Louise Webb & Anor v Sunley (Findlay Close) Residents Ltd

A party seeking payment of service charges must prove that the relevant demands were served. A tribunal must not reverse that burden by requiring leaseholders to prove non-service.

Where service is contested on material facts and the written evidence does not permit a concluded finding, determining the matter without a hearing is unfair. The tribunal should direct a hearing at which the evidence may be tested, including by cross-examination where appropriate.

The appellants were long leaseholders of a flat managed by the respondent residents’ management company. The respondent sought a determination under section 27 A of the Landlord and Tenant Act 1985 that service charges for 2016 to 2020 were payable.

The appellants accepted that their flat was the proper service address because they had not supplied another address. They disputed that demands had ever been served. The First-tier Tribunal nevertheless determined the case on the papers and found the charges payable.

On appeal, the central issues were whether the procedure was fair and whether the finding of service was open on the evidence.

1. Appeal allowed. The First-tier Tribunal’s decision was unfair and its finding that the demands had been served was not open on the evidence before it.

2. The respondent company bore the burden of proving service of the demands. The First-tier Tribunal erred by treating the appellants’ inability to provide positive evidence of non-delivery as supporting a finding of service. The appellants’ non-residence at the flat did not deprive their evidence of relevance, particularly where service itself was disputed.

3. The respondent had no witness able to give evidence of actual service. Its evidence depended on material supplied by its former managing agent. The First-tier Tribunal also failed properly to consider Ms Barton’s statement that she had not received demands herself. That evidence was capable of making non-service upon other leaseholders more likely.

4. On the written material, the only decision open to the First-tier Tribunal was that service had not been proved. If the respondent had evidence capable of proving service, the appropriate course was to direct a hearing so that the appellants could test that evidence by cross-examination.

5. The matter was remitted to the First-tier Tribunal. If the respondent seeks to rely on further evidence of service, it must seek directions; it should consider carefully whether it can prove service of the demands.

• Upper Tribunal (Lands Chamber): allowed the appeal in [2022] UKUT 171 (LC) and remitted the matter to the First-tier Tribunal.
• First-tier Tribunal (Property Chamber): determined the matter on the papers and held that service charges were payable.