In Nogueira v Westminster the Upper Tribunal had to deal with a rather odd decision of the First Tier Tribunal (called the “F-tT” in the report – an orthography I shall avoid).
To cut what must have been a long story short, the case was about major works to a large block. The freeholders had carried out major works. Somehow (the Upper Tribunal report is unclear) the case had reached the FTT for determination of the payability of the large service charge bill arising.
The FTT found that there were defects in the work that needed to be put right. That would imply that the work was not to a reasonable standard and hence service charges for the costs incurred in the works were unreasonable and unpayable, at least to some extent.
The FTT found instead that all the service charges were payable because the freeholders had given undertakings to the tribunal that they would carry out further remedial works. If the undertaking were not complied with, though the FTT, then the tenants could enforce them as an order of the tribunal.
Surely, you might think, the FTT can’t do that? Indeed not. In the Upper Tribunal the parties agreed that the FTT’s approach had not been acceptable. The Upper Tribunal, in the form of HHJ Huskinson agreed. While there was no need for him to decide the point (because it was agreed with the parties) he held that:
- the FTT has no inherent jurisdiction to grant injunctions and hence to accept undertakings
- there was no statutory basis for accepting an undertaking of this kind
- in any case the FTT had no power to enforce such an undertaking
- the undertakings offered before the FTT were “much too imprecise to be the proper subject of such an undertaking”
What an FTT could do, he thought, in a case where remedial work was required, was to find that one sum (£X say) was recoverable in full and that another sum (£Y say) would be reasonable if the works were done properly. That is not the same thing as accepting an undertaking.
I think this must be right. Section 27(3) of the Landlord and Tenant Act 1985 says that the FTT may determine what would be the payability of service charges if costs were incurred. It is therefore possible for the FTT to rule that a sum would be payable in hypothetical circumstances of this kind. Personally I would want to avoid hypothetical findings of that kind because when work is actually finally completed costs are rarely what was anticipated and outcomes not always intended.