Mr Max Thorowgood & Marina Krisko BSc. (EST MAN) FRICSAngus Gloag, of Counsel for the ApplicantApplication for determination of liability to pay for the RespondentVenue Marriott Hotel, Waltham AbbeyDate 16 January 2025Property: Cross, Hertfordshire, EN8 7ATType of application: service charge pursuant to s. 27A Landlord & Tenant Act 1985 Mr Max Thorowgood & Marina Krisko BSc.
DECISION
[1]The application 1.1. The Applicant is the lessee of the maisonette known as 271C Bridge Court, High Street, Waltham Cross. She seeks determinations as to the payability of various items included within the service charges payable under her lease for the years March 2019 – March 2024.[2]The building 2.1. In order to understand the disputes between the parties it is necessary first to describe the building of which the Applicant’s premises are part. The building comprises a parade of shops on the ground floor; separate premises on the first floor which were formerly in use as a snooker hall but have now been converted for use as 5 residential units and are subject to a distinct headlease and are managed by the agents as a single unit; and 5 maisonettes on the second and third floors, of which the Applicant’s premises are one. The maisonettes are accessed via a separate enclosed staircase to the right of the building as it is viewed from the road. That staircase passes over the vehicular access to the rear of the building to a terrace from which the maisonettes are accessed. To the rear of the building there is a car park which accommodates 24 vehicles. It is used both by the shops and by the tenants of the residential properties. There is a steel fire escape from all the upper floors into the car park. Whether or not the first floor premises are strictly entitled to access the fire escape was not clearly established on the evidence before us but it was clear in the course of our inspection that in practice there was a door from the first floor, which was open when we inspected, by the means of which the fire escape was accessible.[3]The lease 3.1. The original lease of the Applicant’s premises is dated 17th August 1976. That lease was extended by the Applicant on 3rd July 2013. 3.2. The material provisions of the Applicant’s lease are as follows: “And also paying by way of additional rent a due proportion of the costs of the Landlord of carrying out the works and supplying the services specified in the Fourth Schedule hereto such proportion and amount in case of [… the lease is illegible but it probably says ‘dispute’] to be determined by the Landlords Surveyors for the time being whose decision shall be final and binding on the Tenants such amount shall be assessed on a yearly basis from the second year of the term and from year to year … The Landlords surveyors shall before 25th day of March each year produce to the Tenants a certified and audited statement of expenditure incurred by the Landlords under the provisions of the Fourth Schedule hereto in the year ended the preceding 25th December and any deficiency between the amount expended and the amount calculated from the Tenants shall be paid with the other rents due from the Tenants on such day and at that time the Tenants shall pay the sum estimated by the Landlords Surveyors as the amount of the costs for the then current years And also paying by way of additional rent a sum or sum of money equal to a due proportion of the amount which from time to time the Landlords may expend in effecting or maintaining the insurance of the Building of which the demised premises form … such proportion and such amount in case of dispute to be determined by the Landlords or their Surveyors for the time being whose decision shall be final and binding on the Tenants …” 3.3. The works and services specified in the Fourth Schedule are as follows: “1. The repair of the common access way and rear car parking area shown edged brown on the plan annexed hereto.[2]The lighting cleansing re-decoration and repair of the common staircase shown edged green on the plan annexed hereto.[3]The lighting cleansing and repair of the common access balcony shown edged green on the plan annexed hereto.[4]The maintenance and repair of the fire escape staircase shown coloured brown on the plan annexed hereto.[5]Maintenance repair and replacement (if required) of the boundary fence surrounding the area shown edged brown on the plan annexed.”[4]Apportionment 4.1. The key area of disagreement between the parties is as to the apportionments made by the Respondent’s surveyor of the costs incurred. 4.2. The approach which should be adopted by the Tribunal to disputes of that sort has recently been the subject of significant decisions by the Supreme Court and the Upper Tribunal namely: Aviva Investors Ground Rent GP Ltd v Williams [2023] UKSC 6 and Hawk Investment Properties Ltd v Eames [2023] UKUT 168 (LC). 4.3. The Respondent accepts that it is the effect of these decisions that the terms of the lease which provided that the decision of its surveyor should be binding on the Applicant are to be disregard pursuant to Landlord and Tenant Act 1985 s.27A(6). 4.4. According to Hawk the first question for us is whether the apportionments which have been made by the Respondent’s surveyor are in accordance with the terms of the lease. In this case, that means the first question is whether the proportions which have been demanded of the Applicant are ‘due’. In our view the word ‘due’ in this context is to be interpreted as, fair or reasonable. 4.5. The question whether the apportionment was ‘reasonable’ is to be distinguished from whether it was ‘rational’ in the manner explained by Lord Sumption in Hayes v Willoughby [2013] UKSC 17 at 14, namely that reasonableness is concerned with the outcome of a person’s thoughts and intentions, namely, whether a hypothetical reasonable person would have reached the decision which the Respondent did; that is an open-ended and flexible test. 4.6. Our assessments in each case insofar as they are required in relation to this issue are explained in our responses to each challenged item of expenditure are set out in the Scott Schedule which is annexed hereto.[5]Provision of information 5.1. A number of the original disputes between the parties have now been resolved as a result of information requested by the Applicant having, belatedly, been provided by the Respondent. However, it was a feature of the hearing before us that it proved impossible, despite the Respondent’s assurances to the contrary, for either the Applicant or the Respondent’s agent’s representative to access the Respondent’s portal to which it said the documents requested by the Applicant had been uploaded. Failures of this sort needlessly increase the extent of disputes of this sort and damage the relationship between the parties and are evidence of unreasonable conduct by the landlord. Tenants are entitled by virtue of s. 22 Landlord & Tenant Act 1985 to be afforded reasonable facilities to inspect the documents which are said to support the sums identified in the accounts.[6]Conclusions 6.1. Our conclusions as a matter of principle in relation to the outstanding issues revealed by the Revised Scott Schedule filed by the parties pursuant to our directions. It will be for the parties to make and we hope agree upon the necessary calculations. APPENDIX 1- RIGHTS OF APPEAL[1]If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.[2]The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.[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 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 making the application is seeking.