R Ground Rents (Regisport) Ltd v The Upper Tribunal (Adminisrative Appeals Chamber)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leggatt,MR JUSTICE LEGGATT |
| Judgment Date | 17 July 2013 |
| Neutral Citation | [2013] EWHC 2638 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 17 July 2013 |
| Docket Number | CO/3996/2012 |
[2013] EWHC 2638 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Leggatt
CO/3996/2012
MR S MURCH appeared on behalf of the Claimant
MR H DOWLEN, MR W ROSE & MR A GREENE appeared on behalf of the Interested Party
(As Approved)
This is a claim for judicial review of a decision of the Upper Tribunal (Lands Chamber) dated 16 January 2012 refusing the present claimant permission to appeal from a decision of the Leasehold Valuation Tribunal. The claimant asks this court to quash the decision of the Upper Tribunal and send the matter back for reconsideration. The ground on which this relief is sought is that the Upper Tribunal made its decision on the basis of an assumption that was not based on evidence and further, on what was in fact a materially mistaken understanding of the facts as found by the Leasehold Valuation Tribunal.
The Facts
The relevant facts as found by the Leasehold Valuation Tribunal can be summarised briefly. The claimant, whom I shall call "Regisport", is the freehold owner of three blocks of flats in a development known as Abbey Mills in Merton in south west London. Regisport acquired the freehold from the developer, Countryside Properties UK Limited, on 1 October 2004, after the development had been completed and the last of the flats had been sold.
During the development stage an agreement had been made on 25 February 2004 for the supply of water to the flats. The parties to that agreement were Thames Water Utilities Limited ("Thames") and a company associated with Countryside Properties UK Limited called Countryside Properties Merton Abbey Mills Limited. Nothing turns for present purposes on the distinction between the two associated companies in the Countryside Properties Group and for convenience I will refer to them both as "Countryside Properties".
Under the agreement for the supply of water, Countryside Properties agreed to pay for all water and sewerage services provided by Thames with the intention that the costs would be recovered from the leaseholders of the flats through the service charge. When Countryside Properties transferred the freehold to Regisport, however, it appears that nothing was done to arrange for Regisport to take over responsibility for payment of water charges under the agreement with Thames.
Between June 2005 and early 2011 no water charges for two of the three blocks of flats were paid to Thames or collected from the leaseholders. It appears that bills were received by the managing agents for water supplied to one of the three blocks, called Vista House, and they wrongly assumed that the bills were intended to cover the supply to all three blocks.
Thames apparently sent reminders and demands for payment for the sums outstanding for the supply of water to the other two blocks, called Prospect House and Independence House, but those demands were sent to Countryside Properties, and no payments were made. Through what the Leasehold Valuation Tribunal in effect found was the negligence of the managing agents, for which Regisport as the company which employed them was vicariously responsible, the true position was not discovered until some time in 2010. When that discovery was made, Regisport sought to recover from the leaseholders through the service charge the sums charged by Thames for supplying water to Prospect House and Independence House between 1 October 2006, when Regisport became the landlord, until January 2011, when the water supply agreement was terminated.
The Tribunal Proceedings
The leaseholders disputed their liability to pay the whole of these costs and this was an issue in the proceedings before the Leasehold Valuation Tribunal. In those proceedings the leaseholders relied on section 20(b) of the Landlord and Tenant Act 1985 which provides:
"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 the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred."
The first demand for payment of a service charge which included the arrears for the supply of water was made on 30 October 2010. On that basis the leaseholders argued that they were only liable to pay any such costs incurred within the previous 18 months and were therefore not liable to pay any such costs incurred before January 2009.
The Leasehold Valuation Tribunal issued its decision on 6 September 2011. At paragraph 20 of its decision the tribunal said:
"We are satisfied that the tenants are entitled to the benefit of a limitation period of 18 months prior to the demand of them for payment of the arrears on or about 30 June 2010. We are satisfied that as a matter of law costs are 'incurred' within the meaning of section 20(b) of the Act when the landlord becomes liable to pay them, which is normally and is in this case, when the bill in question is first presented for payment to the landlord for the time being."
At paragraph 21 the tribunal went on to say:
"The tenants do not in our view have to show that Regisport, the current landlord, rather than Countryside Properties, the previous landlord, is at fault in failing to draw the arrears to their attention and demand for service charge in respect of them, but as it happens they can show that both of them by their managing agents were at fault."
The tribunal went on to explain the reasons for that finding and then at paragraph 22 concluded:
"In these circumstances it is clear that whether or not Regisport is ultimately held liable to pay the arrears for which Countryside Properties is being pursued by Thames, the tenants ought not to be prejudiced in that they are not liable for any water charges incurred, which is to say billed, prior to 30 January 2009."
Regisport applied for permission to appeal from that decision to the Upper Tribunal. That application was dealt with in writing. It was refused by the Upper Tribunal on 16 January 2012. That is the decision of which judicial review is sought in these proceedings. The reasons given by the Upper Tribunal for refusing permission to appeal were as follows:
"The single ground of challenge to the decision on water charges is that the fact that the previous landlord was sent an invoice does not mean that the present landlord, who seeks to recover the sums, has incurred the liability. There is no realistic prospect of success on this ground. The limitation under section 20(b) applies to costs incurred by the landlord as landlord under the lease and the fact that the landlord's interest has been assigned from one person to another is of no materiality."
Regisport sought clarification of these reasons and drew attention in particular to the fact that on the findings of the Leasehold Valuation Tribunal the company to which the invoices had been sent by Thames, namely Countryside Properties, was no longer the landlord of the premises at the time when the relevant invoices were sent and demands for payment were made.
On 3 April 2012 a letter was sent on behalf of the President of the Upper Tribunal in response to that request for clarification. The response said:
"The decision to refuse permission was based on the assumption that the demand sent to the previous landlord was sent before the transfer of the freehold to your clients [ie Regisport]. Your letter suggests that such demands were in fact, however, sent after the transfer. It appears that the Leasehold Valuation Tribunal's findings of fact show that this is correct and therefore that the assumption on which the decision to refuse permission was given was unfounded. In these circumstances you may wish to consider asking the tribunal to review its decision. Any such application would need to satisfy the tribunal both that it had power in the circumstances to review the decision and that it was appropriate to do so."
Having considered that letter, Regisport took the view that the Upper Tribunal did not have power to review its decision, because the circumstances of this case do not fall within rule 45 of the Tribunal Procedure (Upper Tribunal) Rules 2008. Its only possible means of seeking review of the Upper Tribunal's decision was, therefore, to make a claim for judicial review.
The Claim
This claim for judicial review was commenced on 17 April 2012. On 15 January 2013 Mr Justice Nicol granted permission to proceed with the claim. The Upper Tribunal, as defendant, has taken no active part in the proceedings. However, three of the leaseholders, who were applicants before the Leasehold Valuation Tribunal, have made written submissions and have appeared at the hearing today as interested parties.
I approach this claim on the basis that, as held in the case of R(HS) v Upper Tribunal (2012) EWHC 3126 (Admin), the second tier appeal criteria identified by the Supreme Court in R(Cart) v Upper Tribunal (2012) 1 AC 663, although relevant at the stage of granting permission to proceed, are not applicable at this hearing and that the claim is to be decided by applying the ordinary well established principles of...
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