Trustees of Sloane Stanley Estate v Mundy & Lagesse; Aaron v Wellcome Trust Ltd: [2016] UKUT 0223 (LC)
Trustees of Sloane Stanley Estate v Mundy & Lagesse; Aaron v Wellcome Trust Ltd: [2016] UKUT 0223 (LC)
On 10 May 2016 the Upper Tribunal delivered judgment in these three test cases which considered the appropriateness of using a statistical model known as the Parthenia Model to calculate relativity under the Leasehold Reform, Housing and Urban Development Act 1993. The cases were presided over by Mr. Justice Morgan because of their importance.
The 1993 Act requires the relative value of a lease of a flat to be calculated on the assumption that the flat in question does not benefit from any of the rights conferred by the Act. The Parthenia Model relied on by the tenants was based on a historic data sample of properties sold without Act rights and used a statistical method, known as hedonic regression, to try to isolate the effect of lease length on value. The Upper Tribunal rejected use of the Parthenia Model on the basis that it produced an impossible result in relation to one of the flats under consideration. It was held that, since the Model did not work in relation to one flat, it was broken and should not be used to calculate relativity.
Stephen Jourdan QC and Julia Petrenko represented the Wellcome Trust. Anthony Radevsky represented the Sloane Stanley Estate, and Cecily Crampin acted for the tenants.
The judgment can be found here
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