[2025] UKUT 120 (LC)

In the event, the 2021 court proceedings were not formally served and were struck out. A new claim was issued by the appellant on 6 June 2023 seeking payment of £24,817 plus interest said to be outstanding for the years 2019 to 2023. In response, on 15 June 2023, the respondent commenced her own application in the FTT under section 27A, 1985 Act, asking it to determine her service charge liability for the same years. She also requested an order under section 20C, 1985 Act, to prevent the recovery from her of any contribution to the costs of the proceedings (she did not ask for protection for any other leaseholder).

The FTT gave directions for the appellant to provide copies of service charges accounts and estimates and for the parties to cooperate in the production of a schedule of disputed items. The respondent was to begin by identifying those charges which she challenged, with reasons. When the appellant responded to the schedule it was to provide copies of all relevant invoices relating to the matters disputed by the respondent.

In the completed schedule the respondent listed some, but not all, of the items shown in the annual expenditure summaries. For example, for 2019, she disputed lift expenditure, buildings insurance, external repairs, gardening, management fees and the annual contribution towards reserve funds of £10,000. She also took from the 2019 service charge budget two further items which did not feature in the summary of expenditure, health and safety costs, and professional fees.

She adopted a similar approach in the schedule of disputed charges for 2020, identifying 17 items of which ten were taken from the summary of expenditure and seven from the budget. Some items appeared both in the budget and in the summary of expenditure, but for different amounts (for example, £600 had been budgeted for emergency lighting testing, but only £576 had been spent). Other items had been budgeted for, and were disputed by the respondent in the schedule, but no corresponding expenditure had been incurred (for example, £500 had been budgeted for pest control but nothing had been spent). Finally, some items were given different names in the budget from those which appeared in the summary of expenditure (a sum of £13,000 was budgeted under the heading “porter”, but the corresponding expenditure in the summary was of £14,256 described as “cleaning”); the respondent disputed both items.

The respondent took the same approach to the years 2021 and 2022, combining budget items and certified expenditure in the same schedule. She did not dispute any expenditure in 2023 (which had not yet been certified) nor did she challenge any internal repair item. She provided no details of any specific ground of challenge although she did file a witness statement referring to her draft defence in the original Court proceedings as explaining her concerns. That defence was expressed in very general terms, effectively putting the appellant to proof that the expenditure had been incurred and was reasonable.