Garside & Anor v RFYC Ltd & Anor, Court of Appeal - Lands Tribunal, September 15, 2011, [2011] UKUT 367 (LC)

Resolution Date:September 15, 2011
Issuing Organization:Lands Tribunal
Actores:Garside & Anor v RFYC Ltd & Anor

110© CROWN COPYRIGHT 20111UT Neutral citation number: [2011] UKUT 367 (LC)UTLC Case Number: LRX/54/2010 TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007LANDLORD AND TENANT - service charges - whether costs reasonably incurred - whether LVT should have taken into account financial impact on tenants when deciding whether major works should be phased - appeal allowed - Landlord and Tenant Act 1985 s.19IN THE MATTER OF AN APPEAL FROM A DECISION OF THE LEASEHOLD VALUATION TRIBUNAL FOR THE LONDON RENT ASSESSMENT PANELBETWEEN (1) MARIE GARSIDE Appellants(2) MICHAEL ANSON and RFYC LIMITED Respondents B R MAUNDER TAYLOR Re: 15, 20 & 36 Frognal Court, Finchley Road, London NW3 5HG Before: Her Honour Judge Alice Robinson Sitting at: 43-45 Bedford Square, London WC1B 3AS on 12th September 2011Edward Denehan instructed by Woolsey, Morris & Kennedy for the Appellants Gerard van Tonder instructed by Gisby Harrison for the Second RespondentThere was no appearance on behalf of the First Respondent.The following cases are referred to in this decision:Ashworth Frazer Ltd v Gloucester City Council [2001] 1 WLR 2180, HLForcelux v Sweetman [2001] 2 EGLR 173, LTVeena SA v Cheong [2003] 1 EGLR 175, LTSouthend-on-Sea Borough Council v Skiggs LRX/110/2005, LT DECISIONIntroduction1. The Appellants appeal to the Upper Tribunal (Lands Chamber), with permission, from a decision of the Leasehold Valuation Tribunal for the London Rent Assessment Panel (hereafter ``the LVT'') dated 10 March 2010 whereby the LVT decided that service charges sought in respect of major works for the years ending 2009 (£100,000) and 2010 (£538,012) were reasonably incurred as required by section 19(1)(a) of the Landlord and Tenant Act 1985 (hereafter ``the 1985 Act'').2. The Appellants are the lessees of flats in The Frognal Estate, Finchley Road, London NW3 5HG (hereafter ``the Estate'') of which the First Respondent is lessor. The First Appellant is the lessee of 15 Frognal Court pursuant to a lease dated 27 October 1975 for a term of 120 years from 24 June 1969 and also holds the lease of 20 Frognal Court which is sub-let. The Second Appellant is the lessee of 36 Frognal Court pursuant to a lease dated 21 July 1975 for a term of 120 years from 24 June 1969. The Second Respondent is the Manager of the Estate appointed by the LVT on 7 May 2009 pursuant to section 24 of the Landlord and Tenant Act 1987. 3. The Estate comprises 5 blocks containing 54 flats and, in some cases, commercial premises at ground floor level. Historically little maintenance work had been carried out by the lessor leading to neglect as a result of which a number of the lessees applied to the LVT for the appointment of a manager. On his appointment as Manager the Second Respondent took steps to arrange for the outstanding works to be carried out. Initially a figure of £100,000 was added to the service charge in 2009 and when a detailed specification had been prepared and costed a further £538,012 was added to the proposed service charge for 2010. A number of the lessees were concerned about the very significant increase in service charges and their ability to pay the sums demanded. On 26th November 2009 the Second Respondent applied to the LVT for a determination as to whether the service charges for 2009 and 2010 were reasonably incurred. By its decision dated 10 March 2010 the LVT decided that these sums were reasonably incurred.Submissions4. The Appellants' case before the LVT was that, although it was accepted works of repair were needed, it was not appropriate to carry the bulk of them out all at once. Rather, the work should be phased so as to spread the increased service charge costs. The amount of service charge being demanded (around £7,600 and £9,000 for the Appellants respectively in 2010 alone) was very substantial. It was said many of the lessees could not afford to pay and some would have to sell their flats in order to be able to do so. 5. In its decision the LVT said:``15. The Tribunal does not accept [counsel for the lessees'] argument that consideration of the reasonableness of costs requires consideration of the ability of individual leaseholders to pay those costs. Whilst [counsel] suggested that this was one of the factors behind the legislation he was unable to direct the Tribunal to any evidence which suggested that different classes of leaseholders should be treated differently. In the opinion of the Tribunal the ability of individual leaseholders to pay for required works...

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