“On30 Sept 2022 the Applicants indicated above were sent a final service charge account by Network Homes for April 1 2021 to March 31 2022. The increase charged by Network Homes amounts to 42%, and this is on top of our estimated service charge for that year that Applicants have already paid. All Applicants requested that Newtork [Network] Homes provided an application for such costs, in terms of budget apportionment, actual costs and S22 that Network Homes need to serve to the managing agents. The budget apportionment figures sent to the Applicants don’t match and do not coincide with the service charge calculations. The S22 was not provided (Flat 203 requested S22 for 2020 year in November 2021. It has been 13 months, and still nothing.)”
“We believe that the amount that we pay for the service charge is unreasonable and unfair, considering the poor services (especially throughout the pandemic) and evidence (supporting documents not sent). We would like to know how the service charges were spent and why it has increased so sharply last year. All flats have emailed Network Homes asking for clarification; since we were sent a final account we thought that getting the answers to these questions would be easy, but we are struggling to get even the simplest questions answered.
“Outgoings 3.3.1 To pay Outgoings. 3.3.2 To refund to the Landlord on demand (where outgoings relate to the whole or part of the Building or other property including the Premises) a fair and proper proportion attributable to the Premises, such proportion to be conclusively determined by the Landlord (who shall act reasonably). 3.3.3 To pay the sums due to the Superior Landlord under the Superior Lease.”
“Outgoings means (in relation to the Premises) all existing and future rates, taxes, charges, assessments, impositions and outgoings whatsoever (whether parliamentary or local) which are now or may at any time be payable, charged or assessed on property, or the owner or occupier of property.”
“1. The Applicants in this matter are the leaseholders of 45 Millharbour, London, E14 9TR and they bring this application for a determination of reasonableness as they consider that, for the period from 2019 to date the service charges which they have paid are an unreasonable amount. On that basis the Applicants seek a determination of reasonableness in respect of the charges levied in the years to November 2019-March 2020, April 2020-March 20[2]1, April 2021-March 2022 and April 2020-March 2023.”
“8. The Applicants rely on the following parts of the Lease to the apartments: 11 (i) Schedule 7 Clause 1: This requires the Management Company to provide an Account of Estate Service Charge Costs. This has now been provided however, this is significantly late. (ii) The Managing Agent has throughout the Tribunal process, failed to provide data to the Respondent in a timely fashion which is indicative of their general lack of care and attention. (iii) Schedule 7 Clause 1 h; This requires the Management Company to hold an annual meeting to discuss matters pertaining to the previous service charge year. The Management Company is in breach of this covenant. (iv) 3.2: The Applicants will state that the Service Charge Certificate fails to give a “fair summary” of the Management Company’s expenditure and outgoings.”
“*1) Chargeable under lease? *2) Reasonable in amount/standard? *3) Correctly demanded?”
“12. The application challenges the costs incurred under the headlease (see, e.g. the exhibited accounts, which are from Cudweed Management Co Ltd). That is obviously correct. Network Homes Ltd is, in large part, a “pass through” body for this block. The parties that control the costs are the freeholder and management company under the headlease.”
“26. As far as SNH can see, they have nothing to answer in this application and, indeed, have very little to say about this case at all. They reiterate the “Introduction” to this document and their previous statement of case, including, in particular, paragraph 19.”
“11. Neither §3.3.1 or 3.3.2 are apt to enable the First Respondent to recover from the Applicants the service charges it pays to the Second Respondent under the Superior Lease, given the definition of Outgoings at §1.2.22 of the Occupational Lease; outgoings are sums assessed against the property in the nature of taxes / rates, not service charges. It is understood to be the case that the First Respondent relies upon §3.3.3 for passing on the service charge costs it incurs under the Superior Leases.”
“60. It is a matter of regret that the Tribunal has been unable to determine this issue of liability to pay at this two day hearing. Ms Traynor rather directed her attention to drafting a Skeleton Argument seeking to argue why we should not do so. If we are to deal with this matter fairly, we were satisfied that we had no option but to adjourn the case and give further Directions. This issue does not involve the Second Respondent and no further submissions are required from them. This Tribunal is accustomed to dealing with litigants in person. Neither the Applicants nor the First Respondent should feel the need to be legally represented.”
“• The relevant provisions in the underlease relevant to the tenant’s liability to pay, including any legal argument, particularly with regard to Clause 3.3. • Whether it is contended that the Lead Applicant is liable to pay to the First Respondent any sum pursuant to Clause 3.3 of her lease for the 2019 service 19 charge year, and, if so, what sums have been demanded and/or paid by the Lead Applicant. • In respect of each of the calendar years 2019 to 2023, all sums that it is alleged that the Lead Applicant has been obliged to pay pursuant to Clause 3.3 of her lease, the dates upon which the said sums became payable, the demands made for these sums, and all sums paid by the Lead Applicant.”
“49. Ms Traynor argued, with great vehemence, that it was not open to the Tribunal to raise the issue of the payability of the service charges pursuant to the terms of the First Applicant’s underlease. She provided a Skeleton Argument in support of her submissions. She contended that the Applicants had been given every opportunity to set out the nature and scope of the issues in dispute. The Directions given on25 September 2023 , had required the Applicants to file a Statement of Case which should specify any legal submissions in support of the challenge to the service charges claimed, including argument, if liability to pay was at issue. The Applicants, advised by Solicitors, had filed a Statement of Case. Their Statement of Case was restricted to the reasonableness of the service charges which had been demanded. No issue was raised on the issue of liability to pay. The Respondents had prepared their Statements of Case on their understanding that liability to pay was not at issue.”
“54. In response, Ms Whitehouse stated that the Applicants wanted the Tribunal to consider the issue of reasonableness to pay. She had only been instructed some two weeks previously and had not drafted the Statement of Case. She was handicapped by the manner in which the case had been prepared by the previous solicitor. The Tribunal was not impressed by Ms Traynor’s response to these submissions, namely that their remedy lay in a negligence claim against their former solicitor.”
“DCP Decorating will start work on the staircase tomorrow morning, using my first- floor flat as a base. 24 The cost, assuming no extras and the discovery of nothing unexpected, will be£3,980 (no VAT applicable). At Sven’s request, Trade Diamond Paint will be used on the walls.” “Thank you David, I am really pleased to hear that the decorating is starting tomorrow. In relation to the paint, you clarified Trade Diamond will be used on the walls, (resulting in an increased cost of£280 ) I presume you meant all surfaces including the woodwork as per my request?”
“13. It is regrettable that it appears to be a developing practice within some leasehold valuation tribunals to take it upon itself to identify issues which are of no concern to the parties and then reach a decision on issues they have not been asked to which then results in an appeal and all the waste of time and money and attendant general aggravation. It may therefore be helpful to set out the legislative framework and general principles applicable.”
“19. That said, there may of course be rare cases in which it is appropriate or necessary for the LVT to raise issues not expressly raised by the parties but which fall within the broad scope of the application in order to properly determine the issues expressly in dispute. But even then, the issues must fall within the scope of the application, not something which arises outside of it. This no doubt is what His Honour Judge Mole QC had in mind when he said in Regent Management Limited v Jones[2012] UKUT 369 (LC) , LRX/14/2009 that: “29. The LVT is perfectly entitled, as an expert tribunal, to raise matters of its own volition. Indeed it is an honourable part of its function, given that part of the purpose of the legislation is to protect tenants from unreasonable charges and the tenants, who may not be experts, may have no more than a vague and unfocussed feeling that they have been charged too much. But it must do so fairly, so that if it is a new point which the tribunal raise, which the respondent has not mentioned, the applicant must have a fair opportunity to deal with it.”
“30. In this case the appellant’s departure from the scheme of accounting required by the lease was so fundamental that it was both proper and inevitable, in my judgment, that the FTT should raise the issue at the hearing. When it appeared to the tribunal that sums had been claimed and included in the service charge which fell outside the scope of the fifth schedule because they related to other buildings, it was undoubtedly entitled to ask for an explanation. The fact that 29 Mr Ojo may not have appreciated that the service charges were being demanded on a different basis from the lease did not require the FTT to shut its eyes to an obvious and potentially fatal irregularity. It was, in any event, part of Mr Ojo’s challenge to the service charges that they included at least one item of expenditure, on the employment of a caretaker, which was not wholly for the benefit of his building or even of his estate. It was within both the broad question which the FTT was required to determine, namely the quantum of Mr Ojo’s liability, and this more specific issue, for it to consider the extent to which the charges were consistent with the contractual scheme.”
“19. In my judgment the F-tT cannot properly be criticised upon this basis in the present case. The question before the F-tT was how much was recoverable by way of service charge for the relevant two years. The appellants had raised for the first time at the hearing the argument that nothing was payable by reason of the failure to comply with a condition precedent regarding (putting it broadly) the audit and certifying of accounts and certifying the amounts of service charge. The F-tT was aware that both parties were appearing without legal representation. The F-tT was also aware that there had been an earlier 2014 decision when this point had not been raised by the appellants. I do not consider that it should be seen as a demonstration of bias for a F-tT to ask for assistance from the parties in circumstances where a point of law in its view potentially arises upon the facts before it, being a point of law of potential importance in the ultimate disposal of the case. I notice the observation in paragraph 22 of the appellants’ written representations dated13 August 2015 in relation to the first further directions issued by the F-tT. Here reference is made to the fact that the tenant (i.e. the appellants) had not in the 2014 proceedings raised the condition precedent argument. The appellants state: “… the Tribunal will of course note that the previous Tribunal members (necessarily including at least two experienced property professionals) did not identify the arguments themselves either (something which was within their power to raise of their own initiative in much the same way as this Tribunal has raised this abuse of process issue of its own initiative).”
“37. Fourthly, however, the ET’s role is arbitral not inquisitorial or investigative. It must perform its functions impartially, fairly and justly, in accordance with the overriding objective, the law, and the evidence in the case. It may consider it appropriate to explore the scope of a party’s case by way of clarification. That 33 may, in particular, be considered appropriate in the case of an unrepresented party. Whether to do so is however a matter of judgment and discretion which will rarely qualify as an error of law such that the EAT can interfere. The ET has no general duty to take pro-active steps to prompt some expansion or modification of the case advanced by a party where that might be to their advantage. These propositions emerge clearly from a series of decisions of this court and the EAT.”
“38. We have been referred to the decisions of this court in Mensah (above) at [28] and [36] and Muschett v HM Prison Service[2010] EWCA Civ 25 ,[2010] IRLR 451 [31]. I do not consider it necessary to review those two cases in further detail. That was done in Drysdale v Department of Transport[2014] EWCA Civ 1083 ,[2014] IRLR 892 where the court subjected the relevant authorities to a detailed analysis from which Barling J (with whom Arden and Christopher Clarke LJJ agreed) derived the following general principles: (1) It is a long-established and obviously desirable practice of courts generally, and employment tribunals in particular, that they will provide such assistance to litigants as may be appropriate in the formulation and presentation of their case. (2) What level of assistance or intervention is “appropriate” depends upon the circumstances of each particular case. (3) Such circumstances are too numerous to list exhaustively, but are likely to include: whether the litigant is representing himself or is represented; if represented, whether the representative is legally qualified or not; and in any case, the apparent level of competence and understanding of the litigant and/or his representative. (4) The appropriate level of assistance or intervention is constrained by the overriding requirement that the tribunal must at all times be, and be seen to be, impartial as between the parties, and that injustice to either side must be avoided. (5) The determination of the appropriate level of assistance or intervention is properly a matter for the judgment of the tribunal hearing the case, and the creation of rigid obligations or rules of law in this regard is to be avoided, as much will depend on the tribunal’s assessment and “feel” for what is fair in all the circumstances of the specific case. (6) There is, therefore, a wide margin of appreciation available to a tribunal in assessing such matters, and an appeal court will not normally interfere with the tribunal’s exercise of its judgment in the absence of an act or omission on the part of the tribunal which no reasonable tribunal, properly directing itself on the basis of the overriding objective, would have done/omitted to do, and which amounts to unfair treatment of a litigant.”
“36. The Applicants apply to the Tribunal pursuant tosection 27A(1)(c) of the LTA Act 1985 for a declaration that the services charges applied between November 2019 and March 2023 are not payable in the sums claimed on the basis (a) they have not been reasonably incurred pursuant tosection 19(1)(a) of the LTA Act 1985 and/or (b) that the services provided were not of a reasonable standard pursuant tos19(1)(b) of the LTA Act 1985 .”
“28. Where an application is made to the FTT for a determination under section 27A of the 1985 Act the overarching question to be addressed is, usually: what sum, if any, is payable as a service charge by leaseholder. In order to answer that question a number of sub-questions or individual issues are likely to have to be addressed, but the tribunal’s most important task is to determine that amount.”
“32. On the morning of the second day, we heard detailed submissions from Ms Traynor on why we should not consider the issue of liability to pay. Ms Whitehouse indicated that the Applicants wished to take this point. We made a brief ruling stating that we would require the First Respondent to address this issue. We agreed to put our reasons in writing. In the afternoon, we concluded 37 our consideration of the reasonableness of the service charges challenged in the Scott Schedule.”
“54. In response, Ms Whitehouse stated that the Applicants wanted the Tribunal to consider the issue of reasonableness to pay. She had only been instructed some two weeks previously and had not drafted the Statement of Case. She was handicapped by the manner in which the case had been prepared by the previous solicitor. The Tribunal was not impressed by Ms Traynor’s response to these submissions, namely that their remedy lay in a negligence claim against their former solicitor.”
"…within the bounds set by the Civil Procedure Rules, a first instance judge is entitled to a wide degree of latitude in the way in which he conducts proceedings in his court. However, that latitude is not unlimited. Ultimately, the process must always be the servant of the judicial function of dealing with cases justly (see the overriding objective expressed inCPR 1.1 ) …"
"It is, we think, important to appreciate that the risk identified by Lord Greene MR in Yuill v Yuill does not depend on appearances, or on what the objective observer of the process might think of it. Rather, the risk is that the judge's descent into the arena (to adopt Lord Greene MR's 43 description) may so hamper his ability properly to evaluate and weigh the evidence before him as to impair his judgment and may for that reason render the trial unfair."
“46. The preliminary view of the Tribunal is that the First Respondent has not demanded “the sums due” under Clause 3.3.3 in accordance with the terms of the lease. No liability arises on the Leaseholder to pay any sum until it becomes due the Superior Landlord under the Superior Lease. It will only become payable when the Management Company has approved a budget for the 48 relevant service charge year and a demand has been made for an interim service charge.” “59. The Tribunal is required to consider whether the service charges levied by the Second Respondent for 2019 are reasonable. We asked Ms Traynor whether the Lead Applicant was obliged to pay any “sums due to the Superior Landlord under the Superior Lease” in respect of this service charge year. She was unable to answer. Our preliminary view is that neither the Lead Applicant nor any of the other Applicants were obliged to pay any service charge in respect of this service charge year. This Tribunal does not determine academic questions.”
“Bias means a prejudice against one party or its case for reasons unconnected with the legal or factual merits of the case:”