Claimant Requests Removal of Unfair Criticisms from Previous Tribunal Decision

OUTCOME: Other

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FIRST-TIER TRIBUNAL

[NAME]

(RESIDENTIAL PROPERTY)

Case Reference

: BIR/OOAW/LAM/2019/0002

Property

: [NAME], Kensington, London [POSTCODE]

Applicant: [redacted] instructed by [NAME] : Appointment of Manager

Members of Tribunal : Judge D [NAME] [APPELLANT] : 21st January 2020 CCT – Birmingham

Date of Decision : 12th February 2020

DECISION

© CROWN COPYRIGHT 2020

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The Background to the Application

1. This application, to set aside parts of the decision of a previous Tribunal made on 26th July 2018, is an unusual one in that it is made by an applicant who was not a party to those proceedings. Before dealing with the issues it is necessary to explain the history and circumstances that have given rise to the present application.

2. References in square brackets relate to the page reference in the Applicant’s bundle.

3. [NAME] is a seven-storey building on the corner of Kensington High Street and [NAME] with views over [ADDRESS] to the north. The entrance to the communal hall and stairs is on [NAME]. [NAME] comprises 5 flats and 3 commercial units. The commercial units occupy the basement and ground floor with the flats above [1190].

4. On 26th June 2015, the [NAME] of Flat 2 ([COMPANY].) and Flat 3 (Trustees of the [COMPANY]) (“the [NAME]”) made an application to the Tribunal for the Appointment of a Manager under section [NAME] of the Landlord and Tenant Act 1987 [1-15]. The Respondent to the application was the freehold owner of [NAME], [RESPONDENT] [COMPANY] (“WPL”). It is also necessary at this stage to introduce [NAME] [NAME] [NAME] whom the [NAME] allege is the “controlling mind” of WPL.

5. In August 2015, shortly after the application was made to the Tribunal, the Applicant, [NAME] [APPELLANT] (trading as “My Home Surveyor”), was appointed by WPL to act as managing agent at [NAME].

6. On 26th June 2017, a Tribunal (BIR/00AW/LAM/2015/0001) issued “Preliminary Decision, Adjournment and [NAME]” [1187-1197]. The determination was an unusual one. At paragraph 45, the Tribunal said [1195]:

“The Tribunal finds as set out above, that of the applicant’s four grounds three pass the gateway or threshold but the Tribunal further finds that this is not a clear-cut case where it would be just and convenient to appoint a manager at this time. In the Tribunal’s view, it would have been clear-cut in favour of an appointment had [NAME] [NAME] continued to manage the [NAME] given the findings of the previous Tribunal as to his managerial competence and given the breaches that have occurred”

3 The Tribunal continued at paragraph 47:

“But the landlord had, at the time of the hearing, taken one significant step by way of improvement, namely the appointment of [NAME] [NAME] to manage the [NAME].”

And at paragraph 49:

“Before considering finally whether or not the point of no return has been reached and it is just and convenient to appoint for the better future management of [NAME], the Tribunal would like to see how [NAME] [NAME] goes on for another six months. He has to date had at least six months or more, to become familiar with the [NAME] and the parties. He came across to the Tribunal as experienced and personable and able to deal with difficult personalities and thus the Tribunal would like to see him continue in his present role for a further six months to see if matters settle down between the parties. After that further period the Tribunal considers it will be in a better position to consider whether it is just and convenient to appoint or not and to issue its final decision dealing with that point”

7. Having reached its Preliminary Decision and decided to adjourn, the Tribunal gave the following [NAME] at paragraph 51 [1196]:

“The Tribunal, therefore, directs the parties to make further written [NAME] to the Tribunal by 15th January 2018 on whether it is just and convenient for the appointment to be made, such [NAME] to be accompanied by updated witness statements (signed and containing statements of truth) from [NAME] [NAME], [NAME] [NAME] and [NAME] [NAME] whereupon the Tribunal will exchange [NAME], invite any counter [NAME] within 14 days and reconvene in early February 2018 to consider whether an appointment should be made at that date. Such [NAME] should also set out the up-to-date service charge position together with details of any arrears of service charge, who owes the same and the reasons given for non-payment. [NAME] [NAME] additional witness statement should contain his proposals for recovery of any outstanding service charge ….”

The Tribunal then went on to say:

“The Tribunal considers that, having been provided with updated [NAME] and witness statements, it can deal with the matter by paper determination without a further hearing…. The parties and Counsel are thus asked to write to the Tribunal within the next 21 days either confirming that they are happy for the matter to be dealt with on paper or their availability for a further hearing….”

4 8. On 26th July 2018 the Tribunal issued its Final Decision [1586-1598] under section [NAME](1) of the 1987 Act appointing [NAME] [NAME] as Manager of [NAME] for a period of two years in accordance with the attached Management Order. What is described by the Tribunal as “Method of Submission” is set out at paragraphs 7-9 of the Final Decision [1587]:

“7. The Tribunal heard the case over two days in 2017 with both parties represented by Counsel. In view of the potential cost another day’s hearing which the Tribunal regarded as disproportionate, the Tribunal suggested the final decision could be made by written [NAME] and witness statements and invited the parties to comment.

8. Both parties agreed, [NAME] by email on 14 February 2018 and [NAME] by email on 21 February 2018. It is therefore surprising to find that in his final submission, Counsel for the Respondent complains “Unfortunately the procedure adopted by the Tribunal (determination without a hearing) means that R and its legal advisers will not have had the opportunity to test the evidence advanced by [NAME] [NAME] in cross examination or otherwise, or to respond to a new set of [NAME] advanced by A1/2”

9. The Tribunal refutes this, the parties have been given ample opportunity to air their views, there have been three rounds of witness statements, timetables have been relaxed to accommodate the parties and [NAME] have agreed the procedure. The Tribunal therefore proceeds on the basis agreed by the parties”

9. It can readily be seen that the seeds of the present application were sown by the decision of the Tribunal to reach its Final Decision without a hearing. Much criticism has been made of the Tribunal. However, we feel compelled to repeat the observations made by the Judge of the present Tribunal who issued [NAME] on 26th September 2018 [1599-1601]:

“I am wholly unable to understand why two specialist firms of solicitors should have agreed that this application, involving vigorously contested matters of fact and complex legal issues, should be considered in any way suitable for determination without a hearing under Rule 31. Both parties have a duty to help the Tribunal to further the overriding objective (Rule 3(4)). They have failed in that duty in consenting to a paper determination. The indication tucked away at paragraph 61 of the Respondents [NAME] dated 16th April 2018 is insufficient. Both parties should specifically have withdrawn their consent and requested an oral hearing.”

5 10. On 17th September 2018, WPL sought to appeal the Final Decision to the Upper Tribunal. This was not a happy time for the freeholder. It dispensed with the services of [NAME] [COMPANY] who had represented WPL throughout the proceedings. It briefly engaged [NAME] but by December 2018, was acting in person. By the time of the hearing of the present application [NAME] and [NAME] of [NAME] had been appointed as fixed charge receivers of the freehold of [NAME].

11. On 7th February 2019, HHJ Gerald, sitting as a Judge of the Upper Tribunal, refused to admit the application for permission to appeal by WPL primarily on grounds of delay [1613-1618].

12. On 21st January 2019, an “Application on behalf of [NAME] [APPELLANT] to be joined as a party and for permission to appeal” was made to the Upper Tribunal [1607-1612]. Two points arise here. First, it does not appear that application was received in time to be referred to HHJ Gerald when he refused WPL permission to appeal on 7th February 2019. Second, in another of the highly unusual procedural applications which bedevil this case, the Applicant did not apply to the First-tier Tribunal to be joined as a party or for permission to appeal, instead he applied directly to the Upper Tribunal.

13. The Final Decision of July 2018 contained significant criticism of the Applicant as managing agent prior to the Appointment by the Tribunal of [NAME] [NAME]. The Tribunal criticised his management of [NAME] and questioned his professional competence. Those criticisms were made without an oral hearing, without warning of the adverse view formed by the Tribunal and without giving the Applicant the opportunity to respond. The Applicant submitted that this amounted to procedural unfairness and that his Article 8 ECHR rights were engaged (respect for private life). The Applicant seeks that the offending parts of the Final Decision be expunged.

14. On 15th February 2019, the Deputy President of the Upper Tribunal postponed further consideration of the application to allow the Applicant to consider whether, and if so advised, to make an application to the First-tier Tribunal under Rule 51 [1619-1620].

15. The Applicant then requested the Upper Tribunal to convene an oral hearing of his application for permission to appeal. On 26th March 2019, the Deputy Chamber President Ordered [1621-1623]:

“1. The applicant shall, within 14 days, make a written request of the First-tier Tribunal ([NAME]) that it should consider whether to exercise its power under rule 51, Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 to set aside and remake parts of its decision of 26 July 2018 in case number BIR/OOAW/LAM/2015/0001 (including paragraphs 11, 18, 19) so far as they relate to [NAME] [NAME].

6 2. Further consideration of the application for permission to appeal is stayed pending the outcome of that request.”

16. On 8th April 2019 the “Application under Rule 51 Tribunal Procedure (First Tier Tribunal) ([NAME]) Rules 2013” was made [1624-1642].

Who should hear the Application?

17. On 24th April 2019, [NAME] were issued to the Applicant and also to [APPELLANT] [NAME] (on behalf of the [NAME]), WPL and to [NAME] in the following terms [1643- 1645]:

“The application has been drafted by counsel who, at paragraph 12, indicates ‘This is a very unusual application (likely the first of its kind in this Tribunal). Careful consideration needs to be given to the future management of this application’.

I entirely agree and have given considerable thought as to who should hear this application.

The starting point is the Practice Statement “Composition of Tribunals in the [NAME] on or after 15th November 2013” issued by the Senior President of Tribunals on 15th November 2013 provides at paragraph 11 that any applications under Part 6 of the Tribunal Procedure Rules 2013 must be decided by the same Members of the First-tier Tribunal as gave the substantive decision.

Paragraph 12 of the Practice Statement provides that paragraph 11 does not apply where complying with it would be impractical or would cause undue delay. Paragraph 12(b) allows for the matter to be determined by another Judge of the First-tier Tribunal nominated by the Chamber President. Under paragraph 5 the powers of the Chamber President under the Practice Statement may be exercised by a Regional Judge.

I take into account the following:

a) The legally qualified panel member retires, by reason of age, in May 2019.

b) The application is based on ECHR Article 8 and bristles with potentially complex legal argument. The application should therefore be heard by a Tribunal Judge.

7 c) One of the reasons behind the strictures of Paragraph 11 of the Practice Statement is that any Part 6 application should be determined by the same Tribunal that received oral evidence and heard oral [NAME]. Here the very basis of the application is that the Decision was made without a hearing.

d) The Applicant does not seek to disturb the Management Order itself.

e) The application under Rule 51 was preceded by a complaint of judicial misconduct made by the Applicant against all three Members of the Tribunal. That complaint was summarily dismissed by the Chamber President. However, I note that the complaint is repeated by way of attachment at paragraph 10 and Exhibit 3 to the application. This places the Members of the Tribunal in an invidious position.

f) Counsel who appeared for both [COMPANY] and the Trustees of [COMPANY] and counsel who appeared for [RESPONDENT] [COMPANY] are both fee paid Judges of the First-tier Tribunal ([NAME]). The Applicant is himself a former fee paid Member of the Tribunal. This application therefore gives rise to potential conflicts of interest.

g) Under Rule 3(3)(b), the Tribunal must seek to give effect to the overriding objective when interpreting any rule or practice direction. This is an application which is important and raises complex issues. I am mindful of the substantial costs already incurred by all parties and the likely anticipated costs.

I am therefore of the preliminary view that this application should be determined by a salaried Judge sitting with a salaried Deputy Regional Valuer. Having regard to the resources of the Tribunal I am minded to hear this application myself.”

18. No objections have been made to the Tribunal and accordingly this matter has been heard by a salaried Judge and the Deputy Regional Valuer.

Rule 51 – Setting aside a decision which disposes of proceedings

19. Rule 51 provides:

51.— (1) The Tribunal may set aside a decision which disposes of proceedings, or part of such a decision, and re-make the decision or the relevant part of it, if—

(a)the Tribunal considers that it is in the interests of justice to do so; and (b)one or more of the conditions in paragraph (2) are satisfied.

(2) The conditions are—

8 (a) a document relating to the proceedings was not sent to, or was not received at an appropriate time by, a party or a party’s representative; (b) a document relating to the proceedings was not sent to or was not received by the Tribunal at an appropriate time; (c) a party, or a party’s representative, was not present at a hearing related to the proceedings; or (d) there has been some other procedural irregularity in the proceedings.

(3) A party applying for a decision, or part of a decision, to be set aside under paragraph (1) must make a written application to the Tribunal so that it is received—

(a)within 28 days after the date on which the Tribunal sent notice of the decision to the party; or (b)if later, within 28 days after the date on which the Tribunal sent notice of the reasons for the decision to the party.

20. Concern has been expressed, not least by the Applicant’s solicitors [1621], that the Applicant may not have standing to make an application under Rule 51. In particular, Rule 51(3) specifically refers to “a party”.

21. We have been referred to Re: W (A child) (Care Proceedings: Non Party Appeal) [2016] EWCA Civ 1140. The central issues in that appeal were:

“1. Can a witness in Family proceedings, who is the subject of adverse judicial findings and criticism, and who asserts that the process in the lower court was so unfair as to amount to a breach of his/her rights to a personal and private life under ECHR Art. 8, challenge the judge’s findings on appeal?

2. If so, on what basis and, if a breach of Article 8 is found, what is the appropriate remedy?”

22. In that case, [NAME] LJ identified a number of “substantive and procedural legal landmines”. Although the application before the Tribunal relates to set aside under the Tribunal Procedure Rules and not an appeal in Family Proceedings, the difficulties are the same. Can a non-party challenge a decision and is a challenge possible where the only complaint relates to subsidiary internal findings within a Decision rather than the Order itself?

23. In relation to the non-party point, [NAME] LJ held at paragraph 42:

“….where it is established that an individual’s rights under ECHR, Art 8 have been breached by the outcome of proceedings in the lower court, then this court

9 has a duty under HRA 1998 to read down s31K and the court rules in such a manner as to afford that individual a right of appeal”.

[NAME]. However, the position in relation to challenging subsidiary internal findings rather than the substantive Order is more complicated. In Re M (Children) (Judge’s finding of fact: jurisdiction to appeal) [2013] EWCA Civ 1170 [NAME] LJ held that “Findings of fact do not comprise determination, order or judgement unless they concern the issue upon which the determination of the whole case ultimately turns or are otherwise subject of a declaration of the whole case ultimately turns or are otherwise subject of a declaration within the order”.

25. [NAME] LJ cites other authorities referring to findings of fact which are “pregnant with legal consequences” (see paragraphs 52 and 53). In the case before us the Applicant at paragraph 2 of his Witness Statement [1650] states:

“At a professional level, I had to decline work and business opportunities and I am aware that I have not been considered for possible s24, 1987 Act appointments. I have had to notify my business partners, [NAME], and my [NAME] of the decision”.

The Tribunal also notes that the criticisms of the Applicant in the Final Decision came “out of the blue” (see paragraph 89 of Re: W) in that the Tribunal in its Preliminary Decision said of the Applicant: [redacted] personable and able to deal with difficult personalities”

26. At paragraph 67 of Re: W it was accepted that ECHR, Art. 8 extends in the context of private life to a person’s professional life as well:

“No issue was taken before this court as to the potential applicability of ECHR, Art 8, in the context of private life, to the professional lives of [NAME] and [NAME]. It is not necessary to do more than draw attention to the relevant domestic and Strasbourg case law on the point.”

The conclusions of the Court of Appeal on procedural unfairness and Article 8 are set out at paragraph 97. Two of those conclusions apply with considerable force to the application before the Tribunal:

“a) In principle, the right to respect for private life, as established by Article 8, can extend to professional lives.

d) At its core, fairness requires the individual who would be affected by a decision to have the right to know of and address the matters that might be held against him before the decision maker makes his decision”

10 27. We set out in full “Remedy on appeal” and “Conclusion” in Re: W:

“Remedy on appeal

119. Where, as I have found to be the case here, the adverse findings complained of have been made as a result of a wholly unfair process and where, again as here, the consequences for those who are criticised in those findings are both real and significant, it is incumbent on this court to provide a remedy and, so far as may be possible, to correct the effect of the unfairness that has occurred. In the present case what is sought is the removal from the judgment of any reference to the matters that were found by the judge against [NAME], [NAME] and the local authority that fell outside the parameters of the care proceedings and had not been raised properly, or at all, during the hearing.

120. [NAME] [NAME] accepts, as I understand it, that if this court reaches the stage that, in my judgment, it has indeed reached, then redaction from the judgment must follow, subject to any [NAME] as to detail. I agree that that must be the case. So that there is no ambiguity as to words such as 'removal' or 'redaction' in this context, I make it plain that the effect of any change in the content of the judge's judgment that is now made as a result of the decision of this court is not simply to remove words from a judgment that is to be published; the effect is to set aside the judge's findings on those matters so that those findings no longer stand or have any validity for any purpose. The effect is to be as if those findings, or potential findings, had never been made in any form by the judge.

Conclusion

121. For all of the reasons that I have now given I hold that each of these appellants was, by the conclusion of the first instance process, a 'party' to the proceedings and that the Court of Appeal has jurisdiction to entertain their appeals on the basis that they each assert that the judge has acted in such a way so as to amount to a breach of their rights under ECHR, Arts 6 and/or 8 pursuant to HRA 1998, ss 7 to 9 . I have further held that there was, most unfortunately, a wholesale failure to achieve a fair trial in relation to the matters that the judge went on to find proved against them, which are outside the parameters of the issues in the case and are the subject of this appeal.

122. I therefore allow the three appeals and hold that, if my lords agree, those parts of the judge's judgment which record those matters are to be set aside on the basis that they are to have no further validity and are to be regarded as if they had never been made.”

11 28. At the hearing, [NAME] [NAME] also helpfully referred the Tribunal to the decision of the Upper Tribunal (Tax and Chancery Chamber) in [COMPANY] v Commissioners for HMRC [2019] UKUT 7 (TCC). Paragraph 21 confirms that Article 8 protection extends to protection of reputation provided that it is sufficiently serious (citing Axel Springer v Germany (2012) 55 EHRR 6 applied in Yeo v [COMPANY] [2015] EWHC 3375 (QB)). The Tax and Chancery Chamber also confirmed at paragraph [NAME]:

“The proceedings in Re W were care proceedings in the Family Court but much of the discussion in the judgement of [NAME] LJ applies equally to other proceedings including appeals in the FTT”

29. We are therefore satisfied that, subject to finding a breach of ECHR Art 8, that the Applicant has standing to make an application to the Tribunal under Rule 51 even though not originally a party to the proceedings. We also find that, subject to the terms of Rule 51, the Applicant is entitled to the remedy of setting aside those parts of the Final Decision which impugn his professional reputation even though he does not seek to challenge the Management Order itself.

30. We note that the Deputy Chamber President [1623] suggests that “the FTT is entitled to consider exercising its power to set aside in part on its own initiative”. However, having considered Re: W we are satisfied the Applicant has standing to make a Rule 51 application rather than merely inviting the Tribunal to act on its own initiative.

31. As has been observed above, this is an unusual application. What is the position in relation to the 28 day time limit set out in Rule 51(3)? The Applicant argues that he was not a party and not a recipient to whom “the Tribunal sent notice of the reasons for the decision to the party”. There is therefore a strong argument for holding that, in these circumstances, no time limit applies. However, the absence of a time limit could have potentially very serious consequences in a case like the one before us. To set aside a Management Order many months after it was made would have a very serious effect both on the management of [NAME] and the residential and commercial leasehold occupiers. There has been delay by the Applicant. We note that the Applicant must have been aware of the Decision in August 2018 because on 3rd September 2018, counsel instructed by him made a detailed complaint of judicial misconduct [1637- 1642]. The application under Rule 51 was not made, as it should have been, to the First-tier Tribunal, until 8th April 2019 – a delay of 7 months. However, we take into account the reasons given by the Deputy Chamber President for extending time for making an application for permission to appeal [1622]. Under those circumstances we do not find that delay in making the application should in any way prejudice its consideration. However, our Decision should not be taken as authority for the proposition that delay will not be a relevant consideration in any future applications made on similar grounds. Delay is clearly a relevant consideration in relation to the interests of justice test in Rule 51(1)(a).

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Concession as to the scope of the application and the position of other parties

32. At paragraph 2 of his Application, the Applicant makes it clear [1607]:

“He does not seek to overturn the substantive decision (i.e. that a manager should be appointed under section [NAME], Landlord and Tenant Act 1987) but is concerned only to ensure that his professional reputation is not unfairly sullied.”

33. That concession is well made. However, it is clear that the [NAME] as well as the WPL and the Tribunal Appointed Manager, [NAME] [NAME] (referred to as “the Interested Parties” within [NAME]) are potentially affected by the application.

34. By letter dated 15th May 2019, [NAME] on behalf of the [NAME] indicated, on the basis that the application does not seek to disturb the Management Order, that their client neither supports nor objects to the application [1647].

35. No correspondence has been received by the Tribunal from WPL. However, as noted above, Fixed Charge Receivers have been appointed. Their solicitors [NAME] [NAME] have confirmed that they neither object to nor support the application [1702].

The Application

36. The Applicant seeks set aside of paragraphs 11, 18 and 19 of the Final Decision.

37. Paragraph 11 contains 6 findings [1588]:

“1. [NAME] [NAME] has not issued revised statements of account to the tenants by 11 October 2017 although the service charge year ended on 31st May 2017. The Tribunal finds this delay unreasonable.

2. The Tribunal has difficulty understanding how [NAME] [NAME] could have managed the building without a basic survey of the structure and services, particularly where there was a lift. This would be essential for any proper management involving service charge expenditure and the lack of a basic survey is regarded by the Tribunal as a failing.

3. [NAME] [NAME] had failed to produce a service charge budget for the year ending 31 May 2018 by 8 February 2018 according to Counsel for the Applicants of that date, even though it had been promised in June 2017. The Tribunal finds this unacceptable.

13 4. [NAME] [NAME] has clearly not been in control of the service charge. At para. 2.2.3.1 he said the Freeholder was paying the cleaning costs directly. The Tribunal finds this unacceptable.

5. [NAME] [NAME] has taken instructions from [NAME] [NAME], a new party not referred to at the January 2017 Hearing and apparently introduced at a later date, who he described as “the main point of contact now for the Landlord”, but it is not clear from either his or [NAME] [RESPONDENT] statements whether it is [NAME] [NAME] who is acting as primary agent or his company, [COMPANY]. The Tribunal finds this unacceptable.

6. [NAME] [NAME] statement fails to give reasons for the non-payment of service charges or recovery of outstanding sums despite being required to do so by the Tribunal’s Preliminary Decision. All he says is “These matters continue to be handled by the client’s appointed solicitors and Counsel”. [NAME] [COUNSEL] has not provided the Tribunal with the required information which the Tribunal finds unacceptable.”

38. Paragraph 18 reads as follows:

“[NAME] [NAME], despite having had well over a year to do so, has not convinced the Tribunal that he is effectively managing [NAME] for the following reasons:

a) Service charge demands and year-end statements are being sent too late;

b) There has been no proper survey to identify the major costs of repair expected in the future (which are essential to set a budget);

c) The way the service charge accounts have been presented is confusing;

d) No evidence of substance has been presented to demonstrate that [NAME] is subject to regular estate management inspections and

e) The Tribunal asked for [NAME] [NAME] specific proposals to recover outstanding service charges and his answer has simply to refer to his client’s solicitor and Counsel when this should clearly be within a managing agent’s control – if not direct control, then indirect control by way of instructions to third parties to recover the debt but certainly not derogated entirely.”

39. Finally, Paragraph 19:

“In the Tribunal’s opinion [NAME] [NAME] has never been in sole control of managing [NAME] and has been out of his depth, although in stating as such, the Tribunal recognizes the difficulties [NAME] [NAME] has faced.”

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40. In determining this application, we have considered the Witness Statement of [APPELLANT] dated 31st October 2019 [1650-1674]. The Applicant gave evidence to the Tribunal at the hearing on 21st January in Birmingham. He was represented by [COUNSEL] of counsel. None of the Interested Parties attended or made written [NAME].

41. The Applicant told us that the Final Decision came as a shock to him. The Decision has been published and is in the public domain. He told us that it has harmed his business and professional reputation. He has had to disclose the Final Decision to his professional indemnity [NAME] and has had some difficult discussions with solicitors who would normally instruct him. He has not received as many section [NAME] enquiries in relation to potential appointment of manager applications as he would usually expect. He has had to disclose the Decision to the professional institutions for whom he lectures. He was particularly distressed by the suggestion that he was “out of his depth”. He is a Fellow of the RICS and formerly a Valuer Member of the Leasehold Valuation Tribunal and the First-tier Tribunal ([NAME]).

We now deal with each of those parts of the Final Decision which the Applicant seeks to set aside.

11.1 [NAME] [APPELLANT] has not issued revised statements of account to the tenants by 11 October 2017 although the service charge year ended on 31st May 2017. The Tribunal finds this delay unreasonable.

42. The Tribunal relied on paragraph 39 of the Witness Statement of [COUNSEL], solicitor for the [NAME], dated 8th February 2018 [1282]. He complains that “the accounts for year end 31st May 2017 were not received until 12 November 2017, notwithstanding assurances that they would be received earlier”. More detail of the criticism is set out at paragraph 32 of [NAME] [NAME] Witness Statement [1281]:

“I had also been pressing [NAME] [NAME] for the year end service charge accounts, 31 May 2017. On 20 June 2017 [NAME] [NAME] told me (p15) that the draft year-end figures had been submitted to the Respondents accountants for review and for certification. He stated that the accounts would be distributed over the next two weeks i.e. by the early part of July. By October 2017 the [NAME] had still not received the accounts. On 11 October 2017 [NAME] [NAME] informed me (p40) that he had been passed further documentation in the past few weeks that needs to be incorporated into the records held by them. He said that he was in the process of dealing with that and that he will be providing the certified accounts as soon as he had finalised the process. This made little sense as [NAME] [COUNSEL] was the Managing Agent for the entire accounting period and should have had all the expenditure documentation himself. He ought to have been controlling the expenditure.”

15

The exhibit at page 15 [1300] is an email from the Applicant to [NAME] [APPELLANT] of 20th June 2017 the relevant part of which states: “I have prepared the draft year-end figures (to 31st May 2017) in relation to the service charges and submitted them to our client’s appointed accountants for review and certification. We shall distribute the same over the next couple of weeks to all [NAME], along with supporting invoices for their files”.

The exhibit at page 40 [1325] is another email from the Applicant to [NAME] [APPELLANT] dated 11th October 2017 which explains: “As to the financial year end March 2017, we have been passed further documentation on the past few weeks that needs to be incorporated into the records we held. We are in the process of dealing with this and will be providing certified accounts for that period as soon as we have finalised that process.”

43. At the hearing the Applicant told the Tribunal that he received invoices for cleaning from [NAME] [NAME] after the accounts had been drafted. This meant that accounts preparation had to “go back to square one”. The Applicant told us that he had many discussions with [NAME] [APPELLANT] to the effect that all expenditure should go through managing agents and that [NAME] [NAME] should instruct him to take over arrangements in relation to cleaning. It appears that [NAME] [NAME] retained a caretaker from adjoining [NAME] to carry out cleaning and who was paid directly by WPL which in turn submitted the invoices to the Applicant for inclusion within the service charge accounts.

44. Our finding is that service charge accounts for year ending 31st May 2017 were not issued to [NAME] until 12th November 2017. This is within 6 months of the service charge year end and not of itself something that the present Tribunal would find unusual or even objectionable. To the extent that there was any unreasonable delay, the cause is attributable to the late submission of cleaning invoices by WPL. The Applicant had prepared draft year-end figures by 20th June 2017. Any unreasonable delay was not of his making.

11.2 The Tribunal has difficulty understanding how [NAME] [NAME] could have managed the building without a basic survey of the structure and services, particularly where there was a lift. This would be essential for any proper management involving service charge expenditure and the lack of a basic survey is regarded by the Tribunal as a failing.

45. The Tribunal relied on paragraph 5.1.5 (f)(i) of the Second Witness Statement of [NAME] dated 16th March 2018 [1414 -1425]. The relevant paragraph and large parts of that Witness Statement are taken verbatim form “Brief Management Report to First Tier Tribunal ([NAME])” dated 6th February 2018 [1261-1270]. Paragraph 5.1.5 (f) needs to be read in full to understand its context:

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“At my meeting with the [NAME] of Flat 2 and 3 (and [NAME] [NAME]) it became clear that there was a longing for the building management to encompass the “longer term” financial liabilities that occur in a management of this nature, but the establishment of a suitable reserve fund to even out the demands on [NAME] year-on-year. I believe that it was also accepted that in order to achieve these two things need to happen”

The two things were the survey at 5.1.5 (f) (i) and the setting up of a fund (ii). Neither of these desirable things happened because:

“This matter has yet to be progressed, given the continuing and unresolved financial “dispute” of Flats 2 & 3 with the Landlord”

46.

Accordingly, the context of 5.1.5 (f)(i) is the ongoing dispute between WPL and the [NAME]. In an effort to try to resolve that dispute in the context of service charge payments, the Applicant met with the [NAME]’ solicitor [NAME] [COUNSEL]. [NAME] [COUNSEL] said at that meeting that his clients would like to see a long term management plan. The Applicant, perfectly properly, suggested that any long term plan should be based on a detailed survey and the setting up of a fund. However, as long as the dispute between the [NAME] and WPL continued, no progress could be made in relation to long term planning until a financial settlement had been reached. It is not for the present Tribunal to decide the merits of the Leaseholder/WPL dispute save to note that its continuance makes any long term planning virtually impossible. We find that any fault was not that of the Applicant. He was not put in funds to progress either a survey or long term management.

47. The Tribunal in its Final Decision refers to a “basic survey”. In his evidence the Applicant said that as a Fellow of RICS he was qualified to inspect [NAME] and indeed lectures on basic building construction. He also carries out home buyer surveys. He is capable of understanding the nature of the building. The management issues at [NAME] do not raise any significant structural issues. A competent managing agent would be able to address most issues by way of visual inspection. In any event, the Applicant had access to reports prepared by a third party surveyor during 2016 and 2017. A more in depth survey would, of course, be required if any major projects were to be undertaken e.g. roofing works. The Tribunal agrees.

11.3 [NAME] [NAME] had failed to produce a service charge budget for the year ending 31 May 2018 by February 2018 according to Counsel for the Applicants of that date, even though it had been promised in June 2017. The Tribunal finds this unacceptable.

48. The Tribunal relied on paragraph 4 (a) of “Applicants’ [NAME]” prepared by [COUNSEL] (counsel for the [NAME]) on 8th February 2018 [1271-1275]. [NAME] [APPELLANT] submitted [1272] that the Applicant had failed:

17

“To produce a budget for the service charge to the year end 31st May 2018 [MGWS para 39]. Which is a very poor indicator of future management prospects. This is despite promising one in June 2017 [MGWS exh p15]”

MGWS para 39 refers to paragraph 39 of [NAME] [NAME] Witness Statement [1281] which simply recites that “the [NAME] have not received from [NAME] [NAME] a budget for the current financial year (to 31 May 2018)…”

Exhibit 15 [1300] is an email from the Applicant to [NAME] [APPELLANT] of 20th June 2017. The relevant section reads:

“We have also prepared the budget for the current year (at somewhat less than the previous budget) and this is currently with my client for review and agreement. It was slightly late getting to them but I hope to be able to distribute the same over the next week along with a request for payment of the first interim instalment”

On 29th June 2017 the Applicant sent an email to his client’s then solicitors, [NAME] copied to [NAME] [APPELLANT] [1668-1669]. At the end of the email the Applicant chases [NAME] [APPELLANT]: “cc Alon – fyi and discuss with [APPELLANT]. Can I please then have the Landlord’s agreement to the draft budget I present earlier?”

49. However, in making criticisms of the Applicant based on [NAME] [APPELLANT] [NAME] of 8th February 2018 and [NAME] [NAME] Witness Statement, the Tribunal appears to have overlooked [NAME] [NAME] Witness Statement dated 2nd April 2018 [1426-1518] and in particular paragraph 25 [1430]:

“I need to correct an error in my fourth witness statement. At paragraph 39 I say that a budget for the current financial year and service charge demands have not been received. Having seen [NAME] [NAME] reply (paragraph 10.11 of his witness statement) I asked my IT department to search my emails to see if I had received anything from [NAME] [NAME] in August 2017. I can confirm that as a result of that search I have found two emails from [NAME] [NAME] dated 1st August 2017 to which he attached a Budget for 2017/18 and a request for payment of an interim service charge. I believe I overlooked the emails because I received them while I was away from the office on holiday. I apologise for the error on my part.”

The email of 1st August 2017 enclosing 2018 Budget is at [1493] and forms part of Exhibit MJG 8.

50. We find that no fault attaches to the Applicant and that subparagraph 3 of Paragraph 11 of the Final Decision must be set aside.

18

11.4 [NAME] [NAME] has clearly not been in control of the service charge. At para. 2.2.3.1 he said the Freeholder was paying the cleaning costs directly. The Tribunal finds this unacceptable.

51. This appears as “note (a)” on page 10 of the Applicant’s Second Witness Statement [1423]: “cleaning as the Freeholder has (I understand) been paying this cost directly”. This is a verbatim recital of paragraph 2.2.3.1 of the Applicant’s “Brief Management Report” [1270].

52. We repeat our findings at paragraphs 43 and 44 above. The fault here lies with WPL and not with the Applicant. No managing agent can be aware of expenditure incurred by the freeholder of which he has no knowledge. The first the Applicant knew of the expenditure was when invoices were submitted to him (late) by WPL. As expenditure on cleaning is a service charge item the Applicant had no choice but to forward the cleaning invoices to the accountants for incorporation within the accounts.

53. We entirely agree with the Tribunal that for a freeholder to pay directly for services is unacceptable. All services should be under the direct control and paid for by the managing agent. However, what is unacceptable is the conduct of the freeholder and not the Applicant.

11.5 [NAME] [APPELLANT] has taken instructions from [NAME] [NAME], a new party not referred to at the January 2017 Hearing and apparently introduced at a later date, who he described as “the main point of contact now for the Landlord”, but it is not clear from either his or [NAME] [RESPONDENT] statements whether it is [NAME] [NAME] who is acting as primary agent or his company, [COMPANY]. The Tribunal finds this unacceptable.

54. At paragraph 20 of the Final Decision the Tribunal found:

“In the Tribunal’s further opinion, [NAME] [NAME] involvement adds nothing to the management other than adding yet another layer. Arising out of the Hearing, the Tribunal has always been concerned about the opacity of ownership of the reversionary interest in [NAME] and the management difficulties caused to the [NAME] that such opacity causes and the introduction of [NAME] [NAME] does not alleviate these concerns, it merely adds to them. He appears to be acting jointly with [NAME] [NAME] but was not previously identified as a Manager. The fact that his expertise seems to lie in tax advice and company re-structuring does not persuade the Tribunal that he is a suitable or competent property manager nor is his comment that he is Director of [COMPANY], that is to say, a company that [NAME] [NAME] ascertained had been dissolved in May 2017, calculated to reassure. When it deferred its decision, the Tribunal was hoping that [NAME]

19 [NAME] would demonstrate strong, efficient and effective management but those hopes have simply not materialised, the Tribunal finds. Instead effectively all the Respondent has done is to involve [NAME] [RESPONDENT].”

The present Tribunal entirely understands the previous Tribunal’s well founded concerns in relation to “opacity of ownership”. We entirely agree that the involvement of [NAME] [APPELLANT] only added to those concerns.

55. However, the Applicant had no choice but to take instructions form [NAME] [APPELLANT]. On 6th February 2018 [RESPONDENT] made a Witness Statement on behalf of the Respondent, WPL [1253-1258]. At paragraph 6 [NAME] [RESPONDENT] states: “I am the principal point of contact for [NAME] [NAME] and have authority to provide instructions to him”.

56. What else was the Applicant to do? His clients instructed him to deal with [NAME] [APPELLANT]. We entirely agree that the addition of [NAME] [NAME] into an already opaque situation was unacceptable. However, it is the conduct of WPL in involving [NAME] [APPELLANT] that is unacceptable and not the conduct of the Applicant in taking instructions from the person appointed by his client to be the principal point of contact.

11.6 [NAME] [NAME] statement fails to give reasons for the non-payment of service charges or recovery of outstanding sums despite being required to do so by the Tribunal’s Preliminary Decision. All he says is “These matters continue to be handled by the client’s appointed solicitors and Counsel”. [NAME] [COUNSEL] has not provided the Tribunal with the required information which the Tribunal finds unacceptable.

57. Paragraph 51 of the Preliminary Decision [1196] directed that: “[NAME] [NAME] additional witness statement should contain his proposals for recovery of any outstanding service charge”. The Applicant’s “Recovery Proposals” are at paragraph 8 of his Second Witness Statement [1423]:

“We are not currently instructed in any “litigation” matter for the collection of (disputed or otherwise arrears). These matters continue to be handled by the client’s solicitors and Counsel”.

58. There is a very long history of litigation at [NAME]. In 2014, a Tribunal (LON/OOAW/LSC/2014/0112 and others) made a service charge determination arising from proceedings issued by WPL against the [NAME] in the County Court (Case Nos. 3YL63321 and others) to recover substantial service charge arrears 2013/14 [118-163]. Following that determination, the case went back to the County Court at Wandsworth and was heard by Deputy District Judge Shelton on 27th July 2017 [1221- 1225]. WPL’s claim was for arrears of service charge for the years 2013/14. The [NAME] defence is set out at paragraph 2 of the Deputy District Judge’s Judgement: “It says, “We are not liable. We are in credit”; that is really the rub of it.”

20 59. The Deputy District Judge found that Flat 3 was in credit to the sum of £25,090.05 and Flat 2 to the sum of £29,776.28. The Tribunal notes the observations at paragraph 7 of the Judgement: “it is frankly beyond me as to how the claimant can carry on. That is how inaccurate their record keeping is”.

60. Having regard to the comments of Deputy District Judge Shelton, the present Tribunal can readily understand why the [NAME] applied for the appointment of a manager and why the previous Tribunal granted that application.

61. However, none of this is the Applicant’s fault. He was not appointed until August 2015 and therefore not responsible for the 2013/14 service charge. The bitterness of the dispute between the [NAME] and WPL is apparent even from the papers. Their longstanding dispute bedevilled the Applicant’s management from the outset. What was he to do? It is obvious that WPL were not going to surrender litigation to his control.

Accordingly, the Applicant said in his “Recovery Proposals” at paragraph 8 of his Second Witness Statement all that he could possibly say. It is not uncommon for freeholders to keep control of service charge litigation. The Applicant told us that he would support his client with any factual evidence they required but was not obliged or required under his Management Agreement [1226-1243] to conduct litigation on their behalf.

62. The failure to deal with recovery of outstanding service charge arrears (and also to reflect credits within the accounts) is, as the previous Tribunal found, unacceptable. However, the fault appears in the judgement of Deputy District Judge Shelton to lie with WPL’s inaccurate record keeping and not any unacceptable behaviour by the Applicant.

18. [NAME] [APPELLANT], despite having had well over a year to do so, has not convinced the Tribunal that he is effectively managing [NAME] for the following reasons:

e) The Tribunal asked for [NAME] [NAME] specific proposals to recover outstanding service charges and his answer has simply to refer to his client’s solicitor and Counsel when this should clearly be within a managing agent’s control – if not

21 direct control, then indirect control by way of instructions to third parties to recover the debt but certainly not derogated entirely.

63. Much of paragraph 18 of the Final Decision has already been covered. Paragraph 18 a) repeats the finding at paragraph 11.1. Paragraph 18 b) repeats paragraph 11.2. Paragraph 18 e) repeats paragraph 11.6.

64. In relation to paragraph 18 c) the Tribunal has considered “Unaudited Service Charge Accounts” for year ended 31st May 2015 (before the date of the Applicant’s appointment) [766-770], for year ended 31st May 2016 [919-926] and for year ended 31st May 2017 [1373-1383]. Those Accounts were prepared by [COMPANY], [NAME] in accordance with TECH 03/11. The present Tribunal cannot see that the way those service charge accounts have been presented is in any way confusing. In any event the Applicant is not responsible for any confusion. He has acted perfectly properly in instructing independent accountants to prepare the accounts.

65. Paragraph 18 d) relates to a lack of “evidence” to show that [NAME] has been the subject to regular estate management inspections. Had the Applicant been given the opportunity he could have provided evidence for the Tribunal’s consideration. In his Witness Statement at paragraph 32 [1654], the Applicant says that he carried out 7 inspections in the year between the Preliminary Decision and the Final Decision. He was contracted to carry out 4 visits per annum in his Property Management Agreement [1226-1243].

66. [NAME] is a stucco building and at least 150 years old. It has been substantially altered in common with most buildings in that part of London. It is not in poor condition but would benefit from some upgrading. We find that in the absence of any significant deterioration of condition or major works that quarterly inspections are reasonable and in accordance with the principles of good estate management. We find that the Applicant was not given the opportunity to provide evidence and had he done so the previous Tribunal would not have found a that he had failed to carry out regular estate management inspections.

19. In the Tribunal’s opinion [NAME] [NAME] has never been in sole control of managing [NAME] and has been out of his depth, although in stating as such, the Tribunal recognizes the difficulties [NAME] [APPELLANT] has faced.

67. The suggestion that the Applicant “has been out of his depth” has been particularly upsetting to him.

68. The Deputy Chamber President has already presciently observed in relation to the Applicant [1622 and 1623], that “a number of criticisms made against him are said to be factually inaccurate … although they may be valid criticisms of his former client”

22 and went on to question “whether it was necessary for the FTT to make findings it did against [NAME] [NAME] (rather than against his client from whom he received his instructions)”.

69. In its Preliminary Decision of 26th June 2017, the previous Tribunal was clear where fault lay. It found that WPL had left [NAME] uninsured between 1st and 17th November 2014 and had failed to consult under section 20 of the 1985 Act (Ground 1 [1190]). It found that WPL had levied unreasonable service charges in 2014 and referred to breaches that were “substantial for some items” (Ground 2 [1191]). It also found breach of the Code of Practice issued under section 87 of the 1993 Act (Ground 3 [1192].

70. The Applicant was not appointed until August 2015 and therefore bears no responsibility for the failings which formed the basis of the application made in June 2015 nor for the adverse findings, Grounds 1-3, made by the Tribunal in its Preliminary Decision.

71. In its determination at paragraph 47 of the Preliminary Decision, the Tribunal found [1195]:

“The Tribunal also have concerns (not allayed at the hearing) about the opaque nature of the ownership of the [NAME] in which off-shore companies or shareholders appear to be involved”

72. The [NAME] submitted (paragraph 39 of the Preliminary Decision [1194]) that the Applicant “has been unable to act independently or allowed to carry on his role without interference from [NAME] [RESPONDENT] of the Respondent Landlord”. At paragraph 41, [NAME] [RESPONDENT] “acknowledged that he had made mistakes” and at paragraph 42, the Respondent acknowledged that “in the past [NAME] [RESPONDENT] had been the ‘main face’ of the Respondent”. At paragraph 43, the Tribunal recorded the following undertaking:

“Furthermore, the Respondent offered undertakings at the start of the hearing to the effect that among other matters, [NAME] [NAME] would be given a free rein to manage [NAME] from that date”.

73. We have the advantage over the previous Tribunal in that we have received oral evidence from the Applicant about his management of the [NAME] since the Preliminary Decision. His evidence has been consistent and we accept it. The Applicant had not been given “a free rein to manage [NAME]”. [NAME] [NAME] continued to be involved even to the extent of arranging minutiae such as the cleaning arrangements. The Applicant had to take instructions not only from [NAME] [APPELLANT] but also, and in addition, from [NAME] [APPELLANT]. Finally, the Applicant had been hamstrung in his management by the continuing and unresolved dispute between the [NAME] and WPL stemming from the 2014 Tribunal Decision and the Judgement of the

23 Deputy District Judge at Wandsworth County Court. Many managing agents would not have persevered with a client such as WPL as the Applicant did to his credit.

74. Having heard from the Applicant we find that he was not “out of his depth”. He was not given “a free rein” and was not in “sole control” of management. [NAME] [APPELLANT] has remained “the main face” of WPL and the Applicant has had to act in accordance with his client’s instructions. The continued problems at [NAME] are, we find, attributable to the failure of WPL to abide by its undertaking given to the Tribunal on 25th and 26th January 2017 and recorded at paragraph 43 of the Preliminary Decision [1195].

75. We find that the suggestion that the Applicant was “out of his depth” must be set aside. Consequently, we have also substituted “the Respondent” for the reference to the Applicant in the final line of paragraph 21 of the Final Decision.

Conclusions

76. We find that the criticisms of the Applicant made in the Final Decision of 26th July 2018 are sufficiently serious in relation to his professional reputation as to engage the protection of Article 8 of the ECHR. Those criticisms were made without an oral hearing, without warning of the adverse view formed by the Tribunal and without giving the Applicant the opportunity to respond.

77. We have had the advantage over the previous Tribunal in having heard oral evidence from the Applicant. Having done so we find that the criticisms made of the Applicant are either factually inaccurate or are instead valid criticisms of his former client, WPL, from whom he received his instructions.

78. Those criticisms were made as a result of an unfair process and amount to a breach of the Applicant’s rights under Article 8 of the ECHR. Those criticisms are real and significant and pregnant with legal consequences. It is incumbent on the present Tribunal to correct the effect of the unfairness that has occurred.

79. The appropriate remedy is to be found in Rule 51 of the Tribunal Procedure Rules. We find that the condition in Rule 51(2)(d) is satisfied. There has been a procedural irregularity in the proceedings. We further find that it is in the interests of justice (Rule 51(1)(a)) to set aside and remake paragraphs 11, 18, 19 and 21 of the Final Decision.

80. In remaking part of the Final Decision, we have had uppermost in our minds the unimpeachable decision of the previous Tribunal to make a Management Order. It is not said by any party before this Tribunal that the Management Order was wrongly made or should be set aside.

Accordingly, in remaking part we have striven to seek a result which does the least violence to the Final Decision. We are grateful to [NAME] [NAME]

[NAME] for providing a draft of his proposed revisions. The remade Final Decision is attached as an annex to this Decision.

81. The effect of our Decision is to set aside those parts of the Final Decision which impugn the Applicant’s professional reputation. The effect is that those findings no longer stand or have any validity for any purpose and are to be regarded as if they had never been made in any form by the previous Tribunal.

Decision

82. Pursuant to Rule 51 (1) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 paragraphs 11, 18, 19 and 21 of the Final Decision of the Tribunal dated 26th July 2018 under Case Reference BIR/OOAW/LAM/2015/0001 are set aside and re-made in the form annexed hereto.

83. For the avoidance of doubt the Management Order appointing [NAME] [APPELLANT] in accordance with section [NAME](1) of the Landlord and Tenant Act 1987 is wholly unaffected by this Decision and remains in full force and effect.

D Jackson Judge of the First-tier Tribunal

Any party may appeal this decision to the Upper Tribunal (Lands Chamber) but must first apply to the First-tier Tribunal for permission. Any application for permission must be in writing, stating grounds relied upon, and be received by the First-tier Tribunal no later than 28 days after the Tribunal sends this written Decision to the party seeking permission.

1

Case Reference : BIR/00AW/LAM/2015/0001

Property

: [NAME], Kensington, London, [POSTCODE]

Applicants

: [redacted] [COMPANY].c/o [NAME]

(Channel Islands) [COMPANY]

(2) [NAME] and [NAME] [NAME] as Trustees of the

[COMPANY]

: [COUNSEL] LLP Solicitors

[COUNSEL], Counsel, [NAME]

Respondent: [redacted]

Representative

: [RESPONDENT] Solicitors

[COUNSEL], Counsel, 37-[ADDRESS], London

Type of Application : Application for the Appointment of a Manager under

section [NAME] Landlord & Tenant Act 1987

Tribunal Members : [NAME]. [APPELLANT] [NAME].(Est.Man.) [APPELLANT]

[NAME]. [APPELLANT]

[NAME]. [NAME]. [APPELLANT] and Venue of : 25 and 26 January 2017 at the First-tier Tribunal (Property Hearing

Chamber), 10 [ADDRESS], [POSTCODE].

Date of Preliminary : 26 June 2017 Decision

Date of Final Decision : 26 July 2018

Set Aside in part and re-made in part 12th February 2020

___________________________________________________________

FINAL DECISION

____________________________________________________________

© CROWN COPYRIGHT 2018 FIRST - TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY)

2

Pursuant to Rule 51 of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 the Final Decision dated 26th July 2018 has been set aside in part and re-made in part. Those paragraphs affected are 11, 18, 19 and 21. The Tribunal’s reasons for taking action under Rule 51 are set out in the Decision under case reference BIR/00AW/LAM/2019/0002 dated 12th February 2020. References contained within square brackets in paragraphs 11, 18, 19 and 21 of this Final Decision are references to paragraphs in the Decision dated 12th February 2020.

D Jackson Judge of the First-tier Tribunal

Background

1 This Final Decision relates to a Preliminary Decision dated 26 June 2017 in which an application had been made to the Tribunal for appointment of a Manager under section [NAME] of the Landlord & Tenant Act 1987 ('the Act'). In that decision, the Tribunal found that the prerequisites in s.22 of the Act had been met in respect of three of the grounds of the application. However, in view of the consequences of appointing a Manager which were regarded as a sanction of last resort, the Tribunal were reluctant to find that it would have been 'just and convenient' to make the appointment and deferred a final decision for six months to allow the existing Manager [NAME] [NAME] time to become more established at which point the position could be re-assessed.

2 [NAME] were issued and the parties made further [NAME] supported by witness statements which were received by the Tribunal on 9 February 2018.

3 The Respondent objected to some of the comments made by the Applicant's witness [NAME] [APPELLANT] but to ensure all the points were fully considered, the Tribunal issued further [NAME] requiring final [NAME] to be made by 12.00 noon on Thursday 12 April 2018.

4 The Applicants' final submission was received in time.

5 The Respondent's Solicitor emailed the Tribunal on 11 April requesting an extension to 16.00 pm on Friday 13 April and at 16.06 pm 13 April, requested another extension to 18.00 pm on Monday 16 April. As the Tribunal Chairman was away, these requests were not agreed but in the interests of ensuring that all points were fully aired and to bring finality to this long running case, the Tribunal was prepared to allow the late submission and has taken account of its content in arriving at this decision.

6 Furthermore, the Tribunal has been willing to give latitude in this case due to the exceptional circumstances of the Respondent's Solicitor and Counsel both being ill during Spring 2018.

Method of Submission

7 The Tribunal heard the case over two days in 2017 with both parties represented by Counsel. In view of the potential cost of another day's hearing which the Tribunal regarded as disproportionate, the Tribunal suggested the final decision could be made by written [NAME] and witness statements and invited the parties to comment.

8 Both parties agreed, [NAME] by email on 14 February 2018 and [NAME] by email on 21 February 2018. It is therefore surprising to

3

find that in his final submission, Counsel for the Respondent complains 'Unfortunately the procedure adopted by the Tribunal (determination without a hearing) means that R and its legal advisers will not have had the opportunity to test the evidence advanced by [NAME] [NAME] in cross examination or otherwise, or to respond to a new set of [NAME] advanced by A1/2.'

9 The Tribunal refutes this, the parties have been given ample opportunity to air their views, there have been three rounds of witness statements, timetables have been relaxed to accommodate the parties and [RESPONDENT] [NAME] had agreed the procedure. The Tribunal therefore proceeds on the basis agreed by the parties.

Tribunal Findings

10 In order to assess whether it would be 'just and convenient' to make the appointment, the Tribunal considered further witness statements and Counsel [NAME] for both parties. The Tribunal do not propose to rehearse all the points made which will be familiar to the parties, but focus on the key elements summarised below.

For the Respondent

11 [NAME] [RESPONDENT] 51 of the Preliminary Decision gave clear instructions to the Respondent to:

'set out the up-to-date service charge position together with details of any arrears of service charge, who owes the same and the reasons given for non-payment.’

and to [NAME] [NAME] to produce a witness statement which should

‘contain his proposals for recovery of any outstanding service charge.'

Having read the additional statements and [NAME], the following points are particularly relevant:

1 Accounts for service charge year ended on 31 May 2017 were not received by [NAME] until 12/11/17 due to late submission of cleaning invoices by the Respondent [44].

The Tribunal finds this delay unreasonable.

2 In his statement of 16 March 2018, [NAME] [NAME] said at para.5.1.5(f)(i) that what was needed was:

'a proper survey of the building and calculation completed to establish the condition of the building and equipment elements; including a statement on anticipated life expectancies and costs for interim repair and eventual replacement,...'

This matter was not progressed due to the continuing and unresolved dispute between the Applicants and the Respondent [45]. [NAME] [RESPONDENT] was not put in funds to progress either survey or long term management [46]. The lack of any necessary survey is a failing for which the Respondent is responsible.

4

3 Set Aside [50].

4 The Respondent has been paying the cleaning costs directly. All services should be under the direct control and paid for by the managing agent [53].

The Tribunal finds this unacceptable.

5 The Respondent has required [NAME] [RESPONDENT] to take his instructions from [NAME] [NAME], a new party not referred to at the January 2017 Hearing and apparently introduced at a later date, who he described as 'the main point of contact now for the Landlord' [para.5.1.2(b)], but it is not clear from either his or [NAME] [NAME] statements whether it is [NAME] [NAME] who is acting as primary agent or his company, [COMPANY]. The Tribunal finds this unacceptable. [NAME] [NAME] has acted in accordance with his client's instructions in treating [NAME] [NAME] as the principal point of contact [56].

6 The Respondent has failed to deal adequately with recovery of service charge arrears (and to reflect any credits within the accounts). The Tribunal finds this unacceptable. [NAME] [NAME] was not instructed in any litigation in relation to the collection of arrears. Those matters were dealt with by the Respondent’s solicitors [57- 62].

12 [NAME] [RESPONDENT]

[NAME] [RESPONDENT].D.Fisher provided a witness statement on behalf of the Respondent which was received by the Tribunal on 9 February 2018. He said he had been a Chartered Accountant and Director of [COMPANY] although checks made by the Applicants' solicitor found the company had been dissolved on 30 May 2017.

[NAME] [NAME] main expertise is as a tax consultant associated with property ownership.

He advised that he had been corresponding with the Applicants' solicitor about service charges (para.12), joint correspondence with the managing agent over management of the building, service charges and statements of account and attending a meeting with the Applicants' solicitor and [NAME] on 12 October 2017. These are all functions normally expected of a managing agent acting alone which raises the question of whether [NAME] [NAME] was the managing agent or [NAME] [NAME]. His status is unclear but if [NAME] is to be effectively managed, the managing agent's identity and role must be provided to the [NAME].

The Tribunal is surprised to find another party involved but his position tends to suggest a lack of individual responsibility for [NAME]'s management.

13 [NAME].[NAME]

[NAME] [RESPONDENT] advises that he resigned as Director of [RESPONDENT] [COMPANY]. on 15 August 2017 and notified the Applicants' solicitor on 16 August 2017.

However, [NAME] [COUNSEL], the Applicants' solicitor advised that he had been told by [NAME] [COUNSEL] that he had resigned some two weeks earlier (MJC para.14) and the letter of 15 August merely stated that he 'wished' to resign as Director from that date. In fact, [NAME] [NAME] had previously advised [NAME] [NAME] that he had resigned on 16 September 2015 but was still a Director of the Freeholder on 16 January 2017 (MJC para.19).

The role of [NAME] [NAME] is not entirely clear, however the Tribunal is only concerned with whether or not it would be just and convenient to appoint a Manager.

14 [COUNSEL].[COUNSEL] of Counsel

5

[NAME] [COUNSEL] submission covers the points raised by the Applicants and concludes that [NAME] [NAME] is an independent manager unafraid of reprimanding his employer or taking steps to remedy breaches where in the interests of [NAME] as a whole. [NAME] [NAME] congratulates [NAME] [NAME] for his professional commitment in the face of sustained criticism and monitoring and difficult protagonists.

For the Applicant

15 M.[COUNSEL]

[NAME] [COUNSEL] is solicitor to the Applicants and has acted on their behalf for several years. He makes numerous points having been involved in meetings and correspondence with the

Freeholder, with [NAME] [NAME], the Freeholder's solicitors, [NAME] [NAME] and [NAME] [NAME], but is clearly frustrated by the lack of proper management being carried out.

16 [COUNSEL].[COUNSEL] of Counsel

[NAME] [COUNSEL] states that less than two weeks after the hearing for appointment of a manager, the Respondent pressed ahead with four claims against the Applicants in the County Court and lost. In this decision, Deputy District Judge Shelton sitting in Wandsworth County Court (Case 3YL63321) held:

para 1: 'The need to bring the case to this stage after years of dispute, I regret to say, is clearly laid at the door of the claimants ([RESPONDENT] [COMPANY].) or their managing

agents, because more competent accounting could have avoided this, I think, altogether.'

para 6: 'I am afraid that the systems used by the claimant, do not provide clarity for anybody, least of all the claimant.'

para.7: ' .. It is frankly beyond me as to how the claimant can carry on. That is how inaccurate their record keeping is. I find that, as a fact.'

[NAME] [NAME] said [NAME] [NAME] had failed to produce the service charge budget to year end 31 May 2018, failed to serve service charge demands, failed to get to grips with the outcome of the Respondent's loss in the County Court litigation, failed to produce accurate statements of account for the Applicants and failed to produce the 2017 service charge accounts within a reasonable time. In summary, [NAME] [NAME] said there was no prospect of proper management unless the manager proposed by the Applicants, [NAME] [NAME], were appointed.

Tribunal Decision

17 Having carefully considered the evidence presented to it, the Tribunal finds there has been no real change in the standard of management since the hearing in January 2017.

18 The Respondent has not convinced the Tribunal that [NAME] is being effectively managed for the following reasons:

(a) service charge demands and year-end statements are being sent too late;

(b) there has been no proper survey to identify the major costs of repair expected in the future (which are essential to set a budget);

(c) the way the service charge accounts have been presented is confusing ;

6

(d) Set Aside [65].

(e) The Respondent has failed to deal adequately with recovery of service charge arrears (and to reflect any credits within the accounts) [57-62].

19 Set Aside [75].

20 In the Tribunal’s further opinion, [NAME] [NAME] involvement adds nothing to the management other than adding yet another layer. Arising out of the Hearing, the Tribunal has always been concerned about the opacity of ownership of the reversionary interest in [NAME] and the management difficulties caused to the [NAME] that such opacity causes and the introduction of [NAME] [NAME] does not alleviate these concerns, it merely adds to them. He appears to be acting jointly with [NAME] [NAME] but was not previously identified as a Manager. The fact that his expertise seems to lie in tax advice and company re-structuring does not persuade the Tribunal that he is a suitable or competent property manager nor is his comment that he is Director of [COMPANY], that is to say, a company that [NAME] [NAME] ascertained had been dissolved in May 2017, calculated to reassure. When it deferred its decision, the Tribunal was hoping that [NAME] [NAME] would demonstrate strong, efficient and effective management but those hopes have simply not materialised, the Tribunal finds. Instead effectively all the Respondent has done is to involve [NAME] [RESPONDENT].

21 Bearing these points in mind, the Tribunal, therefore, has no hesitation in finding it just and convenient to appoint a new Manager. No criticism has been made of the Applicants' proposed appointee, [NAME] [NAME] [NAME], AssocRICS, whom the Tribunal finds eminently suitable as referred to in the Preliminary Decision. (para.46). The Tribunal has, as stated above, given the Respondent, more than adequate time to demonstrate that [NAME] is now being managed in a transparent and competent manner and yet, despite a two day hearing and numerous exchanges of documentation post-hearing, many, if not most of the Applicants' concerns remain outstanding. In the Tribunal’s view it is time for an independent outsider to step in and manage and the Tribunal feel that backed up by the authority of a suitable order such manager will do a better job than the combined and hitherto inadequate efforts of the Respondent and [NAME] [RESPONDENT] [75].

22 Therefore, in accordance with section [NAME](1) Landlord and Tenant Act 1987, [NAME] [APPELLANT] of [NAME] is appointed as Manager of [NAME] at [NAME], London [POSTCODE]. The Manager shall manage [NAME] in accordance with the Management Order and schedule of functions and services attached to this order.

[NAME]. [NAME].(Est.Man.) [APPELLANT] to the Upper Tribunal/Appeal Provisions

A person wishing to appeal this decision to the Upper Tribunal ([NAME]) must seek permission to do so by making a written application to the First-tier Tribunal at the Regional Office which has been dealing with the case which application must:

i) be received by the said office within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

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ii) identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.

If the application is not received within the 28-day limit, it must include a request for extension of time and the reasons for it not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal.

IN THE FIRST-TIER TRIBUNAL ([NAME])

CASDE REF: BIR/00AW/LAM/2015/0001

IN THE MATTER OF [NAME](1) OF THE LANDLORD & TENANT ACT 1987

AND IN THE MATTER OF

[NAME], LONDON, [POSTCODE]

BETWEEN:

[COMPANY].(1) [NAME] AND [NAME] AS TRUSTEES OF THE [COMPANY] (2)

Applicants AND

[RESPONDENT] [COMPANY]

Respondent

MANAGEMENT ORDER

Interpretation: In this Order:

(a) 'Common Parts' means any garden, post box, refuse store, cycle store, security gate, lift, path, hall, staircase and other access way and area (if any) within the [NAME] provided by the Respondent for common use by the [NAME].

(b) 'Leases' means the leases vested in the [NAME] of the flats and leases vested in the [NAME] of the commercial units.

(c) '[NAME]' means a tenant of any flat or commercial unit.

(d) 'the Manager' means [NAME] [NAME] [NAME] of [NAME], Chartered Surveyors.

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(e) 'the [NAME]' means all that property known as [NAME], London, [POSTCODE] including the five flats, two commercial units and basement office.

(f) 'The Respondent' includes any successors in title of the freehold estate registered under Title Number BGL5964 or any interest created out of the freehold title.

(g) 'the Tribunal' means the First-tier Tribunal ([NAME]).

Preamble

UPON the Applicants having applied for the Appointment of a Manager under Part II, Landlord and Tenant Act 1987

AND UPON the Tribunal being satisfied that the Applicant is entitled to so apply and that the jurisdiction to appoint a Manager is exercisable in the present case

AND UPON the Tribunal being further satisfied that the conditions specified in s24 Landlord and Tenant Act 1987 are met, such that it is just and convenient to appoint a Manager

IT IS ORDERED THAT

The Manager:

1 The Appointment of [NAME] [NAME] as Manager (including such functions of Receiver as specified herein) of the [NAME] pursuant to s.[NAME] of the Act shall continue for a period of two years from the date of this Order and is given for the duration of his appointment all such powers and rights as may be necessary and convenient and in accordance with the Leases to carry out the management functions of the Respondent and in particular:

(a) To receive all service charges, interest and other money payable under the Leases

and any arrears thereunder, the recovery of which shall be at the discretion of the

Manager.

(b) For the avoidance of doubt, the current service charge financial year shall continue

to 31 May 2019 and thereafter from 1 June to 31 May in each year this Order is in

place.

(c) The power and duty to carry out the obligations of the Respondents contained in

the Leases and in particular and without prejudice to the foregoing the power to

carry out:

(i) the Respondent's obligations to provide services;

(ii) the Respondent's repair and maintenance obligations; and

(iii) the Respondent's power to grant consent (save that the Manager may not

give consent for alterations in respect of any lease of a flat in the [NAME],

such power to be retained by the Respondent).

(iv) the power to grant consent to assignment of the residential leases if

required.

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(d) The power to delegate to other employees of [NAME] [NAME], appoint solicitors,

accountants, architects, surveyors and other professionally qualified persons as

he may reasonably require to assist him in the performance of his functions.

(e) The power to appoint any agent or servant to carry out any such function or

obligation which the Manager is unable to perform himself or which can more

conveniently be carried out by any agent or servant and the power to dismiss such

agent or servant.

(f) The power is his own name or on behalf of the Respondent to bring, defend or

continue any legal action or other legal proceedings in connection with the Leases

of the [NAME] including but not limited to proceedings against any [NAME] in

respect of arrears of service charges or other monies due under the Leases and to

make any arrangement or compromise on behalf of the Respondent. The Manager

shall be entitled to an indemnity for both his own costs reasonably incurred and

for any adverse costs order out of such service charge account.

(g) The power to commence proceedings or such other enforcement action as

necessary to recover sums due from the Respondent pursuant to paragraph 1(c) of

this Order.

(h) The power to enter into or terminate any contract or arrangement and/or make

any payment which is necessary, convenient or incidental to the performance of

his functions.

(i) The power to open and operate client bank accounts in relation to the

management of the [NAME] and to invest money pursuant to his appointment in

any manner specified in the Service Charge Contributions (Authorised

Investments) Order 1998 and to hold those funds pursuant to s.42 of the Landlord

& Tenant Act 1987. The Manager shall deal separately with and shall distinguish

between money received pursuant to any reserve fund (whether under the

provisions of the Lease (if any) or the power given to him by this Order) and all

other money received pursuant to his appointment and shall keep in a separate

bank account or accounts established for that purpose money received on account

of the reserve fund.

(j) The power to rank and claim in the bankruptcy, insolvency, sequestration or

liquidation of the Respondent or any [NAME] owing sums of money under his

Lease.

(k) The power to borrow all sums reasonably required by the Manager for the

performance of his functions and duties, and the exercise of his powers under this

Order in the event of there being any arrears or other shortfalls of service charge

contributions due from the [NAME] or any sums due from the Respondent, such

borrowing to be secured if necessary on the interests of the [NAME] party (i.e. on

the leasehold interest of any [NAME], and the freehold of the [NAME] in

respect of the Respondent) PROVIDED THAT the Manager shall not secure any

borrowing as aforesaid without the consent of the [NAME] party (not to be

unreasonably withheld), or in default of that consent, without further Order of the

Tribunal.

If the parties wish to apply for any extension of the order, they are encouraged to do so at least three months before the Order expires.

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2 The Manager shall manage the [NAME] in accordance with:

(a) the [NAME] of the Tribunal and the Schedule of Functions and Services attached

to this Order;

(b) the respective obligations of all parties, landlord and tenants, under the Leases

and in particular with regard to repair, decoration, provision of services and

insurance of the [NAME]; and

(c) the duties of the Manager set out in the Service Charge Residential Management

Code (the 'Code') or such other replacement code published by the Royal

Institution of Chartered Surveyors approved by the Secretary of State pursuant to

s.87 of the Leasehold Reform, Housing & Urban Development Act 1993.

3 That not later than four weeks after the date of this Order the parties to this application

shall provide all necessary information to and arrange with the Manager an orderly

transfer of responsibilities and documentation. No later than this date, the Respondent and its agents shall shall transfer to the Manager all the accounts, books, records and funds (including without limitation, any service charge reserve fund).

4 From the date of this Order, no other party shall be entitled to exercise a management

function in respect of the [NAME] where the same is a responsibility of the Manager

under this Order.

5 From the date of this Order, the Respondent shall not, whether by itself or any agent,

servant or employee, demand any further payment of service charges, administration

charges or insurance premiums from the [NAME] (including the commercial tenants) at

the [NAME], such functions having been transferred to the Manager from and

including the date of the Tribunal's decision.

6 The Respondent and the [NAME] and any agents or servants thereof shall give reasonable

assistance and co-operation to the Manager in pursuance of their duties and powers

under this Order and shall not interfere or attempt to interfere with the exercise of any

of their said duties and powers.

7 Without prejudice to the generality of the foregoing:

(a) The Respondent shall permit the Manager and shall assist him as he reasonably

requires, to serve upon [NAME] any Notices under s.146 of the Law of Property Act

1925 or exercise any right of forfeiture or re-entry or anything incidental or in

contemplation of the same.

(b) The rights and liabilities of the Respondent as Landlord arising under any

contracts of insurance to the [NAME] shall continue as rights and liabilities of the

Manager.

(c) The Manager shall be entitled to remuneration (which for the avoidance of doubt

shall be recoverable as part of the service charges) in accordance with the Schedule

of Functions and Services attached.

8 The Manager shall in the performance of his functions under this Order exercise the

reasonable skill, care and diligence expected of a Manager experienced in carrying out

work of a similar scope and complexity to that required for the performance of the said

functions and shall ensure he has appropriate professional indemnity cover in the sum

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of at least £5,000,000 providing copies of the current cover note upon request to any

[NAME], the Respondent or the Tribunal.

9 The Manager shall act fairly and impartially in his dealings in respect of the [NAME].

10 The Manager is directed to register a restriction in Land Registry standard form N

against the Respondent's estate registered under Title Number BGL5964 in the following

words: 'No disposition of the registered estate by the proprietor of the registered estate or

by the proprietor of any registered charge is to be registered without a written consent

signed by [NAME] [NAME].

11 The obligations contained in this Order shall bind any successor in title and the existence

and terms of this Order must be disclosed to any person seeking to acquire either a

leasehold interest (whether by assignment or new grant) or the freehold.

12 At the expiry of six months from the date of this Order the Manager shall prepare a brief

written Report for the Tribunal on the progress of the management of [NAME] up to

that date and shall submit the same to the Tribunal no later than 1 March 2019.

Exclusions

13 For the avoidance of doubt, this Order does not require or permit the Manager to:

(a) collect ground rent or rack rent from the [NAME] (other than service charge

contributions or insurance premium reserved a rent);

(b) to advise on or negotiate new terms in respect of the commercial units on the

ground floor or basement or serve any notice to quit pursuant to s.25 Landlord &

Tenant Act 1954 which remain the responsibility of the Respondent;

(c) to advise on or negotiate rating assessments or Council Tax assessments on behalf

of the Applicants or Respondent.

Liberty to Apply

14 The Manager may apply to the First-tier tribunal ([NAME]) for further

[NAME] in accordance with s.[NAME](4) of the Landlord & Tenant Act 1987. Such

[NAME] may include but are not limited to:

(a) Any failure by any party to comply with an obligation imposed by this Order;

(b) For [NAME] generally;

(c) [NAME] in the event that there are insufficient sums held by him to discharge

his obligations under this Order and/or pay his remuneration.

(d) Any amendment to this Order necessary to enable the Manager to manage

effectively.

S.20C Landlord & Tenant Act 1985

15 The Respondent shall not be entitled to recover its costs of these proceedings from any

Applicant by way of a service charge.

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SCHEDULE OF FUNCTIONS AND SERVICES

Service charge 1 Prepare an annual service charge budget, administer the service charge and prepare and distribute appropriate service charge accounts to the [NAME] as per the terms of the Leases. 2 Instruct solicitors to recover any unpaid service charges and insurance premiums. 3 Maintain on trust an interest bearing account/s at such bank or building society as the Manager shall from time to time decide, into which service charge contributions and insurance contributions arising under the leases shall be paid. 4 Create a reserve fund. 5 Manage all outgoings from the funds received in accordance with this Order in respect of day to day management and pay bills. 6 All monies collected will be accounted for in accordance with the regulations of the Royal Institution for Chartered Surveyors. 7 Produce for inspection (but not more than once a year) within a reasonable time following written demand by the [NAME] or Respondent, relevant receipts or other evidence of expenditure and provide VAT invoices (if any). 8 Deal with all enquiries, reports, complaints and other correspondence with [NAME], solicitors, accountants and other professional persons in connection with matters arising from the day to day financial management of the [NAME].

Insurance 9 Take out in the Manager's name in accordance with the terms of the Leases an insurance policy in relation to the buildings and contents of the common parts of the [NAME] with a [NAME], and provide a copy of the cover note to all [NAME] and the Respondent on request. 10 Manage or provide for the management through a [NAME], any claims brought under the insurance policy taken out in respect of the [NAME] with the [NAME].

Maintenance 11 Deal with all reasonable enquiries raised by the [NAME] in relation to repair and maintenance work and instruct contractors to attend to and rectify problems as necessary. Deal with all maintenance relating to the services and structure of [NAME]. 12 Administer contracts entered into on behalf of the Respondent and [NAME] in respect of the [NAME] and check demands for payment of goods, services, plant and equipment supplied in relation to contracts. 13 Manage the common parts and service areas of the [NAME], including the arrangement and supervision of maintenance. 14 Carry out regular inspections (at the Manager's discretion but not less than four per year) without use of equipment, to such of the common parts of the [NAME] as can safely be inspected without undue difficulty to ascertain for the purpose of day-to-day management only, the general condition of the common parts.

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Major Works 15 In addition to undertaking and arranging day-to-day maintenance and repairs, to arrange and supervise major works required to be carried out to the [NAME] (such as interior or exterior redecoration or repairs required to be carried out under the terms of the Leases or other major works and where necessary prepare a specification of works, obtain competitive tenders, serve relevant notices on the [NAME] and supervise the works). 16 In particular to undertake as soon as practicable a full health and safety review, an assessment of the electrical supply to the [NAME] and ensure that the ventilation duct serving the restaurant is cleaned annually at the cost of the tenant of the restaurant unit.

Administration and Communication 17 Deal promptly with all reasonable enquiries raised by [NAME], including routine management enquiries from the [NAME] or their solicitors. 18 Provide the [NAME] with telephone, postal and email contact details and complaints procedure. 19 Keep records regarding details of [NAME], agreements entered into by the Manager in relation to the [NAME] and any changes in [NAME].

Complaints procedure 20 The Manager shall operate a complaints procedure in accordance with or substantially similar to the requirements of the Royal Institution of Chartered Surveyors.

Fees 21 Fees for the mentioned management services (with the exception of supervision of major works) will be £7,500 plus VAT per annum for the [NAME] until the end of the current service charge year. Thereafter the fee shall be reviewed annually in line with inflation. 22 An additional charge shall be made in relation to the arrangement and supervision of major works (including preparation and service of any statutory consultation notices) on the basis of a fee of 2% of the cost of works plus VAT. 23 An additional charge shall be made in relation to the arrangement, claims handling and brokerage of insurances for the [NAME], [NAME], [NAME] and employee cover on the basis of a fee of 20% of the insurance premium. [NAME] An additional charge for dealing with solicitors' enquiries on transfer will be made in a sum not to exceed £150 plus VAT payable by the [NAME]. 25 The undertaking of further tasks which fall outside those duties described above are to be charged separately at a present hourly rate of £125 plus VAT for a qualified member of staff but, if the matter requires the Manager's personal attention, at a present hourly rate of £200 plus VAT for [NAME] [NAME]. 26 The recovery of outstanding service charge monies shall give rise to an administration charge payable by the [NAME] of £30 for each letter written after the first. __________________________________________________________________