Freehold Valuation and Costs Order Determined by First-tier Tribunal

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : CAM/00KG/OCE/2023/0017 Property :

17, 17A, 19, 19A, 21, 21A, 21B & [ADDRESS], Horndon on the [ADDRESS] [POSTCODE]

Applicant : [redacted] : [RESPONDENT] Respondent : [redacted] :

Section 24 of the Leasehold Reform, Housing and Urban Development Act 1993

Tribunal members : Judge David Wyatt Mrs M [NAME] (Hons) Date of decision : 14 June 2024

DECISION

Decisions (1) The purchase price payable for the proposed acquisition of the freehold title to the Property will be £1,510 composed of: (a) £1,440 for the specified premises; and (b) the £70 agreed between the parties for appurtenant property. (2) The other terms of acquisition are those set out in the draft transfer deed (at pages 86-89 of the hearing bundle) agreed between the parties.

2 (3) The tribunal orders the Respondent to pay £300 to the Applicant, within 14 days of the date this decision was sent to him, to reimburse the tribunal fees they have paid. (4) The tribunal orders the Respondent to pay a further £4,800 to the Applicant, within 28 days of the date this decision was sent to him, as a contribution towards their other costs. The tribunal cannot enforce this decision or advise. However, so far as the tribunal is concerned: (a) the parties can agree between themselves to treat the price as paid by deduction from the costs, and the costs paid to that extent, whenever they wish; and (b) if the collective enfranchisement proceeds and the costs are not paid, it appears the price could be set off against the unpaid costs, so the price is treated as paid and the balance is to be paid by the Respondent. Reasons 1. This decision follows an [NAME] under section 24 of the Leasehold Reform, Housing and Urban Development Act 1993 (the “Act”) for a determination of the terms of the proposed acquisition by the Applicant of the freehold title to the Property. Basic background 2. The Property accommodates eight flats, each let under a long lease granted in 1966 for a term of 999 years from 24 June 1966. We were given a sample lease and told that all the leases were in substantially the same terms.

3. On 4 October 2022, the Respondent completed his purchase of the freehold title to the Property (title number EX602487) for a declared price of £3,000, apparently following sale by public auction on 15 September 2022. The Respondent promptly wrote to the [NAME], seeking service charges and alleging that their leases were defective. On 31 January 2023, following what he described as many months of acrimonious correspondence, the Respondent wrote to the [NAME] setting out 21 alleged defects in their leases. He invited the [NAME] to agree deeds of variation, or an [NAME] to vary their leases, to rectify these. On 27 February 2023, the [NAME] wrote to the Respondent disputing his allegations and offering to purchase the freehold for the same £3,000 he had paid for it. They warned that if this could not be agreed they would be seeking to collectively enfranchise, asserting that the freehold was worth considerably less than the Respondent had paid for it at auction.

4. By a notice of a claim dated 17 July 2023, given under section 13 of the Act and naming the Applicant as the nominee purchaser, the [NAME] of the eight flats claimed to exercise the right to acquire:

3 (a) the freehold of the specified premises proposed to be acquired under section 1(1) of the Act, proposing a price of £1,300; and (b) the freehold of appurtenant property (said to be, with the specified premises, all the land in freehold title number EX602487) proposed to be acquired under section 1(2) of the Act, proposing a price of £70.

5. The Respondent immediately replied arguing, amongst other things, that the claim notice had been given in bad faith. However, he later served a counter-notice dated 22 September 2023 which admitted that the [NAME] had on the relevant date the right to collective enfranchisement. He accepted the proposed price of £70 for the appurtenant property. He counter-proposed a price of £32,000 for the specified premises.

6. On 24 November 2023, the Applicant applied to the tribunal to determine the terms of collective enfranchisement. On 23 January 2024, the tribunal gave case management directions for the steps to be taken by the parties to prepare for a hearing. The directions required production of a draft transfer deed and all documents relied upon. They gave permission for expert valuation evidence in reports to be produced by 20 February 2024.

7. On 20 February 2024, the parties were notified that the hearing had been fixed for 15 May 2024. During the course of the proceedings the Respondent made various case management applications, which were decided as set out in the case management decisions already given.

8. On 2 April 2024, the Applicant applied under rule 13 of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 (the “Rules”) for a costs order against the Respondent. The tribunal gave directions for representations and any further documents from the Respondent in answer so that the tribunal could deal with that [NAME] at the hearing. Pursuant to the directions, the Applicant’s solicitors produced a hearing bundle.

9. At the hearing by video on 15 May 2024 the Applicant was represented by [COUNSEL] of counsel. [COUNSEL] attended and gave expert evidence for the Applicant. The Respondent attended and represented himself. The parties confirmed that the terms of the draft transfer deed, and the price for the appurtenant property, were agreed. The remaining matters for the tribunal to determine were the price for the specified premises and the costs [NAME] under Rule 13. The price 10. Schedule 6 to the Act sets out how the price of the specified premises is to be assessed. In this case, the potential components in paragraph 1(b) and (c) are not relevant because the leases have more than 80 years left to run, so any marriage value is to be ignored (para. 4(2A)), and there is

4 no other relevant property in respect of which compensation might be payable under paragraph 5.

11. This leaves paragraph 1(a), which requires determination in accordance with paragraph 3 of the value of the freeholder’s interest if sold in the open market. Under paragraph 3, that is the amount which at the relevant date the interest might be expected to realise if sold by a willing seller (with no tenant of flats in the specified premises, or the like, seeking to buy), on specified assumptions. These include an assumption that the relevant Chapters of the Act confer no right to acquire any interest in the property.

12. The parties agreed the valuation date of 17 July 2023 and the unexpired terms of 942 years. This type of freehold property subject to long leases is usually valued on an investment basis, where the freehold has no intrinsic value apart from the calculated present value of: (a) the rental income over the remaining terms of the leases; and (b) repossession of the property on expiry of the leases. [NAME] [NAME] said, and it was not disputed, that the latter has no present value because at 942 years the leases had far too long left to run. We agree. 13. [NAME] [NAME] said the only value was the right to the ground rent. It was not disputed that an annual rent of 12 guineas was reserved under each lease. [NAME] [NAME] had based his calculations on £12 because that was the rent being charged. We consider that the valuation should be based on the rent reserved, which equates to an annual rent of £100.80 (£12.60 multiplied by the eight leases). The Respondent agreed the capitalisation rate of 7% proposed by [NAME] [NAME] and did not dispute his corresponding years purchase figure of 14.2857. This gives a value of £1,440 (£100.80 x 14.2857) as the price which the freehold might be expected to realise based on the rental income alone. Additional value 14. The Respondent’s case was that the valuation should also take into account likely benefits from premiums for rectification of alleged lease defects and income from prospective service charges. When we asked, he confirmed that his proposed price of £32,000 assumed a premium of £4,000 would be paid by each of the eight [NAME].

15. The Respondent confirmed that his correspondence up to December 2022 had focussed on alleged defects relating to insurance, while also seeking service charges for a reinstatement cost assessment survey and the like. His letter of 31 January 2023 expanded this to describe all of the 21 alleged defects he now relies upon. Since these are largely criticisms of the insurance and repair provisions in the leases, we consider those matters first.

16. The Property only has two (ground and first) floors. The photographs indicate simple construction with brick walls, UPVC windows and pitched roof. The Respondent alleged disrepair, but (apart from a cracked pathway/paving area) none is obvious from the photographs.

5 He referred in particular to window frames, but again there was no evidence of any significant disrepair.

17. In clause 2(3) of the sample lease, the lessee covenants to repair the demised premises and all additions during the term, providing that in the case of a ground floor “maisonette” this covenant extends to the foundations and drains under it, and in the case of a first floor “maisonette” this extends to that part of the roof and roof structure over it.

18. In clause 2(6), the lessee covenants to pay a fair proportion of the cost of repairing that part of the roof above the demised premises, the garage run in, specified pathways and other areas, and pipes, gutters, party structures (and so on) capable of being used by the lessee in common with the lessor and relevant tenants/occupiers, with similar provision for the cost of repairing the floor dividing the upper maisonette from the lower. Clause 2(12) has provision for entry by the lessor, lessees or occupiers for the purpose of repairing such areas. Clause 5(1) confirms that every internal wall separating the demised premises from any adjoining maisonette shall be a party wall severed medially.

19. In clause 2(13), the lessee covenants to insure the demised premises against fire and all other risks normally included in a fully comprehensive policy to their full value and in case of destruction or damage by an insured risk to lay out all monies received to rebuild/repair, [NAME] good any deficiency from their own monies, provided that they shall not be liable to repair any part other than the demised premises and relevant services. Clause 2(23) is a separate covenant to pay proportions of the lessor’s costs of repairing specified pathways and the garage run in.

20. The lessor’s covenants are limited, with a covenant for quiet enjoyment at 3(1). Clause 3(2) is a covenant to on reasonable request (and subject to the usual conditions for an indemnity/security) enforce covenants entered into by the other lessees, in particular those requiring a due contribution from the lessees of the adjoining “maisonette” above below or to the side of the demised premises, towards the cost of repair of the roofs, common structures and other parts described in 2(6) and (23). 21. [NAME] [NAME] accepted that the RICS recommend that, wherever possible, a block of flats is insured as a whole, not as separate flats. He said that many properties of this type had been leased on terms like this in the 1960s, with [NAME] in control of everything, and generally were not problematic. He pointed out that the Property has been operating under the original leases for more than 50 years with no evidence of problems. [NAME] were liable for the insurance arrangements and repairs.

22. The Respondent relied on various e-mails from [NAME]. These are responses to his requests for quotations for blocks of flats

6 and/or for confirmation that multiple insurance policies of individual flats leave gaps and will not cover the common areas and structure of a building. Unsurprisingly, the [NAME] generally respond agreeing and confirming that they insure flats as a block. For example, [NAME] [NAME] [NAME] says: “It is out of my field to say the present situation vitiates the [NAME] insurance but it would certainly prejudice them in a serious claim that affects common areas (such as the roof)…”. [NAME] [NAME] said that, unlike the type of building these [NAME] appear to have in mind, the Property has no significant common areas.

23. A different point was made by some of the [NAME], including [NAME] [NAME] of Barnes, who said: “If you insure an individual flat within a block, it is very difficult to determine where one flat ends and another begins and so if they are insured through different [NAME] there will almost always be disputes between who’s [sic] insurance policy it will fall under.” The Respondent also sought to rely on comments in a short document from “[NAME]” on the terms of the lease and the defects alleged by the Respondent. Assessment 24. The point raised by [NAME] [RESPONDENT] would have weight in relation to a larger or more complex property. Similarly, if critical areas (such as a roof) were not subject to repairing/insuring obligations, that would leave the type of gap the Respondent appears to have asked [NAME] about.

25. But that is not what we are dealing with. The Respondent said it followed from the terms of the leases that the parts the leaseholder was responsible for repairing (the roof above an upper floor flat, for example) were included in the demise of that flat. So the [NAME] are responsible for repair and insurance of the critical building areas, which appear clear enough, with basic provisions for each to contribute to repair costs. Each has the benefit of the enforcement covenant and rights of access. While there are more interfaces here, looking at the roof and dividing walls in isolation the risks of the type described by [NAME] [NAME] do not seem to be very different from the risks of terraced or semi-detached houses being insured under separate policies.

26. In any event, we were not persuaded that, given the apparent simplicity of the Property and the lease provisions summarised above, any potential risks for [NAME] would be given hope value by a prospective purchaser of the freehold. In practice, as one of the [NAME] had pointed out, [NAME] of this type of property may decide to insure together under a single policy. The risks of a limited insurance policy, or disputes between [NAME] in the event of a claim affecting areas different [NAME] are responsible for, or [NAME] failing to procure the types of surveys and checks which might be required by insurance policy terms, or the lack of a specific obligation to repair secondary areas (such as the garage run in, pathways and service media outside the specified premises), or any of the similar points raised by

7 the Respondent in different ways about repairs and insurance, are not enough to appear a potentially valuable opportunity for a purchaser of the freehold.

27. Our view of the other matters described as defects is the same. They are criticisms about the lack of provisions, drafting and terminology which might be expected in a modern flat lease, such as payment of service charges on account, reserve funds, reinstatement cost assessments, control of subletting to ensure compliance with insurance policy terms, provisions for notification and regulations. Such matters might reassure [NAME] but may be at least as much a benefit for the landlord. We are not satisfied that their absence represents an opportunity which a purchaser of the reversion would pay anything for.

28. The Respondent said that a leaseholder of [NAME] in Woking had agreed in July 2023 to pay £4,000 for a deed of variation to address similar defects. He had produced no evidence of this and confirmed, when asked, that the transaction did not happen because the leaseholder’s sale did not proceed. He said that a solicitor for a [NAME] had offered £3,000 in August 2022 for a similar deed of variation, and said that had been paid, but had not produced the deed of variation or any other evidence. The Respondent also mentioned at the hearing another potential transaction, but had produced no evidence of this. He said the valuation should also take into account likely income of 15% of management fees following deeds of variation.

29. We recognise the Respondent’s point that individual [NAME] might agree to pay something to improve the terms of leases, particularly if they are endeavouring to sell. We have to value on the assumption that the relevant parts of the Act do not apply, so if [NAME] were at risk they could not collectively enfranchise and then vary their own leases. However, we have no expert evidence which supports the Respondent’s case and no real evidence of the lease terms and buildings at [ADDRESS] where the Respondent says he (or he would have) successfully extracted payments for the reversioner.

30. In this case, it is difficult to see how the types of variation suggested by the Respondent could work unless all, or at least most, of the [NAME] agreed to vary and to pay premiums (in addition to any costs), which makes any opportunity more speculative still. It appears these leases have relatively modest values (the Respondent estimated they were worth £250,000 each). The Respondent suggested that the leases did not meet lender’s handbook requirements, but failed to demonstrate that. Further, two of the leases are subject to mortgages in favour of high street lenders (No.21 in 2022 to [COMPANY] and No.21B in 2015 to [COMPANY]). We are not persuaded that the open market would be likely to value any potential for profit from property management fees for a property of this type, particularly when this would depend on whether [NAME] can be persuaded to vary their leases to agree to pay such fees.

8 31. Ultimately, if there are any opportunities as argued by the Respondent, they are far too speculative. We are not satisfied that an open market purchaser would be expected to pay anything extra for these.

32. We asked the Respondent about the price of £3,000 (plus purchase costs) he paid about 10 months before the valuation date. That is more than the value of the ground rent alone, but he took the view that he could extract additional sums as a result of the defects he believed he had identified. It is far less than the £32,000 he argues for. The Respondent’s only answer was that he had investigated and seen the defects and opportunity that others had not. He had referred in his correspondence to the value of his “intellectual property” in identifying the defects. This all seems consistent with our view that a hypothetical purchaser would not be expected to pay as much as the Respondent did, let alone the much higher price he seeks.

33. The Applicant said, and it was not disputed, that the Respondent had instructed his own expert valuer ([RESPONDENT]), who had indicated a value of £1,120 and had been instructed not to release his valuation. We note that valuation appears to have followed an e-mail dated 30 January 2024 from [NAME] [RESPONDENT] to the Respondent which says: “Separate insurance policies is unusual but not a defect. Everyone is assumed to comply with their covenants so no problem. If someone does not comply that is not a defect with the lease: it is a breach of lease … [NAME] [NAME] is correct.” 34. We recognise that (to put it mildly) the Respondent disputes that valuation, and no doubt the views expressed in that e-mail. However, these are consistent with the view we have taken above. The Respondent has failed to produce any expert valuation advice to support his position. He has argued (in effect) that he cannot do so because experts will not support his position unless the tribunal determines that the leases are defective. That seems to be another way of saying that he has been unable to find an expert valuer who will say that his alleged defects are defects, or that a prospective purchaser would pay more because of them.

35. We accept [NAME] [NAME] evidence, subject to the slight variation described above to reflect the reserved rent. The value of the Respondent’s interest in the specified premises is the value of that interest as a ground rent investment. That is £1,440, as calculated above, which is the price payable for the specified premises. [NAME]

36. Rule 13(2) gives the tribunal discretion to make an order requiring a party to reimburse to any other party the whole or part of any tribunal fee paid by that other party.

37. Rule 13(1)(b) provides that the tribunal may make an order in respect of other costs: “…if a person has acted unreasonably in bringing, defending or conducting proceedings…” in a case of this type.

9 38. When considering whether a party had acted unreasonably in this context, the Upper Tribunal in [ADDRESS] Company 1985 [COMPANY] v Alexander [2016] UKUT 0290 cited with approval [NAME] [NAME] [NAME] in Ridehalgh v Horsefield [1994] Ch 2005. After giving the extract from Ridehalgh at [20], it confirmed at [24]: “"Unreasonable" conduct includes conduct which is vexatious, and 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 [NAME] [NAME] "acid test": is there a reasonable explanation for the conduct complained of?”. Did the Respondent act unreasonably? 39. The Respondent cited [RESPONDENT] in his written submissions arguing that his conduct had not been unreasonable. He confirmed that he also knew the decision in [ADDRESS]. We note from [ADDRESS] at [32] that: “The behaviour of an unrepresented party with no legal knowledge should be judged by the standards of a reasonable person who does not have legal advice. The crucial question is always whether, in all the circumstances of the case, the party has acted unreasonably in the conduct of the proceedings.” 40. We may have considered the Respondent’s substantive case in more detail than it deserved, but it seemed important to avoid any possible doubt. His case was weak and became harder to justify after the advice on 30 January 2024 from [NAME] [NAME] [NAME]. He was repeatedly encouraged to take independent legal advice. However, he was unrepresented throughout. He may find it difficult to be objective and/or feel unable to restrain himself; more than one civil restraint order has been made against him. To begin with he might have had some reasonable basis for believing that he was being wronged. Although he has some familiarity with the legal system, we give him the benefit of the doubt about his actual legal knowledge. He has cited many well-known authorities, but generally they are not relevant.

41. Even with a generous allowance for this, we accept the Applicant’s evidence that the Respondent sent unreasonable correspondence. This was excessive and included extremely long letters, some running to over 100 pages, attaching a range of documents and unexplained extracts from documents, including repeated arguments to the effect that the lease terms are defective. Such letters demanded immediate responses. We also accept the Applicant’s evidence that in advance of [NAME] his second and third main sets of case management applications the Respondent sent several drafts of the applications to them by e-mail, often with a deadline of the same day for response. None of the correspondence from [NAME] [APPELLANT] or the Applicant’s

10 solicitors gives the Respondent any justification. They appear to have been professional, fair and concise.

42. Further, the Respondent repeatedly made serious allegations against the Applicant’s representatives and their valuer. For example: (a) on 25 November 2023, the day after the [NAME] had been made to the tribunal and copied to him, the Respondent wrote a lengthy letter accusing Miss [RESPONDENT] of [NAME] of being “…dishonest and misleading me and the Honourable Tribunal…”; (b) on 29 January 2024, in response to requests for details of his valuer following the case management directions, the Respondent wrote to [NAME] [RESPONDENT] saying: “In light of your fraudulent claim that the leases are not defective and fraudulent undervaluation, I will be applying to strike out your valuation and claim costs under Rule 13 of the tribunal”; (c) on 5 February 2024, the Respondent wrote to Miss [RESPONDENT] of [NAME] saying: “1. A complaint has been filed with the SRA re your fraudulent misconduct.

2. A complaint has been lodged with the RICS re [NAME] [NAME] fraudulent undervaluation… 4. If you [sic] clients want to offer a premium close to £32,000, I will consider.

5. I will be lodging an [NAME] to strike out the enfranchisement notice on the grounds of fraudulent undervaluation”; (d) on 21 February 2024, the Respondent wrote to [NAME], [NAME] [RESPONDENT], the [NAME] and others alleging fraud and other matters; and (e) on 11 March 2023, in response to a draft statement of agreed facts, the Respondent wrote to [NAME] [RESPONDENT] and [RESPONDENT]: “Respectfully, nothing has been agreed. On the contracy [sic], both of you are accused of fraudulent undervaluation, negligent undervaluation, breach of duty, breach of fiduciary duty, bad faith and conspiring with the lessees”.

43. There was no explanation for the excessive correspondence or such allegations. The Respondent said that if the leases were not defective then his conduct had not been “correct”. We consider it likely that he knew his allegations were baseless.

44. The correspondence and allegations were vexatious and probably designed to harass. It is likely that the Respondent was motivated by his desire to extract money from the [NAME]. He referred to a number of properties which he (or another person for whom he was acting) had purchased with this aim in mind. He said, as noted above, that payments had been negotiated from [NAME] of such other properties. He had purchased the freehold to the Property with the same aim in mind. He was unhappy that these [NAME] had reacted by (after their offer was not accepted) seeking to enfranchise. It seems likely that he was endeavouring to, while not incurring costs

11 himself, put unreasonable pressure on the Applicant and their representatives and/or obstruct their efforts to progress these proceedings. That would help his efforts to press the [NAME] (and their mortgagees/[NAME]) to pay him for deeds of variation, or to pay much more for the freehold than it was worth.

45. However, even if we are wrong about the Respondent’s actual motives, the question is whether a reasonable person in the position of the Respondent would have conducted themselves in the manner complained of. As explained in Ridehalgh (as cited in [ADDRESS] at [20]), it makes no difference whether the unreasonable conduct is the product of excessive zeal and not improper motive. The Respondent went far beyond what might have been reasonable for him to do. We are satisfied that the Respondent acted unreasonably in defending or conducting proceedings in this case. Should we make an order? 46. Aside from an order for reimbursement of modest tribunal fees, it is exceptional for the tribunal to make a costs-shifting order. Parties must usually expect to bear their own costs in these types of proceedings. However, we have decided that in view of the conduct summarised above and the other matters summarised below we should make an order in this case.

47. The Respondent said at the hearing that if his conduct had been unreasonable the costs [NAME] was justified, but also said the conduct of the [NAME] meant they did not have clean hands. He argued they had not been repairing adequately and were using enfranchisement to avoid their own breaches of covenant, avoid the defects in their leases, and avoid paying service charges. He had not demonstrated any significant disrepair. We do not consider that exercising the right to collective enfranchisement is something the [NAME] can be criticised for, particularly in these circumstances. The Respondent’s written submissions in response to the costs [NAME] had accused the Applicant of fundamental dishonesty, but again the Respondent has entirely failed to justify that accusation.

48. The Respondent’s unreasonable conduct in these proceedings followed a long period of correspondence seeking to worry, or negotiate with, [NAME]. [NAME] [RESPONDENT] became involved, the Respondent wrote to him on 10 November 2023 saying: “Please appoint a solicitor to represent you in the legal claims against you and your clients”. [NAME] [NAME] said that was an unreasonable attempt to threaten the expert. No other explanation for it was given. [NAME] [RESPONDENT] made it clear to the Respondent then (and again on 20 November 2023, shortly before the [NAME] to the tribunal) that he did not agree the leases were defective, and the only value was the loss of the ground rent.

49. The Respondent also made professional complaints against the Applicant’s representatives, which again appear entirely unreasonable.

12 His first complaint to the SRA about Miss [NAME] and [NAME] was made on 29 November 2023. This included allegations of misleading the tribunal. We understand this was followed by three more reports to the SRA alleging such matters as fraud and misleading the tribunal. Following a decision by the RICS on 4 April 2024 that the Respondent’s complaint about [NAME] [RESPONDENT] did not meet their threshold for investigation, the Respondent made further complaints against him alleging fraud. We accept [NAME] [NAME] submission that these complaints were probably designed to put these representatives in a difficult position, creating additional work and stress. Again, no other explanation was given. What should the order(s) be? 50. First, we consider that under Rule 13(2) we should order the Respondent to reimburse the tribunal [NAME] (£100) and hearing (£200) fees paid by the Applicant. In addition to the matters noted above, his case has been unsuccessful and the tenants had made an early offer, long before starting the collective enfranchisement process, which he has failed to beat.

51. Under Rule 13(1)(b), the Applicant claimed costs of £7,480 plus VAT (£8,976). This is composed of: (a) £1,480 plus VAT for their surveyor’s fees at £185 plus VAT per hour (so eight hours) for dealing with directions and the Respondent. This was said to be in addition to his usual fixed fee, which was not quantified; (b) £1,500 plus VAT for their surveyor’s fees for attending the hearing; (c) £2,500 plus VAT for their solicitors’ fees at £285 plus VAT per hour. The last published guideline hourly rates for Grade A solicitors (those with over eight years’ post-qualification experience) range from £272 upwards depending on location and for Grade B solicitors (those with over four years’ post-qualification experience) range from £233 upwards. They said £1,000 plus VAT had originally been estimated, but the Respondent’s behaviour had caused them to add £1,500 plus VAT (about five or six hours), which they said was far less than the actual time spent; and (d) Counsel’s fee of £2,000 plus VAT.

52. We do not consider that we should order the Respondent to reimburse all these costs, even if the Applicant paid other fee(s) in addition. We do not see that this was an [NAME] only for a modest part of their costs, as was suggested. We recognise that, following [ADDRESS] at [42], there is no need to limit costs to those attributable to the unreasonable conduct. However, the nature, extent and consequences of that conduct are relevant factors to be taken into account in deciding whether to make an order and what order to make.

13 53. The circumstances are summarised above. Again, this is generally not a cost-shifting jurisdiction. However, neither party should have incurred anything other than modest costs in this case, which should have been very simple. If the Respondent had persisted with his case (perhaps even in the teeth of expert advice indicating a low value) in a way that was not unreasonable, the additional costs of the Applicant’s surveyor and solicitors should not have been incurred, a hearing might have been unnecessary and the Applicant could have been represented at any hearing by their surveyor, which is normal in this jurisdiction at the range of values contended for by these parties. It was the Respondent’s unreasonable conduct which caused the Applicants to incur relatively substantial additional costs and counsel’s fees.

54. In our summary assessment, taking into account the £300 fee reimbursement order, the fair order is that the Respondent should also contribute £1,250 plus VAT towards the additional costs of the surveyor, £1,250 plus VAT towards the additional costs of the solicitors and £1,500 plus VAT towards counsel’s fees. These total £4,800 including VAT. Judge David Wyatt

14 June 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) 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.