[2023] UKUT 197 (LC)

The FTT considered the application at a hearing at which evidence was given by Mr Davies and by Mr Cleaver, a director of Urang. Its decision was issued on 31 August 2022 and summarised the main points of Mr Davies’ case. First, the dismissal of the 2013 County Court proceedings meant that the RTM Company had never been entitled to demand the sum of £616.60; in 2014 the FTT dismissed a claim for the same sum; therefore, he was entitled to a credit which he could deduct from his liability as he had done on 31 May 2015. Secondly, he “relied on a purported agreement made with Urang’s employee, Ms Paige McIntosh, to refund him this amount on the basis that it was not owed by him”. The FTT referred to “various emails passing between him and Ms McIntosh from May to August 2015” but did not consider what those emails said.

The FTT reached its conclusion on the argument that Mr Davies was entitled to a credit which extinguished his liability, as follows:

“15.

The tribunal was satisfied that the 2013 County Court proceedings did not extinguish the Respondent’s service charge liability for the period 1 October 2012 to 31 March 2013. The only reason those proceedings were dismissed is that the Applicant had not come up to proof that it had been validly constituted. Indeed, when giving directions in the 2014 Tribunal proceedings, Tribunal Judge Martynski indicated as much and this was restated in the decision issued following those proceedings (see above).

16.

In concluding that the Applicant had in fact been validly constituted from the outset, this meant that all service charge demands served on the Respondent were retrospectively valid, including the one for the sum of £616.60. As this was not challenged and paid by the Respondent at the time, he is now prevented from doing so pursuant to section 27A(4) of the Act and he is not entitled to make any further challenge in respect of this sum.

17.

The Tribunal was also satisfied that the sum of £616.60 was withdrawn from the 2014 Tribunal proceedings and was not the subject matter of the decision issued by the Tribunal then.”

It then considered the suggestion that there had been an agreement that the disputed service charge was not payable:

“18.

The Tribunal found that there was no agreement made between the Respondent and Ms McIntosh (or anyone else at Urang) that he was not liable for the sum of £616.60 and it would be refunded to him. The Tribunal also accepted the evidence of Mr Cleaver in those terms. It is clear from the email exchanges that, at best, there was only a proposal made to the Respondent to defer payment until such time as he sold the property, which was not accepted by him.

19.

Accordingly, for the reasons given, the Tribunal was satisfied that the Respondent is liable for the sum of £616.60. As he did not dispute the quantum, it was allowed as claimed.”

The decision went on to find that the administration charges levied for work done on the 2014 FTT proceedings and subsequent attempts at debt recovery were reasonable and payable; interest at 10% per annum was also payable under the terms of the lease.

The final issue was a claim for legal costs of the County Court and FTT proceedings totalling £14,569.50 including VAT. The FTT was satisfied that these were recoverable under paragraph 33 of Part II of the Sixth Schedule to the lease, and then proceeded to assess the sum payable, explaining, at paragraph 29:

“The assessment of the quantum of the costs by the Tribunal was carried out by way of a summary assessment.”

Having reduced the sum claimed to £8,197.50 by that summary process the FTT concluded at paragraph 32 with the following statement:

“The Tribunal orders that the service and administration charges and the costs awarded are payable by the Respondent within 28 days of this decision being served on the parties.”

An order of the County Court dated 1 August 2022 was then made entering judgment for £6,719.59 including interest and ordering Mr Davies to pay the RTM Company’s costs summarily assessed at £8,197.50.