Where the First-tier Tribunal employs its expertise in determining an issue it must provide reasons for its findings. Its experience and knowledge alone cannot be relied upon as a basis of reaching a particular finding.
In Assethold Ltd v The Lessees of Flats 1-14 Corben Mews [2023] UKUT 71 (LC) the Upper Tribunal (Lands Chamber) was asked to determine an appeal and cross-appeal relating to the reasonableness and payability of service charges.
A disputed service charge for the year 2019-2020 was the sum of £1,608 demanded by the appellant, Assethold Ltd, for fireproofing works. On the limited evidence, the FTT found the sum charged was unreasonable in amount. In the absence of evidence as to what would be a reasonable charge for the work, the FTT using its “own knowledge and experience” reduced the figure to £750. Assethold appealed.
A lessee cannot put a landlord to proof as to the reasonableness of an item of expenditure without adducing evidence that the costs of the same was excessive. The UT observed that although the FTT was an expert tribunal, without any evidence being adduced by the lessees, it erred in relying on its own expertise and experience in determining the cost of an item of expenditure without an explanation of how that figure was derived.
In the absence of evidence, the FTT, in some instances, may be required to adopt a pragmatic approach when arriving at a figure for costs for reasons of proportionality and commonsense, but this should be stated. In the present case there was evidence that fireproofing works were not completed. The UT found that it would be disproportionate to remit the matter back to the FTT for further evidence to be adduced. Taking a pragmatic approach it reduced the cost to £800 including VAT.
Pursuant to rule 13(1)(b) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 an order for costs was made against Assethold. It appealed the same on the basis that the FTT had failed to follow the three-stage test laid down in Willow Court Management Co Ltd v Alexander [2016] UKUT 0290. Having determined Assethold had acted unreasonably, it contended that the FTT had failed to give separate consideration to the remaining issues of whether it should exercise its discretion to make a costs order and what that order should be.
The UT found the FTT had correctly applied the three stage test. In dismissing this ground of appeal it found that Assethold’s conduct had been particularly egregious. Its procedural failings had led to it being debarred from adducing evidence and the effect of its conduct onsome of the lessees, such as being sued and threatened with forfeiture proceedings, was serious.
Elizabeth Dwomoh is a barrister at Lamb Chambers
