Brunswick Mansions Management Company Limited v Triplerose Limited

Orders under Landlord and Tenant Act 1985, section 20C, and Schedule 11 to the Commonhold and Leasehold Reform Act 2002 may properly be made against a management company which has incurred costs in actively opposing a leaseholder's successful service-charge challenge. The formal allocation under the lease of responsibility for a particular charge does not decide the issue. The tribunal may consider the company's practical and financial interest, its role in arranging the relevant service, and the evidence and argument it advanced. It is unrealistic and unfair to deny protection merely because another party was formally responsible for the charge.

The management company appealed against First-tier Tribunal orders made in favour of the leaseholder under section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

The underlying consolidated proceedings concerned the reasonableness and payability of management fees, an entry system charge and insurance charges. Under the leases, the freeholder covenanted to insure, while the management company reimbursed the insurance cost and recovered it from leaseholders. The leaseholder was largely successful, principally on insurance. The management company contended that this success was against the freeholder rather than against it.

The central issue was whether the management company's participation and interest in the insurance dispute justified the protective costs orders against it.

1. Appeal dismissed. The First-tier Tribunal was entitled to make the section 20C and Schedule 11 costs orders against the management company.

2. The management company had actively opposed the insurance challenge. It gathered and adduced evidence, complied with directions concerning insurance material, presented argument and cross-examined the leaseholder's witness. Its participation was not merely assistance to the tribunal.

3. Although the lease placed the primary covenant to insure on the freeholder, the management company had a real interest in the insurance costs. It arranged the insurance through the managing agent and was obliged to reimburse the freeholder. That obligation was not conditional on recovery from the leaseholder. Its attempted substantive appeal on insurance confirmed that interest.

4. The leaseholder had challenged insurance, the entry system and management fees, and the management company had incurred costs in resisting all three challenges. The leaseholder was largely successful. Most costs were incurred on insurance, an issue in which the management company properly participated. Treating the company's lack of formal responsibility for insurance as determinative would have been unrealistic and unfair.

• Upper Tribunal (Lands Chamber): dismissed the management company's appeal from the First-tier Tribunal's protective costs orders: [2023] UKUT 31 (LC).

• First-tier Tribunal (Property Chamber): after determining service-charge issues, made orders under section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002. No citation was stated.