[2024] UKUT 399 (LC)

In its decision published on 12 June 2024 the FTT explained what happened at the hearing on 29 April. Only the respondent’s representatives had attended. Its counsel made what was described as “an oral application (on written/email notice to the respondent)” for costs pursuant to rule 13(1)(b) and an application without notice for a direction under section 20C, Landlord and Tenant Act 1985 that costs incurred in the proceedings could be added to a service charge payable to the appellant. The FTT heard oral submissions on both applications and directed the appellant to respond to them in writing, with the respondent then being given a right of reply. The FTT later said in its decision that it had had regard to the respondent’s oral and written submissions.

The appellant’s subsequent written submissions reminded the FTT of the limits of its costs jurisdiction and argued that it had been fully entitled to put the respondent to proof of its entitlement to acquire the right to manage. It had withdrawn its counter-notice following receipt of the evidence of Mr Weill, consideration of which by Scott Cohen had been delayed by its having been sent only to Eagerstates. The observance of Passover by the appellant’ directors had then impacted the timing of their instructions. The case had been re-evaluated on 25 April 2024 in light of Mr Weill’s statement, and on the same day the counter-notice had been withdrawn.

The respondent’s reply to those submissions began by criticising them as “generic” and as having been “made without any real thought to this particular case”. That observation cannot be allowed to pass without noting the obvious disadvantage and consequent unfairness to the appellant of being required to respond to an application made orally in its absence. That unfairness was not cured by the respondent having warned right at the end of the previous working day that it intended to make the application. Parties are entitled to proper notice of applications and of the grounds on which they are made, and a proper opportunity to respond, which the appellant did not have in this case.

In its decision the FTT recorded six separate allegations of unreasonable conduct made by the respondent against the appellant. Only two of these featured in the FTT’s own reasons for considering that the condition in rule 13(1)(b) was satisfied which were as follows:

“24.

The tribunal considers the respondent’s failure to engage in any dialogue or communication with the applicant after 6 March 2024 to be unreasonable and not what would reasonably be expected from a respondent or its legal representative. The tribunal finds that although action on the applicant’s communication of 17 April 2024 may have been delayed for religious reasons, the tribunal finds is difficult to accept the respondent could not have found means by which to alert the applicant of this delay or arrange for communications to be either forwarded or dealt with in its agent’s absence.

25.

The tribunal accepts the respondent had a right to put the applicant to proof of its claim but finds it unreasonable for the respondent not to engage with the applicant, particularly when a hearing date approaches. The tribunal finds the respondent’s last minute and equivocal email concerning its withdrawal of its objection to the claim, necessitated the applicant to attend the hearing in order to ensure (i) the respondent unequivocally withdrew its objections and admitted the applicant’s right to acquire the right to manage and (ii) ascertain the date on which the applicant acquired the right to manage. Both of those matters could have been dealt with in correspondence before the hearing.”

The FTT also rejected points made by the appellant about the quantum of the respondent’s costs and decided that the appropriate order was for payment of the full amount of the respondent’s costs incurred in the proceedings.