[2025] UKUT 88 (LC)

I have decided so far that the reasons given by the FTT did not justify its refusal to vary the leases to oblige the leaseholder to reimburse the lessor’s costs of enforcement action, nor did they justify its refusal to vary the leases to permit the recovery of those costs through the service charge.

On an appeal, if this Tribunal finds that the making of the FTT’s decision involved the making of an error on a point of law, it may (but need not) set aside the decision. If the decision is set aside the Tribunal must then either remit the case to the FTT for reconsideration or re-make the decision.

On behalf of Mr Polturak, Mr Demachkie submitted that the FTT’s decision should not be set aside, because it was supportable on an additional ground, which it had not considered. That was that the proposed variation would drastically alter what Mr Demachkie referred to as “the balance under the lease” by favouring the RTM Company at the expense of any tenant with a legitimate dispute. He asserted that the variations would substantially prejudice the leaseholders, and that such prejudice could not sensibly be quantified or compensated in money.

As Mr Demachkie acknowledged, the FTT did not consider the issue of prejudice. Although the Tribunal in Shellpoint had dealt with prejudice, the passage which the FTT quoted from that decision was not concerned with the quantification of prejudice or whether such prejudice as might be caused by a variation could be adequately compensated. Neither party has suggested that I should remit the case to the FTT to enable it to consider that issue for itself, and it would put the parties to further avoidable expense and delay which can and should be avoided. As it will therefore be necessary for me to consider the issue of prejudice in any event, and as it involves balancing a number of factors, the better course is for me to consider it while re-making the decision on the application as a whole.

For these reasons I set aside the FTT’s decision, and I will now re-make it.