[2024] UKUT 54 (LC)

The Burton Waters Estate is a mixed residential and commercial estate in Lincoln which includes 361 houses and flats arranged around a marina and let on long leases. The appellants each hold leases of one of those properties. The three respondent companies are landlords of different parts of the Estate.

On 13 January 2020 the owners of ten properties on the Estate applied to the FTT under section 27A for a determination of the service charges payable by them in respect of the service charge years from 2013 to 2020. I will refer to these proceedings as “the 2020 application”. Seven of the applicants subsequently discontinued their applications, leaving only the appellants and Mr Joshua Fernie who owns a leasehold flat at 34 The Quays, Burton Waters as applicants.

The 2020 application was not the first to be made to the FTT by Joshua Fernie. He had brought an application in 2018 concerning service charges for the years 2015, 2016, 2017 and part of 2018. In that application, which I will refer to as “the 2018 application”, Mr Fernie was represented by his father, Mr Darren Fernie, and challenged 278 individual service charge items worth about £4,000. After a hearing lasting five days, the FTT issued a decision on 21 July 2021 in which it dismissed all but six of Mr Fernie’s challenges and reduced his service charges by only £10.44. It subsequently ordered Mr Fernie to pay the respondents’ costs of the 2018 applications, and later still it made an order for the payment of wasted costs against Mr Darren Fernie because of the manner in which he had represented his son during the hearing.

Shortly after the commencement of the 2020 application the FTT directed that it be “stayed” (meaning delayed or put on hold) while Mr Fernie’s 2018 application was determined. The 2020 application remained in its early procedural stages when the decision to strike it out, which is the subject of this appeal, was made by the FTT in October 2022. I understand the appellants had not yet filed statements of case.

Once Mr Fernie’s 2018 application had been concluded, and his applications for permission to appeal had been dismissed, the FTT turned its attention to the appellants’ and Mr Fernie’s 2020 application, which covered some of the same years as had already been thoroughly investigated as well as periods before and after those years. On 6 July 2022 the FTT struck out those aspects of the 2020 application by Mr Fernie which had already been determined against him in its decision on his 2018 application. The FTT also struck out the challenges by all three applicants to the charges for the years 2013 and 2014 because it decided that those had previously been the subject of agreement and could no longer be challenged.

By its order of 6 July 2022 the FTT also then notice that it was minded to strike out the remaining issues in the 2020 application pursuant to rule 9(3)(d) of the FTT’s procedural Rules. That rule allows the FTT to strike out the whole or part of proceedings if it considers the proceedings, or the manner in which they are being conducted, to be “frivolous or vexatious or otherwise an abuse of the process of the tribunal”.

The FTT proposed to strike out the appellants’ case so far as it concerned the years 2015, 2016, 2017 and the first part of 2018, which it referred to as “the 2015 to 2018 repeat challenge” under rule 9(3)(d) and invited them to make representations if they considered it should not do so. It explained that, in its view, for the appellants to continue to challenge the charges for these service charge years “would amount to conducting an appeal against [the FTT’s decision in the 2018 application] and as such would be frivolous and vexatious”.

The FTT stated that it was minded to strike out the applications by all three applicants so far as they concerned the years which post-dated those disputed in the 2018 application (which it referred to as the “2018 to 2020 Challenge”). It explained that any consideration of those years “would result in the determinations made in [the 2018 application] being applied to the later years” and “proportionality must be considered so that is not fair and just to permit this part of the case to continue, it being frivolous and vexatious”.