[2025] UKUT 97 (LC)

The FTT refused Manaquel’s application. In its Costs Decision it noted Manaquel’s criticism of Lambeth’s conduct in continuing to assert the existence of hazards without reinspecting the Estate, notwithstanding that works had been undertaken. There was, Manaquel had submitted, “no reasonable explanation for [Lambeth’s] failing to correct the notice in the two years between the notice of appeal and the hearing.”

The FTT directed itself on the law by reference to the Tribunal’s decision in Willow Court Management Ltd v Alexander [2016] UKUT 290 (LC) which followed the Court of Appeal in Ridehalgh v Horsfield [1994] EWCA Civ 40. The Court held that unreasonable conduct includes conduct which is vexatious, and designed to harass the other side rather than advance the resolution of the case, and identified the acid test as being whether there was a reasonable explanation for the conduct complained of.

The FTT was critical of Lambeth’s conduct of the appeal. The improvement notice was “seriously flawed” and it should have been clear that it was unlikely to be upheld, and that Lambeth had provided insufficient information to enable a satisfactory variation to be ordered. Nor could Lambeth reasonably have expected the FTT simply to adjourn the proceedings to allow it to produce a more credible notice. Lambeth was not a litigant in person, but a local housing authority, yet it had failed to take steps which one would expect such an authority to take, including disclosing its hazard scoring calculations and inspection records and undertaking a reinspection of the Estate nearer to the hearing date.

The FTT also took account of considerations which it felt weighed more in Lambeth’s favour. The authority had “identified many Category 1 and Category 2 hazards and [Manaquel] does not deny this.” Lambeth had been under a statutory duty to act (a duty imposed by section 5(1), 2004 Act, where a Category 1 hazard is considered to exist). It faced a very difficult task since the nature and extent of the hazards was different in each flat and in the extensive common parts. There was persuasive evidence that Manaquel had failed to engage with Lambeth for long periods and the FTT had rejected its arguments (about the relevance of the application for planning consent). Lambeth had also demonstrated flexibility over how the parties should best proceed. The FTT did not accept that its conduct was vexatious, abusive, designed to harass the other side or frivolous, nor was there any suggestion that it had acted improperly.

The FTT turned finally to the question whether there was a reasonable explanation for Lambeth’s conduct. On that question, it said this, at [30]:

“[…], to treat the Respondent’s conduct in this case as unreasonable conduct for the purposes of Rule 13(1)(b) would ultimately in our view be too harsh, as we do not accept that this is the type of situation envisaged by the Upper Tribunal in Willow Court as justifying a Rule 13(1)(b) cost order. Charlotte Ward, the Respondent’s main witness, was cross-examined extensively at the hearing, and although she was unable to defend the improvement notice or the decision to contest the appeal to the tribunal’s satisfaction, she nevertheless came across as an experienced professional who took her housing standards responsibilities seriously and had genuinely tried to engage with the Applicant. And whether it was due to an element of ‘tunnel vision’ or to a misguided belief that the improvement notice could sensibly be varied on the information available or due to some other factor or a combination of factors, our view is that the Respondent’s approach in relation to these proceedings was incompetent but that the Respondent did not act unreasonably in the sense envisaged by the first stage of the Willow Court test.”

Having decided that Lambeth had not behaved unreasonably, the FTT did not have to consider whether it should exercise its discretion to make a costs order. The application could simply be dismissed.