S F HOLDINGS INC (A Company) v THE TRUSTEES OF THE EYRE ESTATE LRA/33/2002

UPPER TRIBUNAL
LANDS CHAMBER
LRA/33/2002Case No LRA/33/2002
Between
S F HOLDINGS INC (A Company)ApplicantTHE TRUSTEES OF THE EYRE ESTATERespondent
Before
P R Francis FRICSVenue 48/49 Chancery Lane, London, WC2A 1JRDate 2 July 2003Hearing 19 May 2003Property: 64 Avenue Road, London, NW8Catchwords: LEASEHOLD ENFRANCHISEMENT – price payable for freehold of house – unimproved value – comparable sale - market movement between valuation date of subject property and sale of comparable - Leasehold Reform Act 1967 section 9 – appeal dismissed
[1]This is an appeal by S F Holdings Inc (“the appellant”), the lessee of 64 Avenue Road, London, NW8 (“the subject property”) against a determination of the Leasehold Valuation Tribunal for the London Rent Assessment Committee (“the LVT”) determining the price payable for the freehold interest in the sum of £1,864,250 under the provisions of the Leasehold Reform Act 1967 (“the 1967 Act”). The appellant’s case at the hearing was that the premium should be £1,412,933 whereas the freehold landlord, the Trustees of the Eyre Estate (“the respondents”) accepted the LVT’s determination.[2]Mr Edwin Johnson, counsel for the appellant, called Mr Gavin Buchanan BSc (Est Man) MRICS, a director of Colliers CRE, Consultant Surveyors, and Mr Neil Stone, Managing Director of Bargets (Estate Agents) Ltd of Regents Park. Mr Timothy Dutton, counsel for the respondents, called Mr Julian Briant BA MRICS, surveyor to the Eyre Estate and a partner in Cluttons, Chartered Surveyors of St John’s Wood. Both Mr Buchanan and Mr Briant have considerable experience in leasehold enfranchisement matters and Mr Stone specialises in the sale of residential properties in the vicinity of the subject property.[3]The parties agreed a statement of facts for this hearing from which, together with the facts agreed before the LVT and the evidence, I find the following facts.3.1 The subject property comprises an extended detached 1930s style red-brick house with accommodation on 3 floors, located on a plot of 1,756 sq m (0.43 acres) on the north-east side of Avenue Road close to the junction with Elsworthy Road in St John’s Wood. The effective floor area of the original house (excluding bathrooms and circulation space) was 360 sq m (3,875 sq ft). The Gross internal Area (“GIA”) was 600 sq m (6,458 sq ft). The effective floor area of the existing house is 443 sq m (4,768 sq ft) and the GIA is 740 sq m (7,965 sq ft).3.2 A lease was granted in 1938 for 92½ years from December 1936 (expiring 24 June 2029) at a rent of £225 per annum. The appellant gave notice of its desire to acquire the freehold, pursuant to section 9(1C) of the 1967 Act on 28 March 2001, this being accepted by the freeholder. That date is thus the valuation date for the purposes of determination of the price.3.3 The value of the tenant’s improvements in terms of their impact on the unimproved freehold vacant possession value are agreed at £650,000.3.4 The parties have agreed that the marriage value should be shared equally between the parties, and the appropriate yield is agreed at 6.5 per cent.3.5 It is agreed that the principal comparable to be used in assessing the freehold value of the subject property as at the valuation date is 46 Avenue Road, a detached 6 bedroom, 4 reception room period house in a less desirable part of the street sold for £7,000,000 in November 2001. It had an effective internal area of 337 sq m, a GIA of 601 sq m and a site area of 1,170 sq m. For the purposes of adjustment, the following are agreed: Condition Nil 3 Style - £800,000 Location - £1,000,000 House size + £800,000 Site size + £800,000 Planning permission - £100,000 Market movement Mar – Nov 2001 NOT AGREED[4]Thus, the sole issue for my determination is what, if any, adjustment should be made for movement in the market between the valuation date and the date of the sale of 46 Avenue Road in order to determine the unimproved freehold value. The LVT accepted the respondent’s case that there had been no movement, and determined that element of the valuation at £6,050,000 (after the agreed deduction of £650,000 for tenant’s improvements). Appellant’s Case[5]Mr Buchanan said that it was the appellant’s case that the LVT was wrong to reject his evidence that, between March 2001 (the valuation date) and November 2001 when 46 Avenue Road was sold for £7,000,000, market values for this type of house had increased by about 7 per cent. The LVT had accepted the respondents’ expert’s view that the events of 11 September 2001 (the terrorist attacks on the World Trade Centre in New York) had served to wipe out any increase that had taken place between March and September leaving the position static. In Mr Buchanan’s view, drawn from his own professional experience of the St John’s Wood market, the opinions expressed by local estate agents and the indices prepared by the major London firms, particularly FPD Savills, there was no evidence to support any proposition that there was a decline in market values during the period in question. It was accepted that the market was static for a short period after 11 September, but the unease in the market was short lived.[6]The LVT’s statement that “the effects of 11 September on markets of all kinds is well known, and it is the tribunal’s view that it was on the high value properties where the impact was greatest” was not accepted. Mr Buchanan said that the market for very high value properties (over £5m) was a rarified one where buyers were individuals of high net worth and tended to be less concerned about the level of the stock market, interest rates or the state of the economy. The fact that the comparable upon which both of the experts were relying was sold for less than the asking price after it had been on the market for a long time was not, as the LVT had concluded, evidence of a fall in the market. There was no evidence, he said, to support the LVT’s speculative comment that “the vendor of 46 Avenue Road would have been relieved to be able to sell at the same price as he might have obtained in March”. It was more likely that the property had been over-valued when it first went on the market, as it was following a substantial reduction in the asking price that the house was sold, the market eventually having caught up. This was supported by the letters that the previous owner, a Mr Hersham, had written to Mr Briant setting out the background to the sale. He had received offers between £6m and £6.8m whilst it was being marketed by FPD Savills, Knight Frank and Aston Chase during the course of 2001, but none of these were accepted. In October of 4 that year the person who had originally made an offer through Bargets in 2000 re-appeared at a figure of £7m and a sale was concluded in November at that price.[7]Mr Buchanan said the sales history of 10 Gilston Road, London SW10 supported his view that the market for high value properties was not adversely affected during the period in question. This substantial house in south-west London had received extensive publicity following a sale by the celebrity Chris Evans to the singer George Michael in November 2001 for £7,250,000. It had been acquired by Mr Evans in March 2001 for £6,850,000 and, it was understood, no work had been carried out in the intervening period. The price information had been confirmed by the Land Registry.[8]There were also the indices, and Mr Buchanan said he had relied principally upon the FPD Savills (PCL North) Flats and Houses version which showed an increase between March and December 2001 of 5.9 per cent in its area of influence which included St John’s Wood. He said he normally used that index, although it was acknowledged that it did include flats which might distort the results to some extent. The PCL Houses index showed a fall of 0.7 per cent but this may not reflect, he said, the market for extra high value houses as it included properties in all price ranges. Knight Frank’s index showed a 12.6 per cent increase for prime central London properties for the whole of 2001, with the Hampstead area (including St John’s Wood) showing 8 per cent. Chesterton’s inner London house price research showed an increase of 1.6 per cent between April and September 2001, 5.5 per cent between September and December and 10.1 per cent for the whole year. Cluttons London Residential Property Commentary indicated an annual increase in 2001 of 6.1 per cent for Central London properties, but only 1 per cent for those in the Central North-West area that included St John’s Wood.[9]It was evident, Mr Buchanan said, that there was a wide difference of opinion over the extent of the market movement during the relevant period, but in broad terms it acted as a useful indicator of trends from which, together with the opinion of Mr Stone, he had concluded that a rise in value between March and November of £500,000 (or 7.14 per cent) fairly reflected the market movement. The unimproved freehold value of £6,050,000 should be reduced by this amount to leave a value of £5,550,000. This resulted (there being no adjustment to any of the other figures) in an enfranchisement price of £1,572,032 as set out in his valuation [Appendix 1].[10]In respect of the evidence of the sales of two houses in Carlton Hill produced by Mr Briant, Mr Buchanan said they could not be seen as in the same market, having achieved prices in the £2m range. They were terraced houses in poor repair, one having been bought by an owner-occupier and the other acquired by a developer who would have built a profit element into his bid, thus making comparisons unreliable.[11]In cross-examination, Mr Buchanan accepted that the housing market indices could only ever be a guide to support the experienced surveyor or estate agent’s ‘gut feeling’ about the value of any given property and, particularly in respect of high value properties, they were not particularly reliable. It was suggested that he had been selective in the indices he had chosen, those relating to houses rather than houses and flats showing, in many examples, 5 a fall in value. In response, Mr Buchanan said that he had used FPD Savills PCL North because that was the one he normally used and felt it gave the best flavour of the market. Even though that showed a 5.9 per cent rise, he still felt his 7.14 per cent was appropriate despite there being no evidence from the indices or otherwise of such an increase.[12]He did not accept that a property in south-west London could not be considered a good comparable against a house in St John’s Wood – his use of it acting as an indication of the fact that the high-value market was protected from factors that affect the market generally.[13]Mr Stone said that although he was unable to point to a particular property that had been sold and re-sold at the relevant dates, it was his view as an agent active in the sale of high-value properties in St John’s Wood, that the market rose by a factor of about 7 per cent between March and November 2001. Although he accepted that the events of 11 September caused the market to come to a halt for a few weeks, the pessimistic predictions in the press and media failed to materialise, and by October his own agency was once again active. He said there was no reliable evidence to support the respondents’ contention that any price rises that occurred in the run up to 11 September were eroded by an equivalent fall between then and November, resulting in a status quo in terms of rises in values over the relevant period. He was not a believer in the indices that had been referred to, and Mr Stone said that it was certainly his perception that no falls took place.[14]He had been the original agent instructed on the sale of 46 Avenue Road, taking it onto the books in 2000 at an asking price of £7,750,000 which was, in his view, substantially more than it was worth and represented the vendor’s ‘inflated aspirations’. His own advice would have been to ask between £6.5m and £7m. Mr Stone said that he was surprised when the eventual purchaser came along at an early stage with an offer of £7.7m but, in his view, he soon realised he had offered too much and used a dispute over the exclusion of some fixtures and fittings as an opportunity to withdraw. The 3 agents who were then instructed to market the property at the reduced price of £7.25m received offers up to £6.8m which supported his initial thoughts on value. However, the eventual purchaser, who had remained on Bargets’ books, renewed his interest in October 2001 and made a revised offer of £7m which was accepted.[15]In response to a comment from me to the effect that the range of values he had indicated as appropriate for an asking price for 46 Avenue Road was the same as the amount in dispute in this matter (£500,000), Mr Stone said that he would normally be a little more specific when advising a vendor, but in the overall scheme of things, £500,000 was not a huge amount, and fell within an acceptable valuation range of 8 to 10 per cent. Respondents’ Case[16]Mr Briant said that it was the respondents’ case that any rise that had taken place in the market between March and September 2001 was eroded following the events of 11 September, and the LVT was right to accept the evidence that he had presented to that effect and to make no adjustment for market movement over the period March to November 2001. In addition to what he said at the LVT, Mr Briant said he was aware of the consecutive sales 6 of two virtually identical properties in Carlton Hill by the Eyre Estate at the relevant time, and had analysed his own firm’s indices and those of FPD Savills.[17]17 Carlton Hill had been sold by Cluttons in July 2001 at £2,250,000 and No 23 sold in December 2001 for £2,157,500. This represented a fall of 4.5 per cent between July and December and provided, he said, a good indicator of what was happening in the market at the time. It was also reliable because as the properties were virtually identical no adjustments were necessary. He accepted in cross-examination that these were very much cheaper properties and that they required total modernisation which included a requirement to convert them from flats to houses for single family occupation. However, he said that when they were modernised they would be worth at least £3m which was closer to the value of the subject property. He also acknowledged that No 23 was the subject of two Repairs Notices that had been served by the City of Westminster under the provisions of section 189 of the Housing Act 1985 (as amended), but did not accept that these would act as a deterrent to a purchaser, both properties needing completely stripping out and refurbishing as a single house. Neither did he think that the fact the two properties were, initially, being offered on different bases (one freehold and one long leasehold) had any effect on the ultimate prices achieved.[18]Whilst accepting that No 17 was sold to an owner-occupier, and No 23 was sold to a developer, Mr Briant said that in a rising market it was not unusual for builders to pay the same as, or more, than private individuals. He also accepted that as both properties had been sold by a ‘best and final bid’ process, it was possible that the successful bid could have been substantially higher than the one beneath, this serving to distort the comparison.[19]Mr Briant accepted that the Gilston Road property did indicate evidence that, in respect of that particular property, the market had risen.[20]The Cluttons Prime Central London Index (for all property types) taken as a whole showed a rise of 4.5 per cent between March and September 2001 followed by a fall of 2.3 per cent to 1 December 2001 (an aggregated result of plus 2.1 per cent). The Prime Central London Family Houses Index gave a rise of 3.3 per cent March to September and a fall of 4.2 per cent to December giving an aggregated fall of 1 per cent over the period in question. Central North-West London – Family houses indicated a rise of 5.7 per cent to September and a fall of 10 per cent from then to December, indicating an aggregated fall of 4.9 per cent.[21]Mr Briant said that the most appropriate FPD Savills index was Prime Central London as it differentiates between houses and flats, although it does not analyse at sub-market level for, for instance, different types and values of house. That showed a rise of 3.8 per cent between March and September 2001 and a fall of 4.5 per cent to December, giving an aggregated decrease of 0.7 per cent over the relevant months. However, in the same index, flats performed very much better than houses, showing an aggregated rise of 3.9 per cent over the same period. Thus, Mr Buchanan’s use of PCL North (indicating a rise of 5.9 per cent) could well be distorted by including, as it did, flats. 7[22]In cross-examination, Mr Briant accepted that the FPD Savills indices were not an analysis of actual transactions, but were based upon regular re-valuations of hypothetical properties opined by the staff of the agencies involved. Similarly, Cluttons indices covered the whole price range of the various types of property included, and did not therefore reflect the vagaries of particular market sectors.[23]Mr Briant said that whilst his analyses of what he thought was the most appropriate index showed a market fall of 4.9 per cent, he felt that the parity that had been adopted by the LVT was correct in the light of the all the evidence taken in the round, and that was also what his own professional experience told him. He also said that if this Tribunal was to find in favour of the appellant, the differential between the unimproved leasehold value and the unimproved freehold value would be out of line with those that prevailed from an analysis of Cluttons’ settlements for the Eyre Estate under section 9(1A) and 9(1C) of the Act. An appropriate relativity for a lease with 28.25 years unexpired would be in the region of 51 per cent, the LVT determined a relativity of 55.3 per cent but Mr Buchanan’s figure produced a relativity of 60.3 per cent, that being 18 per cent above the ‘trend line’ shown on Cluttons graph. This added further weight, he said, to the respondent’s argument that the growth in the market that was being claimed just did not exist. However, in cross-examination, Mr Briant accepted that the difference between an average relativity level of 55 per cent (accepting that if the graph produced had been drawn accurately, this would have been the figure rather than the 51 per cent stated) and the claimed 60 per cent was within an acceptable range.[24]For these reasons he contended that the LVT’s determination was correct, and the appellant had failed to make out a case that it was wrong. The appeal should, therefore, be allowed, and the enfranchisement price should be confirmed at £1,864,250. Submissions[25]Mr Dutton said that there was no evidence before me upon which I could possibly conclude that the LVT was wrong to determine that there was no movement in the market between March and November 2001. There was little difference between the achieved prices for the two virtually identical properties in Carlton Hill, and this, together with the fact that the circumstances in respect of each sale were slightly different, meant there was nothing upon which I could form a conclusion that that evidence proved a continuing rise in the market. There was also no reliable evidence in respect of the sales history of 46 Avenue Road from which I could confer a value at the earlier date.[26]The indices referred to by both experts were ‘all over the place’, and Mr Stone produced no evidence, other than his own personal opinion, to support the contended for rise of 7 per cent. In short, Mr Dutton said, there was nothing in the evidence from which I could conclude the LVT’s decision was wrong, and the appellant had failed to discharge the burden of proof that it was obliged to do. In any event, the difference between the parties of £500,000 was within the acceptable margin of error in valuation terms, as was the relativity between unimproved freehold and leasehold values, and so even if I were to accept the appellant’s arguments, there were no grounds to overturn the LVT’s decision. 8[27]Mr Johnson said that the appellant accepted that the correct approach to an appeal from the LVT was as set out in Wellcome Trust Ltd v Romines [1999] 3 EGLR 229 and that it must prove, upon the evidence called before this Tribunal, that the LVT’s decision was wrong on the sole issue upon which this appeal was based.[28]He said it would be unrealistic to expect proof to be provided on the basis of two consecutive sales of the same or absolutely identical properties and an element of professional judgment had to be exercised in interpreting figures by those best placed to make it. There was no concrete evidence before the LVT upon which it based its decision, and it expressed a preference for Mr Briant’s opinion. There is no reason why I should not accept the opinions of Mr Stone and Mr Buchanan who were, in the appellant’s opinion, those best placed to express them.[29]However, in this case there was one example of the same property being sold at both dates, that being the ‘celebrity’ purchase and sale of the house in Gilson Road, SW10. Mr Briant accepted that this evidence did, indeed, indicate a market continuing to rise in respect of that particular property. There were also sales of almost identical properties (17 and 23 Carlton Hill), but Mr Briant’s evidence had been shown to be unreliable, and there was nothing in that from which a conclusion either of a rise or fall in the market could be made.[30]The indices provided helpful support to the professional opinion of the valuer, and in this case the FPD Savills (PCL North) was the most appropriate, showing a market continuing to rise with an increase of 5.9 per cent over the relevant period. Mr Stone, who was the local agent with local experience thought the increase was 7 per cent, and his evidence was that upon which I should place the most reliance.[31]The respondents’ arguments in respect of relativity were flawed, as was evidenced by the inaccuracy in the settlement graph that Mr Briant produced and, as was the case in Langringer v Cadogan Estates (2001) LT LRA/46/2000 (Unreported) reliance upon such evidence should be treated with caution.[32]It was the appellant’s case that, on balance, the evidence was sufficient for me to determine that the burden of proof had been discharged, and that I should find that the LVT was wrong to conclude there had been no rise in the market over the relevant period. Decision[33]The question I have to answer is this: has the appellant provided sufficient evidence for me to conclude that it has discharged its burden of proof that the LVT’s decision was wrong? Mr Johnson referred to Wellcome Trust where the Member, Mr P H Clarke FRICS said, (at 233):
“4. If this tribunal is satisfied on the evidence before it that the decision of the leasehold valuation tribunal is wrong, then it must allow the appeal; otherwise, it must dismiss the appeal. Because the right of appeal is unqualified, save as to the identity of 9 the appellant and compliance with the time-limit, it would clearly never be right, other than in some wholly exceptional circumstances, for this tribunal to dismiss an appeal despite being satisfied that the decision of the leasehold valuation tribunal is wrong…”
[34]In coming to a conclusion, there are six points to consider: the main comparable – 46 Avenue Road; the Carlton Hill properties; the indices; the Gilston Road property; relativity and margin of error, and I take each one in turn.[35]Firstly, 46 Avenue Road. The LVT said in its decision (on the question of market movement) (at para 13):
“13. Market Movement. Mr Buchanan said that 46 Avenue Road had been on the market for well over 12 months and that the original asking price, presumably in the third quarter of 2000 had been £7,750,000. This was later reduced to £7,250,000, and the property was eventually sold for £7,000,000. The effects of the events of 11 September 2001 on markets of all kinds is well known, and it is the tribunal’s view that it was on the high value properties where the impact was greatest. The tribunal was not provided with any specific evidence to show the trend of such values in the fourth quarter of 2001, but Mr Buchanan asked the tribunal to accept that the comparable would have increased in value by £500,000 i.e., about 7 per cent, between March and November 2001. It appears to the tribunal that this is tantamount to saying that in March 2001, the vendor of 46 Avenue Road would have been prepared to sell for £6,500,000. The tribunal does not accept this. Given the state of the market in November 2001, the tribunal considers that the vendor of 46 Avenue Road would have been relieved to be able to sell at the same price as he might have obtained in March. Accordingly, the tribunal accepts Mr Briant’s view and makes no adjustment in this respect.”
Since the LVT hearing more information has been obtained regarding the background to the sale, and, with the evidence from Mr Stone, whose firm achieved the ultimate sale of No 46, I can see nothing that persuades me the LVT’s conclusion was wrong. I accept Mr Stone’s view that the eventual purchaser, when making his first offer of £7.7m in 2000, probably realised he had offered too much, but I gained the impression also that there may have been some acrimony between the vendor and the potential purchaser which could have been a contributory factor in his decision to withdraw.[36]The reduction in the asking price to £7.25m in March 2001 appears to vindicate Mr Stone’s opinion that the initial price was far too optimistic, and the offers received of between £6m (which may well have been speculative) and £6.8m indicate to me that the revised asking price was closer to the mark. The fact that the original party came back, presumably having been unable to find anything he liked as much, at £7m in October 2001 does nothing to suggest to me that Mr Hersham would have been prepared to sell for £6.5m in March of that year. I agree with the LVT’s finding in this respect. If he had been so prepared, why then did he not accept the offer of £6.8m that had been made through one of the other agents? Although any such assumption must be speculation, in my judgment Mr Hersham had a base price that he was not prepared to go below, and that price must have been £7m. As to Mr Stone’s opinion that there was an approximately 7 per cent rise in values 10 over the relevant period, whilst I accept the fact that he is an estate agent working actively in the St John’s Wood marketplace, he produced no actual evidence to support that view.[37]Mr Briant referred to the consecutive sales of two properties in Carlton Hill to support his view that the market actually fell between July and December 2001. However, it became evident in cross-examination that not only were those properties very different to the subject property, and even when modernised would have been worth less than 50 per cent of the subject property’s agreed improved value of £6,700,000, but the circumstances of the sales were also very different. This evidence does not, in my judgment, indicate either a rise or a fall in the market, and I can give it no weight.[38]I agree with the experts that the use of indices to indicate a market trend can only ever be used in support of true transactional market evidence, and can only give a very general guide. It was clear to me that the indices for the period in question were, as Mr Dutton said, ‘all over the place’ and I accept Mr Briant’s evidence that the relatively strong performance in the sale of flats could well have distorted the figures in the FPD Savills PCL North index (as acknowledged by Mr Buchanan in cross-examination). Indeed, the PCL Houses index showed a fall of 0.7 per cent but Mr Buchanan dismissed that one as possibly not reflecting the market for high value houses. Mr Briant’s use of the Cluttons indices showed a downward trend towards the end of the year, and the Prime Central London Family Houses index (which was probably the most appropriate although that, again, included a wide range of properties) showed an aggregate fall of 1 per cent over the year.[39]On balance, I do not think that the widely varying results of the various indices can be relied upon to show anything other than a very general trend. That trend, in my judgment, supports the respondents’ argument that there was little if any overall rise in values for family houses in the period from March to November 2001, and certainly nothing to indicate a rise, as suggested by Mr Buchanan, of 7.14 per cent.[40]The only evidence which, to me, could suggest the continuing upward rise in the value of high value properties was the sale of 10 Gilston Road, SW10. However, this was a one- off example, and the specific circumstances of the sales was not investigated or confirmed. On the strength of all the other evidence and arguments this one comparable is insufficient, in my view, to support a conclusion that the LVT was wrong to find as it did.[41]I think Mr Briant accepted, on the question of the relativity between leasehold and freehold unimproved values, that Mr Buchanan’s figure of 61 per cent was within an acceptable margin, but on the basis of my conclusions it is a matter with which I do not need to deal.[42]This leaves margin of error. It was accepted that a margin of error, in valuation terms, of between 8 and 10 per cent is acceptable, and £500,000 represents 8.2 per cent. However, that, in itself, is not in my judgment an acceptable argument for not allowing the appeal if, indeed, I had found Mr Buchanan’s evidence convincing. If I had done, and I had concluded that the LVT was wrong to determine that there had not been any price inflation, I would 11 have to allow the appeal. But, as will be evident from what I have said above, I have not been persuaded by the appellant’s evidence, and thus conclude that the LVT was not wrong to determine as it did.[43]The appeal therefore fails, and it is dismissed. The enfranchisement price for the freehold of the subject property is confirmed at £1,864,250.[44]What I have said so far concludes my determination of the substantive issue in this appeal. It will take effect as a decision when the question of costs is decided, and at that point, and not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions on costs in writing, and a letter accompanying this decision sets out the procedure. DATED 9 June 2003 (Signed) P R Francis FRICS ADDENDUM ON COSTS[45]Submissions on costs have been received from the respondent. On the basis that the appeal was wholly unsuccessful, and there being no special reasons why it should depart from the normal rule that costs follow the event, it was submitted that the respondent should receive the whole of its costs.[46]I have received no submissions from the appellant, and having dismissed its appeal entirely, I determine that the appellant shall pay the respondent’s costs in the appeal, such costs if not agreed to be the subject of a detailed assessment by the registrar. DATED 2 July 2003 (Signed) P R Francis FRICS 12 APPENDIX 1 THE LEASEHOLD REFORM HOUSING AND URBAN DEVELOPMENT ACT 1993 DATE: 14th October 2002 PROPERTY: 64 Avenue Road, London NW8 VALUATION DATE: 28th March 2001 LEASE DETAILS DATE 19th July 1938 TERM 921/2 years from 25th December 1936 EXPIRY DATE 24th June 2029 UNEXPIRED TERM 281/4 years GROUND RENT £225 per annum (fixed) VALUES UNIMPROVED FHVP £5,550,000 UNEXPIRED TERM £3,345,000 LESSEE’S IMPROVEMENTS (£650,000) VALUE OF FREEHOLD PRESENT INTEREST TERM GROUND RENT £ 225p.a. x YP 28.25 years 61/2% 12.78 _________ £2,875 REVERSION FHVP (less improvements) £5,550,000 x PV 28.25 years 61/2% 0.1688 _________ £939,840 Lessors interest £939,715 MARRIAGE VALUE FHVP (less improvements) £5,550,000 Less Lessor’s Present Interest £939,715 Lessees Interest (less improvement £3,345,650 £1,264,635 Marriage value 50% Marriage Value £632,317 TOTAL £1,572,032