[2023] UKUT 135 (LC)

Both the appellant and the Association applied for permission to appeal and the FTT invited the respondents’ comments. Somewhat surprisingly, the respondents supported the Association’s application and claimed that they had never asked for an order for the payment of their costs by it. Reference was made to Mr Holt’s second witness statement which had anticipated the making of an application against Mr Connell alone, although it is apparent from the order recording what had occurred on 22 July and from the submissions made to the FTT by the respondents’ solicitors and counsel that the FTT had not been mistaken in its understanding the application was pursued both against the Association and against its Secretary.

Faced with the respondents’ change of position, the FTT decided to review its original decision and on 7 November 2022 it issued a new decision setting aside the order against the Association and dismissing the appellant’s application for permission to appeal. At paragraph 7 of that decision it paraphrased its reasons for making a costs order, as follows:

“The application for recognition supported by Mr Connell alone, or possibly by 77 qualifying tenants could not succeed. It was unreasonable to bring the application. It was unreasonable to fail to withdraw the application in the face of an application to strike out. It was unreasonable to serve a statement of case acknowledging the failure to have support of at least 50% of the qualifying tenants at the site and ask the Tribunal to exercise discretion that it does not have to overlook this failure. It was unreasonable to require that there be two hearings in the face of that application for it to be struck out, when it should have been withdrawn.”

The FTT then recognised that it may be difficult to enforce a costs order against the Association because none of its members other than Mr Connell had signed the application, and because the Association itself would not have the funds to pay the costs. It said that the Association’s appeal was “not resisted” and that there was “a reasonable prospect of a successful appeal” and that it would therefore review its decision and determine that the costs should not be paid by the Association. (I should point out that the FTT was here asking itself the wrong question; before reviewing its decision it should have considered whether the proposed appeal was “likely to be successful”, a higher standard than the reasonable prospect of success test for permission to appeal – see rule 55(1)(b) of the FTT Rules).

In response to Mr Connell’s application for permission to appeal the FTT considered his position independently of the Association for the first time (previously all of the conduct relied on had been attributed to both Mr Connell and the Association without distinguishing between them). It was satisfied that an order could properly be made against Mr Connell because he was the Secretary of the Association, “an unincorporated applicant”, he had signed the application form, he was responsible for the statement of case, he had signed all pleadings and submissions, including the application for permission to appeal, and he had served documents and attended the hearings.

The FTT then considered the grounds of appeal and acknowledged that it had been mistaken as to the facts in suggesting that Mr Connell and the Association had asked for the hearings on 5 May and 22 July to be adjourned. Instead it said that representations made “by [the Association] and Mr Connell caused those hearings to be adjourned”. I understand that to be referring to a submission by Mr Fernie that the request notice had not been complied with. The FTT concluded that there was no realistic prospect of a successful appeal by Mr Connell.

The FTT then referred to a request made by the respondents that it review its original decision to deal with submissions they had made but which it had not mentioned. This was a reference to the respondents’ complaint that the application was a front for Mr Fernie to pursue a vendetta against them. The FTT said that it was well aware of those allegations but had determined that “this is a very straightforward case” and that it was not necessary “to consider matters which would be hotly contested”.