MR REGINALD HILL v HELIX HOUSING ASSOCIATION [2017] UKUT 238 (LC)

UPPER TRIBUNAL
LANDS CHAMBER
[2017] UKUT 238 (LC)Case No RAP/10/2016
Between
MR REGINALD HILLApplicantHELIX HOUSING ASSOCIATIONRespondent
Before
Martin Rodger QCProperty: 45B Knighton Park Road,, London, SE26, Martin Rodger QC, Deputy Chamber PresidentCatchwords: LANDLORD AND TENANT – Rent determination – fair rent – application of Rent Acts (Maximum Fair Rent) Order 1999 – power of First-tier Tribunal to review its own decisions – whether mistaken understanding of relevant facts a permissible ground of appeal – appeal allowed by consent – whether to remit for further consideration
[1]This appeal is brought by Mr Hill, the tenant of a flat at 45B Knighton Park Road, London SE26, against a decision of the First-tier Tribunal (Property Chamber) (“the FTT”) given on 14 March 2016 to register a rent of £345 per fortnight as the fair rent payable under his regulated tenancy. The FTT’s decision confirmed a determination of the rent officer following an application for the registration of a fair rent under Part IV, Rent Act 1977, made by Mr Hill’s landlord, Helix Housing Association. The decision was made by the FTT following a review of an earlier decision of its own made on 17 December 2015, for which it had given reasons on 21 January 2016, and in which it had allowed an appeal by Mr Hill against the rent officer’s decision and determined that the rent to be registered for the flat was £95.50 per fortnight.[2]The appeal was originally listed to be heard on 19 January 2017. Shortly before that hearing the Housing Association took legal advice on the issues raised in the appeal, apparently for the first time, and its solicitors wrote to the Tribunal conceding that the appeal should be allowed. They also invited the Tribunal to remit the proceedings to the FTT for re- determination. The outstanding issue in the appeal is therefore whether I should take that course or simply set aside the FTT’s decision of 14 March 2016 and reinstate its original decision. The capping of fair rents[3]The reason for the difference between the rent of £345 per fortnight registered by the rent officer and confirmed by the FTT in its March 2016 decision, and the rent of £95.50 per fortnight which the FTT found to be the fair rent when it gave its December 2015 decision, was the application of the Rent Acts (Maximum Fair Rent) Order 1999 (“the 1999 Order”).[4]Before 1 February 1999 there was no limit on the amount of any increase which could be determined by a rent officer or tribunal on an application for the registration of a fair rent. That position was altered by the 1999 Order, article 2(1) of which imposes a maximum increase, or “cap”, determined by the application of a formula in article 2(2) limiting the permitted increase to the rate of increase in the UK retail prices index since the previous registration plus 5%.[5]The circumstances in which article 2 applies are identified in article 2(6):
“Subject to paragraph (7), this article applies where an application for the registration of a new rent in respect of a dwelling-house is made after this Order comes into force and, on the date of that application, there is an existing registered rent under Part IV in respect of that dwelling-house.”
[6]Article 2(6) is subject to article 2(7) which provides that the cap will not apply in the following circumstances:
“This article does not apply in respect of a dwelling-house if because of a change in the condition of the dwelling-house or the common parts as result of repairs or improvements (including the replacement of any fixture or fitting) carried out by the 4 landlord or a superior landlord, the rent that is determined in response to an application for registration of a new rent under Part IV exceeds by at least 15% the previous rent registered or confirmed.”
The relevant facts[7]Mr Hill has been a regulated tenant of the Housing Association since at least 1979. His first regulated tenancy was of a flat at 7C Queens Thorpe Road which he occupied with his family and for which he paid a fair rent registered under Part IV of the 1977 Act.[8]By 2011 the flat in Queens Thorpe Road had fallen into poor condition and in that year Mr Hill moved temporarily to 45B Knighton Park Road (“the Flat”) to enable the Housing Association to carry out works of repair. The temporary removal later became permanent and on 13 July 2015 Mr Hill was granted a new tenancy of the Flat. It is not in dispute that this replacement tenancy was also a regulated tenancy to which the 1977 Act applies by virtue of section 34(1)(b) Housing Act 1988.[9]Although Mr Hill first moved to the Flat in 2011 it is necessary to say something about its history before that date. It had previously been occupied by a Mr Arnold under a regulated tenancy. Little is known about that tenancy beyond what can be deduced from an entry in the statutory rent register maintained by the rent officer. This shows that a rent of £59 per fortnight was registered for the tenancy with effect from 1 May 1992 following an application made by the Housing Association. The premises comprised in that tenancy are described in the register as a “self-contained converted flat … modernised comprising 4 room(s), 1 kitchen, 1 bath/wc, 1 wc”.[10]The effect of sections 44(1) and 45(2) of the 1977 Act is that where a rent is registered in respect of a dwelling house under Part IV of the Act, the rent recoverable under any regulated tenancy of that dwelling-house is limited to the registered rent until a new rent is registered or the previous registration is cancelled. Thus a registered rent applies to the dwelling-house, and not simply to the tenancy current at the time of the registration.[11]According to the records of the Housing Association Mr Arnold’s tenancy came to an end in 1993. The next tenant to occupy the Flat was an assured tenant under the Housing Act 1988. The registered rent had no application to that assured tenancy but no steps were taken by the Housing Association to cancel the registration, as could have been done under section 73(1A), Rent Act 1977. No doubt it was thought unnecessary to cancel the registered rent. The possibility that the flat might once again be occupied under a regulated tenancy must have appeared remote since no new regulated tenancies had been capable of being granted since the commencement of Part 1 of the Housing Act 1988 on 15 January 1989. If that was the assumption, it overlooked the possibility that the flat might come to be occupied by a person (such as Mr Hill) who was already a regulated tenant of the Housing Association in another flat who agreed to transfer his tenancy in circumstances where section 34(1)(b) rendered his new tenancy also a regulated tenancy. 5[12]When Mr Hill moved to the Flat from Queens Thorpe Road in 2011 the rent of £59 per fortnight registered in 1992 at the time of Mr Arnold’s tenancy remained the registered rent of the Flat. Despite that fact Mr Hill continued to pay the rent of £183.50 per fortnight which had been the registered rent for his previous home.[13]On 10 August 2015 the Housing Association applied to the rent officer to register a new rent for the Flat. In response to that application the rent officer inspected the Flat, held a consultation with Mr Hill, and on 6 October 2015 registered a rent of £345 per fortnight.[14]It is clear from the entry made in the rent register to record the new rent that the rent officer considered that the 1999 Order did not apply to the registration.[15]The rent register also contains a description of the flat which is somewhat different from the description included in the 1992 register. The Flat is now said to be a self-contained converted flat with full central heating comprising three rooms (rather than four), one kitchen and one bath/wc (with no mention of a separate wc). It appears that various works were carried out by the Housing Association after the end of Mr Arnold’s regulated tenancy in 1993, and subsequently, before the registration of the new rent in October 2015. Central heating was first installed in 2000 and at some point after that, but before 2011 when Mr Hill and his family moved in, the Flat was refurbished and altered from three bedrooms to only two. In 2012 the central heating was modified either by the provision of a new boiler or a new pump. In the same year Mr Hill installed new bathroom fittings. The appeal to the FTT and its original decision[16]On 26 October 2015 Mr Hill appealed to the FTT against the rent officer’s determination which had almost doubled his rent. In his letter of appeal Mr Hill made a number of comments about the circumstances in which he had moved from his previous accommodation and about the state of repair of the Flat. Understandably he did not make any reference to the effect of the 1999 Order but he did mention that the Flat has two bedrooms and not three, a point he had already made to the rent officer and which was now reflected in the updated rent register.[17]The changes made to the flat between 1992 and 2015 appear not to have been fully explained to the FTT by either party when it considered Mr Hill’s appeal. Mr Hill presumably did not know what condition the Flat had been in at any time before 2011. The Housing Association initially chose not to make any representations to the FTT and did not attend the inspection. In its statement of reasons given on 21 January 2016 the FTT explained that after the inspection it had sought clarification from the Housing Association of when the central heating had been installed and whether any repairs or improvements had been carried out to the property. It noted that the 1992 rent register referred to the flat as “modernised” but made no mention of the full central heating now present in the Flat. In response the Housing Association explained that the central heating boiler had been installed in 2000, and replaced in 2012 after Mr Hill moved in (although Mr Hill maintains that in 2012 only a new pump was provided). 6[18]In paragraph (g) of its January statement of reasons the FTT explained that the market rent of the Flat was £500 per fortnight. It then considered the effect of the 1999[19]When the Housing Association received the FTT’s reasons for its decision it wrote requesting permission to appeal. In its letter of 22 January 2016 it explained that at the time of the previous registration in 1992 the flat had had no central heating and repeated that this had been installed for the first time in 2000. Moreover, the Association said, before Mr Hill moved to the flat in 2011 it had been “completely refurbished and was changed from three to two bedrooms.”[20]When the FTT received the application for permission to appeal it issued a direction on 1 February 2016 recording that it intended to review its decision and staying the implementation of the whole of the decision until the outcome of that review. The FTT explained that it “had now received further evidence on the status of the repairs and improvements carried out” by the Housing Association and considered that that evidence might have a bearing on the rent payable by Mr Hill. It asked the Housing Association to confirm whether the 1992 registration had been cancelled (it had not) and allowed Mr Hill the opportunity to make any representations on the Housing Association’s contentions concerning the refurbishment of the Flat. Both parties then 7 made further representations. Mr Hill pointed out that the Flat had lost a bedroom since the 1992 registration and that only the pump (and not the whole boiler) had been replaced in 2012.[21]On 14 March 2016 the FTT issued a second decision, which it described as a “reviewed decision”. It stated that it had considered the Housing Association’s request for permission to appeal “and having reviewed its decision and being satisfied that a ground of appeal is likely to be successful, it hereby remakes that decision.” The FTT did not say what ground of appeal it considered was likely to be successful, nor had the Housing Association identified any error of law (or any other error) in the original decision when it had requested permission to appeal.[22]In paragraph 3 of the reviewed decision the FTT referred to the form submitted by the Housing Association when it requested a new rent and in which it had said that there had been no improvements or repairs since the last registration. It now appeared that the form had been completed incorrectly and that, contrary to the Housing Association’s original statement, refurbishment had indeed taken place. In the light of this new information the FTT saw no reason to revise its assessment of the open market rent of the Flat but included a new paragraph concerning the effect of the 1999 Order, as follows:
“Given the new information provided to the tribunal by the landlord, the tribunal now considers that the improvements made to the property since the last registration, would increase the registered rent by more than 15%, and therefore that the capping mechanism should not be applied. Taking 15% of the existing fair rent figure of £95.50 resulted in a figure of £14.32. Therefore it was necessary for the landlord to be able to demonstrate that the refurbishment would result in a rent that exceeded the existing fair rent by £14.32 for the cap to be misapplied. Taking the market rent for the property at £500 per fortnight, the Tribunal considers that the deductions to be made in relation to scarcity, and the different terms of the tenancy, as compared to a market rent, such as a decorating liability for example, would mean that a tenant would pay less than the market rent for the property. On the basis of the new information before it, the Tribunal considers that the fair rent set by the rent officer of £345 per fortnight is correct, and that this increase in value is the result of the improvements carried out. The Tribunal therefore should not have applied the cap to the fair rent, and it hereby confirms that rent with effect from 15 October 2015.”
This is also a puzzling passage. Taking it at face value it appears to suggest that the FTT considered that the increase in the fair rent from “the existing fair rent figure of £95.50” to its current level of £345 was wholly attributable to the improvements carried out to the Flat. That would be a surprising conclusion given the general increase in the level of residential rents since 1992, but in any event the existing fair rent was not £95.50 (which was the figure the FTT itself had determined in its January decision and which it was now engaged in reviewing) but was the £59 registered in 1992. The relevant comparison was therefore between 15% of that figure, £8.85, and the amount by which the fair rental value of the flat in 2016 was attributable to the improvements carried out since 1992. Despite that slip it is clear enough from this passage that the FTT was satisfied that the improvements themselves had increased the fair rent by more than 15% of the previous registered rent. On that basis the FTT’s conclusion that the cap imposed by the 1999 Order did not apply is perfectly understandable. 8 Mr Hill’s app[23]Mr Hill applied for permission to appeal the FTT’s reviewed decision. His request was refused by the FTT but granted by this Tribunal on two grounds.[24]The first ground of appeal is that it is arguable that the FTT exceeded its jurisdiction by basing its decision to review and set aside the original decision on new evidence adduced by the Housing Association in support of its application for permission to appeal. The FTT’s power of review is exercisable only where it is satisfied that a ground of appeal is likely to succeed. It is arguable that in the circumstances of this case there was no basis on which the FTT could conclude that a ground of appeal was likely to succeed. Nor had it considered whether it was open to the Housing Association to rely on the new evidence in support of its proposed appeal.[25]The second ground of appeal for which permission was granted was that it was not clear that there was any evidence before the FTT to justify the conclusion that the installation of central heating and other improvements had taken place since the previous rent registration in 1992, given that the property was described in that registration as “modernised”. At that stage the Housing Association had not responded to the Tribunal’s invitation to comment on Mr Hill’s application for permission to appeal, and I had not seen a copy of its letter to the Tribunal of 22 January 2016 in which it asserted (for the first time) that the flat had had no central heating in 1992. The FTT’s power to review its own decisions[26]The FTT’s power to review its own decisions is conferred by section 9 of the Tribunals, Courts and Enforcement Act 2007 (“the 2007 Act”), and is subject to the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (“the 2013 Rules”).[27]Section 9 of the 2007 Act provides for review (so far as material) as follows: 9 Review of decision of First-tier Tribunal(1) The First-tier Tribunal may review a decision made by it on a matter in a case, other than a decision that is an excluded decision for the purposes of section 11(1) (but see subsection (9)).(2) The First-tier Tribunal’s power under subsection (1) in relation to a decision is exercisable— (a) of its own initiative, or (b) on application by a person who for the purposes of section 11(2) has a right of appeal in respect of the decision.(3) [Tribunal Procedure Rules](4) Where the First-tier Tribunal has under subsection (1) reviewed a decision, the First- tier Tribunal may in the light of the review do any of the following— (a) correct accidental errors in the decision or in a record of the decision; 9 (b) amend reasons given for the decision; (c) set the decision aside.(5) Where under subsection (4)(c) the First-tier Tribunal sets a decision aside, the First- tier Tribunal must either— (a) re-decide the matter concerned, or (b) refer that matter to the Upper Tribunal. (6)-(8) [powers of Upper Tribunal] (9) This section has effect as if a decision under subsection (4)(c) to set aside an earlier decision were not an excluded decision for the purposes of section 11(1), but the First-tier Tribunal’s only power in the light of a review under subsection (1) of a decision under subsection (4)(c) is the power under subsection (4)(a). (10) A decision of the First-tier Tribunal may not be reviewed under subsection (1) more than once, and once the First-tier Tribunal has decided that an earlier decision should not be reviewed under subsection (1) it may not then decide to review that earlier decision under that subsection. (11) Where under this section a decision is set aside and the matter concerned is then re-decided, the decision set aside and the decision made in re-deciding the matter are for the purposes of subsection (10) to be taken to be different decisions.[28]The relevant tribunal procedure rules regulating the FTT’s power of review are the 2013 Rules, and specifically rules 53 and 55. So far as is material these provide as follows: 53 Tribunal’s consideration of application for permission to appeal(1) On receiving an application for permission to appeal the Tribunal must first consider, taking into account the overriding objective in rule 3, whether to review the decision in accordance with rule 55 (review of a decision).(2) If the Tribunal decides not to review the decision, or reviews the decision and decides to take no action in relation to the decision, or part of it, the Tribunal must consider whether to give permission to appeal in relation to the decision or that part of it. (3)-(5) … 55 Review of a decision (1) The Tribunal may only undertake a review of a decision— (a) pursuant to rule 53 (review on an application for permission to appeal); and (b) if it is satisfied that a ground of appeal is likely to be successful. (2)-(3) … 10[29]The effect of rule 55(1) is that the FTT may only review a decision if an application for permission to appeal has been made and if it is satisfied that a ground of appeal is likely to be successful.[30]In general appeals from the FTT to the Upper Tribunal are restricted to appeals “on any point of law arising from a decision other than an excluded decision” (section 11(1), 2007 Act). In certain types of case a somewhat wider right of appeal is provided by section 176B of the Commonhold and Leasehold Reform Act 2002 (these are cases in which rights of appeal to the Upper Tribunal from decisions of residential property tribunals and leasehold valuation tribunals were formerly conferred by section 175 of the Commonhold and Leasehold Reform Act 2002 or section 231 of the Housing Act 2004). But in rent cases the only right of appeal to the Upper Tribunal from decisions of the FTT is on a point of law.[31]It follows that in a rent case the FTT has power to review a decision only if it is satisfied that a ground of appeal on a point of law is likely to be successful. It is important for the integrity of the appellate process, including proper adherence to the restrictions which apply to rights of appeal from tribunals, that the power of review is not abused. It does not provide an opportunity for the FTT to set aside a decision and remake it on grounds which would not justify granting permission to appeal. A successful party is not to be deprived of the benefit of a favourable decision simply on the basis of a change of mind by the FTT, or even an appreciation that it has made a mistake, unless the mistake is one which is likely to provide grounds for a successful appeal.[32]It is also important to note the limitation imposed by section 9(1) of the 2007 Act that an “excluded decision for the purposes of section 11(1)” may not itself be the subject of a review. Such decisions are identified in section 11(5) and (so far as is relevant) comprise the following: (5) For the purposes of subsection (1), an “excluded decision” is— … (d) a decision of the First-tier Tribunal under section 9—(i) to review, or not to review, an earlier decision of the tribunal,(ii) to take no action, or not to take any particular action, in the light of a review of an earlier decision of the tribunal,(iii) to set aside an earlier decision of the tribunal, or(iv) to refer, or not to refer, a matter to the Upper Tribunal, (e) a decision of the First-tier Tribunal that is set aside under section 9 (including a decision set aside after proceedings on an appeal under this section have been begun), … This restriction on the scope of the power of review is itself the subject of the important qualification introduced by section 9(9) that a decision under subsection (4)(c) to set aside an earlier decision takes effect as if it were not an excluded decision for the purposes of section 11(1). Thus, for the purpose of considering an application for permission to appeal under section 11(1) a decision, taken on a review, to set aside an earlier decision under the power in section 9(4)(c) is not an excluded decision; it follows that such a decision may itself be the subject of an appeal under section 11(1). 11 The appeal[33]Shortly before the appeal was due to be heard the Housing Association’s solicitors conceded that the appeal should be allowed on either of two alternative grounds, which were explained in a letter to the Tribunal of 5 January 2017. The first ground was that rule 55(1) of the 2013 Rules required that before it could exercise its power of review the FTT must first be satisfied that a ground of appeal is likely to be successful, and it was conceded that no ground of appeal which was likely to succeed had been identified in the Housing Association’s letter of 22 January 2016. The second ground of the concession was that the FTT had failed to consider whether the Housing Association could rely on new evidence.[34]I am satisfied that these concessions were properly made.[35]The Housing Association’s letter of 22 January 2016 did not identify any error in the FTT’s January decision, and was limited to repeating facts of which the FTT was already aware and adding one (or perhaps two) new facts, which had not previously been asserted. The first was that the Flat had been completely refurbished before the assured tenancy commenced in 1993. This was contrary to the impression previously given to the FTT that no improvements had been undertaken since the last registration. The extent of the refurbishment was not explained, but the FTT already knew that the number of rooms had been reduced from four to three. The second new fact asserted was that the Flat had had no central heating at the time of the 1992 registration. It is not clear whether this really was new information and it may simply have confirmed what the FTT had assumed to have been the case as a result of the Housing Association’s answer referred to in paragraph 17 above.[36]Despite the very limited additional information supplied to it after its January decision the FTT obviously regarded the new material as transformative. I find it very difficult to understand why it took that view or what fact it considered to be of such significance that it demonstrated that the FTT’s previous view that the 1999 Order applied and capped the fair rent was no longer tenable. In any event, as has now been conceded, the new material did not provide any ground of appeal which was likely to succeed and could not therefore provide the basis for the FTT to exercise its power to review its January decision. To explain why the material was not sufficient to engage the power of review it is necessary to refer briefly to two decisions of the Court of Appeal on the scope of an appeal on a point of law from a specialist tribunal where the tribunal is alleged to have made its decision on the basis of a mistaken understanding of the relevant facts.[37]Railtrack plc v Guinness Limited [2003] EWCA Civ 188 was an appeal on a point of law from the Lands Tribunal, in which the issues were whether the Tribunal had misunderstood some complicated expert evidence, resulting in a double counting in its valuation and, if it had, whether that would justify setting the decision aside as disclosing an error of law. Carnwath LJ explained at paragraph [51] that the concept of an error of law in the context of appeals from tribunals was “not narrowly understood”:
“The Court can correct "all kinds of error of law, including errors which might otherwise be the subject of judicial review proceedings" (R v IRC ex p Preston [1985] 1 AC 835, 862 per Lord Templeman; see also De Smith, Woolf and Jowell, Judicial 12 Review 5th Ed para 15-076). Thus, for example, a material breach of the rules of natural justice will be treated as an error of law. Furthermore, judicial review (and therefore an appeal on law) may in appropriate cases be available where the decision is reached "upon an incorrect basis of fact", due to misunderstanding or ignorance (see R (Alconbury Ltd) v Secretary of State [2001] 2 WLR 1389, 2001 UKHL 23, para 53, per Lord Slynn).”
[38]In E v Secretary of State for the Home Department [2004] EWCA Civ 49 the Court of Appeal gave more detailed consideration to the circumstances in which a decision reached "upon an incorrect basis of fact" may be the subject of an appeal from a specialist tribunal on a point of law. The appeals in that case were from the Immigration Appeal Tribunal from whose decisions appeal lay to the Court of Appeal on a point of law; it is not necessary for the limited purpose of determining the remaining issue in this appeal to consider the decision in detail. After an extensive review of differing views expressed in previous cases, at paragraph [66] Carnwath LJ (delivering the judgment of the Court) explained that in the Court’s view “the time has now come to accept that a mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law”. At paragraphs [68] to [89] the Court went on consider the circumstances in which new evidence might be admitted on an appeal to prove that a tribunal had been mistaken in its appreciation of the facts. Much of that consideration was specific to the immigration and asylum context but the Court emphasised the general importance of adhering to Ladd v Marshall principles i.e. the principle that new evidence will not be admitted on an appeal where the material relied on could and should have been made available to the tribunal at the time of its original decision. It was said that exceptional circumstances might require some departure from those principles where the interests of justice required it, but as unfairness was the basis of the principle that a mistake of fact could provide grounds for an appeal on a point of law “a claimant who had the opportunity to produce evidence and failed to take it may not be able to say that he has not had “a fair crack of the whip”.”[39]In this case it was clearly impossible for the Housing Association to satisfy the Ladd v Marshall principles, and it made no attempt to do so. The limited information it supplied to the FTT was all within its own knowledge and could have been supplied before the January decision. There was therefore no basis on which the FTT could admit the evidence and rely on it as establishing the existence of a ground of appeal on a point of law sufficiently strong to confer jurisdiction to review the January decision and set it aside.[40]The review decision was therefore one which the FTT did not have jurisdiction to make and must itself be set aside, as the Housing Association’s solicitors have helpfully conceded. That has the result of reinstating the FTT’s January decision that the cap applies and that the fair rent is limited to £95.50 per fortnight.[41]Having made these concessions the Housing Association nevertheless invites me now to send the proceedings back to the FTT for it to reconsider its original decision. The FTT was obviously not satisfied with its January decision but in my judgment I would not be justified in taking the suggested course unless I was satisfied that there was some basis on which that decision could properly be set aside. The fact that the Housing Association chose not to 13 participate actively in the original proceedings would clearly not be enough in itself to justify allowing it a further opportunity to persuade the FTT that the 1999 Order should not apply to the first registration of a new rent for the Flat since 1992.[42]For the reasons I have already given the grounds on which the Housing Association originally sought permission to appeal when it challenged the January 2016 decision do not provide grounds for a successful appeal. Nevertheless, it is quite clear to me that something went wrong in the FTT’s consideration of this case. In paragraph 18 above I have set out the key passage in the FTT’s original decision in which it explained its reasons for disagreeing with the decision of the rent officer that the cap did not apply. I have already explained the difficulty I have in understanding what the FTT had in mind, but it seems to me that, whatever it intended, the passage of its decision in which it explained its conclusion discloses a clear error which vitiates the decision.[43]It seems to me most likely that the FTT assumed that only work carried out during the current tenancy was relevant to the dis-application of the cap under article 2(7) of the 1999 Order. What other reason could there have been for seeking to establish whether the boiler had been installed during the previous tenancy, or for disregarding it and focussing only on the replacement of the previous boiler in 2012? If that was indeed what the FTT thought it was clearly wrong. Article 2(7) applies whenever there has been a change in the condition of a dwelling-house as result of repairs or improvements (including the replacement of any fixture or fitting) which has the result that the new fair rent determined in response to the current application exceeds the previous registered rent by at least 15%. All repairs or improvements carried out since the previous registration are therefore material.[44]The other possibility is that the FTT understood (erroneously) that no improvements at all had been carried out since the last registration and that central heating had first been installed before 1992. I doubt that was what the tribunal meant at all since it had already recorded that it had been informed that the boiler had been installed in 2000, and it did not suggest anywhere in its decision that it believed the flat had previously had the benefit of central heating.[45]If the FTT did not approach its task on the basis of the mistaken understanding I have suggested in paragraph 43 above I find it impossible to understand what it meant by the critical passage in its January decision. For that reason it is necessary to set the decision aside on the basis that it has not been explained with sufficient clarity to enable the parties to understand why the FTT reached the conclusion that despite the installation of central heating since the 1992 registration, the statutory cap applied. In its very recent decision in Llepojevic v University of Cambridge Accommodation Service [2017] UKUT 213 (LC) which concerned the standard of reasons required in cases of this nature, the Tribunal referred to the explanation given by Henry LJ in Flannery v Halifax Estate Agencies Limited [2000] 1 All ER 373, 377J, for insisting that a court or tribunal give clear reasons for its decisions, namely that “fairness surely requires that the parties – especially the losing party – should be left in no doubt why they have won or lost.” In my judgment the FTT’s January 2016 decision fell short of providing an explanation which left the parties in no doubt why the statutory cap applied. 14[46]I am therefore satisfied that it is appropriate to remit this case to the FTT for redetermination, as requested by the Housing Association. In the circumstances fairness requires that the redetermination be by a differently constituted tribunal. Martin Rodger Deputy Chamber President 7 June 2017

Order

“Originally, it appeared that the rent officer considered that the Order did not apply to this property because of the addition of central heating, which the rent officer considered would increase the rental value of the existing registered rent (£59 per fortnight) by more than 15%. Having sought the confirmation from the landlord that the central heating had been installed during the previous tenancy, and that according to the RR1 form submitted by the landlord, no repairs and improvements had been carried out to the property since the last registration, this Tribunal considers that the maximum fair rent order must apply, and that the replacement of a boiler in 2012 is not a significant repair or improvement when the property was previously centrally heated. The Tribunal therefore applied the Order to arrive at the rent of £95.50 per fortnight.” It is notable that the FTT placed weight on its understanding that the only significant item of work of which it had been made aware, the installation of central heating, had occurred during the previous tenancy and that no repairs or improvements had been carried out since the previous registration (in 1992). The only other work it referred to was the replacement of the boiler in 2012, which had occurred during Mr Hill’s tenancy but which it did not consider to be significant. It is not very clear what the FTT had in mind in this passage but one possible interpretation is that it approached the application of the 1999 Order on the assumption that only work carried out during the current tenancy was relevant to the dis-application of the cap under article 2(7). Another possible reading is that when it referred to “the previous tenancy” the FTT meant the previous regulated tenancy, and that it took the statement in the RR1 form that no improvements had been carried out since the last registration to signify that the central heating had been installed before 1992, but that would be inconsistent with the fact that the boiler had been installed in 2000, as the FTT recorded in paragraph (e) of its reasons. The FTT’s reviewed decision

Cited in 1 later judgment