[2024] UKUT 54 (LC)

There is no challenge to the FTT’s decision to strike out the 2020 application by Mr Fernie. Nor have the appellants been given permission to challenge the dismissal of their own application so far as it related to the years before 2015. The only issues are whether the FTT was entitled to strike out the appellants’ 2020 application so far as it related to the years already considered in Mr Fernie’s 2018 application, and in respect of the subsequent years which had not been the subject of any consideration.

Section 27A(1), Landlord and Tenant Act 1985 gives leaseholders (and others) the right to apply to the FTT for a determination whether a service charge is payable and, if it is, as to the person by whom it is payable, the amount which is payable, and the date at which it is payable. That entitlement is extended by section 27A(3) to cover charges in respect of future expenditure. No such application may be made in respect of a matter which has already been agreed or admitted by the leaseholder, referred to arbitration, or been the subject of determination by a court or an arbitrator (section 27A(4)).

Although the application by Mr Fernie in respect of the years 2015 to 2018 was not prohibited by section 27A(4), the FTT was entitled to strike it out because Mr Fernie’s challenge for those years had already been considered and determined in the 2018 application. It is a general principle of public policy that once any court or tribunal has given a decision, no party to that decision can raise the same dispute for a second time in different proceedings. That general principle is reflected in the FTT’s rule 9(3)(c), which allows it to strike out proceedings if: “the proceedings or case are between the same parties and arise out of facts which are similar or substantially the same as those contained in a proceedings or case which has already been decided by the Tribunal”.

But rule 9(3)(c) did not apply to the appellants’ application for a determination of the service charges payable by them for the years 2015 to 2018. The appellants were not parties to the 2018 application. The FTT obviously appreciated that distinction and it did not rely on rule 9(3)(c) when it struck out the appellants’ 2020 application in respect of those years. It relied instead on rule 9(3)(d), and on the proposition that it would be “frivolous or vexatious or otherwise an abuse of the process of the Tribunal” for the appellants to require the FTT and the respondents to investigate once again the matters which had already been considered in the 2018 application.

The short answer to the FTT’s approach is that every leaseholder is entitled to a determination by the FTT of the service charges that they are liable to pay. That right cannot be removed from them by a decision made by the FTT about the service charge payable by someone else, whether or not the expenditure on which both service charges are based was the same. That right is conferred by section 27A, and it is protected both by the common law right to a fair hearing and byArticle 6(1) of the ECHR, which states: “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”.

The FTT considered that the appellants’ 2020 application would “(in effect) raise an appeal” against its determination of Mr Fernie’s 2018 application. But the remaining issues to be determined in the 2020 application are different from those in the 2018 application, in that they concern the sums payable by the appellants rather than by Mr Fernie, and the appellants had the right to rely on evidence which they would produce, which might be different to the evidence considered by the FTT in the 2018 application. Even if the material put forward by the appellants turned out to be the same as the material previously relied on by Mr Fernie, that would not deprive them of the right to have their own application determined.

The FTT also considered that the 2020 application was being orchestrated by Darren Fernie “not purely to challenge service charges, but also for the vexatious reasons of attempting to conduct an audit of the site’s finances in the hope of establishing a management wide fraud”. It is difficult to see how that motive would be advanced by an investigation restricted to “security costs, pressure washers and key fobs”, but even assuming it to be the case, Darren Fernie is not a party to the 2020 application and his motives in offering assistance to the appellants cannot be attributed to the appellants themselves; they denied that they were acting as “nominees” of Darren Fernie and the FTT found that one of the appellants, Ms Lynn, had no knowledge of the other cases involving Mr Fernie and his son. The FTT did not find that the appellants had an improper motive in bringing their application and in my judgment it was wrong to rely on its view of the Fernies’ motives to justify striking out their case.

The FTT struck out the application so far as it related to the years 2018 to 2020 on the grounds of proportionality. Whether it was entitled to take that course in the case of Mr Fernie is not for consideration in this appeal, but it clearly was not entitled to do so in the appellants’ case. There had been no previous consideration of the later years and the FTT’s determination of Mr Fernie’s service charges in the 2018 application could not answer the section 27A questions for Mr Fernie or anyone else for different years. The excessive time and expense which had been devoted by the FTT and by the respondents to investigating 2015 to 2018 can provide no justification for depriving the appellants of a determination of their own liability for 2018 to 2020.