Halliard Property Co Ltd v Belmont Hall & Elm Court RTM Co Ltd; City & Country Properties Ltd v L Brickman Ltd

Leasehold valuation tribunal (LVT) – Procedure – Applications for costs – Applications against appellant landlords withdrawn – Appellants applying for costs against respondents – LVT indicating cases suitable for determination on documents – Appellants requesting oral hearing – Para 10(2)(b) of Schedule 12 to Commonhold and Leasehold Reform Act 2002 – LVT ordering costs against appellants – Whether appellants acting “otherwise unreasonably” by insisting upon oral hearing – Appeals allowed The appellants were landlords against whom applications had been made in the leasehold valuation tribunal (LVT) that had subsequently been withdrawn. In the first case, the respondent right-to-manage company had made and then withdrawn a claim to acquire the right to manage relevant premises on behalf of tenants pursuant to the Commonhold and Leasehold Reform Act 2002. In the second case, the respondent tenant had applied, under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993, for a new lease, which claim was subsequently deemed to have been withdrawn.In each case, the appellant landlord sought payment of its reasonable costs by the respondent pursuant to, respectively, section 88 of the 2002 Act and section 60 of the 1993 Act. Where costs were not agreed, the appellant applied to the LVT for a determination. The LVT gave directions indicating that the matter was suitable for determination on the documents without an oral hearing, but, pursuant to regulation 13(3) of the Leasehold Valuation Tribunal (Procedure)(England) Regulations 2003, the appellant none the less chose to exercise its right to request such a hearing. Following the hearing, the LVT awarded costs against the appellant in the sum of £500 on the ground that it had, by insisting upon an oral hearing against the LVT’s advice, without having justified this, acted “otherwise unreasonably in connection with the proceedings” within the meaning of para 10(2)(b) of Schedule 12 to the 2002 Act.The appellants appealed, contending that the LVT had given too wide an interpretation to the words “otherwise unreasonably” and should not have applied it where they were exercising an absolute, unqualified right to an oral hearing conferred by regulation 13 of the 2003 Regulations.Held: The appeals were allowed. The LVT had interpreted the words “otherwise unreasonably” too widely. Those words had to be construed ejustem generis with the preceding words “frivolously, vexatiously, abusively, disruptively”. They covered behaviour that merited criticism at a similar level albeit that the behaviour might not fit the words “frivolously, vexatiously, abusively or disruptively”. The test was whether the behaviour permitted of a reasonable explanation: Ridehalgh v Horsefield [1994] 3 All ER 848 applied.The statutory provisions conferred upon a party an absolute right to request an oral hearing, consistently with Article 6 of the European Convention on Human Rights. That right was unqualified by the need to produce a reasoned justification for insisting upon it. Accordingly, exceptional circumstances would be required before a finding could be justified that a party had acted unreasonably in exercising its right. In neither of the appeals were there such exceptional circumstances as to justify a finding that the appellant had acted unreasonably in requesting the oral hearing to which it was entitled.Simon Serota (of Wallace LLP) appeared for the appellants; Peter Luck, secretary and director of Belmont Hall & Elm Court RTM Co Ltd, appeared on behalf of the first respondent; the second respondent did not appear and was not represented.Sally Dobson, barrister