ALBYN PROPERTIES Ltd v KNOX
| Jurisdiction | Scotland |
| Judgment Date | 22 December 1976 |
| Docket Number | No. 11. |
| Date | 22 December 1976 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION.
Landlord and tenantRegulated tenancyRent Assessment CommitteeDetermination of fair rentFactors to be consideredRent (Scotland) Act 1971 (cap. 28), sec. 42 (1) and (2).
Administrative LawRent Assessment CommitteeDuty to give reasons for decisionExtent of dutyTribunals and Inquiries Act 1971 (cap. 62), sec. 12 (1) and (5).
The Rent (Scotland) Act 1971 enacts by sec. 42, as amended by para. 18 of Schedule 1 to the Rent Act 1974 (cap. 51):"(1) In determining for the purposes of this Part of this Act what rent is or would be a fair rent under a regulated tenancy of a dwelling-house, regard shall be had, subject to the following provisions of this section, to all the circumstances (other than personal circumstances) and in particular to the age, character, locality and state of repair of the dwelling-house (2) For the purposes of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwelling-houses in the locality on the terms (other than those relating to rent) of the regulated tenancy is not substantially greater than the number of such dwelling-houses in the locality which are available for letting on such terms."
The Tribunals and Inquiries Act 1971 enacts by sec. 12 that, where any such tribunal as is specified in Schedule 1 to the Act gives any decision, "it shall be the duty of the tribunal to furnish a statement of the reasons for the decision if requested, on or before the giving or notification of the decision, to state the reasons."
The question of the fair rent of certain dwelling-houses came before the relevant Rent Assessment Committee. The landlord, who was seeking to uphold the rent officer's assessment, led evidence that a market rent approach was unhelpful because no true comparative material was available. Rents in the area had "plateaued" by too rigid adherence to the comparative method, which resulted in rents failing to keep up with inflation. A fair rent should be calculated by taking the open market value of the subjects reduced by 50 per cent to allow for scarcity and applying a percentage of 8 per cent which, with a sum to cover outgoings, would represent a fair return on the reduced capital value. The committee fixed a fair rent substantially lower than that fixed by the rent officer. Their note did not explain why they disagreed with the rents fixed by the rent officer and with the evidence of the skilled valuer led by the landlords. It did not state the facts on which they proceeded and did not disclose what method of valuation they decided was appropriate, nor how any method was applied to the facts to produce their resultant figures. It merely proceeded on the basis that the comparable method was preferable and that any formula based on capital value was at most an ancillary process.
Held (1) that the statutory obligation to give reasons is designed to make clear to the parties and to the Court the basis on which the committee's decision was reached and that they reached their result in conformity with the requirements of the statutory provisions and the principles of natural justice; (2) that the committee's note must therefore state (i) what facts they found to be admitted or proved; (ii) whether and to what extent the submissions of parties were accepted as convincing or not; and (iii) by what method or methods of valuation applied to the facts found their determination was arrived at; and (3) that the committee's note had failed to meet these requirements.
Further held that in fixing a rent which is fair to both landlord and tenant the probable return on a landlord's capital is an important factor, and no particular method of valuation, provided that it is lawful and reasonable, is preferable as a matter of law to any other.
Albyn Properties Limited appealed to the Court of Session under section 13 of the Tribunals and Inquiries Act 1971 against a decision of the Rent Assessment Committee for Aberdeen dated 28th May 1976, relating to premises at 4, 6, 8, 10 and 16 Whitehall Place, Aberdeen, tenanted by Miss W. A. Knox and others.
The facts are stated in the note of the Rent Assessment Committee and in...
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