South v Trustees of the Phillimore Kensington Estate (Kensington Estate)

An appeal by way of case stated from the Lands Tribunal is confined to questions of law. The Court of Appeal must not reopen factual findings, reassess expert evidence or substitute its own valuation unless no tribunal properly directed as to the law could have reached the decision.

A valuation tribunal may select or reject comparables and may give no weight to settlement evidence where more reliable open-market evidence exists. There is no general rule requiring settlements under the Leasehold Reform Act 1967 to be treated as comparables. The adequacy of reasons depends on whether the decision sufficiently explains the material basis of the valuation.

The appellant held a long lease of a residential property and served notice under the Leasehold Reform Act 1967 shortly before expiry. A Leasehold Valuation Tribunal assessed the enfranchisement price at £2,000,075. On appeal and cross-appeal, the Lands Tribunal fixed the price at £2,395,000.

The appellant challenged the Lands Tribunal’s treatment of settlement offers, comparable transactions, the calculation of equivalent values, and the alleged risk that vacant possession would not be given. The central issue was whether those conclusions disclosed an error of law capable of review on a case stated.

1. Appeal dismissed. The appeal was confined by section 3(4) of the Lands Tribunal Act 1949 to questions of law. The Court could not reopen factual issues or substitute its assessment of expert valuation evidence, save in the extreme case where no properly directed tribunal could have reached the conclusion reached.
2. The Lands Tribunal was entitled to find that the earlier figures quoted by the respondent’s valuer were negotiated offers rather than objective valuations. Their weight and effect on credibility were matters for the Tribunal. The Tribunal was also entitled to treat those offers as an example of the Delaforce effect and disregard them as evidence of market value.
3. The Tribunal was entitled to reject an unreliable comparable and to give no weight to settlements under the 1967 Act. Settlement evidence may be relevant, but there is no general rule requiring it to be admitted or given weight. In this case, better evidence existed in the form of freehold and leasehold sales.
4. The Tribunal’s reasons were sufficiently clear. Adjustments for location and quality involved overall professional judgment, while the other adjustments were explained. Curtis v London Rent Assessment Committee was distinguishable because the reasoning there was deficient, whereas the reasoning here was adequate.
5. The Tribunal was entitled to reject a discount for the risk of failure to give vacant possession. The experts could identify no comparable transaction in which such a discount had actually been made. The issue depended on the evidence and involved no error of law.

The appeal was dismissed with costs subject to detailed assessment. Permission to appeal to the House of Lords was refused.

• Lands Tribunal: dismissed the appellant’s appeal from the Leasehold Valuation Tribunal and allowed the respondent’s cross-appeal, fixing the price at £2,395,000.
• Court of Appeal (Civil Division): dismissed the appeal by way of case stated with costs.