Goldstein v Conley

A costs order made by the Lands Tribunal on an appeal from leasehold valuation tribunal proceedings may be enforced by an action at common law. It creates an obligation to pay the assessed costs, independently of statutory enforcement machinery. The appeal costs are separate proceedings and are not excluded by section 91(8) of the Leasehold Reform, Housing and Urban Development Act 1993, which protects parties from recovery of costs incurred in leasehold valuation tribunal proceedings. An unsuccessful county-court enforcement attempt does not create an estoppel or abuse preventing a common-law action. On the facts, statutory enforcement under section 66 of the Arbitration Act 1996 was unavailable because the proceedings began before the relevant amendment took effect.

The tenant had claimed a new lease under the Leasehold Reform, Housing and Urban Development Act 1993. The leasehold valuation tribunal fixed the premium at £143,000. On the landlord’s appeal, the Lands Tribunal increased the premium to £191,212.50 and ordered the tenant to pay the landlord’s costs. The decision is reported at [1999] 03 EG 137.

The landlord’s first attempt to enforce the costs order through the county court was set aside. He then brought a High Court action for the assessed costs. Master Rose granted summary judgment, and Gray J dismissed the tenant’s appeal. The tenant appealed against that decision and also obtained permission out of time to challenge the original costs order. The central issues were the Lands Tribunal’s jurisdiction to award costs, the available enforcement route, the effect of the county-court proceedings, and whether the High Court’s jurisdiction was excluded.

The Court of Appeal unanimously dismissed both appeals. Clarke LJ gave the leading reasons. Sir Anthony Evans agreed with the result and with the principal reasoning, subject to a different view on the wider effect of the statutory enforcement rule. Mantell LJ agreed with both appeals being dismissed.

1. Enforcement. A Lands Tribunal costs order creates an obligation on the party ordered to pay. In the absence of effective statutory machinery, that obligation is enforceable by an action at common law. The right is independent of other enforcement procedures. The analogy is with enforcement of a foreign judgment, although the action is not identical to an action on an arbitration award.
2. Statutory enforcement. Clarke LJ held that rule 32(d) of the Lands Tribunal Rules 1996 applied section 66 of the Arbitration Act 1996 to Lands Tribunal proceedings, but only within the temporal scope of the 1997 amendments. The landlord’s proceedings began on 25 July 1996, before 1 September 1997, so section 66 was unavailable. Evans LJ agreed that the amendment could not operate retrospectively, but considered that section 66 did not clearly make all Lands Tribunal decisions enforceable as arbitration awards.
3. Earlier county-court proceedings. The failed administrative application and the district judge’s order did not prevent the landlord from proceeding by common-law action. There was no relevant res judicata, cause of action estoppel or abuse of process under the principle discussed in Henderson v Henderson.
4. Jurisdiction to award costs. Section 3(5) of the Lands Tribunal Act 1949, together with rule 52 of the Lands Tribunal Rules 1996, empowered the Lands Tribunal to award costs of the appeal. Section 91(8) of the 1993 Act concerned costs incurred in proceedings before the leasehold valuation tribunal. Proceedings before that tribunal and an appeal to the Lands Tribunal were ordinarily separate proceedings. The section therefore did not remove the Lands Tribunal’s jurisdiction to order the appeal costs. The court rejected the contrary obiter view expressed by Judge Wakefield.
5. High Court jurisdiction and final orders. Section 90(2) of the 1993 Act did not oust the High Court’s jurisdiction because the action was brought to enforce the Lands Tribunal order; the statutory construction issue arose only incidentally as a defence. The tenant had not challenged the taxation itself, so no relief was available on quantum. Both appeals were dismissed, with the landlord awarded 60% of the costs.

• Court of Appeal: Both appeals dismissed on 4 May 2001. Permission to appeal to the House of Lords was refused.
• High Court, Queen’s Bench Division: Gray J dismissed the tenant’s appeal from Master Rose’s summary judgment on 12 June 2000.
• Master Rose: Summary judgment was entered for the landlord on 13 March 2000 in the High Court action enforcing the Lands Tribunal costs order.
• Lands Tribunal: On 13 August 1998 the landlord’s appeal was allowed, the premium was fixed at £191,212.50, and the tenant was ordered to pay the appeal and cross-appeal costs. The costs order was amended on 18 September 1998. The merits judgment is reported at [1999] 03 EG 137.
• Leasehold valuation tribunal: On 4 July 1996 the appropriate premium was fixed at £143,000.