[2025] UKUT 292 (LC)

Ground 4 arises for consideration only if the other grounds fail, as indeed they have done. This ground is that it was not open to the FTT, on the evidence before it, to find that the leases failed to make satisfactory provision, for three reasons.

The first is that the FTT was wrong to infer at its paragraph 35 that the reason the urgent works to the spire had been delayed was the service charge mechanism, and to rely on that to justify its finding that the provisions of the lease were unsatisfactory. In fact, say the appellants, the landlord was ready and able to do the work, obtained the dispensation from the consultation requirements under section 20ZA of the Landlord and Tenant Act 1985, and would have proceeded had it not been prevented from doing so by the RTM company, which threatened an injunction if the landlord proceeded with the work while the claim to acquire the right to manage was pending. The respondents say that there was no evidence that the landlord was ready to do the work, although it did serve invalid service charge demands seeking the whole cost in advance from the leaseholders. In any event, said Mr Rainey KC, the FTT had no need of evidence as to what could or might have been done; its judgment was based on the lease itself and its unsatisfactory provisions.

In my judgment this ground of appeal cannot succeed. The respondent is now responsible for the emergency works; as discussed above, the lease provisions for the interim maintenance charge are and always were unsatisfactory and the respondent as an RTM company does not have the independent resources to buy its way around those provisions. What the landlord has done or might have done is not relevant to the judgment the FTT correctly made on the basis of the statutory criteria; even if it could have been shown that the landlord as a matter of fact stood ready to do the work, with the resources to do so in its pocket, that would have made no difference to the FTT’s decision.

Second, it is said that the respondent failed to discharge the evidential burden of proving that the existing provisions of the lease were not workable. It said it could not afford to carry out the emergency works but had not shown that that was the case. In particular it had entered into a contract for the works, but no copy was provided; there was no evidence that the respondent could not have found a contractor who would wait for payment, there were no bank statements, there was no evidence that it could not raise finance. Its only evidence was that of MsCarroll, an employee of the respondent’s managing agent; as the FTT explained (in its paragraph 35, set out above at paragraph 25) her evidence was that the respondent could not afford to fund the works; the appellants did not formally challenge that evidence because they had no positive case with which to contradict it, but they made it clear that they did not accept it.

Mr Bates KC pointed to the FTT’s paragraph 34 and suggested that it was for the respondent to show that none of those options was open to it.

I regard this point as unrealistic for two reasons. First, Ms Carroll’s evidence was unchallenged; the appellants did not require her to attend for cross-examination. The fact that the appellants did not agree with it is neither here nor there; they provided no basis on which her evidence could be rejected. It was in any event credible; RTM companies do not have funds beyond what is paid to them in service charges. As we saw above this is well-known: see in particular the dicta of Lord Briggs in FirstPort Services Ltd v Settlers Court RTM Co Ltd [2022] UKSC 1 (set out at paragraph 21 above).

Second, the options set out in the FTT’s paragraph 34 were, as Mr Rainey KC observed, set out in order to show that the respondent had no realistic options. It could not fund the works itself; contractors do not take payment on trust; there is no reason to presume upon the generosity of a minority of leaseholders to fund the works without any certainty of reimbursement; waiting for the reserve fund to build up the funds will take too long.

There is no substance in this second point.

Third, it is argued that if (contrary to the appellant’s submissions) the financial circumstances of the respondent as an RTM company are relevant then so are those of the person with control of the respondent. He is said to be a Mr Hamad Khalifa Abdulla Al-Attiyah, whose wealth it is said could be inferred from his ownership of eight flats in the property and who in any case can be seen by searching the internet to be “an ultra-high net worth individual”. He could have funded the emergency work and the rest of the work could have waited for funds to be raised through the lease as it stands.

For the respondent it is pointed out that in Gianfrancesco v Haughton (2008) the Lands Tribunal (the President, George Bartlett) said:

“Although it is right that the question of satisfactory provision should be determined in all the circumstances, the weight to be given to particular matters may need careful consideration. What the landlord or the tenant says that he is willing to do in addition to his obligations may have some relevance as to how, in practice, the provision in question is likely to operate. But it would normally be wrong, it seems to me, to base a decision on such an expression of willingness since the person in question could change his attitude or be replaced as landlord or tenant by another person differently disposed.”

Accordingly it is said that the financial status of Mr Al-Attiyah is irrelevant, and I agree. It may or may not be the case that an individual member of the respondent could fund the works. There is nothing to require him to do so. There is nothing to require him not to sell his flat and forfeit his membership. The financial status of a member of the respondent company was as irrelevant to the consideration of the respondent’s application as would be the financial status any shareholder of a corporate landlord if it was the landlord who sought a variation.

Accordingly, the three points made on this ground all fail.