This case highlights – yet again – why the property tribunal system sometimes fails so badly. The First Tier Tribunal is intended to be the low-cost legal system in what is meant to be the lowest form of court in the land.
The tribunal rules require that if a case is sufficiently complex it should be moved to the Upper Tribunal, where there are more specialist and highly qualified judges. This was clearly a complex case, with the landlord represented by a QC and the leaseholders represented by an experienced barrister, and with both sides supported by specialist solicitors.
In total, the case has incurred well over half a million pounds in costs. A figure far more appropriate to the Court of Appeal or Supreme Court, rather than a First Tier Tribunal.
In the subsequent written costs hearing, Judge Marynski used an unusual methodology for awarding costs that seems to have unfairly burdened all the leaseholders at Chelsea Harbour with almost all the costs.
From reading the costs decision, it also seems unlikely that either side submitted full details of their costs – or at least that they were not considered in any financial detail. This may well be yet another case where the tribunal determines legal costs without “taxing” the actual figures. That is, the court assessing the nature of the costs claimed.
Time and again, LKP notes the tribunal hands down very dangerous costs decisions that are set out as percentages rather than an actual amount. So, 50 per cent of some unknown number – or rather 92 per cent in this case – seems a ridiculous and unfair way to conclude any hearing.
Had the leaseholders appealed to the Upper Tribunal, and then gone on via the Court of Appeal or even the Supreme Court they would have faced financial ruin.
By contrast, the landlord sits in a win-win situation.
Many leases allow the landlord to pass on his costs to defend any claim, while he knows full well there is no corresponding right to the leaseholder.
There are almost no circumstances in which the tribunal can award its own costs, being a low-cost court which, of course, only impacts the leaseholders.
Only if a section 20C order is given against the landlord is there any chance of limiting the landlord’s costs.
To obtain such an order, the leaseholders must both win, using money from their own pockets, at least a good proportion of their case, and then remember to ask the courts for the landlord’s costs to be limited from being passed to the service charge.
Just to tip things even more in favour of the landlord, had he lost at tribunal he would almost certainly have been granted leave to appeal on the inevitable ground that the case raises wider legal issues.
The only route left for those leaseholders who were not part of the main case and do not agree with the legal costs now passed on to them is to take their own case to determine whether the apportionment by the landlord has been fair.
The problem they face is that the landlord will claim he is only applying the judge’s cost ruling, which the judge has also somehow decided should not be subject to a further challenge.
In the build-up to the case, the need to abandon the original hearing and the inability for the parties to comply with directions seems to be a euphemism for the tribunal – yet again – failing to control the case.
Time after time, the tribunal seems to be supine in reacting to the games played by the lawyers in causing delays.
Bretherton solicitors, who acted for the landlords in this case, have certainly known these tricks of old, having played them before in cases such as Charter Quay, in Kingston, where they managed no less than four sets of delays in a single case.
Terms like “a lack of particularisation” also seem to be a bit of an issue with the tribunal, where lawyers deluge the tribunal with ever more documentation.
The tribunal allows more evidence than can ever be read, considered or understood – 26 volumes in this case! Then, it somehow accepts the lawyers’ arguments that this is still not enough detail on particular points.
It is the leaseholders’ legal team that should have checked each and every argument to ensure that it was fully supported by the relevant files.