Landlord and tenant – Service charge – Reasonableness – County court entering money judgment against appellant for unpaid service charge – Judgment upheld by circuit judge on appeal as being fixed charge not susceptible to challenge on grounds of reasonableness – Parties later agreeing that charge a variable service charge – First-tier tribunal declining jurisdiction to decide outstanding application for determination of reasonableness of charge under section 27A of Landlord and Tenant Act 1985 – Whether having jurisdiction in light of county court judgments – Appeal dismissed
The appellant occupied a residential property under an assured tenancy from the respondent landlord. The lease contained service charge provisions enabling the respondent to recover from the appellant the cost of providing a television aerial for the property. In November 2013, the respondent issued proceedings against the appellant in the county court, seeking an order for possession of the property on grounds which included non-payment of service charge. As part of her defence, the appellant disputed whether the service charge was reasonable within the meaning of section 19 of the Landlord and Tenant Act 1985, a matter which only arose if the charge was a “variable service charge” within the meaning of section 18 of that Act.
In January 2014, the district judge granted the order sought and gave a money judgment for £511.51 in respect of the television aerial. He did not expressly decide whether the charge was a fixed charge or a variable service charge, although he referred to the issue of reasonableness and stated that that it was properly the domain of an application to the first-tier tribunal (FTT).
The appellant appealed to the circuit judge and also issued an application to the FTT, under section 27A of the 1985 Act, for a determination as to the reasonableness of the charge. Contrary to the usual practice, the county court did not stay the appeal issues relating to the service charge pending a determination by the FTT. Instead, the circuit judge upheld the money judgment against the appellant and dismissed the appeal. In reaching that decision, he held that the charge for the television aerial was a fixed charge, not a variable service charge, such that the matter was not susceptible to a determination of reasonableness by either the FTT or the county court under section 19.
An issue then arose as to whether, in light of the judge’s decision, the FTT had jurisdiction to determine the appellant’s section 27A application. Both parties accepted that, contrary to the judge’s finding, the charge for the aerial was in fact a variable service charge. The FTT held that it lacked jurisdiction to determine the reasonableness of the charge up to January 2014 since a court had already determined that all the disputed service charges for the aerial were payable; it dismissed the application accordingly. The appellant appealed.
Held: The appeal was dismissed.
At the time when the matter was before the FTT, and as matters currently stood, there was a money judgment, entered by the county court, requiring the appellant to pay £511.51 to the respondent. While the district judge appeared to have proceeded on the footing that the service charge was a variable service charge, since otherwise there could have been no suggestion of the matter being pursued in the FTT, the circuit judge in the appellate county court had determined that it was a fixed charge; however, the differing reasons behind the making of the money order did not alter the fact that, subject to an outstanding application for permission to appeal, the money order or judgment remained extant. It resolved the question not only of liability but also of the amount which had to be paid and by whom and the question of jurisdiction. No sensible distinction could be made between liability to pay and the amount payable. As matters stood, the appellate county court had determined that the charge for the television aerial was not a “service charge” within section 18 of the 1985 Act, from which it followed that the FTT had no jurisdiction by virtue of section 27A(4)(c) and also section 27A(1), which only vested jurisdiction where the matter concerned a variable service charge.
While that outcome resulted in the somewhat unsatisfactory position that, up and until January 2014, the service charge could not be challenged because the appellate county court had determined that it was a fixed charge, whereas it could be challenged for all subsequent periods because it was now accepted that it was a variable service charge. The resolution of that matter would be a matter for the Court of Appeal when it determined the appellant’s outstanding application for permission to appeal.
Andrew Brown, a friend of the appellant, appeared on her behalf; Justin Bates (instructed by instructed by Shakespeare Martineau, of Stratford-upon-Avon) appeared for the respondent.
Sally Dobson, barrister
Click here to read transcript: Cowling v Worcester
