[2023] UKUT 271 (LC)

Fecha: 12-Oct-2023

The grounds of appeal

The grounds of appeal

34.

The grounds of appeal, as set out in the Appellant’s application to this Tribunal for permission to appeal, dealt only with the first of the issues in the appeal; namely the question of whether the FTT were right to impose the Costs Condition. Those grounds of appeal, in support of the Appellant’s case that the FTT were wrong to impose the Costs Condition, can be summarised in the following terms:

(1)

The FTT were procedurally incorrect to review the Original Decision, so as to include the Costs Condition:

(i)

the decision to review the Original Decision to this effect was made without the parties having had the opportunity to make submissions on whether the Costs Condition should be imposed,

(ii)

none of the parties had sought the imposition of the Costs Condition. The FTT imposed the Costs Condition of their own accord.

(2)

None of the Respondents had made an application for an order under Section 20C of the 1985 Act. Some of the Respondents did not engage with the proceedings in the FTT and did not dispute the Dispensation Application.

(3)

The Dispensation Application was successful, and the Appellant should not be penalised for relying on professional advisors in respect of the Dispensation Application.

(4)

The relevant test, under Aster Communities v Chapman [2020] UKUT 177 (LC), is that the Tribunal “has power to grant a dispensation on such terms as it thinks fit – provided, of course, that any such terms are appropriate in their nature and effect.”. The FTT did not provide any explanation as to how this nature and effect test had been met in respect of the Costs Condition. The Costs Condition was not appropriate in nature and effect because the Dispensation Application was made in the best interests of the leaseholders.

35.

As I have explained, Paragraph 9 came into the appeal when the Deputy President drew attention to the question of whether the Costs were covered by Paragraph 9, so that no service charge was payable in respect of the Costs by any leaseholder whose lease is a qualifying lease, within the definition of a qualifying lease in Section 119 of the 2022 Act. It is convenient to set out the Deputy President’s characterisation of this issue, in paragraph 3 of his decision granting permission to appeal. It is also convenient to include the Deputy President’s identification of the issues arising in relation to the question of whether the Costs Condition should have been imposed:

“1.
The proposed appeal raises issues of general importance to the owners of residential buildings and leaseholders of flats within them. Those issues are:

Whether, in principle, a dispensation from consultation requirements granted under S.20ZA, Landlord and Tenant Act 1985, in respect of works which are found to be urgent should be conditional on the landlord agreeing, or being prevented from, recovering the legal and other costs of making the application for dispensation from leaseholders through a service charge.

If no such principle exists, whether the condition imposed in this case was nevertheless a proper exercise of the FTT’s discretion (the points raised by the applicant in paragraph 11 of its grounds of appeal will all be treated as falling within the scope of this issue).

Whether in any event the legal or other professional costs of seeking dispensation under S.20ZA, Landlord and Tenant Act 1985 in respect of the remediation of defects falling within sections 120 and 122, Building Safety Act 2022 are covered by paragraph 9 of Schedule 8, Building Safety Act 2022 so that no service charge is payable in respect of such legal or other professional costs by any leaseholder whose lease is a “qualifying lease” within the definition in section 119. Although this issue was not considered by the FTT it necessarily arises under ground 2 above in respect of the reviewed decision which was made after the relevant parts of the 2022 Act came into force on 28 June 2022.”

36.

It follows that the Appellant does not have a ground of appeal, as such, in relation to the question of whether Paragraph 9 applies to the Costs. Rather, the Appellant is required to deal with this question, as an issue arising in the appeal. By his directions for the conduct of the appeal the Deputy President gave the Appellant permission to file a further statement of case in respect of the Paragraph 9 issue. The Appellant filed a further statement of case in which it set out its case on the Paragraph 9 issue.

37.

In summary, the Appellant’s case on the Paragraph 9 issue, as set out in the further statement of case, fell into two parts, as follows:

(1)

The 2022 Act had not come into force when the Dispensation Application was made. The Costs, which were the costs of the Dispensation Application, were incurred prior to the provisions of Schedule 8 coming into force. As such Paragraph 9 cannot apply to the Costs.

(2)

Independent of this first argument, legal costs which are incurred in relation to applications for dispensation pursuant to Section 20ZA(1) of the 1985 Act and which relate to relevant defects within the meaning of Section 120 of the 2022 Act are not incurred “in respect of legal or other professional services relating to the liability or potential liability of any person incurred as a result of a relevant defect”, within the meaning of Paragraph 9. It follows that, as a matter of language, Paragraph 9 does not apply to such costs. The Costs fall into this category. As such, Paragraph 9 does not apply to the Costs.