS WITH THE Lessor as follows that is to say: (1) To pay the reserved rent at the time and in manner aforesaid without any deduction whatsoever (except Landlord’s Property Tax) and then typed in on that agreement, though this is not necessarily common to the other agreements, are the words: Rider C — (2) To pay and contribute to the Lessor by way of further and additional rent a proportionate part (to be determined in manner hereinafter described) of the costs expenses outgoings and matters mentioned in the Fourth Schedule hereto. The amount of such contribution shall be ascertained and certified by the Lessor’s Managing Agents acting as experts and not as arbitrators once a year on the Sixth day of April in each year . . . The subclause goes on to provide that the certificate ‘shall contain full details and figures relating to all the component elements comprised therein’ and will supply a copy to the lessee at his request and without charge. It continues: ‘AND the said amount shall be calculated by multiplying the total of the said costs expenses and outgoings by the rateable value of the Flat as at the said Sixth day of April in each year and dividing the resultant sum by the aggregate of the rateable values (as at the said date) of all the flats in the said Building.’  The subclause then goes on to provide, among other things, for interim payments. Clause 2(8) of the agreement puts certain obligations as to internal repair on the tenant, that is to say to keep the flat and fixtures and fittings (I summarise, for the detail is unimportant) well and substantially repaired and maintained. Clause 6(1) is the landlords’ repairing covenant and I read it so far as material: ‘THE Lessor HEREBY COVENANTS WITH THE Lessee as follows: (1) SUBJECT to the payment by the Lessee of the rents and the contributions herein before mentioned’ to maintain and repair ‘(a) the structure of the said Building . . . (b) the sewers drains channels water-courses gas and water pipes electric cables and wires and supply lines . . . (c) the boilers and heating and hot water apparatus . . . (d) the passenger lifts lift shafts and machinery’ and the common parts of the building, stairs, passages etc, ‘(e) the boundary walls and fences . . .’ The landlords further covenanted, subject as aforesaid, to clean and light the common parts, to attend to the gardens etc and to provide constant hot water for domestic purposes and, in the cold season, for central heating; to provide porterage and refuse removal services and to insure the building, landlords’ fixtures and fittings and service apparatus. The Fourth Schedule sets out in some 16 paragraphs what are described as: ‘Costs Expenses Outgoings and Matters in respect of which the Lessee is to make a contribution’ that is to say under clause 2(2) of the agreement. It is unnecessary to go in detail through all 16 paragraphs. The more important ones, for the purposes of this appeal, can be categorised under three headings as follows: 1. Those which relate to services such as, for example, porterage (para 5), common parts (para 6) and upkeep of gardens (para 13). 2. Those which relate to the cost to the landlords of carrying out what might be called their repair and maintenance obligations, for example the expense of maintaining, repairing etc under the clause 6(1) obligation (para 1), the cost of periodically inspecting, maintaining, overhauling, repairing and, where necessary, replacing the whole of the heating and domestic hot-water systems and the lifts, lift shafts and machinery (para 2), the cost of fuel for the hot-water boiler and to operate the lifts (para 3), exterior decoration (para 7) and so on. 3. Those which the committee chose to deal with separately, saying that they did not come within the statutory category of services (whether rightly or wrongly has not been argued before me) but that that did not of itself affect its decision, that is to say the cost of insuring (para 4) and of creating a reserve fund (para 16). From the foregoing analysis, it will be seen that the financial obligations of each tenant of an unfurnished flat fell under two headings, the rent reserved and the contribution for the Fourth Schedule items. It is to be noted that the latter, conveniently described as a ‘variable’ contribution or charge, had been accepted on two previous considerations of the fair rent of the premises by the committee since 1968 as a proper element to be variable in the registration of the fair rent. When, however, the committee came to its present decisions, now the subject of this appeal, on May 14 1981, it declined to register that as variable and proceeded to determine and to register as a fair rent a sum which included any sums payable by the tenant for the Fourth Schedule items. The machinery by which the decision was reached is laid down in sections 70 and 71 of the Rent Act 1977. I need not repeat section 70 save in so far as it requires regard to be had to all the circumstances other than personal circumstances in fixing a fair rent. The relevant subsections of section 71 are (1) and (4): (1)  The amount to be registered as the rent of any dwelling-house shall include any sums payable by the tenant to the landlord for the use of furniture or for services, whether or not those sums are separate from the sums payable for the occupation of the dwelling-house or are payable under separate agreements. Subsections (2) and (3) deal with rates. Subsection (4) reads: Where, under a regulated tenancy, the sums payable by the tenant to the landlord include any sums varying according to the cost from time to time of (a) any services provided by the landlord or a superior landlord, or (b) any works of maintenance or repair carried out by the landlord or a superior landlord, the amount to be registered under this Part of this Act as rent may, if the rent officer is satisfied or, as the case may be, the rent assessment committee are satisfied, that the terms as to the variation are reasonable, be entered as an amount variable in accordance with those terms. 90 I remind myself this is a regulated tenancy and that clause, by concession, falls to be considered. For these purposes it is of interest to note that the Housing Finance Act 1972, by section 90, defines ‘service charge’ in the following terms: ‘(12) ‘service charge’ means any charge for services, repairs, maintenance or insurance, being a charge which is payable as part of, or in addition to, the rent, and which varies or may vary according to any costs (including charges for overheads) incurred from time to time by or on behalf of the landlord or any superior landlord.’ As will be seen from the provisions of section 71(4) of the Act of 1977, a division is to be made between the two types of ‘service charges’, that is to say in (a) any services provided by the landlord or (b) any works of maintenance or repair carried out by the landlord. It must be presumed that Parliament intended to differentiate between those two in the 1977 Act. The only sensible difference on the facts of the present case which I can or have been invited to discern is that between the first and second categories of charges, to which I have already referred, in the 16 paragraphs of the Fourth Schedule to the agreement. While the first category can, without straining language, be regarded as ‘services’, the second is plainly works of maintenance and repair. Now while in the vast majority of cases there may be no difficulty in terms of valuation in ascertaining the rental value of the premises so as to include both the occupation element and the first category ‘services’ element, and so producing a fair rent for premises where these two factors alone apply (and to these common form, run-of-the-mill valuation principles can apply), problems undoubtedly may arise when questions of repair and maintenance are involved. To take only the simplest of examples, to adduce true comparisons between one and another block of flats with differing repair and maintenance obligations on the lessor and lessee is bound to create difficulties, and indeed raises doubts as to whether the comparable is truly a comparable at all. The approach to the proper construction and application of section 71(4) in the context of section 71(1) in the present case must recognise not only that the relevant tenancies are regulated, but also that the sums payable by the tenants to the landlords include, under the agreements, sums varying according to the cost from time to time both of services provided by the landlords and of any works of maintenance or repair carried out by the landlords. Accordingly, the committee must begin with the contractual bargain freely entered into by tenants who cannot be regarded here as disadvantaged and who are able, as here, to call on professional advice and assistance in connection with their agreements. In that context, of course, the rent officer and the committee are entitled to vary, as it were, the terms of the agreement by fixing and registering the ‘fair rent’. Next, subsection (1) makes it clear that the amount of the registered rent shall include any sums payable for services, whether or not such sums are separate from the sums payable for occupation, but are given the power by subsection (4) to vary that approach in an appropriate case where they are satisfied that the terms as to the variation are reasonable. Such a determination, that is the latter determination, must necessarily, in accordance with the decision in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, take account of all relevant factors, must not take into account irrelevant factors and must be a decision to which a sensible tribunal, properly directing itself as to the matters which it should take into consideration, could reasonably come. That being so, what is the duty of the rent assessment committee?  Its statutory function is to determine the amount to be registered as the fair rent and it may, if satisfied that the terms of the tenancy as to variation are reasonable, enter an amount variable in accordance with those terms in respect of sums payable to the landlord for services provided or for works of maintenance or repair carried out by him. Thus from an obligation to register as the fair rent a sum inclusive of sums payable for services, there is a discretionary power to include in the fair rent an element of a variable amount for services where satisfied that the terms as to the variation are reasonable. It is necessary now to look at the actual determination of the committee to see what it was that it decided and, where possible, the material upon which the decision was made. The relevant passages are to be found in paragraphs 40 and following of the decision. Paragraph 40, which is to be found on p 36 of exhibit PMH 1 to the affidavit of Philip Mark Hargreaves, reads as follows under the heading Conclusion and Reasons. 40. Before proceeding to consider the valuation evidence, the committee had to decide whether or not the terms as to variation set out in clause 2(2) and the Fourth Schedule in the lease under consideration, were reasonable in accordance with section 71(4) of the Rent Act 1977. The full extent of the provisions relating to the variable clause were carefully examined as well as the means by which excess service and maintenance charges could be served on the lessees. The fact that a number of items included in the Fourth Schedule, for example, insurance and the liability to contribute to a reserve fund, did not come within the definition of section 71(4) did not in the committee’s view in itself make the whole clause unreasonable. Although the leases provided a method for calculating the excess charge, the evidence showed that it had not in fact been operated in accordance with the terms. 41. Against that background, the committee were of the opinion that, in examining the variable clauses set out in 2(2) and the Fourth Schedule, the word ‘may’ in section 71(4) of the Rent Act 1977 entitled them to exercise a residual discretion and look at the terms of the tenancies in a wider context and not merely to the clauses within the isolation of a single contract. In the committee’s view, the correct operation of the variable terms in the present case, where substantial works were still in progress, could not only make the fair rent unfair in relation to similar flats in the same building but could also, quite arbitrarily, in any year during the course of a period of registration, have the effect of significantly distorting the rent officer’s or rent assessment committee’s assessment of the fair rent. In the present case, a tenant could be called upon to pay his contribution in respect of expenditure, however reasonably incurred, on items such as rewiring, replacement of lifts and boilers and other major costs as set out in the Fourth Schedule. The fact that maintenance costs had not in fact been charged in the last two years in itself cast doubt on the practicability of the operation of the variable clause. Also the intention had been expressed on behalf of the landlords that regulated tenants were unlikely to be charged with such costs, but, neither this nor the previous practice provided any guarantee that charges would not be claimed in the future in accordance with the provisions of the agreement. 42. Therefore in the light of all the circumstances of the present case, the committee considered that the terms as to variation were so far reaching that they were rendered unreasonable in relation to the subject regulated tenancies. They therefore direct that the amount within the fair rent which is attributable to the provision of services shall hereafter be fixed. In so doing, the committee took full account of the effect of the clauses and the fact that certain items will continue to operate in accordance with the terms of the tenancies. At a later stage in this judgment I shall continue with paragraph 43 of the decision. The first point which I have to consider upon those paragraphs which I have read is whether the committee was right to arrogate to itself a ‘residual discretion’ (as it describes it) based solely on the word ‘may’ in section 71(4) of the 1977 Act. By way of background, counsel for the appellants drew attention to section 67 of the Act, the effect of which is that a fair rent, when registered, is open to review only after two (then three) years. Accordingly, the discretion, whatever its extent, is directed only to a determination for what may well be — indeed is likely to be — a limited future period. The difference between the parties is illustrated in the papers. The landlords’ expert witness, Mr Adamson, put the matter in this way in his report which was before the committee: ‘Therefore, I am of the opinion that the fair rental values of appeal flats as at March 12 1980, vacant and to let on the terms of the current regulated tenancies and subject to a three-year term with the relevant phasing provisions’ — that is to say under section 55 of the Act — ‘inclusive of the costs of services (subject to variation) but exclusive of rates, and excluding allowances, are as follows.’  He then dealt with the details. The committee, on the other hand ‘. . . had regard to the fact that the rents determined would no longer vary in respect of items of maintenance and services coming within the definition of section 71(4) of the Rent Act 1977,’ but did not specify what part of the noted amount or the service element in the rent so determined was assessed to provide over the three years until the next review for the then unascertained maintenance and repair costs. While, therefore, there may be no difficulty for a surveyor or the committee properly advised or advising itself to cross a two-or three-year period in determining in the fair rent the value of the ‘normal’ services, that is to say those in the first category previously referred to, it is much more difficult, even if possible, to ascertain two or three years in advance the costs of repairs and maintenance which may be incurred. Certainly this cannot be ascertained either by reference to rents of comparable premises unless subject to similar repair and maintenance obligations both in fact and in terms of the contractual obligations of the parties or by reference to professional advice or their own expertise referable both to the subject premises and premises identified, if that can occur, as truly comparable. The residual discretion which the committee says it has and which it was entitled to exercise was to ‘look at the terms of the tenancies in a wider context and not merely to the clauses within the isolation of a single contract’. If that merely meant that the committee may look at true comparables as a means to assist it to assess the fair rent of a subject tenancy, no one could quarrel with it, but it is wholly unnecessary to say it and it certainly does not justify the phrase ‘residual discretion’; that is a run-of-the-mill valuation. The following words make it clear, however, that that is not what was meant. When the committee determined to look ‘not merely at the clauses within the isolation of a single contract’ it indicates that it was, in my view, going outside its statutory power to determine as between landlord and tenant the fair rent (whether inclusive or with a variable clause) to be registered. It is, however, the next succeeding words, which I have already set out, which put the matter beyond question. The committee said, in paragraph 41: ‘In the committee’s view, the correct operation of the variable terms in the present case . . .’. This appears to assume that the committee has some sort of umbrella-like discretion or jurisdiction over, in this case, the whole block by which it may, because at any one point of time or in any one year, work in progress may have benefited or, on the contrary, adversely affected some but not all of the tenants, disapply (or treat as unreasonable) an apportionment of costs in accordance with the terms of variation in clause 2(1) in respect of any one tenancy. When it is remembered that the blocks contain both furnished and unfurnished flats and tenancy agreements both with and without the variable clause for different terms of years or occupied by tenants holding over under the statute, it will be seen how inappropriate the umbrella image is. It necessarily fails to recognise existing inequalities in the different tenancies. It also disregards completely, though this is by no means conclusive in this type of social legislation, the contractual obligations into which the parties have entered. Furthermore, to assume, as this committee appears to have done, that there is some sort of ideal fair rent for the subject premises (or it may be — it is far from clear from its decision — for all or some of the flats in the same block) against which by the exercise of a residual discretion the potential effect of the variable clause is to be measured, seems to me to be embarking on the statutory exercise from the wrong start line. The proper approach, as it seems to me, is first to value the ‘occupation’ element in the rent of the subject flat, next to consider the services provided by the landlord (what I have called ‘the first category’) and to determine whether or not the contractual terms for that variation are reasonable and, if not, to assess, having regard to all the relevant circumstances, the annual rental value to be attributed to them as part of the ‘service’ element to be included in the inclusive fair rent. Finally to consider, as section 71(4) requires, the cost of the landlord’s maintenance and repair obligations when chargeable to the tenant. There is, as I see it, no room here for any so-called ‘residual discretion’. The statutory exercise in relation to each subject flat is an exercise in valuation subject only to this, that in relation to both limbs of section 71(4) the committee has to consider whether or not the contractual terms for a variable amount are, as between the landlord and the tenant, reasonable and, if not, what sum is to be included in respect of the annual cost of the relevant items in the inclusive fair rent. Both Mr Brown and Mr Morgan contended for a wider interpretation of the word ‘may’ in section 71(4). I accept the distinction drawn between the obligation placed on the committee by the word ‘shall’ in section 71(1) and elsewhere in the Act and schedules and the word ‘may’ in section 71(4), but this does not remove the obligation on the court to determine what, if any, limits are placed on the power or discretion vested in the committee by the word ‘may’. I have already indicated my view that it is inappropriate to regard it as a residual discretion. In my view, the word can only be construed in the context of this legislation on the Wednesbury principle, that is to say, in relation to each tenancy agreement between each landlord and tenant, is there material on which the committee could properly and reasonably determine, taking into account all the relevant considerations and disregarding none, that the terms upon which the charges or contributions for certain items of expenditure by the landlord under the contract, the cost of which is recoverable from the tenant, which costs may be variable from year to year, are assessed are unreasonable?  Put in another way, so far as the present cases are concerned, was there any material relevant to any particular letting upon which the committee could not have been satisfied that the terms of variation were unreasonable? As I read the subsection, the committee has no power to determine that the existence of a clause in a regulated tenancy providing for variable sums to be payable by the tenant to the landlord is itself unreasonable. That is a matter of contract between the parties unaffected by the words of the section. All that the committee has power to do is determine whether or not the terms as to the variation are reasonable and it is the committee’s satisfaction upon this matter which, under the Wednesbury principles, falls to be considered by way of judicial review. In approaching this question I am, as I understand it, bound as a matter of law to accept, on the authority of the decision of the Court of Appeal in Finchbourne Ltd v Rodrigues [1976] 3 All ER 581 that the operation of a variable contribution clause is, in any event and as a matter of law, limited by a ‘fair and reasonable’ condition. It follows from this that a necessary assumption in the landlord’s favour is that the variable contribution clause will not be operated otherwise than fairly and reasonably. From that decision it is necessary to cite only three passages. The first one is from the headnote where it is recorded that it was held: The appeal would be dismissed for the following reasons . . . (ii) It could not have been intended between the parties that the plaintiffs should have an unfettered discretion to adopt the highest conceivable standard of maintenance for the block of flats and to charge the tenant with the cost thereby incurred. Accordingly, in order to give business efficacy to the lease, a term was to be implied that the cost recoverable from the defendant should be ‘fair and reasonable’. That editorial note is consistent with the judgment of Cairns LJ at p 586H where he says this: However, I will express my opinion briefly on the second point. Is there an implication that the costs claimed are to be ‘fair and reasonable’?  It is contended that no such implication is necessary to give business efficacy to the contract. Passages from the speeches in the House of Lords in the recently decided case of Liverpool City Council v Irwin [1977] AC 239 are referred to as the most recent statement of the principles on which terms can be implied. Taking the strictest of tests on that matter, I am of opinion that such an implication must be made here. It cannot be supposed that the plaintiffs were entitled to be as extravagant as they chose in the standards of repair the appointment of porters etc. Counsel for the plaintiffs said that there would come a point without any implied term where the costs might be so outlandish as not to come within the description of the seventh schedule at all. In my opinion, the parties cannot have intended that the landlords should have an unfettered discretion to adopt the highest conceivable standard and to charge the tenant with it. Stress is laid on the provision that, in so far as the fees payable to the managing agents were included, it was expressly provided that it was to be a ‘reasonable and proper fee’. There was a special reason for drawing attention to this, seeing that the agents themselves were to be the certifiers. It is not, in my view, a case where the expression of one amounts to an exclusion of the other. He took the view that the trial judge had arrived at the right conclusion and would dismiss the appeal. Orr LJ agreed that the appeal should be dismissed for the reasons given by Cairns LJ. In the course of his short judgment, set out at p 587, he set out the Eighth Schedule to the lease providing: that the amount of the lessee’s contribution ‘shall be ascertained and certified by the lessors’ managing agents acting as experts and not as arbitrators’. a phrase which reflects that in the instant tenancy agreement: Where, as here, the managing agent is an estate agent, two matters very much within his expertise are what work is reasonably required to be done in order to comply with the terms of the lessors’ obligations under the lease, and what is the reasonable cost of such work, but merely to add up the figures of expenses incurred on the work done does not call for expertise. Browne LJ delivered an assenting judgment. He pointed out that in a clause such as that ‘The intention clearly was that the tenant should be entitled to rely on the expertise of . . . a third person.’ Mr Mota Singh also contended that the provisions of Schedule 19 to the Housing Act 1980 — replacing, by way first of sections 90 to 91A of the Housing Finance Act 1972 (I interpolate to say that91 section 91A would not have been relevant here as it did not apply to regulated tenancies) — were yet another limitation on the committee’s power to consider the reasonableness of a variation term. Paragraphs 2 to 6 of the Schedule apply only to terms permitting variable charges for services (see para 1), but when applicable limit the amount payable under such terms to ‘no greater amount . . . than is reasonable’ (para 2(a)) where the charges are payable before the costs are incurred and for adjustment after they are incurred and, further, for costs to be taken into account only to the extent that they are reasonably incurred and only if the services or works are of a reasonable standard. These provisions only apply (para 15) when the amount registered under section 71 of the Act is entered as a variable amount. Mr Brown contended on this that, merely because terms of variation, if registered as variable under registration of the fair rent, were subject to statutory control, this did not entitle the landlords to say that, therefore, the terms of variation were themselves reasonable; as he put it, terms of variation are not made the more reasonable because the effect of statutory provisions applying after registration is to cure or ameliorate existing elements of unreasonableness. This, therefore, cannot be used to decide whether or not to register a variable amount. Having regard to the conclusion which I have reached and which I shall state shortly as to the meaning of the words ‘The terms as to the variation’, I cannot accept Mr Brown’s argument. It seems to me that if the committee is looking at ‘terms as to the variation’, as I understand those words, to see whether or not they are reasonable and to determine whether or not, therefore, they should be registered as variable, the committee must also look at the statutory limitations on the effect of those words if a variable amount is entered in the registration of the rent. This task this committee here never undertook. However, when I come to the construction of the words ‘the terms as to the variation’ and the committee’s test of their reasonableness in any particular case, the words of Schedule 19 are very important. Before I do that, I must refer to one other authority which was drawn to my attention. I am not persuaded by the references to O’May v City of London Real Property Co Ltd [1982] 2 WLR 407 that considerations there tending to show that short-term tenants ought not to be saddled unforeseeably with heavy capital expenditure are relevant here. The point is succinctly made in the passage from the judgment in the Court of Appeal of Buckley LJ, cited with approval by the Lord Chancellor, Lord Hailsham, at p 415. That case concerned an application by the tenant of commercial premises for a new lease under section 35 of the Landlord and Tenant Act 1954. The landlord’s proposals for the new tenancy included a departure from the old tenancy agreement in so far as he sought to impose on the tenant an obligation not in the old tenancy agreement, to the terms of which the court was required by the section to have regard, to repay the landlord certain costs of repair and maintenance. In return the tenant was to have some reduction in rent and the landlord would get a clear lease by which the building became more valuable and more easily disposable. It was held that such a departure, imposing a new obligation on tenants, whose interest was limited, could not be sanctioned. That case is a very long way from this. What then is meant by ‘the terms as to the variation’?  What is the task of the committee (or indeed the rent officer) in considering whether or not it is satisfied that those terms are reasonable? First of all, I exclude from present consideration, as the committee did, the two items in the Fourth Schedule to the tenancy agreement dealing with insurance and the reserve fund to which I have already referred; pausing only to note that there is a further definition of the service charge in Schedule 19(1) as ‘an amount payable by the tenant of a flat as part of or in addition to the rent which is payable directly or indirectly for services, repairs, maintenance or insurance or the landlords’ costs of management . . .’, the last seven words of which make me wonder if the committee was right to exclude them from consideration, even on the view it formed as to the meaning of ‘terms of the variation’. There is no suggestion in the decision that it allowed for such items which would, to some extent, increase the rent fairly payable even if for a fixed sum. However, this point was not argued before me and I make no finding upon it. Secondly, Mr Mota Singh for the appellants does not contend that if the issue had related solely to the first category of the 16 Schedule Four items, what can be called ‘services’ in the common or garden sense, he could argue that the rent could not sensibly be fixed to include such items over a two-or three-year period. What, then, is the position in relation to the cost of repairs and maintenance?  If the material words of section 71(4) are isolated in giving, as it were, highlights, the answer seems to me to become clear. I read those words so highlighted: ‘Where . . . the sums payable . . . include any sums varying according to the costs from time to time of . . . any works of maintenance or repair carried out by the landlord . . . the amount to be registered . . . as rent may . . . if the . . . committee are satisfied that the terms as to the variation are reasonable, be entered as an amount variable in accordance with those terms’. Variable sums are permissible for items, the cost of which may vary, but only when the committee is satisfied that the terms as to variation are reasonable. I do not consider that on a proper construction of the agreements here the list of items chargeable at variable costs (that is to say at the least the second category of recoverable charges in Schedule Four) is itself open to attack. The list of items which may invoke variable contributions is not itself a ‘term as to the variation’. The only terms as to variation upon which a decision as to reasonableness is open to the committee are those, on the instant agreements, which provide for the assessment and payment of the variable contributions. This, as I read the decision, is the very task upon which this committee did not embark. Alternatively, if it did, it did not conclude by asking itself the right question. In the further alternative, if it did, there was no material at all upon which it could reach the conclusion which it did. In so far as it is possible to untangle a process of reasoning from paragraphs 40, 41 and 42 of the committee’s decision, it would appear that, firstly, from inappropriate and substantially undisclosed reputed comparables it assessed notional fair rent for the subject premises on, it must be assumed, the basis of excluding variability in service charges of both the section 17(4)(a) and (b) varieties. Next, it is to be noted that the committee had no evidence, and did not seek to elicit, from the appellants’ surveyor any valuation on the basis that a ‘variable’ clause would not be acceptable or on any basis other than an ‘including a variation clause’ basis (as I have already read from his report), and the surveyor does not appear to have had his mind directed to the possibility that the committee might have been minded to reach the conclusion which it did or to deal in evidence with the ‘reasonableness’ of the ‘terms of variation’, whether as understood by the committee or as interpreted in this judgment, or to provide any valuation which would have assisted the committee in reaching the conclusion it did in making a fair rent inclusive of the costs wholly unascertained of maintenance and repair. I have been wholly unable to discover in the committee’s records of submissions and evidence and its decision any consideration of the assumed value of the cost of or obligation to carry out maintenance and repairs to be included in the inclusive rent. Thirdly, although without any such material the committee concluded, as Mr Brown analysed para 41 for my assistance, that the variable clause was unreasonable because (a) in the context of substantial works in progress the fair rent could be made unfair in relation to similar facts and (b) it could significantly distort the committee’s assessment of the fair rent. I have already stated my reasons for regarding these conclusions as inappropriate and outwith the committee’s powers. No one of these conclusions can properly be reached by the committee exercising its functions in accordance with the statute. That A or B may equally benefit from the cost of substantial capital works on the building (that is to say, for example, by the installation of a new central heating system) does not of itself mean that A with a ‘variable’ clause should not be charged more than B whose rent has been agreed on an inclusive basis. Without much more analysis than the committee had available to it such conclusions cannot be upheld. In my opinion, this construction of the words ‘terms as to the variation’ is the only one consistent with the intentions of Schedule 19, paragraphs 2 to 6, the material words of which I now read. These are all concerned with what I have called the terms which provide for92 the assessment and payment of the variable contribution, that is to say, those terms which I have held to be the terms to be considered under section 71(4). Schedule 19 — and again I summarise simply to indicate the important points as I see them — reads as follows: 1(1). For the purposes of this Schedule, a service charge is an amount payable by the tenant of a flat as part of or in addition to the rent — (a) which is payable, directly or indirectly, for services, repairs, maintenance or insurance or the landlord’s costs of management; and (b) the whole or part of which varies or may vary according to the relevant costs; and the relevant costs are the costs or estimated costs (including overheads) incurred or to be incurred in any period (whether the period for which the service charge is payable or an earlier or later period) by or on behalf of the landlord or a superior landlord in connection with the matters for which the service charge is payable. . . . 2. The extent to which relevant costs are taken into account in determining the amount of a service charge payable for any period shall be limited in accordance with the following paragraphs, and the amount payable shall be limited accordingly; and where the service charge is payable before the relevant costs are incurred — (a) no greater amount shall be so payable than is reasonable; and (b) after the relevant costs have been incurred any necessary adjustments shall be made by repayment, reduction of subsequent charges or otherwise. 3. Costs are to be taken into account only to the extent that they are reasonably incurred, and costs incurred on the provision of services or the carrying out of works only if the services or works are of a reasonable standard. There are then more detailed provisions in paragraphs 4 and 5 substantially for the protection of the tenant, including provisions for competitive estimates and for notice and for the provision of information as to relevant costs. Indeed there is a dispensing clause which enables the court if satisfied that the landlord acted reasonably to dispense with any or all of the requirements. The whole of that goes, as I have said, to the machinery, that is the assessment and payment of the costs of the services provided, particularly and aptly costs of maintenance and repair. It is right to record that in paragraph 42 of the decision which I have already read the committee put on record that in all the circumstances of the case it considers that the terms as to variation were so far reaching that they were rendered unreasonable in relation to the subject regulated tenancy. Mr Morgan and Mr Brown submitted that that was a supportable and indeed a conclusive finding which the court should and could not disturb. I suspect, however — and in this I am reinforced by the submissions of counsel — that this committee really wished to assert that the terms of the variation included the possibility that in any one year it was open to the landlords, following the contractual procedure for variation, to impose a whole year’s contribution to maintenance and repair costs upon the tenants. It was this that led it to think that the terms of variation were unreasonable. If that was what the committee had wished to say it would have been simple to say so, though, of course, it would have been necessary to consider that finding, if it had been made, with proper regard to the obligations and limitations imposed by Schedule 19 and the decision in the Finchbourne case. Those limitations might have made it difficult, if not impossible, for the committee to have come to that conclusion. Moreover, before it said that, if it had been minded to say that, the committee would have to have investigated the issue of reasonableness with the appellants’ witnesses instead of leaving it, as was done, on the unsatisfactory basis that the landlords had not, in the two preceding years, charged any maintenance costs to the tenants and without investigating, in appropriate detail, the landlords’ intention so far as a fair and reasonable application of the variable clause in the future was concerned. This view of the assumed purpose of the committee seems to me to be consistent with its comments on ‘distortion’ in paragraph 41 and on making ‘the fair rent unfair’ to which I have already referred. It is also clear to me from paragraph 43 of the decision, which I have not yet read, that the committee did tackle its task the wrong way round. It begins that paragraph by saying: ‘Having reached a conclusion on the variable clause issue, the committee looked at the latest known costs of providing the services but could not accept the total figure submitted.’  Then the committee, in that paragraph, went on to canvass various items of first category services and to conclude, broadly, that the amounts claimed were either excessive or subject to offset of one kind or another. This, of itself, is not an inappropriate exercise in valuation, nor can the committee be criticised if it was to the terms of variation in relation to these matters that they applied the attribution ‘so far-reaching as to be rendered unreasonable’. But they include no reference whatsoever to repairs or maintenance, save for items in relation to lifts and boilers included in a total services calculation totalling some £550,142 (see the evidence of Mr Bagnall recorded in the decision at paragraph 5) which the committee reduced, because eg the costs for clearing the common parts were thought to be unreasonably high and other items referred to in paragraph 43, to £459,606. But, as I have said, not once there does there seem to be any reference to the costs of repairs and maintenance and indeed the only reference to that is a passing reference, for example to the boiler renewal programme, not as an item of cost but as an item which caused some intermittent withdrawal of the central heating and hot water supply and, in relation to the lift, a reduction to reflect the admitted unreliability and additional use of them by workmen and materials during the course of refurbishment of the block in the subsequent flats. It goes on to say that in making a reduction the committee took into account the fact that the schedule did not include an item for depreciation on the newly installed lifts. It is to be noted that neither in Mr Bagnall’s calculations nor elsewhere in the evidence was there any calculation — nor was any invited — of the potential liability expressed as an annual figure for the tenant for general repairs and maintenance, including, for example, structural repairs, replacement of plant etc. There is a reference to this in the broadest terms in the evidence of Mr Adamson when he spoke of ‘a total cost to date of £1 million and future unquantified costs of refurbishing Park West’, but even that is nowhere to be found reflected in the decision, by which I mean to say that the committee does not appear to have included for that or any part of that amount in any one year or in the fair rent calculations to which they came. And so, without any information and without any identifiably true comparables, the committee proceeded to provide for such items in an inclusive rent. It was, in my opinion, wrong to do so. In its conclusions, which are set out in paragraphs 49 and following, the committee says that it had regard to the fact that the rents determined would no longer vary in respect of items of maintenance and services and took account of substantial refurbishments to the block which offset some of the benefit in the light of disturbance in the programme of modernising vacant flats which would continue, to some extent, during the period of registration. The committee then determined inclusive fair rents, as set out in the schedule, to be registered exclusive of rates borne by the landlord but recoverable from the tenant and setting out, in the noted amount, the amounts within the rent so determined fairly attributable to the provision of services; not of course a noted amount which is itself subdivided into services and repairs and maintenance. It concludes by saying: ‘The fair rents have been determined on the basis that the terms of the tenancies, other than the rent, including the repairing obligations of the parties, are those contained in the respective tenancy agreements.’ What, to my mind, it should have done, having applied itself to what are, as I find, the ‘terms as to the variation’, was to consider whether or not it was satisfied that those terms were unreasonable, bearing in mind that if variable terms were included in the registered rent they were subject to Schedule 19 and to a ‘fair and reasonableness check’ pursuant to the decision in Finchbourne. In conclusion, therefore, and by reference to the grounds of appeal, I am of the opinion that under amended ground 2 the committee was wrong in holding that it had what was described as a ‘residual discretion’ which justified it in the circumstances set out in the decision in treating the terms as to variation as unreasonable. Further, the committee was in error in including in the ‘terms as to the variation’ the items relating to repairs and maintenance listed in the Fourth Schedule, whereas the terms as to the variation on a proper construction were only those terms dealing with the assessment and payment of the variable contribution; and in addition was in error under amended ground 1(b) in failing to pay any regard to the restriction on the recovery of service charges imposed by Schedule 19 and the decision in Finchbourne’s case. Finally, under ground 1(A)(a) and (b) the committee was in error in disregarding the satisfactory operation of the ‘terms as to the variation’ since 1968 under the tenancy agreements as evidence of93 reasonableness and in assuming a potential unfairness in the operation of the terms which, in any event, was likely to be limited to three years being the period then before the next review’ in the absence of any evidence thereof and despite the statutory and other limitations on unreasonableness. For all these reasons these appeals, in relation to the unfurnished tenancies, are allowed and I consider it appropriate to make an order such as that which was made by Woolf J in Metropolitan Properties Co (FGC) Ltd v Good (1981) 260 EG 87 that the matter be remitted to the rent assessment committee for reconsideration as appropriate having regard to this judgment. It may be thought better that the committee be differently constituted. No order was made as to costs. Leave was given, if necessary, to appeal in respect of the decision on the unfurnished flats.