This recent decision in the Upper Tribunal (UT) serves as both a reminder of proper procedure and a warning to practitioners.
It concerned an appeal from the first tier tribunal (FTT) decision determining liability to pay service charge. Prior to the FTT hearing, and in accordance with directions, the areas of service charge is dispute had been identified. At the hearing the landlord was legally represented and the lessee in person. The FTT itself immediately spotted that the strict terms of the lease had not been complied with. It allowed what it describe as “a substantial adjournment” for instructions to be taken by the landlord but did not allow further opportunity to present its case/ adduce further evidence on an estoppel by convention existing. It concluded that nil was due for the years in question as the service charge calculation did not accord with the lease.
The UT noted that the FTT’s rules differ noticeably from the CPR, with the CPR making “no reference to the avoidance of formality, the task of facilitating participation or the effective use of special expertise”. It found the FTT was right to raise the issue – indeed it observed that the appellant’s departure from the scheme of accounting required by the lease was so fundamental that it was both proper and inevitable…that the FTT should raise the issue at the hearing. Where however, the FTT erred was in not allowing sufficient opportunity to the parties to address the issue it raised. Thereafter, the UT considered the issue of estoppel by convention and found in the appellant’s favour.
And now for the warning. Having overturned the FTT’s decision the UT was asked to similarly reverse the decision to make an order under s20C of the 1985 Act. It declined to do so. Martin Rodger QC commented “The appellant’s representative ought not to have been taken by surprise by the point being taken by the FTT and, although I have come to a different conclusion from a tribunal, it was entitled in my judgment to make an order preventing the appellant from adding any of the costs of the proceedings before it to a service charge payable [by the lesee]”.
Elizabeth Haggerty / 20th Oct 2016
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