Wareing v White

Rent Act 1977 — Appeal by tenant from decision of Woolf J dismissing tenant’s appeal from decision of rent assessment committee — Woolf J had rejected criticisms of committee’s decision based on alleged inadequacy of reasons, a complaint as to the manner in which the committee had dealt with the question of inflation, and alleged failure by committee to give tenant a proper opportunity of considering documentary material presented by the landlord at the hearing resulting in an alleged breach of natural justice — Court of Appeal held that the reasons given by the committee for their decision could not fairly be criticised — As regards inflation, inflation was a matter which had to be taken into account and the committee had stated that they had made a reasonable allowance for it up to the date of their decision; there was nothing wrong with that approach — Committee had not said that they were applying any index or suggesting that rents must be rigorously kept in line with general inflation — They had explained that certain alleged comparables were not useful because no details had been supplied to support the comparisons — As regards the tenant’s complaint (which was the subject of some conflict in the affidavit evidence) that he had not been given a fair opportunity of considering the landlord’s document, this failed both on the broad ground of breach of natural justice and as an alleged breach of regulation 5 of the Rent Assessment Committees (England and Wales) Regulations 1971 as amended — The landlord’s document was in fact a proof of evidence of which copies had been given to the tenant and the committee at the hearing — Regulation 5(2) did not apply to copies of a proof of evidence distributed to all concerned for convenience at the hearing — Tenant’s appeal dismissed — Two matters mentioned in the judgment of Lawton LJ may be noted — (1) Grant of leave to cross-examine deponents who have sworn affidavits should be given when the justice of the case requires it, but the decision is within the discretion of the judge — (2) The statement usually made at the end of a committee’s ‘reasons’, referring inter alia to their ‘knowledge and experience’ and to section 70 of the Rent Act 1970, is not to be dismissed as ‘merely a common form statement’ This was an appeal by Alan Wareing, tenant of property at 41 Gordon Road, Wanstead, London E11, from a decision of Woolf J (reported at (1984) 270 EG 851, [1984] 1 EGLR 97) dismissing his statutory appeal under section 13 of the Tribunals and Inquiries Act 1971 from a committee of the London Rent Assessment Panel. The committee had increased a rent of £92.95 per month fixed by the rent officer to £115 per month. The respondent before Woolf J and the Court of Appeal was the landlord, Albert Walter Vousdon White. N Ley (instructed by R H Lomax) appeared on behalf of the appellant; the respondent appeared in person. Giving judgment, LAWTON LJ said: This is an appeal by Mr Alan Wareing with the leave of a single member of this court from a judgment of Woolf J, delivered on January 25 1984, whereby the learned judge dismissed Mr Wareing’s appeal on a point of law against a decision of a London Rent Assessment Panel Committee, which had been made on March 15 1983, but the reasons were not given until April 7 1983. Mr Wareing was the tenant of a dwelling-house at 41 Gordon Road, Wanstead, London E11. It was a self-contained, first-floor flat, consisting of two rooms, a kitchen/dining room, bathroom and a separate wc. It was a property which was probably built about the turn of the century. In 1979 a rent assessment committee decided, on an appeal from a rent officer’s decision, that the rent for the premises should be £85 per month exclusive of rates. In 1982, as he was entitled to, the landlord applied for a new fair rent to be fixed. He made the application in September 1982; the rent officer considered it and decided that a fair rent should be £92.95 per month. Between October 1979 and the date when the rent officer made his decision a period of just over three years had passed, and those three years, to everyone’s knowledge, were a period of very high inflation. According to Mr Wareing’s arithmetic, the increase of rent represented 9.3% over the rent fixed in October 1979. The general rate of inflation, as fixed by the retail price index for the same period was in the region of 38% over October 1979 figures. It is not surprising, in those circumstances, that the landlord was aggrieved by the failure of the rent officer to give no more credit for inflation than about 9%. He appealed, as he was entitled to appeal, to the rent assessment committee. Rent assessment committees are regulated by the Rent Assessment Committees (England and Wales) Regulations 1971 (SI 1971 no 1065), as amended. There are various regulations relating to what is to be done. There is one regulation to which I shall have to refer later about documents, which is regulation 5, and in its original form, as promulgated in 1971, there was a regulation relating to decisions. Regulation 10(1) was in these terms: The decision of the committee upon a reference shall be recorded in a document signed by the chairman (or in the event of his absence or incapacity,126 by another member of the committee) which shall contain the reasons for the decision, but shall contain no reference to the decision being by a majority (if that be the case) or to any opinion of a minority. In 1981 it was decided, under statutory powers, to amend that regulation and a new regulation 10A, was brought into operation. That reads as follows: Where the committee are requested, on or before the giving of notification of the decision, to state the reasons for the decision, those reasons shall be recorded in a document. It is clear what had happened. Requiring rent assessment committees to state their reasons in writing in every case had proved to be too much of a business. It was decided by the minister that they should only be required to state their reasons if they were requested to do so by the parties. Although rent assessment committees have to comply with the regulations set out in the statutory instrument to which I have referred, it is common knowledge that in many cases — and Mr Ley, who seems to have considerable experience of rent assessment committees, says that in most cases — the parties before the committee are not represented, either by lawyers or by other persons, such as surveyors, estate agents and the like. They attend and do their best to satisfy the committee what a fair rent should be. When this matter was before the rent assessment committee on March 15 1983 neither the tenant nor the landlord was represented. They each tried to put their case in their own way. It seems to have been appreciated by the tenant that the landlord was going to ask for an increase in rent over the October 1979 figure because of inflation, and, courageously, he made a submission to the rent assessment committee that they were not entitled to take inflation into account when deciding what was a fair rent. He also tried to produce what are known, in this class of case, as comparables (that is the rents of similar properties) but he did not call any evidence as to what the comparables were, save to produce extracts from a local rent register of a number of other properties which he submitted were similar properties. But those extracts from the rent register did not give any particulars upon which any responsible tribunal could decide that they were comparables. In other words, they were merely records of rents fixed, without anything being shown as to how they had been fixed or for what reason. The landlord is an architect. He came to the tribunal prepared to argue his case on various grounds. Very sensibly, he prepared a memorandum of what he wanted to say to the tribunal. It was what lawyers would call a ‘proof of evidence’. When the time came for him to give his evidence, he handed to the chairman of the tribunal a number of copies of the memorandum which he had prepared. He was, in lawyers’ language, handing in his proof of evidence. The chairman, sensibly, gave one of the copies to the tenant. The tenant was put at an advantage by Mr White’s foresight because if Mr White had not handed in his proof of evidence, the tenant would have had to have waited until the landlord said in evidence what he wanted to say. At this point, there seems to be a difference in recollection. According to the tenant, having been handed what was in effect the landlord’s proof of evidence, he asked the tribunal for a short adjournment so that he could read it. He says that the chairman refused. The landlord’s recollection is different. He says that the chairman read the proof of evidence, as did the tenant, and that there was no refusal by anybody of an adjournment. Woolf J took the view, when this matter was raised before him, that the landlord’s recollection sounded the more likely. Having heard the landlord’s evidence, which dealt with a few comparable properties and the inflation figures for the period between October 1979 and March 1983, the tribunal made its decision. The tribunal consisted of a legal member, as is the practice; it also consisted of a Fellow of the Royal Institution of Chartered Surveyors. Fellows of the Royal Institution of Chartered Surveyors are men of considerable experience in their profession. I feel entitled to infer that this member of the tribunal was likely to have had a good general knowledge of property values in the Wanstead area of East London. The tribunal decided that the rent fixed by the rent officer of £92.95 per month was too low, and they decided to fix a rent of £115 per month. There have been some disputes in this court about the arithmetic, but assuming that Mr Ley’s arithmetic is correct, that rent of £115 per month represented an increase of 35.25% over the rent fixed by the rent assessment committee in October 1979 and a 28% increase over that fixed by the rent officer in December 1982. As required by the statute, the tenant asked the chairman to state his reasons and, on April 7 1983, the chairman did so. Mr Ley, on behalf of the tenant, submitted to this court that the reasons were inadequate for a number of reasons and therefore they were not reasons at all for the purposes of the regulations and, in consequence, the finding of the tribunal should be quashed. It is necessary for me now to examine the reasons in some detail. They start in this way: In this case the landlord contended that the rent officer had not allowed enough for the effects of inflation since the effective date of the previous committee decision on this same property. That is a clear statement of the landlord’s main case. The reasons go on as follows: The tenant said that, legally stating, no allowance should be made for inflation. There was no justification for an increase for the amount determined by the previous committees. He had replaced the bed by one of his own. He requested and received an assurance that the committee would take no account of the value of the tenant’s bed. In so far as the tenant’s case was that the tribunal should not take into account the effects of inflation, it was clearly bad. Inflation is a matter which does have to be taken into account by rent assessment committees. The reasons go on as follows: ‘The tenant put forward a number of copies of rent officer’s registrations but was unable to provide details required to make these comparisons useful to the committee.’ The tribunal should have stated, in much more detail, submitted Mr Ley, why the comparisons were unsatisfactory. The answer to that is that we have looked at the documents which the tenant put forward, and they did not begin, as I have already stated, to provide any facts upon which the tribunal could act. Then there is a statement as to what the property consists of, and I need not read that out, and then comes the real ground for the committee’s decision: ‘The committee derived considerable assistance from the decision of the previous committee.’ We have not seen it, but it was accepted by Mr Ley that it would have been on the file before the tribunal. The reasons go on: ‘The furniture was largely the same. The present committee considered that they had to make a reasonable allowance for the effects of inflation up to the date of their decision.’ I stress the word ‘reasonable’. They were not saying, as seems to have been said in one of the cases to which our attention was drawn, that the committee were bound to apply the retail price index for calculating inflation. They were saying that it was reasonable to take into account the effects of inflation. Mr Ley submitted that that was not good enough because inflation has various aspects. There may be the retail price index figures, with which all of us are familiar these days; but it does not follow that inflation, in relation to property values, is the same as in the retail price index figures. There was no evidence before the tribunal as to what the inflation figures, in relation to property in the Wanstead area, were. What they did have was the retail price index figures produced by the landlord, but they did not slavishly follow those figures at all because, if they had done so, they would have used an inflation figure higher than the one they in fact did — calculated, as Mr Ley calculated it, on a percentage basis. They concluded in this way: Having regard to the evidence put before them, to their inspection, to their knowledge and experience and to the provisions of section 70 of the Rent Act 1977, the committee determined the fair rent which has been notified to the parties. Mr Ley criticised that last paragraph on the ground it was merely a common form statement which tends, nowadays, so he said, to turn up in many reasoned decisions of rent assessment committees. It may be a common form but unless the committee were being untruthful — and there was no suggestion here that they were — they had taken into account their inspection, and their knowledge and experience and they had paid regard to the provisions of section 70 of the Rent Act 1977, which sets out, in some detail, the matters which a rent assessment committee should take into account when deciding what is a fair rent. Mr Ley accepted that, on a fair reading of those reasons, the committee were saying in plain terms that they had decided that the rent should go up because they had to make allowance and had made allowance, on a reasonable basis, for the effects of inflation. I myself can see nothing wrong whatsoever with that approach. 127 It may be that if there is evidence about a difference between the retail price index figure and the inflation figure for property values in a particular area, then the committee must put their minds to that difference; and if they decide to follow one figure rather than another, they must say that they are doing so. But one of the difficulties these committees have — and it is a difficulty in my judgment which this court ought to bear in mind — is this: rent assessment committees are usually dealing with people without expert knowledge. They may or may not have a lot of evidence and when, as in this case, they have little, if any, evidence from the tenant, and some evidence from the landlord, they have to do their best on what they have got. This committee were entitled to take into consideration what we all know, namely, that between October 1979 and March 1983 there had been considerable inflation, much more than the rent officer had taken into account. It follows, in my judgment, that there was nothing which can be fairly criticised about the reasons which the tribunal gave for the decision they made. That, however, is not unfortunately the end of this case because when the matter came before Woolf J the tenant filed an affidavit in which he said that he had not been given a fair opportunity of considering the document which the landlord had handed to the chairman, either at the beginning of the case or as he was about to give evidence, that he had asked for an adjournment and it had been refused. I have already referred to this matter when recounting the history. Mr Ley informs us that during his submissions to Woolf J, he submitted that if Woolf J was going to rely upon the affidavit which the landlord filed, saying that the tenant had had an opportunity of considering his document, and there had been no refusal by the chairman, he, Mr Ley, asked for leave to cross-examine the landlord. However, the landlord’s recollection as to what happened in front of Woolf J is not the same as Mr Ley’s recollection. It is quite impossible for this court to determine a matter of that kind. I am left with the impression here that it was a point which was mentioned but not pressed by Mr Ley. When Woolf J came to deliver his judgment he said this about this matter: There is one matter relied upon until the notice of motion dated January 9 1984 was filed. It states: ‘The committee erred in law in refusing to delay the start of the hearing so that the appellant might be able to read and digest the respondent’s written submissions which had just been handed to him’. The affidavit of the landlord disputes that allegation. It would be surprising if the chairman had in fact, as was suggested by the tenant, refused him a short time to read and digest certain submissions which were handed to him prior to the commencement of the hearing by the landlord. Having regard to the evidence filed on behalf of the landlord, dealing with the matter as I must from the material which is before me, the conclusion to which I have come is that the appellant has certainly not established what he would need to establish to succeed on this point that there was any breach of the rules of natural justice. In this court Mr Ley not only relied on the rules of natural justice, but he also sought to rely on the regulations promulgated in 1971 and amended in 1981. One of those regulations relates to documents and it is in these terms: ‘The committee shall, where the reference is to be subject to a hearing, take all reasonable steps to ensure that there is supplied to each of the parties before the date of the hearing . . .’ and then it refers to various documents. There was no question of any document being sent to the tribunal by the landlord before the date of the hearing, so that part of the regulation does not apply. The second part is in these terms: Where at any hearing (i) any document relevant to the reference is not in the possession of a party present at that hearing; and (ii) that party has not been supplied with a copy of, or sufficient extracts from or particulars of, that document by the rent officer or by the committee in accordance with the provisions of paragraph (1) of this regulation, then unless — (a) that party consents to the continuation of the hearing; or (b) the committee consider that that party has a sufficient opportunity of dealing with that document without an adjournment of the hearing, the committee shall adjourn the hearing for a period which they consider will afford that party a sufficient opportunity of dealing with that document. I am firmly of the opinion that that regulation was never intended to apply to what was in effect a proof of evidence. The landlord, as I have already commented, could have gone into the witness box with the leave of the chairman and read from his document in the witness box. Again I repeat the tenant had the advantage of knowing before the landlord started to give evidence what he was going to say. This document was well outside the provisions of regulation 5. Further, for the reasons which I have already indicated, there was no breach of the rules of natural justice. The tenant was going to listen to what the landlord was going to say. He had the advantage of having it in writing before him. I cannot see why there has been any breach of the rules of natural justice in this case. Accordingly, there is nothing in this point. Our attention was called to what was said by Lord Diplock in O’Reilly v Mackman [1983] 2 AC 237. At the bottom of p 282 Lord Diplock, reviewing the procedure which should be followed in relation to judicial review, said this: Nevertheless having regard to a possible misunderstanding of what was said by Geoffrey Lane LJ in R v Board of Visitors of Hull Prison, ex parte St Germain (No 2) [1979] 1 WLR 1401, 1410, your Lordships may think this an appropriate occasion on which to emphasise that whatever may have been the position before the rule was altered in 1977 in all proceedings for judicial review that have been started since that date the grant of leave to cross-examine deponents upon applications for judicial review is governed by the same principles as it is in actions begun by originating summons; it should be allowed whenever the justice of the particular case so requires. That is a general principle of law. Mr Ley submitted that in the circumstances of this case, for the reasons I have indicated, the interests of justice did require that there should have been an adjournment, and, secondly, the interests of justice should have required Woolf J to allow cross-examination of the landlord on his affidavit where he had deposed as to his recollection of what had happened before the tribunal. It seems to me that Lord Diplock cannot for one moment have intended to say that the courts have no discretion about cross-examination. It has always been accepted in cases where affidavits are used that it is a matter for judicial discretion as to whether cross-examination upon affidavits should be allowed. If the cross-examination goes to the root of the issue before the court, clearly cross-examination should be allowed, but if it goes to a peripheral matter (as it did in this case) then it seems to me the learned judge was entitled to exercise his discretion as to whether or not he should allow this cross-examination. I am firmly of the view that this particular point was very much on the periphery of this case. I can see nothing in this point. I would dismiss the appeal. FOX LJ agreed that the appeal should be dismissed for the reasons given by Lawton LJ. Also agreeing, KERR LJ said: I would only add that we were referred, among other cases, to the decision of Forbes J in Kovats v Corporation of Trinity House (1981) 262 Estates Gazette 485 where he drew attention to the fact that it is a fallacy to conclude that rents must rigorously be kept in line with inflation generally. Nothing that has been said in this court, as far as I am concerned, in any way contradicts this. If this tribunal had taken the view that because of the increase in the retail price maintenance between 1979 and 1983 they were bound to follow the increase and reflect it in the rent, then I think they would have gone wrong in law, but it is perfectly clear they did not do that. They looked at a number of factors; they inspected the premises and my lord has already referred to what they took account of — which I think this court must clearly accept — and the contrary is not really suggested by Mr Ley. Among those matters, and perhaps a particularly important one, was that they made a reasonable allowance for inflation so as to approach the total increase since 1979. That may be somewhat unfortunate for the tenant but it is something which I think they were entitled to do. While it does not follow by any means that rent increases must keep pace with inflation, inflation is a matter which tribunals may obviously take into account. For these reasons I agree that this appeal must be dismissed. The appeal was dismissed. No order was made as to costs.