[2025] UKUT 136 (LC)

It does not follow that the FTT’s flawed procedural decision requires that its substantive decision be set aside. Setting aside the procedural decision will be of no consequence unless the Building Owner can demonstrate that the substantive decision of 16 July to require payment of only nominal consideration was rendered unfair by the earlier refusal to permit expert evidence. Mr Holland KC submitted that it was and that, additionally, the decision to award only £1 was made without evidence to support it and was contrary to evidence on which the Building Owner had relied.

I can deal with the second and third of those submissions briefly. The FTT decided to award only nominal consideration; as far as a requirement for evidence is concerned, there is no difference between awarding nominal consideration and awarding no consideration at all. The FTT was not obliged to award real as opposed to nominal consideration because, in an interim rights case, paragraph 26(6)(b) of the Code releases it from the duty in paragraph 23(3) to include terms as to the payment of consideration. Whether it should include substantive consideration was a decision to be made on the basis of whether the FTT thought it “appropriate” to do so. I reject Mr Holland KC’s submission that the FTT could not properly decide whether it was appropriate to include substantial consideration without first hearing evidence on whether, in a notional no-network open market, parties would agree a substantial sum. The FTT had to make the discretionary decision on the basis of the material the parties had put before it. In the absence of useful evidence, and in view of its experience of previous agreements, the FTT was entitled to decide that it was not appropriate to include more than nominal consideration. There is no inconsistency between this conclusion and the recognition that expert evidence is required to determine the consideration which it would be appropriate to award if it is to be more than nominal.

Mr Holland KC also suggested that there was evidence which the FTT should have had regard to, but I am satisfied that such evidence as there was was neither objective nor persuasive. Ms Joss Dobbie, an asset manager with responsibility for the management of the Building, made a witness statement which included statements to the effect that the Building Owner is “not in the business of permitting the acquisition of rights over their building in return for no payment”. That is no doubt also true of most building owners, but it does not help in determining whether a hypothetical building owner which must be assumed to be willing to grant rights for a few short and unobtrusive visits would require payment; experience suggests otherwise and even this Building Owner made no charge for the MSV of November 2021. The evidence of Mr David Boyne, a chartered surveyor, on which the Building Owner also relied, was that sums of between £1,000 and £2,500 had been paid for MSV’s in his experience of arranging them. That is no doubt true, but similar sums are provided for by the agreement imposed on the Building Owner by the FTT (£440 per day for any visit of more than 4 hours duration and £220 for shorter visits; £550 for providing documents and £275 for approving risk assessments). Mr Boyne’s examples are also of negotiated agreements to which the no-network assumption did not apply.

The only valid ground of complaint open to the Building Owner is that its application for permission to rely on expert evidence was refused for reasons which were not justified. But that irregularity, which amounts to an error on a point of law, does not automatically render the substantive decision unfair. A finding on an appeal that a decision involved the making of an error in point of law engages the Tribunal’s power under section 12(2), Tribunals, Courts and Enforcement Act 2007, to set aside the decision; that power is discretionary (“the Upper Tribunal … may (but need not) set aside the decision of the First-tier Tribunal”).

The substantive decision will only have been unjust if the application to admit expert evidence ought to have succeeded. But it is clear to me that the application should have been dismissed for entirely different reasons from those relied on by the procedural judge.

The application could have been made at any time after 12 April but it was delayed for more than two months before finally being made on 19 June, less than a month before the hearing was due to take place on 16 July. That delay was unexplained in the body of the application, other than by the statement that the parties had been unable to agree what consideration should be paid. But the parties’ inability to agree was inevitable as soon as the Building Owner made clear on 16 March that it sought substantial consideration and proposed a payment of £2,000. CTIL’s position on consideration was well known to the Building Owner’s solicitor, Mr Watson, who is very experienced in Code litigation; it was stated explicitly on 29 April when CTIL’s solicitors asserted that “consideration (other than a nominal figure of £1) is not payable for a MSV Agreement”.

When the application was made it was not accompanied by a draft report or any indication of the consideration being proposed. The only direction suggested was for simultaneous exchange of reports one week before the hearing date. The Building Owner’s solicitors had instructed its own expert on 30 May in a detailed letter accompanied by relevant documents, but they did not inform CTIL’s solicitors that they had done so. The timetable they proposed, which assumed a simultaneous exchange of reports, would therefore have allowed their own expert significantly more time to prepare than any, as yet unidentified, expert whom CTIL might instruct. Had the FTT allowed the application on 24 June, rather than refusing it, CTIL and any expert would have had less than three weeks to prepare evidence before the proposed date of exchange, and less than four weeks before the hearing date. Nor did the timetable propose or allow time for preliminary discussions between experts to narrow issues or prepare an agreed statement. The Building Owner and its solicitors gave no consideration to the practicalities of their proposed timetable.

When its solicitors made the application the Building Owner said that the original time of 3 hours allocated for the hearing would now be inadequate in view of what was said to be the need to cross examine the expert witnesses. No alternative time estimate was supplied, although it was said that the requirement of additional time had been discussed with counsel.

In summary, the application was hopelessly late, was not accompanied by any indication of the substance of the evidence which the Building Owner wished to adduce, did not propose a realistic timetable for evidence in response and was guaranteed to disrupt the determination of the substantive interim rights application.

Mr Holland KC suggested that the FTT could have given directions for a split hearing, with consideration being dealt with on a later date, or it could have given directions for sequential exchange of evidence. No doubt it could, although no proposal to that effect was made, but that misses the point that it was being invited to consider directions for expert evidence so close to the hearing date that a sensible timetable was simply not feasible. Had the FTT considered that it should permit reliance on expert evidence it was inevitable that the hearing would not be completed on 16 July.

The Building Owner was under a duty to cooperate with the FTT to enable it to manage the proceedings consistently with its overriding objective of dealing with the matter fairly and justly. For the reasons I have given its application of 19 June was not consistent with that duty. It was calculated to obstruct the achievement of that objective and, by necessitating the postponement of the hearing, to delay the resolution of the application and to waste the FTT’s resources.

Although the procedural judge’s reasons for refusing the application were flawed, it is overwhelmingly likely that a judge properly directing themselves on the law would have reached the same conclusion for purely practical case management reasons and would have dismissed the application in any event. In those circumstances, there was no injustice in the FTT’s determination of the terms of the new Code agreement without permitting the Building Owner to rely on expert evidence.

The appeal is therefore dismissed.