Tribunal Decision on Cost Recovery for Fire Safety Measures

OUTCOME: Allowed in Part

Note: in this decision figures in [ ] are reference to page numbers in the document bundles

Decisions

1. Costs of £59,910 plus VAT were reasonably incurred in the completion of compartmentalisation works and a service charge is payable by the tenants in respect of those costs.

2. Costs of £120,969 plus VAT were reasonably incurred in connection with the [NAME] alarm works and a service charge is payable by the tenants in the respect of those costs.

3. We dispense with the statutory consultation requirements in respect of (a) the compartmentalisation works and (b) the [NAME] alarm works.

4. Costs of £144,499.66 plus VAT were reasonably incurred in the provision of [NAME] marshals and a service charge is payable by the tenants in the respect of those costs.

5. Costs of £10,557.782 plus VAT were reasonably incurred in the procurement of the [NAME] marshals and a service charge is payable by the tenants in the respect of those costs.

6. At the end of this decision we give further directions in respect of:

a. Whether as a condition of granting dispensation the landlord should be required to pay all or part of the tenants’ costs incurred in obtaining advice on the dispensation [NAME]; and

b. The tenants’ applications for orders limiting the landlord’s ability to recover the costs to these proceedings either through the service charge or as an administration charge under the terms of their leases.

7. For the avoidance of doubt and notwithstanding the notice that appears at the end of this decision, the appeal rights are extended and will run from the date upon which our supplemental decision relating to the above two issues is sent to the parties.

The applications and the hearing

8. On 23 July 2018 the tribunal received the landlord’s applications under sections 27A and 20ZA of the Landlord and Tenant Act 1985 (“the 1985 Act”). The [NAME] under section 27A was for a determination of the tenants’ liability to pay service charges in respect of costs incurred by the landlord in (a) the provision of a waking watch (b) compartmentalisation works and (c) [NAME] alarm works. The [NAME] under 20ZA was for dispensation from the consultation requirements in respect of the contract for the provision of the waking watch and the contracts for the completion of the works. The respondents to the [NAME] are listed in the schedule to the [NAME] form and we understand them to be all the long leaseholders in [NAME]. Ultimately 90 of the respondents were represented by Axiom Stone Solicitors including [COMPANY] and [COMPANY] who own 13 and 6 flats respectively.

9. In their statement of case the tenants applied for orders under 20C of the 1985 Act and under paragraph 5A of schedule 11 to the Commonhold and Leasehold Reform Act 2002. By these applications the tenants sought orders limiting the landlord’s ability to recover the costs to these proceedings either through the service charge or as an administration charge under the terms of their leases.

10. At the hearing the landlord was represented by [RESPONDENT] and the tenants were represented by [NAME]. Both Mr [NAME] and Mr [RESPONDENT] are barristers.

11. On behalf of the landlord we heard oral evidence from [RESPONDENT] [NAME], [NAME], [NAME] [NAME] [NAME] and [NAME] [NAME]. Their statements are at [503-572]. Mr [NAME]’s is a major shareholder in the landlord company. Ms [RESPONDENT] is the head of property management at [NAME] who were the managing agents for [NAME]. Mr [NAME] is the managing director of [NAME]. [NAME] [NAME] [NAME] is an Associate [NAME] employed by [COMPANY] (“WYG”). Mr [NAME] is a [NAME] and explosion [NAME] and Associate Director and Head of [NAME] at WYG. Also included in the bundle were two reports from [COMPANY] dated 15 September 2017 and 3 October 2017 [183-199] but the authors of those reports did not attend for cross examination.

12. On behalf of the tenants we heard oral evidence from [NAME[NAME] and [NAME]. Mr [NAME] is a chartered [NAME] with over 30 years international survey and consulting experience in [NAME] safety engineering. His expert reports are at [395-430] and [430A-430H). He gave evidence as an expert witness and his reports contained the usual expert’s declaration. Mr [NAME] is a director of [COMPANY] and his statement is at [573-614]. Also included in the bundle was an expert report from [NAME] (Hons), LLM, MCIArb [431-502] but he did not attend for cross examination.

Procedural issues

13. Mr [NAME] had been given notice of the hearing dates in January 2019 but at the time of the hearing he was in Saudi Arabia and unable to attend. Judge Vance had previously refused requests from the tenants for permission (a) to rely upon a supplementary expert report from Mr [NAME] (b) to allow Mr [NAME] to give his evidence by Skype and (c) for a postponement of the hearing. In doing so he observed that we might be in a better position to reconsider those requests at the hearing.

14. With the agreement of Mr [NAME], we agreed to Mr [NAME] giving his evidence by Skype.

15. Mr [NAME] supplemental report [430A-430H] effectively suggested alternative works that might have been completed more quickly and more cheaply than the works undertaken by the landlord with the result that the [NAME] marshals might have been withdrawn at an earlier stage than was actually the case. We considered that the tenants would be prejudiced if they were unable to rely on the supplemental report. In giving that decision, we indicated that we would be minded to postpone the hearing if the landlord required time to obtain further evidence. We also pointed out that in such circumstances the tenants might find themselves at risk of a rule 13 cost order. After a short adjournment Mr [RESPONDENT] said that the landlord would not seek a postponement but would prefer to press on with the hearing.

16. One further procedural issue arose during the hearing and it is best to deal with it now. At the start of the hearing and in answer to our questions Mr [NAME] accepted that the disputed costs were recoverable under the terms of the leases. We took that to mean that there was no dispute between the parties as to payability. However, in his cross examination of Ms [NAME] Mr [NAME] raised an issue of payability that had not been foreshadowed either in the tenants’ statement of case or in his skeleton argument.

17. In short, the service charge provisions of the leases contain two lists of recoverable costs: part A and part B. Only the [NAME] contribute towards part A costs whilst the lessees of both the residential flats and the commercial ground floor units contribute towards part B costs. The thrust of Mr [NAME] argument was that the disputed costs had been recovered as part A costs whereas they should have been recovered as part B costs. If correct that would result in the tenants paying higher service charges than was required under the terms of their leases.

18. Having adjourned for a short time we came to the preliminary conclusion that there may have been a simple mistake in the wording of the demands sent to the tenants and that the sums actually demanded were probably correct. However, Mr [NAME] was not able to deal with the point because the only person who could clarify the demands was on holiday. Although we declined to allow Mr [NAME] to pursue this argument we do not accept Mr [NAME] observation that “the ship has sailed”. If there has been a simple mistake that has adversely affected all the tenants it would be unduly oppressive to allow it to go uncorrected.

19. We rather suspect that this issue can be resolved between the parties in correspondence but if not, we are satisfied that the tenants would be entitled to raise the issue as a partial defence to any claim for the disputed service charges.

Background

20. [NAME] was previously an office block with a car park owned by [COMPANY]. That company sold [NAME] to [COMPANY] in February 2015. Having acquired the property [COMPANY] converted it to form 119 flats over 13 floors with commercial units on the ground floor. It is not clear if the commercial units pre-date the conversion and were always there, but nothing hangs on that.

21. The conversion works were completed and signed off on 7th March 2016 and all the flats were sold on 999-year leases before the end of that year.

22. On 6 November 2016, whilst the reversion was still owned by [COMPANY], there was a [NAME] on the 5th floor. The [NAME] inspected and an Enforcement Notice was issued on 5 December 2016, shortly before the landlord purchased the reversion on 19 December 2016. The enforcement work was completed by 29 March 2017 when the [NAME] and Emergency Planning Authority (LFEPA) confirmed in writing that the work had been satisfactorily completed [128].

23. On 14 June 2017 [NAME] broke out in Grenfell Tower with tragic consequences. Any further comment on that [NAME] would be superfluous.

24. On 30 June 2017 representatives from the [NAME] and a [NAME] inspected [NAME]. They inspected the [NAME] safety measures and tested the smoke extraction system, the [NAME] alarm system and the sprinkler system. In addition samples of the cladding were taken for further testing.

25. On 6 July 2017 the Department for Local Communities and Local Government (DCLG) confirmed that the cladding had failed the [NAME] safety test [130]. The communication included a list of information required by the DCLG.

26. On 11 July 2017 LFEPA gave formal notification of [NAME] safety deficiencies identified during the inspection on 30 June 2017 [133-148]. The deficiencies were identified by reference to the Regulatory Reform ([NAME]) Order 2005 an extract of which was attached to the notification .

27. It seems that the identified decencies were dealt with because we were told that on 5 August 2017 LFEPA confirmed that the deficiencies had been rectified although the evidence in support of that [159] was less than conclusive.

28. After 8 August 2017 but before 16 August 2017 DCLG issued guidance following the [NAME] [165-166]. No one was able to confirm the exact date of the guidance but it is clear that it was after 8 August 2017 because the guidance refers to a letter of that date. Equally it must have been before 16 August 2017 when the [NAME] requested a further inspection following the publication of the guidance.

The guidance refers to advice given on 22 June 2017 relating to “interim measures” and to advice of 28 July, 2 August and 8 August 2017 that “[NAME] advice should be sought” [165]. This advice was not disclosed.

The guidance contains the following passages that were relied on at the hearing: -

“We expect that following this advice you have reviewed your [NAME] risk assessment and that interim measures have been implemented as informed by the outcome of that [NAME] risk assessment review”; and

“As above we expect you to have followed this advice and sought the advice of a [NAME]”.

At the hearing it was common ground that “a [NAME]” would be someone such as a [NAME].

29. On 16 August 2017 the [NAME] wrote to the landlord referring to the cladding test failure and informing the landlord of a further visit [161]. The email contains the following passage: -

“The test failures now indicate a potential risk to life for the residents of your building and our expectation is that the DCLG guidance has been followed and implemented (see attached for further information). In light of this new information we strongly recommend this advice is reviewed urgently by a [NAME] person and action taken as necessary”.

30. Following the communication of 16 August 2017 the [NAME] inspected on the following day, 17 August 2017. Ms [NAME] was present during the inspection. Her evidence, that in this respect was not seriously disputed, was that the [NAME] required the removal of the cladding within 6 months. It also required the immediate introduction of a 24-hour waking watch, failing which the residents would have to immediately evacuate [NAME] that would then be closed and locked.

31. After negotiations with the [NAME] a waking watch of four [NAME] marshals was agreed on the basis of 24-hour attendance by the existing concierge staff. The [NAME] marshals were procured through the landlord’s usual facilities maintenance company and they took up their positions on the same date, 17 August 2017. They remained in place until 3 January 2018 when they were replaced by one person whose task remains to patrol the outside of the [NAME] and monitor the [NAME] alarm system on the ground floor.

32. Pausing there, the position on 17 August 2017 was that a waking watch had been introduced as a temporary measure until interim measures could be implemented that would then remain in place until the cladding was removed. At that time, it seems that DCLG envisaged the removal of the cladding within 6 months although there is no reference to that period in its guidance and we assume that the period had been extended because the cladding remains in place.

33. On 14 September 2017 the landlord by letter gave notice to each of the tenants that the cladding would have to be removed and that as an interim measure they had employed the waking watch. The letter also informed the tenants of the landlord’s intention to apply to the tribunal for a determination as to whether the waking watch costs were reasonable and recoverable through the service charges [300].

34. The landlord then turned to two companies for specialist advice. The first was [COMPANY]. That company provided two reports, the first on 15 September 2017 and the second on 3 October 2017 [183-199]. On the basis of the landlord’s statement of case the first report followed a desk top survey whilst the second followed a physical inspection of [NAME]. Taken together these reports identify two interim measures that if adopted might justify the removal of the [NAME] marshals. The first was the extension of the automatic sprinkler system to the ground floor commercial units and rear car park. The second was the installation of a communal [NAME] alarm system. The reports indicate that the implementation of either of these interim measures could lead to the removal of or at least a reduction in the waking watch.

35. The second company was [COMPANY]. Their reports are dated 9 October 2017 and simply “October 2017” [201-298]. The date upon which the landlord instructed WYG is opaque. Its statement of case records that instructions were given on 30 August 2017. In their evidence neither Mr [NAME] nor Ms [NAME] specified a precise date. In such circumstances we accept the evidence of Mr [NAME] that the instructions were given on 15 September 2017 when WYG issued its “fee letter”.

36. The report of 9 October 2017 is a very broad [NAME] risk assessment and identifies a large number of risks that need to be addressed. One of the risks identified at [236] is inadequate compartmentation “in the riser cupboards and throughout all floors”. The second report appears to build on the first report and contains proposals for compartmentalisation work that, as we understand it, were ultimately completed.

37. By letter of 31 October 2017 [303] the landlord gave notice to each of the tenants of its intention to complete the [NAME] alarm and compartmentation works and ultimately to replace the cladding. The letter invited the tenants to nominate their own contractor to undertake the proposed works. The letter also informed the tenants that there would not be sufficient time to undertake a formal consultation and that the dispensation [NAME] now before us would be made.

38. By letter of 10 November 2017 the landlord informed each of the tenants that the [NAME] alarm works would commence within two weeks and that access to the flats would be required [306].

39. It is apparent that WYG issued a third report in November 2017. We know this for two reasons. Firstly, because in his evidence [NAME] [NAME] (in paragraph 19 of his statement at [563]) refers to “the recommendations of the WYG report in November 2017”. Secondly because by an e-mail of 22 November 2017 [309] the [NAME] acknowledged receipt of “the [NAME] document for [NAME]…. that you sent to us on 21 November 2017”. That e-mail goes on to accept the “proposed interim measures and the reduction of the number of [NAME] wardens from five to one providing that all of the proposed measures outlined in the report are carried out”. It is unfortunate that the landlord disclosed neither the report nor its covering letter.

40. It is however apparent that the proposed interim measures, accepted by the [NAME], essentially comprised the compartmentalisation and [NAME] alarm works.

41. By letter of 29 November 2017 the landlord gave notice to the tenants that further compartmentation works were required [312]. The letter invited the tenants to nominate their own contractor to undertake the proposed works.

42. The [NAME] alarm work commenced on 27 November 2017 and was completed on 4 December 2017. The compartmentalisation work commenced on 5 December 2017 and was completed on 22 December 2017.

43. Although all the interim measures were completed by 22 December 2017 the waking watch was not withdrawn until 3 January 2018. The explanation for this apparent delay given by Mr [NAME] was “the potential absence of persons from flats during the (holiday period) as well as the potential for Christmas activities and parties”.

Costs in dispute

44. The following costs were incurred by the landlord:

1) Cost of Compartmentalisation Works:

Cost of Works £59,910.00

VAT £11,982.00

Total Cost of Works £71,892.00

2) Cost of [NAME] works:

Cost of Works £120,969.00

VAT £24,193.80

Total Cost of Works £145,162.80

3) Cost of the Waking watch

Cost of [NAME] marshals £183,470.86

VAT £36,694.17

[NAME] £13,405.00

VAT £2,681.00

Total Cost of Waking watch £236.251.03

45. The cost of the [NAME] marshals accrued at the rate of £11,901.18 per week until 20 November 2017. After that date the weekly cost reduced to £9,742.80 although no explanation was given for the reduction.

46. During the course of the hearing Mr [NAME] on behalf of the tenants made the following concession that narrowed the issues in dispute: -

a. That any costs found to be reasonably incurred could be recovered under the terms of the tenants’ leases; and

b. The costs of the compartmentalisation and [NAME] alarm works were in themselves reasonable for the work actually undertaken; and

c. The provision of the waking watch was neither “qualifying works” nor a “qualifying long-term agreement” within the meaning of section 20ZA of the 1985 Act. Consequently, the landlord had not been obliged to consult and dispensation under section 20ZA was not a live issue in respect of the waking watch cost.

Reasons for our decisions

That costs of the compartmentalisation and [NAME] alarm works were reasonably incurred

47. The tenants considered that at least parts of those costs were unreasonably incurred. Their case rested largely on the evidence of Mr [NAME]. In his supplemental report Mr [NAME] suggested that instead of undertaking these works the landlord could have extended the sprinkler system to the ground floor commercial units as envisaged by the first Horton and Horton report. That work could have been completed more quickly and at substantially lower cost. His evidence was supplemented by that of Mr [NAME] who had obtained an estimate for an extension of the sprinkler system to the commercial units in the sum of £68,250 plus VAT.

48. The tenants case was fundamentally undermined by Mr [NAME] answers to Mr [NAME] first two questions. In answer to those questions Mr [NAME] said that there was “no right or wrong way” of responding to the potential risk to life identified by the [NAME] in its letter of 16 August 2017. He continued by saying that there was a “a range of reaction” and he agreed with Mr [NAME] that the compartmentalisation and [NAME] alarm works actually undertaken by the landlord “fell within that range”.

49. There is a well-established principle, which predates the 1985 Act, that reasonable cost does not equate to lowest cost. In [NAME] v Hounslow LBC [2017]1 W.L.R.2817 Lewis LJ put it another way when he said: -

“…. it must always be born in mind that where the landlord is faced with a choice between different methods dealing with the problem in the physical fabric of a building (where the problem arises out of design defect or not) there may be many outcomes each of which is reasonable. I agree with [counsel] that the tribunal should not simply impose its own decision. If the landlord has chosen a course of action which leads to a reasonable outcome the costs of pursuing that course of action will have been reasonably incurred, even if there was another cheaper option which was also reasonable”.

50. The evidence of the tenants’ own expert was that the interim measures taken by the landlord were reasonable. Consequently, the costs were reasonably incurred.

51. That apart the possibility of extending the sprinkler system to the ground floor commercial units was at best speculative. Mr [NAME] had not measured the header tank that supported the residential sprinkler system but he accepted that a tank of 21 cubic meters would be required to provide whole building cover for 60 minutes, which is required by the relevant British Standard. When it was put to him that the existing header tank was only a quarter of that size Mr [NAME] said that 15 minutes would be sufficient to enable the [NAME] to attend on site and that it could then pump water into the header tank to enable these sprinklers to continue operating. It is self-evident that if a [NAME] hose was being used to refill the header tank it could not be applied in fighting a [NAME] in the building. Mr [NAME] accepted that it could take 3 to 4 months to install a larger header tank and he could not say if there was sufficient space to install one.

52. In answer to our question Mr [NAME] declined to assess the probability of the [NAME] agreeing to the extension of the sprinkler system as a sufficient interim measure to enable the landlord to withdraw the waking watch. In such circumstances we consider that it is appropriate to have regard to the assessments given by [NAME] [NAME] and Mr [NAME]. [NAME] [NAME] put the probability at “less than 50%” whilst Mr [NAME] put it at “20%”.

53. On the basis of this evidence we find that it is more likely than not that the [NAME] would have rejected an extension of the sprinkler system as a sufficient interim measure to enable the waking watch to be withdrawn and that consequently the landlord acted reasonably in discarding that option.

54. Consequently, and for each of the above reasons we conclude that the interim measures adopted by the landlord were reasonable and that, on the basis of Mr [RESPONDENT] concession, the costs were reasonably incurred.

To dispense with the consultation requirements in respect of the compartmentalisation and [NAME] alarm works

55. Following Lord [NAME] judgment in [COMPANY] v [NAME] and Others [2013] UKSC 14 we agree with both advocates that the central issue is whether the tenants were significantly prejudiced by the landlord’s failure to consult before implementing the interim measures. We remind ourselves that the purpose of section 19(1) of the 1985 Act, in the context of these proceedings, is to ensure that tenants are not required to pay more than they should for the compartmentalisation and [NAME] alarm works and as Mr [NAME] pointed out there is considerable overlap between the two applications. Having found that the costs of the compartmentalisation and [NAME] alarm works were reasonably incurred it inevitably follows that the tenants have not suffered any financial prejudice.

56. We reject Mr [NAME] argument that the tenants were prejudiced by the effective denial of an opportunity to either obtain alternative quotations or to comment upon the works or indeed by the landlord’s failure to obtain more than two estimates for the cost of the work. The tenants were criticising the landlord for the delay in implementing the works resulting in an increase in the waking watch costs. At the same time, they were criticising the landlord for not consulting them and for not obtaining further estimates before work commenced, both of which would have resulted in further delay and an increase in the waking watch costs. The landlord was being “damned if it did and damned if it didn’t”.

57. We equally reject the description of Ms [NAME] invitations to the tenants to nominate a contractor “as a sham”. Whilst we accept that it may have been difficult if not impossible for the tenants to nominate an alternative contractor before the work commenced, [NAME] was doing her best in very difficult circumstances to keep the tenants fully informed and to give them at least an opportunity to comment on the proposed works. In fact, we were told that no comments were received from any of the tenants.

58. Many of the tenants’ criticisms were made with the benefit of hindsight and completely overlook the wider consequences of the [NAME]. In the months following that terrible [NAME] landlords were rightly under considerable pressure to ensure that high rise blocks of flats with defective cladding were immediately made safe. At that time, we doubt that the tenants would have expected anything less.

59. For each of the above reasons we are satisfied that it is appropriate to dispense with the consultation requirements in respect of the compartmentalisation and [NAME] alarm works.

60. There remains an issue as to whether as a condition of dispensation we should require the landlord to contribute towards the tenants’ costs incurred in obtaining advice on the dispensation [NAME]. At the hearing we agreed to Mr [NAME] request that we determine the 20C [NAME] on the basis of written submissions following the issue of this decision. We will also consider this issue on the same basis and at the same time.

That the cost of the [NAME] marshals and the procurement costs were reasonably incurred

61. Costs of £183,470.86 plus VAT were incurred in the provision of [NAME] marshals between 17 August 2017 and 3 January 2018. The tenants considered that at least part of that cost was unreasonably incurred. Although conflated throughout the hearing there were essentially three strands to their case. The first was that the [NAME] marshals could have been employed at cheaper rates. The second was that if the sprinkler system had been extended to the ground floor commercial units as suggested by Mr [NAME], the waking watch could have been withdrawn much sooner. The third was that there was an unreasonable delay in implementing the compartmentalisation and [NAME] alarm works that resulted in an increase in the cost of the waking watch.

62. The tenants’ case that the [NAME] marshals could have been employed at substantially cheaper rates rests on the evidence of Mr [NAME]. Using hourly rates for [NAME] marshals provided by two other companies Mr [NAME] calculated that the waking watch could have been provided at a cost of between £157,692.48 plus VAT and £172,704 plus VAT. In round terms that equates to a reduction of between 6% and 14%.

63. In assessing the reasonableness of the costs incurred it is appropriate to consider the circumstances in which the [NAME] marshals were employed. The [NAME] inspected on 17 August and required the immediate introduction of a 24 hour working waking watch. The [NAME] marshals had to be on site by the end of that day if the residents were not to be evacuated. In that context the differential of some 6% between the actual cost incurred and the higher of Mr [NAME] estimates is reasonable.

64. Furthermore, Mr [NAME] evidence is undermined by Mr [NAME] expert report [431-502]. Mr [NAME] was the tenants’ own expert although he was not called for cross examination. Although we can give his report only limited weight his conclusion can be set against the evidence of Mr [NAME]. Although Mr [NAME] criticises the absence of a full tendering process he concludes at paragraph 2.18 of his report: “When comparing these figures to the weekly costs claimed by the [tenants], then in my opinion, the cost of £11,901 per week is reasonable for four [NAME] marshals”.

65. Having regard to the circumstances in which the [NAME] marshals were employed we are satisfied and find that the rates paid for the [NAME] marshals were reasonable. There was no direct challenge to the procurement costs. However even had there been a challenge we are satisfied that it was reasonable for the landlord to instruct its usual facilities maintenance company to procure the [NAME] marshals not least because they had to be in place by the end of the day.

66. Our conclusions in the previous section of this decision effectively disposes of the tenants second argument: that if the sprinkler system had been extended to the ground floor commercial units the waking watch could have been withdrawn much sooner. Indeed it is probable that if the landlord had pursued the sprinkler option a new header tank would have had to have been installed to satisfy the [NAME]. On the basis of Mr [NAME] evidence that would have resulted in a considerable delay that would have increased rather than reduced the waking watch costs.

67. Finally, we turn to the issue of delay in implementing the compartmentalisation and [NAME] alarm works. There were three periods of delay, viz: -

a. In the appointment of a [NAME] person. The DCLG guidance was issued in mid August 2017. It is apparent both from the DCLG guidance and from the [NAME]’s letter of 16 August 2017 that both authorities envisaged the immediate appointment of a [NAME] person. However, WYG and Mr [NAME] in particular were not appointed until 15 September 2017.

b. The delay in formulating the interim measures and putting them to the [NAME]. In our assessment of this delay we are somewhat hampered by the absence of “the [NAME] safety strategy review document” submitted to the [NAME] on 21 November 2017. Nevertheless, both the compartmentalisation works and the [NAME] alarm works had been identified as possible interim measures by mid October 2017 and yet the final proposals were not put to the [NAME] until 21 November 2017. This delay is largely unexplained and in the context of the [NAME] we consider it excessive.

c. The delay in withdrawing the [NAME] marshals after the interim measures were completed on 22 December 2017. With the interim measures in place we can see no good reason to retain the waking watch over the Christmas and New Year period because, as Mr [NAME] accepted, many of the residents would be absent. We very much doubt that the landlord would reinstate the [NAME] marshals during a future holiday if the cladding has still not been removed.

68. As we have already commented many of the tenants’ criticisms were made with the benefit of hindsight and without regard to the difficulties and pressures experienced by the landlord following the [NAME]. That said we consider that there was an unreasonable delay in implementing the interim measures in particular in the appointment of a [NAME] person following the very clear advice received from both DCLG and the [NAME].

69. Doing the best that we can from the available information and giving due credit to the landlord for the difficult situation in which it found itself we find that there was nevertheless an unreasonable delay of 4 weeks in the implementation of the interim measures. That resulted in the [NAME] marshals being deployed for 4 weeks when their attendance should not have been required. This resulted in an unreasonable increase in the costs of the waking watch.

Accordingly, we disallow costs of £38,971.20 plus VAT in respect of the [NAME] marshal costs (4 x £9,742.80) and £2,847.22 plus VAT being a pro-rata proportion of the procurement costs.

70. Mr [NAME] suggested that having found that the costs of the compartmentalisation and [NAME] alarm works were reasonably incurred it was not open to us to disallow part of the waking watch costs on the grounds of a delay in implementing those works. We have some difficulty with the logic of his argument. If, as we have found, the waking watch was deployed for 4 weeks when it should not have been required then it is logical to conclude that any costs incurred during that period were not reasonably incurred. Even if we are wrong about that we would have no hesitation in allowing an equivalent sum by way of set-off against the tenants’ service charge liability.

Further directions

71. The tenants shall by 3 June 2019 send to the landlord (1 copy) and the tribunal (2 copies) of (a) their submissions on the outstanding cost issues and (b) a schedule of their costs incurred incurred in obtaining advice on the dispensation [NAME].

72. The landlord shall by 14 June 2019 send to the tenants (1 copy) and the tribunal (2 copies) its submissions on the outstanding cost issues. If it does not seek to recover its costs as an admisntration charge it should say so explicitly.

73. We shall by 19 July 2019 issue a supplemental decision on the outstanding cost issues.

Name: [NAME]: 14 May 2019

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).