Cameron Marshall v Northumberland & Durham Property Trust Limited

Dispensation from statutory consultation requirements for qualifying works must be assessed by reference to prejudice to leaseholders, not merely the urgency or reasonableness of the landlord’s conduct. The tribunal must identify the consultation steps omitted and consider what prejudice resulted. Consultation is a group process: each leaseholder may rely on the possibility that proper consultation by another leaseholder would have reduced the scope or cost of the works. Where a credible case of relevant prejudice is shown, the tribunal should adopt a sympathetic approach and may impose conditions, including a reduction in recoverable costs and reimbursement of reasonable costs incurred in resisting the application. Urgency may explain why consultation was impracticable, but it does not itself establish absence of prejudice or justify blanket dispensation.

The appellant was the leaseholder of a flat in a 16-flat block. The respondent landlord urgently replaced boilers and ancillary equipment without fully complying with the consultation requirements under the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003.

The First-tier Tribunal granted unconditional dispensation. It relied principally on the urgency of the works, the landlord’s intention to consult, and the fact that the other leaseholders had been informed. The appellant argued that he had been excluded from the consultation, and that he had shown a credible case that proper consultation could have affected the contractor selection and cost. The central issues were whether the FTT had applied the correct approach to prejudice and whether dispensation should be granted on conditions.

1. Appeal allowed. The FTT’s decision was set aside. The Upper Tribunal remade the decision under section 12 of the Tribunals, Courts and Enforcement Act 2007.
2. Under section 20ZA of the Landlord and Tenant Act 1985, the decisive issue is the extent to which leaseholders were prejudiced by the landlord’s failure to comply with consultation requirements. The FTT erred by treating urgency as the principal reason for granting unconditional dispensation without identifying the omitted steps, their consequences, or the resulting prejudice.
3. Urgency does not permit prejudice to be assumed away. Contractual or regulatory duties to provide heating, hot water, or safe premises form part of the background, but do not displace statutory safeguards. A tribunal must assess the consequences of the particular failures and consider whether prejudice can be mitigated by conditions.
4. The consultation process is collective. As explained in Aster Communities v Chapman [2021] EWCA Civ 660, one leaseholder may rely on the possibility that another’s participation would have reduced the scope or cost of the works. The FTT therefore erred in stating that the omission of one leaseholder could not found an objection to dispensation.
5. The appellant had established a credible case that, if consulted, he would have nominated another contractor and that a competitive quotation might have enabled the landlord to negotiate a lower price. The FTT further erred by disregarding engineering evidence after misunderstanding its nature and describing it as self-serving.
6. The appropriate dispensation was conditional. Recoverable costs for the works were limited to £13,000 plus VAT. The landlord was required to reimburse specified costs paid by the appellant to Green Flame, his legal representative, and the Tribunal, and to pay the appeal hearing fee.

• Upper Tribunal (Lands Chamber): The appeal from the FTT was allowed, the decision was set aside, and dispensation was granted on conditions.
• First-tier Tribunal (Property Chamber): Unconditional dispensation was granted in respect of the boiler works.