Southwark Council v Various Lessees of the St Saviours Estate [2017] UKUT 10 (LC)

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Summary

The FTT had been entitled to take its own knowledge and experience into account when determining the amount of service charge recoverable by a residential landlord, as well as to take a robust and broad brush approach where there had been a lack of specific evidence before it. Further, the FTT did not necessarily have to set out a legal test in its judgment where the parties before it were agreed on the law.

Facts

This case concerned 12 blocks of flat in an estate owned by the appellant Council. The Council had undertaken a programme of major works to replace a number of fire doors within the estate. When constructed in the 1960s, these doors had been built to a specific fire safety standard known as ‘FD-20’. Over the course of time, many long-lessees had modified the original front doors to their flats, retained by the Council in their demise, with new letterboxes or locks, or else had entirely replaced them.

In 2015, the Council completed a programme of major works replacing non-original front doors and recharging the cost to their individual lessee. Communal fire doors deemed to be in a state of disrepair were also replaced with the cost divided between tenants. 88 tenants challenged whether these sums were recoverable under the service charge provisions in their lease, either on the basis that these works had been ‘improvements’ and not works of repair, or alternatively because the sums charged had not been ‘reasonable’ under s.19 of the Landlord and Tenant Act 1985.  

Issues

The issues in this appeal were, firstly, whether or not the FTT had applied the correct test for disrepair and secondly, whether the FTT had erred in concluding that there was little evidence of the condition of the front doors and the process that the Council had gone through in considering their condition and the action required of them.

First instance

The First-Tier Tribunal had heard evidence from the Council’s employee, who had made a visual inspection of the front doors which informed the programme of major works. On his inspection, the FTT found that he had replaced all non-original front doors on the upper floors of the building (where fire access was a greater issue than on the ground floor), as these would not have been in their original FD20 condition. However the employee could not provide evidence of the fire-safety standard of each door before its replacement.

The FTT concluded that this had amounted to a wholesale replacement of front doors on the basis of their fire resistance when individual doors may not necessarily have been in disrepair. Being unsatisfied with the employee’s evidence, there was little other evidence that the FTT could consider to reach its decision, although it considered that it would have allowed the cost of replacing specific doors where a fire risk assessment had allowed. The FTT therefore concluded as follows:

“We had no evidence before us in [that] regard and thus doing the best we could and having regard to our own experience and expertise we allowed the sum of £80 per door… Otherwise where the fire risk assessments are silent or no fire risk assessments were provided we disallow the cost of the replacement front entrance doors in full.”  

Decision on appeal

It was common ground between the parties that the appropriate standard of repair was whether the doors were FD20 compliant, and that if the doors had been replaced or altered the landlord would be obligated to repair them.

As to the first issue, the Council had submitted that the FTT had failed to properly define what constituted ‘disrepair’ its decision, and that their judgment indicated that the Tribunal had confused that test with the distinct question of whether the doors were compliant with current fire regulations, as opposed to the previous as-built FD-20 standard. The Upper Tribunal disagreed with this assessment on its own reading of that judgment, finding that although the FTT had neither set out the test for disrepair nor cited the material authorities, it was not necessary for it to do so in this instance where the parties had been in agreement on the law.

As to the second issue, the Upper Tribunal found that it was appropriate for the FTT to take a broad brush approach and allow a percentage of the expenditure in cases such as this where ‘detailed mathematical calculation’ is not possible. Where there is no specific evidence, the FTT may take a “robust” approach and apply an appropriate figure based not only on the available evidence but its own knowledge and expertise, as the alternative may to refuse any allowance at all rather than to allow the entire allowance. In such circumstances the FTT was not constrained to ventilate what it proposed to decide before final allowance, even where its proposal is to make only modest allowances in respect of the relevant items in issue.