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Court of Appeal decision in Mundy v Trustees of the Sloane Stanley Estate

Court of Appeal decision in Mundy v Trustees of the Sloane Stanley Estate [2018] EWCA Civ 35

On 24 January 2018, the Court of Appeal upheld the decision of the Upper Tribunal (Lands Chamber), which had rejected the Parthenia model of relativity in valuing new lease claims under the Leasehold Reform, Housing and Urban Development Act 1993.  Parthenia had controversially claimed that a computer model using hedonic regression was the only reliable way of measuring relativity, and that all other methods in current use were flawed.

The Court of Appeal held that the Tribunal had been entitled to hold that the Pathenia model was “a clock which strikes 13”.  This was because it produced an impossible result.  It suggested that the value of a lease without Act rights was worth more than the lease was actually sold for, with Act rights.   It was common ground that rights under the Act were valuable.  The Tribunal had also carefully examined the Parthenia model at a 9-day hearing, with extensive expert evidence, and concluded that it was defective.  There was ample evidence to support the Tribunal’s rejection of the model

The Appellant’s case, that the market was ‘corrupted’ because the Gerald Eve graph had influenced the market was an overstatement.  The market evidence had to be looked at, even if was influenced by the imperfect Gerald Eve graph.

The Appellant was also refused permission to appeal to argue (in one of two ways) that there was a ‘no Act world’ rather than a ‘no Act building’ i.e. that no-one in the country had Act rights.  The Act could not be construed in that way.  Furthermore, that argument had been conceded to be wrong at the Tribunal hearing.

The Upper Tribunal was entitled to hold that the Parthenia model should not be put forward in future cases.  The Court of Appeal concluded by noting that the Law Commission has been asked by the Government to consider the simplification of valuations under the Act.  It may be, therefore, that the ‘holy grail’ of a definitive relativity graph will one day be found.

Stephen Jourdan QC and Anthony Radevsky, instructed by Kerry Glanville of Pemberton Greenish LLP, acted for the successful Respondents.

The full judgment can be found here

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