People who are both regular readers of this blog and interested in the LVT (admittedly a small number) will know that the UT(LC) has been doing the judicial equivalent of laying the smack down on the LVT for deciding cases on points that no-one raised and without telling the parties that this is what the LVT intends to do. See, for example, here and here.
In Sadd v Brown [2012] UKUT 438 (LC) we have “yet anther example of the LVT taking a point not sought to be pursued by the party in whose favour the decision was taken and without giving either party an opportunity to deal with it resulting an appeal that should not have been necessary.”
Mr Saad was the freeholder of a flat and Ms Wild was the leaseholder. Ms Wild applied to the LVT challenging the reasonableness of insurance charges. The LVT found that the insurance costs were reasonable (despite the including insurance for rent in the sum of £31,000, when the ground rent didn’t exceed £80 per year).
The LVT went on to note that, in its view, there was no covenant requiring the leaseholder to pay these costs as a service charge. In short, there as a covenant on the landlord to arrange insurance, but no covenant to reimburse via the service charge. The landlord appealed. Subsequently, Ms Wild sold her interest to the respondent, who took no part in the appeal.
The UT(LC) noted that neither party had raised this issue and that the landlord had been given no opportunity to respond to it. It followed that there had been a procedural unfairness. Having said that, however, the LVT did, in principle, have the jurisdiction to determine the issue of payability (see s.27A) and the landlord had made full submissions in support of the appeal. In the circumstances, it was appropriate to now decide the issue.
[I interpose here. Really? So, the LVT were wrong to take the issue for themselves but, having done so, the UT could review that decision on appeal. Isn’t that slightly different to what the UT did in the other cases? Perhaps the landlord consented (or assented) to this course of action? To my mind, he’d have been better off staying quiet. As we shall see…]
Having considered the relevant lease clauses, the UT held that the lease did not permit the recovery of insurance costs via the service charge. Although it was unusual for a lease not to include a clause of this nature, that was no reason to do violence to the clear words. Nor was there any basis for implying a clause. There was no rule of law that a landlord should always recover all his expenditure via the service charge. If the landlord was dissatisfied, he could seek rectification of the lease (surely pretty unlikely given the lapse of time, etc) or seek to vary the lease under Pt.4, Landlord and Tenant Act 1987.