[2024] UKUT 81 (LC)

The FTT set out paragraphs 14 to 18 of the decision in Cain. It recorded the respondent’s argument:

“It is said that by attending meetings at which challenges could be raised, and otherwise failing to raise any challenge to the service charges demanded from their purchase and occupation in 2004 until late in 2016, and paying the service charges without qualification or protest, the Second and Third Applicants should be considered to have agreed or admitted the charges were payable.”

The FTT found that the appellants had had the service charge accounts each year and were aware – or should have been if they had given it any thought at all - that the interim service charge was calculated on an estate-wide basis. The respondent argued that “the end of year procedure had been settled for many years and was or should not be a bar to a finding that the service charge process had been agreed for many years, evidenced by the unqualified payment of demands.”

The FTT decided that it should “apply Cain”. It said at paragraph 102:

“… every year for around 12 years, two interim demands were made, each of which was paid without protest or qualification. It seems to us that these payments meet the test Judge Gerald set out in Cain, namely that they evidence an acceptance /agreement that the payments were due, even though the Applicants did not know everything they wished, later, to know about the rationale for and calculation of the payments.

103.

In is clear to us that though there were some things the Second and Third Applicants did not know when making payment, there was a great deal they did know. As we found above, they knew how the leases were set up; they knew how much was spent in each year on Kenilworth Court from the accounts; they knew that the accounts were for the whole of the Estate; they knew how much they were being asked to pay by way of interim charge; they knew they were entitled to information about the outturn for the year, and that they did not receive it. In our view, that was adequate information for them to assess whether they wished to pay what was demanded.”

Going back to Cain, the FTT expressed the view that section 27A(5) was limited in its effect, to a single payment, and that it was therefore not constrained by section 27A(5). Hence its conclusion at its paragraph 106, quoted above at paragraph 29, that it had no jurisdiction in respect of the charges from 2012/13 to 2015/16.