82 PORTLAND PLACE (FREEHOLD) LIMITED v Howard De Walden Estates Limited
Decision date: 8 September 2014
Neutral citation: [2014] UKUT 133 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This is an Upper Tribunal rehearing of an appeal against an LVT valuation for collective enfranchisement of 82 Portland Place. Issues were (1) whether leases must be valued without the benefit of the 1993 Act rights (McHale issue), (2) whether Flats E and Q were participating tenants, (3) the correct no‑Act relativity for leases with 11.82 years unexpired, and (4) whether a purchaser’s margin should be deducted from aggregate FHVP. The Tribunal followed binding authority on the McHale point, found Flats E and Q were participating, fixed no‑Act relativity at 33% (allowing 20% from the agreed real‑world 41.25%), rejected a purchaser’s margin deduction, and produced a final price.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Valuation under Schedule 6(3) is to be carried out on the statutory assumptions, which (following binding Court of Appeal authority) require valuing the tenants’ leases without the benefit of the 1993 Act rights; a Deed of Adherence can amount to a valid election to participate under s.14(3) where the Participation Agreement empowers the nominee to enter such arrangements on behalf of participants; where parties agree a real‑world relativity, the no‑Act relativity may be determined by making a reasoned allowance for the value of statutory rights (on these facts a 20% allowance produced a 33% no‑Act relativity).
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed that relativity graphs and transaction evidence vary in reliability and can serve as cross‑checks but are not determinative where direct transaction evidence exists. It also noted that a purchaser’s margin is not in principle prohibited but requires persuasive evidence and must not double‑count risks already reflected in the deferment rate; exceptional facts would be needed to justify departing from the standard approach.