Neil Hood v Southern Land Securities Ltd & Anor

For costs purposes, a party does not beat a settlement offer merely because the tribunal grants relief in a different legal form. The comparison is substantive. A separate lease at a peppercorn rent may be equivalent to enlarging the existing lease, particularly where the practical use and value are materially the same. A refusal based on an extrinsic grievance, rather than the adequacy of the offer, may be unreasonable. Disability is relevant to the assessment but does not justify refusing a reasonable offer. The ordinary costs consequences of a reasonable offer are not improper. In a land-registration appeal determined by written representations, costs will not normally be awarded unless the circumstances justify departing from that norm.

Neil Hood appealed against a costs order made by the First-tier Tribunal (Property Chamber) after he succeeded in obtaining registration of a long leasehold title to loft space above his flat. The FTT awarded him costs up to 5 February 2025 but awarded the respondents their later costs because he had refused an offer of a peppercorn-rent lease of the loft, with each side bearing its own costs.

The FTT considered the refusal unreasonable, including because Mr Hood imposed a condition concerning alleged unlawfulness in the respondents’ acquisition of the freehold. Permission to appeal was granted on the question whether the FTT’s order was better than the offer. The Upper Tribunal also considered costs of the appeal.

1. Appeal dismissed. The FTT was entitled to conclude that Mr Hood had not obtained a materially better result than the respondents’ offer.
2. The offer provided a separate lease of the loft at a peppercorn rent, whereas the FTT order enlarged the existing lease. The difference in legal form did not establish a substantive improvement. The restriction of use to storage carried little weight because the loft appeared incapable of lawful use otherwise. There was no evidence that separate ownership would impair saleability or value, and any additional conveyancing cost was immaterial.
3. The offer of no order as to costs did not give Mr Hood less than he would probably have obtained had he succeeded without an offer. His own evidence showed that the offer was acceptable in substance, subject to his demand for proof concerning the respondents’ acquisition of the freehold. That demand concerned matters extrinsic to the proceedings and was reasonably found to be an unreasonable condition of settlement.
4. The respondents’ indication that they might rely on the offer in relation to costs was not improper. It was the usual consequence of making a reasonable offer which was not accepted. The respondents were not required to abandon their case merely because it appeared to have serious difficulties on an accretion analysis.
5. The Tribunal had power to award costs under para 25.1 5) of the Upper Tribunal (Lands Chamber) Practice Directions 2024. Costs normally follow the event if awarded, but para 25.6 established the usual position that costs would not normally be awarded in an appeal determined by written representations. No sufficient circumstances justified departure from that norm, and no costs order was made for the appeal.

• Upper Tribunal (Lands Chamber): Appeal against the First-tier Tribunal’s costs order dismissed. No costs order was made in respect of the appeal.
• First-tier Tribunal (Property Chamber) (Land Registration): On 6 March 2025, awarded Mr Hood costs up to 5 February 2025 and the respondents their costs thereafter, on the basis that he had unreasonably refused their settlement offer.