Service Charges & Estate Management - June 2012 updates

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SERVICE CHARGES AND ESTATE MANAGEMENT

JUNE 2012 UPDATE

Beitov Properties Ltd v Martin [2012] UKUT 133 (LC)

Summary: The requirement to give the landlord’s address in a LTA 1987, s.47 demand is not satisfied by giving the landlord’s agent’s address.

Facts: The LVT raised with the landlord the question of the address given in the demand for service charges, although that this had not been a matter of concern to the tenant who did not attend the hearing.

The demands, which had been prepared and sent by the landlord's managing agents, BLR Property Management, contained the following statement:

“Notice is hereby given pursuant to the Landlord and Tenant Act 1987 section 48 that all notices (including notices in proceedings) may be served upon the Landlord

Beitov Properties Ltd

Hyde House

The Hyde

London NW9 6LH”

The address given was that of BLR. The LVT accepted the evidence of a property manager with BLR that the address of Beitov Properties Ltd was 266a Regents Park Road, London N3 3HN.  It said that this was reinforced by the Land Registry entries, which recorded that as the company's address; while a company search revealed that its registered office was at Sapphire House, 73 St Margarets Avenue, Whetstone, London N20 9 LD.

The LVT held that the amounts demanded were not payable because the demands had not complied with s.47 in that they had not contained the address of the landlord.

On appeal: The landlord argued that the Act does not prescribe or limit the particular address to be used by the landlord and provided the address is one with sufficient connection with the landlord and at which it could receive communications, s. 47 is satisfied. It was argued that the landlord receives mail addressed to Beitov Properties at the Hyde House address, the managing agent instructed by the landlord to manage and administer the portfolio of properties operates the business of administration of the property from that address, the landlord's records, files and accounts relating to the property are held at this address, and it is at this address that leaseholders are notified that inspection of invoices may be carried out.

Dismissing the appeal, The President said at [9]: “the purpose of the requirement in [s.47(1)] (a) to provide the address (as well as the name) of the landlord is not solely for the purpose of providing the tenant with an address at or through which he can communicate with the landlord. That is clear because (b) provides that, if the landlord's address is not in England and Wales, an address in England and Wales must be given at which notices may be served on the landlord by the tenant. Thus even if the landlord's address is not in England and Wales it still has to be given (and a further address provided for the service of notices). The purpose of the requirement in section 47 to include in any demand the name and address of the landlord, in my judgment, is to enable a tenant to know who his landlord is, and a name alone may not be sufficient for this purpose. To provide an address at which the landlord can be found assists in the process of identification.”

He continued at [11]: “The address of the landlord for the purpose of section 47(1) thus seems to me to be the place where the landlord is to be found. In the case of an individual this would be his place of residence or the place from which he carries on business. In the case of a company it would be the company's registered office or the place from which it carries on business. If there is more than one place of residence or place from which business is carried on, then, depending on the facts, it may be that any one of such addresses will do. I do not think that it is useful to say any more than this. Of course in many cases providing the address of a company landlord may for purposes of identification add nothing of practical value and is unlikely to be of any interest to the tenant, who will be more concerned about having an address at or through which he can communicate with the landlord.”

Comment: It is common for landlord’s agents to prepare and send demands for rent and service charges and to serve one notice under both s.47 and s.48.  This case makes it abundantly clear that the landlord’s address must be given in addition to an address for service of notices if the address for service is not the landlord’s address.

Country Trade Limited v John Hanton & Others [2012] UKUT 67 (LC)

Summary: In this case the UT (LC) explained how the well-known principles on bias apply to hearings before the LVT, where it is not uncommon for parties to appear before the same members of the LVT in respect of very similar management issues.

Facts: The appellant manages 126 dwellings in 17 blocks owned by various members of a group of companies incorporated in Guernsey. The group includes Landfast Ltd, the owner of the block subject to the appeal, and Breydon Ltd.

At the beginning of the hearing before the LVT the appellant renewed an earlier written request for an adjournment on the ground that the Lands Chamber was due to hear an appeal against a decision of the LVT on another application under section 27A in respect of properties which the appellant manages on behalf of Breydon Ltd (“the Breydon case”).  It was argued that very similar management issues had arisen in that case as were due to be argued in the instant case. The LVT had decided against the appellant on the management issues and expressed itself with some emphasis. The chairman and one member of the LVT in that case were sitting as the LVT in the current case.  The LVT declined to adjourn, proceeded to hear the case and determined it adversely to the appellant. They had been asked, in effect, to recuse themselves but had refused. The reason for not doing so was that the Breydon appeal was “essentially on procedural and evidential points; not on matters of principle concerning the manner in which management of the estate was conducted.”

The appellant appealed on a number of grounds but the central complaint was that they did not get a fair hearing because two of the members of the LVT had already formed an unfavourable view of the appellant, its method of management and the charges it sought to levy, i.e. that the LVT was biased.

The law: In R v Gough [1993] AC 646 at 670 Lord Goff set out the test for bias as:

“having ascertained the relevant circumstances, the court should ask itself whether, having regard to those circumstances, there was a real danger of bias on the part of the relevant member of the Tribunal, in the sense that he might unfairly regard (or have unfairly regarded) with favour, or disfavour, the case of a party to the issue under consideration by him..”

In Re Medicaments and Related Classes of Goods (No.2) [2001] 1 WLR 700 , Lord Phillips MR reviewed the authorities and said (at 726):

“We would summarise the principles to be derived from this line of cases as follows. (1) if a judge is shown to have been influenced by actual bias, his decision must be set aside. (2) where actual bias has not been established the personal impartiality of the judge is to be presumed. (3) the court then has to decide whether, on an objective appraisal, the material facts give rise to a legitimate fear that the judge might not have been impartial. If they do the decision of the judge must be set aside. (4) the material facts are not limited to those which were apparent to the applicant. They are those which are ascertained upon investigation by the court. (5) an important consideration in making an objective appraisal of the facts is the desirability that the public should remain confident in the administration of justice.

“The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.”

In Porter v Magill [2002] 2 AC 357, Lord Hope, with whom the other Law Lords agreed, approved that test subject to the deletion of the words ‘a real danger’, which served no useful purpose. He said: “The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.”

On appeal: HHJ Mole QC made the following statements of principle:

“[at 41] The fair-minded and informed observer of this case would be aware that the LVT would draw both its members and its cases from its region. It has a specialised jurisdiction. That may mean that suitably qualified and public-spirited members are a limited resource …”

“[42] It is also likely that a local landlord or local management company with several properties may often find itself appearing, probably with the same representation or witnesses, before the same Tribunal members ... It is very possible that a Tribunal may start to form a general provisional view about the way the management committee or landlord in question conducts its business or the general reliability of a particular witness. This is commonplace; legal representatives and witnesses are usually aware of the value of their good reputation and jealous of it. And by the same token, Tribunal members (including Judges) know that they not only have to be open-minded and prepared to set any preconceptions aside, they have to behave in a way that shows that they are doing so. The fact that there are a limited number of local Tribunal members and a limited number of likely litigants, makes it more important, if anything, that the tribunal is scrupulous about being and appearing fair and sensitive to the impression given by what it says and does.

“[43] As a matter of general principle no fair-minded and informed observer would consider that the simple fact that the same litigant appeared quite often before the same Tribunal and that the Tribunal quite often found against him was an indication that there was a real possibility that the Tribunal was biased. The same would be true even if the litigant sometimes succeeded in winning on appeal. The Tribunal in this case was entirely correct when it observed that ‘Judges and Tribunals often have to deal with many cases involving the same parties, and in particular large corporate or local authority landlords, but that does not justify a charge of partiality.’ It is not just what is done that is important; it is how it is done.

HHJ Mole then considered the instant case and held that the LVT was wrong to say that the Breydon case was challenged “essentially on procedural and evidential points; not on matters of principle concerning the manner in which management of the estate was conducted.”  The LVT’s decisions concerned the way the estate was managed.  In fact the issues in both cases were very similar and sometimes virtually the same.  Also, the Tribunal in the Breydon case expressed itself in language that was unnecessarily colourful or, as HHJ Gerald put it in the appeal against the first LVT, ‘contentious.’  Similar complaints were made about the procedures in the two Tribunals: in the appeal against the first LVT, Judge Gerald found the appellant’s representative was not given a fair opportunity to deal with a point raised by the LVT. In the instant, HHJ Mole found that the appellant’s representative was not given a fair chance to deal with a comparable produced without notice by a member of the Tribunal. This comparable plainly carried some weight with the LVT. The appellant did not receive a ‘fair crack of the whip’ and the LVT erred in law.

HHJ Mole concluded “[48] The fair-minded observer would therefore have noted that the Breydon LVT had expressed its decision against the management company in a way found on appeal to be contentious and found to have involved procedural errors of law. Two members of that panel refused to recuse themselves from sitting on another panel dealing with the same management company, knowing that the earlier decision was under appeal and what the grounds of appeal were. The panel gave reasons for not recusing itself which appear, on examination, to be mistaken and possibly somewhat disingenuous.  Thus constituted, the LVT then found against the management company once more on very much the same issues as before. The LVT also made at least one similar procedural error of law, putting forward its own comparable and not giving the management company a fair chance to deal with it.

“[49] In that light it seems to me that the question whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased, must be answered in the affirmative. The particular circumstances in that case made it clear that the Tribunal ought to have adjourned the case of its own motion and ordered that it be heard by a different panel.”

Comment: It remains a difficult task to persuade a tribunal to recuse itself simply because it is constituted of members who have previously decided a case against the same party, even on the same or similar issues.  To establish a real possibility of bias there must be something more, such as the repetition of procedural error as in the instant case.

JONATHAN UPTON

TANFIELD CHAMBERS

JUNE 2012