Cadogan & Anor v Chehab

A tribunal must disclose all relevant evidence and submissions to every party before relying on them, particularly where material is supplied after the oral hearing. A Rent Assessment Committee must value security of tenure as an advantage to the tenant. It must assess all relevant elements and factors affecting rent and must not impose an artificial statutory cap. The court left open the difficult question whether rent must be reassessed where valuing security of tenure itself takes the rent above the threshold at which that security ceases to exist.

The appellants, a landlord and its estate company, appealed against a Rent Assessment Committee’s determination of the rent for an assured tenancy at £22,500 per annum. The Committee had relied on a supplemental report from the tenant’s surveyor which had not been served on the appellants. The appeal also challenged the Committee’s treatment of security of tenure and its apparent approach to the £25,000 statutory threshold. The central issues were procedural fairness and the proper valuation of an assured tenancy under section 14 of the Housing Act 1988.

1. Disposition. The appeal was allowed. The Rent Assessment Committee’s decision was quashed and the matter was remitted for a complete re-hearing before a differently constituted panel.
2. Procedural fairness. Evidence or submissions which are germane to the decision and relied on by a Rent Assessment Committee must be disclosed to all parties who may be affected. If relevant material is submitted after the oral hearing, it should ordinarily be sent directly to the other side. Where the Committee permits material to be submitted through it, the Committee assumes responsibility for ensuring that every party receives it. Reliance on undisclosed material breached natural justice.
3. Security of tenure. Security of tenure is an advantage to a tenant while it persists. The Committee was therefore required to assess the rent including the value of that security, and then consider whether the resulting valuation created any difficulty. It could decide whether to address the factor separately or as part of the overall valuation, depending on the circumstances. Treating security of tenure as having no value to the tenant was inappropriate and irrational.
4. No artificial cap. The valuation must take account of every element and factor affecting the rent. No artificial limit could be imposed by reference to the statutory threshold. The court agreed with the approach in R v London Rent Assessment Panel ex parte Cadogan Estates, [1998] QB 398.
5. The court declined to decide whether a further reassessment is required where the value of security of tenure itself takes the rent above £25,000, thereby removing that security by operation of law. That issue required fuller argument.

• High Court (Administrative Court): The appeal against the Rent Assessment Committee’s decision dated 22 June 2009 was allowed. The decision was quashed and the matter remitted for a complete re-hearing before a differently constituted panel.
• Rent Assessment Committee: Determined the rent under section 14 of the Housing Act 1988 at £22,500 per annum.