89 Holland Park (Management) Limited v Andrew Lawson Dell & Anor

A prior ruling that expenditure is not recoverable through a lease’s service-charge provisions does not necessarily bar a distinct claim based on a separate contract. A claim seeking to recover the same expenditure through estoppel may be abusive where it would undermine that final ruling and could have been pursued earlier. A lease governing service charges does not automatically exclude restitution for expenditure said to fall outside that regime. Where the existence and terms of a contract, or the elements of unjust enrichment, depend on disputed facts, those issues may require trial rather than summary disposal.

The claimant management company sought contributions from the defendants, long leaseholders, towards costs of a dispute with a neighbouring landowner. In earlier proceedings, the First-tier Tribunal found the costs recoverable as service charges, but the Upper Tribunal and Court of Appeal concluded that they were not recoverable under the lease. The claimant then brought this claim on alternative bases, including a separate funding agreement, estoppel and unjust enrichment.

The defendants applied to strike out the claim or obtain reverse summary judgment. The central issues were whether the alternative claims were barred or abusive, whether the pleaded contract and restitution claims could proceed to trial, and whether the estoppel claim could circumvent the earlier service-charge determination.

The application was granted in part. The estoppel claim was struck out. The contract and unjust-enrichment claims may proceed, subject to amended particulars of claim.

1. Effect of the earlier service-charge decision. The Court of Appeal had determined that the FTT Costs were not recoverable under the lease’s service-charge provisions. That conclusion also applied to the New Costs Claim. It did not determine whether the defendants might be liable under a separate agreement or another distinct legal basis. The earlier decision did not, without more, make the contract claims abusive: 89 Holland Park (Management) Ltd v Dell, [2023] EWCA Civ 1460.
2. Contract claims. Whether the parties formed a separate funding agreement, and its terms, scope, duration or termination, depended on an objective assessment of their communications and conduct over time. Those matters required a full evidential exploration and could not be summarily disposed of. The claimant was, however, required to amend its pleading to give a more detailed account of the alleged agreement or agreements.
3. Estoppel. The estoppel claim sought indirectly to achieve recovery through the service-charge machinery after the recoverability question had been conclusively determined. The point could and should have been pursued in the earlier proceedings, but was not preserved on appeal. Raising it now fell within the principle in Henderson v Henderson. The claim was struck out as an abuse of process under rule 3.4(2)(b) of the Civil Procedure Rules; it also lacked adequate particulars, particularly as to reliance and detriment.
4. Unjust enrichment. Expenditure incurred under a mistaken belief about legal entitlement may in principle support a restitutionary claim. The lease did not necessarily exclude such a claim where the expenditure was said to fall outside its service-charge regime. The contractual regime discussed in Pan Ocean Shipping Co Ltd v Creditcorp Ltd did not require the claim to be struck out at this stage. Whether the defendants were enriched, whether that benefit could be valued in money, and whether its retention would be unjust were fact-sensitive questions requiring trial. The claimant had to amend its pleading to clarify those matters.

The matter was to proceed to trial on the surviving causes of action, with further directions to follow.

This is a first-instance decision; no appeal from it is stated. The judgment records earlier service-charge proceedings concerning the same costs:

1. Supreme Court An application for permission to appeal was unsuccessful.
2. Court of Appeal In [2023] EWCA Civ 1460, it held that the disputed costs were not recoverable as service charges under the lease.
3. Upper Tribunal On 1 July 2022, it allowed the leaseholders’ appeal.
4. First-tier Tribunal On 3 September 2021, it had found the costs recoverable as service charges.