CHRISTIAN WALLIS v HUTCHBY & COLLUMBELL LIMITED 115 Broadwater Street East, Worthing, West Sussex BN14 9AP [2025] UKUT 179 (LC)

UPPER TRIBUNAL

LANDS CHAMBER

[2025] UKUT 179 (LC)

Case No LC-2025-126

Between

CHRISTIAN WALLISApplicant

HUTCHBY & COLLUMBELL LIMITED 115 Broadwater Street East, Worthing, West Sussex BN14 9APRespondent

Before

Martin Rodger KC Deputy Chamber President

Date 11 June 2025

Catchwords: LANDLORD AND TENANT – RENT DETERMINATION – assured periodic tenancy – whether tenancy granted on terms that rent was fixed – reasons – insufficiency of fact finding – whether rent determined by FTT payable – s.14(7), Housing Act 1988 – appeal allowed in part

Introduction

[1]This appeal is against a decision of the First-tier Tribunal (Property Chamber) (the FTT) given on 23 January 2025 on a reference by the appellant, Mr Wallis, of a notice of increase of rent under section 13(2), Housing Act 1988 served on him by the respondent, Hutchby & Collumbell Ltd, his landlord, in respect of his tenancy of 115 Broadwater Street East, Worthing.

[2]The weekly rent payable under the tenancy had previously remained unchanged since 1999 and the FTT increased it from £100 a week to £156 a week with effect from 25 November 2024. It later granted Mr Wallis permission to appeal and the appeal has been determined on the basis of the parties’ written submissions.

[3]An appeal against a tribunal’s decision setting a new rent for an assured tenancy is an appeal on a point of law only, under section 11 of the Tribunals, Courts and Enforcement Act 2007. The Housing Act 1988 is not one of the statutes listed in section 176A(2) of the Commonhold and Leasehold Reform Act 2002 for which section 176B(1) provides a wider right of appeal. For the appeal to succeed I must therefore be satisfied that the FTT made an error of law in reaching its decision.

The proceedings in the FTT

[4]Where a dwelling is let under an assured periodic tenancy under the Housing Act 1988, the landlord is entitled to obtain an increase in rent by giving the tenant a notice of increase under section 13(2) proposing a new rent. Provided the notice is in the prescribed form, the rent payable under the tenancy will increase to the proposed amount from the date suggested by the landlord unless the tenant refers it to the FTT (section 13(4), 1988 Act). Where a notice of increase is referred to the FTT by a tenant, the FTT will determine the rent at which the dwelling-house could reasonably be expected to be let in the open market by a willing landlord to a willing tenant on certain assumptions identified in section 14(1).

[5]When he appeared before the FTT, Mr Wallis did not place much emphasis on the rent which his home could be let for in the open market. He maintained instead that the rent for his tenancy could not be increased at all.

[6]The tenancy under which Mr Wallis occupies his home was not made in writing but was the result of an oral agreement between Mr Wallis and Mr Malcom Hutchby, a director of the respondent. Mr Wallis produced copies of a number of rent books, starting in August 2004, recording the receipt of weekly payments of £100 a week which he had made under the tenancy. None of the rent books recorded any terms of the tenancy, nor were the front or rear pages of the rent books (which might have recorded standard terms) included in the copies.

[7]Mr Wallis told the FTT that in 1999, when he moved to 115 Broadwater Street East from another property which he had occupied as tenant of the respondent, there was a verbal agreement between him and Malcom Hutchby that the rent which he was to pay would be “fixed” at £100 a week. He said that the rent under his previous tenancy had also been fixed and he relied on the fact that he had continued to pay £100 a week since 1999 in support of his case that his rent could never be increased.

[8]The FTT did not accept Mr Wallis’s case that his rent could not be increased. It said this:

[17]Essentially, the tenant argues that the verbal agreement was perpetual at the original rent. However, there is no evidence whatsoever to support this claim.

[18]It is the job of the Tribunal to determine what was in the minds of the parties at the outset of the agreement. In normal circumstances the written agreement must be the primary source of evidence as to the intention of the parties to the agreement. Although there was no written agreement the Tribunal adopts the guidance given to it by the Supreme Court in Arnold v Britton and other

[2015] UKSC 36

[The FTT then quoted a passage from Lord Neuberger’s judgment about the interpretation of written agreements].

[19]On the balance of the evidence before it, the Tribunal is of the opinion that there is insufficient evidence to conclude that the parties intended the rent to stay fixed for the duration of the agreement. Hutchby & Collumbell were landlords of a portfolio of 17 properties, and it would have made no business or commercial sense whatsoever to agree to a concessionary rent that could be fixed for 25 years or more. Therefore the Tribunal determines that the rent in the agreement can be varied.

[9]Having rejected Mr Wallis’s case that no rent increase was possible, the FTT then determined the rent which it considered would have been agreed on a letting in the open market, which it was satisfied would have been£156 a week (having regard to various improvements and repairs carried out by Mr Wallis).

The appeal

[10]When it was asked for permission to appeal the FTT said that “the Tribunal considers the matter of interpretation of the verbal agreement open to further clarification.”

[11]In the written statement he provided to the FTT Mr Wallis did not give any detailed account of what he and Mr Malcolm Hutchby had said to each other in 1999 when it was agreed that he would move to his current home from the accommodation where he was already a tenant of the respondent company. The most relevant part of his statement said this:

“I became a tenant of Mr Malcolm Hutchby of Hutchby & Collumbell Ltd in the Summer of 1993 at 85 Sugden Road, Worthing, West Sussex. The rent was set and fixed at £60-00 per week. I was “paid up” in full. I continued to be a tenant of the same Mr Malcolm Hutchby of Hutchby & Collumbell Ltd when I moved into my new home, 115 Broadwater Street East, Worthing, West Sussex, BN14 9AP at the beginning of November 1999. The rent was set and fixed at £100-00 per week.”

[12]Mr Wallis also relied on the rent books which showed that he has paid rent at the same rate of £100 a week since at least August 2004. That is evidence that no change in the rent was agreed between the parties or determined by a tribunal, but it is not evidence of what they agreed in 1999. The only evidence of that is Mr Wallis’s evidence that “the rent was set and fixed at £100-00 per week.” Mr Malcolm Hutchby is dead and it was not suggested that anybody else witnessed the conversation between the two men or that anyone else at the respondent company had any relevant knowledge of what had been agreed.

[13]The FTT’s decision is puzzling. It clearly accepted that there had been a verbal agreement, as it referred to it in paragraph 17 of the decision and when it granted permission to appeal. But it made no finding about what was agreed and it did not say, in terms, whether it believed Mr Wallis’s evidence on that subject or not. It is possible that when it said that there was “no evidence whatsoever” to support the claim that the rent agreed was “perpetual” it intended that to be understood as a rejection of Mr Wallis’s account of the effect of what had been agreed. But the statement is open to other possible meanings. It is difficult to understand why the FTT would have given permission to appeal on “the matter of interpretation of the verbal agreement” or why it would have reminded itself of the guidance of the Supreme Court on the interpretation of written agreements if it did not think something had been, or at least might have been, agreed which needed to be interpreted.

[14]The statement that there was “no evidence whatsoever” of an agreement that the rent would be fixed was not correct. There was Mr Wallis’s own evidence, limited though it was on matters of detail, but clear on the effect of what he said had been agreed. The FTT may therefore have intended to convey that there was no other evidence to support or corroborate Mr Wallis’s story. But that would be to ignore the evidence of the rent books, which were consistent with Mr Wallis’s account and which are inconsistent with any suggestion that this was a conventional arrangement.

[15]The FTT’s reference to “the balance of the evidence” and to there being “insufficient evidence that the parties intended the rent to stay fixed”, is also puzzling. The respondent did not advance any evidence about what had been agreed in 1999, so there was no evidence to counterbalance what Mr Wallis said. The only weight on the opposite side of any balancing exercise was the improbability of a landlord making an agreement of the sort suggested. But the likelihood that parties would agree what was suggested can only go so far in a case like this, since whatever was agreed in 1999, the arrangement did not follow a normal course: it is most unusual for the rent under an assured tenancy to remain at the same level for 25 years, as it seems to have done here. If the FTT did undertake a balancing exercise it still needed to say what it made of Mr Wallis’s own evidence. If it did not believe him, it should have said so, and explained why.

[16]Instead of making a finding of fact about what was agreed, or not agreed, by Mr Wallis and Mr Hutchby in 1999, the FTT embarked on an irrelevant digression. The proposition that it was the job of the tribunal “to determine what was in the minds of the parties at the outset of the agreement” was not a good starting point. Unless it found expression in what they agreed, whatever may have been in the minds of the parties was irrelevant. In the same way, whether it would or would not have made “business or commercial sense” for Mr Hutchby to agree to a concessionary rent without limit of time was only relevant to the question of whether he did or did not agree it, as Mr Wallis says he did. It might be said that it made just as little “business or commercial sense” for the rent to have remained at £100 a week for 25 years.

[17]The FTT did not make any finding on what the parties agreed. It was not enough to ask itself what they intended to agree.

Disposal

[18]In normal circumstances these conclusions would result in the appeal being allowed and the reference being remitted to a differently constituted panel of the FTT for redetermination. But I have decided not to take that course.

[19]The issue between the parties does not fall naturally within the scope of a reference under section 13. Where a tenant receives a notice of increase and refers it to the FTT under section 13(4)(a), the task of the FTT is laid down by the Act. It is required by section 14(1) to determine the rent at which the property could reasonably be expected to be let in the open market by a willing landlord to a willing tenant on the prescribed assumptions. The FTT has done that, and Mr Wallis does not have permission to challenge its valuation, only its “interpretation” of the oral agreement which created his tenancy.

[20]The question which divides the parties is not a valuation question. If the terms of the tenancy do not permit the rent to be increased, then the FTT’s determination may be of no effect. I say that it “may” be of no effect, rather than it “will” be of no effect because it remains an open question whether an agreement that the rent for an assured periodic tenancy will be fixed is effective to oust a new rent determined by the FTT under section 14 of the 1988 Act.

[21]By section 13(1)(b) section 13 applies to an assured periodic tenancy which does not include a contractual provision binding on the tenant “under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period”. An agreement that the weekly rent for a tenancy will be “fixed” is not an agreement under which the rent “will or may be greater than the rent for an earlier period”. Section 13 therefore appears on its face to apply to a periodic tenancy which includes a term that the rent will not be increased. If section 13 applies, Parliament has laid down in section 13(2) that the landlord is entitled to obtain a new rent by giving a notice of increase which may then be referred to the FTT by the tenant and which will result in a determination.

[22]But a determination under section 14(1) is not the end of the story. Section 14(7) of the 1988 Act provides that where a notice of increase has been referred to the FTT, the rent which it determines will become the rent payable under the tenancy “unless the landlord and tenant otherwise agree”. That raises a question of interpretation, namely, whether an agreement made before the FTT has determined a new rent under section 14(1), including an agreement made at the commencement of the tenancy, can be an agreement for the purpose of section 14(7).

[23]If an agreement made before the FTT has determined a new rent can, in principle, be an agreement for the purpose of section 14(7), and if Mr Wallis and Mr Hutchby agreed in 1999 that the rent for the new tenancy would be “fixed” for as long as the tenancy continued, then the rent of £156 a week determined by the FTT will not have become the rent payable for the tenancy with effect from 25 November 2024. Both those issues will need to be resolved before a conclusion can be drawn as to the effect of the FTT’s determination. The FTT has so far failed to answer the first question and the parties have given no thought to the second question and have made no submissions on it.

[24]The FTT has fully performed the task given to it by section 14, 1988 Act. The questions which remain to be determined are not questions which arise on a reference under sections 13 and 14. They are, whether the parties agree the rent would be “fixed”, and, if they did, whether that was an agreement for the purpose of section 14(7) which prevented the new rent from becoming payable? As the FTT has determined a rent, it is distinctly arguable that those questions are no longer within its jurisdiction. The better course in those circumstances is to set aside the FTT’s decision so far as it concerns the terms of the agreement reached in 1999, but to leave its determination of the rent under section 14(1) in place. If the parties are unable to reach an agreement, the question whether the new rent became payable on 24 November 2024 should be determined by a court (either in proceedings for a declaration as to the existence of an agreement and on the proper interpretation of section 14(7), 1988 Act, or in proceedings for recovery of the arrears of rent which will have accumulated if the FTT’s determination was effective).

[25]For these reasons, I allow the appeal and set aside the FTT’s decision that the rent payable under the tenancy can be varied; there is no other challenge to the amount of the rent determined by the FTT, which is payable under the tenancy unless the rent cannot be varied; I decline to remit the reference to the FTT for it to determine that question. Martin Rodger KC, Deputy Chamber President 11 June 2025 Right of appeal Any party has a right of appeal to the Court of Appeal on any point of law arising from this decision. The right of appeal may be exercised only with permission. An application for permission to appeal to the Court of Appeal must be sent or delivered to the Tribunal so that it is received within 1 month after the date on which this decision is sent to the parties (unless an application for costs is made within 14 days of the decision being sent to the parties, in which case an application for permission to appeal must be made within 1 month of the date on which the Tribunal’s decision on costs is sent to the parties). An application for permission to appeal must identify the decision of the Tribunal to which it relates, identify the alleged error or errors of law in the decision, and state the result the party making the application is seeking. If the Tribunal refuses permission to appeal a further application may then be made to the Court of Appeal for permission.