East End Dwellings Company Ltd v Finsbury Borough Council
| Jurisdiction | UK Non-devolved |
| Judge | Lord Porter,Lord Morton of Henryton,Lord Reid,Lord Tucker,Lord Asquith of Bishopstone |
| Judgment Date | 25 July 1951 |
| Judgment citation (vLex) | [1951] UKHL J0725-2 |
| Date | 25 July 1951 |
| Court | House of Lords |
[1951] UKHL J0725-2
Lord Porter
Lord Morton of Henryton
Lord Reid
Lord Tucker
Lord Asquith of Bishopstone
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause East End Dwellings Company Limited against Mayor, etc., of Metropolitan Borough of Finsbury, that the Committee had heard Counsel, as well on Tuesday the 12th, as on Wednesday the 13th and Thursday the 14th, days of June last, upon the Petition and Appeal of The East End Dwellings Company Limited, whose registered office is situate at 27 Chancery Lane, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal of the 20th of October 1950, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Mayor, Aldermen and Councillors of the Metropolitan Borough of Finsbury, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled. That the said Order of His Majesty's Court of Appeal, of the 20th day of October 1950, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Devlin of the 8th day of May 1950 thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords
This is an Appeal from an Order of the Court of Appeal dated the 20th October, 1950, allowing an appeal by the Respondents from an Order of the King's Bench Division which upheld an Award by an Official Arbitrator dated the 14th February, 1950. The facts upon which your Lordships' opinion is required appear in the award and may be stated in sufficient detail in the following terms. The Claimants are the Freeholders of two pieces of land situated in Collier Street and Killick Street in the Metropolitan Borough of Finsbury in the County of London. The portion of the land with which your Lordships are concerned is the site of certain dwellings for the working classes known as Winton Houses, which were completely demolished as a result of enemy action on the 24th June, 1944. None of the war damage had been made good at the date of the Notice to Treat hereafter referred to.
Winton Houses, before the occurrence of the war damage, comprised fifty-five working-class dwellings, and when it occurred all these fifty-five dwellings were let to and occupied by weekly tenants at rentals at or below the Statutory limits laid down by the Rent and Mortgage Interest Restrictions Acts, 1920 to 1939. There were no written tenancy agreements. All the dwellings were, by reason of their rateable values on the 6th of April, 1939, subject to the provisions of the Acts, and were indeed the subject of old control. Of the above mentioned fifty-five tenancies, forty-two were Statutory tenancies and thirteen were contractual tenancies, but it is agreed between the parties that this diversity is irrelevant to the question which your Lordships have to determine, and that the matter may be treated as one in which all the dwellings were the subject of Statutory tenancies.
On the 6th December, 1947, the Minister of Health confirmed a Compulsory purchase order by which the Finsbury Corporation were to acquire the land on which the dwellings had been built, and on the 28th July, 1948, the Corporation served a notice to treat on the claimants.
Subsequently, by a determination made on the 9th May, 1949, the War Damage Commission directed that the appropriate payment under the War Damage Act, 1943, in respect of the war damage would, apart from the Compulsory Purchase Order, be a payment of cost of works. In these circumstances an official arbitrator was appointed to assess the compensation payable to the claimants and in fulfilling his functions made the following award.
"I assess the compensation payable in respect of the said land on the assumption that, if the whole of the said war damage had been made good before the date of the said Notice to Treat, the rents legally recoverable in respect of the said dwellings would not be subject to the Statutory limits imposed by the Rent and Mortgage Interest Restriction Acts, 1920 to 1939, at the sum of £32,000-0-0 (Thirty-two thousand pounds)."
In making his award the Official Arbitrator has not stated what sum he would have given if he had assumed that the rent of destroyed dwellings if made good would be subject to control under the Rent Restriction Acts, but it is agreed that in those circumstances the figure which he would have awarded would have been £20,000.
In this state of facts the Appellants maintain that the award is correct and that they are entitled to receive £32,000 as compensation for the damage they have suffered.
In substantiation of this claim they rely Upon Sect. 53 of the Town and Country Planning Act, 1947.
The relevant wording is that contained in Subsection 1 ( a) and is as follows:—
"The value of the interest for the purposes of the compensation payable in respect of the compulsory purchase shall, subject to the provisions of this section, be taken to be the value which it would have if the whole of the damage had been made good before the date of the notice to treat."
There is no dispute as to the applicability of the section but its construction is the subject of acute controversy. The Appellants say that if the damage had been made good before the compulsory acquisition they would have had a block of flats free from any control imposed by the provisions of the Rent Acts notwithstanding that before their destruction the premises were thus controlled. They would have erected, they say, a new building, which would not necessarily have been identical with the old, but even if no change had been made the case of Ellis and Sons Amalgamated Properties, Ltd. v. Sisman [1948] l.K.B. 653 is an authority for the proposition that a house erected upon the old site may be identical in structure to, but is a different building from that previously standing on the site and therefore not subject to the same incidents as the old.
But, they add, the relevant sections of the Act of 1947 and other material Acts do not compel them slavishly to follow the lines of the old structure. They can alter its form, at any rate if they do not make too great a change. Moreover the whole development of the law relating to war damage shows, they maintain, an increasing tenderness for the owner of the damaged property and a desire to induce him to rebuild a house of the same type, but not necessarily subject to the same limitations. They point out that Sect. 57 of the Town and Country Planning Act 1944 (which provided for the assessment of the value interests in land by reference to 1939 values) was repealed by Sect. 50 of the Act of 1947, that Sect. 51 of the latter Act substituted assessment in accordance with the provisions of the Acquisition of Land (Assessment of Compensation Act of 1919—i.e., current market value—in place of 1939 values, that subsection (2) of that section and the Third Schedule permit an increase of the building by one tenth and in the smaller buildings possibly more and that Sect. 8 of the Act of 1943 contemplates the making of alterations and additions to and in certain cases omissions from the reconstructed building of features which were to be found in the former building and provides for appropriate variation in the compensation payable in respect of the altered edifice. As a result of these provisions the Appellants submit that in a case where a cost of works payment is the appropriate payment under the War Damage Act of 1943 (as it is in this case) and where a building has been totally destroyed and none of the damage has been made good, then the value of their interest in the destroyed property for the purposes of compensation in the case of compulsory purchase is to be taken to be the value which it would have had if the whole of the damage had been made good. That value, they say, would be the value of a building free from control.
This contention was resisted by the Respondents for a number of reasons. They maintained in the first place that by the wording of the section the sum payable was to be determined by the value of the building when "made good" and this expression connoted the re-erection of a building substantially identical with that destroyed, with all its incidents and limitation of value, and one incident or limitation was the control imposed upon the former building by the Rent Restriction Acts. The purpose of the relevant sections was, they said, to put the owner in the same position as if the former building had never been destroyed. You cannot, it was urged, split up the various aspects of a building: it must be regarded as a whole, with all its qualities, physical and economic, composing one entity.
Ellis' case ( supra) is, they maintain, inapplicable. Whether a house is controlled...
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