[2023] UKUT 271 (LC)

This is an appeal against a decision of the First-tier Tribunal (Property Chamber). The decision, which was made pursuant to the tribunal’s powers of review, is dated 30^th June 2022. The tribunal’s original decision, prior to this review, is dated 20^th December 2021.

The case came before the First-tier Tribunal (“the FTT”) as an application for dispensation from the consultation requirements in Section 20 of the Landlord and Tenant Act 1985 (“the 1985 Act”). The application (“the Dispensation Application”) was made, pursuant to Section 20ZA(1) of the 1985 Act, by the Appellant in this appeal, Adriatic Land 5 Limited. I will refer to this company as “the Appellant”.

The Appellant is the freehold owner of a mixed use building, containing 32 residential flats let on long leases, at Hippersley Point, 4 Tilson Bright Square, Felixstowe Road, Abbey Wood, London SE2 9DR (“the Building”). The Appellant made the application, for dispensation with the consultation requirements, in respect of remediation works required to the external façade of the Building and in respect of interim fire safety measures.

The respondents to the Dispensation Application, and the Respondents to this appeal are the long leaseholders of the flats in the Building. I will refer to the long leaseholders as “the Respondents”.

By their original decision (“the Original Decision”) the FTT decided that dispensation from the consultation requirements should be granted, on an unconditional basis. They also decided that an order should be made, pursuant to Section 20C of the 1985 Act (“the Section 20C Order”), preventing the Appellant from recovering any of its costs of the Dispensation Application from the Respondents, by the service charge provisions in their leases.

The Appellant sought a review of the Original Decision, so far as concerned the Section 20C Order, on the basis that the FTT had been wrong to make this order. In response to the application for a review the FTT exercised their power to review the Original Decision and produced a revised decision on 30^th June 2022. By their revised decision (“the Reviewed Decision”) the FTT reversed their decision to make the Section 20C Order. In its place however the FTT made it a condition of the grant of dispensation that the Appellant should not be entitled to recover its costs of the Dispensation Application (“the Costs”) from the Respondents.

In response to this decision, the Appellant sought (i) a review of the Reviewed Decision, so far as concerned the imposition of the costs condition in relation to the grant of dispensation (“the Costs Condition”), or (ii) if the FTT were not willing to exercise their powers of review, permission to appeal against the Costs Condition. The FTT refused to exercise their powers of review and refused permission to appeal. The application for permission to appeal was however renewed to this Tribunal. Permission to appeal was granted by the Deputy President.

The grounds of appeal were confined to the Appellant’s case that the FTT had been wrong to impose the Costs Condition. In granting permission to appeal however, the Deputy President drew attention to the fact that the grounds of appeal gave rise to a further issue. This further issue was whether the Costs were, in any event, covered by paragraph 9 of Schedule 8 to the Building Safety Act 2022 (“the 2022 Act”), so that no service charge was payable in respect of such costs by any leaseholder whose lease was a qualifying lease, within the meaning of Section 119 of the 2022 Act.

There are therefore, in broad terms, two issues to be decided in the appeal. The first issue is whether the decision of the FTT to impose the Costs Condition, as a condition of the grant of dispensation from the consultation requirements, can be upheld. The second issue, which effectively only becomes a live issue if the decision to impose the Costs Condition cannot stand, is whether recovery of the Costs is affected by paragraph 9 of Schedule 8 to the 2022 Act. For ease of reference, I will refer to Schedule 8 to the 2022 Act as “Schedule 8”, and to paragraph 9 of Schedule 8 as “Paragraph 9”.

I should also mention that this is the first occasion on which the Tribunal has had to consider the 2022 Act, which provides important protection for certain leaseholders against the costs of remediation of some building defects.