The Church Commissioners v Derdabi, Re The Quadrangle Tower, Court of Appeal - Lands Tribunal, September 27, 2011, [2010] UKUT 380 (LC)

Resolution Date:September 27, 2011
Issuing Organization:Lands Tribunal
Actores:The Church Commissioners v Derdabi, Re The Quadrangle Tower




UT Neutral citation number: [2010] UKUT 380 (LC)

UTLC Case Number: LRX/29/2011


LANDLORD AND TENANT - service charges - Landlord and Tenant Act 1985 s20C - order to disregard litigation costs as relevant costs for service charge - relevance of outcome of proceedings - ``just and equitable'' criterion






Re: Flat 172

The Quadrangle Tower,

Cambridge Square,

London W2 2PJ

Before: His Honour Judge Gerald

Decision on Written Representation

The following cases are referred to in this decision:

Iperion Investments Corporation v Broadwalk House Residents Limited [1995] 2 EGLR 47

The Tenants of Langford Court (Sherbani) v Doren Limited LRX/37/2000

Schilling v Canary Riverside Development PTE Limited LRX/26/2005DECISION


The Appellants are the freeholders of the Quadrangle Tower, Cambridge Square, London W2. The Respondent holds a long lease of flat 172.

On 28th June 2010, the Appellants issued a claim in the Central London County Court for £2,749.10 being the balance of service charge arrears principally in respect of service charge years 2007 and 2008 although some amounts were claimed in respect of 2009 and 2010.

By her Defence dated 14th July 2010 the Respondent disputed ``the balancing service charge'' because ``they have not given me a service warranting to ask for more money as balancing service charge''.

On 9th November 2010, the matter having been transferred to the Leasehold Valuation Tribunal (``LVT''), the LVT gave directions requiring the Appellants to serve ``a detailed statement of case setting out under appropriate headings the issues and the amounts sought in respect of which a determination is required'' following which the Respondent was ordered to set out a detailed reply as to ``which issues are in dispute and the reasons why they are in dispute'' (``Directions'').

Instead of serving a detailed statement as ordered by the Directions, the Appellants elected to adopt the Particulars of Claim served in the County Court, which merely set out the balancing sums claimed rather than the total service charge for each year and their respective component parts.

This confused the Respondent who was expecting a detailed statement as per the Directions. Once the Appellants' position was made clear to her, by letter dated 29th December 2010 the Respondent set out her case (``the Respondent's Statement of Case''). She made clear that ``my main objection is to the very poor service that does not at all warrantee (sic) the money we pay. It is therefore difficult to show you evidence...''. She then illustrated her complaint by providing examples of poor service - such as the entry phone being broken for three years, dirty and shabby common parts, repeatedly broken lifts, intermittent hot water, stopped gas supply, broken heating and so on. She enclosed a large volume of documentation in support, which included specific references to certain items in the 2007 and 2008 accounts.

The Appellants replied to the Respondent's Statement of Case by witness statement made on 20th January 2011 by Rebecca Sanchez (``Miss Sanchez'') an associate of the present managing agents Knight Frank LLP. It is a relatively short statement in which she does not deal in detail with the substance of the complaint - poor management - principally because it relates to the conduct of the previous managing agents Cluttons, but she does deal with some (but not all) of the specific accounting points raised by the Respondent.

The hearing took place on 21st January 2011, and the LVT issued its decision on 24th January 2011 (``Decision''). The kernel of the Decision is that the amounts claimed in the 2007 and 2008 service charges in respect of some of those items which the Respondent referred to as demonstrating ``poor management'' were reasonable and therefore recoverable save that management had been poor in relation to those issues and generally thereby warranting a reduction in the management fees charged for each of those two years.

The LVT went on to consider, and acceded to, the Respondent's request for an order under section 20C of the Landlord and Tenant Act 1985 (``the 1985 Act''). Its summary reasons are set out in paragraph 16 of the Decision thus:

``16. The respondent asked for an order that the costs of the proceedings should not fall on the service charge. Mr Hammond [Counsel for the Applicants/Appellants] invited the tribunal to make such order as follows the award. In that case there would be no order as the monetary effect of the tribunal's determination is largely for the applicant. However the tribunal has found that Mrs Derdabi had grounds for her complaint about poor service and that appearance before the tribunal was her only recourse. Accordingly the tribunal makes the order.''

The LVT elaborated on its reasons in its 24th February 2011 refusal to grant the Applicants permission to appeal thus:

``1. With regard to proportionality, and the guidance issued by His Honour Michael Rich Q.C., each case has to be determined on its facts. The respondent's complaints had always been about the poor quality of management and in that, albeit that she did not in her statement of case quantify the proper cost of what she received, she succeeded. Many of her disputes were not about how much things cost but such matters as: equipment that was broken and not repaired quickly enough, that cleaning staff were not properly supervised, careless accounting and budgeting and lack of adequate communication of information to tenants.

``2. It would have been simplistic in this case to allocate money values to the specific items whose costs were not themselves challenged (other than via the management fee) and calculate the fee as a proportion of the whole for the purpose of determining whether and to what extent a section 20C order should be made.

``3. The respondent's only course to ventilate her complaint about poor service due to poor management was to the LVT and in that she succeeded.

``4. With regard to the landlord's claim to have no knowledge prior to the hearing that management fees were an issue, the respondent's statement of case was dated 29 December 2010. This was...

To continue reading