Upper Tribunal – Appeals – Extension of time – Leasehold valuation tribunal making determination against applicant and in favour of respondents with regard to recoverability of service charges for major works – Differently constituted LVT later deciding against respondents in another case concerning same works on a point not raised by applicant – Whether appropriate for Upper Tribunal to grant permission for late appeal – Whether such appeal in interests of justice – Application dismissed
The applicant was the long leaseholder of a flat in an estate owned by the respondent council. In 2009, the respondents brought county court proceedings to forfeit her lease on the ground of non-payment of £7,838 in service charges for the year ending March 2009. The matter was transferred to the leasehold valuation tribunal (LVT) for a determination of whether the charges were payable. Some of the service charges in issue related to routine service charge items and to a historic service charge debt that had accumulated under the previous management of the estate. The rest concerned the applicant’s required contribution of £4,263 to the cost of three major works contracts for improvements to the estate. In its decision issued in April 2011, the LVT concluded that all those items were recoverable, save for a small credit to which the applicant was entitled. The matter then returned to the county court.
Two years later, in April 2013, the applicant applied to the LVT for permission to appeal under section 175 of the Commonhold and Leasehold Reform Act 2002. The LVT refused to admit the application, determining that it had no power to consider it since it had been made outside the 21-day time limit in regulation 20 of the Leasehold Valuations Tribunals (Procedure) (England) Regulations 2003 and no extension of time had been sought within that period.
The applicant renewed her application before the Upper Tribunal, which, under r 21(6) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, had power to grant permission for an appeal, following a refusal of the LVT to admit a late application, if it considered that it was in the interests of justice to do so.
In support of her application, the applicant relied on the decision of a differently constituted LVT in Southwark London Borough Council v Woelke*, decided six months after its decision in her case, to the effect that the respondents were not yet entitled to recover service charges in respect of the major works since they had not served proper demands for those sums in accordance with the requirements of the relevant lease. That decision in turn referred to an earlier LVT decision from 2009 involving another of the respondents’ tenants. The applicant had not relied before the LVT on the point on which Woelke was decided.
Held: The application was dismissed.
If the LVT refused to admit an application for permission to appeal because it was not made in time, the Upper Tribunal could admit the application only if it was in the interests of justice for it to do so. In deciding whether to admit such an application, the tribunal had to bear in mind the overriding objective of the 2010 Rules, expressed in r 2(1), of dealing with cases fairly and justly. The decision had also to take into account the well-established public interest in the finality of litigation, which applied just as much to proceedings before tribunals as it did to those in court: Taylor v Lawrence [2002] EWCA Civ 90; [2003] QB 528 applied.
Had the argument considered in Woelke been taken in the applicant’s case, it was very likely that a similar conclusion would have been reached and that the LVT would have found that so much of the service charge as related to the major works was not yet due from the applicant, since it could safely be assumed, from the evidence recorded in Woelke, that the respondents adopted the same approach to billing for major works in the case of all its leaseholders. The approach taken in Woelke would have provided a practical benefit to the applicant by delaying her liability to contribute £4,263 towards the cost of the major works and so reducing the burden of interest. On the other hand, it would not have eliminated that liability since there would have been nothing to prevent the respondents from issuing fresh demands, calculated in accordance with the terms of the lease, and then amending their claim in the county court to recover the same sum by a different route. Decisions of one LVT were not binding on one another and the respondents had been under no duty to inform the LVT in the applicant’s case of the 2009 decision against them. The LVT itself was not under a positive duty to investigate the billing practices of the respondents, or to consider for itself whether they were compliant with the terms of the lease, and had correctly confined itself to the issues identified in the extensive statements of case that the parties had prepared to define the issues in the county court. The LVT could not be criticised for confining itself to the points that the parties, and the county court, had asked it to decide: Birmingham City Council v Keddie [2012] UKUT 323 (LC); [2012] 3 EGLR 53; [2012] 49 EG 71 applied.
It was further relevant that the LVT had, with one minor exception, dismissed all the challenges raised by the applicant to the service charges that the respondents claimed from her. The applicant had not appealed those adverse conclusions and, for at least 20 months thereafter, she and the respondent had continued on the assumption that the LVT’s decision was final and conclusive. It would be wrong now to upset that settled assumption and admit the application for permission to appeal so long after the expiry of the time permitted by the 2010 Rules. The interests of justice, and in particular the public interest in having finality to litigation, pointed decisively against allowing the appeal to proceed. If permission were given, and an appeal were pursued with eventual success, then the respondents could simply revise the service charge demands to include in them all the costs of major works previously omitted and claimed separately. They would be likely to do so in any event, without waiting for the outcome of the appeal, and, once that task had been undertaken, the applicant would have no defence to the sums on which the LVT had already ruled in the respondents’ favour. The effect of admitting an appeal would be to delay the final recovery by the respondents of sums that they had expended in proper compliance with their obligations to the applicant and its other leaseholders, increase the costs devoted by the parties to the recovery of moderate sums and draw on resources of the Upper Tribunal and LVT that would otherwise be deployed on resolving disputes between other parties.
*The Upper Tribunal decision on appeal in Woelke is now reported at [2013] UKUT 0349 (LC); [2013] PLSCS 264.
The appeal was determined on the written representations of the parties.
Sally Dobson, barrister
