Anna Kyriacou v Vanessa Linden

Under section 168(4) of the Commonhold and Leasehold Reform Act 2002, the First-tier Tribunal's function is confined to deciding whether a breach of lease covenant has occurred. It must not refuse a determination because the breach was remedied, waived, or absent when the application was issued. If the alleged breaches are clearly identified and the respondent can answer them, the Tribunal should determine them on all the evidence.

A covenant to insure in joint names and for a stated risk is breached by non-compliant insurance. The absence of significant detriment does not excuse non-compliance. A costs order for unreasonable conduct must rest on a sound assessment of relevant matters and remain proportionate, while taking account of the relationship between unreasonable conduct and costs incurred.

Anna Kyriacou v Vanessa Linden was an appeal from a First-tier Tribunal decision published on 1 February 2021. The FTT had dismissed the landlord's application under section 168(4) of the Commonhold and Leasehold Reform Act 2002 for determinations of breach of covenant by the leaseholder of a ground-floor flat. It also ordered the landlord to contribute £35,841 towards the leaseholder's costs.

The surviving allegations concerned repairs, obstruction of an entranceway by bins, and insurance. The lease required insurance in the joint names of landlord and tenant, including two years' loss-of-rent cover. The central issues were whether past non-compliant insurance required a determination despite later compliance, and whether the FTT's costs order was lawfully made.

1. Appeal allowed. The Tribunal substituted determinations that the respondent had breached paragraph 17 of the Third Schedule. Insurance was not held in joint names from 2 December 2019 to 19 February 2020. The policy obtained from 1 November to 2 December 2019 also failed to cover loss of rent.

2. The FTT erred by treating later compliance as preventing a determination. Under section 168(4) of the Commonhold and Leasehold Reform Act 2002, its sole task is whether a breach has occurred. Remedy, waiver of forfeiture and resulting loss are matters outside that jurisdiction. The application date has no special limiting significance where the allegations are clear and the respondent has had an opportunity to answer them. This followed GHN (Trustees) Limited v Glass, LRX/153/2007, and was consistent with Bedford v Paragon Asra Housing Association Ltd [2021] UKUT 266 (LC).

3. The FTT also erred in treating the lack of loss-of-rent cover as immaterial because the potential loss of ground rent was small. Once it entertained that allegation, the lease's express insurance requirement had to be applied.

4. The appeal against the costs order was also allowed. The FTT's assessment was flawed because it treated the insurance claim as unsubstantiated and relied on irrelevant or unjustified criticisms, including the failure to withdraw that successful allegation. The original order was set aside.

5. Re-making the costs decision under rule 13(1)(b), the Tribunal held that the landlord had acted unreasonably in reviving bin allegations and in refusing to nominate a bin area required by the lease. A contractual right requiring the other party's nomination cannot be defeated by that party's refusal to nominate; the opportunity is treated as waived if not exercised. But the landlord was entitled to pursue the insurance breaches. A proportionate contribution, taking causation into account, was £10,000 payable within 28 days.

• Upper Tribunal (Lands Chamber): Allowed the appeal, substituted breach determinations under section 168(4) of the Commonhold and Leasehold Reform Act 2002, set aside the FTT costs order, and re-made it for £10,000.
• First-tier Tribunal (Property Chamber): On 1 February 2021, refused the landlord's application for breach determinations and ordered her to pay £35,841 towards the leaseholder's costs.