Luke Highet Bendram Jamieson v London and Quadrant Housing Trust

When exercising discretion under section 20C of the Landlord and Tenant Act 1985 or paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, the tribunal must make the order that is just and equitable in light of the overall outcome. The provisions do not create conventional costs orders, but a successful tenant’s success on the substance is a material consideration. The tribunal should avoid over-complicating the assessment by analysing individual arguments which are merely steps towards resolving one larger dispute. Irrelevant considerations include the fact that the lease provisions were difficult to construe and that neither party acted unreasonably, where the application is not under rule 13(1) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.

The appellant held a shared ownership lease from the respondent housing trust. He challenged service charges arising from costs payable by the trust under a superior lease. The First-tier Tribunal reduced the charge payable for the first, incomplete service charge year, but made orders under section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 limiting recovery of the landlord’s legal costs to 50%.

The appellant appealed against the costs limitation. The central issue was whether the FTT had exercised its discretion lawfully and fairly when assessing what order was just and equitable.

1. Appeal allowed. The FTT’s 50% limitation was set aside. The Upper Tribunal substituted orders under section 20C of the Landlord and Tenant Act 1985 and paragraph 5 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 in respect of the whole of the landlord’s legal costs in the FTT.
2. The discretion under both provisions is broad. An appellate tribunal should interfere only where the FTT has exceeded the generous ambit within which reasonable disagreement is possible, applying Tanfern Ltd v MacDonald [2000] 1 WLR 1311. These applications are not conventional costs orders, since they override a landlord’s contractual entitlement to recover litigation costs through service or administration charges.
3. The principal consideration is what order is just and equitable in light of the outcome. An issues-based approach may be useful, but the tribunal must not lose sight of whether individual issues are merely steps towards determining one larger dispute. The guidance in Primeview Developments Limited v Ahmed and others [2017] UKUT 57 was applied as a reminder against over-complicated analysis.
4. The appellant had been wholly successful on the substantive dispute. His liability was required to be apportioned by reference to the period for which he held the lease during the incomplete service charge year. The 30-pence difference in calculation did not alter that conclusion.
5. The FTT’s view that the appellant’s argument was wrong, and its finding that the lease provisions were difficult and that neither party was at fault, were irrelevant or unfair considerations in the circumstances. The issue was not whether either party had acted unreasonably under rule 13(1). The FTT’s order therefore fell outside the bounds of its discretion.

• First-tier Tribunal (Property Chamber): determined the service charge liability and reduced the landlord’s recoverable legal costs under section 20C of the Landlord and Tenant Act 1985 and Schedule 11 to the Commonhold and Leasehold Reform Act 2002 to 50%.
• Upper Tribunal (Lands Chamber): allowed the appeal, set aside the FTT’s costs order and substituted orders covering the landlord’s whole legal costs in the FTT.