City and Country Properties Limited v BC Court RTM Company Limited

Repealing an enactment does not, without a contrary intention, extinguish rights and liabilities already accrued under it. A contrary intention may appear from express language or sufficiently strong circumstances, assessed in light of the unfairness of changing the legal consequences of past events. The absence of transitional savings does not itself displace the presumption in the Interpretation Act 1978, s 16(1). A tribunal must give a party a fair opportunity to answer concerns it raises on its own initiative before deciding an unraised point against that party where the failure may materially affect the outcome.

City and Country Properties Limited owned the freehold of a block of flats. The respondent RTM company served a notice to acquire the right to manage, then withdrew it in September 2024. The landlord applied for its costs under the then applicable Commonhold and Leasehold Reform Act 2002 provisions. After those provisions were repealed on 3 March 2025, the First-tier Tribunal, Property Chamber (FTT) refused the costs application under the replacement regime, which required unreasonable conduct. The FTT also disallowed VAT and Land Registry fees on issues it raised without inviting the landlord to respond. The appeal concerned whether the repeal affected the accrued costs liability and whether the FTT had acted fairly.

1. Appeal allowed on the statutory issue. When the RTM company withdrew its claim, the landlord had incurred costs and had an accrued right to recover reasonable costs under ss 88 and 89 of the Commonhold and Leasehold Reform Act 2002, subject to the statutory requirements. Section 16(1) of the Interpretation Act 1978 and the common-law presumption against retrospectivity preserve accrued rights and liabilities unless a contrary intention appears. The governing principle was supported by Lipton v BA Cityflyer Ltd [2024] UKSC 24 and Secretary of State for Social Security v Tunnicliffe [1991] 2 All ER 712.

2. The repeal and replacement made by s 50 of the Leasehold and Freehold Reform Act 2024 did not express an intention to extinguish accrued rights. No saving regulations were needed: the general saving provision already applied. The absence of transitional provisions did not reverse that effect. Nor did the surrounding circumstances displace the presumption. The court rejected the FTT’s reliance on the tenant protections in ss 20CA and 20J of the Landlord and Tenant Act 1985: s 20CA concerns litigation costs, which were not recoverable under s 89 and were not at issue in this withdrawn claim; s 20J concerned non-participating tenants who had no liability under ss 88 and 89. The court applied the contextual approach discussed in Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point [2025] EWCA Civ 856 and Sunshine Porcelain Potteries Pty Ltd v Nash [1961] AC 927. The new regime therefore did not govern this pre-commencement claim.

3. The FTT also acted unfairly on VAT and Land Registry fees. It disallowed those sums on concerns it raised itself, without notice or an opportunity for the landlord to answer. That prevented effective participation and materially affected the result. On the evidence before the Upper Tribunal, VAT was recoverable and it was reasonable to obtain title documents within the one-month period for deciding whether to contest the RTM claim. The FTT’s decision on those items was set aside. The court noted that Metropolitan Property Realisations Ltd v Moss [2013] UKUT 415 (LC) bore a close resemblance to the VAT issue.

4. The FTT’s £1,000 award was set aside and an award of £2,107.20 substituted, comprising £1,756 plus £351.20 VAT. Under s 89(3) of the 2002 Act, the sum was payable by the RTM company and all persons who were or had been its members. That statutory liability existed without a further order and regardless of whether those members were parties to the proceedings.

1. Upper Tribunal (Lands Chamber) — appeal allowed. The FTT’s award was set aside and £2,107.20 substituted: [2026] UKUT 339 (LC) .
2. First-tier Tribunal, Property Chamber — by a decision published on 25 September 2025, refused the landlord’s costs application under the replacement statutory regime and disallowed VAT and Land Registry fees. No citation is stated in the judgment.