CASE SUMMARIES 28 August 1995

The following notes of judgments were prepared by reporters of the All England Law Reports.

Housing

Kelsey Housing Association Ltd v King & anr; CA (Butler-Sloss, Aldous LJJ) 7 July 1995

A judge was entitled, in the exercise of his discretion under s 8(1)(b) of the Housing Act 1988, to dispense with the service of a notice to quit, despite the risk of prejudice to the tenant, if it was just and equitable in the circumstances to do so. Where, therefore, the notice failed to comply with the section, its service could be dispensed with and the landlord's claim for possession allowed to proceed. Moreover, it would be wrong for the court to commence with a preconceived idea of what was just and equitable, as the editors of Sweet & Maxwell's Housing Encyclopaedia, vol 1 (1987) at p 897 appeared to suggest. The law was better stated in Megarry on the Rent Act (11th edn, 1989) vol 3, at p 140.

Spath Holme Ltd v Greater Manchester and Lancashire Rent Assessment Committee; CA (Glidewell, Morritt LJJ, Sir John May) 19 July 1995

In assessing, in accordance with section 70 of the Rent Act 1977, the fair rent to be paid for flats let on regulated tenancies, a rent assessment committee was wrong (i) in failing to appreciate that the fair rent was the market rent for the property discounted to remove the effect of scarcity; (ii) in considering that they could only use the comparables afforded by the rents payable under the assured tenancies for similar flats in the same block if they concluded there was no scarcity; and (iii) in deciding that such rents could not be used as comparables as they would have to be discounted on account of the effect of the security of tenure enjoyed by the tenant.

It was well established that the fair rent which was to be determined was the market rent for the property, disregarding the personal circumstances referred to in s 70(1) and the specified disregards in s 70(3), and discounted for any scarcity pursuant to s 70(2). Had the committee had this in mind, they would have appreciated that scarcity could not be sufficient reason to reject as comparables the virtually identical flats in the same block suggested by the landlords.

John Furber QC (Treasury Solicitor) for the committee; James Bonney (Drewitt Willan, Manchester) for the landlords.

Practice

Hogg v Aggarwal; QBD (Sedley J) 9 June 1995

While the court's orders were expected to be complied with, a party should only be expelled from the legal process as a last resort. Accordingly, while a deliberate flouting of the court's order could never be excused, and while breaches through neglect would cease to be excusable if they were repeated, it was for the court in other cases to inspect the reasons or excuses tendered for the default and if, in the circumstances, it could be excused, give the defaulter another chance. In this case, the failure of the plaintiff to set down his action within the period specified in an "unless" order having resulted in its being struck out, the judge was entitled, on finding the purpose and effect of his original order to have been overtaken by the mutual error of the parties, to reinstate the action.

Paul Richardson (W Murray Humphrey & So, Sunderland) for the defendants; Stephanie Jarron (Wilkinson Maughan, Newcastle upon Tyne) for the plaintiff.

VAT

Customs & Excise Commrs v Bessimeh; QBD (Sedley J) 31 July 1995

In notifying a director of a personal liability under s 14 of the Finance Act 1986 (now s 61 of the VAT Act 1994) to pay a portion of a VAT penalty assessed on a company, the commissioners only had to specify the total amount of the penalty, which might be in respect of a number of prescribed accounting periods. They were not obliged to break down the total and apportion it between specified accounting periods. Moreover, the director's degree of culpability was relevant when fixing the portion of the company's liability recoverable from him. He was prima facie liable, jointly with any other directors, for the whole of the company's default, but he might show that he was less culpable than they.

Rupert Baldry (Barry Phillips & Co) for the taxpayer; Nigel Pleming QC, Hugh Davies (Customs & Excise) for the Crown.