Key points:
■ A pilot scheme is seeking to streamline property disputes by use of a single forum for a decision
■ However, there are limits to what the First-tier Tribunal can decide under the scheme
Many residential property disputes are dealt with in the county court; others by the First-tier Tribunal (Property Chamber) (FTT). Following amendments to the County Courts Act 1984, FTT judges may also sit as county court judges. The goal of the Residential Property Dispute Deployment Pilot scheme is to allow for residential property disputes to be dealt with in one forum. The scheme allows for judges to hear a range of residential property disputes. The proper limits of the scheme have now been considered by the Upper Tribunal (Lands Chamber) (UT) in Avon Ground Rents Ltd v Child [2018] UKUT 204 (LC); [2018] PLSCS 114. One of the central issues was whether the FTT has jurisdiction over a landlord’s claim for the legal costs incurred in the county court before the case was transferred to the FTT.
Background
Avon are the landlords and Sarah Child one of their leaseholders. She disputed certain service charge claims and refused to pay the full bill. Avon issued county court proceedings for arrears of service and administrative charges. As she resisted these claims (which included a claim for the costs incurred in the county court), the county court transferred the dispute to the FTT for a determination.
Following this transfer, directions were given by an FTT judge who also sits as a county court judge. Further directions were to follow relating to the disposal of the disputed charges and the claims for costs, including the county court costs (some £4,425) incurred prior to the transfer. Avon questioned whether the FTT had jurisdiction over the costs claim and an exchange of correspondence between the FTT and Avon ensued. However, the FTT judge proceeded to deal with all aspects of the claim and gave a decision. An appeal was made to the UT.
The pre-hearing exchange between Avon and the FTT was described by the UT in this way: a “reasonable and well-informed reader” would have concluded that the FTT judge proposed to sit alone as a county court judge to deal with issues relating to costs in both the FTT and the court. He would do this after determining the substantive issue which was transferred (where Child claimed not to have received demand notices).
The hearing in the FTT
The FTT decided the transferred issue in favour of Avon and made determinations of the substantive claims for unpaid charges. It also proceeded to determine Avon’s claim for its costs incurred in the county court claim, reducing the costs claimed significantly. It did so by treating those costs as “administration charges” which have to be “reasonable” (under paragraph 2 of part 1 of Schedule 11 of the Commonhold and Leasehold Reform Act 2002). Before the FTT determinations were delivered, the same judge, this time sitting as a district judge, allocated the claim to the small claims court. He then gave judgment in favour of Avon for the sums determined (including the costs).
The appeal
Permission to appeal was given by the UT. The main issues were: did the FTT have jurisdiction to consider the county court costs claim? Did the FTT make it clear which procedure it was using and the jurisdiction it was exercising? Did Avon have adequate opportunity to meet the challenges to its service charges claim?
Its appeal succeeded. First, reasoned the UT, deployment of FTT judges as judges of the county court does not affect the substantive provisions which govern the jurisdiction of the FTT and the court. Their procedures and powers are also different: the FTT does not have the power to make a money judgement, for example. Moreover, noted the UT, unlike the county court, the FTT has only limited powers to make awards of costs. And different rules apply to the seeking permission to appeal.
Where a judge is acting both as a judge of the FTT and the county court on the same occasion it must be clear as to which “hat” is being “worn” at each stage of the process:
“Although a person who is a judge of both the FTT and the County Court may wear two hats, these two separate jurisdictions (and their respective procedural rules) cannot be elided, or treated effectively as a single jurisdiction, without legislative change.”
The judge must also maintain and articulate a clear distinction at all times between the different functions and roles that are being performed.
The UT noted comments in a previous decision (Cain v Islington London Borough Council [2015] UKUT 117 (LC); [2015] PLSCS 111 that, as the jurisdiction of the FTT is statutory, it has no inherent power to make any determination. Nor can jurisdiction be conferred on the FTT by agreement or consent.
Applied to this appeal, there was no power to make a determination of costs as this can only be exercised by the court.
The FTT costs decision was set aside and the UT, exercising its own county court costs jurisdiction, made a finding on the costs that could be claimed.
The UT was supportive of the goals of the pilot scheme, except where the practice guide suggests that the scheme may be used to decide issues that are outside the jurisdiction of the FTT. It recommended that aspect of the practice guide should be redrafted.
James Driscoll is a solicitor and a writer
