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Upper Tribunal roundup (The Very Late Summer 2019 edition)


There have been a fair few recent (and perhaps no-so-recent) decisions from the Upper Tribunal (Lands Chamber) on leasehold matters, so it’s time for a bit of a round up. Actually, it was time for a bit of a round up back in August when I started this post and I can only apologise that it has taken so long to finish. This is partly because the UT keeps producing new decisions so it has become a bit like painting the Forth Bridge (and yes, I know that’s not continual really) and partly because of general indolence on my part. So, without any further ado, and in no particular order, here we go.


Triplerose v Cakan: interim service charges

Triplerose Ltd v Cakan & Binkaya [2019] UKUT 257 (LC)

This decision is mainly notable for the wonderful criticism by the UT Judge (Elizabeth Cooke) of the relevant provision in the lease as having a “miserable absence of punctuation”.

Here the lease provided for a service charged which was called the Maintenance Charge. Each service charge year ran from 25 March. At the end of each year, the amount of the Maintenance Charge for that past year had to be certified by the landlord’s managing agents or accountants. At the start of each year, the tenant had to pay a charge called the Interim Maintenance Charge (which could apparently be paid in two half-yearly payments, see [13] of the FTT decision). That was defined as being a sum to be paid on account of the Maintenance Charge as specified by the landlord (or its managing agents or accountants) as fair and reasonable. This sum was to be increased or decreased by the difference between the previous year’s Interim Maintenance Charge and the (actual) Maintenance Charge.

The landlord sought to recover three half-yearly contributions towards the Interim Maintenance Charge (quite how half-yearly demands come into it isn’t clear). The FTT determined that the insurance element of this was recoverable but the rest was not because

“ … the sums claimed ought to have been certified sums, and the Tribunal has not been provided with any certified accounts as required by the lease. The Tribunal has also not been provided with any invoices. The only invoices/ ascertainable sums relate to the insurance payments. Accordingly the Tribunal cannot be satisfied on a balance of probabilities that sums were incurred for general maintenance, gardening or professional fees as claimed in the Applicant’s statement of claim”

The UT allowed the landlord’s appeal because this reasoning

“was incorrect in two respects. First, the lease does not require the Interim Maintenance Charge statement to be “certified”. The Interim Maintenance Charge is the sum that the landlord or its agent shall specify. And since the Interim Maintenance Charge is an advance payment there is no need for, and indeed no possibility of, proof that the expenses set out in the statement we actually incurred. So the FTT appears to have misdirected itself in disallowing all but the insurance payments for this reason.”

There were also some arithmetical problems with the FTT’s determination, which the UT pointed out to help with the redetermination.


Westleigh Properties v 47 Park Hill (Carshalton) RTM: r.13 costs orders

Westleigh Properties Ltd v 47 Park Hill (Carshalton) RTM Co Ltd [2019] UKUT 252 (LC)

This was an RTM claim which ended up in a hearing. The landlord did not attend the hearing, but filed a written statement. The FTT determined that the RTM Co was entitled to exercise the right to manage and then made a costs order against the absent landlord:

“In the absence of any specified arguable grounds on which to challenge the Applicant’s Claim Notice, the tribunal determines that the Respondent has acted unreasonably in persisting with its opposition to the Applicant’s claim. The tribunal accepts the costs incurred as set out in a schedule provided by the Applicant. The tribunal finds that the costs of £1,515 (including VAT) are reasonable and therefore determines that this amount should be paid to the Applicant by the Respondent.”

Although not expressly set out in that paragraph, it is clear from the FTT decision that this costs order was made under r.13 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. Now, we have encountered r.13 before (see our note on Willow Court v Alexander here). The UT (again Elizabeth Cooke) allowed the landlord’s appeal, accepting the landlord’s argument that a r.13 costs order had been made without any explanation, beyond the assertion that the applicant had acted unreasonably in resisting the claim, and that the FTT had accepted the RTM Co’s costs schedule without giving the landlord any opportunity to comment on it.


Firstport Property Services v Settlers Court RTM: the on-going effect of Gala Unity

Firstport Property Services Ltd v Settlers Court RTM Co Ltd [2019] UKUT 243 (LC)

Here the UT (Judge Siobhan McGrath) had to grapple with the Court of Appeal decision in Gala Unity Ltd v Ariadne Road RTM Co Ltd (our note here). This is probably of great importance, and almost certainly more significant than the write-up that I am giving it suggests. In my defence this decision is unlikely to be the last word on this point (more on that later) and this is a roundup of several cases.

To go back a step or two first, in Gala Unity the Court of Appeal decided that an RTM co was entitled, upon exercising the right to manage, to take over the management of “appurtenant property” which was “usually enjoyed” with the flats, and therefore met the definition of appurtenant property in Commonhold and Leasehold Reform Act 2002, s.112. That appurtenant property was made up a bin area, access road, and gardens which were enjoyed not just by the block of flats in question, but also by some freestanding houses (which were not part of the RTM application). The Court of Appeal noted that the freeholder would remain entitled to manage those bits of land for the lessees of the houses and there was therefore the potential for duplication of work or conflict between the RTM co and the freeholder. Nonetheless, this did not alter the court’s reading of the legislation and the definition of “appurtenant property”. The court said that it was always open to the parties to reach an agreement which made economic sense (which is true; but it was also open to them to not reach such an agreement (see below)). As J commented in our note, there are difficulties with the Gala Unity approach. Gala Unity was subsequently considered by the Court of Appeal in Triplerose Ltd v Ninety Broomfield Road RTM Co Ltd (our note here), but on a slightly different point (i.e. whether the right to manage could be exercised over more than one block of flats at a time, to which the answer was “no”, although in Gala Unity that had been done, albeit without it being the contentious point).

This decision concerns an estate, known as Virginia Quay Estate, constructed by Barrett Homes at the turn of the century/millenium, across the Thames from what was then the Millennium Dome. There are ten blocks of flats and several terraced houses. The leases of the flats were tripartite leases, with Firstport Property Services Ltd named in the leases as the management company. Firstport was also the identified management company under the terms of freehold transfers of houses on the estate.

The background was that in 2014, Settlers Court RTM Co Ltd had purported to exercise the right to manage over one of the blocks of flats. It started providing services to that block. Firstport wrote to the RTM company, proposing that they continued to provide the estate services and collect the service charges for the same. There appears to have been correspondence leading to a draft agreement, but the FTT subsequently found that no binding agreement was concluded. Nonetheless, Firstport continued to provide the estate services. That is not at all surprising as Firstport would be obliged to provide those services to other lessees and house owners. In 2017, the RTM co disputed the entitlement of Firstport to continue to provide the services and collect service charges for them. In due course an application was made to the FTT.

That tribunal found (as already noted) that there was no binding agreement about the provision of the estate services. The Tribunal also determined that it was bound by Gala Unity to hold that the management functions relating to estate services had passed on the date that the right to manage was acquired and there was therefore no entitlement to collect service charges from lessees in that block.

Firstport appealed to the Upper Tribunal. They accepted that this case could not be distinguished on the facts from Gala Unity but contended that the Court of Appeal decision in Gala Unity was per incuriam. While this was a clever argument, I think it was always going to be difficult to get home on it in the Upper Tribunal, and so it proved, as Judge McGrath held that Gala Unity had not been decided per incuriam.

It is difficult to work out where one this might go after this. It reads as is Firstport are setting this up to go the Court of Appeal again or even the Supreme Court. As observed by Martin Rodger QC, the Deputy President of the UT, when granting permission to appeal if “Gala Unity … is a bar to the prospects of success of the appeal in this Tribunal, the issue raised by the appeal is nevertheless one of considerable practical importance which requires to be resolved definitively at a higher level.” At the end of the UT judgment, however, Judge McGrath noted that “The Law Commission is currently considering the Right to Manage scheme generally and in January 2019 issued its consultation paper Leasehold home ownership: exercising the right to manage. It is likely that its recommendations will seek to address Gala Unity and the management of estates more generally.” According to Case tracker there does not appear to have been any appeal lodged at the Court of Appeal, so it might be that this is not the case which ends up resolving this.


Plantation Wharf Management v Fairman: s.20C

Plantation Wharf Management Ltd v Fairman [2019] UKUT 236 (LC)

Every so often a case comes along where the answer seems obvious at first glance, but the reasoning to get to that answer is rather more complicated than you might have thought. This was, for me at least, one of those cases. The question for the UT (HHJ Bridge) was shortly stated:

Can a court or tribunal make an order under [Landlord and Tenant Act 1985] section 20C in favour of a person who has neither made an application under that provision themselves nor given authority to another to make application on their behalf?

To which my first reaction was “no, obviously not”. As the UT decided, it turns out that I was right about “no”, but given that the UT decision on appeal runs to 60 paragraphs it might be thought that the outcome was not as obvious as I had thought. Anyway, now we know for certain.


Ghosh v Hanover Gate Mansions Ltd: qualifying long term agreements

Ghosh v Hanover Gate Mansions Ltd & Hanover Gate Mansions (Park Road) Ltd [2019] UKUT 290 (LC)

It is a little difficult to know what to make of this one as only the appellant was involved at the Upper Tribunal stage. The respondents had appointed Faraday Property Management Ltd as a property manager and sought to recover their fees as a service charge. The appellant’s share of those fees was £218.73. He argued that the agreement appointing Faraday was a qualifying long-term agreement and, as there had not been any consultation, his contribution was capped at £100. A QLTA is “an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months”: Landlord and Tenant Act 1985, s.20ZA.

Here, it seems that there was no signed contract but there was an unsigned draft. That recorded that it was made on 12 June 2017 and set out at cl.D the term of the agreement as being “from 12th June 2017 to 11th June 2018. After this period, the Agreement shall continue on the terms set out, subject to termination under Clause 7.” The all-important cl.7 was: “Either party may terminate this Agreement following expiry of 9 calendar months of the stated Management Period, by serving on the other not less than three months’ notice in writing.”

Before the FTT, the respondents conceded that if the agreement started on 12 June 2017 it was a QLTA as it was not possible for it to be terminated earlier than 12 June 2018. As the UT Judge Elizabeth Cooke explained:

“It appears from the FTT’s decision that it was conceded by the respondents that if that contract had come into effect on 12 June it would have been a qualifying long term agreement (paragraph 30 of the FTT’s decision). That must be correct; the contract was intended to last for at least 12 months, and could not be terminated before 12 th June 2018. It was therefore for a term of more than twelve months and was therefore a qualifying long term agreement.”

The respondents also accepted before the  FTT that there was a contract between one of them and Faraday and that services were provided from 12 June 2017. The UT considered that the FTT must have found that the terms of that contract were the terms set out in the unsigned draft. The FTT nonetheless found that the agreement was not a QLTA: “Instead the Tribunal determines that an oral contract evidenced by the actions of supply and a subsequent payment was entered into on some date after 12 June 2017. … Even if the start date had been 13 June and to the Tribunal 24 June appeared much more likely, then it would not have been a QLTA. It follows that no consultation was required …”. Why 24 June? Well, this seems to have been the date that a payment from one the respondents to Faraday was made. The conclusion that the agreement did not begin until then seems to be based on Brodgen v Metropolitan Railway Co (1877) 2 App Cas 666. That does not seem to be what the House of Lords actually decided in Brogden, as the UT Judge explained. The headnote to Brogden records that “Circumstances in the conduct of two parties may establish a binding contract between them, although the agreement, reduced into writing as a draft, has not been formally executed by either.” Here the contract took effect by performance on 12 June 2017 when Faraday began providing the services.


Westlake Estates v Yinusa: statutory requirements of service charge demands

Westlake Estates Ltd v Yinusa [2019] UKUT 241 (LC)

Here the FTT found that service charge demands were not payable because the landlord had not complied with Landlord and Tenant Act 1985, s.21B, and Landlord and Tenant Act 1987, s.47. The UT (Judge Elizabeth Cooke) disagreed with the FTT on both points and determined that the charges were recoverable (subject to some unappealed deductions made by the FTT).

So far as s.21B is concerned, the tenant does not appear to have asserted that the summary of rights and obligations had not been given. Instead, he had argued that he had not received the demands at all. The landlord’s evidence included copies of the demands and the summary of rights and obligations. The FTT found that the demands had been sent and received but then went on to say that the “information notifying the tenant of his rights was not included”. No further reasons appear to have been given for that finding. The UT dealt with this as follows.

“22. At paragraph 6 the FTT referred to the appellant’s evidence that copies of the demands were included in the bundle together with a summary of the tenant’s rights. The FTT does not say that the respondent said that the summary, found in the bundle between the covering letter and the invoice itself, was not in fact sent to him with the invoice; nor is there anything to that effect in the respondent’s witness statement before the FTT. Nor is there any suggestion, in the evidence or argument recounted by the FTT or in its own reasoning, that the summary sent was not in the prescribed form.

“23. In its response to the appeal the respondent complains that the covering letter did not say that the summary of rights and obligations was included, and says that therefore the appellant has not proved (as it was obliged to do) that section 21B was complied with. It is not suggested for the respondent that he raised this point before the FTT, and it is not open to him to raise it now; in any event there is no substance in it since he has not given evidence that the summary was not included and the disclosed documents indicate that it was. The respondent also complains that the appellant’s Statement of Case did not state that it had complied with the requirements of section 21B; but there was no need for any such statement at that stage. I agree that after the case Management Hearing the section 21B point was is issue before the FTT, but it appears that the respondent did not take the point at the hearing and there was certainly no evidence before the FTT from the respondent that section 21B had not been complied with.

“24. In the presence of evidence – in the form of the disclosed documents – that the summary had been provided to the respondent, and in the absence of any evidence to the contrary I take the view that the FTT could not reasonably have made its finding about section 21B.”

So far as s.47 is concerned, the demands included the landlord’s name and address. The FTT held that s.47 had not been complied with. Again, no further reasons were given, although it seems from the tenant’s arguments before the UT that the point was that the demands did not identify the name and address as being that of the landlord and reference was made to Tedla v Cameret Court Residents Association Ltd. There, the Deputy President had said:

“36. … The invoice contains the names and addresses both of Cameret Court Limited and of the respondent (as well as of their agent). It would be entirely unclear to anyone unfamiliar with s. 47 whether either of those companies was being identified as the landlord, or if either of them was. Indeed, a recipient of such a demand who was familiar with s. 47 would be led to believe by the information in the first line that Cameret Court Limited was the landlord, and not the respondent.

“37. The statutory requirement is not simply that the name and address of the landlord must appear on any written demand. The tenant must be informed of the name and address of the landlord, hence the requirement that: “the demand must contain the following information”. A demand which provides the name and address of two or more different companies without identifying which of them is the landlord does not, in my judgment, provide the required information. The tenant is not to be left to guess which of two or more parties is the landlord, but is to be informed of the landlord’s identity.”

The UT considered that this did not apply to the demands given by Westlake as there was no other name or address identified and so no risk of confusion.

Rule 13 and s.20C orders made by the FTT were also set aside.


Southwark v Royce: liability for service charges

Southwark LBC v Royce & Nicoue [2019] UKUT 331 (LC)

This case concerns the liability of residents on one estate to contribute towards the costs of works carried out on an adjoining estate owned by the same landlord. As such it has considerable significance for the residents of both estates (those on estate may now not have to pay, while those on the other may now be asked to pay double). The facts are a little complex, but in summary, the Acorn Estate was constructed in the 1960s and the adjoining Carlton Grove Estate was constructed in the 1970s. Flats in both estates received heating from a district heating system which centred on a boiler house located on a third estate. Flats on the Acorn Estate also received hot water. Following a series of works, Southwark wanted to carry out work replacing underground pipes on the Acorn Estate. They sought to recover the costs of this as a service charge from lessees on the Acorn Estate and the Carlton Estate. The FTT found that the two estates had two separate systems of pipe work and so lessees on the Carlton Estate were not required to contribute to the costs of work to pipers on the Acorn Estate. The FTT decision is here.

This is obviously a fairly big deal for Southwark and they appealed to the UT with a silk on board. The respondent tenants were fortunate enough to have acquired representation from the wonderful Amanda Gourlay, who argued that it was necessary to deal first with the FTT’s factual findings about the pipe systems. The UT Judge (HHJ Hodge QC) agreed:

“29. For the reasons advanced by Miss Gourlay, the Tribunal concludes that the FTT was entitled, on the evidence … to reach the finding that it did at para 40 of its decision: that there were two separate systems of pipe work, one providing heating to the Carlton Grove Estate and the other providing heating and hot water to the Acorn estate. Indeed, Mr Moore’s second report … had referred to ‘two main circuits’. The FTT expressly cited the relevant part of Mr Marenghi’s evidence at para 29 of its Decision, including his conclusion that ‘… although both Acorn Estate and Carlton Grove Estate are divided geographically, they are joined mechanically and both depend on each other[‘]. However, despite the joinder of the two systems mechanically at the boiler, and their limited inter-dependence, by reason of the factors identified at paras 43 to 46 of its decision the FTT concluded that there were in fact two separate systems of pipe work. The Tribunal does not consider that any of those factors was entirely irrelevant to the conclusion that the FTT reached at para 40 of its decision; and the weight to be attached to each of those factors was a matter for the FTT. The Tribunal would agree with the appellant to the extent that it would not have attached any particularly great weight to the fact that the Carlton Grove Estate received heating but not hot water from the DHS; but for the reasons pointed out by Miss Gourlay at para 20 above this was not an entirely irrelevant consideration; and the FTT never suggested that it regarded it as determinative. The fact that Carlton Grove received heating but not hot water from the DHS was simply one element of the FTT’s overall reasoning that it had been entitled to take into consideration because the circuit which served the Carlton Grove Estate circulated hot water in a different way to ‘the main system’ (serving the Acorn Estate) during the summer time. That disposes of the third ground of appeal.

“30. The Tribunal accepts Miss Gourlay’s submissions … that the geographical separation of the Acorn Estate and the Carlton Grove Estate was a relevant factor to which the FTT was entitled to have regard in determining the respondents’ liability to contribute to the cost of replacing pipe work on the Acorn Estate. If the Acorn Estate did not exist, the Carlton Grove Estate would still receive heating (and vice-versa). Indeed, the Acorn Estate had existed before the Carlton Estate had been ‘bolted on’. The two heating pipe work systems were physically separate; they could be independently replaced, and any leak in one system could be isolated from the other. There were significant differences in the way the two systems operated. The residents of the Carlton Grove Estate could quite happily live with the existing pipe work on the Acorn Estate. The Tribunal considers that, despite the evidence of Mr Marenghi and Ms Turff, it was open to the FTT to find that ‘there never was a complete integrated system’ because ‘the evidence indicated that it was possible to isolate sections of the pipework including that serving the Carlton Grove Estate’. At para 41(2) of its skeleton argument, the appellant does not take issue with the fact that ‘it is possible to isolate sections of the pipework’, enabling ‘repairs and replacements of parts without affecting the whole’. As a result, the Tribunal considers that the FTT’s finding at para 40 of its Decision cannot ‘… be said to be unsupported by the evidence and the decision is certainly not one that no reasonable [tribunal] could have reached’. That disposes of the second ground of appeal.

“31. … Once the separate nature of the two systems is established, the costs and expenses of replacing the separate heating and hot water system serving only the Acorn Estate cannot sensibly or properly be characterised as a cost or expense ‘incidental to’, still less a cost or expense ‘of’, providing heating to the properties on the Carlton Grove Estate. The Tribunal accepts the point made by the respondents at para 4 of their grounds of response that, stripped of the suggestion that the FTT failed to refer to para 7(2), the first ground of appeal is effectively a re-statement of the second ground, namely that the heating system was one system and not two. The costs and expenses of replacing a heating system that does not serve the properties the subject of the relevant leases cannot properly be regarded as being in any way ancillary to, or associated with, or even connected with the provision of heating to those properties. To hold that they were would, in the Tribunal’s judgment, be ‘a case of the tail wagging the dog’ …”.

Accordingly, appeal dismissed.

chief is a barrister in the big city. he specialises in public law, landlord & tenant, football and rock 'n' roll (the last two are only when his clerks aren't watching). he sometimes pops by here, but not as often as he'd like. he will occasionally eschew capital letters. the reasons for this odd affectation are lost in the mists of time.


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