St John’s Wood Leases Ltd v O’ Neil [2012] UKUT 374 (LC)

IN THE MATTER OF AN APPEAL AGAINST A DECISION
UT Neutral citation number: [2012] UKUT 374 (LC)Case No LRX/86/2011Venue OF A LEASEHOLD VALUATION TRIBUNAL FOR THE, LONDON RENT ASSESSMENT PANEL, BETWEEN ST JOHN’S WOOD LEASES LIMITED Appellant, and, JOANN O’NEIL Respondent, Re: Flat 4,, Athena Court,, 2 Finchley Road,, London,, NW8 6DP, Before: His Honour Judge Gerald and N J Rose FRICS, Sitting at 43-45 Bedford Square, London WC1B 3AS, Cecily Crampin instructed by Butcher Burns LLP for the Appellant, The Respondent in person., The following cases were referred to in this decision:, Iperion Investments Corporation v Broadwalk House Residents Limited [1995] 2 EGLR 47, The Tenants of Langford Court (Sherbani) v Doren Limited LRX/37/2000, Schilling v Canary Riverside Development PTE Limited LRX/26/2005, The Church Commissioners v Derdabi [2010] UKUT 380 (LC) LRX/29/2011, Roache v News Group Newspapers Limited [2003] 1 WLR 60, Lucie M v Worcestershire County Council and Evans [2002] EWHC 1292 (admin), Flannery v Halifax Estate Agencies Ltd [2000] 1WLR 377, English v Emery Reimbold & Strick Limited [2002] 1WLR 2409, South Buckinghamshire DC v Porter (No 2) [2004] 1WLR 1953, DECISION, Introduction
Between
St John’s Wood Leases LtdO’ Neil
Date 7 September 2012
[10]“10. The principles applicable to challenges of the Tribunal’s decision are not unique to this Tribunal, but since several cases in relation to its decisions were cited I summarise their effect. First, proper and adequate reasons must be given, so that they are intelligible and deal with the substantial points that have been raised, and the reasons should deal, in short form, with the substantial issues raised in order that the parties can understand why the decision has been reached : S v Special Educational Needs Tribunal and the City of Westminster [1996] ELR 102 at 112; The Queen on the application of B v Vale of Glamorgan CBC [2001] ELR 529, 536: Crean v Somerset CC [2002] ELR 152, 164 to 165. Secondly, and as a result of the first principle, the absence of reasons to explain why a case was rejected may make the decision appear irrational: Crean at 167. Thirdly, where reasons are inadequate, it is not normally appropriate that the reasons should be amplified on the appeal to the High Court: Oxfordshire CC v GB [2002] ELR 8 , at 11 (C.A.). 11. Fourthly, a decision must be sufficiently specific and clear as to leave no room for doubt as to what has been has been decided: London Borough of Bromley v Special Educational Needs Tribunal [1999] ELR 260 , 297 (C.A.)…”. 20. Those principles are broadly consistent with the three authorities considering the nature and extent of the duty of the judge to give reasons to which we were referred. In Flannery v Halifax Estate Agencies Limited [2000] 1 WLR 377 the Court of Appeal said at 381G to 382C:
“We make the following general comments on the duty to give reasons. (1) The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know (as was said in Ex parte Dave ) whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not. (2) The first of these aspects implies that want of reasons may be a good self-standing ground of appeal. Where because no reasons are given it is impossible to tell whether the judge has gone wrong on the law or the facts, the losing party would be altogether deprived of his chance of an appeal unless the court entertains an appeal based on the lack of reasons itself. (3) The extent of the duty, or rather the reach of what is required to fulfil it, depends on the subject matter. Where there is a straightforward factual dispute whose resolution depends simply on which witness is telling the truth about events which he claims to recall, it is likely to be enough for the judge (having no doubt summarised the evidence) to indicate simply that he believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases. (4) This is not to suggest that there is one rule for cases concerning the witnesses’ truthfulness or recall of events, and another for cases where the issue depends on reasoning or analysis (with experts or otherwise). The rule is the same: the judge must explain why he has reached his decision. The question is always, what is required of the judge to do so; and that will differ from case to case. Transparency should be the watchword.” 21. As was put by Lord Phillips MR (as he then was) in English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 : “We would put the matter at its simplest by saying that justice will not be done if it is not apparent to the parties why one has won and the other has lost”
. In South Buckinghamshire DC v Porter (No 2) [2004] 1 WLR 1953 in the House of Lords, Lord Brown of Eaton-under-Heywood considering the adequacy of reasons for a planning decision, said at paragraph 36:
“The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the “principal important controversial issues”, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced…”
. Proceedings before the LVT Introduction 22. Before considering the section 20C and Regulation 9 orders it is first necessary to summarise the background to the Application, the Application itself and the subsequent procedure and then the issues before the LVT and how and why they were determined in the way in which they were. Background to dispute 23. The broad background to the Application appears to be that Athena Court had in some respects been poorly managed before the appointment of new managing agents Rennie & Partners in November 2009 such that the Respondent was not satisfied that certain items of service charge had been reasonably incurred in the years prior to their appointment. There was also a dispute concerning the penthouse flat situated on the seventh and eighth floors of Athena Court which had been extended over the roof, with the result that it was the Respondent’s view that its service charge contribution of 6.82% should be increased and her (and other tenants’) service charge contribution of 4.5% should be reduced. The Respondent was also concerned as to the scope and cost of proposed external and internal major works to be paid on account for the service charge year ending 30 th June 2011 and their apportionment between the penthouse and the remainder of the building and their recoverability through the service charge. The Application as originally drawn 24. The Application as issued was confined to challenging the reasonableness of certain items of expenditure in three service charge years ending 30 th June 2007, 2008 and 2009, no specific complaints being advanced in respect of 2010, and also as to the reasonableness of the scope and costs of the external and internal major works to be levied as part of the 30 th June 2011 service charge. 25. On 9 th November 2010, there was a pre trial review at which various directions were made (“the PTR”). The order recorded that both parties wished to consider mediation and ordered that should they wish to take advantage of the LVT’s mediation scheme they should inform the LVT by 15 th December 2010. Neither party took advantage of this order, and there has been no attempt to mediate. Widening the ambit of the Application 26. In November 2010, after the PTR, the Respondent sought permission of the LVT to enlarge the matters in issue to include challenging the reasonableness of certain items of expenditure in the four service charge years ending 30 th June 2003, 2004, 2005 and 2006 and also for variation of the service charge contributions paid following the penthouse roof extension. The LVT responded on 26 th November 2010 that this would have to be determined at the substantive hearing, which is what the Respondent elected to do rather than issue a new application. 27. The Respondent then served her Statement of Case setting out her case in respect of (a) variation of the service charge contributions following the penthouse extension and also her challenges to the reasonableness of the historic expenditure for (b) the four service charge years ended 2003, 2004, 2005 and 2006 and also (c) the three years ended 2007, 2008 and 2009 as well as the prospective expenditure for the (d) internal and (e) external major works to be collected on account for the service charge year ended 2011. There were therefore five issues on which the Respondent sought the determination of the LVT, only three of which ((c), (d) and (e)) had been raised in the Application as issued. 28. The Appellant duly responded to all five issues, and the Respondent then amalgamated both parties’ Statements and her own Reply to the Appellant’s Statement into a single composite document with all relevant documents exhibited to each section of it which was produced to the LVT in a bundle filling one lever arch file (“the Composite Statement”). Precisely how the parties’ positions developed is unclear as that is all that was before the LVT and is before us: the original Application and other documents in response are not before us, nor were they before the LVT. The hearing before the LVT 29. The parties therefore attended the hearing on 14 th and 15 th February 2011 having prepared for all five issues to be determined or at any rate for rulings to be made as to whether the new issues would be determined. The Respondent represented herself. The Appellant was represented by its building surveyor Mr Sautschak and property manager Ms Suant, both of Rennie & Partners, and also by a director of the Appellant company. 30. The LVT ruled that it had no jurisdiction to determine the (a) variation to service charge percentages and would not deal with (b) the reasonableness of the four service charge years 2003, 2004, 2005 and 2006 because they did not form part of the original Application. The challenges to the (d) internal major works were not pursued as the Respondent had adduced no evidence in relation thereto. That left two remaining issues for resolution, the reasonableness of the (c) 2007, 2008 and 2009 expenditure and of the (e) external major works, which is what the bulk of the nineteen page Decision deals with. The Decision – external major works 31. There were four categories of challenge to the external major works raised by the Respondent which are dealt with in nine pages of the Decision comprising paragraphs 13 to 59. First , the Respondent said that the costs of the external works were either the responsibility of the penthouse lessee because they were works to the penthouse itself or fell within its repairing covenants (essentially a question of interpretation of the various leases) or they were over-specified and therefore too high. The Appellant adopted a broadly neutral stance in respect of the interpretation of the leases but did put forward arguments in relation to some of the other matters. In broad terms, the LVT accepted the Respondent’s interpretation of the leases and found that of the twelve items falling within this category, she had made out five of them which should be disallowed in total. In respect of one or two matters the LVT also accepted the Respondent’s case that they had been over-specified and therefore reduced the amount claimed. Of the £109,070 claimed for these items, the Respondent challenged £45,718 but succeeded in respect of £10,863. 32. Secondly , the Respondent said that the £5,946 works planned to the tank roof were over specified and therefore unreasonable. The LVT rejected the Respondent’s case and accepted the Appellant’s although noting a minor agreement to apportion by the Appellant. Thirdly , the Respondent challenged a further ten items totalling £107,645 each of which the Appellant responded to in varying amounts of detail, sometimes retendering for the works much of which the Respondent did not accept in her Reply. However, before the LVT she agreed virtually all of these sums albeit sometimes in slightly different amounts, £100,680 ultimately being allowed and £6,965 [1] being reduced by agreement. Fourthly , the Respondent said £17,451 of planned roof repairs were caused by the negligence of the penthouse lessee and also challenged £15,994 of other roof works. The first was not proceeded with, or “withdrawn” as described by the LVT, at least in part because the LVT has no jurisdiction to determine issues of negligence. The second was not proceeded with, or “withdrawn” as described by the LVT, presumably because the Respondent accepted the Appellant’s explanation in their Statement of Case. 33. We have summarised these matters in Schedule A hereto (“Schedule A”): noting that it is merely a summary which of necessity loses some of the nuances contained in the Decision and the Composite Statement. It is merely intended as a “ready reckoner” to see the extent to which the Respondent was successful, the reasons for success being summarised above but detailed in the Decision when understood in the context of the evidence before the LVT, principally the Composite Statement. The Decision – challenges to the 2007, 2008 and 2009 service charges 34. The Respondent challenged expenditure in service charge years 2007, 2008 and 2009 on the basis either that there was no evidence that certain sums claimed had been incurred or that their amount was unreasonable because the works had not been done properly. The Appellant by and large was unable to challenge these allegations because it had been unable to obtain the underlying invoices or other evidence (if it ever existed) from the previous managing agents. Perhaps unsurprisingly, the Respondent succeeded in respect of the vast majority of the items challenged, albeit that she did concede one or two items as did the Appellant who was successful on one or two issues. The findings of the LVT occupy five pages of the Decision, paragraphs 60 to 80, and are summarised in Schedule B hereto (“Schedule B”), again with the caveat already mentioned. Discussion and decision – section 20C 35. In our judgment, there are three principal reasons why the Decision should be set aside. First, it is not possible to understand why the LVT found that the Respondent had “overall succeeded”. Sometimes the reasons for a finding will be readily apparent and naturally flow from the preceding findings of an LVT, for example, where the LVT has accepted the overwhelming majority (whether by number or value) of the tenant’s challenges to the landlord’s service charge claims for reasons connoting unreasonableness. This is not one of those cases. What precedes paragraph 81 of the Decision are a complex of findings the upshot of which is that of the five issues on which the Respondent sought the determination of the LVT, only two were proceeded with and of those two she was only partially successful with respect to the external works and was significantly more successful with respect to the challenges to the 2007, 2008 and 2009 service charges. The LVT does not explain why it found the Respondent to have “overall succeeded” so that that finding in our judgment is of itself irrational ( Lucie M ( supra )) and it is in any event impossible to know how and why it reached the decision it did ( Flannery ( supra )). 36. Secondly, it follows from what is said in the previous paragraph that there is no material which could reasonably or properly support a finding that the Respondent had “overall succeeded”. We are conscious that matters may appear differently to the first instance tribunal hearing an application. However in this case the Respondent for whatever reasons did not proceed with three of the issues she wished to pursue, in respect of which all parties attended ready and prepared to deal with those substantive issues. Of the two issues which were heard, the Respondent can not be said to have succeeded in respect of even the majority of them as is clear from the summary already given and from the summaries, with all their attendant caveats , appearing in Schedules A and B hereto. 37. Thirdly, by exercising its discretion on the basis that the Respondent had “overall succeeded” it betrayed an approach to the exercise of discretion as one in which costs automatically follow the event without providing any explanation or analysis for the reasons behind its finding or why in this case it was just and equitable that costs should follow the event. As already noted, in some cases it may well follow and be sufficiently clear from the preceding findings that the tenant has overall succeeded, and why, such that the exercise of the section 20C discretion will be clear. That can not be said in this case. Where a landlord has been put to the cost of attending and preparing for a hearing for three (of five) issues which are not proceeded with, there would have to be compelling reasons to justify a section 20C order in respect of those costs which would require clear and cogent explanation by the LVT, otherwise the jurisdiction would be being used as an instrument of oppression by tenant not landlord. It appears that the LVT did not even consider this aspect of the matter before it. 38. Those reasons are in our judgment sufficient to require that the section 20C order and repayment of the £500 orders be set aside. It is therefore not necessary for us to consider the plethora of other points raised by the Appellant as grounds for setting aside those orders, save to say that it will be clear from the reasoning behind our exercise of the discretion which follows below that the LVT erred in failing to properly consider and analyse the relative degrees of and reasons for “success”. The question is to be considered afresh by this Tribunal by way of review, to be based solely upon the evidence before the LVT, it of course not necessarily following that this Tribunal will reach a different conclusion. In the circumstances of this case, however, we find that it is just and equitable that 10% of the costs of the Appellant are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the Respondent or any of the other 19 tenants referred to above. Our reasons are as follows. 39. The starting point is to identify and consider what matters were in issue, the extent to which the Respondent succeeded and why. In this case, this includes not only those matters raised in the Application but also those which the Respondent sought to raise, because the Appellant had to and in fact did deal with all such issues. With regard to the three issues not pursued at hearing , in our judgment it is wrong in principle to deprive the Appellant of its related costs unless there is some good reason making it just and equitable to do otherwise. The Respondent has, in our judgment, failed to advance any so that the Appellant is to be treated as having been wholly successful in respect of all three issues for the purpose of deciding how to exercise the section 20C discretion. Specifically, we reject the Respondent’s argument that as a layman she did not understand that the LVT had no jurisdiction to vary the penthouse service charge contributions or the procedural requirement that claims form part of an application and not be tacked on later: it is incumbent upon an applicant to familiarise him or herself with jurisdictional and procedural rules. If a landlord is put to costs of dealing with ultimately aborted issues it should not, save in the most exceptional of circumstances, be prevented from recovering those costs through the service charge, otherwise the tenant can raise issues with impunity. We reject the Respondent’s argument that the costs of dealing with the penthouse variation issue and her challenges to the 2003 to 2006 service charges should be dismissed as being de minimis : it is clear from the documentation before the LVT that the Appellant did spend at least a modest amount of time in responding to these two items. 40. We also reject the Respondent’s argument that she did not proceed with her challenges to the costs of the internal works because the Appellant agreed to postpone their recovery until the 2013 service charge year. Not only does this go behind the LVT’s Decision that she did not proceed due to lack of evidence, but ignores the fact that the Respondent still had to spend time and money dealing with her challenges. Had that agreement not been reached she would have been unable to proceed with her challenges before the LVT as she had adduced no evidence in support of her challenges. It would be unreasonable, and unjust, if the Appellant were prevented from recovering its costs of dealing with her challenges or queries relating to the internal major works. 41. We now turn to the external major works . Undoubtedly, these involved the bulk of the evidence, hearing time and therefore preparation. Whether these issues are considered numerically by items challenged or by amount, it is plain that it is the Appellant who overwhelmingly succeeded. The Respondent challenged a total of twenty-six items claimed in varying amounts and for varying reasons but succeeded in respect of only seven by LVT order and ten by agreement; of the £256,106 claimed, the Respondent challenged £186,808+ but succeeded in getting only £10,863 disallowed by the LVT and a further £6,965 reduced by agreement by the Appellant: we refer to Schedule A which breaks down the Decision but organised to reflect the four categories referred to above. 42. Within those bald, and broad, figures are some important points. First, the first twelve items were principally (but not solely) matters of interpretation of the penthouse lease itself in the context of the other leases in order to determine whether the works were to the demise or the retained land and whether part of the penthouse tenant’s repairing covenant or the landlord’s. Those arguments were won by the Respondent. The Appellant submitted that it should not be prevented from recovering its costs as these issues nonetheless had to be resolved. That argument might hold sway if the landlord had itself initiated the application or at any rate sought the ruling of the LVT between competing interpretations of the various leases which would then be binding on all lessees. That was not so in this case. As the LVT recorded, the Appellant adopted a neutral stance in the face of only one possible construction being advanced, namely, that being propounded by the Respondent. Whilst the Appellant had to consider those arguments, there is no reason we can see why it should not have conceded the arguments well before the hearing which would have avoided some of the costs. When put in the balance of weighing countervailing factors affecting exercise of the section 20C discretion, this should count against the Appellant. 43. Secondly, in respect of some of the items, the Respondent successfully challenged the scope, not the need to effect, repair work. There was no suggestion by the LVT that the Appellant should not have scoped the work as it did or was otherwise being unreasonable or unrealistic or in some way bumping up the scope of the works or their costs to more than what was reasonably required to do an adequate or reasonable job. In some respects, such as the fire escapes, the Appellant provided alternative scopes of work. We accept Ms Crampin’s submission that it does not flow from the fact that the LVT opted for a cheaper option or narrowed the scope of the works that the Appellant should not be able to recover its costs. Rather, it demonstrates that the management of a residential building is an art not a science where there will frequently be more than one means of resolution, and a landlord should not ordinarily be penalised because it has put forward different options or the scope of the work has been narrowed or altered. There may of course be some instances where the landlord should be penalised, but this is not one of those cases. This should therefore not count against the Appellant. 44. Thirdly, in respect of ten items, the Respondent originally challenged the items but at trial agreed to the sums claimed or relatively modest reductions, sometimes because she accepted a full and proper explanation from or further information provided by the Appellant not previously given, sometimes because the landlord had re-tendered and sometimes because there was an informal arrangement or concessions as to future apportionment or such like. The Respondent submitted in respect of these, and some other, items that they all should have been sorted out well before the hearing. That may be so in some cases but in our judgment that can not be said in this case. Had the Appellant taken those steps before issuance of the Application it would have been properly entitled to recover its costs via the service charge: faced with queries or challenges, a reasonable landlord acting reasonably will respond by explanation, provision of further information or sometimes retendering. The fact that it took those steps, or some of them, after the Application was issued has not caused any duplication or escalation in costs. 45. Indeed, it appears from the Compilation Statement that much of what has passed between landlord and tenant is what one might well expect as part of the normal to-ing and fro-ing and give-and-take between landlord (by managing agent) and tenant. Whilst it is preferable for such to be conducted prior to issuance of an application, the fact that it is done afterwards has not altered costs and in this case has most likely served to focus the parties’ minds on the real issues. Many of the issues relating to the external major works were, so far as we can tell, raised for the first time within the Application so that it can not sensibly be said that the Respondent should have dealt with them before. In those circumstances, it would in our judgment be quite wrong to deprive the landlord of its costs. Otherwise the landlord is put in an impossible position of having to deal responsibly with challenges properly made by tenants yet unable to recover the costs of dealing with same if the tenant accepts the landlord’s response. That in our judgment would result in an oppressive use of the section 20C jurisdiction unless of course there are factors (all absent here) to suggest that the landlord has in some way behaved improperly. This therefore should not count against the Appellant. 46. Fourthly, the £17,451 challenged in respect of the roof terrace was based upon an allegation that those works were necessitated by negligent workmanship by the penthouse tenant’s workmen so were his responsibility. This was withdrawn because, the Respondent accepts, the LVT has no jurisdiction to deal with such allegation. Albeit a relatively minor matter in the overall scheme of the Application, what it does is demonstrate that there would inevitably have been a hearing before the LVT because, along with other issues already mentioned, the Respondent wanted to pursue them. It is unreal, for reasons already stated in respect the Respondent’s failure to familiarise herself with the jurisdictional and procedural rules pertaining to the LVT, for the Respondent to dismiss this as being of no consequence. Self-evidently, this can not count against the Appellant. Fifthly, the £15,994 challenged in respect of the rotunda roof was not pursued before the LVT. Again, this should not count against the Appellant. 47. We now turn to the 2007 to 2009 service charge challenges , the Respondent can properly be described as having been successful in reducing the £31,421 claimed by almost 50% to £16,169: see Schedule B. She succeeded principally because the Appellant was unable to produce evidence to substantiate that the works had been done or were reasonably necessary or because they were not recoverable under the service charge provisions of the leases, albeit in respect of some items the Appellant did concede eight of the items challenged and the Respondent conceded that five were recoverable, the LVT having to determine one against her. 48. In respect of those items where the Appellant simply did not have the proof to establish that the money had been expended or reasonably incurred, in our judgment it can not properly be said that the Appellant has acted reasonably. Put bluntly: in this case since the Appellant can not prove that it has spent money or incurred costs reasonably or at all which it seeks to recover via the service charge, it would be unjust and inequitable for it to then claim its costs of failing to recover them as that aspect of the hearing was pointless. It is not, in our view, an answer for a landlord (as here) to justify its failure to prove expenditure by an inability to get the documentation or proof from the previous managing agents. It is the ultimate responsibility of the landlord to maintain sufficient documentation and employ reasonably competent managing agents to maintain records for tenants to inspect. Neither, in this case , do we think it reasonable of the Appellant to have sought recovery of items which the LVT found clearly did not fall within the service charge provisions. This should therefore count against the Appellant. It must, however, be borne firmly in mind that even had the Appellant not contested those items which it should not have, there would still have been a hearing, as is evident from the fact that it was only at the hearing that the Respondent conceded five of her challenges and the LVT decided against her in respect of one of them. It is not an answer for the Respondent to say that had the parties been acting reasonably some accommodation would have been reached without resort to the LVT because it was not, and the LVT’s order for mediation was not taken up by either party. 49. The final question is how we reach the figure of 10%. The Respondent was successful in approximately 15% of the total amounts she challenged (£33,080 [2] of the total challenged of £224,175). However, a neat scientific or arithmetical calculation is not possible in this case because whichever way the figures are calculated they would not give adequate weight to the underlying reasons as to why and how the Appellant and Respondent were successful in respect of the various different categories. It does not reflect the three items not pursued. Neither does it reflect that the bulk of the success (£15,252 against £31,421 challenged) was achieved in relation to challenges to the 2007 to 2009 service charges, when compared with the relatively modest success (£17,828 against £192,754 challenged) which consumed the vast bulk of the evidence, preparation and court time. Nor does it reflect that items totalling £134,125 of the £192,754 of external works challenged were agreed or withdrawn or an accommodation was reached. Nor that there would have to have been a hearing in any event. But it would in our judgment be equally wrong to ignore the fact that in respect of the penthouse and 2007-2009 service charge challenges the Appellant acted unreasonably. Taking all of those factors into account, the view we have reached is that 10% is the appropriate percentage of the Appellant’s costs which it should be prevented from recovering via the service charge pursuant to section 20C. Decision – Regulation 9 50. In our judgment the Appellant should not be ordered to reimburse the Respondent her £500 fee because she was only partially successful and it is inevitable that she would have issued the Application and incurred the tribunal fees in any event. In this respect, we have ignored the issues which were not part of the Application as originally drawn as being irrelevant to the issuance fee. However, in respect of the other issues, the internal major works were not pursued and she achieved only limited success in respect of the external works. This conclusion is not altered by the fact that she was overwhelmingly successful in respect of the 2007-09 service charge challenges. Section 20C – the costs of the appeal 51. Given that the appeal has been successful, it would be unjust and inequitable for the Appellant to be barred from recovering its costs of the appeal via the service charge. We therefore refuse the Respondent’s application for a section 20C order. That said, the Respondent did accept that if the appeal were even partially successful it would be inappropriate for a section 20C order to be made as such would have been justified and therefore the associated costs reasonably incurred. Dated: 26 October 2012 His Honour Judge Gerald N J Rose FRICS SCHEDULE A – external major works Sums alleged to be the responsibility of the penthouse lessee: Amount claimed Amount challenged Amount allowed Prelims 18,200 2,093 18,200 Scaffolding 33,580 3,862 33,580 Security gates 280 280 *0 Penthouse extension roof 4,420 4,420 *0 Tank houses 3,400 3,400 3,400 Tank room access 4,790 4,790 4,790 Fire escape 15,192 1,899 *13,293 Roof terrace access door 400 400 *0 Painted metalwork 720 720 *570 Painted fire escape 7,228 3,154 *3,874 Joinery varnished 860 700 *500 Contingency 20,000 20,000 20,000 Totals: 109,070 45,718 98,207 * denotes Respondent successful. £1,899 represent 1/8 th of the amounts challenged (top floor of 8 storey block). £4,074 represents result of Respondent’s successful challenged £7,288 as over-specification but the LVT allowed the Appellant’s alternative option but apportioned by 1/8 th . Within the £20,000 contingency, supervision was to be apportioned. Overspecified (but small apportionment agreed): Tank roof 5,946 Unstated 5,946 Totals: 5,946 Unstated 5,946 Sums originally challenged but agreed by Respondent at trial: Satellite dishes 15,600 15,600 10,638 Concrete repairs 10,000 10,000 9,400 Roof cables and ligntning conductor 2,340 2,340 2,340 Overhaul of windows 4,778 4,778 3,375 External lighting – general 2,300 2,300 2,300 External lighting – rear landing 5,760 5,760 5,760 External door lights 350 350 350 External entrance lights 930 930 930 External car park lights 923 923 923 Painted woodwork 1,664 1,664 1,664 Provisionals 63,000 63,000 63,000 Totals: 107,645 107,645 100,680 Withdrawn by Respondent at trial Roof terrace roof 17,451 17,451 17,451 Rotunda roof 15,994 15,994 15,994 Totals: 33,445 33,445 33,445 Grand totals: 256,106 186,808+ 238,278 Plus unstated: 192,754 SCHEDULE B – 2007 to 2009 service charges * denotes LVT recording that agreed by Appellant ** denotes LVT recording that agreed by Respondent Amount claimed Amount challenged Amount allowed Unbloc drain contract 4,303 4,303 0 Other drain repairs 4,376 4,376 *0 Management fees 16,227 Unstated 14,604 Legal costs (2008) 690 690 *0 Legal costs (2007) 470 470 *0 Legal costs (2008) 605 605 0 Lift repairs (2008) 1,057 1,057 0 Cleaning (2009) 716 716 *0 115 115 **115 610 610 195 Repairs (2009) 128 128 *0 218 218 **218 86 86 **86 139 139 *0 217 217 **217 Survey fees 734 734 **734 431 431 *0 Lift repairs (2009) 299 299 *0 Totals: 31,421 15,194 16,169 Plus unstated 31,421 [1] That is, £107,645 - £100,680 reduced by agreement. [2] £10,863 (penthouse) + £6,965 (agreed reduction) + £15,252 (2007/09 service charge).

Cited in 2 later judgments