Tribunal Determines Reasonable Costs for Opposing Right to Manage Application

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AJ/LCP/2024/0011 Property : Harborough House, Saltley House and [ADDRESS] [POSTCODE] Applicant : [redacted] : n/a Respondent : [redacted] : [NAME] of Determination : 16 December 2024

DECISION ________________________________________________________________________________

Decision of the Tribunal (1) The Tribunal finds that the reasonable costs payable by the [COMPANY] to [COMPANY]) [COMPANY] is £11,198.40.

The [NAME] 1. This is an [NAME] made pursuant to section 88(4) of the Commonhold and Leasehold Reform Act 2002 (CLRA 2002) seeking the tribunal’s determination as to the costs recoverable by the Applicant in respect of earlier proceedings to determine whether the Respondent should acquire the right to

manage the premises known as Harborough House Saltley House and [ADDRESS] [POSTCODE].

2. The Applicant in these proceedings is the manager of Harborough House and Brecon House . The Applicant is a party to each lease in Harborough House and Brecon House. It does not carry out any management functions in respect of Saltley House, which is owned by [NAME]. The Applicant in these proceedings was the Second Respondent in Case ref LON/00AJ/LRM/2023/0013, being this Respondent’s [NAME] to acquire the right to manage Harborough House, Brecon House and Saltley House. For clarity I will refer to the Applicant in these proceedings as ‘[APPELLANT] and the Respondent to these proceedings as ‘the [COMPANY]’.

3. On 23 August 2023 the First Tier Tribunal dismissed the [COMPANY]’s [NAME] to acquire the right to manage the subject premises. The [COMPANY] appealed to the Upper Tribunal. That appeal was determined by 2 May 2024. The appeal was partially successful only insofar as the decision of the FTT was set aside, however the Upper Tribunal then proceeded to consider the RTM’s company’s [NAME] afresh, and dismissed it.

4. On or about 21 June 2024 [COMPANY] applied under s88(4) of CLRA 2002 for a determination of its reasonable costs incurred in opposing the [COMPANY]’s [NAME].

Legal Framework

5. Section 88 of the CLRA 2002 provides:

(1) A [COMPANY] is liable for reasonable costs incurred by a person who is (a) landlord under a lease of the whole or any premises, (b) party to such a lease otherwise than as landlord or tenant (c)….

(2) Any costs incurred by such a person in respect of professional services rendered to him by another are to be regarded as reasonable only if and to the extent that the costs in respect of such services might reasonably have been expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs. (3) A [COMPANY] is liable for any costs which such a person incurs as party to any proceedings under this Chapter before the appropriate tribunal only if the tribunal dismisses an [NAME] by the company for a determination that it is entitled to acquire the right to manage the premises.

(4) Any question arising in relation to the amount of any costs payable by a [COMPANY] shall in default of agreement be determined by the appropriate tribunal.

6. [COMPANY] v [NAME] [COMPANY] [2014] the Upper Tribunal confirmed that the costs included in s88(1) include the reasonable costs of an appeal to the Upper Tribunal.

The Determination 7. Pursuant to the Tribunal’s directions [COMPANY] have prepared a statement of costs and the [COMPANY] have responded to it. [COMPANY] have served a reply and prepared a bundle for the purposes of this determination. Neither party requested an oral hearing and the [NAME] has been determined on the papers.

8. [COMPANY] have prepared a schedule of costs totalling £11,878.40 comprising work done by its in-house solicitor (£4678.40) and counsel’s fees for the hearing before the Upper Tribunal (£6,000).

9. In its response the [COMPANY] does not take issue with the hourly rate or the recoverability in principle of any of the costs claimed, but considers that [NAME] should have reasonably taken less time to deal with the proceedings and suggests that 10 hours would have been reasonable. This would result in solicitors costs of £2720. The [COMPANY] takes issue with the following specific items on the schedule;

(i) Liaising with counsel in respect of the skeleton argument and considering/serving the same. [COMPANY] have claimed £299.20. The [COMPANY] submits that £272 would be reasonable (ii) Attending the Upper Tribunal hearing. This is claimed at £680. The [COMPANY] submits that this was not reasonable. [COMPANY] has conceded those costs of attendance in its reply. (iii) Attendance on client. [COMPANY] has claimed £680 or 2.5 hours. The [COMPANY] suggests that 1 hour would be sufficient. (iv) Counsel’s fee for the appeal. TheRTM company submits that counsel’s fee for the appeal hearing of £6000 was ‘excessive’.

10. The tribunal considers that the costs claimed in respect of the time spent by [COMPANY] in-house solicitor are reasonable give the work involved and makes no adjustment other than in respect of the concession made as regards the costs of attending the appeal hearing. As regards counsel’s fee, the [COMPANY] has not disclosed the fee paid to its counsel for the appeal for the

purposes of comparison. The [COMPANY] asks the tribunal to bear in mind the fact the appeal was dismissed for reasons that were not raised by either party and which the [COMPANY] considers were based on an ill-founded assumption of fact, however the only issue which this tribunal can consider is whether or not the right to manage [NAME] was unsuccessful and whether or not the costs sought might reasonably have been expected to have been incurred by any self-funding party. Given the complexity of the issues raised in the appeal, it was reasonable for [COMPANY] to instruct experienced counsel. The tribunal considers the fee might reasonably have been expected to have been incurred by any of the parties to the appeal.

Name: Judge N O’Brien Date: 16 December 2024

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).