Landlord and tenant – Service charge – Strike out application – Rule 9(3) of Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 – Appellant tenants applying for determination of service charges – First-tier Tribunal striking out application – Appellants appealing – Whether FTT entitled to strike application out as frivolous or vexatious following determination of service charges payable by different leaseholder – Appeal allowed
The Burton Waters Estate was a mixed residential and commercial estate in Lincoln which included 361 houses and flats arranged around a marina and let on long leases. The appellants each held leases of one of those properties. The three respondent companies were landlords of different parts of the estate.
In January 2020, the owners of ten properties on the estate, including the appellants, applied to the First-tier Tribunal under section 27A of the Landlord and Tenant Act 1985 for a determination of the service charges payable by them in respect of the service charge years from 2013 to 2020. Seven of the applicants subsequently discontinued their applications, leaving only the appellants and another applicant (F) whose earlier application in 2018, in respect of 2015-2017 and part of 2018, had been largely dismissed.
The appellants appealed against the decision of the FTT striking out their application. The issues were whether the FTT was entitled to strike out the appellants’ application so far as it related to the years already considered in 2018, and subsequent years which had not been the subject of any consideration.
The respondents conceded that the FTT should not have struck out the application. However, a concession by a respondent was not a sufficient basis on which an appellate tribunal could conclude that a decision of a lower tribunal was wrong and should be set aside and the underlying matter remitted to it for reconsideration. Setting aside a decision of the FTT required a judicial determination.
Held: The appeal was allowed.
(1) Section 27A(1) of the 1985 Act gave leaseholders (and others) the right to apply to the FTT for a determination whether a service charge was payable and, if it was, by whom, the amount which was payable, and the date at which it was payable. That entitlement was extended by section 27A(3) to cover charges in respect of future expenditure. No such application might be made in respect of a matter which had already been agreed or admitted by the leaseholder, referred to arbitration, or been the subject of determination by a court or an arbitrator (section 27A(4)).
It was a general principle of public policy that once any court or tribunal had given a decision, no party to that decision could raise the same dispute for a second time in different proceedings. That general principle was reflected in rule 9(3) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.
(2) Rule 9(3)(c) did not apply to the appellants’ application for a determination of the service charges payable by them for the years 2015 to 2018 as they were not parties to the 2018 application. The FTT appreciated that distinction and it did not rely on rule 9(3)(c) when it struck out the appellants’ 2020 application in respect of those years. It relied instead on rule 9(3)(d), and on the proposition that it would be “frivolous or vexatious or otherwise an abuse of the process of the tribunal” for the appellants to require the FTT and the respondents to investigate again the matters which had already been considered in the 2018 application.
However, every leaseholder was entitled to a determination by the FTT of the service charges that they were liable to pay. That right could not be removed by a decision of the FTT about the service charge payable by someone else, whether or not the expenditure on which both service charges were based was the same. That right was conferred by section 27A, and it was protected both by the common law right to a fair hearing and by article 6(1) of the European Convention on Human Rights.
(3) The FTT considered that the appellants’ 2020 application would (in effect) raise an appeal against its determination of the earlier 2018 application. But the remaining issues to be determined in the 2020 application were different from those in the 2018 application, in that they concerned the sums payable by the appellants rather than by the 2018 applicant, and the appellants had the right to rely on evidence which they would produce, which might be different to the evidence in the 2018 application. Even if the material put forward by the appellants turned out to be the same as the material previously relied on, that would not deprive them of the right to have their own application determined.
The FTT struck out the application so far as it related to the years 2018 to 2020 on the grounds of proportionality. It was clearly not entitled to take that course in the appellants’ case. There had been no previous consideration of the later years and the FTT’s determination of F’s service charges in the 2018 application could not answer the section 27A questions for any different years. The excessive time and expense which had been devoted by the FTT and by the respondents to investigating 2015 to 2018 could provide no justification for depriving the appellants of a determination of their own liability for 2018 to 2020.
(4) Accordingly, the FTT was wrong to strike out the appellants’ 2020 application, and its decision had to be set aside and remitted to a differently constituted panel for case management and determination. In the circumstances of this case, it would not be fair to the appellants for the application to continue to be managed or determined by the same panel as had already struck the application out.
In the unusual circumstances of these proceedings, the FTT should draw the appellants’ attention to its power under rule 13(1)(b) to make an order in respect of costs if it was satisfied that a party had behaved unreasonably in bringing or conducting proceedings. The appellants had to appreciate that they risked being liable for some, or all, of the respondents’ costs of the proceedings in relation to the years 2015 to 2018 if the outcome of their application was not materially different from the outcome of the 2018 application. Fairness to them required that that risk should be spelled out clearly, and they should be given the opportunity to consider whether they wished to withdraw that part of their application that related to the years 2015 to 2018.
The appeal was determined on written representations.
Eileen O’Grady, barrister
Click here to read a transcript of Connell and another v Beal Developments Ltd and others
