Simon Birch v Paul Meredith

Failure to comply with section 47 of the Landlord and Tenant Act 1987 has a suspensory effect. It does not invalidate a service charge demand or prevent a tribunal from determining whether the charges are otherwise payable. The charges become due when the landlord furnishes the required name and address by notice.

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 involve interference with contractual rights and are discretionary. The tribunal must assess the parties’ real success and relevant circumstances. It should not rely on an erroneous view that charges were wholly irrecoverable, marginal degrees of evidential success, or hypothetical future costs.

The landlord appealed against the First-tier Tribunal’s decision concerning service charges demanded from the head-lessee of a building containing six flats. The FTT held that the demands were invalid because they did not comply with section 47 of the Landlord and Tenant Act 1987. It nevertheless determined that nearly all the underlying costs were reasonably incurred, reducing the claim by only £417.37.

The FTT 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, and ordered reimbursement of the leaseholder’s tribunal fee. The central issues were the effect of non-compliance with section 47 and the relevant considerations governing those discretionary costs decisions.

1. Appeal allowed. The FTT’s decision on costs and fees was set aside, and the Upper Tribunal substituted its own decision.
2. Non-compliance with section 47 of the Landlord and Tenant Act 1987 is suspensory only. It does not invalidate a service charge demand or prevent determination of whether the charges are otherwise payable. Once the landlord furnishes the required name and address by notice, the charges are treated as due. This was the effect described in Cannon v 38 Lambs Conduit LLP [2016] UKUT 371 (LC), following Tedla v Cameret Court Residents Association Ltd [2015] UKUT 0221 (LC).
3. The FTT therefore erred in treating the leaseholder as having achieved complete success and in basing its discretionary decisions on the proposition that none of the charges was payable. The FTT also wrongly relied on the fact that the landlord had only narrowly established that its costs were reasonably incurred. Interference with contractual rights was not justified merely because the evidential balance was not substantially tipped.
4. The FTT’s reference to possible future remedial works was irrelevant because no such costs had yet been incurred or charged. The Upper Tribunal did not need to determine the landlord’s allegations concerning the leaseholder’s conduct.
5. The landlord had been overwhelmingly successful on the real issue. The reduction from nearly £47,000 was only just over £400. It was therefore appropriate to make the requested 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 in respect of the landlord’s FTT costs. Reimbursement of the leaseholder’s FTT fee was refused.

• Upper Tribunal (Lands Chamber): appeal from the First-tier Tribunal’s decision allowed. The FTT’s costs and fee decisions were set aside and replaced.
• First-tier Tribunal (Property Chamber), Ref: CHI/45UC/LSC/2024/0018: determined that the service charge demands were invalid, assessed the underlying charges, made orders under section 20C and paragraph 5A, and ordered reimbursement of the leaseholder’s tribunal fee.