[2023] UKUT 197 (LC)

On 11 May 2021 the RTM Company issued a new claim against Mr Davies in the County Court for £7,276.49. That sum comprised £3,856.60 in service charges and contractual administration charges, £2,444.29 in interest and £975.60 in contractual costs for the claim itself. The principal sum was later broken down further to reveal that it comprised the same £616.60 which had been in dispute since at least May 2015 and £3,240 in administration charges. The largest single administration charge was £2,400 relating to the 2014 FTT proceedings, which Urang demanded on 7 August 2015 under the description “time spent on tribunal application and hearing”. The balance comprised two sums of £300 in November 2016 and July 2020 each recorded as “administration fee, arrears collection” and two of £120 on 24 February and 30 March 2020 each recorded as “first reminder, arrears collection”.

In a detailed defence dated 28 June 2021 Mr Davies denied that he was in arrears and disputed his liability to make payments of interim service charges by a single annual charge (as the lease provides for 10 instalments). He denied that the administration charges claimed fell within the scope of the contractual charging provision (which allows only the recovery of costs incurred “in connection with the recovery of arrears of rent and service charge” or “in contemplation of proceedings under sections 146 and 147 of the Law of Property Act 1925”) or that they had been properly demanded or were reasonable in amount.

The County Court proceedings were transferred to the FTT under section 176A, Commonhold and Leasehold Reform Act 2002 on 8 December 2021. Directions were issued on 25 February 2022. These included a narrative explanation of the history of the dispute and a statement that the issues were agreed to concern service charges of £616.60 and administration charges of £3,240. The directions did not identify the period to which the disputed service charges related but recorded Mr Davies’ case as being, first, that a claim for the same charges had been considered and dismissed by the County Court in 2013, and secondly, that “after the case management hearing in the previous [2014] tribunal proceedings, the RTM Company had agreed to withdraw its claim for the £616.60”. Despite that concise summary of his case, Mr Davies did not abandon the points he had taken in his defence of 28 June 2021, which were repeated in a new statement of case and a supporting witness statement.

The FTT’s directions also included the following statement:

“These proceedings will be administered by the Tribunal. The Judge who eventually hears the case will deal with all the issues in the case, including, interest and costs, at the same time as the tribunal decides the payability of the Service and Administration charges and the Judge (sitting alone as a Judge of the County Court) (DJ) will make all necessary County Court orders”.