Written and recorded by Rachel Coyle, Barrister, The 36 Group
Hi. My name is Rachel Coyle and I'm a bison 36 Greek. I specialized in property, commercial housing and today from nine port in conjunction with data up in the case of Whitehall Court, London LTD. On Crown Estate Commissioners 2018. You know what else? Court appeal. Still a division 17 They're full. Today's webinar is going to be a world wind. Talk about this case. How? Said what it set out to achieve on specially how useful it can be or not be is it might be for you and your clients this is geared towards, though to operate in the industry are leasehold enfranchisement. So if you're not into any of facts than this probably isn't a weapon, are you because we are principally dealing with leasehold reform, Housing and Urban Development Act of 1993. So natural riches in that Please don't worry about what the remainder of this How much you really, really interested in it. So the case of Whitehall court under Limited I'm just going to first right here on a white wall. This was the case which, if you want to know what had gone out out from Waas little about interpretation of paragraphs read too big off schedule. 30 Off the leasehold reform Housing on Urban Environment Act of 1993 here and after, I will call it in 1993 Act. In essence, what was said was that assumption in that paragraph does not mean subject fat is unique in having no right to lease extension on that social price of all platinum. Not now that might excite you have contact with you, so I'm going to go through that a little bit. More details go. So what? The facts of this case will construct a little the past, its case relatively cynical parasite. Unusual day that is, that the head lease was owned by wife Court on it required payment off rents to a freeholder, which was worked out as a percentage of the head lessees Total income from the block. I booked a certain fix some when buying in the lost to the freehold on Headley's respectively, resulting from the ground off a new lease subject by was needed to know if there to treat at certain but the rent of a lot the other flats would indeed double by the year 2029. Reason for that is because the rents are all on extended. Nieces in the flat didn't sorry. The rents are all extended. Leases off plants in the building doubled in 2029 to take the A total income above the fixem. The question often not treated a certain that the rent of oil the tractor would double in 2029. Or should there be an allowance for potentially diminishing rents due to the future 1993 act future in these extension turning, then to slide number three. This is about the case off Monday. Now you may have heard the case of Monday. Hope you have, but I am going to go through it with you. But there is no I made reference to this is because in a court of appeal in the case that we are talking about what court it made reference the case of Monday because in Mundy, loosen, LJ rejected arguments about half dependent in relation to very similar assumptions in the context of calculating the marriage value and that they effectively precludes the valuer from having regard to any transactions in the real world concerning a least for the benefit of rights under the nine tonight. He was not very impressed with the arguments that the volume is required to assume a market in which no one has rights in the 99th react. So in the quote, no act world happy paraphrase it waas effectively night to rest about point. But in Monday, Wasson eagerly awaited case by these holders because they're hoping the courts with favor a method of working out. Shortly spying on his extension claim was generally favor tenants on the backs of Burundi. With this, the respondent finds the free hard with Dr Flats on the African was the leaseholder one of rats. The Africans sought to require new niece and flat pursuant to the 1990 the act where the parties couldn't agree the mouth of premium with spin applications made to first tribunal determination. However, in trying to calculate the perhaps length of the unexpired term of the lease on the buy of the applicants leaves the Africans by used what's called the parental model evaluation. The freeholders experts relied on relativity relativity grabs published by firms, so the application was joined the Children vacations, which these holders also sought to lie on the Corinthia model. Sorry Frontier Path Kenya model. The applications were transferred to the tribunal under Rule 25. The tribunal procedure her first, her travel or property rules 2000 30 and as a result, the open tribunal house up the path in your model was on right on. Reliable actually should not be used to future cases under the 1993 act. It noted that the application off the model relations the leaves off one of the flats produced a value well, the least on the assumption that there was no and franchise prints rights, which was higher than the agreed found you all the same lease within franchise men, right? I wish to travel there for conservative supreme. Possible the tribunal's recorded number of criticisms while Father Model made find the freeholders expert. However, in that case, it turns a deal to the Court of Appeal. It's a sign of a floor, the issues that were raised with this, whether to accept the path in your model valuations, a question of fact for your tribunal, said the Court of Appeal. That was awful evidence and tight in the tribunal to reject it, so I can leave the property violation. Usually proceeds by compassion with real transactions call to the appropriate adjustments being made or differences in practice, like vacation time, physical condition. There is nothing impossible in making adjustments reflect terms. What was the staff tree assumption? If only you could see also said that it could not be said that the effects of the relativity graphs commonly used by surveyors was such that the market had become corrupted. The vibe release in the market could not be used as a comparator, even if the markets have been influenced by the relativity graphs, though, that waas no reason to ignore riel transactions effectively. All the turns grounds for appeal were rejected because what the court ultimately decided was that compassion of releases within without rights to extend were legitimate and that the real world transactions, therefore, can be considered. It was happy that there's plenty of evidence one sustained criticism off the path on your model and in also is trying to return the point that the talents view that the markets corrupted, Waas stated. The last the market might not perfect. It wants the market, and that simply could not be ignored. So the court convert a path. Any model could not be used in future. And it has be noted that Law Commission has seen UPS by the government to consider a simplification of buying under the 1990 s. Lord Justice Louis and England E therefore rejected the tenants assertion that the comparison of the least with rights on one without rights was illegitimate and illegal. Back to the APP completed the Value annual Tribunal Mom regard to any leads for transactions in the court. Real world in summary and listen. Lj's view whether to accept or reject the park venue model was a question of fact for the other tribe, you know, and if you have the sustained criticism of the party model by the experts, called on behalf of the mammals, there's evidence that the tribunal to rely on and therefore no justice Louis in. If you look at Sly, Fine did not accept Carla. It's did not accept that car without J in Elk, Akdogan and Sport telly. In 2007 England World Court appeal several tradition that paid 1042 at Paragraph H seven, in addition was proposing, but it compresses the sale of at least with rights and one without was illegitimate. It's a matter of law, his judgment, Lord Justice Louis and concluded. Your travel was well within the scope of its functions. The ruling out future years to prompt a new model. It's all I'm not the invitation with not the invitation with government, the law commission is to consider the simplification of violations and react. He therefore ended with a quote. It may be, therefore a Holy Grail for one day, he found Close quote, because the question was or not, what next might go and intervene that time? Bernie, Mark, Sony in January This year, it is Johnny 2018. There's a possibility that it might do back. There was a suggestion that there might be a consultation paper floating around about the suggestion of lease extensions, whether Queen may quicker and cheaper. My understanding is that there is some kind of consultation of some description whether it deals with this particular point. I'm sure what I do know is that with a proper bar association, they were socially appetite ID well, people who would in the field of Franchising, at least what exceptions to come forward to express that Bettis opinions on how operates in practice for the purposes of consultation government. So it might be that that is part of half of what's being considered. That was just around about think about April this year. That said, I haven't seen anything yet exactly on that point. But it might be that is no absolutely necessary in view of my court, because one of the problems with Monday was that there were thousands of leaseholders who have brought that freehold value, and therefore what about very hard done by others could now come along and get a free holds on the cheap. There's also the suggestion that those three blocks of new freeholders who will have paid for valuable flat, who chose not to join in the claim at the time and would now look to keep investment when there's a bonus, do you want to extend leases. So by the time it came to the court appeal of game, in the case of White Hole, I thought they did consider this case of Monday the issue the court will have to determine. That's where the assumption extends not to the world, but at least to the building containing the talents flat has contended for by the respondent freeholder whether it applies only to the tenants. Flat, slightly different variation of Hyundai the island advanced by a parent in the case, uh, was that it was held. It held an intermediate leasehold interest. I want to acknowledge enough both constructions prosperous matter of language, the court unanimously held. That assumption extends the building contained turns flat that other qualifying tenants are to be treated. There's not having the 1993 act rights just briefly deal with the 1990 act. What's the most parts of it to remember? For the purpose of this case, it's important. Remember that part of the exercise to be carried out in order to arrive at the premium payable or an extended lease on the Chapter 2 19 3 acts is to buy London's interest in the total that both before and after the new leases granted and this is done with happens to a transaction. The open market with the bases on two assumptions interruptions of these one. But there is a cell by winning seller with quote. Neither the talents nor any owner off any int immediately told interest buying or seeking to buy. End quote. We're not this assumption existence of special perches in the market. Wouldn't Julie increase the vibration? The second assumption is that Chapter one, which concerns the rights of collected from franchise mint on chapter to the right extended lease body 1990 act quote, confers no right to acquire any interest in any premises containing the tenants flat or to acquire any new lease. Close quote. This is the so called quote no act assumption, which ensures that the open market valuation is not reduced by the compulsory acquisition right which the statute confers. They're turning to slide sixth, and the issue in light of all court is are set out in the first paragraph. But one thing to remember is that although the focus off the valuation is the land of interest in the talents, it does not follow that only the talent is to be assumed to have no act right paragraph three to being. Why is an assumption that Chapter one could both no right to acquire any interest in any promises, contain attendants flat. So the act right of other quiet, how intense the property must also be If you like, switched off otherwise right hard by other tenants would depress the value of the landlord's interest in the talents that it turned himself. Had zero Chapter one right? The question was, well, still this long, Which means any leads, for example, on the Express reference to only one spatial limitation, which is quote premises containing the tenants from Were these in turn it to capture chaps to rights of all the talents of blocks and blocks. How did being intended to confine the assumption this could have been achieved by reference To quote any new lease of the talents black. The arguments by the A pendant based on a comparison between the valuation provisions relating to collect from franchise mint and extended leases. But its Schedule six and 13 of the 1993 act respectfully were rejected. So submissions, in this case by the apparent would based upon, If you like your analogy with other composure, opposition cases where one is required to assume that no scheme will such a repetition applies problem. Waas would appeal, really didn't think much of this submission you brought to decided that they know after so Jin on these extensions extends to the block containing not just the flat alone I'm interested in, like this is the first case to burn, so we just turned out PowerPoint slide seven. You can see that that quarter appeal had to decide the extent to know act assumption. And he decided to the Crown estate commissioners favor and not to dismiss Depot on this issue from the tribunal I the last train below. But he also considered the issue of whether there had less he had to keep payments received from transactions entered into in breach of the covenant. When accounting for income received, the court should appeal. How that it did about the parties said, would have stood that where a breach of common occurred, the freeholder could weight the breach that I make the transaction lawful. And it was no blast inclusion in the ankle that was be taken into account in calculating the reps that the income happen obtained in a way not envisaged a lawful buy leasehold companies. So why hold courts a good case in that, at least now confirms what it apparently all probably knew about. The assumptions para about Tweetie be in the 1993 act Schedule 13. But it's also useful case because the fact that makes records to Monday and also I suppose you could say, clarified a little bit more about what legit nor justice loose in the same. Because the waitresses Jason was talking about setting the value in a no act. Well, it also saying about how you assess it in terms of at the real world. Of course, what Whitehall court does. He thought it was deciding the extent of the no actor assumption. So I suppose you could say went just that little bit further. And also it Monday. That was less about that, and more about which model to be a doctor. Should it be the peremptory a model? Or should it be a different kind off model such as the model of relativity? Well, the relativity violations will grass if you like. Um, but as largest leads inside, it may be that elderly ground will be found one day once the government turns around to simplify valuations. But ultimately, the white home court cases less about what model more about what assumptions backed into that model. So do you think that has assisted in some way? You know that you actually had a story of two cases. Really? In one. But both of them on I can say somewhat into linked. You can't really look one of your that. Why do I have been of assistance? Uh, do you remember that white local is like I say? The first case actually deals with the extent of the not to sumption paragraph to me to be So do you have any such cases? Do you like this? I know that this is the case that your thinking on and please do outside evaluation questions and hopefully you'll feel trapped. Today's Andi I have you found it useful From what time?
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