Tenant not in breach of lease covenants for alterations

OUTCOME: Dismissed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : CAM/12UD/LBC/2020/0004 HMCTS code (paper, video, audio) : V: CVPREMOTE Property

Applicant: [redacted]

: Flat 6, St.[ADDRESS] [POSTCODE]

[APPELLANT] : Mr [COUNSEL] ‘in house’ Counsel Respondent : [redacted] : Mr [COUNSEL] counsel - instructed by [COUNSEL] solicitors Type of [NAME] : Determination of an alleged breach of covenant Tribunal member : Tribunal Judge Dutton Venue : Remote video hearing Date of Decision : 1st December 2020

DECISION

Covid-19 pandemic: description of hearing This has been a remote video hearing, which has been consented to by the parties. The form of remote hearing was CVPREMOTE. A face-to-face hearing was not held because it was not practicable, and all issues could be determined in a remote hearing. The documents that I was referred to are in two bundles of approximately 280 pages, the contents of which I have noted.

2 Decisions of the tribunal (1) The tribunal determines that there has been no breach of the covenant or condition of the lease for the reasons set out below and dismisses the [NAME]. (2) No request in these proceedings was made by the tenant for an order under s20C of the Landlord and Tenant Act 1985.

Background 1. This is an [NAME] by [APPELLANT], the Landlord of the property, being [ADDRESS] [POSTCODE] (the Flat) for an order that there has been a breach of covenant or condition of the lease pursuant to s168(4) Commonhold and Leasehold Reform Act 2002 (the Act).

2. The tenant is Ms [APPELLANT[NAME], who has owned the lease of the Flat since November 2015.

3. The alleged breach is that Ms [NAME] has made alterations to the Flat that she occupies under the terms of a lease dated 7th June 2007 between [COMPANY] (McLeod) (1), [ADDRESS] ([ADDRESS]) [COMPANY] (2) and M P O‘Donovan (3) (the Lease). The Lease is for a term of 125 years from 7th June 2007.

4. The Applicant is the landlord and freehold owner of the property known as 3 – [ADDRESS], [ADDRESS], March, which comprises four flats, two on the [APPELLANT] floor and two on the first floor and is contained in HM Land Registry Title number CB345547. The Applicant purchased the property on 3rd September 2008, although registration does not appear to have been concluded until June 2009.

5. The allegations are set out in the [NAME] and are to be found at clause 3.7 of the Lease. They are under the heading “Alterations” and set out the following: 3.7.1 not to make any structural or external alterations whatsoever and not to make any other alterations or additions to the Premises without the prior written consent of the Landlord and the Management Company 3.7.2 not relevant

3 3.7.3 not to carry out or make any alteration or addition to the Premises until: 3.7.3.1 all necessary notices under the Planning Acts have been served and 3.7.3.2 all necessary permissions under the Planning Acts have been obtained 3.7.3.3 and until the prior written consent of the Landlord and the Management Company is obtained and subject to clause 3.7.1 above 6. In addition to the alleged breaches concerning alterations the [NAME] also refers to breaches of planning and a requirement to obtain planning. Finally, there is an allegation concerning encroachment which is neither pursued in the statement of case, which accompanied the [NAME], nor in the witness statement of Mr [NAME], the asset manager responsible for the property nor indeed by Mr [COUNSEL] acting as advocate for the Applicant at the hearing on 26th November 2020.

7. It is appropriate to record the description of the Flat, which in the Definitions and Interpretation section of the Lease describes the “Premises” as all that flat known as plot 6, more particularly described in the First Schedule. One then turns to the First Schedule and finds the following description of the Premises, ALL THOSE premises known as Plot 6 situate on the first floor of the Building and shown edged red on the Plan including: …. Under the exclusion wording at 8 the Lease says this “any part of the Building lying above the surface of the ceiling or below the floor surfaces save as otherwise provided in this lease” The plan annexed to the lease shows the [APPELLANT] and first floor of the property, although it is to be noted that in respect of the Flat there appears to be a set of internal stairs rising upwards, both in the Flat of Ms [NAME] but also flat 5, the neighbouring property.

8. I was provided with bundles both on behalf of the Applicant and Ms [APPELLANT]. The Applicant’s bundle included the [NAME], statement of case, the tribunal directions dated 15th September 2020, a copy of the Lease, Land Registry entries for the freehold and leasehold titles and a witness statement of Mr [NAME] with a number of exhibits. Mr [NAME] did not attend to give evidence. His reason for non-attendance is unknown. I will return to specific documents as necessary.

9. For Ms [NAME] I was provided with a Statement of Case, her witness statement and exhibits, legal submissions, a copy of a decision by the Eastern Tribunal in 2016 in respect of flat 4 at the property and a short video, which apparently the Applicant was not able to view. Ms [COUNSEL] was represented by Mr [COUNSEL], of Counsel.

4 10. The Applicant’s statement of case sets out the alleged clauses said to be breached, with reasons for such allegations. It is firstly said that a staircase has been constructed and a new habitable space has been made within the roof space resulting in an additional bedroom and that there had been maiming the roof to add a Velux window. It is further alleged in this statement that no consent was granted for the alterations, nor planning granted.

11. In support of the Applicant’s case I was provided with a witness statement of Mr [NAME]. This is dated 29th September 2020 and the same day the Applicant wrote to the Tribunal indicating that either Mr [APPELLANT] or Mr [NAME] would be attending. Mr [NAME] had not made a witness statement. Mr [NAME] confirmed he was the asset manager responsible for the property. As a result of Ms [NAME] wishing to dispose of the Flat, correspondence was entered into in the Summer of 2020. This correspondence indicated that a second bedroom existed at the Flat, which it appears was not known to the Applicant. The Lease provides for a Consent to the sale as there is a Restriction on the Title requiring a consent to show that clause 3.12 has been complied with. This clause relates to Alienation. In his statement Mr [NAME] said that such a consent would not be provided unless the Flat had been inspected to ensure no breaches of the lease.

12. In an attempt to speed matters up, as Ms [NAME] had found somewhere to buy, she sent a copy of the buyer’s bank valuation and the Estate Agents particulars. These described the Flat as a two storey maisonette with two bedrooms, one on the first floor and one on the second floor. Mr [NAME] also referred to earlier correspondence with [NAME] Solicitors in 2015. This was on behalf of an earlier purchaser. The first letter appears to be from those solicitors dated 6th March 2015. It says at the second paragraph “It is understood that there is loft access in the flat, however it is not included in the demise, nor does our client have the right to use same. Please can you provide your consent to our client using the loft space for storage”.

13. This elicits a response from the Applicant stating that a Deed of Variation would be required, that the area is valuable space and puts a price of £5,500 plus an increase in the [APPELLANT] rent to enable the prospective purchaser to acquire same. This offer was in essence repeated to Ms [NAME].

14. The statement then goes on to set out the clauses Mr [NAME] considers Ms [NAME] has breached.

15. Notwithstanding that Mr [NAME] had not provided a witness statement of his own, he did seek to rely on Mr [NAME] statement. He added that the Flat did not go beyond the ceiling joists to the first floor and that the lease and the plan referred only relates to the first floor. He said that although

5 planning may have been granted for an additional floor this did not mean that the planning permission had actually been implemented.

16. He was asked questions by Mr [NAME]. Mr [NAME] maintained that the staircase and the velux window were not present when the lease was granted. He did admit that he had not been to the property and nor did it seem had Mr [NAME]. Reference was made to the decision of our colleagues in August 2016 (case CAM/12UD/LSC/2015/0039) when the block is described. Included in the description is a statement that there were two one-bedroomed flats on the [APPELLANT] floor and two two- bedroomed flats on the first floor, each with an attic bedroom. This prompted Mr [NAME] to say that there would seem to be evidence of another breach by the owner of flat 5. He was not prepared to accept that the lease when granted was for anything other than a single floored property.

17. Mr [NAME] was then taken to a copy of the planning permission for the development. This was contained in the respondent’s bundle at page 70 onwards. It is dated 30th June 2005, the applicant is [APPELLANT], the original [NAME] and landlord of the Property. This describes the property as 2 x 2 – bed flats and 2 x 1 – 1 bed flats. At item 8 the permission refers to roof lights on the second floor. With the planning are copies of drawings submitted by [RESPONDENT] in May 2005. At page 77 of the Respondent’s bundle is a drawing clearly showing the existence of a bedroom in the attic area. Indeed, it shows two figures looking out of the velux window. Further support for the existence of the second bedroom in the attic, was it was suggested by Mr [NAME] to be found in the additional drawing at page 111 of the bundle showing the attic floor as a bedroom, with stairs rising to it.

18. Mr [NAME] did not accept this as evidence that the flat, when constructed had two bedrooms, one on the attic floor level. He said it was not unusual for developers to deviate from the plan, although he had no evidence to support such an assertion.

19. He was then taken back to the lease plan which shows stairs leading to the attic floor, which was consistent with the developers plans. He denied this, relying on the lease. He was referred to copies of estate agents particulars, from the time of Ms [NAME] intended sale and including earlier ones in 2012 and 2014 referring to a two bedroomed flat. He was asked to review the original sale prices for the [APPELLANT] floor and the upper floor flats which showed in 2007 the [APPELLANT] floor sold for circa £95 – 100,00 yet the sale price for Ms [NAME] property was circa £115,000. Mr [NAME] was not persuaded and indeed thought the lower prices for the [APPELLANT] floor properties may have been because the [NAME] wished to sell quickly. He did, however, accept that the flat had been converted into two bedrooms by 2012. He confirmed that the applicant had owned the building since 2008.

6 20. We were told by Mr [NAME] that he had introduced a policy of inspecting properties before a consent to sale was given to ensure that there had been no breaches. This was, he said, as a result of a Supreme Court decision, details of which were not provided to us. It seems however, that at no time has the applicant inspected the subject property.

21. He was asked why the decision in 2016 had not resulted in action at that time. Somewhat surprisingly he suggested that the applicant, who had not attended that hearing, would, although accepting that the decision had been received, not have read beyond the front page, which contained the tribunal’s findings.

22. Returning to the correspondence in 2015 between [NAME] and the applicant he said that the offer was made without inspection of the property. If the matter had proceeded, then the property would have been inspected. He maintained throughout that the lease was the document which mattered. There was no reference to a second floor being part of the demise, nor did the plan show the additional floor. He did not accept that there may have been a fault in the drafting of the lease. Relying on his stated experience in drafting leases he felt that the wording of the demise would be carefully considered by the client, in this case the [NAME] and such an omission picked up.

23. Mr [NAME] was asked about replies given by Mr [NAME] to pre contract enquiries at the time of Ms [RESPONDENT] purchase. Again, in the respondent’s bundle, there is a copy of the letter sent by Mr [NAME] to the vendor’s solicitors [NAME], sent by email and dated 9th August 2015. In answer to the question “Are there any matters relating to the property that a prudent buyer should be aware of including a known breach” to which he answers NO. Later the question is in part repeated asking whether the tenant was in breach of any covenants/stipulations in the lease and again the answer is NO. Mr [NAME] response was that the [NAME] to the tribunal was started promptly after it is said the applicant became aware of the breach. Further, that the answers by Mr [NAME] in August 2015 reflected that which was known by the applicant at the time, although he did accept that he considered [NAME] would have relied on these responses. 24. [NAME] gave evidence [NAME] said that there were certain headline points to be made: - • The burden of proof rests with the applicant • There has been no inspection of the property since the applicant bought in 2008 • The lease definition of the demise and the plan is the only evidence adduced by the applicant

7 • There is overwhelming evidence that there have not been alterations made to the Flat since the lease was granted. This evidence was to be found in the planning papers, the original sale price, the estate agents particulars going back to 2012 showing the Flat was two bedroomed, over two floors. The lease plan shows stairs to upper floor. • The lease is in error 25. Thereafter we heard from Ms [NAME]. There was a statement of case and a witness statement. I have noted both. She describes the property she purchased at paragraph 2 of her statement, which is a two bedroomed flat over two floors. Throughout her period of occupancy she has paid the [APPELLANT] rent and service charges and has made no changes to the Flat other than replacing the cooker and some decoration. She believes that the applicant has misunderstood the extent of the property, an example being that a charge for a lock to the basement door was included, notwithstanding there is no basement. She said that because of this action she has now lost the property she and her partner were hoping to buy.

26. Ms [APPELLANT] told me that she had paid her [APPELLANT] rent until October this year, the action having been started in September 2020.

27. Asked about Mr [NAME] replies to questions raised in 2015, she told me she had relied on them in deciding to purchase the Flat.

28. She was asked by Mr [NAME] about the correspondence between [NAME] and the applicant in 2015. She said that this was on behalf of a [NAME] prospective purchaser. She was asked why the offer made in 2015 was the same made to her this year, which it was suggested showed that the applicant was talking about the upper floor and not the small loft space. She could not answer. She did say that the other flat at this floor level, flat 5, had the same layout as hers and that flat 5 had not, during her period of occupancy, been altered.

29. She was asked why she had not accepted the offer by the applicant and replied that she did not see why she should pay for an error in her lease. She repeated that the loft space referred to in the correspondence could only be accessed from the first floor.

30. Mr [NAME] summed the case up as there being a key question to answer. Not what was demised but have there been alterations to create a stair case and a second bedroom on the upper floor? The evidence was that planning permission was granted for a two bedroomed flat with a velux window, which is what exists. The lease plan shows stairs. Also, the difference in the first selling price for this Flat and the downstair flats is consistent with the differing accommodation. The applicant had

8 produced no positive evidence. The applicant has owned since 2008 but it is only in 2020 that the issue is raised.

31. Mr [NAME] relied solely on the description of the Flat in the lease and that there was no plan of the second floor. He requested a finding that there had been breach. Whether the Landlord and Tenant (Covenants) Act 2007 assist the respondent he would not say as my task, he told me, was only to determine whether a breach had occurred. Findings 32. The [NAME] it is alleged that “the leaseholder (Ms [NAME]) or their predecessor have carried out an act of trespass and have developed the loftspace which falls outside of the leaseholders demise to create a second bedroom within the premises”. The statement of case does not seem to pursue the allegation of trespass, confining itself to the alleged breaches of the lease as set out under the heading ‘Alterations’ under clauses 3.7 of the lease, including planning issues under 3.17.1 and 3.17.2 of the lease.

33. I therefore have to decide whether Ms [NAME], or a [NAME] has created a second bedroom in the top floor of the Flat without containing the consent of the applicant, or its predecessor in title and without the relevant planning permission to undertake such work.

34. The evidence relied upon by the applicant is confined to the wording of the lease which describes the Flat as set out in paragraph 7 above and the accompanying lease plan which refers to the First Floor only, although does show a set of stairs purportedly giving access to the top floor. I do not consider that the question of ‘ceilings’ assists the applicant as this can refer to the timbers above the ceiling on the second floor as easily as the first floor. The only witness was Mr [NAME], but he did not attend to give oral evidence. Mr [COUNSEL] purported to give evidence, but he was the advocate for the applicant, in house counsel as he described himself to me and had not made a witness statement. He answered questions put to him by Mr [NAME] but his knowledge of the property was limited as, like Mr [NAME], he had not inspected. Such evidence as he gave was limited to is experience in drafting leases and the changes he had made to the applicant’s procedures for considering alienation.

35. On behalf of the respondent I heard from Ms [RESPONDENT] and had the benefit of seeing a number of relevant documents. These included the planning permission granted in 2005 to the [NAME] [NAME] clearly showing permission for two 2 bed properties in a block of 4 flats. The permission also provides for the installation of rooflights to the second floor. The planning drawings included in the bundle clearly show a second floor with a bedroom and stairs rising to that level, as well as roof lights.

9 36. In addition to these details I was provided with copies of estate agents particulars in 2012 and 2014 showing the Flat as a two bedroomed property. The original sales details for flat 3 show a sale price of £99,995 (August 2007) and for flat 4 a sale price of £94,995 (July 2007). In contrast the sales details for the original sale of flat 6 shows a price of £114,995 (June 2007). I accept that this spread of prices does provide evidence of the difference between the value of the one bedroomed flats on the [APPELLANT] floor and the subject Property consistent with the flats according with the original planning.

37. Mr [NAME] suggested that developers do not necessarily adhere to the planning, which might be true. However, I cannot envisage a [NAME] building a smaller flat than planning allowed for and the difference in the original sale price and that of the [APPELLANT] floor properties would support the contention that the Flat was as provided for in the planning.

38. I must also consider the position of the applicant. At the time of Ms [APPELLANT] purchase Mr [APPELLANT] answered that there had been no breaches of the lease, a response relied upon by Ms [NAME] when she purchased. I also find it strange that the applicant, who has owned the Property since 2008 has never inspected, or requested to do so, even before starting this [NAME]. It would seem that the applicant was at cross purposes with the enquiry made by solicitors about the roof space. I am satisfied that the space the solicitors were referring to was the small loft space accessible from the first floor and not the bedroom in the attic. An offer to grant a deed of variation for £5,500 was made without an inspection, although [NAME] said an inspection would have taken place before the deed was finalised. It is fair to say that the applicant has shown only limited interest in the property since it acquired the freehold in 2008. The burden of proof rests with the applicant.

39. I do not consider that the applicant has discharged that burden of proof. The only witness did not attend the hearing. [NAME] conceded that the second bedroom existed at a time before [NAME] purchased. I am satisfied on the evidence before me that the development was on the basis that [NAME]’s flat was always a two bedroomed property. The lease would appear to be in error when I consider the contemporaneous evidence in the form of the planning documents existing at the time of the building of the development and the difference in the original sale prices for the one bedroomed and the two bedroomed flats. All the evidence supports that Ms [NAME] has made no alterations to the flat requiring either planning permission or the consent of the applicant and Mr [APPELLANT] conceded that was the case.

40.

Accordingly, for the reasons I have set out above, I find that the respondent, Ms [RESPONDENT], has not breached a covenant or condition of the lease by creating a second bedroom in the Property and I dismiss the [NAME].

10 Tribunal Judge Dutton

1st December 2020

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. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : CAM/12UD/LBC/2020/0004 HMCTS code (paper, video, audio) : P: PAPERREMOTE Property

: Flat 6, St.[ADDRESS] [POSTCODE] Applicant: [redacted] Respondent : [redacted] : [COUNSEL] solicitors Type of [NAME] : Costs under the provisions of rule 13 Tribunal Procedure (First- tier Tribunal)([NAME]) Rules 2013 Tribunal member : Tribunal Judge Dutton Venue : Remote paper determination Date of Decision : 12 February 2021

DECISION

Covid-19 pandemic: description of hearing This has been a remote paper determination, which has not been objected to by the parties. The form of remote hearing was P:Paperremote. A face-to-face hearing was not held because it was not practicable, and all issues could be determined on the papers. The documents that I was referred to are in a bundle of approximately 24 pages, the contents of which I have noted.

2 Decisions of the Tribunal The tribunal determines that the applicant has acted unreasonably in bringing and conducting the proceedings in this case under the provisions of rule 13 Tribunal Procedure (First-tier Tribunal)([NAME]) Rules 2013 (the Rule) and the total sum awarded as costs against the applicant is £9,290.70, to be paid within 28 days.

The [NAME]

1. On 1 December 2020 I issued a decision (the Decision) that the applicant’s claim for forfeiture of the respondent’s lease should be dismissed for the reasons set out in the Decision.

2. The respondent has applied under the provisions of rule 13 for an order that the applicant should pay her costs on the grounds that the applicant had acted unreasonably in bringing and or conducting the proceedings leading to the Decision. The grounds are set out in a Notice of [NAME] dated 23 December 2020.

3. Directions in this case were issued on 6 January 2021 and have been complied with by the respondent. The applicant has, for reasons unknown to me, chosen not to participate. The directions provided for a paper determination and I considered this matter on 12 February 2021.

4 In the bundle provided by the respondent’s solicitors I had the Decision, the directions, the Notice of [NAME] and correspondence in support of the [NAME], including a letter from [APPELLANT] to the applicant dated 12 November 2020 and the costs summary.

5. The Notice of [NAME] lists seven allegations of unreasonable conduct. These include a failure to ascertain the history and layout of the property and not visiting the property at any time before or during the proceedings to verify the applicant’s case. There is an allegation that the applicants did not clarify the position with the respondent before starting the proceedings and ignored a letter from the solicitors acting for the respondent drawing the deficiencies in the applicant’s case with a warning of costs consequences. Mr [APPELLANT], the property manager for the respondent, who had made a witness statement, did not attend the hearing and gave no reason for such non-attendance. Finally, it is said that during the hearing admissions were made by the applicant that the respondent had not made changes to her flat which required the consent of the applicant or planning permission.

6. The schedule of costs shows the work done by Mr [COUNSEL], said to be a grade A solicitor charging an hourly rate of £201. The total solicitors’ costs are £5,326.50, with Counsel’s fees of £3,200 and

3 disbursements of £18 for Land Registry copies. With VAT the total sum claimed is £10,249.80.

7. As I indicated above the applicant has not participated in these proceedings.

The law

8. The provisions of the Rule are set out below. I have carefully considered the Upper Tribunal decision in [ADDRESS] Company (1985) [COMPANY] v Mrs [NAME] [2016] UKUT (LC)

Findings

9. At paragraph 24 of the judgment in [ADDRESS] the tribunal said this: 24. ……. 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. We see no reason to depart from the guidance given in Ridehalgh at 232E, despite the slightly different context. “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 Sir [NAME] “acid test”: is there a reasonable explanation for the conduct complained of?

10. At paragraph 26 of the decision the tribunal said this:

26. We also consider that tribunals ought not to be over-zealous in detecting unreasonable conduct after the event and should not lose sight of their own powers and responsibilities in the preparatory stages of proceedings. As the three appeals illustrate, these cases are often fraught and emotional; typically those who find themselves before the FTT are inexperienced in formal dispute resolution; professional assistance is often available only at disproportionate expense. It is the responsibility of tribunals to ensure that proceedings are dealt with fairly and justly, which requires that they be dealt with in ways proportionate to the importance of the case (which will critically include the sums involved) and the resources of the parties. Rule 3(4) entitles the FTT to require that the parties cooperate with the tribunal generally and help it to further that overriding objective (which will almost invariably require that they cooperate with each other in preparing the case for hearing). Tribunals should therefore use their case management powers actively to encourage preparedness and cooperation, and to discourage obstruction, pettiness and gamesmanship.

11. The Upper Tribunal decision then moves on to the steps I must follow in considering an [NAME] under rule 13. They are set out at paragraphs 27 to 30 where it said as follows:

4 27. When considering the rule 13(1)(b) power attention should first focus on the permissive and conditional language in which it is framed: “the Tribunal may make an order in respect of costs only … if a person has acted unreasonably….” We make two obvious points: first, that unreasonable conduct is an essential pre-condition of the power to order costs under the rule; secondly, once the existence of the power has been established its exercise is a matter for the discretion of the tribunal. With these points in mind we suggest that a systematic or sequential approach to applications made under the rule should be adopted.

28. At the first stage the question is whether a person has acted unreasonably. A decision that the conduct of a party has been unreasonable does not involve an exercise of discretion but rather the [NAME] of an objective standard of conduct to the facts of the case. If there is no reasonable explanation for the conduct complained of, the behaviour will properly be adjudged to be unreasonable, and the threshold for the [NAME] of an order will have been crossed. A discretionary power is then engaged and the decision maker moves to a second stage of the inquiry. At that second stage it is essential for the tribunal to consider whether, in the light of the unreasonable conduct it has found to have been demonstrated, it ought to make an order for costs or not; it is only if it decides that it should make an order that a third stage is reached when the question is what the terms of that order should be.

29. Once the power to make an order for costs is engaged there is no equivalent of CPR 44.2(2)(a) laying down a general rule that the unsuccessful party will be ordered to pay the costs of the successful party. The only general rules are found in section 29(2)-(3) of the 2007 Act, namely that “the relevant tribunal shall have full power to determine by whom and to what extent the costs are to be paid”, subject to the tribunal’s procedural rules. Pre-eminent amongst those rules, of course, is the overriding objective in rule 3, which is to enable the tribunal to deal with cases fairly and justly. This includes dealing with the case “in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties and of the Tribunal.” It therefore does not follow that an order for the payment of the whole of the other party’s costs assessed on the standard basis will be appropriate in every case of unreasonable conduct.

30. At both the second and the third of those stages the tribunal is exercising a judicial discretion in which it is required to have regard to all relevant circumstances. The nature, seriousness and effect of the unreasonable conduct will be an important part of the material to be taken into account, but other circumstances will clearly also be relevant; we will mention below some which are of direct importance in these appeals, without intending to limit the circumstances which may be taken into account in other cases.

12. I have considered the Notice of [NAME] and the seven grounds advanced, all of which are, in my finding valid. The applicant undertook no meaningful research before embarking on the [NAME] seeking an order for forfeiture of Miss [NAME] flat. That is an aggressive move and very worrying for Miss [NAME]. Having started the proceedings it would seem that no research was undertaken to establish the historic

5 position and indeed the applicant did not even undertake an inspection of the property, either before or during the proceedings.

13. I do accept that the lease appears to be defective and it is surprising that no party picked up the anomaly in the description of the property in the lease and the actual layout. Nonetheless the applicant, as the party bringing the proceedings could and should have investigated the matter more fully instead of allowing the case to run its full course.

14.

Accordingly, I find that the applicant has acted unreasonably in failing to both investigate the facts before commencing proceedings and indeed responding to matters highlighted to it by the solicitors for Miss [NAME] in November 2020. Further the failure to ensure that a witness with knowledge was called to the hearing is, in my finding, also unreasonable. No explanation was given for the non-attendance of Mr [NAME]. That attitude, I am afraid, has permeated into these proceedings as evidenced by the lack of involvement on the part of the applicant.

15. I agree with the final point in the Notice of [NAME] namely that the “applicant brought and conducted proceedings they knew or should have known had, and never had, any or any reasonable prospects of success”. Notwithstanding the problem with the description of the property in the lease an inspection would have provided assistance to the applicant, as would the enquiries that the respondent made of the local authority to check planning matters.

16. Instead, they undertook aggressive litigation, threatening Miss [NAME] home. I find that the second stage is made and it is appropriate for me to make an order under Rule 13.

17. The fact that I have concluded that the first two stages have been established enables me to move on to the assessment of the costs. I bear in mind the Upper Tribunal’s guidance on this element at paragraph 29 of the decision. The importance to [APPELLANT] of this case is immense, not so I think for the applicant, who is a [COMPANY], presumably with resources.

18. On the assessment of costs I find that the hourly charging rate for a Grade A fee earner of £201 is not excessive. Indeed, the latest recommendations as to hourly rates would show that a Grade A fee earner in the area of Wisbech would be in the region of £255, if the recommendations are followed.

19. I am a bit hamstrung on Counsel’s fees as there is no fee note and I do not know Mr [NAME] hourly rate. I see he was called in 2007 and is therefore experienced. The fee for the hearing seems wholly reasonable.

20. Doing the best I can on the information provided I find as follows:

6 • The solicitors fees of £5,326.50 are quite high for a case of this nature. I am dealing with this assessment on a summary basis and on a standard costs basis. I suspect that not all letters written were necessary for the conduct of the case and included correspondence with the tribunal which would not normally be included in party/party costs. I propose to reduce the solicitors costs by admittedly a somewhat arbitrary 15% but I consider that would reflect the solicitor and own client element, which I do not consider the applicant should be required to pay. This would include, for example, the attendance at the hearing, which could have been covered by a lower grade fee earner, as might the preparation of the hearing bundle.

Accordingly, the solicitors costs I allow are £4,527.25. Vat thereon is £905.45 – ((total £5,432.70)

• As to Counsel’s fees without the fee note I am somewhat in the dark as to what was done to justify the fee of £2,200. The brief fee for the hearing is, I consider, perfectly reasonable. A review of the respondent’s hearing bundle and the costs schedule show there are instructions to Counsel to advise and settle and in the bundle was a 7 page statement of case prepared by Mr [RESPONDENT], together with a document headed Respondent’s legal submissions, which Mr [RESPONDENT] had also prepared.

Accordingly, notwithstanding the lack of fee note I am prepared to accept the fees claimed by Counsel in this case or £3,200, with VAT of £640. (total £3,840)

• The only disbursement appears to be the Land Registry copy documents at a fee of £18.

21. The total costs I allow are therefore £9,290.70, to be paid within 28 days.

Tribunal Judge Dutton

12 February 2021

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].

7

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).

Rule 13 Orders for costs, reimbursement of fees and interest on costs

13. (1) The Tribunal may make an order in respect of costs only (a) under section 29(4) of the 2007 Act (wasted costs) and the costs incurred in applying for such costs; (b) if a person has acted unreasonably in bringing, defending or conducting proceedings in (i)an agricultural land and drainage case, (ii)a residential property case, or (iii)a leasehold case; or (c)in a land registration case. (2) The Tribunal may make an order requiring a party to reimburse to any other party the whole or part of the amount of any fee paid by the other party which has not been remitted by the Lord Chancellor. (3) The Tribunal may make an order under this rule on an [NAME] or on its own initiative. (4) A person [NAME] an [NAME] for an order for costs (a)must, unless the [NAME] is made orally at a hearing, send or deliver an [NAME] to the Tribunal and to the person against whom the order is sought to be made; and (b)may send or deliver together with the [NAME] a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal. (5) An [NAME] for an order for costs may be made at any time during the proceedings but must be made within 28 days after the date on which the Tribunal sends (a)a decision notice recording the decision which finally disposes of all issues in the proceedings; or (b)notice of consent to a withdrawal under rule 22 (withdrawal) which ends the proceedings. (6) The Tribunal may not make an order for costs against a person ([NAME]) without first giving that person an opportunity to make representations. (7) The amount of costs to be paid under an order under this rule may be determined by

8 (a)summary assessment by the Tribunal; (b)agreement of a specified sum by [NAME] and the person entitled to receive the costs ([NAME]); (c)detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by [NAME] by the Tribunal or, if it so directs, on an [NAME] to a county court; and such assessment is to be on the standard basis or, if specified in the costs order, on the indemnity basis. (8) The Civil Procedure Rules 1998(1), section 74 (interest on judgment debts,etc) of the County Courts Act 1984(2) and the County Court (Interest on Judgment Debts) Order 1991(3) shall apply, with necessary modifications, to a detailed assessment carried out under paragraph (7)(c) as if the proceedings in the Tribunal had been proceedings in a court to which the Civil Procedure Rules 1998 apply. (9) The Tribunal may order an amount to be paid on account before the costs or expenses are assessed.