Rent Act 1977 — Question whether tenancy was a protected tenancy or excluded from protection as a holiday letting by virtue of section 9 of the Act — Duty of rent officer when faced with a jurisdictional issue — Application for judicial review by tenants seeking order of mandamus to require rent officer to determine and register fair rent of flat — Proceedings started in county court under section 141 of Act to determine whether tenancy was protected, but county court hearing not likely to take place quickly — At a preliminary consultation rent officer expressed himself as satisfied that the letting was not a holiday letting and that he had jurisdiction to proceed — Subsequently, however, the rent officer, although still considering that he had jurisdiction, intimated that he would adjourn the consultation sine die in view of county court proceedings — Tenants urged rent officer to proceed to registration as delay might affect them adversely in view of imminent implementation of changes by Housing Act 1980 affecting the date from which excess rent could be recovered from a landlord — Duty of rent officer analysed by court — If a rent officer was satisfied that he had jurisdiction (although his decision on this point could not be final) it was his duty to proceed — It was only if he was in doubt about his jurisdiction (or perhaps if a court decision on the issue was imminent) that he had a discretion whether or not to proceed — Observations on ‘Noel’ case — Order of mandamus granted.
This was an
application for judicial review by Cyril and Bekky Ibiri, tenants of Flat 3,
105 York Way, London N7, who sought an order of mandamus against J McW Smith, a
rent officer for the London Borough of Camden Registration Area, requiring him
to determine and register a fair rent in respect of the above flat.
D Watkinson
(instructed by Nic Madge, Camden Community Law Centre) appeared on behalf of
the applicants; Simon Brown and John Laws (instructed by the Treasury
Solicitor) represented the respondent rent officer.
Giving
judgment, DONALDSON LJ said: The history of the matter is this. The two
applicants took a tenancy of the premises at Flat 3, 105 York Way, London N7,
in November 1979. In May 1980 they applied to have a fair rent registered. A
copy of the application was forwarded by the rent officer in the usual and
required way to the landlords, Sherman Securities Ltd, and the landlords by a
letter dated June 18 took the point that this was not a protected tenancy but
was a holiday let and so was outwith the jurisdiction of the rent officer. As
soon as that letter was received by the applicants, or very shortly afterwards,
they started proceedings in the county court in order to determine whether or
not this was a protected tenancy, the applicants of course contending that it
was and the landlords contending that it was not.
The rent
officer meanwhile had arranged for a preliminary consultation between the
parties to take place on July 28, and at that meeting he went into the question
of whether or not this was a protected tenancy. It was not a case, as was the
position in R v Kensington and Chelsea Rent Officer, ex parte Noel
[1978] QB1, of merely having submissions from agents or representatives of the
parties. The parties gave evidence. There was a statement from the tenants. A
Mr Sherman represented the limited company landlord and Mr Sherman
cross-examined the tenants.
At the end of
the proceedings the rent officer said:
In the light
of what I have heard this afternoon, I have come to the conclusion that this is
not a holiday let, but an ordinary regulated tenancy. In the light of the
reference and Mr Ebiri’s statement, I feel I have jurisdiction to proceed. I
have cases where I decide straight away that there is a holiday let and adjourn
them sine die for the tenant to prove it in court. Sometimes I have
never heard any more, or the courts have confirmed it. In this instance there
is no doubt in my mind, and I do feel that I can proceed.
Having done
that, he then proceeded to fix August 12 as being the date for the consultation
when representations are made by
away, in order to give the landlords opportunity to apply for judicial review
if they wished to prevent him proceeding further and also to prepare any
arguments they might want to advance to him about the exact level of rent.
The landlords
took no steps to prohibit him from proceeding, and the parties met again before
the rent officer on August 12. Meanwhile the landlords had written to the rent
officer on August 4 saying this:
You will
recall that despite the pending county court proceedings to decide whether the
occupancy of the above flat is a protected tenancy, you made your own decision
that it is so.
The fact that
the letting agreement describes the tenancy as ‘. . . a holiday letting only’
is prima facie evidence that it is until the court decides otherwise
under section 141 of the Rent Act 1977.
We feel that
you are pre-empting the decision of the court and acting beyond your powers in
proceeding with the application for the registration of a fair rent until the
court has determined whether a protected tenancy exists.
In those
circumstances we feel that the consultation proposed for August 12 should not
be proceeded with.
On August 12
Mr Smith referred to that letter. He said that, in his view, his letter
constituted ‘new evidence’ and that in the light of that and other factors he
considered that it would be wiser for him not to register a rent. He said he
would adjourn the consultation sine die. The representative of the
tenants argued that that was not the right course and that the rent officer
ought to register a rent. The rent officer said that he still thought he had
jurisdiction to do so but that he would not in fact register a rent. He did not
say so, but clearly he thought he was acting within the scope of his discretion
and he said, somewhat incorrectly, that no one could compel him to register a
rent.
The
proceedings then went on by Mr Madge, representing the tenants, urging the rent
officer to give detailed reasons and drawing his attention to the fact that
there might be rights vested in the tenants which would be lost if there was any
delay as a result of orders being made bringing parts of the Housing Act 1980
into operation. I need not pursue exactly how that could operate. No orders
have yet been made and it is unlikely that they will be made until the end of
next month. But it clearly was a factor which he was entitled to take into
consideration if and in so far as he had a discretion in the matter.
The rent
officer adhered to his view that he could not register the rent, but he did
proceed to hear argument on what should be the level of rent which would be
fixed if and when he was prepared to register it.
The facts end
with a letter from the rent officer to the tenants’ representative simply
saying:
Following the
meetings held at this office on July 28 and August 12 last from the information
made available to me and in view of the fact that application has been made to
the court for a declaration I am adjourning this case pending the decision of
the court.
No doubt you
will let me know the outcome.
In my
judgment, it is the duty of a rent officer to consider what is his jurisdiction
in cases in which he has an application which depends upon a disputed question
as to whether the particular contractual arrangement between landlord and
tenant or landlord and licensee is or is not a protected tenancy. He has to
consider it but he cannot determine it. He has no jurisdiction to determine it
on a final and binding basis, subject to appeal as between the parties. His
jurisdiction is like that of an arbitrator. It stems from an assumption,
namely, in the case of an arbitrator that there is an agreement to refer, in
the case of a rent officer determining a fair rent upon an assumption that
there is a protected tenancy. Somebody else has to decide whether that
assumption is valid, if the matter is to be determined in a final and binding
way. But this is very far from meaning of course that every case where there is
a doubt is to be referred to the courts. The duty of the rent officer, I think
it is clear from such cases as Noel’s case to which I have referred and Zerek’s
case which is referred to in Noel’s case, is to inquire as to the facts.
If he is satisfied that there is not a protected tenancy he has no problem. He
just does not proceed further until it has been determined by a court of
competent jurisdiction that there is a protected tenancy. If he is satisfied
that there is a protected tenancy (and, note, I say ‘satisfied’ and not
decided, because he has no jurisdiction to decide), in my judgment, he must
proceed. It is only if he is in doubt as to whether there is or is not a
protected tenancy that he has a discretion whether to proceed or not to
proceed. That is putting the position, I accept, in somewhat black and white
terms, and his discretion might extend to not proceeding in a case in which he
is certain or virtually certain in his own mind that there is a protected
tenancy but within 24 hours he knows it is going to be decided by a court of
competent jurisdiction. I would not dissent from the view that in that highly
unusual and marginal case he may have a discretion to postpone deciding the
matter for 48 hours to get just beyond the decision. But the broad position, as
I see it, is that he is obliged to proceed if he is satisfied.
What is
unusual about this case is that the rent officer was satisfied. He expressed
himself as being satisfied that this was a protected tenancy. He remained
satisfied at all times and it is not possible to attack his satisfaction as it
was possible in Noel’s case. There it was said that the rent officer
could not be satisfied because he did not have any evidence on which to be
satisfied. There was evidence in this case and he was satisfied. Let me make it
clear, in order that nobody should be influenced by anything that I say, that
he may have been wholly wrong in being so satisfied. That is a matter which the
county court judge will have to determine eventually, but he was satisfied and,
being satisfied, I think it was his duty to go ahead and register this rent. If
he does not do so and there is any delay in the county court deciding the
matter, it looks as if these applicants will suffer a real diminution in their
rights. But quite apart from that, I think that was the rent officer’s duty.
Accordingly, I would let an order go requiring him to determine and to register
whatever fair rent he determines.
Agreeing,
FORBES J said: I would only desire to add one short point because of a matter
which arose in the course of argument. Of course in these cases the rent
officer is often asked to determine a preliminary issue of fact: is this a
protected tenancy or not? Such a
determination is not conclusive, as my Lord has pointed out. The attitude which
the rent officer ought to adopt is, I think, very shortly set out in the report
of the case of Ex parte Noel at page 8 explaining the decision in Ganatra:
What I
understand Park J to have said was that if the rent officer, having gone into
the matter, found that he was in doubt as to whether there was jurisdiction, so
that he was not himself able to determine the matter, then he should leave it
so that the parties could take the matter to the county court if they so chose.
Originally, on
behalf of the rent officer it was argued in this case that, although the rent
officer initially decided on this preliminary issue that it was in fact a
protected tenancy, he subsequently changed his mind, but this argument has now
been abandoned. The argument now is that the rent officer was indeed satisfied that
it was a protected tenancy but nevertheless decided it was inappropriate to
proceed at once to determine to register the rent. In my judgment, he was wrong
about that, as my Lord has said. However, during the course of the original
discussion on the argument as to whether he had changed his mind, the effect of
the case of Ex parte Noel was said to be this, that the rent officer was
precluded from deciding the question of whether it was a protected tenancy or
not whenever the allegation was made that the tenancy document were a sham; and
in all those cases, so it was argued or said, he should always leave it to the
county court.
In my view, Ex
parte Noel cannot be so read. It is clear to me that when one looks at the
judgment of Slynn J at p 9, what he started with was saying that the rent
officer was entitled to conclude that there was a protected tenancy, but in
this particular case — Ex parte Noel — he went about it the wrong way.
He attempted to decide that issue on submissions, and at F on that page Slynn J
said:
In my
judgment it is quite impossible to resolve a matter of this kind merely on the
basis of submissions made and arguments put before a rent officer by the
solicitors for the parties. An allegation was made that this document was
a cloak or a sham, a device to avoid the effect of the Rent Acts. That is a
matter which could only properly be dealt with by the hearing of oral evidence,
and if required, by subsequent cross-examination.
At the top of
the next page he said:
In my
judgment the procedure which was adopted on this occasion is not at all
satisfactory and the rent officer was not, because of the procedure adopted, in
a position to come to a determination of this kind in the way that he did.
As I say, I
read that as simply an indication that in that particular case the rent officer
went about it the wrong way because he attempted to deal with a question which
involved fraud or something of that kind — at any rate the document was a sham
— not on oral evidence at all but on submissions by solicitors and one could
not determine a matter of that kind merely on such submissions. But where the
rent officer goes into the matter and hears evidence, as he did in this case,
and hears cross-examination of the applicants, it seems to me there is nothing
in Ex parte Noel which prevents him, if he wishes, from determining that
question, as indeed he did in this case. I agree with my Lord that the order
should go in the way he has indicated.
The
application for an order of mandamus was granted with costs.
