4, Clarendon Avenue, Altrincham WA15 8HD MAN/00BU/LVM/2023/0004
DECISION
In this Order, the following words/terms shall have the following meanings:(1) “the Application” means the application ref. no. MAN/00BU/LVM/2023/0004 dated 15 December 2023 for an extension of the term of appointment of Howard Jones and Jennifer Dickie as joint managers of the Property;(2) “the Costs’ Application” means the application dated 13 October 2025 under Rule 13(1)(b) of the Tribunal Procedure (Property Chamber) (First-tier Tribunal) Rules 2013 by Yousef Ayub and Shaheen Ashraf for an order for costs against the applicants to the Application;(3) “the Applicants” mean Yousef Ayub and Shaheen Ashraf as the applicants to the Costs’ Application;(4) “the First Respondents” mean Michael William Armiger and Audrey Doreen Armiger as respondents to the Costs’ Application;(5) “the Second Respondent” means Apex Adventures Limited as respondent to the Costs’ Application; and,(6) “the Respondents” means together the First and the Second Respondents. Order[1]The Tribunal orders by way of summary assessment as follows:1.1 an order for costs against the Respondents in the sum of £380 in respect of unreasonable conduct by the Respondents in their conduct of the Application;1.2 an order for costs against the Second Respondent in the sum of £114 in respect of unreasonable conduct by the Second Respondent in its decision to pursue the Application as originally drawn; and,1.3 an order for costs against the Respondents in the sum of £95 in respect of costs incurred by the Applicants in the preparation of the Costs’ Application.1.4 Payment of each of the sums awarded shall be made to the Applicants within 7 days of the date of this Order.1.5 The Respondents are jointly and severally liable for the costs awarded in paragraphs 1.1 and 1.3 above. Background[2]The Costs’ Application was received by the Tribunal by email dated 13 October 2025 from the Applicants and copied to the Respondents by the Applicants. Details of the Applicants’ claims are set out in their Statement of Case.[3]By an email dated 22 October 2025 from the Tribunal, the Respondents were invited by the Tribunal to submit written representations within 7 days on the issue whether the Respondents or any of them has acted unreasonably in the bringing or conducting of the Application.[4]Written representations were received from the Second Respondent dated 27 October 2025 and from the First Respondents dated 29 October 2025.[5]Responses to each of the First and Second Respondents’ representations were made by the Applicants dated 3 November 2025.[6]The parties were informed by email dated 25 November 2025 that the Tribunal would determine the Costs’ Application on the papers on 12 December 2025, in the absence of a request for a hearing from any of the parties.[7]None of the parties requested a hearing and the Tribunal made its determination “on the papers” on 12 December 2025. Evidence The Applicants’ Statement of Case[8]The Applicants’ grounds for the Costs’ Application comprise the following:8.1 unreasonable conduct by the Respondents in the bringing and conduct of proceedings;8.2 destructive conduct during proceedings;8.3 continuing application in the face of evident futility;8.4 contradictory positions and bad faith conduct;8.5 withdrawal of support by the tribunal appointed managers;8.6 failure to identify or secure replacement manager;8.7 serious procedural unpreparedness; and,8.8 failure to comply with tribunal directions.[9]The unreasonable conduct as alleged by the Applicants in respect of the above grounds is summarised as follows:9.1 failure to include the Applicants in discussions before the issue of the Application and to engage in post-issue constructive compromise;9.2 applications for the striking-off and dissolution of Lambscare Limited;9.3 failure by the Respondents to address the Applicants’ concerns/complaints about the Managers’ performance;9.4 lack of good faith following the making of a “without prejudice” compromise offer;9.5 repeated procedural failures eg compliance with tribunal directions causing delay/increased costs. The First Respondents’ Response[10]The First Respondents’ reject all of the Applicants’ claims that they have acted unreasonably in the bringing and/or conduct of the Application, as follows:10.1 the Application was made with the support of all of the then leaseholders of the Property save for the Applicants and with the support of the Managers;10.2 whilst the Applicants were opposed to the continuation in post of the Managers, they acknowledged the need for and/or desirability of a professional manager to manage the Property rather than a return to the situation which existed prior to the Managers’ appointment;10.3 following the Managers informing the Tribunal and the parties in May 2024 of their unwillingness to continue to act, concerted efforts were made by Mr Armiger over a period of time to try to find a suitable replacement to take on the role of manager of the Property but ultimately this proved impossible. The reasons for this were “the number of contributing leaseholders at the Property and the issues”;10.4 by contrast, they note the absence of any effort on the Applicants’ part to identify a suitable replacement despite the Tribunal indicating that all parties should do so;10.5 they had agreed to mediation (unlike the Applicants) which they believe could have resolved the issue as there was general agreement between all leaseholders of the need for professional management of the Property;10.6 following the issue of a separate application by the Managers seeking their discharge and notification from the Tribunal setting out its position with regard to the Application, by email dated 18 August 2025 they indicated their wish to withdraw from the Application;10.7 throughout the proceedings, the First Respondents have acted as litigants in person. 10.8. The First Respondents challenge the amount of costs sought by the Applicants as “wholly excessive” as it amounted to “8 working weeks (assuming a 40 hour week”. The Applicants’ Response to the First Respondents’ Response[11]The Applicants’ response restates examples of alleged unreasonable behaviour by the First Respondents and identifies the issues in dispute between them as follows:11.1 that the Applicants were unwilling to mediate;11.2 that, save for the Applicants’ insistence on a hearing of the Application in order to voice their concerns/complaints regarding the Managers, the Application could have been determined by the Tribunal at an earlier date;11.3 that the Applicants were under any obligation to identify a suitable replacement for the Managers (having already discharged any such obligation in respect of the original application which led to the Managers’ appointment);11.4 that the First Respondents were “overwhelmed” by the hearing bundle produced by the Applicants;11.5 their inexperience in legal and/or property matters and the relevance of their lack of legal representation;11.6 that the discharge of the Managers “would likely lead to disruption and a recurrence of the circumstances which led to the Order being made”. The Applicants claim that the causes of the ongoing difficulties with the management of the Property are the Managers’ failures/conduct since their appointment and the First Respondents’ “sustained obstruction and unreasonable conduct” prior to and since the making of the Order.[12]With regard to the schedule of costs:12.1 the First Respondents have not produced any evidence to support their claim that the Applicants’ costs are “excessive”; and12.2 the making of separate responses by the First and Second Respondents is an unnecessary duplication of work which has involved the Applicants in additional work. They have therefore revised their initial claim for costs to include the time spent on responding to the Respondents’ responses. The amount now claimed is £6863.75. The Second Respondent’s Response[13]The Second Respondent’s response is summarised as follows:13.1 Nick Richardson has acted as a director of Apex Adventures Limited, (“Apex”) and not in any personal capacity;13.2 as the Application was initially made by Michael Armiger, Apex cannot have acted unreasonably in bringing the Application. The other applicants were added to the Application subsequently by the Tribunal;13.3 with regard to acts detailed in paragraphs 4.1, 4.2, 4.5 and 4.7 of the Applicants’ Statement of Case, these were undertaken by other parties and in which Apex had no involvement;13.4 an earlier opportunity to determine the Application by the Tribunal, in view of the Managers’ stated unwillingness to continue and the lack of success in sourcing a suitable replacement, was resisted by the Applicants because of their wish to voice their concerns/complaints about the Managers at a hearing of the Application;13.5 the size of the Bundle reflected to a large extent the Applicants’ extensive submissions but the work of the Applicants in preparing the Bundle is acknowledged;13.6 it is assumed that a large proportion of the costs claimed relate to the period prior to the Managers indicating their unwillingness to continue to act. It is unclear what efforts were made by the Applicants to source a suitable replacement for the Managers;13.7 the Second Respondent’s decision to pursue the Application in its original form reflected the general agreement between all leaseholders that management of the Property should be undertaken by professional managers and the lack of success in finding any suitable replacement for the Managers: it was the last/only available course: “The leaseholders are in a desperate situation with no prospect of the services at the property being carried out without a Manager”;13.8 in view of the Tribunal’s notification that it was minded to strike-out the Application, the Second Respondent withdrew its support; and,13.9 the Second Respondent has acted as a litigant in person in these proceedings. The Applicants’ Response to the Second Respondent’s Response[14]The Applicants’ response identifies the issue in dispute between them and the Second Respondent and restates examples of alleged unreasonable behaviour by the Second Respondent.[15]The issue in dispute is the extent of each of Nick Richardson and Apex’s involvement in the bringing and conduct of the Application.[16]The same point is made by the Applicants regarding the incurring of additional costs/revision of their costs’ claim because of the submission of separate responses by the Respondents.REASONS
[17]The Upper Tribunal gave guidance on the application of Rule 13(1)(b) in its decision in Willow Court Management (1985) Limited v Alexander [2016] UKUT 290. In particular:17.1 the Upper Tribunal suggested that three sequential stages should be worked through in considering an application which can be summarised as follows:(1) Stage 1: has the party acted unreasonably in bringing, conducting or defending proceedings? This is an objective test.(2) Stage 2: only if unreasonable conduct is established, should the Tribunal exercise its discretion to make an order for costs?(3) Stage 3: if the Tribunal determines to make an order, how should it exercise its discretion to determine the amount of the costs’ award?17.2 The burden is on the party seeking the costs’ award to establish that it has an entitlement to an order by reason of the other party’s unreasonable behaviour.17.3 It is made clear that the making of costs’ orders under Rule 13(1)(b) should be the exception rather than the rule.17.4 In determining whether conduct has met the necessary threshold, the test could be expressed as “Would a reasonable person in the position of the party have conducted themselves in the manner complained of, and/or, is there a reasonable explanation for the conduct complained of?17.5 As a general rule, conduct prior to the issue of proceedings is not relevant in a consideration of whether the Stage 1 test of unreasonableness has been satisfied.17.6 The Upper Tribunal has indicated that vexatious behaviour designed to harass the other side rather than advance the resolution of a case is behaviour which would fall within that envisaged as meriting the making of an award under Rule 13(1)(b) but has also stated that it is not to be regarded as unreasonable for a lay person to misunderstand the law or procedure.17.7 In further illustration of the suggested approach, the Upper Tribunal has stated that pursuing points which are ultimately lost and/or an unsuccessful outcome generally is not sufficient evidence in itself of unreasonableness, whilst a decision to withdraw proceedings even at a late stage is not, without more, to be regarded as unreasonable. Even a late recognition of limited prospects of success or that the pursuit of proceedings is not the best approach is to be encouraged as the fear of an adverse costs’ order would otherwise result in matters going to a final hearing where they may otherwise not have done. 17.8. The Upper Tribunal has also indicated that, as a general rule, costs’ decisions need not be lengthy and, where appropriate, any costs award may be determined by summary assessment. Length of this Decision[18]The length of this decision is a reflection of the very extensive submissions of the parties and, in particular, those of the Applicants. In this respect, the Tribunal finds as follows:18.1 in view of the particularity of the Applicants’ claims against each of the First and the Second Respondents, it was appropriate for them to make separate responses to the Costs’ Application; and,18.2 it was neither reasonable nor proportionate for the Applicants to submit responses of 15 and 17 pages (plus attachments) to the Respondents’ responses much of which appears to be a duplication of matters already raised in the Statement of Case (which itself comprises 12 pages (plus attachments)).[19]The Tribunal disallows any revision of the Applicants’ costs to include any time/costs incurred relating to the preparation of these responses. Personal Liability of Nicholas Richardson[20]The Tribunal finds that:20.1 following the issue of the Application, it confirmed Apex Adventures Limited as an additional applicant to the Application; and,20.2 there is no personal liability for costs upon Nicholas Richardson acting in his capacity as a director of Apex in relation to these proceedings;20.3 the familial relationship between Christine Richardson, director of Lambscare, and Nicholas Richardson is of no relevance to the Costs’ Application. Unreasonable conduct[21]Exclusion of the Applicants from material discussions and refusal to engage in constructive compromise21.1 The Tribunal notes as follows:(1) much of the conduct in question occurred prior to the issue of the Application and is of no relevance in a determination of Stage 1 behaviour;(2) there is evidence before the Tribunal that the Applicants’ dissatisfaction with the Managers was known by the Respondents at and/or prior to the date of issue of the Application and may have been referenced in the Application where it states that the Managers are performing well under “difficult conditions”;(3) there was no obligation on the Respondents to involve the Applicants in any pre-issue discussions nor is there any requirement for an application under s24(9) of the Landlord and Tenant Act 1987 to be made and/or supported by all leaseholders. Section 24(9) is explicit in that an application may be made by “any person interested”.21.2 The Tribunal finds as follows: (1) a reasonable explanation for the exclusion of the Applicants from any pre-issue discussions and any failure to pursue any post-issue discussions is the difficulties in the relationships between the parties and between the Applicants and the Managers; and, (2) none of the conduct referred to under this heading satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of costs under Rule 13(1)(b).[22]Destructive conduct during proceedings22.1 The conduct in question is the application to the Registrar of Companies for the striking-off and/or dissolution of Lambscare, the management company and lessor under the leases of the various apartments at the Property. The Tribunal has previously explained to the Applicants that questions regarding the lawfulness of any striking-off/dissolution of Lambscare are outside the Tribunal’s jurisdiction.22.2 The Tribunal finds as follows:(1) the application for the striking-off and/or dissolution of Lambscare is not conduct relating to the issue and/or conduct of the Application and is not relevant conduct for the purpose of the Costs’ Application;(2) the striking-off and/or dissolution of Lambscare does not make “the Management Order unworkable” or compromise “the legal framework for the management of the Premises”, as the Applicants claim. Under the terms of the Management Order the Managers assume Lambscare’s responsibilities as management company/lessor under the terms of the leaseholders’ leases(3) if either of the above findings is incorrect, a reasonable explanation for the failure of the directors of Lambscare to notify the Applicants of the application to strike-off is the mutual lack of trust/antagonism between them and the Applicants rather than any attempt to obstruct/disrupt the Application;(4) none of the conduct referred to under this heading satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of costs under Rule 13(1)(b).[23]Continuing application in the face of evident futility/ Failure to identify or secure replacement manager/ Serious procedural unpreparedness23.1 The relevant chronology is as follows:(1) December 2023: issue of the Application;(2) May 2024: withdrawal of support for the Application by the managers with effect from 31 July 2024;(3) August 2024: variation of the Application (following the CMC on 5 August 2024) for appointment of alternative managers;(4) December 2024: stay of the Application pending confirmation by the Respondents of how/if they wish to pursue the Application (following evidence at the hearings on 9 and 17 December 2024 of no progress having been made on identifying nominees as managers);(5) August 2025: withdrawal of First Respondents as parties to the Application;(6) September 2025: confirmation by Second Respondent of intention to pursue the Application in its original terms;(7) 24 November 2025: striking-out of the Application.23.2 The conduct in question relates to the Respondents’ decision to continue the Application despite: (1) the Applicants’ claims regarding the Managers’ failures of compliance with their obligations; (2) the Managers’ notification in May 2024 that they were unwilling to remain in post after 31 July 2024; (3) the lack of success/sufficient effort by the Respondents to identify any suitable nominees to replace the Managers; and, (4) the Second Respondent’s decision in September 2025 to pursue the Application on its original terms.23.3 May – December 2024 The Tribunal finds that: (1) there was common ground between the parties that the Property requires professional management, (which appears to continue to be the parties’ position); (2) there is evidence that both Mr Armiger and Mr Richardson made efforts to identify suitable nominees as replacement managers during this period; (3) the Applicants were not absolved from any obligation to make reasonable efforts to identify a suitable nominee(s) as replacement manager(s) by reason of having secured the Managers’ appointment in the first instance or otherwise; (4) the poor state of relations between the parties and the Applicants and the Managers (for which all parties bear a measure of responsibility) contributed to the difficulty in securing a replacement manager(s); (5) the Respondents’ wish to try to secure a replacement manager(s) for the Managers is a reasonable explanation for the continuation of the Application during this period, and is not conduct which satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of costs under Rule 13(1)(b).23.4 December 2024 (1) The Tribunal finds that with regard to the hearings on 9 and 17 December 2024: (a) the Respondents were unprepared to pursue the Application at the hearing on 9 December and again on 17 December 2024 notwithstanding having been directed by the Tribunal at the hearing on 7 December 2024 as to the action required of them at the hearing on 17 December; (b) there is no reasonable explanation for this lack of preparedness on the Respondents’ part and is conduct relating to the conduct of the Application which satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of cost under Rule 13(1)(b).23.5 January – September 2025 (1) The Tribunal finds that: (a) as at January 2025, notwithstanding repeated statements from the Managers of their unwillingness to continue to act and the making of an application by the Managers for their discharge, the Respondents still wished to pursue the Application for an extension of the Managers’ term of appointment (although some reference was also made to other possible replacement managers); (b) save as above, during the period from January – August 2025, the Respondents again demonstrated a lack of understanding of what was required of them in relation to the conduct of the proceedings and of the Tribunal’s powers/jurisdiction, and it is reasonable to assume that, if the Tribunal had not raised the issue with the Respondents in August 2025, no action would have been taken by either of them in respect of the Application; (c) there is no reasonable explanation for this ongoing lack of engagement/failure to understand their obligations as the applicants to the Application and it is conduct relating to the conduct of the Application which satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of cost under Rule 13(1)(b); (d) the First Respondents’ notification in August 2025 of their wish to withdraw from the Application was reasonable; and, (e) there is no reasonable explanation for the Second Respondent’s decision to pursue the Application in its original terms, as notified to the Tribunal on 25 September 2025, and it is conduct relating to the conduct of the Application which satisfies the Stage 1 objective test of unreasonableness.[24]Contradictory positions and bad faith conduct24.1 The conduct in question relates to a compromise offer made to the Applicants in a letter dated 3 May 2024 marked “without prejudice save as to costs” and the Second Respondent’s subsequent behaviour which the Applicants claim was contradictory and raises questions as to the genuineness of the Respondents’ wish to settle the Application. The Tribunal directed the Respondents not to respond to this issue insofar as it relates to the “without prejudice save as to costs” offer as this evidence was inadmissible. The Applicants claim that the Tribunal has erred in making this direction.24.2 The Tribunal is satisfied that it did not err in its direction to the parties regarding the admissibility of the “without prejudice save as to costs” correspondence for the following reasons:(1) following receipt of Apex’s email dated 25 September 2025, the Tribunal emailed all of the parties on 7 October 2025 informing them that it was minded to strike-out the Application and requesting written representations within 7 days from its date ie by 14 October 2025. Until receipt and consideration of any representations, the Tribunal could not make any determination as to whether to proceed with the striking-out or to continue to a substantive determination of the Application. The Costs’ Application is dated 13 October 2025. It was therefore inappropriate for the Applicants to pre-empt the Tribunal’s determination to strike-out the Application by submitting the “without prejudice save as to costs” correspondence which was inadmissible as at 13 October 2025. In the event, no representations were received from any of the parties and a striking-out order has since been made by the Tribunal;(2) determination of whether correspondence is properly to be regarded as “without prejudice” is not a matter for the Tribunal. If, as the Applicants claim, there is a question as to the validity of it being labelled as “without prejudice”, then this should have been determined at the time of its receipt. The Tribunal notes from the Applicants’ Statement of Case that the Applicants appear to have been legally represented at the relevant time. They have not produced any evidence to the Tribunal that the issue was raised with the other parties and/or that the validity of the “without prejudice” label was successfully challenged. In the absence of any evidence to the contrary, the Tribunal must treat the correspondence as properly labelled as “without prejudice save as to costs”;(3) the Tribunal accepts that, following the making of the striking-out order, the correspondence may have become admissible in relation to the issue of costs. Nonetheless, the use of “without prejudice” correspondence is for the benefit of all relevant parties. It therefore requires the consent of all relevant parties to its disclosure. The Applicants have not provided to the Tribunal any evidence of such consent from the other parties.24.3 For the reasons set out above, the Tribunal maintains its position that the information disclosed set out in the “without prejudice” correspondence was not admissible at the time of its submission and/or until the parties were made aware of the Tribunal’s decision to strike-out the Application.24.4 If this is incorrect, the Tribunal is not persuaded that the Respondents’ behaviour in acting in a way that may be perceived as “contradictory” to a settlement offer is behaviour which satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of costs under Rule 13(1)(b). Adopting apparently contradictory positions in open and without prejudice correspondence/dialogue is a common feature of such negotiations.[25]Failure to comply with tribunal directions 25.1 Failure to agree a joint bundle: the Tribunal finds that:(1) it is explicit in the directions that production of a joint bundle is to be encouraged but may not prove to be possible. A failure, however regrettable, is not evidence in itself of unreasonableness; and,(2) without attributing any responsibility to any party for the state of relations between the Applicants and the Respondents, they will have heightened the degree of suspicion/concern with which the Respondents approached a bundle prepared by the Applicants as compared with that prepared by the Managers;(3) the lack of trust and/or antagonism between the parties is a reasonable explanation for the Respondents’ failure to engage with the Applicants in the preparation of a joint bundle and is not conduct which satisfies the Stage 1 objective test of unreasonableness entitling the Applicants to an award of costs under Rule 13(1)(b).[26]Failures to amend Application: this matter is dealt with in paragraph 23 of this Decision. Costs Awards[27]Having determined in paragraphs 23.4(2)(c) and (e) that there is conduct which satisfies the Stage 1 objective test of unreasonableness, the Tribunal must now decide if it should exercise its discretion to make an award of costs.[28]The Tribunal determines that it is appropriate to make an award in respect of the following conduct:(1) the Respondents’ lack of preparedness with regard to the Application at the hearings on 9 and 17 December 2024;(2) the submission of witness statements in January 2025 which amounted to a reversal of their position as presented to the Tribunal since August 2024;(3) the Respondents’ lack of engagement with the proceedings/lack of understanding of their obligations following the stay of the Application in December 2024; and,(4) the Second Respondent’s decision in September 2025 to pursue the Application in its original terms.[29]The Tribunal finds that:(1) it is appropriate to determine the awards by way of summary assessment and by reference to the Applicants’ Schedule of Costs for the period from 10 December 2024 – 13 October 2025 which is attached to the Costs’ Application;(2) there appear to be repeated examples in the Schedule of Costs of a duplication of time/costs by the Applicants for which no explanation has been provided eg it is reasonable to expect that a review of documents and/or correspondence could be carried out by one of the parties and summarised to the other; and,(3) time incurred in research and/or seeking legal advice is not allowable.[30]The Tribunal orders the Respondents to pay a total sum of £285 to the Applicants made up as follows:(1) in respect of the Respondents’ lack of preparedness for the hearings on 9 and 17 December 2024, an award of £95 based on a total of 5 hours’ time;(2) reading/reviewing the Respondents’ witness statements in January 2025, an award of £57 based on a total of 3 hours’ time; and,(3) in respect of time incurred May – August 2025 reading/reviewing and/or responding to correspondence from the Tribunal, an award of £133 based on a total of 7 hours' time.[31]The Tribunal orders the Second Respondent to pay the sum of £114 to the Applicants in respect of a total of 6 hours spent by the Applicants on considering and/or responding to the Tribunal in relation to the striking-out of the Application.[32]As stated above, the Tribunal considers that the length of, and the amount of time spent by the Applicants on the making of the Costs’ Application was disproportionate and unnecessary, particularly when viewed in the context of the level of awards made in paragraphs 30 and 31 above. Nonetheless, the Tribunal has determined that in a small number of instances the Respondents have acted unreasonably and it therefore makes a further award of £95 based on a total of 5 hours’ time in respect of the preparation of the Costs’ Application payable by the Respondents to the Applicants .