DAVID EDWARD ACTON v CHRISTINE ACTON (No Respondent) LRA/34/2001

UPPER TRIBUNAL

LANDS CHAMBER

LRA/34/2001

Case No LRA/34/2001

Between

DAVID EDWARD ACTONApplicant

CHRISTINE ACTON (No Respondent)Respondent

Before

Decision of His Honour Judge Michael Rich QC

Date 17 December 2001

Property: 83 Glendon Road, Erdington, Birmingham B23 5HQ, Decision of His Honour Judge Michael Rich QC

[1]This is an appeal against the decision of the Leasehold Valuation Tribunal (“LVT”) dated 6 August 2001, in respect of the determination of the reasonable costs to be borne by the purchaser of the freehold of 83 Glendon Road under the Leasehold Reform Act, 1967. No appeal is made in respect of the decision as to the purchase price, and the appeal is exclusively as to the determination of the costs to be borne in accordance with s.9(4) of the Act.

[2]The respondent has taken no part in the appeal, which has proceeded on the basis of written submissions and a direction by the Tribunal that the appellants should lodge:(i) copies of documents relied upon;

(ii) signed witness statements of any matters of fact;

(iii) any submissions of law, preferably accompanied by copies of any authorities which the appellants wished to draw to the Tribunal’s attention.

[3]Before the LVT, it appears that the appellants sought a determination that £250 plus VAT was to be borne by the respondent in respect of a valuation under para (e) of s.9(4) and £650 plus VAT in respect of solicitors’ costs in respect of which the LVT was, according to paragraph 14 of their Decision, provided with an itemised schedule. The only schedule placed before this Tribunal is of hours spent between 12 December 2000 and 21 May 2001 and of work apparently carried out on the days referred to in that schedule.

[4]The LVT refused any costs in respect of the valuation on the ground that:

“section 9(4) does not entitle the [present appellants] to recover costs where those costs were not incurred in pursuance of a leaseholder’s notice of claim. Since the notice of claim was dated 30 November 2000, it follows that the costs incurred in respect of the valuation of the subject property in July 2000 are not recoverable ..”

[5]The Tribunal has been provided with an unsigned witness statement attached to a signed statement by Mr Tom Sloan FRICS, which latter says that he “contend[s] for the payment of the fees of £250 plus VAT under section 9(4)(e) of the Leasehold Reform Act, 1967 in respect of surveyor’s valuation fees.” That unsigned statement does not seek to address the LVT’s reasons for refusal, but confirms that the valuation was indeed made before the service of the notice in response to Mr Knott’s enquiry about the price to be paid for the freehold.

[6]S.9(4) provides for reasonable costs to be borne by the respondent only “so far as they are incurred in pursuance of the notice”. Costs incurred before the notice are not incurred in pursuance of it. I therefore dismiss the appeal in respect of the costs of valuation. 2

[7]The LVT held at paragraph 37 of their Decision that the present appellants “are entitled to recover “administrative costs” under paragraphs (a) and (c) and “conveyancing costs” under paragraph (b).” But in determining the quantum they held that “such costs should properly be discounted to reflect Mr Acton’s status as a “solicitor litigant …” They therefore determined the reasonable costs incidental to the matters set out in paragraphs (a), (b) and (c) of s.9(4) in the sum of £275 (plus VAT if appropriate).

[8]The Tribunal has been provided with a signed witness statement of David Edward Acton who says that “Mr Acton was not the freeholder. The freeholders were himself and his wife jointly” and addressed argument as to whether his costs should be “discounted”, presumably from a figure of £650 plus VAT and disbursement of £8 in respect of office copy entries and filed plan”; said to be “as per our submission to the Panel [i.e. the LVT]”. The submissions, dated 29 June 2001 however appear to be directed exclusively to what has been allowed in other cases, and I can find no evidence relating the sums claimed to the relevant paragraphs of s.9(4).

[9]If, as I guess the £650 sought is in respect of the 10 hours scheduled in the document sent to the Tribunal, at the rate of £65 per hour, it is apparent that 7 hours and 40 minutes were spent not on any of the matter listed in the relevant paragraphs of s.9(4) but in preparing submissions as to reasonable costs for the LVT. As the LVT correctly points out at paragraph 35 of their decision the costs incurred in respect of the application to the Tribunal are not recoverable. Whether that excludes all costs incurred after the application on 12 March, 2001, depends upon the precise work, but it seems likely from the schedule of the work which has been sent to the Tribunal that there was no work after that date which was recoverable under s.9(4).

[10]If the time spent on matters within the paragraphs was only 2 hours 25 minutes, then it would appear that, far from making a discount, the LVT awarded more than the claimed rate of £65. On the material which the appellants have elected to place before me, I cannot tell whether this is so. I will not therefore merely dismiss this appeal, but will allow a further 21 days from the date of this Decision for the appellants to provide evidence of the costs actually and reasonably incurred under paragraphs (a) to (c) of s.9(4). Unless further evidence is submitted within that time, the appeal, as a whole, will be dismissed.

[11]Since, as I apprehend, the real concern of the appellants is to have a decision of this Tribunal as to whether the solicitors’ costs recoverable should be “discounted” from the full profit costs chargeable by a solicitor to a client with whom he has no relationship, it may be helpful both to the appellants and possibly to the LVT for me to state what I take to be the relevant principles. The entitlement is to(1) the “reasonable” costs

(2) “incidental” to the matters listed in the paragraph (3) “incurred in pursuance of the notice”. The appellants must therefore show what costs they have actually incurred. No bills have been produced. They must show that the costs are incidental to the listed matters. As I have observed such evidence as has been placed before the Tribunal, indicates that the majority is not so incidental. Finally, and in this context, most importantly the costs must be reasonable. If a solicitor engages in property speculation, it may well not be reasonable that he should recover legal costs as if he was acting solely in the course of his legal practice. That would remain true whether he acted alone or together with his wife. How much less he should be 3 allowed to recover than he might reasonably charge an independent client, is a matter for judgment upon the evidence, as to which the Tribunal has received none. Dated: 17 December 2001 (Signed): His Honour Judge Michael Rich QC 4