Landlord and tenant – Claim – Transfer – Costs – Appellant landlord bringing county court claim to recover unpaid service and administration charges – Claim being transferred to First-tier Tribunal (FTT) for determination – Other claims not transferred but determined by FTT judge sitting as county court judge – Whether appropriate procedure adopted regarding costs – Appeal allowed
The respondent was the long leasehold owner of Flat 63, The Icon, Southernhay, Basildon, Essex for a term of 125 years. The appellant landlord issued a claim in the county court to recover unpaid service and administration charges. The county court transferred the matter to the First-tier Tribunal (FTT) under section 176A of the Commonhold and Leasehold Reform Act 2002. The FTT judge indicated that, after the hearing, he intended to use his county court jurisdiction under the Residential Property Dispute Deployment Pilot (which enabled an FTT judge, who was also a county court judge, to hold a hearing in which all aspects of a single dispute, some of which fell within the jurisdiction of the FTT and others within the jurisdiction of the county court, were dealt with on the same occasion). The FTT ruled in favour of the respondent. The tribunal then went on to deal with the legal costs incurred by the respondent following the issue of the proceedings as “costs claimed contractually as administration charges”.
The appellant appealed contending, amongst other things, that: (i) the FTT had no jurisdiction, whether by way of transfer or by way of free-standing application, to deal with post-issue costs; and alternatively (ii) if the FTT did have the necessary jurisdiction to determine the amount payable in respect of the post-issue/transfer costs, there was no power for the judge, who was sitting both as an FTT judge and as a district judge, to give effect to the FTT’s decision by way of a court order.
Held: The appeal was allowed.
(1) The statutory provisions which permitted the flexible deployment of FTT judges as county court judges did not affect the substantive statutory provisions which governed the respective jurisdictions of those bodies, nor did they alter the procedural rules which governed proceedings in each jurisdiction. Procedure in the county court was governed by the Civil Procedure Rules (CPR) while procedure in the FTT was governed by the FTT Rules. The FTT had no power to enter a money judgment or otherwise require one party to make a payment to another but simply to declare what the parties’ rights were and leave questions of enforcement to the county court. The FTT had no power (even with the consent of the parties) to extend its jurisdiction, or to arrogate to itself a jurisdiction to determine questions which the county court had no power to transfer to the FTT for determination. In the context of a transfer under section 176A of the 2002 Act, only questions which the FTT would have had the jurisdiction to determine under any of the enactments specified in section 176A(2) might properly be transferred from the county court to the FTT. They did not include the determination of the costs of the present proceedings in the county court, which fell to be determined under section 51 of the Senior Courts Act 1981, which was not specified in section 176A(2). The scope of the questions transferred from the county court for determination by the FTT depended not just upon the terms of the county court’s order but, more fundamentally, upon whether any particular matter was within the jurisdiction of the FTT under an enactment specified in section 176A(2). Even in those cases where a transfer order was not made and a judge was deployed to sit in both the FTT and the county court, the tribunal had to ensure that it did not act outside its jurisdiction. In the present case, the costs decision had been made not by the county court, but by the FTT, on the basis that the post issue costs were variable administration charges subject to para 2 of Schedule 11 to the 2002 Act and were payable only to the extent that they were reasonable in amount. However, they had not become administration charges and the issue of their reasonableness had not been referred to the FTT. Accordingly, the FTT was not seised of any jurisdiction in respect of those costs. The FTT should have confined itself to determining the reasonableness of the pre-issue costs as an administration charge and then left the determination of the costs of the proceedings (including those before the FTT) to be determined by the county court under section 51 of the 1981 Act, and in accordance with the relevant provisions of the CPR: Cain v Islington London Borough Council [2015] UKUT 117 (LC) applied.
(2) Had it been necessary to decide the point, the county court had the power to give effect to the FTT’s determination under section 176A(3) of the 2002 Act. It was unnecessary for a party to have resort to the enforcement route under section 176C (with its attendant procedural requirements in CPR 70.5 and the associated Practice Direction) in relation to any case which had been transferred to the FTT under section 176A. In such a case, the county court might give direct effect to the FTT’s determination in an order of the court by virtue of section176A(3).
(3) When a transfer order was drawn up, care needed to be taken to see that it identified the specific matters being transferred, that they fell within the FTT’s jurisdiction and that they fell within the scope of the power to order the transfer. Jurisdiction could not be conferred on the FTT (or on the county court) by consent. Although a person who was a judge of both the FTT and the county court might wear two hats, the two separate jurisdictions (and their respective procedural rules) could not be elided, or treated effectively as a single jurisdiction, without legislative change. The FTT only had jurisdiction to determine the costs of proceedings pursuant either to rule 13 of the FTT Rules or an application in accordance with para 5A of Schedule 11 to the 2002 Act. The FTT had no jurisdiction to determine the costs of proceedings under section 51 of the 1981 Act, which were the preserve of the court, applying any relevant contractual costs provisions in the lease and the applicable provisions of CPR 44. The FTT had to leave the issue of costs falling outside its jurisdiction to the county court. A tenant had to consider making an early application under para 5A, both to the county court and to the FTT. There could be no objection to an FTT judge sitting also as a judge of the county court to determine under section 51 of the 1981 Act the costs of proceedings transferred from the county court, both in that court and in the FTT. But the judge had to be very clear about which role he was performing and ensure that he did not involve his fellow FTT members in making any decision in the exercise of the county court’s jurisdiction. Sitting as a judge of the county court, the FTT judge might also give effect to any decision of the FTT in an order of the court under section 176A(3) of the 2002 Act. However, the rules of natural justice required the county court judge to give a fair and proper opportunity to each of the parties to address him on any points he might consider relevant to his decision.
Justin Bates and Amy Just (instructed by Scott Cohen Solicitors, of Henley-on-Thames) appeared for the appellant; John Jessup (instructed by Direct Access) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read transcript: Avon Ground Rents Ltd v Child
