I promised to write the second of these case reports a week ago. Mea culpa. Still, by delaying, I’ve managed to find two other cases to include. So, without further ado…
Ayres and others v Roberts and others
In All’s Well That Ends Well (Act.1, Scene 1), Shakespeare urges us to “love all, trust a few.” Wise words indeed, and very apt for the case of Ayres and others v Roberts and others CHY09726 (Central London CC; transcript via Westlaw), where HHJ Cowell has pointed out that the LVT is sending misleading and legally inaccurate information to litigants. How so? Well…
The Leasehold Reform, Housing and Urban Development Act 1993, makes provision, inter alia, for qualifying tenants of flats to purchase another 90 years on their lease. If the terms of purchase cannot be agreed, then the LVT is empowered to determine them. Once the LVT has reached a decision, the parties have a period of time to agree a form of contract, failing which, the court may make such order as it thinks fit, to give effect to the rights of the parties (in broad terms, the court will usually decide that it is empowered to sign the contract on behalf of the defaulting landlord, since it usually is the landlord who delays things).
The application to the court can only be made within a 2 month window which begins with the date when the LVT decision becomes final (s.48(6), 1993 Act). A decision of an LVT becomes final (if it is not appealed against) on the expiry of the time for bringing an appeal (s.101(9), 1993 Act). The time for bringing an appeal against an LVT decision is 21 days “starting with the date on which the document which records the reason for the decision… is sent to that party.” (LVT Procedure (England) Regulations 2003, reg.20).
Now, the LVT does not tell people this. Rather, the covering letter that it sends out tells people that they may appeal “within 21 days of the date of this letter.” That is not what reg.20 says. As HHJ Cowell explained, the phrase “within 21 days of the date of this letter” means 21 days after the date on the letter, whereas reg.20 provides for 21 days including the date on the letter.
Clearly, this could be a highly significant difference, not just for applications under s.48, 1993 Act but when dealing with appeals from the LVT in any field. Lets hope that the LVT corrects its standard covering letter.
Greening v Castelnau Mansions Ltd
The real way to tell who has won or lost litigation is to look at the costs order, or, as Puff Daddy (as he was then) put it – it’s all about the benjamins.
In Greening v Castelnau Mansions Ltd [2011] UKUT 326 (LC) the respondent had sued Mr Greening for arrears of service charges and interest of just over £11,000. The case was transferred to the LVT, which allowed the sum claimed in full. The landlord sought to recover c.£4,600 of legal costs through the service charge, with Mr Greening being said to be liable for 1.81608%. The lease provided for the recovery of “… all proper fees salaries charges and expenses payable to [persons employed for the purposes of managing and/or administering the building]… ” The LVT allowed the costs and Mr Greening appealed.
The appeal was allowed. Legal costs were not a cost of “administering” the building: Stella House Ltd v Mears [1989] 1 EGLR 65, CA. This was an undesirable result as it was “obviously desirable” that a tenant-owned company, such as the respondent, should recover legal costs through the service charge. However, the lease was clear and was in very similar terms to that in Stella House.
John Lennon v Ground Rents (Regisport) Ltd
Finally, we come to John Lennon v Ground Rents (Regisport) Ltd [2011] UKUT 330 (LC) and another attempt by the UT(LC) to grapple with the role of the LVT where proceedings have been transfered from the county court. In particular, is the LVT limited by the county court pleadings?
By Sch.12, para.3, Commonhold and Leasehold Reform Act 2002, a county court is empowered to transfer proceedings to the LVT insofar as they raise a question within the jurisdiction of the LVT. Dr Lennon was the tenant of a flat. The respondent was his landlord. The respondent sued him for arrears of service charges comprising the costs of insurance premiums. The District Judge transferred the issue of the reasonableness of the insurance premium to the LVT.
The LVT allowed about half of the sum claimed in respect of insurance, but then went on to consider other matters, including various administration charges. Neither party had made any application in respect of administration charges and, of course, nothing of this nature had been transferred to the LVT by the county court.
Dr Lennon appealed. The President refused him permission to appeal, but expressed concern that the LVT had gone beyond its jurisdiction in dealing with the administration charges and granted permission to appeal on that point.
The appeal was allowed. The county court had not transferred anything other than the insurance issue to the LVT, such that the determinations in respect of any other issue were void. The parties could have avoided this result (had they so wished) by issuing fresh applications, to be heard with the transferred proceedings, in respect of any other issue.
The respondent had argued that there was no power to transfer only parts of cases – either the county court should transfer all issues, or none. That argument was rejected. It was clear that many cases would raises issues which, although possibly within the jurisdiction of the county court, were better dealt with in the LVT (and vica versa). Each case would have to be examined for its own facts.
On costs, the respondent accepted that they would not seek to recover the costs via the service charge, but via a personal indemnity in the lease. HHJ Huskinson was of the view that, if this were done, it would be as an administration charge (see my previous musings, here).