Service Charges & Estate Management - July 2013 updates

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SERVICE CHARGES AND ESTATE MANAGEMENT

JULY 2013 UPDATE

R (on the application of Spaul) v Upper Tribunal (Administrative Appeals Chamber), Unreported, 22 May 2013 (QB) (Leggatt J)

Summary: The Upper Tribunal, in refusing permission to appeal from a decision of a leasehold valuation tribunal, had not erred in concluding that there had been no substantial procedural defect in an alleged failure to serve notices on the claimant leaseholder at what he said was his proper address.

Facts: The managing agent of a building in London applied to the LVT for a determination that the costs to be incurred on major works were reasonable.  In accordance with the Leasehold Valuation Tribunals (Procedure) (England) Regulations 2003 reg.5 the LVT had sent notice of the application to those named as respondents, including the claimant lessee.  The notice had been sent to the address provided by the managing agent which was the claimant’s flat in the building. The lessee’s case was that he had not received the requisite notice of consultation under s.20 of the 1985 Act, nor notice of the application to the LVT.  He said that he did not live at the flat and that the managing agent knew that, and knew his proper address which it had not given to the LVT. Furthermore, the failure to give notice of the consultation and of the application was a "substantial procedural defect" justifying the grant by the Upper Tribunal of permission to appeal against the decision of the LVT, within the relevant Interim Practice Directions and Guidance of the Upper Tribunal (Lands Chamber). The Upper Tribunal refused permission to appeal on the ground that there was nothing to suggest that the managing agent knew that the lessee’s address was not at the building and that the managing agent knew what that address was.

Issue: The lessee applied for judicial review of the Upper Tribunal’s decision refusing his application for permission to appeal from a decision of the LVT on the ground that, if the Upper Tribunal had properly considered the evidence, it would have been bound to decide that there were reasonable grounds for finding that there had been a substantial procedural defect in the decision of the LVT.

Decision: In dismissing the application, Leggatt J held that the evidence presented to the Upper Tribunal on the critical issue was wholly unsatisfactory and there was no witness statement to indicate what that material was. It appeared that the application for permission to appeal had been presented to the Upper Tribunal on the incorrect basis that the application to the LVT was by the landlord rather than by the managing agent. His case was that he had informed the landlord and the managing agent of his change of address and he said that there had been some evidence to that effect before the Upper Tribunal in the form of a letter. However, he failed to show that that letter had been included in the material before the Upper Tribunal. In any event the managing agent’s case in opposition to the lessee’s application for permission to appeal contained a detailed rebuttal of the allegation that the managing agent was aware of the lessee’s address.  There was compelling contemporaneous documentary evidence that the lessee had been asked by the managing agent for an address for correspondence apart from the flat and that none had been forthcoming. In the circumstances, although the Upper Tribunal might have gone too far in stating that there was nothing to indicate that the managing agent knew that the lessee had an address other than the flat and what that address was, it could not possibly be said that on the material before the Upper Tribunal it was not entitled to conclude that there were no reasonable grounds for asserting that there had been a substantial procedural defect. The lessee’s claim for judicial review failed.

Triplerose Ltd v Grantglen Ltd [2012] UKUT 204 (LC)

Summary: Service charge demands failed to correctly identify the landlord as required by s.47 of the LTA 1987.  The failure could not be rectified by the provision of the correct name and address of the landlord on the application to the LVT.  Consequently, the LVT had erred in finding that the service was payable: Beitov Properties Limited v Elliston Bentley Martin [2012] UKUT 133 (LC) applied.

Moorings (Bournemouth) Ltd v McNeill [2013] UKUT 243 (LC)

Summary: Having withdrawn an express challenge to the validity of a parking scheme in county court claim for the refund of clamping fees, the respondent tenant was estopped from challenging the legitimacy of parking restrictions in LVT proceedings and was liable to pay the administration charges for parking in breach of the parking regulations made under his lease.

Facts: The respondent was a tenant of a flat in an estate comprising a purpose built block of 18 flats and two blocks of garages comprising a total of 18 garages.  Each tenant of the flats owned one garage. The lease to each of the flats provided no right to park, save for the right to use the garage.  The leases also included a tenant’s covenant “to observe such reasonable restrictions and regulations as the lessor may from time to time make for the good running and management of the Estate.”

There had been a problem with parking on the estate which had lead to obstruction of access to one or more of the garages.  The managing agents circulated details of a parking scheme in an attempt to alleviate the difficulties.  The respondent’s vehicle was clamped for being parked in breach of the parking scheme and the respondent was required to pay a release fee.  The respondent issued county court proceedings for the repayment of the release fee.  In those proceedings the respondent attacked the legitimacy of the parking scheme.  At a hearing, the respondent made an admission that he was not seeking to challenge the parking scheme.  The preamble to the court’s order included the admission.  At a subsequent hearing the respondent discontinued the county court claim.        

As a result of those proceedings and the hearings, and the necessity of the appellants to defend the challenge to the parking scheme, costs of £3,206.76 had been incurred. The appellants determined that the costs should not fall upon the tenants generally pursuant to their service charge obligations and therefore sent a demand to the respondent claiming those costs with respect to solicitors and managing agents costs incurred as a result of the breaches of covenant by the respondent in failing to comply with the parking scheme.  As the costs had not been paid the appellants decided to issue a s.146 notice in respect of that breach of covenant. Consequently the appellant required a declaration pursuant to the provisions of s.168 of CALRA that the respondent was in breach of covenant.

The appellant applied for a determination pursuant to Sch 11 of CLRA 2002 that administration charges were to be paid by the respondent on the basis that he had breached his lease covenants.  The application was determined on paper.

The LVT rejected the appellant’s argument that the respondent was estopped from challenging the validity of the parking scheme in these proceedings.

Decision of Appeal:  Allowing the appeal, HHJ Walden-Smith held that Khan v Gollechha International Limited [1980] 1 WLR 1482 and SCF Finance Co Limited v Masri (No.3) [1987] QB 1028 make clear that in order for an issue estoppel to arrive, or for a matter to be res judicata, it is necessary for the issue to have been an issue that was raised in earlier proceedings and that point to have been the one which was conceded in a clear manner in the face of the court. If those two requirements are fulfilled, then a party will be estopped from raising the same issue in subsequent proceedings. In the instant case, it was clear that the respondent did raise the issue as to the legitimacy of the parking scheme in the county court proceedings. He then conceded the legitimacy of that parking scheme and that concession was recorded in the court’s order.

JONATHAN UPTON

TANFIELD CHAMBERS

JULY 2013