Yeoman's Row Management Ltd v Chairman of the London Rent Assessment Committee

On a second appeal, permission should be granted only where the proposed appeal raises an important point of principle or practice, or there is another compelling reason to hear it. A rent assessment committee has a broad evaluative function when determining whether improvements caused a specified increase in rent under article 2(7) of the Rent Act (Maximum Fair Rent) Order 1999. It may start with market rent and estimate the market rent without the improvements. It need not begin with the previously registered fair rent. The assessment is ordinarily a matter for the committee’s judgment and may be challenged only on public law grounds such as irrationality or inadequate reasoning. Where the statutory cap makes any remaining issue academic, permission may properly be refused.

The landlord challenged a Rent Assessment Committee determination registering a fair rent of £10,039.50 for a flat in London. The committee had assessed the market rent at £20,000, applied a 30% scarcity deduction, and concluded that improvements to the building had increased the rent by only 5%, so that the cap under article 2(7) of the Rent Act (Maximum Fair Rent) Order 1999 applied.

Ouseley J rejected the challenge concerning the cap, although he considered the committee’s approach to scarcity erroneous. The landlord renewed an application for permission to appeal, raising the construction and application of article 2(7), and the proper approach to quashing and remitting a decision where the cap applied.

1. Application dismissed. The proposed appeal did not raise an important point of principle or practice, and there was no other compelling reason for the Court of Appeal to hear it under CPR 52.13.
2. The committee was entitled to assess the effect of improvements by starting with the market rent and asking what the market rent would have been without those improvements. There was no legal requirement to use the previously registered rent of £8,700 as the starting point. The choice of methodology and the assessment of the proportion attributable to improvements were matters for the committee’s judgment.
3. The committee’s conclusion that the improvements accounted for only 5% of the increase was not irrational. It was entitled to rely on the evidence, its knowledge and experience, and its assessment of the relative significance of the improvements and other factors, including changes in management. The landlord bore the burden of showing that article 2(7) disapplied the cap.
4. The committee did not have to identify and quantify every cause of the rise in rent before deciding whether the cap applied. Its reasons were sufficient on this issue. The criticisms concerning inconsistencies in the treatment of rent increases did not establish an error of law.
5. The different order made in Spath Holme v North Western Rent Assessment Committee [2001] EWHC Admin 541 arose in particular circumstances and did not create an important point of principle or practice. Any further consideration of scarcity was academic because the cap applied.

Lady Justice Arden agreed with Cresswell J’s reasons and would dismiss the application. The formal order was: application dismissed.

• Court of Appeal (Civil Division): renewed application for permission dismissed under CPR 52.13.
• Queen’s Bench Division: Ouseley J’s order dated 19 April 2002 rejected the challenge concerning the maximum fair rent cap, although he criticised the Rent Assessment Committee’s approach to scarcity.
• London Rent Assessment Committee: determined and registered a fair rent of £10,039.50 on 10 August 2001.