Ross Smith v Waterloo Warehouse RTM Co Ltd

Where the resolution of disputed facts depends on the credibility of competing witnesses, the First-tier Tribunal will ordinarily be unable to determine the matter fairly or reliably on written representations alone. A hearing is not invariably required for contested facts, since corroborating documents may permit a fair decision. However, a tribunal must give adequate reasons for preferring one party’s account. It cannot resolve a credibility dispute by general assumptions about usual practice, unsupported inferences about non-parties, or an unexplained preference for one account over another.

Ross Smith, the leaseholder of two flats, appealed against a First-tier Tribunal decision concerning service and administration charges demanded by the respondent right-to-manage company.

He alleged that the post-April 2015 demands lacked required information and the summary of tenants’ rights, and that the company had wrongly allocated his payments to older arrears. The parties did not request an oral hearing. The FTT nevertheless determined those disputed factual issues on the papers and preferred the company’s evidence.

The appeal concerned whether the FTT could fairly decide disputes turning on credibility without a hearing, and whether its reasons for its findings were adequate.

1. Appeal allowed. The FTT’s findings that the demands contained the prescribed information and tenants’ rights summary, and that no agreement existed about allocating payments, were set aside.

2. Contested facts may sometimes be determined without a hearing. Corroborating documentary evidence may make that course fair and reliable. However, where the dispute turns on the credibility of witnesses, it is difficult to envisage a fair or reliable determination on written material alone. Here, either the appellant’s account of the demands and payment-allocation agreement was untrue, or the respondent’s contrary account was untrue. The written evidence did not provide a reliable means of resolving those credibility disputes.

3. The FTT’s reasons were wholly inadequate. It gave no reason for preferring the respondent’s evidence on allocation of payments. Its reasons concerning the demands were also unsound: a general expectation that managing agents usually issue compliant demands did not answer positive contrary evidence; there was no evidence about other leaseholders; and both parties had supplied conflicting copies of the demands. The possibility that the respondent’s copies had been supplemented could not be dismissed on the material before the FTT.

4. The Tribunal endorsed the warning in Enterprise Home Developments LLP [2020] UKUT 151 (LC) about determining disputed facts on written material from unrepresented parties. The absence of a request for an oral hearing did not cure the unfairness, particularly where an unrepresented party may not appreciate the need to test evidence through witnesses.

5. The matter was remitted to a differently constituted FTT for a fresh determination of the compliance of the post-April 2015 demands, the alleged agreement on allocation of payments, and the application under section 20C of the Landlord and Tenant Act 1985.

• Upper Tribunal (Lands Chamber): Allowed the appeal in [2023] UKUT 8 (LC), set aside the relevant FTT findings and remitted specified issues to a differently constituted FTT.
• First-tier Tribunal (Property Chamber): On 24 November 2021, determined on the papers that the demands were compliant and that payments could be allocated to the oldest arrears; it also refused relief under section 20C. Those findings were set aside on appeal.