Elizabeth Dwomoh focuses on a recent service charges case that brings us back to basics on the rules of evidence.
Key point
- A freeholder only needs to prove on the balance of probabilities that a service charge demand has been delivered when relying on the deeming provisions of section 196 of the Law of Property Act 1925
The law of evidence is a cornerstone of the legal system. Sherlock Holmes, if asked, would undoubtedly say it was elementary that a trier of fact must apply the correct rules of evidence when reaching a decision. The case of 38/41 CHG Residents Co Ltd v Hyslop [2020] UKUT 21 (LC), is a reminder that even the basics can be forgotten when it comes to the thorny issue of proving service of notices.
The background
38/41 CHG Residents Co Ltd (CHGR) was the freeholder of 39 and 41 Craven Hill Gardens. FW Gapp was CHGR’s managing agent. Iris Hyslop was a long lessee of a flat at 41.
The service charge provisions of Hyslop’s lease required payment of service charges in advance, on the basis of a budget, and for an account to be furnished after 31 March each year and a balancing payment or credit to be made. Hyslop argued that she was not liable to pay the service charges for the years ending 31 March 2015 and 31 March 2016 because she had not received the necessary demands.
Clause 6(4) of her lease incorporated the deemed service provisions of section 196 of the Law of Property Act 1925 (the 1925 Act). Therefore, under the terms of her lease, any service charge demand would be deemed “sufficiently served” if it was sent to her by CHGR or FW Gapp by post in a registered letter, left at her last known place of abode in the UK, or affixed or left on the land or any house or building comprised in her lease.
The first decision
Before the First-tier Tribunal (FTT), Mr Gream, a director of CHGR, gave evidence that on 21 July 2015 he personally delivered a cover letter, a tenant statement and a demand for service charges up to March 2015 by posting them through the letterbox of 41. He delivered further copies on 24 July 2015 by placing them under the door of Hyslop’s flat. On both occasions he took photographs. Gream further stated that he delivered a reminder on 15 August 2015, but could not recall the exact method of delivery and had not taken photographs.
In respect of the service charge demand for September 2015, Gream stated that FW Gapp posted it to Hyslop. Further, Gream, who was also a long lessee of a flat in 39, gave evidence that he had received his service charge demand for the year ending March 2016 in September 2015.
The FTT was not satisfied that Hyslop had received the service charge demands for the years ending 31 March 2015 and 31 March 2016. It considered the correct test to be applied in respect of service was whether, in light of her denial of receipt, it was satisfied that a demand was received by Hyslop, not whether it was delivered to her.
With regard to the standard of proof, the FTT found that although Gream’s evidence about delivery on 21 July 2015 was credible, it could not “identify with any certainty” what documents were included in the envelope. Further, the FTT expressed concern that Gream had placed the letter through the communal letterbox instead of the pigeonhole associated with Hyslop’s flat.
In light of Gream’s evidence during cross-examination, the FTT was also not satisfied that the documents delivered by him on 24 July 2015 were exactly the same as the documents he delivered on 21 July 2015. Accordingly, it was not satisfied that the demands of March and September 2014 were pushed under the door of Hyslop’s flat.
The FTT was also not satisfied that the demand of September 2015 had been posted by FW Gapp to Hyslop, because Gream’s witness statement was silent on that issue and FW Gapp had not provided any evidence. Further, a copy of the demand had not been exhibited.
On appeal
CHGR appealed to the Upper Tribunal (Lands Chamber) (UT) on three grounds. First, that the FTT had asked itself the wrong question; namely, whether the demands had been received rather than whether they had been delivered. Secondly, the FTT had applied the wrong standard of proof, requiring certainty rather than making a finding on the balance of probabilities. Thirdly, the FTT erred in law by failing to take proper account of the evidence.
The UT noted that, in light of clause 6(4) of Hyslop’s lease, the FTT has asked itself the wrong question. The proper test was whether the demand had been delivered rather than received by Hyslop. Further having regard to Kinch v Bullard [1998] PLSCS 231 and Henry Smith’s Charity Trustees v Kyriakou [1989] 2 EGLR 110, the requirements of section 196 of the 1925 Act would also be met if the demands were: (a) delivered either by ordinary post, (b) put through the letterbox of 41 addressed to Hyslop or (c) pushed under the front door of Hyslop’s flat.
The UT was notably troubled by the FTT’s reference to “certainty” in relation to the standard of proof required. The UT commented that use of the word suggested that the FTT was looking for proof at a level higher than the balance of probabilities. The FTT had accepted the credibility of Gream’s evidence that he had delivered documents by hand on 21 and 24 July 2015. The FTT was not required to be made certain itself that Gream had delivered the demands on those dates.
On the final ground of appeal the UT was satisfied that Gream had presented credible evidence to rebut Hyslop’s bare denials as to non-receipt of the demands for the years ending 31 March 2015 and 31 March 2016. The FTT’s decision was irrational in light of Gream’s evidence that on balance he delivered the relevant demands on 21 and 24 July 2015, and that FW Gapp had delivered the demand in September 2015, which he, as a long lessee of a flat at 39, had also received.
Elizabeth Dwomoh is a barrister at Lamb Chambers
