First-tier Tribunal Denies Cost Recovery Application

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00BA/LSC/2018/0380 Property : [ADDRESS], [POSTCODE] Applicant : [redacted] : In Person Respondent: [redacted]

[COMPANY] : Mr [COUNSEL] of [NAME], Managing Agents Type of application : Application for costs under Rule 13(1)(b) Tribunal Procedure(First- tier Tribunal) ([NAME]) Rules 2013 Tribunal members : Judge [NAME] [NAME] and venue of hearing : 10 [ADDRESS] [POSTCODE] Date of decision : 30 May 2019

DECISION

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Decision of the Tribunal (1) The Tribunal determines that the applicant is not entitled to recover their costs pursuant to Rule 13(1) (b) of the Tribunal Procedure (First –tier Tribunal) ([NAME]) Rules 2013. The application 1. By the email dated 17 April 2019, the applicant sought an order for the recovery of her costs pursuant to Rule 13(1)(b) of the Tribunal Procedure (First –tier Tribunal) ([NAME]) Rules 2013. (The Rules). A copy of the application was sent to the respondent on the 18 April 2019.

2. The respondent opposed the application for the reasons set out in their letter dated 27 May 2019 Background 3. The applicant applied to the tribunal for a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) as to the amount of service charges payable by the applicant in respect of the service charge years. The applicant also applied for an order under section 20C of the 1985 Act for a limitation of the landlord’s costs in the proceedings. The hearing took place on 3 and 4 March 2019. At the hearing the applicant was represented by Ms [COUNSEL] of Counsel. Ms [COUNSEL] identified the outstanding issues in dispute for which the applicant sought a determination were (i) The payability of service charges for the period November 2015 to July 2016 (ii) The reasonableness of the estimated service charges for the year 2018 to 2019

Summary of the Parties Submissions 4. The applicant now seeks to recover the legal costs incurred in the sum of £5,352.00 and The applicant also seeks to recover what is described as “smaller costs” including printing and postage. The applicant essentially rehearsed the background circumstances leading up to her application under s27A of the Act. The respondent opposes the application and contends that every item of expenditure was scrutinised by the tribunal over the course of the two day hearing and

3 the applicant had ample opportunity to raise any issues and she was legally represented. Statutory Provisions.

5. The tribunal’s power to order a party to pay costs is governed by Rule 13 of the Rules. Rule 13(1) provides that the tribunal may make an order in respect of costs only- (a) under section 29(4) of the 2007 Act (wasted cost) and the costs incurred in applying for such costs; (b) If a person has acted unreasonably in bringing, defending or conducting proceedings…….

6. Rule 13 (5) provides a time limit for an application for costs to be made, in that it maybe made at any time during the proceedings but must be made within 28 days after the date on which the tribunal sends the decision notice recording the decision which finally disposes of all the issues in the proceedings.

Tribunal’s decision 7. In order for the applicant to succeed, the tribunal must be satisfied that the costs have been unnecessarily incurred as a result of unreasonable conduct by the other party in bringing, defending or conducting proceedings. The Rules do not provide a definition as to what amounts to “unreasonable conduct” in the context of Rule 13 (1) (b). [ADDRESS] Company (1985) [COMPANY] v [NAME] [2016) UKUT 0290 (LC) the Upper Tribunal said: “An assessment of whether behaviour is unreasonable requires a value judgment on which views might differ but the standard of behaviour expected of parties in tribunal proceedings ought not to be set at an unrealistic level. …… unreasonable conduct includes conduct which is vexatious, and is designed to harass the other side rather than advance the resolution of the case…it is not enough that the conduct leads in the event to an unsuccessful outcome. The test may be expressed in different ways. Would a reasonable person in the position of the party have conducted themselves in the manner complained of? Or Sir [NAME] “acid test”: is there a reasonable explanation for the conduct complained of?” 9. The tribunal considered all the information provided together with the submissions made.

4 10. The reasons given by the applicant in support of her application primarily relates to the applicant incurring costs as a result of the applicant’s applications to the tribunal as evidenced by the invoice from her Counsel that describes the work carried out. The tribunal’s original decision under appeal determined that the applicant was entitled to challenge the validity of the sums claimed by the respondent and found that through these proceedings, much of the respondent’s failings came to light that included serving invalid service charge demands and producing accounts very late in the day. From our observation of the parties’ conduct in these proceedings, the tribunal formed the view that it was most unlikely that the parties could have resolved the dispute without recourse to the tribunal.

11. However, the question that arises for the tribunal when considering an application for the recovery of a party’s costs is whether the respondent acted “unreasonably” in bringing, defending or conducting proceedings. Having carefully considered this question, the tribunal concluded that there was no evidence put before it and the tribunal did not observe any conduct from which it could be satisfied that the respondent’s conduct could be regarded as “unreasonable in defending or conducting proceedings so as to meet the threshold required under Rule 13.

12. In the circumstances, the tribunal concluded that it cannot make an order under Rule 13(1) (b) as the criteria for making the Order has not been made out.

Name: Judge E Samupfonda Date: 30 May 2019

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