Claimants Win Cost Recovery Under Leasehold Reform Act

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AG/OC9/2024/0061 Property : [ADDRESS] [POSTCODE] Applicants : [redacted] (2) [RESPONDENT] : Mr [COUNSEL], solicitor Respondent : [redacted] Limited Representative : Ms [COUNSEL], counsel Type of application : For the determination of the costs payable – s.33(1) of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members : Judge [NAME], FRICS Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 9 October 2024

DECISION

2 Decisions of the tribunal 1. The tribunal determines that the sum of £6,321.00 is payable by the

respondent to the first applicant in respect of costs pursuant to s.33 of

the Leasehold Reform, Housing and Urban Development Act 1993 (‘the

1993 Act’). 2. The tribunal determines that the sum of £7,734.60 is payable by the

respondent to the [NAME] applicant in respect of costs pursuant to s.33

of the Leasehold Reform, Housing and Urban Development Act 1993

(‘the 1993 Act’). The application 3. The applicants seeks a determination as to the costs payable by the

respondent pursuant to section 33(1) of the 1993 Act. The background 4. This application devolves from an initial application made in about 2017

to the tribunal by the respondent [NAME] seeking a

determination as the right to and extent of the property to be acquired

pursuant to an initial s.13 notice dated 24 November 2016. A counter-

notice dated 6 February 2017 was served on the respondent pursuant to

s.21 of the 1993 Act denying the [NAME]’s right to acquire the

freehold. 5. A preliminary issue arising from that initial application was determined

by the tribunal and subsequently appealed to the Upper Tribunal and

then determined by the Court of Appeal in a decision dated 13 March

2020. On 3 July 2023, the initial application made by the respondent

[NAME] was withdrawn pursuant to s.28(1) of the 1993 Act.

applicant intermediate landlords now seek a determination of their

recoverable costs pursuant to s.33 of the 1993 Act. The hearing 6. The hearing was held by way of video at which the applicants were

represented by Mr [COUNSEL], solicitor of [RESPONDENT] and the

respondent was represented by Ms [COUNSEL] of counsel. The

parties relied upon a digital bundle comprising 257 pages.

3 The applicants’ case 7. The first applicant sought costs of £6,321.00 (including VAT) of which

£2,450.00 related to the fee charged by Mr [NAME]

and Mr [NAME] for a valuation report dated

17/02/2017. The [NAME] applicant sought costs of £7,734.60 (inc. VAT)

of which £2,450.00 related to the valuation report of Mr [NAME] and Mr

[NAME] dated 24/01/2017. 8. At the hearing, Mr [NAME] told the tribunal that the claim for costs

relating to an application made in 2017, were not ‘statute-barred’ as the

cause of action did not arise until the application to which the costs

relate was withdrawn by the respondent on 3 July 2023 and relied on

s.29(6) of the 1993 Act in support. Mr [NAME] referred the tribunal to two

schedules of costs which detailed the work carried out on behalf of the

first and [NAME] applicants respectively in the period 11/01/2017 to

10/12/2017 (sic).* Also included in the documents before the

tribunal were the Valuer’s report with appendices; the Valuer’s

invoices; [COMPANY] letter of engagement and invoice dated

28/02/2017.

*Having regard to both schedules the tribunal finds on the balance of

probabilities this date is meant to read 10/02/2017 but in any event

finds the work described as falling within s.33 of the 1993 Act. 9. Mr [NAME] submitted that the costs schedule were sufficiently detailed for

a summary assessment to be made by the tribunal and accorded with the

tribunal’s directions dated 4 June 2024. Further, the time spent by him

in respect of the first applicant amounted to 4.7 hours and 6.7

hours in respect of the [NAME] applicant. He submitted that the

matter was complex and required the attention of a senior partner

and was [NAME] cost effective for him to have carried out the work

during this limited time frame rather than delegating to and

overseeing a less experienced junior member of staff. The respondent’s case 10. It was submitted by Ms [RESPONDENT] that the application for costs was

statue-barred due to the operation of the Limitation Act 1980 as the

cause of action arose when the costs were incurred i.e. when the activities

to which they relate were carried out in 2016. Consequently, this

application was out of time as it was made [NAME] than six years after the

cause of action arose. 11. Ms [NAME] also submitted in the alternative, that the costs were not

adequately correlated to activities carried out under s.33 (a)(b))c) and

(d) of the 1933 Act and that the applicants had failed to sufficiently prove

their case. Further, the costs were excessive in that the use of and hourly

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charge of a senior partner although no issue was taken with the valuer’s

fee other than to ask the tribunal to use its experience and expertise in

deciding the appropriate cost of the valuer’s reports. Ms [NAME]

referred the tribunal to [NAME] v [COMPANY]

[2018] UKUT 0247 (LC) for guidance on the application of s.33 of the

1993 Act when determining the amount of costs payable by a [NAME]. The tribunal’s decision 12. The relevant parts of section 33 of the 1993 Act states:

(1)Where a notice is given under section 13, then (subject to the

provisions of this section and sections 28(6), 29(7) and 31(5)) the

[NAME] shall be liable, to the extent that they have

been incurred in pursuance of the notice by the [NAME] or by

any other relevant landlord, for the reasonable costs of and

incidental to any of the following matters, namely—

(a)any investigation reasonably undertaken—

(i)of the question whether any interest in the specified premises

or other property is liable to acquisition in pursuance of the

initial notice, or

(ii)of any other question arising out of that notice;

(b)deducing, evidencing and verifying the title to any such

interest;

(c)making out and furnishing such abstracts and copies as the

[NAME] may require;

(d)any valuation of any interest in the specified premises or other

property;

(e)any conveyance of any such interest;

but this subsection shall not apply to any costs if on a sale made

voluntarily a stipulation that they were to be borne by the

[NAME] would be void.

(2)For the purposes of subsection (1) any costs incurred by the

[NAME] or any other relevant landlord in respect of

professional services rendered by any person shall only be

regarded as reasonable if and to the extent that costs in respect of

such services might reasonably be expected to have been incurred

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by him if the circumstances had been such that he was personally

liable for all such costs.

(3)Where by virtue of any provision of this Chapter the initial

notice ceases to have effect at any time, then (subject to

subsection (4)) the [NAME]’s liability under this

section for costs incurred by any person shall be a liability for

costs incurred by him down to that time. 13. The tribunal finds the cause of action arose at the date the respondent

[NAME] withdrew its initial (enfranchisement) application

from the tribunal on 3 July 2023; see s.28(4) of the 1993 Act.

Therefore, the tribunal finds this application for costs is not statute-

barred by the operation of the Limitation Act 1980. 14. The tribunal finds the applicants have sufficiently described the work

carried out in respect of the first and [NAME] applicants, with the

exception of the items listed below. Drawing upon its own knowledge of

the initial application, tribunal finds the application to acquire the

freehold of the subject property was legally complicated and required the

knowledge and experience of a senior partner. The tribunal finds it

was, in the circumstances reasonable for the work to be carried out on

behalf of the applicants, not to be delegated to a [NAME]

during the limited time frame in which costs are sought. 15. The tribunal finds the overall time spent by Mr [APPELLANT] on the first and

[NAME] applicant’s responses and conduct of the litigation to be modest

at 4.7 hours and 6.7 hours, respectively. The tribunal is satisfied the

valuation reports were detailed, thorough and concerned issues that also

fell outside of the [NAME] usual valuation reports parties seek to rely upon.

Therefore, the tribunal finds the cost of the valuation reports to be

reasonable and allows their cost in full. 16. In conclusion, the tribunal finds the costs sought by the first and [NAME]

applicants are reasonable and are payable in full by the respondent.

Name: Judge Tagliavini Date: 9 October 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have.

6 If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First- tier Tribunal at the Regional Office which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber The application for permission to appeal must arrive at the Regional Office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).