[2024] UKUT 158 (LC)

At the appeal hearing there was no legal representation; Mr James Green, the leaseholder of flat 4 and company secretary of the appellant, represented the appellant, and the two respondents appeared in person. I am grateful to them all for their explanations of what happened, which was largely undisputed, and of their respective positions. The following account of the facts reflects what the parties told me, and as far as possible I have indicated where they disagreed; I make no findings of fact.

It is not in dispute that the property has suffered from water ingress for many years, although the cause of the problem is not agreed. Mr Green explained that an initial notice under section 20 was sent by Packfords to all the leaseholders in September 2019, as the first step in the consultation process in respect of work designed to solve the problem by carrying out some work on the balconies to the upper flats. A notice of estimates was sent in January 2020, setting out three estimates obtained and explaining that the appellant proposed to engage the contractor who gave the lowest estimate, SJS Maintenance Limited. On 18 June 2021 Packfords wrote to the leaseholders to say that work was going to start.

It was obviously some time since the first consultation notice had been sent out. Whatever the reasons for the delay, in the meantime Packfords made provision for the cost of the works in the service charge budget; the 2020 budget included £6,668 for “works to eliminate water ingress”, the subject of the consultation notices; the 2021 budget provided for £7,000 to cover work to the skylight which needed replacement (and which Mr Green said was covered by an earlier consultation procedure); the 2022 budget included £500 for a roof inspection. Mr Green and the respondents agreed that those sums - £14,668 in total - were paid by all the leaseholders including the respondents.

However, the appellant took legal advice and was advised that the balconies were demised to the individual leaseholders and therefore the appellant could not carry out that work.

Instead a plan was made, on the basis of a report prepared by LBB surveyors in February 2022, to redirect the guttering on the roof, so as to connect with a downpipe at the side of the building instead of one at the front of the building. LBB recommended that the work to the balconies should also go ahead. All the leaseholders agreed that the redirection of the downpipe should be done; an email from Ms Perrett to Packfords dated 11 February 2022 made it clear that what she (and I infer also Ms Lambell) wanted was for the whole package of work recommended by LBB to be completed, balconies as well as gutters – but at any rate, along with the rest of the leaseholders they agreed that the work to redirect the gutter should be done. They were directors of the appellant at the time. Packfords obtained a number of quotes.

In April 2022 Packfords resigned because of legal proceedings brought by the two respondents to this appeal. The appellant was not able to engage alternative managing agents and therefore AML was incorporated in order to take on the task of management, and subsequently received the service charge balance from Packfords.

Meanwhile Mr Green, along with Mr Stamp in flat 6, took the lead in getting the guttering work done. Of the quotes obtained by Packfords, CK Roofing offered the best deal and were asked to do the work on the gutter, and also to replace a skylight (which Mr Green said was the subject of a separate section 20 consultation) and to inspect the roof to see if anything else needed doing. Mr Green wrote to the leaseholders on 25 April 2022 explaining that on inspection CK Roofing had found ridge tiles needed replacement as well as wooden cladding and fascia, none of which had had any attention since the building was constructed in the 1970s, and setting out the cost. He explained that CK Roofing were prepared to do the work while their scaffolding was already up; if it had to be delayed then a fresh set of scaffolding would cost £3,000.

Miss Lambert replied on 27 April 2022, asking why money that was collected for the work planned in 2019 was being spent on this different plan. Mr Green responded at length on the same day explaining the necessity for the works, setting out the quotes obtained and explaining that CK Roofing’s quote was the cheapest. He asked her to let him know if she wished to “stand in the way” of the appellant’s going ahead, since if so the appellant would go to the FTT to seek a dispensation from consultation. No reply was received.

The leaseholders of flats 3, 5 and 6 indicated their agreement; I was not shown any response from Ms Perrett. The work then went ahead, and the appellant says it paid CK Roofing the £12,500 set out in the FTT’s paragraph 16. The funds for the payment came from the service charges already collected by Packfords, whose budgets from 2020 to 2022 included more than enough to pay.

It was the appellant’s case in the FTT that the consultation carried out by Packfords in 2019 and 2020 was the consultation for the work done. The consultation was about work to prevent water ingress, and that was the purpose of the redirection of the gutter, the renewal of the skylight and fascia, and everything else done on the roof.

The respondents’ case, in the FTT and in the appeal, was that that consultation was for a different package of work and that the quotes obtained were not from the contractors who did the work in 2022, so that no consultation was carried out in respect of the work done in 2022.

The question raised by the appeal is therefore whether the 2019-2020 consultation can be regarded as a consultation in respect of the works actually carried out in 2022.

However in the course of the respondents’ submissions during the hearing it became clear that that was not what they were really concerned about. In answer to questions from me the respondents both agreed that as members of the appellant company they had a responsibility to keep the property maintained; they accepted that they had paid the charges and did not seek to argue that the work should not have been done. Specifically they confirmed that they did not want to be reimbursed what they had paid for the roof works. Instead, what they were concerned about was the provision of information.

Ms Perrett took me to a bank statement and other documents in the bundle and explained that the respondents were unconvinced that CK Roofing had been paid £12,500, and that they were troubled by discrepancies between what was quoted and what was charged. Mr Green helpfully explained that the reason why the appellant’s bank statement did not show all the payments to CK Roofing was that he and Mr Stamp had paid deposits to CK Roofing in April 2022, in order to get the work started before AML was incorporated; those sums were treated as a loan to the company and were repaid after its incorporation. As I said above, I make no findings of fact, but I hope that that information was helpful.

I suggested to the respondents that in light of

That being the case there is no need for me to make any decision about consultation. The respondents were not entitled to challenge the charges for the roof works because the FTT did not have jurisdiction to make any decision about them as a result of section 27A(4) of the 1985 Act., which says: