C/2000/0623
Neutral Citation Number: [2001] EWCA Civ 991
IN THE SUPREME COURT OF JUDICATURE         
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS TRIBUNAL
								Royal Courts of Justice
								Strand
								London WC2

								Friday 15th June, 2001
B e f o r e:

LORD JUSTICE ALDOUS
LADY JUSTICE HALE
LORD JUSTICE JONATHAN PARKER

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JOAN DENISE SOUTH
Applicant/Appellant

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TRUSTEES OF THE PHILLIMORE KENSINGTON ESTATE
Respondent

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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 020 7421 4040
Official Shorthand Writers to the Court)
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MR L PRICE QC and MR J GAVAGHAN (Instructed by Messrs Piper Smith, London) appeared on behalf of the Appellant

MR S BERRY QC and MR E JOHNSON (Instructed by Messrs Forsters, London) appeared on behalf of the Respondent

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J U D G M E N T
1.	LORD JUSTICE ALDOUS: I will ask Lord Justice Jonathan Parker to give the first judgment. 
2.	LORD JUSTICE JONATHAN PARKER: This is an appeal by Mrs Joan Denise South by way of case stated against an order of the Lands Tribunal dated 23 March 2000 dismissing her appeal against a decision of a Leasehold Valuation Tribunal dated 15 September 1998.
3.	The proceedings concern a residential property at 26 Upper Phillimore Gardens, London W8 (“the subject property”). The freeholders of the subject property are the Trustees of the Phillimore Kensington Estate (“the Trustees”). The Trustees are the respondents to this appeal. By a lease dated 18 August 1922 the subject property was let on full repairing and insuring terms for 75 years from 25 March 1922 at a ground rent of £41 per annum. On 1 September 1960 the lease was acquired by Mrs South and her late husband Dr South. On 11 March 1997 (that is to say some 13 or 14 days prior to the expiry of the lease) Mrs South gave written notice pursuant to the Leasehold Reform Act 1967 (“the 1967 Act”) of her desire to acquire the freehold interest in the subject property. That led to an application to a Leasehold Valuation Tribunal to determine the price to be paid for that interest in accordance with section 9(1C) of the 1967 Act. By its decision dated 15 September 1998 the Tribunal fixed the price at £2,000,075. Mrs South appealed that decision to the Lands Tribunal, and the Trustees cross-appealed. By its decision dated 7 February 2000 (embodied in its order dated 23 March 2000) the Lands Tribunal determined the price to be £2,395,000. Accordingly by its order it dismissed Mrs South's appeal and allowed the Trustees' cross‑appeal. Mrs South now appeals to this court, with the permission of Otton LJ granted on 31 July 2000. 
4.	Mrs South appears by Mr Leolin Price QC and Mr John Gavaghan; the Trustees by Mr Simon Berry QC and Mr Edwin Johnson. 
	The hearing before the Lands Tribunal 
5.	It was common ground before the Lands Tribunal that the price payable for the subject property was to be determined in accordance with section 9(1C) of the 1967 Act, and there is no issue on this appeal as to the meaning or effect of the relevant provisions of the 1967 Act. For present purposes it suffices to say that, in the context of the instant case, section 9(1C) provides that the price shall be equal to the amount which on the relevant date the freehold interest in the subject property, subject to the lease, if sold on the open market by a willing seller, might be expected to realise on a number of specified assumptions. It was also common ground before the Lands Tribunal that the relevant date for the purpose of valuation was 11 March 1977 (that being the date on which Mrs South gave notice of her desire to acquire the freehold) and that the price should not include any element of “marriage value”, given that the lease had only a few more days to run.
6.	The hearing before the Lands Tribunal lasted some five days. Expert valuation witnesses were called by each side, and were cross‑examined. Mrs South's expert witness was Mr Peter Young, the managing director of John D Wood & Co (Residential and Agricultural) Ltd. The Trustees' expert witness was Miss Frances Joyce, a director of Chesterton Plc. Mr Francis Carnwath, one of the Trustees, also gave oral evidence. Mrs South did not give evidence.
7.	There were three issues before the Lands Tribunal. The first was as to the open market value of the freehold interest in the subject property, in its existing condition as at 11 March 1997 and subject to the lease (“the market value issue”). The second issue was as to the deduction (if any) to be made from that value in respect of tenant's improvements (“the tenant's improvements issue”). The third issue was as to the deduction (if any) to be made for the risk that Mrs South would or might fail to give vacant possession of the subject property on the expiration of the lease (“the vacant possession issue”).
8.	No issue arises on this appeal in relation to the tenant's improvements issue. 
9.	Mrs South (through Mr Young) contended for a price of £1,197,514, representing an open market value of £1,500,000 plus a figure of £1.42 representing capitalised ground rent, but subject to a discount of 20 per cent to reflect the risk of Mrs South failing to give vacant possession at the expiration of the lease. Adjusted to take account of the unexpired term of the lease, this gave a figure of £1,197,514. 
10.	The Trustees (through Miss Joyce) contended for a price of £2,800,000, representing the open market value of the freehold interest in the subject property with no capitalisation of ground rent, no discount to reflect any risk of Mrs South failing to give vacant possession at the expiration of the lease and no adjustment in respect of the unexpired period of the term.
11.	On the market value issue, both sides relied on comparables. Mr Young cited four categories of what he contended were relevant and reliable comparables, namely freehold sales, leasehold sales, settlements under the 1967 Act, and offers made to Mrs South by the Trustees (through Miss Joyce) prior to 11 March 1997. I shall return to these offers later in this judgment. For her part, Miss Joyce cited all the comparables relied on by Mr Young in the first three categories, plus two additional freehold sales. However, Miss Joyce contended that settlements under the 1967 Act were inherently unreliable comparables, and she further asserted that the offers made to Mrs South prior to 11 March 1997 (the fourth category of comparables cited by Mr Young) were not intended to be valuations and should not be considered as comparables. This latter assertion was echoed in the evidence of Mr Carnwath. 
	The decision of the Lands Tribunal
12.	After setting out the factual background and identifying the issues, the Tribunal (Mr PH Clarke FRICS) addressed and determined certain questions raised in argument as to the jurisdiction of the Lands Tribunal and as to the burden of proof. Since no issues arise on this appeal out of the Tribunal's determination of those questions, I need not refer further to that part of the Decision. The Member then reviewed the evidence of Mr Young and Miss Joyce. In paragraph 54 of the Decision the Member turned to the market value issue and accurately summarised the relevant statutory requirements. In paragraphs 56 to 64 inclusive the Member addressed the tenant's improvements issue. Since, as indicated earlier, no issues arise on this appeal in relation to that issue, I need say no more about this part of the Decision than that the Member valued the tenant's improvements to the subject property at £20,000 plus a figure equal to 40 per cent of the rate per square foot attributable to the floor area of the attic (reflecting tenant's improvements to the attic). 
13.	At paragraph 65 of the Decision the Member turned to the market value issue, and to the comparables. He began this part of his Decision by setting out a number of adjustments which he found to be necessary in order to relate the prices on the comparable transactions to the unimproved value of the subject property as at 11 March 1997. In the first place, he concluded that adjustment had to be made for differences in location and quality of accommodation (paragraph 67). In this connection he said: 
“... valuation by reference to comparables is essentially a matter of overall judgment based on experience and it is impossible to base this judgment on percentages for specific factors, other than for size, changes in value between the two dates and the relationship between freehold and leasehold values which I refer to below. My comparison between the comparable and [the subject property] is a matter of overall judgment.” 
14.	In paragraph 68 he concluded that in calculating changes in value between two dates he should adopt the index of capital values used by Mr Young, namely the FPD Savills Prime Central London Residential Capital Values Index (PCL West). As to adjustments for size, he concluded (in paragraph 69) that such adjustments should be made by reference to gross internal area (an approach adopted by both Mr Young and Miss Joyce), but subject to using a 60 per cent rate for the attic at the subject property (to reflect tenant's improvements, as mentioned earlier).
15.	As to adjustments to reflect the relationship between freehold and leasehold value, the Member said this (in paragraph 70): 
“Where the comparable is a leasehold sale it is necessary to relate the leasehold price to an equivalent freehold price. Miss [Joyce]'s graph shows for example that a leasehold with 50 years unexpired is 81 per cent of the freehold value rising to 90 per cent with 70 years unexpired. I regard this graph as only an approximate guide but I use it in the absence of more reliable evidence, although as I note below this is one of the reasons why I give less weight to leasehold than to freehold transactions.” 
16.	In paragraph 71 the Member noted that in all cases a deduction of £20,000 fell to be made from the comparable price in order to reflect tenant's improvements in the subject property (being improvements other than improvements to the attic, which were already covered by the adoption of a reduced rate of 60 per cent for the floor area of the attic). Finally, so far as adjustments are concerned, the Member observed (in paragraph 72) that the overall purpose of the adjustments was to give an indication of the value of the freehold interest in the subject property disregarding the value of tenant's improvements with vacant possession as at 11 March 1997.
17.	The Member then turned to the first category of comparables to which I referred earlier, namely freehold sales. There were four properties in this category, but the Member rejected one (19/21 Phillimore Gardens, relied on by Miss Joyce) as being unreliable. As to the remaining three properties (viz. 11 Phillimore Gardens, 28 Phillimore Gardens and 16 Phillimore Place) the Member said this: 
“My analysis of the remaining freehold sales, adjusted for location and quality of accommodation, changes in values between the date of the comparable and March 1997, size and improvements to the [subject property], produces the following figures: ...” 
18.	He then set out a table containing (in relation to each of the three comparable properties) equivalent prices for the subject property of £2,600,000, 2,100,000 and 2,415,000 respectively. He continued (in paragraph 74): 
“These freehold comparables indicate a bracket of values for the [subject] property in March 1997 of between £2,100,000 and £2,600,000. [Miss] Joyce's analysis of these transactions produced a higher band of values between £2,658,880 and £2,836,159 for the [subject] property. I regard 11 Phillimore Gardens as the best comparable; this indicates that the value for [the subject property] should be towards the upper end of this band of values. I am surprised to note that Mr Young did not regard the sale of this property, which took place only six months before the valuation date, as a good comparable.” 
19.	The Member then turned to the second category of comparables, viz. leasehold sales. He began by rejecting five of the transactions in this category as being unreliable evidence of value, including the transaction relating to 12 Upper Phillimore Gardens. As to that transaction, the Member said this: 
“The leasehold interest with just over 67 years unexpired in 12 Upper Phillimore Gardens was purchased in January 1997 for £2,550,000 with the right to enfranchise. The enfranchisement price was subsequently agreed at £142,500. I regard this comparable as unreliable due to the uncertainty which emerged at the hearing regarding the material facts, namely whether the leasehold purchaser was a special purchaser, the gross internal area, the improvements to the property and the value of the contents included in the price.” 
20.	By ground 2 of her grounds of appeal, to which I shall return later, Mrs South contends that the Member was in error in rejecting 12 Phillimore Gardens as an unreliable comparable. She contends that there was no rational basis for rejecting 12 Phillimore Gardens as a comparable, and that there were no grounds for finding that there was uncertainty in relation to the transactions in question. In any event, she asserts, all the areas of purported uncertainty identified by the Member were such as would serve to inflate rather than to reduce the price, which was in any event lower than that which the Member eventually determined.
21.	The Member went on to analyse the remaining comparables within this category (i.e. leasehold sales) and set out a table in the same form as that relating to freehold sales to which I referred earlier. The table in relation to leasehold sales indicates a bracket of equivalent values for the subject property of between £2,100,000 and £2,380,000. The Member continued (in paragraph 77): 
“I note that the two transactions at 24 Upper Phillimore Gardens (purchase of 39.5 years' lease and an extension of the term by 59.5 years) give different equivalent freehold figures. This is due to the different adjustments needed for the unexpired term in relation to freehold value (using Mr Young's graph) which produce different freehold figures. This is an illustration of the difficulties which arise when leasehold prices are converted by a general index to equivalent freehold figures and is one of the reasons why I give less weight to the leasehold comparables.” 
22.	By grounds 4 and 5 of her grounds of appeal, Mrs South complains that in relation to both the freehold and leasehold comparables the Member failed to explain adequately or at all how he reached the “equivalent” prices for the subject property as shown in the tables to which I have referred, or how he could arrive at a price which is higher than that indicated by any of the leasehold comparables. 
23.	The Member then turned to the third category of comparables, viz. settlements under the 1967 Act. This part of the Decision (paragraphs 78 to 82 inclusive) is the subject of ground 3 of Mrs South's grounds of appeal, and it is convenient to set it out in full:
“78. I look now at the third category of comparable evidence settlements under the 1967 Act. There are five properties in this category: 10 and 12 Upper Phillimore Gardens, 8 Phillimore Place, 26 and 28 Phillimore Gardens. Enfranchisement prices were agreed by Mr Young on behalf of the tenants and by Miss Joyce on behalf of Phillimore.
79. Mr Young produced an analysis of each purchase price to show the component figures used, including the value of the unimproved freehold with vacant possession. These values range from £1,350,000 to £2,000,000. The valuation dates are between May 1996 and March 1997.
80. Miss Joyce said that the only figures she agreed with Mr Young were the enfranchisement prices, not the calculation or analysis of those prices. The unimproved freehold values produced by Mr Young were not agreed. At the time Miss Joyce produced her own calculation of the enfranchisement price to advise Phillimore regarding a settlement. These calculations produced higher prices than those actually agreed, the policy of Phillimore being to agree lower enfranchisement prices than could be strictly justified in order to avoid the cost and delay of tribunal proceedings and having regard to certainty and timing of capital receipts. This was confirmed by Mr Carnwath.
81. In Delaforce v Evans the member (J Stuart Daniel QC) said (page 777):-
`The Tribunal has often said that settlements, when put forward as comparables, are to be regarded with some caution. If there are open market transactions in which neither party was acting under compulsion then these transactions are to be preferred. But the Tribunal has also said that evidence of previous settlements by an acquiring authority will be accepted and acted on in the absence of other evidence.'
Later in his decision (page 778) he referred to what has come to be known as `the Delaforce effect, namely that settlements may be high or low due to the wish of one or both parties to settle rather than risk the expense and delay of tribunal proceedings. Settlement evidence therefore should be adjusted to take into account the pressure on the parties (or one of them) to settle at a higher or lower figure. It is a question of evidence in each case whether any weight should be given to settlement evidence and, if so, what adjustment (if any) should be made for the Delaforce effect.
82. On the evidence in these appeals I give no weight to these settlements for three reasons. First, I have sufficient and more reliable open market evidence, namely three freehold sales and four leasehold transactions. Secondly, I accept the evidence of Miss Joyce that the only figures agreed were the enfranchisement prices and not the calculations or analyses to produce those prices. The freehold unimproved values on which Mr Young relies have not been agreed. Thirdly, I accept the evidence of Miss Joyce and Mr Carnwath that it was the policy of Phillimore to accept lower prices than strictly justified in order to avoid the expense and delay of tribunal proceedings and for considerations of certainty and timing of capital receipts. This is the Delaforce effect and I have no evidence of the adjustments which ought to be made to remove it from the settlement figures. I give no weight to the settlement evidence and do not consider it further.”
24.	It is Mrs South's contention on this appeal, in ground 3 of her grounds of appeal, that the Member erred in law in failing to attach any weight to evidence of settlements under the 1967 Act.
25.	The Member then turned to the final category of comparables sought to be relied on by Mr Young, viz. offers made to Mrs South by the Trustees prior to 11 March 1997. This part of the Decision (in paragraphs 83 to 89 inclusive) is the subject of ground 1 of Mrs South's grounds of appeal. Once again, it is convenient to set it out in full:
“83. The last category of comparable consist of offers made by Phillimore to Mrs South. The evidence is as follows.
84. Before Mrs South served notice to enfranchise negotiations took place regarding her purchase of the freehold of 26 Upper Phillimore Gardens. On 15 August Miss Joyce wrote to Mrs South:-
`Having given very careful consideration to all of these points, we are of the opinion that the current value of the freehold under the provisions of the Leasehold Reform Act is £1.5 million.'
On 29 August 1996 Miss Joyce wrote again:-
`In my earlier letter I mentioned a figure of £1.5 million for the freehold of the property and the Trustees have said that they would be prepared to reduce this by £15,000 to give a purchase price of £1.485 million.'
On 9 December 1996 Mrs South wrote to Miss Joyce:-
`We have to take into account that - as you have said yourself in relation to my £1.2 million 1990 figure - initial prices quoted on the Estate are open to negotiation. From my own knowledge of other people enfranchised on the Estate ..., the original figure put forward as a starting point by the Estate is normally lowered on negotiation to rather below half.
The £1,485,000 you quoted me would be reduced by this standard proportion in the ordinary course of negotiation and if we take into account the special circumstances of my case ... a lower figure should be reached.'
On 16 December 1996 Miss Joyce wrote to Mrs South:-
`On 15 August this year we quoted £1.5 million for the freehold interest in the house. Although you had not served a notice to enfranchise, the quoting price was calculated on the assumption that you would qualify under the provisions of the 1993 Act. At that time the freehold interest in the property, disregarding lessees' improvements, was valued at £1.55 million. That figure was discounted at a rate of 6% for the period of seven months which remained on your lease. As the unexpired term of your lease was so short, there was no marriage value.
The actual figure shown in the calculation was £1,498,500 and that was rounded up to the quoting price of £1.5 million. I did not include a larger margin for negotiation because you had specifically requested the lowest figure which I could recommend the Trustees to accept. In fact, the Trustees themselves later agreed to reduce the figure be £15,000 but required that you accept the revised offer of £1.485 million by the end of October and complete the purchase by the end of the year ...
I have now recalculated the enfranchisement premium, again using an unimproved freehold value of £1.55 million and a discount rate of 6%, but taking account of the reduction in the length of your lease to three months, This fresh calculation gives an increased enfranchisement premium of £1,527,600.
As you can see from the above, there is no scope for any further reduction of the previously quoted figure, let alone halving it. The quoting price already took account of the scale of your improvements and I think we must agree to differ regarding the effects of our 1990 figure as we have already covered this point extensively in previous correspondence.'
On 8 July 1997, after notice to enfranchise had been served by Mrs South, Miss Joyce wrote to her in more formal terms quoting an enfranchisement price of £2,625,000.
85. It was contended for Mrs South that the figures put forward by Miss Joyce in the above correspondence were valuations and that Miss Joyce has been inconsistent in putting forward a value of £2.8 million before this Tribunal and the leasehold valuation tribunal.
86. Miss Joyce said that the figures in the above correspondence were offers not valuations. They were low in accordance with her instructions from Phillimore to take into account the cost of tribunal proceedings when negotiating sales to sitting tenants. The figures offered were the lowest that could be made with a further discount to reflect Mrs South's long association with the Estate. Her initial figure of £1.5 million was not supported by a detailed valuation, By July 1997, when Miss Joyce quoted a price of £2,625,000, the negotiations were on a more formal basis due to the service of notice to enfranchise by Mrs South. There were many reasons for the difference between £1.5 million and £2.645 million, including recognition of the high price achieved on the sale of 11 Phillimore Gardens and clarification of matters such as size and improvements. Miss Joyce said that with hindsight it would have been better not to have made concessionary offers to Mrs South, nor to refer to them as valuations, but Phillimore put a high price on the avoidance of tribunal proceedings. 
87. Mr Carnwath confirmed that the offers made before service of the notice to enfranchise were never intended to represent the full market value. They were at the lowest end of the scale to reflect the desire of Phillimore to achieve certainty, to avoid the cost of proceedings in the leasehold valuation tribunal and to avoid delays. These low offers reflected the wish of Phillimore to be fair to Mrs South whilst fulfilling the Trustees' duties to their beneficiaries. Mrs South was also advised that if the offers were of interest a small discount would be given to take into account her long association with the Estate. Other offers were made to Mrs South in addition to the purchase of the appeal property. When Phillimore was advised in March 1997 that notice to enfranchise had been served the Trustees withdrew the offers. Miss Joyce was instructed to prepare a valuation in accordance with the 1967 Act with a view to early application to the leasehold valuation tribunal. This produced the offer of £2,625,000.
88. Mr Carnwath said that that instructions to Chesterton in their negotiations with Dr and Mrs South since 1983 have been in accordance with the general police of the Trustees to be as generous as possible to long standing tenants without breaching their obligations to the beneficiaries. The position changed when notice to enfranchise was served. Phillimore then had a duty to seek a price based on strict statutory valuation principles. This is reflected in the price now sought compared to the earlier offers.
89. I accept the evidence of Miss Joyce and Mr Carnwath. I find that the figures quoted by Miss Joyce between August and December 1996 were offers in negotiations and not valuations. They were unfortunately referred to as valuations but were in truth offers to settle long running negotiations. I do not regard them as evidence of value and give them no weight. They are a good example of the Delaforce effect in operation. Furthermore, I do not think that they diminish the credibility of Miss Joyce's valuation evidence. She was not putting forward these figures as objective opinions of value but as the lowest possible offers in accordance with her instructions from Phillimore.”
26.	By ground 1 of her grounds of appeal Mrs South contends that the Member erred in law in failing to take account - whether as relevant to the question of Miss Joyce's credibility or as evidence of value - of the “valuations” given by Miss Joyce in her letters of 15 August 1996 and 16 December 1996 (referred to by the Member in paragraph 84 of his Decision), and in finding that the figures quoted in those letters were offers in negotiations and not valuations. This forms the main ground of Mrs South's challenge to the Decision on this appeal, and I shall return to it in due course. 
27.	Having considered and reviewed all the evidence relating to comparables, the Member addressed the market value issue. In paragraph 91 of the Decision he said this: 
“91. It is now a matter of judgement where I fix the value of the freehold of the appeal property with vacant possession in March 1997 within the overall bracket of £2,100,000 and £2,600,000. Mr Young's figure of £1,500,000 is clearly much too low and unsupported by the evidence. The leasehold valuation tribunal determined this value at £2,100,000, which is at the lower end of my bracket. Miss Joyce figure is £2,800,000, just above the upper end of my band of values. The best evidence of value is 11 Phillimore Gardens, which I have analyses to indicate a price of £2,600,000 for the appeal property. The other comparables, however, suggest a lower figure and I think that I should take them into account to reduce the figure. I determine that the open market value of the unimproved freehold interest in the appeal property with vacant possession as at 11 March 1997 was £2,400,000.”
28.	The Member then adjusted that figure to take into account the unexpired term of the tenancy, as urged by Mr Young, and thereby reached a rounded up figure of £2,395,000.
29.	The Member then turned to the issue whether that figure should be further discounted to reflect the fact that Mrs South might not give vacant possession on the expiration of the term (i.e. the vacant possession issue). That part of the Decision (paragraphs 94 to 114 inclusive) is the subject of Mrs South's sixth and last ground of appeal.
30.	In this part of the Decision, the Member considered the available evidence and concluded that no deduction should be made for the risk that vacant possession would not be given on the expiration of the term. In paragraph 109 of the Decision he said this: 
“What certain evidence is there that the vendor and purchaser in the assumed sale under section 9(1C) of the 1967 Act would have agreed to a deduction for the possibility that vacant possession would not be given on 25 March 197? The short answer is none. Mr Young's deduction is based on conjecture as to the mind of the purchaser, the cost of obtaining possession, analogy with a forced sale and the sale of rent controlled houses and the difficulties which might be experienced in obtaining finance for purchase. I am not persuaded by this indirect and uncertain evidence.” 
31.	Later in the Decision (at paragraph 111) the Member said this: 
“There is no evidence before me to show that purchasers in the market of houses subject to short unexpired terms make a deduction for the risk that the tenant will unlawfully remain in occupation after the expiration of the tenancy. This was conjecture on the part of Mr Young.” 
32.	Earlier in paragraph 111 of the Decision the Member considered the evidence as to Mrs South's intention, referring in this connection to a letter from her to Chestertons dated 12 April 1996 in which she said that the Trustees need not fear that she would stay in the subject property once she had no right to do so. 
33.	Mrs South contends (by ground 6 of her grounds of appeal) that the Member erred in law in rejecting Mr Young's evidence that a discount should be allowed to reflect the risk of vacant possession not being given on the expiration of the term; that the Member applied too high a standard of proof in requiring “certain” evidence (see paragraph 111 of the Decision); that Mrs South's subjective intention was irrelevant; and that in any event the letter to which the Member referred was written almost a year before service of her notice under the 1967 Act. 
	The arguments on this appeal
34.	Ground 1 of the grounds of appeal: the offers of settlement made to Mrs South by the Trustees prior to 11 March 1997
35.	Mr Price QC introduces the grounds of appeal by referring us to well‑known passages from the speeches of Viscount Simmonds and Lord Radcliffe in Edwards v Bairstow [1956] AC 14, in support of the non-contentious proposition that where the decision of the lower tribunal on a question of fact is such as no tribunal properly directed as to the law could have reached, it may be assumed that the tribunal misdirected itself as to the law. He submits that in the instant case the decisions of the Tribunal which are challenged in the grounds of appeal fall into that category, and that they are accordingly susceptible to challenge on this appeal.
36.	Turning to ground 1, Mr Price points to the terms of the letters from Miss Joyce dated 15 August 1996, 29 August 1996 and 16 December 1996. He submits that on the face of it, these letters constitute extremely good evidence of value. He stresses that Miss Joyce is a qualified surveyor with direct knowledge of property in the area and that the figures were expressed to be valuations. He submits that the Tribunal's acceptance of Miss Joyce's evidence to the contrary is wholly unwarranted and that its finding that the figures which she put forward in correspondence did not represent her estimate of the then value of the freehold interest in the subject property is, in the circumstances, a remarkable finding. He reminds us that the Trustees at all times owed a duty to their beneficiaries to achieve the best price reasonably obtainable, and submits that the Tribunal was wrong in apparently accepting Mr Carnwath's evidence (recited in paragraph 88 of the Decision) that “the position changed when notice to enfranchise was served”.
37.	Mr Price submits that the very substantial difference between the figures mentioned by Miss Joyce in correspondence and the figures which she subsequently put forward to the Lands Tribunal (£1,500,000 and £2,800,000) cannot simply be explained away by the Trustees' concern to reach a negotiated settlement if at all possible, particularly when one takes into account the Trustees' obligations to their beneficiaries. He submits that the correspondence completely destroys Miss Joyce's credibility; further or alternatively that the Member ought to have paid regard to the figures mentioned in correspondence as being persuasive evidence of value.
38.	Mr Price further submits that the Member was wrong to accept the evidence of Mr Carnwath to the effect that the offers made by Miss Joyce on behalf of the Trustees “were never intended to represent full market value”. He points out that Mr Carnwath is not a valuer and accordingly is not qualified to give valuation evidence.
39.	Mr Price accordingly submits that the Tribunal should have attached at least some weight to the figures put forward by Miss Joyce in correspondence in 1996, and that had it done so its decision would have been different in that it would have determined a lower price.
40.	He submits that no Tribunal properly instructed as to the law could have concluded that no weight at all should be placed on those figures. 
41.	In his helpful written skeleton argument (we did not find it necessary to call on him to make oral submissions) Mr Berry QC submits that the letters in question can only be relevant to Miss Joyce's credibility, which was a matter for the Tribunal. He points out that it is clear from paragraph 89 of the Decision that the Member was well aware that Miss Joyce's credibility had been put in issue, but he nevertheless accepted her evidence - as well as that of Mr Carnwath. Mr Berry submits that there was no error of law involved in the Member's decision to attach no weight to the figures put forward by Miss Joyce in correspondence.
42.	It should perhaps be recorded that when the Trustees first saw ground 1 of the grounds of appeal, they wrote to the Tribunal asking for the Member's notes of evidence to be disclosed. The Member refused to disclose his notes otherwise than under an order of the court. The Trustees accordingly sought, in their skeleton argument, to rely on counsel's note of Miss Joyce's evidence, together with a note of exchanges between the Tribunal and Mr Price which took place at one stage in the hearing relating to the issue of Miss Joyce's credibility. The purpose of this latter note, as I understand it, was to show that the Tribunal recognised that that issue was fairly and squarely before it. However, neither of the notes was agreed by Mrs South, who objected to their introduction in this appeal. This led the Trustees, at a very late stage (on 30 May last, about a fortnight ago), to apply to the Court of Appeal (Peter Gibson and Laws LJJ) for orders requiring the Member to, in effect, disclose his notes. The application was refused, primarily because it was made far too late. In the circumstances, I would for myself pay no regard to the additional material annexed to the Trustees' skeleton argument or to the skeleton argument itself in so far as it refers to such material.
43.	Ground 2 of Mrs South's grounds of appeal: 12 Upper Phillimore Gardens 
44.	Mr Price accepts that Mrs South cannot challenge on appeal the decision of the Tribunal to reject a number of comparables on the ground that the transactions in question were too far removed in time from the valuation date. However, he does seek to challenge the Tribunal's decision to reject 12 Upper Phillimore Gardens as a comparable because of “the uncertainty which emerged at the hearing regarding the material facts” (see paragraph 75 of the Decision). Mr Price submits that the matters listed by the Tribunal in this connection (viz. whether the leasehold purchaser was a special purchaser, the gross internal area, the improvements to the property and the value of the contents which were included in the price) were all matters which would, if established, serve to inflate the price. He submits that given that the price of 12 Upper Phillimore Gardens indicated a lower figure for the subject property than that which the Tribunal determined, the Tribunal should have taken it into account. He further submits that any uncertainty as to floor area, if not in relation to the other matters in question, could readily have been resolved either by reference to plans or on inspection.
45.	Mr Berry in his skeleton arguments submits that the Tribunal made no error of law in rejecting 12 Upper Phillimore Gardens as a comparable. The Tribunal was, he submits, fully entitled to conclude that it was not a reliable comparable. He points out that since all the leasehold comparables which were taken into account by the Tribunal produced equivalent prices for the subject property which were less than the unimproved value of the subject property as eventually determined by the Tribunal (see the table set out at paragraph 76 of the Decision), it is in any event hard to see what advantage Mrs South lost by reason of the Tribunal's rejection of 12 Upper Phillimore Gardens as a comparable. 
46.	Ground 3 of the grounds of appeal: the reliability of settlements under the 1967 Act as evidence of value
47.	Mr Price submits that since the settlements were made on professional advice by parties in an equal bargaining position, they were akin to transactions in the open market. He submits that in the circumstances it was for Miss Joyce to put forward alternative analyses of the settlements, showing that they differed in some significant way from market transactions. Mr Price further submits that the so‑called Delaforce effect, referred to by the Member in the course of his Decision, is most evident in cases where one party is unrepresented, which was not the case in any of the settlements relied on.
48.	Mr Price cites the decision of the Lands Tribunal in the case of The Keepers and Governors of the Possessions Revenues and Goods of the Free Grammar School of John Lyon v Brett as an example of a case in which the Tribunal took into account evidence of settlements under the 1967 Act. 
49.	Mr Berry in his skeleton argument submits that the Tribunal's reasons for rejecting settlements as comparables are entirely unobjectionable. He submits that settlement evidence may properly be rejected where there is not only “sufficient” but “more reliable” evidence in the form of evidence of open market transactions. As to the impact of the so‑called Delaforce effect, Mr Berry submits that this was a matter for the Tribunal to determine on the evidence. In the instant case, it was a material consideration that Miss Joyce had herself been a party to the settlements relied on. Hence the Tribunal cannot be criticised for having accepted her evidence that the settlements were unreliable as evidence of value. 
50.	Grounds 4 and 5 of the grounds of appeal: the “equivalent” values shown in the tables set out in paragraph 73 of the Decision (freehold sales) and paragraph 76 of the Decision (leasehold sales)
51.	Mr Price complains that the Tribunal did not explain, either sufficiently or at all, how the comparables were adjusted so as to produce the so‑called “equivalent” values shown in the tables to which I have referred, or how reliance on the leasehold sales could have led to a higher price than indicated by any of them. He notes the Tribunal's observation (in paragraph 67 of the Decision) that the comparison in terms of location and quality of accommodation is a matter of overall judgment, but he submits that a properly reasoned decision would set out what relevant differences were found to have existed so that the parties could understand the decision made and consider whether and to what extent it could be subject to challenge. He submits that it is not good enough for a Tribunal to say that in making the necessary comparisons it has exercised a professional judgment: he submits that it must go further and explain how and why it reached the figures it did and it must show its working through of the comparables. He further submits that it is not at all clear how the Tribunal could have used the leasehold comparables and yet come to a figure which is higher than any of the so‑called “equivalent” prices which the leasehold sales produced.
52.	In support of this ground of appeal, Mr Price relies on Curtis v London Rent Assessment Committee [1999] QB 92, a decision of this court. As its title indicates, that case concerned the determination of a fair rent by a rent assessment committee. At page 117 of the report of that case Auld LJ said this in relation to the treatment of comparables (starting at letter C): 
“... however much `feel' or judgment the exercise requires and is given, the end product is a figure for rent of particular premises. Where the comparables are not exact and/or there is a need to make disputed adjustments for hypothetical lack or scarcity or for disregards ... it necessarily involves some working through - some sums, however few and approximate - some arithmetical markers whether in percentage form or otherwise on the way to the final figure. There is no other rational way of giving effect to the scheme of assessment set out in section 70 of the Act of 1977.” (That is a reference to the Rent Act 1979) 
53.	See also Auld LJ's citation from the case of Re Poyser & Mills' Arbitration on page 119 of the report of Curtis at letter D.
54.	Mr Price submits that those observations apply equally in the instant case.
55.	Mr Berry in his skeleton argument submits that the essential reasoning of the Tribunal is made perfectly clear in the Decision, and that it was not necessary for the Tribunal to articulate every element or step in the decision process. What it boils down to, he submits, is that the Tribunal rejected the approach to valuation contended for Mr Young, preferring that contended for by Miss Joyce. It accepted Miss Joyce's evidence that 11 Phillimore Gardens was a good comparable; indeed, it concluded that it was the best. It also accepted Miss Joyce's evidence that the valuation ought to proceed by reference to comparable freehold sales, albeit that it did pay some regard to leasehold transactions. He submits that this explains why the value determined by the Tribunal exceeds the equivalent values derived from the leasehold transactions. 
56.	Ground 6 of the grounds of appeal: the vacant possession issue 
57.	Mr Price submits that the Tribunal asked itself the wrong question when it asked rhetorically (see paragraph 109) what “certain” evidence was there that the vendor and purchaser in the assumed sale under section 9(1C) of the 1967 Act would have agreed to a deduction to cover the possibility that vacant possession would or might not be given at the expiration of the term. Mr Price submits that in the nature of things there can be no certain evidence to that effect, and that the Tribunal ought to have had regard merely to the balance of probabilities. He further submits that statements by Mrs South as to her subjective intention in relation to giving vacant possession at the expiration of the term were irrelevant, the relevant consideration being how a prospective purchaser in the open market would have viewed the risk of her failing to do so. In any event, he points out that the letter relied on by the Tribunal was written almost a year before notice was served under the Act. He submits that what the Tribunal termed “conjecture” on the part of Mr Young was in fact the only rational conclusion in the circumstances, and that the Tribunal ought to have accepted his evidence on this point, given his knowledge and experience of the market.
58.	Mr Berry points out that (as is common ground) neither Mr Young nor Miss Joyce had any experience of an actual sale of a freehold interest subject to a lease with only a few days of the term left to run, and that it is also common ground that Mrs South had no right to remain in possession of the subject property following the expiration of the term. He submits that Mrs South cannot be heard to say that she would or might have wrongfully refused to give up possession of the subject property (in fact, as noted earlier, she did not give evidence before the Tribunal). He submits that the Tribunal made no error of law in deciding that no discount was appropriate. As to the Tribunal's reference to “certain” evidence, Mr Berry submits that it is clear from the context that what the Tribunal was referring to was “actual” evidence of a discount being applied; the contrast being with “indirect” evidence. As already noted, neither Mr Young nor Miss Joyce was in a position to put forward any actual evidence of that. Mr Berry submits that the Tribunal was fully entitled to prefer the evidence of Miss Joyce on this issue to that of Mr Young.
59.	As to the letter from Mrs South to which the Tribunal referred, Mr Berry submits that the Tribunal was entitled to take it into account, but that in any event it is clear that the decision on the vacant possession issue turned in the end on the evidence of the experts, rather than on anything which Mrs South had said in that letter. 
	Conclusions
60.	Before turning to the specific grounds of appeal, it is perhaps as well that I should remind myself that this is an appeal by way of case stated. Section 3(4) of the Lands Tribunal Act 1949 provides that a decision of the Lands Tribunal shall be final, save that a person aggrieved by the decision as being erroneous in point of law may require the Tribunal to state a case for the Court of Appeal. By definition, therefore, an appeal by way of case stated under the 1949 Act is confined to questions of law. Thus, in order to succeed on her appeal Mrs South must demonstrate to the satisfaction of this court that the Tribunal's decision is vitiated by one or more errors of law. It is not for this court, hearing an appeal by way of case stated, to reopen any of the factual issues which fell to be resolved by the Tribunal, save in the extreme case where no Tribunal properly directing itself as to the law could have resolved a particular factual issue as it did.
61.	Nor is it for this court to substitute its own assessment of the expert evidence for that which the Tribunal made. That is exclusively the function of the Tribunal, and it falls outside the scope of an appeal by way of case stated. As Laws LJ said, when agreeing with Peter Gibson LJ that the Trustees' application, to which I referred earlier, should be refused: 
“I think it very much in the public interest to preserve the procedural integrity of appeals of this kind. To do so promotes the desirable aims of clarity and economy and thus the overriding objective of the Civil Procedure Rules.” 
62.	I respectfully agree with those sentiments, which seem to me to be particularly apt when one comes to consider Mrs South's various grounds of appeal.
63.	As Lord Evershed MR said in Routh's Trustees v Central Land Board [1960] 1 WLR 737 (an appeal by way of case stated from the Lands Tribunal) at page 740 of the report: 
“... Parliament in its wisdom and by the terms of the Act [that being a reference to the Lands Tribunal Act 1949] has said in quite plain terms that there shall be no review of matters of fact in the Court of Appeal on a case coming from the Lands Tribunal. On matters of fact the decision of the Lands Tribunal, right or wrong, is final; but a person aggrieved ... may require a case stated which will raise questions of law and law only. In this case the vital question was one of valuation, arriving at an estimation in pounds shillings and pence, of the development value of certain interests in land belonging to the appellants, and a matter of value and such a matter of estimation is one of fact.” 
64.	With those observations firmly in mind, I turn to Mrs South's grounds of appeal. 
65.	The first and main ground of appeal relates to the offers of settlement made to Mrs South by Miss Joyce on behalf of the Trustees prior to service of Mrs South's notice under the 1967 Act.
66.	With all respect to Mr Price's submissions, I cannot for myself see any substance in this ground of appeal. The figures in Miss Joyce's letters were material only to the issue of her credibility in subsequently putting forward substantially increased figures for the value of the freehold interest in the subject property. The Tribunal was plainly aware of the challenge to Miss Joyce's credibility which those letters represented: see paragraph 89 of the decision where the Tribunal said: “Furthermore I do not think that they diminish the credibility of Miss Joyce's valuation evidence.” That was a conclusion which the Tribunal was, in my judgment, fully entitled to reach, and it is one which involves no error of law. The issue as to the credibility of Miss Joyce's evidence was exclusively a matter for the Tribunal, and cannot be reopened on this appeal. In particular, I reject Mr Price's submission that the fact that the existence of the Trustees' obligations to their beneficiaries sufficed to provide a basis of challenging the credibility of Miss Joyce's valuation serves to turn the issue of her credibility into a point of law. 
67.	The Tribunal went on to conclude that Miss Joyce was putting those figures forward not as objective opinions of value but as the lowest possible offers in accordance with her instructions from the Trustees. That too was, in my judgment, a finding which the Tribunal was fully entitled to make, and it is not open to challenge on this appeal.
68.	Mr Price's reliance on the duties owed by the Trustees to their beneficiaries is, once again, an attack on the credibility of Miss Joyce's evidence, and as such it takes Mrs South no further on this appeal.
69.	In any event, the Tribunal was in my judgment fully entitled to conclude that the figures put forward by Miss Joyce in correspondence were, as the Member described it “a good example of the Delaforce effect in operation” (see paragraph 89 of the Decision) and accordingly should be disregarded.
70.	I would accordingly reject Mrs South's first ground of appeal. I would, however, go on to say that I regard this ground of appeal as mischievous. It is quite plain from the correspondence that the Trustees were bending over backwards to be fair to Mrs South, and it is to my mind regrettable that those very attempts, which were rejected by Mrs South, should now form the main basis of her appeal to this court. In making that comment I intend, of course, no criticism whatever of her solicitors or counsel.
71.	I turn, then, to her second ground of appeal relating to 12 Upper Phillimore Gardens. I can deal with this ground very shortly. It was for the Tribunal to decide what comparables to rely on and which to reject. In deciding not to rely on 12 Upper Phillimore Gardens as a comparable the Tribunal made no error of law, and its decision is not susceptible to challenge on this appeal.
72.	The same consideration applies, in my judgment, to Mrs South's third ground of appeal, relating to settlements under the 1967 Act. In some cases such evidence may be the only available evidence of comparables, but in the instant case there was better evidence available in the form of freehold and leasehold sales. Nor do I regard the decision of the Lands Tribunal in Brett (relied on by Mr Price) as laying down any rule as to whether and to what extent evidence of settlements under the 1967 Act should be received as being relevant valuation evidence. In the nature of things, there is no scope for any rule on such a matter. 
73.	In the circumstances there is, in my judgment, no basis for the contention that in attaching no weight to settlements under the 1967 Act in the instant case, the Tribunal somehow erred in law. 
74.	As to grounds 4 and 5 of Mrs South's grounds of appeal, the suggestion that the Tribunal failed properly to explain its conclusions seems to me to be completely unsustainable and I must confess to being considerably surprised to find it being made. The Tribunal plainly took immense care in framing its Decision, as indeed one would expect. If I may permitted to say so, the Decision seems to me to be a model of thoroughness and painstaking attention to detail. As the Tribunal explained in paragraph 67 of the Decision, on matters of location and quality of accommodation the question what adjustment should be made to effect a true comparison with the subject property is a matter of overall judgment. In relation to the other adjustments, the Tribunal explained the basis for the adjustments it made. I can, for my part, discern no substance whatever in either of these grounds of appeal.
75.	Nor do I find the decision in Curtis of any assistance in this connection. The rent assessment committee's reasoning in that case was plainly deficient, in that it was not sufficiently explained in its decision. In the instant case, the Tribunal's reasoning seems to me to be perfectly clear. 
76.	I turn, finally, to ground 6 of Mr South's grounds of appeal relating to the vacant possession issue. I accept Mr Berry's submissions, as set out in his written skeleton argument. It seems to me to be plain from the context that when referring to “certain” evidence (in paragraph 109 of the Decision) the Tribunal was intending to distinguish between factual evidence and opinion evidence. As I read the paragraph, the Tribunal was drawing attention to the fact that, as is accepted, neither Mr Young nor Miss Joyce had been able to point to a situation comparable to the instant case in which a discount had in fact been allowed for the risk that vacant possession would or might not be given on the expiration of the lease. As to the letter from Mrs South referred to in the Decision, it seems to me to be clear that the decision on the vacant possession issue turned in the end on the expert evidence, the Tribunal preferring the evidence of Miss Joyce. But in any event, for reasons already explained, these were all matters for the Tribunal. Once again, I can see no basis upon which the Tribunal's decision on the vacant possession issue can be challenged in this court. 
77.	Having considered all Mrs South's grounds of appeal, I remain wholly unable to discern any error of law in the Tribunal's decision. The conclusions of the Tribunal which are challenged on this appeal were conclusions which the Tribunal, properly directing itself as to the law, was fully entitled to reach. It follows that there is, in my judgment, no basis for an appeal by way of case stated in this case. 
78.	For those reasons, I would dismiss this appeal. 
79.	LADY JUSTICE HALE: I agree. 
80.	LORD JUSTICE ALDOUS: I also agree. 
ORDER: Appeal dismissed with costs to be the subject of a detailed assessment; permission to appeal to the House of Lords refused.
(Order not part of approved judgment)