Adriatic Land 5 Limited v The Long Leaseholders at Hippersley Point

A new Human Rights Act compatibility point may be permitted on appeal even where it was not fully argued below. There is no general requirement that such a point be exceptional. The court should consider the nature of the lower proceedings, the new point and any prejudice.

Where section 3 of the Human Rights Act 1998 is invoked, the court should first construe the legislation conventionally. If that produces a result potentially incompatible with Article 1 of Protocol 1, it should assess legitimate aim and proportionality before considering whether a compatible interpretation is possible. Relevant evidence may be admitted, but is not indispensable.

The landlord appealed from the Upper Tribunal (Lands Chamber), which had held that service-charge costs incurred before 28 June 2022 were not recoverable under paragraph 9 of Schedule 8 to the Building Safety Act: [2023] UKUT 271 (LC). On appeal, the landlord sought to argue both that paragraph 9 was not retrospective and, alternatively, that section 3 of the Human Rights Act 1998 required a compatible interpretation to avoid interference with A1P1 rights.

The Secretary of State objected that the Human Rights Act argument was new, outside the permission granted, and might require further evidence. The Court of Appeal decided whether the point could be advanced and how the evidence and timetable should be managed. It did not determine the substantive question of retrospectivity.

Disposition. The landlord was permitted to advance its section 3 argument. The Secretary of State was entitled, but not required, to adduce evidence on compatibility. The substantive effect of paragraph 9 was left for the substantive appeal.

1. Where section 3 of the Human Rights Act 1998 is relied upon, the court should ordinarily proceed in stages: construe the legislation conventionally, including the presumption against retrospectivity; determine whether the appeal succeeds on that basis; if not, consider whether the result would be unlawful under A1P1; assess legitimate aim and proportionality; and, if incompatibility is established, consider whether section 3 permits a different interpretation. The appeal succeeds only if such an interpretation is possible.
2. There is no general rule that a new point must be exceptional before it can be taken on appeal. The relevant question is whether it is just to permit it, having regard particularly to the nature of the lower proceedings, the nature of the point and prejudice to the opposing party. The present point concerned the interpretation of public legislation with potentially wide implications.
3. An appellate court does not defer to a first-instance proportionality assessment when deciding compatibility with Convention rights, but carries out its own assessment. Proportionality is not an orthodox fact-finding exercise. Relevant background material may include evidence about practical impact, legislative mischief and social conditions, but evidence is not indispensable.
4. The duty under section 3 applies equally at trial and on appeal. The Court of Appeal should adopt flexible procedures where a Human Rights Act issue arises, and may permit further evidence or submissions where necessary. The Secretary of State was therefore given six weeks to adduce evidence if desired.
5. A Court of Appeal decision binds lower courts and the Court of Appeal itself subject to the recognised exceptions identified in Young v Bristol Aeroplane Co Ltd [1944] KB 718. A decision is not per incuriam merely because better arguments might have produced a different result. The court considered it doubtful that awareness of section 3 coupled with a decision not to apply it would ordinarily establish that exception.

The Adriatic and Triathlon appeals were directed to be heard sequentially by the same constitution and listed by the end of the Hilary term 2025.

1. Court of Appeal (Civil Division) permitted the landlord to advance the section 3 argument, allowed evidence directions and directed a timetable for the linked appeals.
2. Upper Tribunal (Lands Chamber) held that the relevant service-charge costs were not recoverable under paragraph 9 of Schedule 8 to the Building Safety Act: [2023] UKUT 271 (LC).