Country Trade Ltd v Noakes & Ors, Court of Appeal - Lands Tribunal, October 07, 2011, [2011] UKUT 407 (LC)

Resolution Date:October 07, 2011
Issuing Organization:Lands Tribunal
Actores:Country Trade Ltd v Noakes & Ors
 
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© CROWN COPYRIGHT 2011

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UT Neutral citation number: [2011] UKUT 407 (LC)

UTLC Case Number: LRX/118/2010

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

LANDLORD AND TENANT - service charges - Landlord and Tenant Act 1985 s19 - reasonableness of service charge - evidence required to support LVT findings

IN THE MATTER OF AN APPEAL AGAINST THE DECISION OF

THE LONDON LEASEHOLD VALUATION TRIBUNAL

BETWEEN COUNTRY TRADE LIMITED Appellant

and

MARCUS NOAKES AND OTHERS Respondents

Re: 11 Chrome Drive,

Breydon Park,

Great Yarmouth,

Norfolk NR31 0HR

Before: His Honour Judge Gerald

Sitting at: 43-45 Bedford Square, London WC1B 3AS

on 26 September 2011

The following cases are referred to in this decision:

Skilleter v Charles [1991] 24 HLR 421

Arrowdale Limited v Coniston Court (North) Hove Limited LRA/72/2005

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

Yorkbrook Investments Limited v Batten [1985] 2 EGLR 100

Daejan Investments Limited v Benson [2011] EWCA Civ 38

DECISION

Background

This is an appeal against the decision (``the Decision'') of the Leasehold Valuation Tribunal (``LVT'') made on 15th July 2010. The sole ground of appeal relates to the LVT's findings concerning what are described as ``secretarial/agents charges.'' The other findings of the Decision are not challenged.

After Ms Crampin Counsel for the Appellant had completed her submissions, Mr Ogunnow, who spoke on behalf of himself and also Mr Noakes and Ms Alps who were also present as well as the remainder of the twenty-six Respondents who were not, accepted that the Decision could not stand.

Both parties agreed that the matter should be remitted to a differently constituted LVT and then retried and substantially agreed directions (``Directions'') for both parties to follow in order to ensure that the re-hearing is effective.

It therefore is not necessary for me to embark on a detailed exposition of the reasons why the appeal was acceded. The purpose of this Decision is to make some remarks which are intended to be of assistance to the subsequent hearing.

There is one preliminary observation to make. The Decision is redolent with contentious language casting implied aspersions on the probity of the management arrangements reached between the Appellant and Robbert Limited (``Robbert''). Those arrangements, described variously as being a ``device'' or ``incestuous'' by the LVT, arose out of commonality of ownership and directorship of some of the legal entities involved about which the Appellant had been open and frank throughout.

Unless, which is not the case here, it is asserted that the management arrangements were a mere ``sham'' i.e. an arrangement which disguised the true relationship or agreement between the parties, there is nothing in principle objectionable to a management company such as the Appellant employing a company it owns or is involved in to provides services: see Skilleter v Charles [1991] 24 HLR 421.

Whilst such arrangements may well justify a rigorous scrutiny of the fees being charged and the services provided, sight must not be lost of the fact that (a) the question is whether or not the costs are reasonable within the provisions of section 19 of the Landlord and Tenant Act 1985 and (b) there is nothing objectionable to such arrangements - unless, as I have said, which was not the case here, it is alleged they were a mere ``sham'' or artifice. It is therefore preferable to avoid the use of such descriptions not least because it may give the impression that the tribunal is not focused on what is or are the real issues - ``reasonableness''.

When considering whether service charges, or elements of them, are reasonable it must also be born in mind that any decision of the LVT must be evidence-based. In Arrowdale Limited v Coniston Court (North) Hove Limited LRA/72/2005 it was said, at paragraph 23:

``It is entirely appropriate that, as an expert tribunal, an LVT should use its knowledge and experience to test, and if necessary to reject, evidence that is before it. But there are three inescapable requirements. Firstly, as a tribunal deciding issues between the parties, it must reach its decision on the basis of evidence that is before it. Secondly, it must not reach a conclusion on the basis of...

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