Tenant Ordered to Pay Reasonable Service Charges

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY) &

IN THE COUNTY COURT at CLERKENWELL & SHOREDITCH, sitting at 10 [ADDRESS] [POSTCODE]

Tribunal reference : LON/00BE/LSC/2019/0399

Court claim number : F2QZ2Y78

Property : 15 [ADDRESS], [POSTCODE]

Applicant/Claimant : [redacted]

Representative : Mr. [COUNSEL]

Respondent/Defendant: [redacted]

Tribunal members : Judge Mullin & [NAME]

In the county court : Judge Mullin

Date of decision : 4th July 2022

DECISION

This decision takes effect and is ‘handed down’ from the date it is sent to the parties by the tribunal office:

Summary of the decisions made by the Tribunal

1. The following sums are payable by the Defendant to the Claimant by 4pm on 8th August 2022:

(i) Service charges: £3628.78

(ii) Legal costs of £710 being total sum of the County Court issuing fee and the tribunal’s fees.

(iii) Interest at 5% per annum over the national Westminster bank base rate, in accordance with clause 2(3)(b) of the lease calculated in the case of service charge demands from the date on which each sum fell due to the date of judgment in the sum of £996.62.

The proceedings

2. Proceedings were originally issued against the Defendant on 2nd July 2019. The Defendant filed a Defence on 31st July 2019. The proceedings were then transferred to this tribunal.

3. Directions were issued and the matter eventually came to hearing on 4th July.

The hearing

4. The Claimant was represented by Mr. [APPELLANT]. The Defendant did not attend.

5. On Friday the 1st July at 16:16 a case officer for the tribunal emailed the parties indicating, incorrectly, that no bundles had been received by the tribunal.

6. Mr. [RESPONDENT] replied at 16:42, with the Defendant in copy, stating that the bundles had been sent some time ago, both in hard copy and by email. He emailed again, also with the Defendant in copy, at 16:59 attaching proof of receipt by the Tribunal.

7. The Defendant then replied to the original case officer email at 17:12 and stated as follows:

[NAME],

Thank you for your notification of a hearing on Monday 4th July 2022.

I was instructed by the court to hand our my bundle to the claimant, althrough I informed the court that I would prefer to deliver my bundle directly to the court and hand a copy to the claimant.

I have informed the court that my bundle has been altered with documents missing and I can not rely on the bundle compiled by the claimant. I have not receive a response from the court since then.

From your email, I gathered that the court has not receive any bundle for the hearing and as such it evident that the hearing will be postponed.

I will not be attending the hearing as the evidence I wish to rely upon has been tampered with, following the court's instructions.

8. It transpired that the bundles had in fact been received by the tribunal in April 2022 and were available for use at the hearing.

The background

9. The Defendant holds a long lease of the subject property, which requires the landlord to provide services and for the lessee to contribute towards their costs by way a variable service charge.

10. The dispute in this matter centres around charges relating to a communal heating system which serves the subject property.

The issues

11. The sums claimed by the Applicant were as follows:

(i) Service charges in the sum of £4375.96

(ii) Interest of £996.62 and legal costs of £710.

12. The tribunal identified the issues in the case as being

(i) Had the Claimant complied with the statutory consultation requirements.

(ii) Were the charges raised reasonable?

County court issues

13. After the proceedings were sent to the tribunal offices, the tribunal decided to administer the whole claim so that the Tribunal Judge at the final hearing performed the role of both Tribunal Judge and Judge of the County Court (District Judge). No party objected to this.

Decisions and reasons

The Defendant’s Non-attendance

14. The Defendant failed to attend the hearing. The tribunal considered whether to adjourn the hearing to facilitate the Defendant’s attendance not withstanding that the Defendant had not requested such an adjournment. From the contents the Defendant appears to have considered, erroneously, that hearing would inevitably be adjourned.

15. Rule 34 of the tribunal’s procedure rules states that the Tribunal may proceed in the absence of a party if it is satisfied that the party has been notified of the hearing and that it is in the interests of justice to proceed with the hearing.

16. In the circumstances the tribunal was satisfied that both limbs of Rule 34 were made out. The Defendant was clearly on notice of the hearing and the tribunal found that it was in the interests of justice to proceed for the following reasons:

a. The County Court claim was issued as long ago as July 2019 and has already been delayed substantially. This mitigated against further delay.

b. The Defendant should have attended not withstanding that the tribunal mistakenly stated by email that no bundles had been received. Significantly, the tribunal did not in its email suggest either expressly or impliedly that the hearing would not be going ahead.

c. Even if the bundles had in fact not been received, the parties could have simply supplied the tribunal with extra copies of the bundles and the hearing would still most likely have been effective. The Defendant did not have a sound basis for assuming that the hearing would not be effective. Indeed, she had been copied into Mr. [NAME] email attaching proof of delivery to the tribunal.

d. The tribunal also considered the value of the dispute, which is relatively modest and that it would be disproportionate to permit further delay.

17. Then having decided to proceed the Tribunal put the points in the Defendant’s statement of case to the Claimant and reached the decisions below on each of the points made by the Defendant.

s.20 Consulation

18. The only point taken by the Defendant in relation to consultation was that although the relevant notice of intention was dated 29th June 2015, she did not receive it until the evening of 17th July 2015.

19. In response the Defendant relies on the evidence of Mr. [RESPONDENT], who attended the hearing. In his witness statement he describes how he is a supervisor of the team who deliver s.20 notices by hand to the relevant properties. He sets out, an attaches to his statement, an email he received on 30th June 2015 from another officer of the council which is a report setting out the notices which had been delivered at that stage. Attached to that email was a statement of delivery and a list of properties to which the notices had been delivered. That statement is signed and dated on 30th June 2015 and shows a delivery date of 29th June 2015.

20. In the circumstances the tribunal prefers the evidence of the Claimant. The Claimant has produced witness statement, verified by a statement of truth and contemporaneous documents which in the tribunal’s opinion make it more likely than not that the relevant notice was indeed delivered to the Defendant’s property on 29th June 2015. The Defendant on the other hand had produced a statement, which is not verified by a statement of truth and had produced no other evidence in support of her case.

Reasonableness

21. The Defendant makes a number arguments under this heading. Firstly she argues that the method of apportionment of the relevant charges chosen by the Claimant is unfair and therefore unreasonable.

22. This point in relation has been determined as between the parties before. In Tribunal cases LON/00BE/LSC/2014/059 & 0583. That case concerned the same lease provisions and also related to service charges incurred for repairs to the communal heating system. In that case the tribunal decided that it was unfair to apportion the charges on a unit basis when other charges were on the bed-weighting system.

23. Mr. [NAME] initial position was that this decision was not binding on this differently constituted tribunal considering a different application. He was asked by the tribunal to consider whether the decision whilst not binding on the tribunal, was binding between the parties in that it created an issue estoppel. He conceded that it did.

24. It is far from clear whether on this application we would have reached the same finding, but given Mr. [NAME] concession that the decision created an issue estoppel as between the parties, we consider that total figure for the charges should be the alternative figure given at paragraph 14 of the Claimant’s statement of case: £4375.96.

25. The second way the Defendant seeks to challenge the charges on this basis that the heating system is now very old was originally designed to service a far larger number of properties and that it no longer presents an efficient system. She submits that [NAME] no longer benefit from economies of scale and that individual [NAME] should be allowed to disconnect from the system and install their own combi boilers. It is not reasonable in those circumstances to continue to operate and maintain the [NAME] and charge service charges to [NAME] for doing so.

26. Mr. [NAME] gave evidence in response, both in his witness statement and in brief oral evidence. In his evidence he stated:

a. The Claimant is subject to covenants to keep the system in operation and scrapping the system would require wholesale variation of leases.

b. Allowing individuals to opt in or out would mean the system would be unable to function properly and would be much more expensive for those remaining on it.

c. He also makes clear that a substantial amount of other work would be needed to make it possible for units to have their own boilers (as set out at paragraph 11 of his witness statement).

d. That not all the boilers are operational at once meaning that the system can operate at a level appropriate for the number of dwellings connected to it.

e. In his view there was no realistic alternative to continuing to maintain the [NAME].

27. The tribunal accepts that evidence. It is satisfied that it is reasonable for the Claimant to operate and maintain the [NAME] for the reasons given by Mr. [RESPONDENT] in evidence.

28. In her statement of case the Defendant also complains about a lack of disclosure from the Claimant. However, the Defendant has not made any applications for disclosure in this application. It was included in the directions that either party could request copies of documents from the other and they should be provided within 7 days. The directions also provided that where there was a dispute about compliance with the directions an application could be made to the tribunal to decide that dispute. No such application has been made. It appears from a section of an Upper Tribunal decision between the parties quoted in the Claimant’s statement of case that the Upper Tribunal has reached a similar conclusion in the past.

29. The Defendant’s final point is that the service provided by the heating system is “below average standard” and that she has been left without heating for “days and sometimes weeks in the middle of the winter from year to year”. She says she has had to spend “lots of money” on electricity using portable heaters to heat her home and to boil hot water. She states that during Christmas 2019 there was no heating and hot water.

30. The difficulty with this argument is that this case is concerned with charges for works designed to improve the functioning and reliability of the [NAME]. Mr. [NAME] evidence is clear that the works have been a success in that they have improved the systems reliability and “bursts have been reduced to a minimum”. Water losses have reduced considerably. Given the unviability, as set out above, of scrapping the system in its entirety, it is difficult to see what else the Claimant can do other than carryout works to try and improve the functioning of the system. The Defendant herself appears to accept that the situation has improved from the historic position in that any outages are now for a shorter duration.

31. In the tribunal’s view the service charges are reasonable and have improved the functioning and reliability of the [NAME] subject only to the point made about apportionment and issue estopel which is set out above.

32. The Tribunal was told that the Defendant has made a payment towards the charges of £576.48 and so the sum we have awarded reflects that payment.

Claims for costs

33. The Claimant sought its costs only to the extent of recovering the issue fee at the county court and the fees to the tribunal. I was told these amounted to £710. I award those costs in full the Claimant being overwhelmingly the successful party.

Rate of interest

34. The Claimant sought to recover interest at the contractual rate in the lease. In my view it is entitled to that sum.

Conclusion

35. By way of conclusion, the following sums are payable by the Defendant to the Claimant by 4pm on 8th August 2022:

(iv) Service charges: £3628.78

(v) Legal costs of £710 being total sum of the County Court issuing fee and the tribunal’s fees.

(vi) Interest at 5% per annum over the national Westminster bank base rate, in accordance with clause 2(3)(b) of the lease calculated in the case of service charge demands from the date on which each sum fell due to the date of judgment in the sum of £996.62.

36. I have drawn a form of order that will be submitted with these reasons to the County Court sitting at Clerkenwell & Shoreditch, to be entered in the court’s records. All payments are to be made by 4pm on 8th August 202.

Name: Judge Mullin Date: 4th July 2022

ANNEX - RIGHTS OF APPEAL

Appealing against the tribunal’s decisions

1. A written application for permission must be made to the First-tier Tribunal at the Regional tribunal office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional tribunal office within 28 days after the date this decision is sent to the parties.

3. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must state the grounds of appeal, and state the result the party making the application is seeking. All applications for permission to appeal will be considered on the papers

5. Any application to stay the effect of the decision must be made at the same time as the application for permission to appeal.

Appealing against the County Court decision

1. A written application for permission must be made to the court at the Regional tribunal office which has been dealing with the case.

2. The date that the judgment is sent to the parties is the hand-down date.

3. From the date when the judgment is sent to the parties (the hand-down date), the consideration of any application for permission to appeal is hereby adjourned for 28 days.

4. The application for permission to appeal must arrive at the Regional tribunal office within 28 days after the date this decision is sent to the parties.

5. The application for permission to appeal must state the grounds of appeal, and state the result the party making the application is seeking. All applications for permission to appeal will be considered on the papers.

6. If an application is made for permission to appeal and that application is refused, and a party wants to pursue an appeal, then the time to do so will be extended and that party must file an Appellant’s Notice at the appropriate County Court (not Tribunal) office within 14 days after the date the refusal of permission decision is sent to the parties.

7. Any application to stay the effect of the order must be made at the same time as the application for permission to appeal.

Appealing against the decisions of the tribunal and the County Court

In this case, both the above routes should be followed.