[2024] UKUT 399 (LC)

Can a landlord which concedes an RTM Company’s entitlement to acquire the right to manage only a day or two before the hearing of the application be ordered to pay the Company’s costs of the proceedings on the grounds that its conduct of the proceedings has been unreasonable? That is the question posed in this appeal from a decision of the First-tier Tribunal, Property Chamber (the FTT).

The appeal arises out of a claim to acquire the right to manage under Part 2 of the Commonhold and Leasehold Reform Act 2002 (the Act) by the respondent, Piano Works Building RTM Co Ltd, which was initially disputed by the appellant, Assethold Ltd. An application was made by the respondent to the FTT to resolve the dispute, and a hearing date was fixed. Eleven days before the hearing the respondent sent additional evidence to the appellant’s managing agent (which was not instructed in the appeal) and a week later, on the second working day before the hearing, the appellant withdrew its final objection to the claim.

At the hearing before the FTT, which only the respondent attended, it applied for an order for the payment of its costs under rule 13(1)(b) of the FTT’s Rules; after receiving submissions in writing from both parties the FTT ordered the appellant to pay all of the respondent’s costs of the proceedings, which totalled £9,120. The FTT made that order because it considered that the appellant’s “failure to engage in any dialogue or communication” with the respondent amounted to unreasonable conduct of the proceedings.

Permission to appeal was granted by this Tribunal on the single ground of whether the conduct found by the FTT to have been unreasonable (failure to engage in the period before the hearing) met the objective standard of unreasonable behaviour capable of justifying an order under rule 13(1)(b).