[2023] UKUT 135 (LC)

By a decision issued on 12 September 2022, the FTT ordered both the Association and the appellant to pay the respondents’ costs of the application and directed that they make a payment of £8,000 on account. The order was made under rule 13(1)(b) on the grounds that both had behaved unreasonably in bringing and conducting the application.

In its decision the FTT followed the three-stage approach suggested by the Tribunal in Willow Court Management Company (1985) Ltd v Alexander [2016] UKUT 290 (LC). Having given an account of the proceedings it said that the first issue was whether the Association or the appellant acting on its behalf had acted unreasonably. It gave four reasons for its conclusion that both had done so.

First, it was absolutely clear that the Association had never had the support of a sufficient number of qualifying tenants to satisfy regulation 4.

Secondly, the requirement to provide a list of the qualifying tenants who were members of the Association, signed by each of them, had not been complied with, and the only person to have provided a signature was the appellant.

Thirdly, the Association’s statement of case filed on 25 February 2020 had acknowledged that only 77 of 361 qualifying tenants were members. It was unreasonable to ask that a certificate be granted “exceptionally” and instead the application ought to have been withdrawn.

Finally, on 22 July 2021 “in the face of an application to strike out this case”, it had been unreasonable for the Association and the applicant to apply to adjourn the hearing.

The second issue was whether an order should be made at all. The FTT suggested that the deficiency in numbers supporting the Association should have been identified by the judge who issued the original directions. It did not consider that it would be fair in those circumstances to make an order for costs simply because the application had not commanded the necessary support. However, by the time the Association’s statement of case was submitted “Mr Connell on behalf of [the Association] was fully aware that the application was being made in breach of the Regulations that are mandatory. The tribunal could not make an exception so as to grant this application.” The FTT appeared to suggest that costs should therefore be awarded from the date the appellant had signed the Association’s statement of case, 25 February 2020, but that qualification was not reflected in the order itself.

Finally the FTT considered the amount that should be paid and decided that the Association “and/or Mr Connell” should pay £8,000 on account and that “the full costs” should then be agreed or assessed by the County Court.