An end to the LVT Lottery

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An end to the LVT Lottery?

By Nicola Muir

The Leasehold Valuation Tribunal is intended to be a relatively informal and cheap forum for the resolution of residential property disputes. This informality means that it is rarely fatal to a party’s case that there has not been strict adherence to the directions or the rules of evidence.  This is all fine and dandy if the dispute which the tribunal ultimately resolves is the one which the parties referred to it. The parties should have been armed with evidence to deal with the broad issue.  However, if new issues are introduced at the hearing, the parties may well be unprepared to deal with it.

Unfortunately, there have recently been a number of LVT decisions where the final decision turns on an issue which the LVT thought of itself rather than the issue which the parties wanted dealt with.  A recent spate of Upper Tribunal decisions seek to rein in the enthusiasm of some LVTs for going on frolics of their own and to direct them to stick to the pleaded case.

Beitov Properties Ltd v Martin [2012] UKUT 133 (LC) started life as a claim for service charge arrears which was transferred to the LVT. The tenant failed to attend the hearing and the landlord’s claim was made out in full.  However, the Tribunal, of its motion, queried whether the service charge demands complied with section 47 of the Landlord and Tenant Act 1987 as they cited the address of the managing agents rather than of the landlord itself. The LVT went on to find that the demands did not comply. The Upper Tribunal agreed but said:

. .  it is in my view generally inappropriate for a tribunal to take on behalf of one side in what is a party and party dispute a purely technical point, by which I mean a point that does not go to the merits or justice of the case. . ..”

Similarly, in Fairhold Mercury Ltd v Merryfield RTM Company Ltd [2012] UKUT 311 (LC) the LVT rejected a claim for a determination of the costs of preparing counter-notices in a RTM claim because the costs were paid to an agent who was not a solicitor. This issue had not been raised by the parties.  The Upper Tribunal found that the LVT was wrong in law and that the decision was made in breach of natural justice.

HHJ Gerald gave two further decisions on this issue in September 2012.  The first – Birmingham City Council v Keddie and Hill [2012] UKUT 323 (LC) was a service charge dispute where the applicants had challenged the reasonableness of window replacement and balcony works. The LVT decided that the windows did not need replacing anyway and that therefore nothing was recoverable in respect of the works.  The LVT did not address the reasonableness of the cost and quality of the works at all.

In the second case – Crosspite Ltd v Sachdev [2012] UKUT 321 - the applicants challenged the reasonableness of a fee for consenting to an under-letting.  Again, the LVT found that nothing was payable, because it said there was no provision in the lease for recovery of such a sum.  The tenants had, in fact, accepted that an administration charge was payable but said it was too high.

HHJ Gerald said in Birmingham:

It is regrettable that it appears to be a developing practice within some leasehold valuation tribunals to take it upon itself to identify issues which are of no concern to the parties and then reach a decision on issues they have not been asked to which then results in an appeal and all the waste of time and money and attendant general aggravation.  . .”

The issues to be decided should be those contained in the statements of case which, HHJ Gerald said, have essentially five functions – (1) to identify the issues (2) to enable the parties to know what issues they must address their evidence to (3) to vest the LVT with jurisdiction (4) to set the parameters of how the case should be managed and (5):        “ . . .by confining the issues requiring resolution to what is actually (as distinct from what might theoretically be) in dispute between the parties they will be assured economical and expeditious disposal of their dispute whilst also promoting efficient and economical use of judicial resources . . .”

In other words, the LVT should stick to the pleaded case.   In the past it has been something of a lottery appearing before the LVT as you never know what issues you will be faced with or what to be prepared for.  Hopefully these decisions will persuade the LVT to decide only what it has been asked to decide by the parties, thereby, saving time, expense and perspiration!

Nicola Muir

January 2013

Published in the Solicitors’ Journal