Leasehold valuation tribunal – Reasons for decision – Respondent leaseholder challenging reasonableness of service charge levied by appellant landlord for provision of television and radio signals – LVT determining amount to be unreasonable – LV giving further reasons for that conclusion when refusing permission to appeal – Upper Tribunal giving permission – Whether LVT’s reasons adequate – Whether entitled to expand on reasons in decision on permission to appeal – Appeal allowed The respondent held a long lease of a flat in a block of which the appellant local authority was the freeholder. He brought proceedings in the leasehold valuation tribunal (LVT), under section 27A of the Landlord and Tenant Act 1985, to challenge the reasonableness of the service charges levied by the appellants for the provision and maintenance of communal television and radio signals to the flat. The relevant costs arose under a contract between the appellants and a communications company; that agreement had been varied to upgrade the services with a consequent increase in the charges. The respondent challenged the charges for the years ending in March 2009 and 2010; these were £66.56 and £70.20 respectively. The LVT determined that the costs of providing and maintaining the signals was recoverable under the terms of the lease but that the costs charged to the respondent were unreasonable in amount; it found that the maximum reasonable charge was £26 pa. In its reasons for that conclusion, the LVT indicated that the evidence before it was limited, there was no evidence as to the competitiveness of the relevant agreement and the large difference in the costs of satellite and television signals was unexplained; it further found that the 15-year length of the agreement was unreasonably long. The appellants applied for permission to appeal. They contended that the LVT had given no adequate reasons for its decision and that its finding as to the maximum reasonable charge was an unjustified “quantum leap” from its other findings. The LVT refused permission, stating that its maximum reasonable figure of £26 pa was based on the limited evidence before it and its own general knowledge and experience. Permission to appeal was granted by the Lands Chamber of the Upper Tribunal and the appeal was conducted by way of a rehearing. The appeal raised general points about the decision-making process of the LVT and how it should express its decisions. Decision: The appeal was allowed. (1) The LVT was obliged by statute to give its reasons in writing: see regulation 18 of the Leasehold Valuation Tribunals (Procedure)(England) Regulations 2003. That was also necessary to satisfy the needs of natural justice. A party, particularly the losing party, was entitled to know why the decision was made, and the reasons given had to be clear and specific. Without such reasons, it could not be determined whether the tribunal had misdirected itself. Giving reasons also concentrated the mind and made sure that the decision was soundly based on the evidence: Lucie M v Worcestershire County Council [2002] EWHC 1292 (Admin) and Flannery v Halifax Estate Agencies Ltd [1999] EWCA Civ 811; [2000] 1 WLR 377 applied. (2) If the LVT did not give adequate reasons in its initial decision, it could remedy that defect by giving its reasons in its decision on permission to appeal: English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; [2002] 1 WLR 2409 applied. There was a clear rationale for the LVT to be able to amplify its reasons, where these were said to be inadequate, provided that those reasons had been properly within the mind of the LVT at the time when the decision was made and had formed the basis, or part of the basis, for that decision. That approach could potentially avoid the need for an appeal and, if it did not, it none the less gave to the Lands Chamber the opportunity of considering the LVT’s reasons and whether the LVT had erred in its decision-making. However, the LVT had no power to review its own decision on an application for permission to appeal. It could correct a clerical mistake under the limited “slip rule” power in regulation 18(7), but that power did not entitle the LVT to have second or additional thoughts or to alter its ultimate decision: Re Clarise Properties LtdÕs appeal [2012] UKUT 4 (LC); [2012] 17 EG 112 and Chelsea Properties Ltd v Earl Cadogan [2007] PLSCS 197 applied. (3) Although the LVT was entitled to use its own expertise in deciding issues before it, it could not use that expertise to raise and decide other issues that the parties might not have had an opportunity to consider. The LVT was an expert body and its expertise was an extremely important part of the decision-making process. However, the knowledge and expertise on which it relied had to be raised before the parties so that they had the opportunity to comment on those matters: Westbourne Ltd v Spink [2008] PLSCS 251, Arrowdell Ltd v Coniston Court (North) Hove Ltd LRA/72/2005 and Regent Management v Jones [2010] UKUT 369 (LC) applied. (4) The LVT in the instant case had been entitled to expand on its reasons when refusing to grant permission to appeal. However, the expansion of reasoning that it had given, namely that it was relying on the limited evidence before it and its own general knowledge and experience, did not cure the defect in its original decision. The amplified reasons had to be matters that had been fully aired in front of the parties and on which they had been given an opportunity to comment. That was not the case here. The matter should be remitted to a differently constituted LVT for a rehearing, in which the respondent could argue all the points that he wanted to argue with respect to the reasonableness of the service charge. James Fieldsend (instructed by the legal department of Havering London Borough Council) appeared for the appellants; the respondent appeared in person. Sally Dobson, barrister
Leasehold valuation tribunal – Reasons for decision – Respondent leaseholder challenging reasonableness of service charge levied by appellant landlord for provision of television and radio signals – LVT determining amount to be unreasonable – LV giving further reasons for that conclusion when refusing permission to appeal – Upper Tribunal giving permission – Whether LVT’s reasons adequate – Whether entitled to expand on reasons in decision on permission to appeal – Appeal allowed
The respondent held a long lease of a flat in a block of which the appellant local authority was the freeholder. He brought proceedings in the leasehold valuation tribunal (LVT), under section 27A of the Landlord and Tenant Act 1985, to challenge the reasonableness of the service charges levied by the appellants for the provision and maintenance of communal television and radio signals to the flat. The relevant costs arose under a contract between the appellants and a communications company; that agreement had been varied to upgrade the services with a consequent increase in the charges. The respondent challenged the charges for the years ending in March 2009 and 2010; these were £66.56 and £70.20 respectively.
The LVT determined that the costs of providing and maintaining the signals was recoverable under the terms of the lease but that the costs charged to the respondent were unreasonable in amount; it found that the maximum reasonable charge was £26 pa. In its reasons for that conclusion, the LVT indicated that the evidence before it was limited, there was no evidence as to the competitiveness of the relevant agreement and the large difference in the costs of satellite and television signals was unexplained; it further found that the 15-year length of the agreement was unreasonably long.
The appellants applied for permission to appeal. They contended that the LVT had given no adequate reasons for its decision and that its finding as to the maximum reasonable charge was an unjustified “quantum leap” from its other findings. The LVT refused permission, stating that its maximum reasonable figure of £26 pa was based on the limited evidence before it and its own general knowledge and experience.
Permission to appeal was granted by the Lands Chamber of the Upper Tribunal and the appeal was conducted by way of a rehearing. The appeal raised general points about the decision-making process of the LVT and how it should express its decisions.
Decision: The appeal was allowed.
(1) The LVT was obliged by statute to give its reasons in writing: see regulation 18 of the Leasehold Valuation Tribunals (Procedure)(England) Regulations 2003. That was also necessary to satisfy the needs of natural justice. A party, particularly the losing party, was entitled to know why the decision was made, and the reasons given had to be clear and specific. Without such reasons, it could not be determined whether the tribunal had misdirected itself. Giving reasons also concentrated the mind and made sure that the decision was soundly based on the evidence: Lucie M v Worcestershire County Council [2002] EWHC 1292 (Admin) and Flannery v Halifax Estate Agencies Ltd [1999] EWCA Civ 811; [2000] 1 WLR 377 applied.
(2) If the LVT did not give adequate reasons in its initial decision, it could remedy that defect by giving its reasons in its decision on permission to appeal: English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; [2002] 1 WLR 2409 applied. There was a clear rationale for the LVT to be able to amplify its reasons, where these were said to be inadequate, provided that those reasons had been properly within the mind of the LVT at the time when the decision was made and had formed the basis, or part of the basis, for that decision. That approach could potentially avoid the need for an appeal and, if it did not, it none the less gave to the Lands Chamber the opportunity of considering the LVT’s reasons and whether the LVT had erred in its decision-making. However, the LVT had no power to review its own decision on an application for permission to appeal. It could correct a clerical mistake under the limited “slip rule” power in regulation 18(7), but that power did not entitle the LVT to have second or additional thoughts or to alter its ultimate decision: Re Clarise Properties LtdÕs appeal [2012] UKUT 4 (LC); [2012] 17 EG 112 and Chelsea Properties Ltd v Earl Cadogan [2007] PLSCS 197 applied.
(3) Although the LVT was entitled to use its own expertise in deciding issues before it, it could not use that expertise to raise and decide other issues that the parties might not have had an opportunity to consider. The LVT was an expert body and its expertise was an extremely important part of the decision-making process. However, the knowledge and expertise on which it relied had to be raised before the parties so that they had the opportunity to comment on those matters: Westbourne Ltd v Spink [2008] PLSCS 251, Arrowdell Ltd v Coniston Court (North) Hove Ltd LRA/72/2005 and Regent Management v Jones [2010] UKUT 369 (LC) applied.
(4) The LVT in the instant case had been entitled to expand on its reasons when refusing to grant permission to appeal. However, the expansion of reasoning that it had given, namely that it was relying on the limited evidence before it and its own general knowledge and experience, did not cure the defect in its original decision. The amplified reasons had to be matters that had been fully aired in front of the parties and on which they had been given an opportunity to comment. That was not the case here. The matter should be remitted to a differently constituted LVT for a rehearing, in which the respondent could argue all the points that he wanted to argue with respect to the reasonableness of the service charge.
James Fieldsend (instructed by the legal department of Havering London Borough Council) appeared for the appellants; the respondent appeared in person.
Sally Dobson, barrister
