Michael Connell & Anor v Beal Developments Limited & Ors

A leaseholder’s statutory right under Landlord and Tenant Act 1985, section 27A to obtain a determination of their own service-charge liability is not displaced by an earlier tribunal decision concerning another leaseholder, even where the same expenditure is in issue.

The First-tier Tribunal cannot characterise that separate application as frivolous, vexatious or an abuse of process merely because it may require reconsideration of matters previously investigated. Nor may it attribute a non-party representative’s alleged improper motive to the applicants without finding that the applicants themselves acted improperly. Expense incurred in earlier proceedings does not justify denying a determination for later, unconsidered service-charge years.

The appellants, long leaseholders on the Burton Waters Estate, applied under section 27A of the Landlord and Tenant Act 1985 for determinations of service charges for 2013 to 2020.

The First-tier Tribunal had previously determined a different leaseholder’s challenge to charges for 2015 to part of 2018. It later struck out the appellants’ challenges for 2015 to 2018 and for later years under rule 9(3)(d) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, treating them as vexatious or abusive. Its decision was made on 19 October 2022 and confirmed on review on 12 April 2023.

On appeal, the respondents conceded that the strike-out was wrong. The central question was whether the FTT could deprive these appellants of determinations of their own service-charge liability because similar charges had been determined in proceedings brought by another leaseholder.

1. Appeal allowed. The FTT’s strike-out of the appellants’ remaining section 27A application was wrong. The decision was set aside and the application was remitted to a differently constituted FTT panel for case management and determination.

2. Section 27A(1) of the Landlord and Tenant Act 1985 gives each leaseholder a right to seek determination of the service charges which they must pay. The statutory bar in section 27A(4) did not apply: the appellants had not agreed or admitted the disputed matters, and their own liability had not been determined by a court or arbitrator.

3. The earlier determination of Mr Fernie’s liability did not determine the appellants’ liability. They were not parties to those proceedings and could rely on their own evidence. Their right to have their application determined remained even if their evidence proved identical to material previously advanced by Mr Fernie. That conclusion was also consistent with the right to a fair hearing under Article 6(1) of the European Convention on Human Rights.

4. Rule 9(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, reflecting the principle against re-litigating a dispute between the same parties, could apply to Mr Fernie but not to these appellants. Rule 9(3)(d) could not properly be used to achieve the same result by labelling their separate statutory claims frivolous, vexatious or abusive.

5. The FTT was also wrong to rely on its view of the Fernies’ alleged motives. Darren Fernie was not a party, his motives could not be attributed to the appellants, and the FTT had made no finding that the appellants themselves had acted improperly. Earlier expense and delay likewise could not justify a strike-out of claims concerning later years that had never been determined.

6. On remittal, the FTT should warn the appellants of the possible costs consequences under rule 13(1)(b) if their challenges unreasonably duplicate matters already answered in the earlier decision. It should also consider whether restrictions on representation are appropriate under rules 6 and 14.

• Upper Tribunal (Lands Chamber): Allowed the appeal in [2024] UKUT 54 (LC), set aside the strike-out, and remitted the application to a differently constituted FTT panel.
• First-tier Tribunal (Property Chamber): Struck out the remaining application on 19 October 2022 under rule 9(3)(d) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013; confirmed that decision on review on 12 April 2023.