![[2023] UKUT 152 (LC)](https://backend.juristeca.com/files/emisores/logo_lnJS4Uj.png){kind=logo}
The factual background
The factual background
Ms Yambasu has a 125-year lease of her flat, granted to her in 2006. It contains at clause 4(5) a covenant by the lessor to provide a number of services including central heating and hot water “and to ensure so far as practicable that they are maintained at a reasonable level”. The lessee covenants to pay “a fair proportion” of the cost to the lessor of providing the services and fulfilling other obligations including insurance, maintenance and repair of the building and so on.
By clause 2(8) the lessee covenanted “Not to disconnect the flat from the district central heating system if such system serves the flat without the previous consent in writing of the Council”. It is not in dispute that the “district central heating system” serves the flat; at the heart of the long-running dispute between the parties is Ms Yambasu’s contention that the system is too old to function economically or to be repaired or maintained, and also that the flats pay too much for heating because the system serves a number of commercial properties as well which, she says, do not pay for it.
The respondent issued proceedings against Ms Yambasu in the county court in July 2019 seeking to recover service charges in the sum of £4,375.96 together with costs and interest. The matter was transferred to the FTT for a determination of the reasonableness and payability of the service charge, in its jurisdiction under section 27A of the Landlord and Tenant Act 1985. The judge in the FTT also sat as a county court judge in order to decide about costs and interest. There is no appeal from the county court decision to this Tribunal; I am concerned only with the FTT’s assessment of the reasonableness and payability of the charges.
The sum in issue in these proceedings was an estimated service charge, invoiced to Ms Yambasu in February 2016, relating to major works to the heating system.
Because of the cost of those works, the respondent sent out notices to the residents, dated 29 June 2015, in compliance with its obligation to consult its lessees pursuant to section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003.
In her statement of case in the FTT Ms Yambasu explained that the heating system was over 48 years old and well outside its useful economic life of 25 years; she pointed out that it had been refurbished at a cost of £3,784,930.80 since 2013 which she said was an unreasonable cost when apportioned among 730 properties. She made three arguments that are relevant to this appeal:
She referred to the notice dated 29th June 2015 which she said was dropped through her letter box, without a postage stamp, on 17 July 2015. She asserted that she was entitled to be served with a notice in accordance with section 20 of the 1985 Act.
She said that the charges had not been fairly allocated – as required by the lease – because they had been split between the 730 properties without the inclusion of a school which was also served by the same system, as well as a Youth Centre, an Education Centre, a Tenant Management Organisation and new development buildings in North Peckham. She also challenged the division between the leasehold properties on an equal basis without regard to the size of the flats so that a resident in a two-bedroomed house such as her own was charged the same as one the lessee of a flat with more bedrooms.
She complained that the heating was inefficient, that she has suffered long periods without hot water and heating, and that the system is inefficient and uneconomic. She wished to be able to disconnect from the system and install a combination boiler.
The hearing before the FTT took place on 4 July 2022. Ms Yambasu did not attend. She asked permission to appeal on the basis that, in view of the reason for her failure to attend, the FTT should not have proceeded in her absence. The Tribunal refused permission on that ground, because (in light of the reason given) there was no realistic prospect of success on appeal. In Ms Yambasu’s absence the FTT considered her statement of case and her evidence. The respondent’s representative and witnesses did attend.
The FTT decided that the respondent had served its section 20 notice on 29th June 2015, that the charges should be apportioned as already determined by the FTT in a decision between the same parties, and that the service charge was reasonable and payable in a lesser sum than that charged by the respondent, with the effect that after deduction of an amount that she had already paid the sum payable was £3,628.78.
Ms Yambasu has permission to appeal that decision on three grounds:
That the FTT did not decide her case on consultation; it determined that the notice had been served on 29 June 2023, in accordance with the respondent’s evidence, but failed to consider whether the consultation requirements had been complied with.
That – in the absence of a clear explanation by the FTT of the basis for the apportionment - the apportionment was unfair on the basis that the leaseholders were paying to heat other properties owned by the landlord.
That the service charges were not reasonably incurred.
I address each ground of appeal in turn.