Decision Nº LRX 120 2014. Upper Tribunal (Lands Chamber), 20-05-2015
| Jurisdiction | UK Non-devolved |
| Judge | Martin Rodger QC, Deputy President |
| Date | 20 May 2015 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | LRX 120 2014 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral citation number: [2015] UKUT 0221 (LC)
LT Case Number: LRX/120/2014
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD AND TENANT – service charges – scope of compromise agreed in correspondence – identity of landlord – validity of service charge demands – section 47, Landlord and Tenant Act 1987 – appeal allowed in part – application under section 20C – whether necessary to rule on scope of service charge clause – application refused
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
THE FIRST TIER TRIBUNAL PROPERTY CHAMBER
(RESIDENTIAL PROPERTY)
and
CAMERET COURT RESIDENTS ASSOCIATION LIMITED
Respondent
Re: 32 Cameret Court,
Lorne Gardens,
London W11
Before: Martin Rodger QC, Deputy President
Sitting at: Royal Courts of Justice, Strand, London WC2A 2LL
5 May 2015
Justin Bates, instructed by Brethertons LLP, for the Appellant
Brynmor Adams, instructed by PDC Legal, for the Respondent
© CROWN COPYRIGHT 2015
The following cases are referred to in this decision:
Ghany v Attorney General of Trinidad and Tobago [2015] UKPC 12
Pendra Loweth Management Limited v North [2015] UKUT 91(LC)
Introduction
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Mrs Tedla, the appellant, is the long leaseholder of a flat at 32 Cameret Court, Lorne Gardens, London W11; Cameret Court Residents Association Limited, the respondent, a company controlled by the owners of flats at Cameret Court, is her landlord. In 2009 the parties reached an agreement compromising a dispute over the service charges payable by Mrs Tedla. This appeal concerns the scope of that compromise. The appeal also concerns the form of service charge demands relied on by the respondent and whether they have complied with the requirements of section 47, Landlord and Tenant Act 1987 (“the 1987 Act”).
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Cameret Court is a block of 36 one and two bedroom flats. The freehold interest is subject to a headlease of the whole block granted on 30 November 1979 for a term of 125 years. The headlease is vested in Cameret Court Ltd. Out of that headlease an occupational sub-lease of flat 32 was granted on 17 July 1985. It is for a term of 125 years (less 10 days) from 30 November 1979 so it will expire on 20 November 2104. Mrs Tedla acquired that sub-lease by assignment in 1988. Sub-leases of the remaining flats in the building were also granted on what I assume were substantially the same terms.
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The respondent was a party to the occupational sub-leases of each of the flats in the building in its capacity as a management company responsible (together with the landlord) for the provision of services.
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On 11 August 1986, which I assume was after sub-leases of all of the flats had been granted, an underlease of the whole building was granted to the respondent for a term expiring on 23 November 2104. That was a lease of the reversion to the occupational sub-leases, in that it was granted subject to those sub-leases. It is now common ground that, by reason of that underlease, the respondent became the appellant’s immediate landlord. The freehold interest in Cameret Court is now vested in Addison & Holland Estates Ltd which is not party to these proceedings.
The proceedings
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There have been numerous county court proceedings between the parties to this appeal. The earliest of which I am aware was a claim for unpaid service charges for the service charge year ending on 23 June 2010. Those proceedings were settled on 24 June 2011 by a consent order by which the appellant agreed to make a payment of £2,500. In March 2013 the respondent commenced a further claim for service charges and administration charges totalling £5,853.41 falling due on and after 25 December 2011. I am told that yet another claim is currently stayed awaiting the outcome of this appeal but no details are before the Tribunal.
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On 15 May 2013 the appellant herself applied to the leasehold valuation tribunal for a determination under s. 27A, Landlord and Tenant Act 1925 of her liability to pay service charges in each year from her acquisition of her sub-lease in 1988 until 2010. The scope of that application was subsequently limited by agreement to cover only the years ending 31 December 2001 to 31 December 2010. It was further limited when it was pointed out that the appellant’s liability for the period 24 June 2010 to 24 December 2011 had been the subject of a previous application under s. 27A, decided by the LVT on 13 December 2012. There was no appeal from that determination.
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The respondent’s claim for service charges payable from 25 December 2011 was transferred by the West London County Court to the First-tier Tribunal (Property Chamber) (“the F-tT”) the (the successor of the LVT) on 29 October 2013 so that it could be heard together with the appellant’s own s. 27A application.
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This appeal is against the decision of the F-tT given on the transferred proceedings and the s. 27A application on 14 August 2014.
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In its decision the F-tT identified two periods as being the subject of its consideration. The first was from 31 January 2001 until 24 June 2009, while the second it described as being from 24 June 2010 “to date”. The period from 24 June 2009 to 24 December 2011 was not open to consideration because of the consent order of 24 June 2011 and the LVT’s decision of 13 December 2012. Although the F-tT referred in paragraph 11 of its decision to the second period commencing on 24 June 2010 in fact it limited its consideration to the period after 25 December 2011.
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The F-tT first considered an argument on the part of the respondent that a binding agreement had been reached in 2009 which settled the appellant’s liability for service charges for the whole of the period up to 24 June 2009. The appellant’s position was that there had either been no such agreement or that any settlement which had been achieved applied only to the period from 24 June 2007 to 24 June 2009, and not for any earlier period. She claimed in any event to be entitled to reimbursement of all of the service charges she had paid in the period from 31 January 2001 to at least 24 June 2007, and subject to the question of settlement to 24 June 2009 as well, on the grounds that the respondent had failed to comply with the statutory formalities for consultation, the provision of information, and the form of demands for service charges.
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The contemporaneous evidence concerning the compromise relied on by the respondent before the F-tT was a single letter dated 30 July 2009 from its managing agents, Lewis & Tucker, to the appellant’s solicitors, Allen Edwards & Co, which contained the following statement:
“Further to your letter dated 16 July 2009, we are instructed to accept the sum of £3,662.05 in full and final settlement of your client’s service charge, ground rent, interest and legal fees for the period 24 June 2007 to 24 June 2009.”
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The F-tT also received evidence in the form of a witness statement by Mr Ross, the chairman of the respondent’s board of directors, in which he stated that the agreement reached with the appellant had been intended to cover all outstanding charges to the date of the letter and not simply for the period from June 2007 to June 2009. A witness statement from the appellant disputed that any agreement had been reached and suggested that her offer to make a payment of £3,662.05 had been subject to the provision of an up-to-date statement of account which had never been forthcoming so that the proposed agreement fell through.
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The F-tT was left in a difficult position. The subjective evidence of what the parties had intended was inadmissible and, possibly for that reason, neither party took the opportunity to cross examine the makers of the witness statements. Understanding what had been agreed, or indeed whether any binding agreement had been achieved, was not easy because the F-tT had only a single letter in what had obviously been an exchange of correspondence. In paragraph 30 of its decision the F-tT nonetheless concluded that, on the balance of probabilities, a binding agreement had been reached in July 2009 and found as a fact, on the basis of Mr Ross’ witness statement, that the agreement had covered all outstanding charges up to the date of the letter of 30 July 2009. On that basis it was satisfied that it was not open to the appellant to seek a determination from the F-tT of her liability to pay the service charges which she had in fact discharged between January 2001 and June 2009.
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For the period from 25 December 2011 to the date of its decision the F-tT considered and rejected a number of challenges by the appellant to sums demanded by the respondent. The F-tT made no decision on an issue of legal costs...
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