Mr and Mrs Ismail v Birmingham City Council

The Tribunal unanimously dismisses the appeal and confirms the City Council's decision.

REASONS

Bourton House was the subject of the Tribunal's decision 51 in April 1987, to which reference should be made in order to understand the background of the present appeal. Miss Lilwall, the appellant in decision 51, has since then been carrying on the home in accordance with the compromise approved by the Tribunal in that decision. That is to say she has had 22 residents, accommodated in 7 double and 8 single rooms. And she has been carrying on the home successfully. The City Council's officers have had no complaints, the residents and their relatives have been happy and she has had no difficulty in filling all her vacancies.

Now she wishes to sell the home to Mr and Mrs Ismail, and the crisp question is whether the compromise number of 22 residents approved in decision 51 should continue to apply when the Ismails take over, or whether, on the change of ownership, the maximum number of residents should be reduced to 19.

The number of 19 is arrived at in this way. As recorded in decision 51, in July 1986 the City Council adopted a policy guideline that double bedrooms should normal form no more than 25% of the total bedrooms in a home. This policy guideline has, since decision 51, also received the support of the Tribunal in decisions 52, 56 and 57. The Tribunal is not bound by its previous decisions, but it would not depart from this line of four decisions unless very good reasons were shown for doing so.

If we were to allow the appeal, we would in effect be exempting Bourton House from the 25%-75% ratio in perpetuity. If the Ismails were permitted to accommodate 22 residents with the present bedroom arrangements they would be entitled to assume there would be no reduction if they in turn decided to sell, and Bourton House's exemption from the guidelines would become a privilege running with the land. The City Council's task of bringing all the homes under its jurisdiction up to an acceptable standard would become much more difficult, because other home owners would no doubt demand the same privilege. The City Council and the Tribunal must look at the overall picture. This necessity to look at the overall picture outweighs the evidence that Bourton House has been running successfully with 22 residents. For various reasons there are, and no doubt always will be some residents, or their relatives, who prefer a double to a single room. By managing her home well Miss Lilwall has had no difficulty in keeping her 7 double rooms full. This does not cast any doubt on the appropriateness of the City Council's overall 25%-75% ratio. It simply means that Miss Lilwall has been drawing from the pool of potential occupants of double rooms a higher proportion of her residents than other home owners have been permitted to draw. This privilege was conferred on her for the reasons set out in decision 51, but there is no reason why the privilege should be extended to the Ismails and their successors in title.

The evidence of financial loss also does not outweigh the desirability of supporting the City Council's efforts to apply its guidelines to all homeowners in an even-handed manner. Mr Ismail made it clear in evidence that if he is allowed 22 residents his bank will finance him for a particular purchase price, but if he is allowed only 19 residents his bank will still finance him, but for a lower purchase price. He is perfectly willing to operate with 19 residents, but Miss Lilwall will not accept the lower price. This does not, however, face Miss Lilwall with the stark choice between continuing to run the home herself with 22 residents or dropping her price. She told us that she has tentative plans for adding 3 single bedrooms at an estimated cost of about £30,000. If these plans are approved and she goes ahead with them a strict application of the 25%-75% ratio would point to a total of 22 residents and there would seem to be a case for asking the City Council to apply its guidelines with sufficient flexibility to allow 23 residents. So, on the evidence presented to us, by investing another £30,000 Miss Lilwall appears to have a reasonable prospect of reaching agreement with the Ismails on an acceptable price.

The Tribunal is very conscious of the financial problems which homeowners face. Although the Tribunal is not equipped to enquire in detail into the finances of residential homes, it is obvious that if homeowners cannot obtain a fair return on their investment and a fair reward for their work they will not stay in business and residents and potential residents will suffer. But the dismissal of the present appeal will not, in our view, impose unfair financial hardship on anyone. The Ismails are prepared to buy a smaller home at a lower price or a larger home at a higher price. Miss Lilwall has three choices: she can continue to run the home with 22 residents, she can accept the Ismails' lower offer or she can invest a further sum of about £30,000 and expect to be able to sell at the higher price.

Finally, the evidence concerning the undesirability of reducing numbers from 22 to 19 by turning three residents out was in our view misconceived. We were assured by Miss Lilwall that she is simply not prepared to accept the Ismails' lower offer, so the prospect of a sudden deal at that figure and the immediate necessity to remove three residents does not exist. No residents are in danger of being turned out.

R H CHRISTIE (CHAIRMAN)
R BESSELL
M S JOBBINS