Costs – First-tier tribunal – Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 – Unreasonable conduct – Proceedings in first-tier tribunal between appellant leaseholder and respondent landlord regarding unpaid service charges – Respondent applying for costs against appellant under r 13(1)(b) – Whether unreasonable conduct by appellant justifying award of costs – Appeal dismissed
The appellant was the long leaseholder of a flat in a building of which the respondent company was the freeholder. The respondent was owned by the leaseholders in the building, including the appellant, and its directors were also leaseholders. The respondent retained a management company to manage the building on its behalf.
The appellant disputed his liability to pay certain sums claimed by the respondent as service charge, including £1,100 for the cost of external redecoration undertaken in 2009. The appellant was dissatisfied with the quality of the work and with the consultation which had been undertaken in advance of the contract being awarded. The dispute was not resolved and the respondent brought county court proceedings against the appellant to recover service charge arrears. The matter was referred to the first-tier tribunal (FTT) to determine the appellant’s liability for the sums claimed. The appellant had no legal representation in those proceedings.
The FTT gave directions regarding the preparation of submissions, evidence and the content of the hearing bundles and identified six issues in the proceedings. However, the appellant resisted that process, variously complaining about the contents of the hearing bundle as produced by the respondent’s solicitor, seeking an adjournment and making allegations of dishonesty against the directors of the respondent.
When the matter was finally heard, the FTT concluded that the full amount of the service charge was reasonable and recoverable. Although the respondent admitted a failure fully to comply with the statutory consultation requirements under the Landlord and Tenant Act 1985 in relation to the external redecoration contract, the FTT held that those requirements could be dispensed with pursuant to section 20ZA of the 1985 Act.
The FTT also allowed an application for costs made by the respondent under r 13(1)(b) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, on the grounds that the appellant had acted unreasonably in the conduct of the proceedings. The FTT rejected the suggestion that the appellant had acted unreasonably in contesting the proceedings at all. However, it found other unreasonable behaviour, including: (i) the appellant’s vigorous objection to the manner in which material that he wished to put before the FTT had been re-arranged and edited in the hearing bundle by the respondent’s solicitors; and (ii) the prolixity of the appellant’s written submissions. It ordered the appellant to pay £1,250 towards the respondent’s costs, which exceeded £19,000.
Held: The appeal was dismissed.
(1) Only in very rare cases would a leaseholder be found to have acted unreasonably in seeking to resist an application for dispensation from the statutory consultation requirements. It would be equally rare for reliance by an unrepresented individual acting in good faith on points of defence, even if they were misconceived, to amount to unreasonable conduct. The FTT had ample powers to control the taking of manifestly bad points by striking them out or determining them summarily. It was preferable that the incurring of unnecessary costs be controlled by the exercise of those powers, rather than by penalising unrepresented parties who could not tell a good point from a bad one. In the instant case, the FTT had found that the points taken by the applicant were not insubstantial, but even if they had been weaker they would have provided no proper basis for an application for costs.
(2) However, the FTT was entitled to regard the appellant’s behaviour in relation to the content of the bundles as unreasonable. The appellant had prepared his evidence in a manner which he regarded as convenient but which entirely overlooked the directions given by the FTT. He was at fault in failing to consider the FTT’s directions with sufficient care and abide by them. Given that the appellant was unrepresented and at risk of losing his home through forfeiture, it was not unreasonable that he should want to present his case in the best light and to organise it in a way which he thought would make it more readily understandable. Had his only default been to organise his presentation in an unorthodox manner, there would have been no grounds for a costs sanction. However, when it was pointed out to him that the manner in which he had arranged the documents was not consistent with the FTT’s directions, he ought to have appreciated that there was substance in that criticism. Instead, he had embarked on an intensive correspondence with the FTT itself complaining about the censorship of his case and the dishonesty of the directors and their agents. The FTT was entitled to find that the appellant was aware that each of his letters would require consideration and a response from the respondent’s solicitors as well as consideration by the FTT. It would also have been apparent to him, had he paused to consider, that those allegations had nothing whatsoever to do with the six issues identified by the FTT in its directions.
Making every appropriate allowance for the fact that the material he wished to rely on had been edited and organised in a way inconsistent with his wishes, the respondent had nevertheless responded in an intemperate and unjustifiably aggressive manner, and continued to do so despite receiving reassurances that all the material on which he relied had been provided to the FTT and that anything which had been omitted could be inserted if he would identify it. That was conduct which passed the threshold required to give the FTT jurisdiction to make an order for costs under r 13(1)(b).
(3) The FTT was also entitled to conclude that the written material produced by the appellant exceeded by a considerable distance what was reasonable and proportionate to deal with the six discrete issues raised in the proceedings. It had been entitled to find that the excessive written material presented by the appellant had contributed very significantly to the inability to stick to the estimated timetable of a day and a half for the hearing. As a result, the hearing had had to be adjourned at the end of the first day without closing submissions having been made, which put the parties to the additional expense and inconvenience of preparing them in writing.
Whether a similar inability to be concise and tendency to repetition would amount to unreasonable conduct in any other case was not a question which arose. In the context of the particular proceedings, after the appellant had made repeated allegations of misconduct and illegality against the directors of the respondent and its agents, and after the exchanges over the contents of the bundles, the FTT was entitled concluded that there was no good reason for the appellant to behave as he did and that a reasonable person in his position would not have done so.
The appeal was determined on the written representations of the parties.
Sally Dobson, barrister
Click here to read transcript: Matier v Christchurch Gardens (Epsom) Ltd
