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You are here: BAILII >> Databases >> England and Wales Lands Tribunal >> Franks & Faith (t/a Ground Rent Securities) v Towse [2000] EWLands LRA_31_1999 (04 April 2000) URL: http://www.bailii.org/ew/cases/EWLands/2000/LRA_31_1999.html Cite as: [2000] EWLands LRA_31_1999

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[2000] EWLands LRA_31_1999 (04 April 2000)

LRA/2/1999

LRA/31/1999

(Consolidated)

LANDS TRIBUNAL ACT 1949

LEASEHOLD ENFRANCHISEMENT - Premium payable for new extended lease of maisonette - Relevant valuation date - Value of existing lease - Value of extended lease - Tenant's surveyor expressing opinions as an advocate - Premium payable increased from £3,350.00 to £5,931.00

IN THE MATTER OF AN APPEAL FROM A DECISION OF THE LEASEHOLD VALUATION TRIBUNAL FOR THE LONDON RENT ASSESSMENT PANEL

BETWEEN DAVID SIMMONDS FRANKS

and

ANITA FAITH

T/A GROUND RENT SECURITIES Appellants

and

MS L J TOWSE Respondent

Re: 22 Henley Close

Isleworth

Middlesex TW7 5DQ

Before: N J Rose FRICS

Sitting in public at 48/49 Chancery Lane, London WC2A 1JR

on 8 February 2000

The following cases are referred to in this decision:

National Justice Compania Naviera SA v Prudential Assurance Co Ltd. ("the Ikrian Reefer") 1993 2 Lloyds' Law Reports, [1993] 2 EGLR 183

Delaforce v Evans and Evans 22 P&CR 770

T C Dutton, instructed by Glovers, Chartered Surveyors, of Harrow, for the Appellants

Mr C A Naylor FRICS, FSVA, retired chartered surveyor, for the Respondent


 


DECISION OF THE LANDS TRIBUNAL

1. This is an appeal by Mr David Simmonds Franks and Ms Anita Faith, trading as Ground Rent Securities, the freeholders of a maisonette known as 22 Henley Close, Isleworth, Middlesex, TW7 5DQ (the appeal property) and a cross-appeal by the lessee, Ms L J Towse, against a decision of the Leasehold Valuation Tribunal for the London Rent Assessment Panel (the LVT), determining the premium to be paid for the grant of a new extended lease under the provisions of section 48 of the Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act) at £3,350. By order of this Tribunal the appeal and cross-appeal were consolidated and before me the freeholders, treated here as the Appellants, contended for a price of £7,082.50. The lessee, as Respondent, contended for a price of £2,675.
2. Mr T C Dutton, counsel for the Appellants, called Mr P L Glover, FRICS, MCIArb, a partner in Glovers, Chartered Surveyors of Harrow, Middlesex. Mr C A Naylor, FRICS, FSVA, a retired Chartered Surveyor and (until its merger with the Royal Institution of Chartered Surveyors) a retired Fellow of the Incorporated Society of Valuers and Auctioneers, appeared for the Respondent with leave of the Tribunal and gave evidence.

The Facts

3. From the evidence I find the following facts. The appeal property is a self-contained, purpose-built ground floor maisonette, one of a block of four, situated in a cul-de-sac development erected in about 1955. The development comprises three blocks of four maisonettes and a detached pair, all in an identical style on the south side of the close, and a block of six maisonettes and a detached pair on the north side in a different style. Henley Close is a turning of College Road to the north of London Road (A315), in an established residential area of similar properties. It is close to Isleworth S.R. station and local shops and Hounslow shopping centre is easily accessible. The area generally is convenient for the large number of businesses in the west London area and, in particular, for Heathrow Airport. However, the south side of the close (which includes the subject property) runs parallel to the main railway line to Waterloo, and the rear elevation is within about 40 feet of the track which is raised on an embankment. Due to the proximity to the airport, there is considerable air traffic noise and this locality is under a flight path. There is very heavy parking in College Road and there is no bellmouth from Henley Close to College Road. There is a footpath to one side only of the close and approximately the first 210 feet is only 20 feet wide including the footpath. The wider end of the close affords on-street parking for about four cars but this facility, together with the 10 individually owned garages within the close, falls short of the parking requirement generated by the 21 properties. Severe congestion is commonplace, especially when access is required by service and commercial vehicles and visitors.
4. The block containing Nos.18, 20, 22 and 24 Henley Close is of 9 inch solid brick construction with pitched tiled roofs. The floorings are of suspended timber to the ground floor and the dividing floors between the units are of concrete. The accommodation of the appeal property comprises entrance hall, living room, two bedrooms, kitchen and bathroom with WC. There are gardens front and rear, but no garage or space.
5. The appeal property had been vacant for about 18 months prior to its purchase by the Respondent in March 1997, and it was then fully refurbished. The work included the provision of a full gas-fired central heating and hot water system; complete renewal of power and lighting circuits; complete replacement of timber windows and the front door in sealed unit double-glazed uPVC units; full floor-and wall-tiling of the bathroom and replacement of the suite; renewal of kitchen half-tiling and provision of floor-tiling; complete renewal of appointments including base and wall units, fridge and freezer, washing machine and oven and hob; and total internal redecoration. In addition the principal bedroom was extensively equipped with storage and wardrobe units and carpeting was provided to the hall and habitable rooms. The standard of appointment and general amenity prior to this work was as would be expected in a maisonette of the 1950s and the quality of decoration was poor. The gardens had been neglected and have since been fully rehabilitated.
6. The appeal property is held by the Respondent under a full repairing lease for 99 years from 25 December 1955 at a fixed annual ground rent of £10.50. The lessee is responsible for all repairs to the property and for a proportion of the expenses of repairing, etc all structures used in common with others. The lessor is not bound to enforce the repairing obligations of its other tenants on the estate. It is agreed, however, that the lessor will assume responsibility for such enforcement under the terms of the new extended lease.
7. The parties indicated that they were content for me to decide whether an inspection of the appeal property was necessary. In view of the fact that the present condition of the property is very different from what it was at the valuation date, I did not consider that an inspection would be of material assistance to me.

Issues

8. It is agreed that the premium is to be calculated under Schedule 13 to the 1993 Act as amended and that for the purposes of this appeal the appropriate capitalisation/deferment rate is 13%. It is also agreed that the Appellants' share of marriage value is 50% and that no compensation is payable under paragraph 5 of Schedule 13. The issues in dispute before me can be summarised as follows:

(1) Whether the relevant valuation date is (as determined by the LVT) 14 September 1998, the date of the LVT hearing or 20 May 1997, the date of the Appellants' counter-notice.

(2) The value of the Respondent's existing interest at both dates.

(3) The value of the new extended lease at both dates.

9. The differences between Mr Glover's valuations (Appendices 1 and 2) and Mr Naylor's (Appendices 3 and 4) are summarised in the following table, which also includes the determination of the LVT upon these issues. I should mention that the Respondent's valuation as at 14 September 1998 (Appendix 4) was not submitted by Mr Naylor in that form, but has been prepared by me, using the format he adopted when preparing his valuation as at 20 May 1997 (Appendix 3), and incorporating the valuations of the existing and extended leases at the later date that he put forward at the hearing.

	Mr Glover	Mr Naylor	LVT
20 May 1997	£	£	£
Existing Lease Extended Lease 14 September 1998 Existing Lease Extended Lease	51,000 61,000 66,000 80,000	58,250 63,450 66,450 72,125	N/A N/A 66,450 73,000

The valuation date

10. Part I of Schedule 13 of the 1993 Act defines "the valuation date" as :

"the date when all of the terms of acquisition (apart from those relating to the premium and any other amounts payable by virtue of this Schedule in connection with the grant of the new lease) have been determined either by agreement or by a leasehold valuation tribunal under this Chapter."

11. The LVT agreed with the Appellants that the date of valuation should be the date of the LVT hearing because they found that, prior to that date, no agreement had been confirmed between the parties as to the terms of the new lease. The Appellants proposed a similar approach before me, but the Respondent argued that the date of valuation should be the date of the counter-notice.
12. In support of their contention, the Appellants relied upon a letter written by Mr Naylor to Mr Glover on 12 January 1998 concerning the insurance arrangements for the appeal property. By Clause 2(13) of the existing lease, the lessee covenants

"forthwith to insure and at all times during the said term to keep insured the demised premises ... in the General Accident Fire & Life Assurance Corporation Limited or such other insurance company as may be nominated by the lessor through the agency of Messieurs (sic) Ellsworth Jones & Co, of 37 Bury Street, St James's, London SW1 or such other agency as the lessor may from time to time require in a sum equal to the full value thereof in the joint names of the lessor and the lessees..."

13. Insofar as it is relevant to this appeal, Mr Naylor's letter of 12 January 1998 said:

"... since it is pretty clear that your clients are not interested in settling the negotiations on the basis of my offer of November 10 through Messrs Hausmann Popeck, I intend to ask the LVT to exclude from the new lease any involvement by the landlords. Since the new lease will be at a peppercorn ground rent for a period of around 140 to 150 years, it cannot be said that the lessor will have any valuable interest and it would seem unreasonable that the lessee's freedom of choice of company should be fettered by the lessors.

It may be, in the end, that the continuance of block cover may be the (sic) for the best, but I see no reason to maintain compulsion.

I understand that the LVT has now advised your clients that the reference has been submitted."

14. Mr Glover said that at no time after that letter was received did the Respondent or her representative confirm that she wished to withdraw that request. It was not until he was given Mr Naylor's proof of evidence approximately five minutes before the LVT hearing that he realised that Mr Naylor would not be seeking to change the insurance covenant.
15. Mr Naylor pointed out that neither the original section 42 notice dated 14 March 1997 nor the Respondent's application to the LVT dated 7 November 1997 referred to a disputed insurance term. Moreover, neither he nor Mr Naylor referred to such a dispute in their proofs of evidence. If the Appellants had been in any doubt as to whether such a dispute existed, they could have applied to the LVT for a pre-trial review to identify the precise areas of dispute, but they failed to do so. Mr Naylor stated that he did not pursue the matter of insurance beyond his letter of 12 January 1998. In fact, he said, there was no issue that he could put before the LVT. The existing lease contained provision for the lessee to insure, which is what the Respondent required. However, in practice the lessors maintained the insurance by block cover through Mr Glover's office. This was satisfactory, provided the position was confirmed annually (which it was) and provided best terms were obtained, which was likely. Therefore, since the Respondent retained the right to insure despite the informal arrangements, she had the best of both worlds; there was no dispute. The LVT could not give a decision on a dispute that never existed. Neither could there be a date when a non-existent dispute arose or was settled.
16. Mr Naylor suggests that, by the date of the Appellants' counter-notice - 20 May 1997 - all the terms of the new lease apart from the premium had been agreed. In fact, however, he informed Mr Glover more than seven months later that he would be asking the LVT to exclude the Appellants from any involvement in insurance under the new lease. In cross-examination, he denied that he had intended to do any such thing. He described the letter of 12 January 1998 as "merely a mischievous letter".
17. Whether mischievous or not, in the absence of any clear indication to the contrary the recipient of that letter was entitled to assume that the author was serious. Mr Glover's evidence is that at no time prior to the LVT hearing was he advised that the Respondent would not be asking for the Appellants to be excluded from any involvement with insurance. He accepts that he did not deal with that matter in his proof of evidence, but he had not seen Mr Naylor's proof before the LVT hearing. Any suggested change to the lease was, he says, a matter for the Respondent's representative to raise and he was not in a position to offer a defence to it until the case for a change had been properly put to the LVT.
18. I accept the evidence of Mr Glover on this point. The fact that insurance was not referred to by the Respondent in her section 42 notice or in her application to the LVT did not mean that she or her agent could not raise the matter subsequently. In my opinion, Mr Glover was entitled to assume that the letter of 12 January 1998 meant what it said. That he did so assume is indicated by his reply dated 16 January 1998, which confirmed that he wished to see the existing insurance clause maintained. In the absence of any subsequent communication from a representative of the Respondent, prior to the LVT hearing, confirming that she was prepared to accept the existing insurance covenant, I find that the terms of the new lease had not been agreed prior to the LVT hearing on 14 September 1998, which is therefore the valuation date.

The valuation evidence

19. All the evidence I heard was given by surveyors. Mr Glover was elected a Professional Associate of the Royal Institution of Chartered Surveyors (RICS) in 1970 and is currently a Fellow of the Institution. Mr Naylor is a retired Fellow of the RICS, having entered the profession in 1940 and retired from full-time practice in November 1993. Whilst the two witnesses were in agreement on certain matters, they disagreed with vital parts of the evidence of their opposite number. It is, therefore, necessary for me to evaluate the surveyors themselves as witnesses on whose evidence I can rely. In this connection, a well-known passage in a decision of Cresswell J in National Justice Compania Naviera SA v Prudential Assurance Co Ltd. ("The Ikarian Reefer")[1993] 2 Lloyds' Law Reports 68, [1993] 2 EGLR 183, is pertinent. That judgment considered and set out various duties and responsibilities of expert witnesses in civil cases. For present purposes I shall cite the first two of the duties and responsibilities identified:

(1) Expert evidence presented to the court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation ...

(2) An expert witness should provide independent assistance to the court by way of objective unbiased opinion in relation to matters within his expertise ... An expert witness in the High Court should never assume the role of an advocate."

20. In my judgment, witnesses who give expert or factual evidence in this Tribunal should never do so in the role of an advocate. In the course of cross-examination, Mr Naylor said that since his retirement he had undertaken no further surveying work and he had not received any Guidance Notes published by the RICS concerning the conduct of surveyors acting as expert witnesses or any other matters. When asked whether he had put forward his real view, he replied that he did not put forward his opinions as an expert witness, but as advocate for the Respondent, his daughter. On the other hand, Mr Glover's report included a declaration which confirmed his belief in the accuracy and truth of the matters it contained and that it complied with the requirements of the RICS as set down in their Practice Statement for Surveyors Acting as Expert Witnesses. I formed the impression that Mr Glover was conscious of his duty to give impartial evidence to this Tribunal. In particular, in answer to a question from me, he frankly admitted he could not exclude the possibility that some of the settlements that he had cited as comparables had been influenced by the "Delaforce Effect" (Delaforce v Evans and Evans 22 P&CR 770). I comment further on this aspect later in this decision.
21. I did not undertand Mr Naylor's observations concerning his role as advocate to extend to factual matters and I obtained assistance from his factual evidence relating to the appeal property and its history. His advocacy, too, was helpful in testing the expert evidence of Mr Glover. I regret, however, that I obtained no assistance from his opinion evidence, since it was given in the role of an advocate and not an expert witness. Against that background, I now consider the various valuations in dispute.

Existing lease value

22. Mr Glover's valuation of the existing lease was £66,000. It was arrived at by a complex calculation, based on the prices paid for the appeal property and 18 Henley Close in 1997, which he adjusted for differences in condition, specification and time and the fact that both prices included the tenant's share of marriage value or a substantial part of it. Having made these adjustments, he arrived at a figure of £66,300, which he rounded down to £66,000. He accepted that the valuation of the existing lease in the hypothetical world of the 1993 Act was difficult, because of the absence of sales effected on that basis. Nevertheless, there was little difference between Mr Glover's valuation of £66,000 and that of £66,450 suggested by Mr Naylor and I accept Mr Glover's pre-rounding value of £66,300.

Extended lease value

23. Mr Glover valued the new extended lease at £80,000. He approached this valuation in several ways. Firstly, he relied on the sale of 2 Henley Close in February 1998 and 1 College Road in November 1998. He adjusted these transactions for differences in condition, specification and time and the fact that (in contrast to the new lease of the appeal property) the two comparable leases provided for a ground rent. Secondly, he considered the "real world" value of the appeal property in Spring 1997 and added all the costs (including inconvenience) which a purchaser would have had to bear if it had acquired an extended lease at that time. For this purpose, he assumed that the premium required by the freeholders would have been £5,000; £1,000 less than they were then quoting. The average of the values produced by this last method and by the adjustments to the sale price of 2 Henley Close and 1 College Road was £81,437. Mr Glover considered that this fully supported his valuation of £80,000.
24. The figure of £80,000 represented an uplift of approximately 21% on Mr Glover's valuation of the short lease of the appeal property. As a check, he referred to research undertaken by Savills Agricultural and Residential Ltd based on 1,000 transactions in the Central London residential market between 1986 and 1992. Although the appeal property was situated outside the area considered by that research, the uplift in value which he had used in his valuation was modest compared with those reported by Savills for leases of comparable lengths in non-prime areas of Central London.
25. Mr Glover also referred to premiums paid for 16 lease extensions in Henley Close and College Road between 1984 and 1996 and to 17 lease extensions on two bedroom, purpose built flats or maisonettes of similar age and type to Henley Close and in similar locations in nearby areas. His firm had been involved in all of these negotiations and his suggested uplift of 21% was consistent with the uplifts agreed in them.

26. Finally, he produced a summary of 17 decisions of leasehold valuation tribunals in respect of lease extensions on flats in various locations across Greater London. He conceded, however, that this summary contained few decisions in respect of leases of less than 60 years in the outer suburbs.

27. In my opinion, Mr Glover has done his best to give objective evidence about a valuation where truly comparable transactions are hard to find. Nevertheless, I have come to the conclusion that his valuation of the extended lease is a little full, for two reasons. Firstly, when adjusting certain transactions for differences in specification, I think he has slightly under-estimated the value of certain improvements. In particular, he deducted £5,000 from the sale price of 1 College Road to reflect the fact that, unlike the appeal property, it had a garage. He agreed, however, that it might well be difficult to purchase a garage in the area for only £5,000 and I consider that he has under-estimated the effect of the garage on the price realised for this comparable. Secondly, although the 1993 Act provides for a peppercorn to be paid throughout the term of the new lease, the settlements negotiated by Mr Glover provided for an increased ground rent to be paid. As indicated earlier in this decision, I put it to Mr Glover that this suggested that the tenants were in a relatively weak bargaining position, which resulted in them paying more than they were legally required to do ("the Delaforce Effect"). Mr Glover, very fairly, indicated that he did not necessarily disagree with this proposition. He agreed that the valuation of the existing lease in the 1993 Act world was not easy, but he suggested that there was not the same difficulty in establishing the value of the extended lease.

28. Doing the best I can with the evidence, I find that the value of the new extended lease as at 14 September 1998 was £78,000. The appeal is therefore allowed and the cross-appeal is dismissed. The premium payable by the Respondent to the Appellants for the grant of the new extended lease in the appeal property under the terms of section 48 of the 1993 Act is £5,931.00, as calculated in Appendix 5.

29. I have also considered the two disputed values of the appeal property on the assumption that I am wrong in holding that the valuation date is 14 September 1998. If the correct valuation date is 20 May 1997, my valuation would have been £4,817.50, as calculated in Appendix 6.

30. What I have said so far concludes my determination of the substantive issues in this case. It will take effect as a decision when the question of costs is decided and at that point, but 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 as to the costs of this appeal and a letter accompanying this decision sets out the procedure for submissions in writing.

Dated:

(Signed) N J Rose

Addendum on Costs

26. I have received submissions on costs from Mr Glover on behalf of the Appellants and Mr Naylor for the Respondent. Each party asks for an award of costs in its favour.
27. The Appellants say that that their appeal was successful. They obtained a determination significantly higher than the LVT's valuation, they successfully resisted the Respondent's cross-appeal and the amount determined was more than they had previously offered to accept in a Calderbank letter.
28. The Respondent argues that the Appellants were responsible for both the appeal and the cross-appeal and that the LVT's decision was not found to be inaccurate, since this Tribunal did not criticise the LVT's valuation, procedure or conclusion. Moreover, since the Appellants' evidence was considered far more favourably than that of the Respondent, the Respondent should not be penalised further by an award of costs against her. Rather, the conduct of the Appellants and their surveyor should be reflected in an award of costs in favour of the Respondent.
29. The Appellants succeeded in both their appeal and the cross-appeal and I have not been persuaded that there is any a good reason why they should be deprived of their costs. The fact that the Appellants initiated the appeal is nothing to the point, since the appeal was contested by the Respondent and was eventually successful. Nor is there merit in the Respondent's suggestion that the cross-appeal was the result of the Appellants' appeal; there was no compulsion on the Respondent to seek a determination below the LVT's figure.
30. The suggestion that the LVT decision was correct, since it was not criticised by this Tribunal, demonstrates a misunderstanding of the nature of appeals to this Tribunal. This was described in Practice Direction 2/2000 as follows:

"In all cases the burden of proof is on the appellant. If the Lands Tribunal is satisfied on such evidence as may be before it that the decision of the LVT is wrong, it must allow the appeal; otherwise it must dismiss the appeal... The Lands Tribunal will treat the appeal as a fresh hearing of the issues to which the application to the LVT gives rise, except where leave has been granted on conditions that limit the appellant to particular grounds. For this reason, it will often not be helpful for parties to orientate their evidence and arguments to a review of the reasons set out in the LVT's decision. Similarly it will be unlikely to be necessary in most cases to refer to evidence that was given in the LVT hearing, and to do so is likely to extend the length of hearing before the Lands Tribunal and may obscure the issues."

31. The fact that this Tribunal determined a value appreciably higher than the LVT's figure demonstrates that the latter was considered to be wrong.
32. Finally, I do not agree that the manner in which the Respondent's evidence was treated by this Tribunal justifies a departure from the general rule that the unsuccessful party should pay the costs of the successful party. The Respondent's point here arises from the fact that her surveyor asked for and was granted permission to appear as both advocate and expert witness, but then decided not to put forward his opinions as an expert witness. That was his decision alone and the Appellants should not be penalised in costs as a result. Moreover, there is in my view no justification for the Respondent's suggestion that the conduct of the Appellants or their surveyor was such as to justify any departure from the general rule on costs.
33. The Appellants ask for their costs to be awarded on a summary basis. They have provided details of the make-up of their costs, which total £6,605.40 including VAT. This Tribunal is entitled to deal with costs by fixing a lump sum (Lands Tribunal Rules 1996, rule 52(4)) and the Respondent does not suggest that the total claimed is excessive.
34. Although, in exercising its discretion on costs, this Tribunal is not bound by the Civil Procedure Rules, I consider it appropriate to bear Part 44 of the Rules in mind in this case. Para 44.5 provides that the court is to have regard to all the circumstances in deciding whether costs were proportionate and reasonable in amount. By sub-paragraph 44.5(3) the court must, among other matters, also have regard to -

"(a) the conduct of all the parties, including in particular -

(i) conduct before, as well as during, the proceedings; and

(ii) the efforts made, if any, before and during the proceedings in order to try

to resolve the dispute;

(b) the amount or value of any money or property involved ...

(e) the skill, effort, specialised knowledge and responsibility involved."

35. In this case, it must be remembered that the costs incurred by the Appellants substantially exceeded the amount of money involved in the case. At the hearing, the difference between the parties was only £4,407.50, or roughly two-thirds of the Appellants' costs. On the other hand, the Appellants had submitted a Calderbank offer more than six months before the hearing date, offering to settle at a figure substantially below the amount eventually determined and that offer was effectively ignored by the Respondent. Moreover, the valuation problems in this case were not straightforward and the Appellant's surveyor sought to minimise costs by instructing counsel direct without the assistance of a solicitor.
36. In the light of all the circumstances, the Respondent will pay the Appellants £6,600.00 in respect of their costs of the appeal.
37. The Appellants also ask for a determination of the reasonable costs payable in accordance with s60 of the Leasehold Reform Housing and Urban Development Act 1993, but in my view this is not a matter which is relevant to an order relating to the costs of the appeal to this Tribunal.

Dated:

(Signed) N J Rose

APPENDIX 1

MR GLOVER'S VALUATION OF 22 HENLEY CLOSE, ISLEWORTH

AS AT 20 MAY 1997

Diminution in value of landlord's interest in accordance with Paragraph 3

This is the difference between the landlord's interest in the tenant's flat prior to the grant of a new lease and the value of his interest once the new lease is granted.

Extinguishment of ground rent

Ground Rent:	£10.50 pa
YP 57 years @ 13%:	7.68	£80.00
Flat Value:	£61,000
PV of £1 in 57 years at 13%:	0.000943	£57.50	£137.50

Landlord's share of the marriage value

This is determined in accordance with Paragraph 4:

New Lease value in accordance with Paragraph 4b: £61,000

Old lease value in accordance with Paragraph 4a: £51,000

Aggregate of landlord's and tenant's interest after

the new lease is created: £61,000.00

Less aggregate of landlord's and tenant's interest

prior to creation of new lease: £51,137.50

Marriage value: £ 9,862.50

50% share of marriage value: £4,931.25

£5,068.75

APPENDIX 2

MR GLOVER'S VALUATION OF 22 HENLEY CLOSE, ISLEWORTH

AS AT 14 SEPTEMBER 1998

Diminution in value of landlord's interest in accordance with Paragraph 3

This is the difference between the landlord's interest in the tenant's flat prior to the grant of a new lease and the value of his interest once the new lease is granted.

Extinguishment of ground rent

Ground Rent:	£10.50 pa
YP 56 years @ 13%:	7.68	£80.00
Flat Value:	£80,000
PV of £1 in 56 years at 13%:	0.0010656	£85.00	£165.00

Landlord's share of the marriage value

This is determined in accordance with Paragraph 4:

New Lease value in accordance with Paragraph 4b: £80,000

Old lease value in accordance with Paragraph 4a: £66,000

Aggregate of landlord's and tenant's interest after

the new lease is created: £80,000

Less aggregate of landlord's and tenant's interest

prior to creation of new lease: £66,165

Marriage value: £13,835

50% share of marriage value: £6,917.50

£7,082.50

APPENDIX 3

MR NAYLOR'S VALUATION OF 22 HENLEY CLOSE, ISLEWORTH

AS AT 20 MAY 1997

(i) Paragraph 2(a) Diminution in value of the landlord's interest as determined in accordance with para 3:-

Landlord's interest prior to new lease

Ground Rent 10.50

YP 57½ @ 13% 7.685 81

Reversion to unencumbered

freehold value 58250

PV 57½ years @ 13% 0.0008888 52

Landlord's interest once new NIL 133

lease is granted

(ii) Paragraph 2(b) Landlord's share of marriage

value as determined in accordance with para 4:-

(a) The aggregate of the value of:-

Tenant's interest under the new

lease with a peppercorn rent 63450

Landlord's reversionary interest NIL 63450

(b) Less the aggregate of the value

of the tenant's existing interest 58250

Landlords' interest prior to

grant of the new lease 133 58383

Gain on marriage 5067

Landlords' share of marriage value 50% 2534

(iii) Paragraph 2c any compensation payable under paragraph 5 NIL

Premium payable by tenant 2,667

Say 2,675

APPENDIX 4

MR NAYLOR'S VALUATION OF 22 HENLEY CLOSE, ISLEWORTH

AS AT 14 SEPTEMBER 1998

(i) Paragraph 2(a) Diminution in value of the landlord's interest as determined in accordance with para 3:-

Landlord's interest prior to new lease

Ground Rent 10.50

YP 56¼ @ 13% 7.684 81

Reversion to unencumbered

freehold value 72125

PV 56¼ years @ 13% 0.001035 75

Landlord's interest once new NIL 156

lease is granted

(ii) Paragraph 2(b) Landlord's share of marriage value as determined in accordance with para 4:-

(a) The aggregate of the value of:-

Tenant's interest under the new

lease with a peppercorn rent 72125

Landlord's reversionary interest NIL 72125

(b) Less the aggregate of the value

of the tenant's existing interest 66450

Landlords' interest prior to

grant of the new lease 156 66,606

Gain on marriage 5519

Landlords' share of marriage value 50% 2760

(iii) Paragraph 2c any compensation payable under paragraph 5 NIL

Premium payable by tenant 2,916

Say 2,900

Note: This valuation has been prepared by the Lands Tribunal on the basis of Mr Naylor's evidence.

APPENDIX 5

22 HENLEY CLOSE, ISLEWORTH, MIDDX

DETERMINATION OF VALUE BY THE LANDS TRIBUNAL

Diminution in value of landlords' interest

Extinguishment of ground rent

Ground rent: £ 10.50 pa

YP 56¼ years @ 13% 7.68 £81.00

New lease value: £ 78,000

PV £1 in 56¼ years @ 13% 0.001035 £81.00 £162.00

Landlords' share of marriage value

New lease value: £78,000

Existing lease value: £66,300

Aggregate of landlords' and tenant's interests

after new lease created £78,000

Less aggregate of landlords' and tenant's

interests prior to creation of new lease £66,462

Marriage value: £11,538

Landlord's 50% share of marriage value £5,769.00

£5,931.00

APPENDIX 6

22 HENLEY CLOSE, ISLEWORTH, MIDDX

ALTERNATIVE DETERMINATION OF VALUE BY THE LANDS TRIBUNAL

Diminution in value of landlords' interest

Extinguishment of ground rent

Ground rent: £ 10.50 pa

YP 57½ years @ 13% 7.68 £81.00

New lease value: £ 61,000

PV £1 in 57½ years @ 13% 0.000888 £54.00 £ 135.00

Landlords' share of marriage value

New lease value: £61,000

Existing lease value: £51,500

Aggregate of landlords' and tenant's interests

after new lease created £61,000

Less aggregate of landlords' and tenant's

interests prior to creation of new lease £51,635

Marriage value: £ 9,365

Landlord's 50% share of marriage value £4,682.50

£4,817.50