Benwell Road RTM Company Ltd v Adam Paul Davies

The First-tier Tribunal has jurisdiction under section 27A of the Landlord and Tenant Act 1985 and Schedule 11 to the Commonhold and Leasehold Reform Act 2002 to determine the reasonableness and payability of service and variable administration charges, including the amount, date and method of payment. Its determination is declaratory; only a court can make an enforceable judgment. The tribunal may determine payability before a compliant demand is served, but a defective demand does not create arrears retrospectively. Legal costs claimed as variable administration charges must be assessed for reasonableness under Schedule 11, not by summary assessment under Part 44 of the Civil Procedure Rules 1998.

Benwell Road RTM Company Ltd claimed £616.60 in service-charge arrears and £3,240 in variable administration charges from Adam Paul Davies under his lease. The administration-charge claim included £2,400 for the costs of earlier First-tier Tribunal proceedings. The 2022 FTT found liability for the charges and awarded £8,197.50 in proceedings costs.

The Upper Tribunal allowed Mr Davies’s appeal, leaving liability for £840 and setting aside the costs award: [2023] UKUT 197 (LC). The RTM Company brought a second appeal. The central issues were the scope of the FTT’s jurisdiction, whether the earlier FTT decision established arrears before 19 November 2014, and whether the later proceedings costs were recoverable as variable administration charges.

Disposition. The Court of Appeal unanimously dismissed the RTM Company’s appeal. Sir Geoffrey Vos MR gave the leading judgment; Singh LJ and Falk LJ agreed.

1. FTT jurisdiction. Sections 19(1)(a) and 27A of the Landlord and Tenant Act 1985, together with paragraphs 2 and 5 of Part 1 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, permit the FTT to determine the reasonableness and payability of service and administration charges. It may determine who is liable, the amount, the payment date and the method of payment. Its decision is declaratory and cannot itself operate as an enforceable judgment or order. Enforcement remains a matter for the court. The court approved the thrust of Termhouse (Clarendon Court) Management Ltd v Al-Balhaa [2021] EWCA Civ 1881, [2022] 1 WLR 1529, while resolving points that decision had left open.
2. Arrears and the 2014 FTT. The 2014 FTT had determined the RTM Company’s constitution and the reasonableness of the 2014–2015 charges. It had not determined when arrears first arose. The demand failed to comply with the lease’s payment-mode requirement and section 21B of the Landlord and Tenant Act 1985. It therefore did not create arrears when served. The later determination that the amount was payable, with payment directed for 19 November 2014, did not retrospectively create earlier arrears. Mr Davies’s acceptance was limited to the issues being determined and did not estop him from raising the earlier-arrears issue. The costs of the 2014 FTT were consequently not costs incurred in recovering arrears.
3. Costs of the 2022 FTT. Legal costs claimed as variable administration charges had to be assessed for reasonableness under paragraph 2 of Part 1 of Schedule 11 to the 2002 Act. The FTT’s summary assessment under Part 44 of the Civil Procedure Rules 1998 was a different exercise and was outside its relevant jurisdiction. A compliant administration-charge demand was also required before a court could order payment. The 2022 FTT’s assessment could not stand because it assumed success on claims that had failed. The UT was therefore right to set it aside and to conclude that the costs claim was not payable under paragraph 5 of Schedule 11.

• Court of Appeal (Civil Division) — The RTM Company’s second appeal was dismissed unanimously in [2025] EWCA Civ 368.
• Upper Tribunal (Lands Chamber) — Allowed Mr Davies’s appeal from the 2022 FTT, reduced the administration-charge liability to £840 and set aside the costs award: [2023] UKUT 197 (LC).
• First-tier Tribunal (Property Chamber) — Determined that Mr Davies was liable for £616.60 in service charges, £3,240 in variable administration charges and £8,197.50 in proceedings costs.