First-tier Tribunal dismisses claim for administration charges due to prior agreement

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AE/LAC/2021/0009 Property : 66 [ADDRESS] [POSTCODE] Applicant : [redacted] : Mr [COUNSEL] [NAME], counsel Respondent : [redacted] : Mr [COUNSEL] [NAME]. Solicitors Type of application : Liability to pay administration charges Tribunal member(s) : Judge Tagliavini Mr O Dowty MRICS Venue : 10 [ADDRESS] [POSTCODE] Date of hearing Date of decision : 23 February 2024 5 March 2024

DECISION

2 The tribunal’s decision 1. The application is dismissed.

2. The tribunal finds it has no jurisdiction in respect of this application as the matters in issue have been the subject of an Agreement entered into by the parties on 23 June 2020, whereby the respondent agreed to pay costs in respect of the tribunal proceedings in ref LON/00AE/LSC/2019/0343 in the sum of £6,100 inclusive of VAT and the applicant accepted [RESPONDENT] at the rate of £1,200 per month.

3. It is accepted by both parties the terms of the Agreement were breached by the respondent. However, that is a matter of enforcement for the county court and does not fall within the jurisdiction of this tribunal

_____________________________________________________ The application 4. In an application dated 15 December 2020 the applicant claimed:

Expenses of £2,110.00 (including VAT) in the form of an administration

charge.

Legal fees of £5,143.20 (including VAT) in the form of an

administration charge.

Total: £7,253.20 Background 5. The applicant previously submitted an application for a determination of the respondent’s liability to pay and reasonableness of service charges. This matter was dealt with under ref: LON/OOAE/LBC/2019/0343 (‘the Claim’). Further to the Tribunal's directions and following service of the applicant's statement of case, the respondent subsequently agreed to pay all outstanding service charges in full. This is recorded in the tribunal's decision dated 2 March 2020.

6. In paragraph (2) of the decision dated 2 March 2020 in ref: LON/OOAE/LBC/2019/03 the tribunal determined:

As Mr [NAME] has admitted that the service charges which were the subject

of the application are payable and reasonable the case is deemed

withdrawn as there is no longer a dispute between the parties meaning

the tribunal has no jurisdiction.

3 7. The applicant now seeks the costs incurred in respect of the Claim in the sum of £7,253.20. The applicant also told the tribunal it would, in due course and by way of a further application (if required), seek the costs of the current application which were said to be in the region of £10,000. The hearing 8. A oral video hearing was held on 23 February 2024 at which [NAME] [COUNSEL] [NAME] of counsel represented the applicant. Mr [COUNSEL] [NAME]. represented the respondent. The parties relied on a single digital bundle of 167 pages and both the applicant and the respondent served late evidence, which was admitted by the tribunal The tribunal’s reasons 9. During the course of the hearing the tribunal’s attention was drawn to a series of letters from the applicant seeking [RESPONDENT] of the administration charges incurred in respect of the previous [RESPONDENT] to the tribunal.

10. On 26 May 2020, the applicant wrote in an email to the respondent: [redacted]

instructions/confirmation of the further [RESPONDENT] referred to. Our

[RESPONDENT] costs were endorsed in the Section 146 Notice which we sent to

you on 19 May*. A further copy of that Notice is attached. The costs

referred to therein relate only to the Tribunal proceedings in respect

of the outstanding service charge**s and do not relate to the breach of

repairing covenants or the County Court proceedings. We look forward

to hearing from you further.

*The s.146 Notice state costs of the tribunal proceedings were estimated

in the sum of £6,100 (including VAT).

**Emphasis added

11. In an email dated 9 June 2020 the applicant wrote to the respondent: [redacted]

us know by this coming Thursday, 11 June, whether [NAME] agrees

the costs endorsed in the Section 146 Notice and, what proposals [NAME] has for paying those costs. If we do not hear from you by 11 June

and/or [NAME] does not agree to pay the costs included in the

Section 146 Notice, [NAME] will serve Notice of Administration

Charges on [NAME] and will proceed with a further determination by

the Tribunal. We look forward to hearing from you on or before

Thursday 11 June.

4

12. In an email dated 23 June 2020 the applicant informed the respondent: [redacted]

by instalments at the rate of £1200 per calendar month towards the

outstanding service charges and the costs endorsed on the Section 146

Notice. The payments will be applied towards the costs first of all and

then the service charges. If [NAME] does not maintain the instalment

payments as agreed, then our [RESPONDENT] rights are reserved and that

includes the right to revert to your [RESPONDENT] mortgagees who have

offered to clear the service charges.

The above agreement does not affect our [RESPONDENT] claims for the

following:

1. The costs and damages in the injunction proceedings in the County

Court at Willesden on which we shall revert to you shortly.

2. The claim for costs on the Tribunal proceedings on the breach of

repairing covenant on which we shall also be reverting to you shortly.

*Emphasis added 11. On 27 September 2020, the applicant wrote in an email to the respondent: [redacted]

any further [RESPONDENT], in spite of the agreement reached. Please advise

[NAME] to make this month’s [RESPONDENT] by return. Please ensure that

[NAME] pays the instalment of £1200.00 by return and that future

monthly instalments are [RESPONDENT] on or before 20th of each consecutive

month. If [RESPONDENT] is not received by its due date, [NAME] reserves the

right to serve Notice pursuant to Section 146 of the Law of Property Act

1925 without further Notice.

*Emphasis added 12. On 30 September, the applicant wrote:

We acknowledge receipt of your email of today. [NAME] previously

agreed to pay the costs associated with the Service Charge proceedings

by instalments of £1200.00 per month initially on or before 11th of

each month and then unilaterally changed by [NAME] to on or

before 20th of each month*.

5

Is [NAME] going to honour this agreement or not? If not, we shall

advise [NAME] to serve Notice pursuant to Section 146 of the Law of

Property Act 1925.

*Emphasis added 13. Further email correspondence was entered into by the parties in which the

applicant stated on 29 October 2020:

Re: [NAME]: M [NAME] - [ADDRESS] - Services Charges &

Costs DEB:00102000017538

We have taken instructions from [NAME] and [NAME] has

confirmed that he is happy to pay the costs for the disbursements in this

matter.

However, in relation the legal costs due to the recent Pandemic he is

financially struggling and is not in a position to pay such high legal

costs given that the matter was settled out of court and the matter was

withdrawn.

[NAME] is happy to meet 50% costs of your [RESPONDENT] legal costs. Kindly

confirm if this is acceptable for us to take further instructions. 13. On 26 November 2020, the applicant served a Notice of Administration Charges

together with a Notice of Tenant’s Rights and Obligation claiming the sum of

£7,35.20. 14. In a witness statement dated 23 February 2024, the respondent stated:

‘…I instructed my previous solicitors and admitted the amount claimed

towards costs. Please refer to this correspondence between solicitors.

On the basis of admission the applicant should not have [RESPONDENT] this

application.’ 15. The tribunal finds, by reason of the above correspondence, the parties did on 23

June 2020, enter into an agreement whereby the respondent agreed to pay the

arrears of service charges claimed in ref: LON/00AE/LSC/2019/034 in addition

to the costs of those proceedings as quantified by the applicant on 19 May 2020

in the sum of £6,100 inclusive of VAT. The tribunal finds that once this

agreement was reached by the parties, the tribunal no longer had jurisdiction to

deal with the reasonableness of the administration charges and enforcement of

that agreement had to be by way of a claim in the county court. 16. Paragraph 5 of Schedule 11 of the Commonhold and Leasehold Reform Act

2002 states:

6

5(1)An application may be [RESPONDENT] to the appropriate tribunal for

a determination whether an administration charge is payable

and, if it is, as to—

(a)the person by whom it is payable,

(b)the person to whom it is payable,

(c)the amount which is payable,

(d)the date at or by which it is payable, and

(e)the manner in which it is payable.

(2)Sub-paragraph (1) applies whether or not any [RESPONDENT] has

been [RESPONDENT].

(3)The jurisdiction conferred on the appropriate

tribunal in respect of any matter by virtue of sub-paragraph (1)

is in addition to any jurisdiction of a court in respect of the

matter.

(4)No application under sub-paragraph (1) may be [RESPONDENT] in

respect of a matter which—

(a)has been agreed or admitted by the tenant,

(b)has been, or is to be, referred to arbitration pursuant to a

post-dispute arbitration agreement to which the tenant is a

party,

(c)has been the subject of determination by a court, or

(d)has been the subject of determination by an arbitral tribunal

pursuant to a post-dispute arbitration agreement

17. The tribunal finds that by reason of the operation of paragraph 5(4)(a)

of the 2002 Act, the applicant is precluded from making this

application to the tribunal, the respondent having entered into an

agreement to pay the administration charges now claimed.

18. Therefore, the application is dismissed for want of jurisdiction

7 Name: Judge Tagliavini

Date: 5 March 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. If a party wishes to appeal this decision to the Upper Tribunal ([NAME]), then a written application for permission must be [RESPONDENT] to the First- tier Tribunal at the [NAME] which has been dealing with the case. The application should be [RESPONDENT] 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 [NAME] within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not [RESPONDENT] 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 [RESPONDENT] to the Upper Tribunal ([NAME]).