The Court of Appeal held that only part of the cost of these services properly fell to be paid for by tenants alone. The rent levels were, therefore, unlawful and the application for judicial review succeeded.

The Court of Appeal dismissed the appeal. The agreement with United Utilities was not ultra vires. The variation of the tenancy agreement was effective even though Rochdale’s preliminary notice did not spell out that breach of the proposed variation could lead to eviction for non-payment of the water charges. Rix LJ stated that there was ‘substantial compliance’ with Housing Act 1985 s103(b). There was a ‘general understanding’ that non-payment could lead to eviction. The variation did not breach the Unfair Terms in Consumer Contracts Regulations 1999. No significant imbalance was created by the insertion of the varied term, and there was nothing contrary to the requirement of good faith. Finally, there was no error in the judge’s exercise of his discretion to make a suspended possession order.

See now Consumer Rights Act 2015 Part 2.

The Court of Appeal held that, although, in fixing rent levels under Housing Act 1957 s111 (now Housing Act 1985 s24), councils could make only ‘such reasonable charges as they may determine’, the consideration of the rent level could (but did not have to) take into account the relative financial circumstances of tenants and rate-payers. Wandsworth’s rent charges were not ‘Wednesbury unlawful’.

Newey J found that Southwark was a re-seller within the meaning of the 2006 Order and, unlike in Lambeth LBC v Thomas (1998) 30 HLR 89, CA (Lambeth LBC v Thomas) and Rochdale BC v Dixon [2011] EWCA Civ 1173 (Rochdale BC v Dixon), Southwark was not acting as Thames Water’s agent. The 2006 Order defines a re-seller as being any person, other than a relevant undertaker – ie a supplier of water and sewerage services under the Water Industry Act 1991 such as Thames Water – and who provides to a Purchaser, ie a person who occupies any dwelling and who buys from a re-seller any water or sewerage services, a supply of piped water or sewerage service which a Water Undertaker has supplied, directly or indirectly, to the re-seller. In this case, the 2000 agreement pointed towards Southwark being a re-seller. The agreement contained no reference to tenants being liable to pay water or sewerage charges to Thames Water, to Thames Water authorising Southwark to collect such charges on its behalf, to Southwark owing any duty of skill and care or to Southwark having any obligation to invoice tenants or in respect of complaints from them. Moreover, the commission paid to Southwark was nothing of the sort; it simply reduced what Southwark had to pay Thames Water and was not conditional on a service being performed. Equally important was the fact that until 2010 it was Southwark who had been liable to pay Thames Water for water charges; it could not therefore have been Thames Water’s agent during that time as its tenants were not liable to pay Thames Water.

HHJ Bird QC, sitting as a Deputy High Court Judge, decided, as a preliminary issue, that the water charges were payable (and therefore in arrear) because Rochdale were not a water reseller within the meaning of the Water Resale Order 2006 as the agreements provided that Rochdale was to provide ‘collection services’ for United Water. Unlike Jones v Southwark, Rochdale was not under a contractual obligation to pay for services provided by United Water.

The House of Lords found that the notices were valid. Lord Neuberger stated that these rent review provisions, like any other contractual term, had to be interpreted by reference to the particular words used in their particular context. Although Riverside’s argument that time was not of the essence when considering them was misconceived, the notion of a moveable rent review date, whereby Riverside could increase the rent once at any time during a year from the first Monday in June, provided that it first gives 28 days’ notice, appeared sensible and fair. The House of Lords construed the relevant clauses in the tenancy agreement as meaning that Riverside was entitled to increase the rent once a year on 28 days’ notice and that the notice could take effect any time on or after the first Monday in June.

The Court of Appeal allowed the appeal and dismissed the claim for possession. Arden LJ said that the rent review clause was inconsistent with the intention of the parties to grant an assured tenancy. In order to establish whether an agreement was intended to have its stated effect it was necessary to look at the substance and reality of the transaction entered into by the parties. For that purpose, the court could look at all the relevant circumstances, including the conduct of the parties after the creation of the tenancy. The rent of £25,000 could not be justified as a market rent and there was no explanation why, if it had genuinely intended that the rent of £25,000 should be payable, it was not immediately demanded on the review. If the clause was not in substance or reality a provision for the fixing of rent, but a provision for the landlord to recover possession other-wise than in accordance with the mandatory scheme, then the clause would amount to a contracting out of the statutory scheme for assured tenancies and would not be enforceable. That was a question of fact, which on the evidence as a whole was established. The clause was a mere device, which enabled the landlord, effectively when it chose, to recover possession. In those circumstances it was unenforceable as an unlawful contracting out of the Housing Act 1988. Pill LJ agreeing said that the clause was ‘inconsistent with and repugnant to the statutory purpose’ and that ‘to permit enforcement of [the clause] would be to defeat the main purpose of the agreement.’

The Court of Appeal allowed the appeal. There is nothing in the wording of section 13(1)(b) which limits the exclusion to rent review clauses which provide for the increase of a fixed sum, as opposed to clauses that provide for unspecified amounts to be arrived at in a particular way. Both kinds of rent review clause fall within section 13(1)(b). Second, estoppel cannot give a court or statutory tribunal jurisdiction that a statute says it is not to have. The jurisdiction of the RAC to determine the rent could have arisen only where notice had been required under section 13(2). Where that requirement has not been satisfied, it is not possible to confer jurisdiction. Statutory jurisdiction cannot be reduced or enlarged by the consent of the parties, or by estoppel.

The Court of Appeal dismissed a second appeal. The effect of Local Government Housing Act Sch 10 paras 9 and 11 was to provide a means of fixing the initial rent. Their function was limited to enabling the rent to be fixed at the outset. Once the initial terms, including rent, were fixed, those paragraphs were spent, and it was open to the landlord to serve a notice and start the procedure for fixing a new rent under the provisions of Housing Act 1988 s13. Sections 13 and 14 only allow improvements made by a tenant under a previous tenancy of the same premises to be disregarded, if that tenancy was an assured tenancy (s14(3)). Sections 13 and 14 provide a complete code for the notices to which they applied and there was no warrant to read in a further principle deduced from Sch 10.

A petition for leave to appeal to Supreme Court was dismissed: [2010] 1 WLR 2880.

The Court of Appeal dismissed her appeal. The RAC was right to hold that in the context ‘refer to’ connotes ‘receipt by’. Dictionary definitions tend to support that natural meaning where the question is one of referring a matter for adjudication. It would be highly inconvenient for the RAC if it had to consider whether it had jurisdiction over disputes about which it had no notice. The fact that there was no discretion to extend time or ‘escape clause’ for the tenant does not lead to the conclusion that ‘refer’ means ‘send’. The subsidiary legislation prescribing the form of tenant’s application could not be used as an aid to interpretation. The RAC has no jurisdiction to consider a tenant’s application to determine the rent if it is not received before the date specified in the landlord’s notice.

Upholding an Administrative Court decision, the Court of Appeal held that:

The tenant appealed unsuccessfully. Although the notice was not in the current prescribed form, it was ‘substantially to the same effect’ (Assured Tenancies and Agricultural Occupancies (Forms) Regulations 1997 reg 2). A section13 notice giving the landlord’s address as a post office box number or care of an agent, where the agent was named and its address given, was perfectly valid. There was also nothing in the use of an annualised figure for rent or the ‘wrong’ date which had the effect of rendering the form not ‘substantially to the same effect’ as a form in the correct form. There was no basis for confusion. Second, the word ‘service’ in sections 8 and 13 was an ordinary English word connoting delivery of a document to a particular person. It carried no implication that the document had to be read, understood or indeed known by the recipient to have been delivered as long as delivery was to the correct address. Such meaning did not change according to the capacity of the intended recipient. In addition there was nothing to put the landlord on notice in its dealings with the tenant that he was incapable of managing his own affairs by reason of mental disability. The position under contract was that such notice of mental disability was neces-sary in order to invalidate a contract. There was no reason why a more rigorous rule should apply to service of a notice on a tenant.

Irwin J allowed the appeal. He said:

Second, it was ‘a fair implication’ from the way the RAC expressed its decision that it had made no adjustment for security of tenure. Security of tenure was an advantage for the tenant. To proceed on the basis that security of tenure was of no value to a tenant was not appropriate or rational. Irwin J declined to rule on the possible effect of the value of security of tenure taking the rent over £25,000 which would abrogate security of tenure (Housing Act 1988 Sch 1 para 2, but see now the Assured Tenancies (Amendment) (England) Order 2010 SI No 908). He quashed the RAC decision and remitted the matter for rehearing before a different RAC.

The appeal was dismissed by Stanley Burnton J. Section 14 does not require the RAC to perform the two-stage process suggested by the tenant. There were no true comparable properties to assist in ascertaining the open market rent. Reasons given must deal with the substantial points in controversy between the parties. The reasoning of the committee in this case was sufficient. Had proper valuation evidence been submitted, a more quantitative approach to the giving of reasons would have been required.

Burnett J allowed the appeal. On expiry of the fixed term, a statutory periodic tenancy came into being. Section 13 provided a statutory scheme governing the increase of rent. Section 13(1) drew a distinction between two different categories of assured periodic tenancy. Section 13(1)(a) was concerned with statutory periodic tenancies other than those which could not be an assured tenancy due to Sch 1 paras 11 and 12. Section 13(1)(b) was concerned with any other assured periodic tenancies. In respect of the latter category, the statutory scheme expressly did not apply where there was a contractual rent review clause binding on the tenant. The natural reading of section 13, given the contrast between the subsections, was that a rent review clause in the original assured tenancy did not oust the mechanism for increasing rent found in section 13 once that assured tenancy had been superseded by a statutory periodic tenancy (para 9). In view of section 5(3), the rent review clause in the original assured tenancy, purporting to govern the position once it had been superseded by a statutory periodic tenancy, was of no effect. In those circumstances, unless there is agreement, the landlord must use the notice provisions of section 13(2) (para 10). Having found that the tenancy was a statutory periodic tenancy, the panel fell into error in considering that section 13(1)(b) was in play rather than section 13(1)(a). The case was remitted to the panel to determine the rent (para 11).

Auld J held that Housing Act 1988 s14(2)(c), when stating that RACs should disregard ‘any reduction in the value of the dwelling-house attributable to a failure by the tenant to comply with any terms of the tenancy’ referred to default by the current tenant only. They were obliged to take into account the current condition of the premises, even if that had been brought about by the default of the tenant’s father before his death.

Davis J rejected the appeal. A complaint that the RAC had not given proper weight to the comparables put forward was misplaced. The RAC had not discounted Park Lane’s comparables, but had been eminently justified in taking into account the fact that (a) there had been selectivity in its use of a limited internet search and (b) the comparables were in respect of rents advertised rather than in fact obtained. Second, the RAC’s local knowledge had not been used in an impermissible way. It had not used its local knowledge alone, but in addition to all the other evidence and representations. Its approach had been proper. Third, the RAC had given adequate reasons. It had clearly considered all the evidence. It had not plucked a figure out of the air but had given a reasoned decision of 39 paragraphs.

Wyn Williams J dismissed the appeal. Housing Act 1988 s14 does not preclude the RAC from taking account of any material which it considers relevant. It did not act unlawfully when it took into account the rent which a comparable property let under an assured shorthold tenancy might be expected to command in the open market. However, if he was wrong in that conclusion and there was an error, it was advantageous to Ms Pimlott because a tenant under an assured periodic tenancy enjoys greater security of tenure than a tenant under an assured shorthold tenancy. He concluded that the RAC had not erred in law in its determination.

Kay J held that the RAC could assess the rent without reference to the £25,000 limit. Housing Act 1988 s14(1) required the RAC to assess the rent at which ‘the dwelling-house concerned might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy’. Parliament had not intended the References to Rating (Housing) Regulations to introduce a rent cap. If the rent assessed by the RAC was in excess of £25,000, the assured tenancy would be at an end.

McCombe J dismissed her application. He accepted submissions of counsel for the RAC that there is no duty to accept valuation evidence by reference to comparables and that there is no necessity for the RAC to research such material if none has been presented to them by the parties. Second, the RAC’s reasoning can only be reasoning that meets the cases of the parties as advanced, but it can use ‘that imponderable element of personal experience of the Committee members when the evidence is other-wise wholly unsatisfactory’. Finally, it was clear that Ms Innes’s evidence about other rents was considered because the RAC expressly said that it had considered all the submissions by the parties. It gave valid reasons during the course of arguments why such material was of limited value. In the light of the tenant’s submissions it was not surprising that the RAC, having taken into account the oral material submitted to it, thought that there could not be any sensible alternative but to use its own experience, to reach the result that it did.

The tenants appealed under Tribunals and Inquiries Act 1971 s13. Goldring J allowed their appeal. The RAP should not have applied a discount de-capitalised in the way that they did. It should simply have taken as the value of the house its current value, less the relevant improvements carried out. The matter was remitted to the RAP.

In November 2011, the freehold interest in the school house was transferred to the Official Custodian of Charities and, in January 2012, the custodian granted a head lease of premises including the school house to the Earls High School, for a term of 125 years. In July 2015, agents acting for the school served a notice proposing a new rent of £520 per month. It referred to Housing Act 1988 s13(2). The guidance notes on the form notified Mr Chouhan that if he did not accept the new proposed rent he was entitled to refer the notice to the First-tier Tribunal (FTT). Mr Chouhan did so, but the FTT concluded that the tenancy was not an assured tenancy to which section 13 applied because it contained a contractual provision for varying the rent (s13(1)(b)) and accordingly it had no jurisdiction to consider the proposed rent increase. Mr Chouhan appealed.

After referring to Helena Partnerships Ltd v Brown [2015] UKUT 0324 (LC) and Contour Homes Limited v Rowen [2007] EWCA Civ 842, Martin Rodger QC, Deputy President, dismissed the appeal. When the interest of the landlord was transferred to the Custodian of Charities and subsequently became vested in the school, the tenancy agreement ceased to be a secure tenancy and became an assured tenancy. Section 13(1)(b) excluded from the ambit of the statutory rent determination procedure any assured tenancy which contained a contractual rent review mechanism binding for the time being on the tenant. Martin Rodger QC stated, ‘It is not possible for parties, by agreement, to confer jurisdiction on a court or statutory tribunal which Parliament has said is not to have jurisdiction in the circumstances of their case’ [22]. The purpose of referring to section 14 in the clause relating to rent increases was that ‘it should be used as a contractual yardstick to regulate the level of rent increases and to prevent the landlord from requiring an increase above the level of the rent which would be determined by a rent assessment committee (or now by the FTT) “if” that body had jurisdiction’ [25]. The only way in which the tenant could challenge the new rent was in proceedings before the county court as an application for a declaration that the rent specified in the notice exceeded the rent which a rent assessment committee would determine for the premises if it had jurisdiction under section 14, or by declining to pay the increased rent and defending any subsequent possession claim.

Cf with Helena Partnerships Ltd v Brown [2015] UKUT 0324 (LC), in which Upper Tribunal held that an agreement which recorded the right of the landlord to serve a notice under section 13 to increase the rent did not take effect as a contractual provision for determining the rent as its intention was merely to inform the tenant of his statutory rights.

Upholding Mr Preston’s appeal, HHJ Walden-Smith (sitting as a High Court judge), held that the panel had failed to go through the process required by Housing Act 1988 s14 – which was to determine the value of the property in its current state, to determine the value of the improvements and then determine what the value should have been disregarding the improvements. Having failed to carry out the process, the panel failed to give the parties an opportunity to understand its underlying reasoning. Taking into account its own general knowledge without explaining it to the parties and allowing them to comment on it was contrary to natural justice. Accordingly, the matter was remitted for a new decision.