First-tier Tribunal Stays Breach of Covenant Case Pending Further Developments

OUTCOME: Struck Out

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00MF/OCE/2025/0004 CAM/00MF/OC9/2025/0002 CAM/00MF/LBC/2024/0601 Property : [ADDRESS] [POSTCODE] Applicants :

[redacted] (2) [NAME]

Respondents : [redacted] (2) [NAME] [NAME] [NAME] and [NAME] of [NAME] : (1) enfranchisement terms/costs (2) breach of covenant Tribunal member : Judge David Wyatt Date of decision : 13 June 2025

NOTICE OF DECISION

1. [COMPANY] made applications to the tribunal under section 24(1) and section 91(2)(d) of the Leasehold Reform, Housing and Urban Development Act 1993 (the “1993 Act”) for determination of terms of acquisition and reasonable costs (CAM/00MF/OCE/2025/0004 and CAM/00MF/OC9/2025/0002, respectively).

2. Their collective enfranchisement claim notice was dated 2 July 2024. [RESPONDENT], the landlord freeholder, gave a counter notice dated 30 August 2024 stating that he did not admit entitlement. On 4 September 2024, the tribunal office received these applications from [NAME], representing the company.

3. In directions given on 28 March 2025, the tribunal raised the question of jurisdiction under section 24. Even if the relevant [NAME] had not been made too soon, jurisdiction of the tribunal appeared to depend on a counter notice admitting entitlement.

2 4. Mr [NAME] provided updates in response. These included an Order dated 10 April 2025, made on 9 April 2025 by Deputy District Judge Hunter sitting in the County Court at Reading, after hearing from the parties. This declared that [COMPANY] “…is entitled to acquire the freehold of the property with title number BK195244…” and provided that “…the issue of valuation of the freehold interest is adjourned generally…”.

5. On 9 May 2025, the tribunal gave further directions. These noted that section 22 of the 1993 Act seems to provide that if an order is made under section 22(1) declaring entitlement then the court shall also make an order declaring that the counter notice shall be of no effect and requiring the landlord to give a further counter notice by such date as is specified in the order (which will be treated as admitting the claim and must comply with the requirements for such a counter notice).

6. The parties were invited to make submissions in relation to the proposed striking out of the [NAME] to determine terms of acquisition (and stay of the [NAME] to determine costs). They were asked to respond to preliminary observations that it appeared: a) “the tribunal has no jurisdiction to deal with the current [NAME] made under section 24(1) because the collective enfranchisement machinery and time limits in the 1993 Act are strict, giving the tribunal (and perhaps the court) only limited powers in specific circumstances”; b) “the court has not attempted to transfer the issue of valuation to the tribunal (the order provides that any such issue is adjourned with liberty to restore) and it may not be possible for the court to do so (when the procedure outlined above has not yet been followed and section 176A of the Commonhold and Leasehold Reform Act 2002 would only allow the court to transfer to the tribunal determination of a question which the tribunal would otherwise have had jurisdiction to determine under the 1993 Act)”; and c) “it seems that the tribunal could only have jurisdiction to determine terms of acquisition if an order is obtained from the County Court ordering the landlord to give the requisite counter notice, the landlord does so, and the applicants then make a new [NAME] to the tribunal within the window specified in section 24”.

7. The directions of 9 May 2025 provided that the tribunal would consider the matter at a video case management hearing (“CMH”) on 11 June 2025. At the CMH, [COMPANY] was represented by Mr [NAME]. Mr [NAME] represented himself (his camera was not working, but he confirmed he was happy to proceed with the hearing). Having heard from Mr [NAME] on his preliminary [NAME], I explained that I was not satisfied that I should recuse myself.

3 8. Mr [NAME] noted that Mr [NAME] had referred to valuation matters, but did not oppose strike out of the [NAME] to determine terms of acquisition or give any grounds on which the tribunal might have jurisdiction to deal with his [NAME] under section 24 of the 1993 Act.

Accordingly, I will strike out this [NAME] under rule 9(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (the “Rules”), because the tribunal has no jurisdiction to deal with an [NAME] under section 24 in the absence of a counter notice admitting entitlement.

9. Similarly, there was no opposition to stay of the [NAME] under section 91(2)(d) to determine the amount of any costs payable. As matters stand, further proceedings seem likely between the same parties and it will be more efficient to aim to deal with this [NAME] at the same time as such proceedings.

Accordingly, I will stay this [NAME] for a reasonable period. Breach of covenant [NAME]

10. Before the collective enfranchisement claim, [NAME] had made an [NAME] to the tribunal under section 168(4) of the Commonhold and Leasehold Reform Act 2002 to determine breaches of covenant (CAM/00MF/LBC/2024/0601), seeking to do so in relation to each of the 18 leases of the property but paying a single [NAME] fee. Following the further directions given on 12 and 28 March 2025, Mr [NAME] elected not to pay any further [NAME] fees and to proceed solely in respect of the lease of Flat 5. In these proceedings, the Respondents are the registered proprietors of the leasehold title to Flat 5, [NAME] and [NAME], who are represented by Mr [NAME]. Following the directions, Mr [NAME] produced a statement of case.

11. Mr [NAME] asked the tribunal to strike out this case. The directions given on 9 May 2025 invited representations about this, including the following preliminary observations, and provided for the matter to be considered at the CMH: “Since it appears an initial notice has been given (and the currency of the claim is continuing because entitlement has been confirmed by the Court), it appears no Court proceedings to forfeit the lease of any flat held by a participating tenant may be brought without the leave of the Court (paragraph 7 of Schedule 3 to the 1993 Act). The entire (or main) purpose of the jurisdiction under section 168(4) is to satisfy one of the preliminary steps which must be taken before any such forfeiture proceedings. If the landlord had not served a counter notice disputing entitlement to collective enfranchisement (wrongly, it seems), the leaseholders could have applied to the tribunal to determine the terms of acquisition in the usual way and the tribunal would now be in a position to do so.

4 Again, the tribunal cannot advise and the parties cannot rely on anything in this letter; all parties may wish to take independent legal advice. I am writing at length only to explain why (subject to what the parties say in response) I am minded to stay this case for a reasonable period to allow time for any steps which need to be taken with the County Court to obtain any necessary further orders for a counter notice admitting entitlement or in default.” 12. Mr [NAME] produced written submissions asking the tribunal to strike out the [NAME] on the basis that it has no reasonable prospect of success or is an abuse of process. He argued it served no legitimate purpose when forfeiture action could not be taken, was duplicative of other proceedings and was disproportionate. Alternatively, he asked that the [NAME] be stayed pending further steps in the County Court proceedings relating to collective enfranchisement.

13. Mr [NAME] produced written submissions asking the tribunal to (in effect) make a summary determination of breaches of the “leases”, apparently on the basis that the tenants’ case had no reasonable prospect of success. If that was refused, he said, these proceedings should be “suspended” until the County Court had decided a claim to set aside the order made by DDJ Hunter dated 10 April 2025.

14. At the CMH, Mr [NAME] argued that the insurance terms and arrangements were causing no practical problems. Mr [NAME] argued that the matter was binary, but focussed on what he said were defects in the terms of the lease(s), not breaches of the terms of the lease. He took me through a copy of what was described as an [NAME] (or draft [NAME]) to vary the terms of the lease(s) under the Landlord and Tenant Act 1987, alleging defects ranging from such matters as a lack of waiver of subrogation rights to problematic insurance provisions and a lack of comprehensive service charge machinery. Mr [NAME] warned of risks and problems in the event of a claim where there are 18 different insurance policies. He had not applied for permission to appeal against the County Court order of 9/10 April 2025. He said that he had not yet applied, but intended to apply, to the County Court to set aside that order based on his allegations of fraud. He understood that the County Court has also now listed for 23 July 2025 the hearing of an [NAME] he had made on 28 January 2025 in the same proceedings to transfer those proceedings to his home court and stay them, or grant summary judgment based on his allegations of fraud.

15. I am not satisfied that I should attempt to determine this case summarily against either of the opposing parties, at least at this stage. In his statement of case, Mr [NAME] alleges a wide range of breaches in relation to insurance and other provisions of the lease. The first alleged breach is that a tenancy agreement should have been provided in respect of a [NAME], who is said to be living at No.5. The statement of case extends to 223 pages including appendices, and might need to be the subject of further directions to enable production of a more focussed document. In any event, the

5 tenants have not yet had the opportunity to answer it substantively, so it is difficult to say that whatever case they may have has no realistic prospect of success.

16. Mr [NAME] arguments that these proceedings are an abuse, or pointless, may have considerable force if the collective enfranchisement is pursued with reasonable diligence to its conclusion. However, these proceedings began before the collective enfranchisement claim. If collective enfranchisement fails, or is not properly pursued, that will reopen the possibility of forfeiture and/or leave a continuing long-term relationship between the parties where a determination from the tribunal might provide sufficient clarity to justify these proceedings, although each party should be taking their own independent legal advice as appropriate. However, I agree that it would be disproportionate and potentially wasteful to insist on progress in these proceedings while the opposing parties are each pursuing further applications to the County Court in relation to the collective enfranchisement claim.

17.

Accordingly, I agree that these proceedings should be stayed for a reasonable period, so that the tribunal can then decide in due course whether to strike them out or give directions for determination, whether summary or otherwise. Mr [NAME] suggested a stay until 10 October 2025. Mr [NAME] expressed incredulity that the County Court proceedings could be concluded by then, particularly when Mr [NAME] has not yet made his new [NAME] to set aside the County Court order of 9/10 April 2025, saying this must be likely to take until December 2025 at least. I consider that it is in accordance with the overriding objective to stay these proceedings for review from June 2026, but with provision for any party to apply after December 2025 to lift the stay if they can show good reason.

18. I am not satisfied that I should make any orders or give any directions other than those below. All parties may wish to take independent legal advice, generally and before [NAME] any allegation of fraud. Conclusion 19. The case under section 24 of the 1993 Act for determination of terms of acquisition (CAM/00MF/OCE/2025/0004) is hereby struck out under Rule 9(2).

20. The other cases (CAM/00MF/OC9/2025/0002 and CAM/00MF/LBC/ 2024/0601) are stayed until 15 June 2026, when the parties should apply for a further stay or further directions. However, either party may apply to the tribunal at any time after 31 December 2025 to lift the stay.

21. Any such [NAME] must be made in a single communication (asking clearly at the top of the covering e-mail/letter that it be referred to a Judge). It must set out in no more than five pages good reasons for staying/continuing these proceedings and proposed directions for the

6 next stage in these proceedings, explaining the position in relation to the County Court proceedings (attaching a copy of any orders made in those proceedings) and identifying any relevant new [NAME] made to the tribunal. Judge David Wyatt

13 June 2025 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 (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00MF/OCE/2025/0004 CAM/00MF/OC9/2025/0002 CAM/00MF/LBC/2024/0601 Property : [ADDRESS] [POSTCODE] Applicants : [redacted] (2) [NAME] Respondents : [redacted] (2) [NAME] [NAME] [NAME] and [NAME] of [NAME] : [NAME] for permission to appeal Tribunal member(s) : Judge David Wyatt

DECISION REFUSING PERMISSION TO APPEAL

DECISION OF THE TRIBUNAL 1. I have considered the request by [NAME] for permission to appeal and determine that: (a) I do not recuse myself; (b) I will not review the decision; and (c) permission is refused.

2. You may make a further [NAME] for permission to appeal to the Upper Tribunal (Lands Chamber). Any such [NAME] must be made no later than 14 days after the date on which the First-tier Tribunal sent notice of this refusal to the party applying for permission to appeal.

3. Where possible, you should make your further [NAME] for permission to appeal on-line using the Upper Tribunal’s on-line document filing system, called CE-File. This will enable the Upper Tribunal to deal with it more efficiently and will enable you to follow the progress of your [NAME] and submit any additional documents quickly and easily. Information about how to register to use CE-File can be found by going to this web address: https://www.judiciary.uk/wp-

2 content/uploads/2023/09/20230927-PD-UT-Lands-Chamber-CE- File.pdf 4. Alternatively, you can submit your [NAME] for permission to appeal by email to: [EMAIL]. The Upper Tribunal can also be contacted by post or by telephone at: Upper Tribunal (Lands Chamber), 5th [ADDRESS] [POSTCODE] (Tel: [PHONE]).

REASONS FOR THE

DECISION 5. On 13 June 2025, I gave a case management decision dealing with various matters (the “Decision”) after hearing from the parties at a case management hearing on 11 June 2025 (“CMH”).

6. On 11 July 2025, Mr [NAME] sent an [NAME] for permission to appeal (I have considered his second version, sent later that day). This seeks to make a range of arguments, but in substance challenges the decision to stay his [NAME] under section 168(4) of the Commonhold and Leasehold Reform Act 2002 for determination that the respondent leaseholders are in breach of various covenants in their lease.

7. Also on 11 July 2025, Mr [NAME] (representing the leaseholders) sent a copy of an order dated 3 July 2025 and made by HHJ Duddridge in the County Court. This deals with various matters and makes a new civil restraint order against Mr [NAME], subject to review at a hearing. Mr [NAME] said that hearing has been listed for 16 September 2025.

8. I do not recuse myself. I explained at the CMH why the reasons then given by Mr [NAME] were not grounds for recusal. A fair minded and informed observer would not consider the mere fact that a judge decided different matters in a different case against a party indicative of a real possibility of bias. The tribunal had explained clearly to Mr [NAME] that it would not respond to any further attempts to apply to set aside those decisions, where permission to appeal had been refused by the tribunal and the Upper Tribunal. Again, no real reasons have been given for the further recusal request.

9. The test for whether to grant permission to appeal is whether there is a realistic prospect of success. For the following reasons, I am not satisfied that any of the matters described as grounds of appeal has any realistic prospect of success. References below in square brackets are to those paragraphs in the Decision.

10. The decision to stay was a case management decision.

11. Mr [NAME] did not say at the CMH, but now says, that I should have recognised that breach of covenant applications serve a distinct statutory purpose and the Upper Tribunal found in [NAME] v [COMPANY] [2017] UKUT 497 (LC) that not insuring in joint names of lessor and lessee was a “breach of the covenant”. [NAME] is a decision about payability of service charges for insurance.

3 12. At the CMH, Mr [NAME] himself invited me to “suspend” his breach of covenant case pending the outcome of his “claim” to set aside the order made by [NAME] (if I was not prepared to attempt to make an immediate summary determination in his favour). His [NAME] for permission to appeal does not seem to say whether this was one of the matters dismissed or stayed and declared totally without merit in the order made by HHJ Duddridge.

13. In any event, the grounds of appeal do not seem to correspond with the substance of the Decision. They ignore the substantive reasons set out in the Decision, which is self-explanatory. Mr [NAME] alleges many breaches, not merely failure to insure in joint names. I did not impose a general stay, but decided on a stay until June 2026 with permission to apply after December 2025 to lift the stay if good reasons can be shown. As explained at [16], those terms were set with the statutory purpose of this jurisdiction in mind.

14. I am not satisfied that I should give any further directions, or make any further orders, at this stage. Name: Judge David Wyatt Date: 23 July 2025