Decision Nº LRX 108 2011. Upper Tribunal (Lands Chamber), 17-12-2012
| Jurisdiction | UK Non-devolved |
| Judge | George Bartlett QC President |
| Date | 17 December 2012 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | LRX 108 2011 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2012] UKUT 457 (LC)
UTLC Case Number: LRX/108/2011
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD AND TENANT – service charges – invalid demand because name of landlord not given – whether made valid for purposes of operation of section 20B by later valid demand – section 20C decision – whether reasons adequate – whether discretion properly exercised – appeal and cross-appeal dismissed – Landlord and Tenant Act 1985 ss 20B and 20C – Landlord and Tenant Act 1987 s 47
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF A
LEASEHOLD VALUATION TRIBUNAL FOR THE
SOUTHERN RENT ASSESSMENT PANEL
BETWEEN HARRY JOHNSON AppellantsJUNE JOHNSON
AND OTHERS
and
COUNTY BIDEFORD LTD Respondent
Re: Holiday Park
Lenwood Country Club
Lenwood Road
Bideford
Devon EX39 3PN
Before: The President
Sitting at: 43-45 Bedford Square, London WC1B 3AS
on 22 October 2012
Mr Charles E S Knapper of Fursdon Knappers, solicitors of Plymouth, for the appellants
Sebastian Kokelaar instructed through direct professional access for the respondent
The following cases are referred to in this decision:
London Borough of Brent v Shulem B Association Ltd [2011] EWHC 1663 (Ch)
Tenants of Langford Court v Doren Ltd LRX/37/2000
Schilling v Canary Riverside Developmemt PTE Ltd LRX/26/2005
The following further cases were referred to in argument:
Drew-Morgan v Hamid-Zadeh [1999] EGLR 13
Beitov Properties Ltd v Martin [2012] UKUT 133 (LC), LRX/59/2011
Akorita v Marina Heights (St Leonards) Ltd [2011] UKUT 255(LC) LRX/134/2009
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This appeal by a number of lessees of holiday chalets on an estate owned by the respondent arises out of an application made by the respondent landlord under section 27A of the Landlord and Tenant Act 1985. The leasehold valuation tribunal that heard the application made two decisions. In the first, dated 2 June 2011, it determined that certain amounts, specified in a schedule to its decision, for the three accounting years 2007/08 to 2009/10 were costs that were reasonable for the purposes of section 19 of the Act, and in so doing it made reductions in a number of items of expenditure relied on by the landlord. It also held that the service charge demands had not complied with the requirements of section 47 of the Landlord and Tenant Act 1987, so that the amounts that it had found to be reasonable were not payable “pending service of valid service charge demands compliant in all respects with the law including section 47”. It said that the applicant had leave to apply to the tribunal for determination that any service charge demands served or to be served complied with section 47. The LVT also made an order under section 20C of the 1985 Act that any costs incurred by the lessor in connection with the proceedings were not to be regarded as relevant costs for the purpose of any service charge. Following the service on the lessees of demands on 8 June 2011 the landlord sought the determination that it had been given leave to seek, and in a further decision dated 27 August 2011 the LVT determined that the service charge demands for the three years complied with section 47 and had been duly served.
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Following the first decision the lessees sought permission to appeal to the Upper Tribunal in respect of a number of matters in the decision. On 11 July 2011 the LVT granted permission limited to one item only, the sewage pump maintenance costs for 2007/08. On 18 July 2011 the lessees made a further application for permission to appeal. They said that a decision of the High Court on 30 June 2011 in London Borough of Brent v Shulem B Association Ltd [2011] EWHC 1663 (Ch) showed that under section 20B of the 1985 Act certain of the amounts that the LVT in its decision of 2 June 2011 had found to be payable (subject to compliance with section 47) were not payable, and they sought permission to enable them to challenge this part of the decision. The LVT refused permission. However, I granted permission to the lessees to appeal on this ground on 23 December 2011. I also granted the landlord permission to appeal on two grounds: firstly whether the LVT’s decision of 2 June 2011 had been correct in determining that the original service charge demands were not section 47 compliant; and secondly whether the LVT had been correct to make an order under section 20C in favour of the lessees.
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At the hearing before me Mr Knapper for the appellants withdrew the appeal in relation to the sewage pump maintenance costs, and Mr Kokelaar for the respondent withdrew the cross-appeal in relation to whether the original demands had been section 47 compliant. This left for determination the appellant’s contention in relation to section 20B and the respondent’s cross-appeal in relation to 20C. It is only necessary, therefore, to refer to such facts as are relevant, or claimed to be relevant, to these matters. I will deal with the section 20B point first.
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The respondent, County Bideford Ltd, became the owner of Lenwood Country Club, the estate that contains the appellants’ chalets, when it purchased the freehold from the previous owners in 2008. On 1 October 2008, in a letter headed “County Bideford (Management) Ltd” Mr Simon Kyriacou, who gave his name above his “countygroup.co.uk” email address, wrote to the lessees as follows:
“You may or may not be aware County Bideford Ltd, have now completed the purchase of the freehold of Lenwood Country Club to include the freehold of your Bungalow.
County Bideford have appointed County Bideford (management) Ltd to manage the estate on their behalf.
I am therefore taking this opportunity to introduce myself as the person responsible for Lenwood on a daily basis.
I also attach a September Rent demand and Insurance confirmation of cover.
Further to a recent meeting with Jane Mills Chair of the Residents Association my client has considered the request for rent and service charges to be paid monthly in advance via direct debit.
On the basis that the September and October Rent and Service charges are paid immediately my clients will accept monthly payments, commencing from 13th November on this basis…”
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The original service charge demands on which the landlord relied were dated between 1 October 2008 and 12 July 2010. Each of these was headed “County Bideford Management Ltd, 156 High Street, Bushey, Hertfordshire WD23 3HF”. The landlord accepts that these demands failed to comply with the requirement in section 47(1)(a) that any written demand must contain the name and address of the landlord. They did not contain the name of the landlord but only that of the management company. Notwithstanding, therefore, that the lessees who had received the letter of 1 October 2008 could have been in no doubt about the name of the landlord, it was accepted that the demands did not contain its name and so failed to comply with the requirement.
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So far as is material for present purposes section 47 of the 1987 Act provides:
“47 Landlord’s name and address to be contained in demands for rent etc
(1) Where any written demand is given to a tenant of premises to which this Part applies, the demand must contain the following information, namely–
(a) The name and address of the landlord…
(2) Where–
(a) a tenant of any such premises is given such a demand, but
(b) it does not contain any information required to be contained in it by virtue of subsection (1)
then…any part of the amount demanded which consists of a service charge or an administration charge…shall be treated for all purposes as not being due from the tenant to the landlord at any time before that information is furnished by the landlord by notice given to the tenant…
(4) In this section ‘demand’ means a demand for rent or other sums payable to the landlord under the terms of the tenancy”
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Section 20B of the 1985 Act provides:
“20B Limitation of service charges: time limit on making demands
(1) If any of the relevant costs taken into account in determining the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge is served on the tenant, then (subject to subsection (2)), the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred.
(2) Subsection...
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