We covered Daejan Investments Ltd v Benson and others [2011] EWCA Civ 38 when it was in the Upper Tribunal (Lands Chamber) (our note, here). For a summary of the relevant law and facts, please see that earlier post (slightly lazy, I know, but I am very tired).
Daejan, as I suspected, pursued the case to the Court of Appeal and their appeal has now been dismissed. It’s a not uninteresting judgment.
The Court of Appeal notes that the primary focus of an appeal is likely to be the decision of the LVT and not the UT(LC), although it would be appropriate to give some weight to the approach taken by that specialist appellate tribunal. Although they don’t say so, this must only be so where (as here) the UT(LC) conducted the appeal by way of review and not re-hearing.
On the power to dispense with the consultation, the Court of Appeal held that financial consequences of failing to grant dispensation were irrelevant:
(a) if that were not so, then it would mean that, the more expensive the works in question, the more likely it was that dispensation would be granted;
(b) it was impractical to look at the financial consequences for the parties, since this would require the LVT (or UT(LC)) to have to examine how financially secure each landlord and tenant was;
(c) the power to dispense was with the consultation requirements, not the consequences of non-compliance with those requirements.
The nature of the landlord might be a relevant factor in deciding whether to grant dispensation (i.e. a lessee-owned/controlled company might enjoy greater flexibility than a private party) but that did not arise in the present case
The key feature was likely to be the degree of prejudice caused to the tenants. A proper consultation process was the essence of the statutory scheme and curtailing consultation was a serious failing that could cause significant prejudice.
So, what sort of cases might be suitable for dispensation? In the view of the CA, there were three: (a) emergency works; (b) where there was only one possible contractor; (c) where there had been a minor breach which had caused no prejudice.