The Upper Tribunal (Lands Chamber) has handed down two more LVT service charge appeal decisions and, hot on the heels of BCC v Keddie / Crosspite v Sachdev, it rather feels like the UT is on a bit of a mission to establish some general rules and standard approach to cases that the LVT should take. That, if true, is very welcome. Part of the fun of LVT work for lawyers is that you never quite know what procedure or approach the LVT will adopt, but for clients (and witnesses) it must be a maddening experience.
In Wales & West HA v Paine [2012] UKUT 372 (LC), Ms Paine had denied,inter alia, her liability to pay management fees as a service charge. She did not dispute the amount, rather, contended that no fee could be charged at all. The landlord explained why it charged a fee. At the LVT hearing, the LVT noted that the charge was high (at around 43% of the total service charge expenditure), which the landlord agreed with, but it was not put to the landlord (whether by the LVT or leaseholder) that the fee was unreasonable. The LVT nonetheless determined that the fee was unreasonable and reduced it by just under 1/3.
The Upper Tribunal allowed an appeal. It had been no part of the case for the applicant that the fee was unreasonably high. The case was that there should be no fee at all. It was an all or nothing argument. That being so, the LVT should not have raised the issue itself. Further, the LVT had not put the issue to the landlord in any proper way, so the landlord had been unable to respond. It was no answer to say – as the LVT had done – that it was an expert tribunal. It still had to act lawfully and fairly and, if it had been minded to use its expertise to take a point against the landlord that had not been raised (itself something that should only be done rarely) then it had to give the landlord proper notice of that and a time to respond: Arrowdell Ltd v Coniston Court (North) Ltd [2007] RVR 39.
In Redrow Regeneration (Barking) Ltd and another v Edwards and others [2012] UKUT 373 (LC), a preliminary issue arose as to whether the landlord had properly calculated the service charges in accordance with the lease. In short, charges were payable in respect of “the Development” but that phrase was not defined in the leases. The Landlord gave evidence as to what it understood that phrase to mean. The LVT held that, on the balance of probabilities, the landlord’s understanding was wrong, with the result that the service charges needed to be re-calculated.
The Upper Tribunal allowed an appeal. There was no burden of proof on the landlord to show what a lease meant. It was a question of law, not fact. In any event, burdens of proof were the last resort when deciding finely balanced cases: see Daejan Investments Ltd v Benson and others [2011] EWCA Civ 38. The LVTs approach was simply wrong in law.
Further, again, neither party had raised this as an issue. The LVT had – again – erred by taking a point that no-one had raised. The case was remitted to decide the substantive service charge dispute alone.