London Borough of Camden v The leaseholders of 46 flats on the Harben Road Estate LON/00AG/LDC/2014/0123: observations

London Borough of Camden v The leaseholders of 46 flats, Harben Road Estate LON/00AG/LDC/2014/0123
29th May 2015
The Gateway (Leeds) Management Ltd v (1) Mrs Bahareh Naghash (2) Mr Iman Shamsizadeh [2015] UKUT 0333 (LC)
6th July 2015
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You can read here my review of this application to First-tier Tribunal for dispensation from the requirement to consult.

This post contains my observations about it – and an Announcement.

Observations

Egregiousness

In our unenlightened, pre-Daejan world, the seriousness of the landlord’s breach of the consultation requirements was relevant for two reasons:

  • Whether a lessee had suffered prejudice, and
  • Whether dispensation should be granted.

On the first of these, in Stenau Properties v Leek [2011] UKUT 478 (LC) the Upper Tribunal went as far as to say that the Tribunal was entitled to infer that lessees had been prejudiced if tenants were substantially deprived of their right to be included in the decision-making process. The more serious the failure to comply, the greater the likelihood of the Tribunal inferring prejudice.

It does not seem to me that Daejan, ahem, dispensed with that principle. As Lady Wilson noted, at paragraph 67 of the Supreme Court’s judgment, Lord Neuberger said:

“the more egregious the landlord’s failure, the more readily a Tribunal would be likely to accept that the tenants had suffered prejudice”.

The Supreme Court did however sweep away the idea that the seriousness of the breach went to whether dispensation was granted.

Nowadays, dispensation:

  • Can be granted on terms, and
  • Depends on the measure of loss that the lessee has suffered by reason of the landlord’s failure to comply with the consultation requirements.

It could be said that the Tribunal has to work harder nowadays. A finding of breach – a finding which is more likely to be made, the more serious the breach – is no longer sufficient to refuse dispensation.

Once the Tribunal has found that a breach, however serious, has occurred, it must determine:

  • Whether to grant dispensation, and if so,
  • The terms on which it should be granted.

As is clear from this decision, determining the terms on which dispensation should be granted ain’t easy.

The practicalities of running a dispensation application

Directions

My experience in the southern region is that the FTT tends to accelerate dispensation hearings. Plainly a determination on paper is likely to be quicker than an oral hearing.

This case shows however that the parties, when not professionally represented, may not be aware of the criteria against which the FTT will exercise its dispensing discretion.

There is case law aplenty where the Upper Tribunal has warned about the potential for the LVT/FTT to appear to have entered the arena, aka become more involved with one side’s case than the other’s.

Plainly, to do that would be inappropriate.

In cases where dispensation is at issue however – and potentially where compliance with the consultation regulations is disputed, would it not be sensible to state in the directions that the parties are urged to consider Daejan v Benson [2013] UKUT 14 and the Service Charges (Consultation Requirements) Regulations 2003/1987?

To do so would not, to my mind, constitute legal advice, nor would it favour one side or the other. It would however flag up the law on which consultation and dispensation are based.

This would of course not be necessary if every landlord, lessee and property lawyer in England and Wales read Law and Lease, but, sadly, that is not the case. Hey ho.

Payment of the lessees’ costs of representation

A dispensation case recently sashayed across my desk: I was for the lessee, who had retained a solicitor.

The solicitor wanted to know:

  • How the landlord-paying-lessee’s-costs mechanism worked, and
  • Whether a lessee could ask for a direction that the landlord pay the costs of responding the dispensation application before the application was determined.

Re-reading Lord Neuberger in Dajean, I came to the conclusion that the FTT does have the power to make such a direction. Happily, that conclusion is borne out by the FTT’s decision in this case.

A direction on costs before everyone launches into preparation for the dispensation hearing gives certainty to both landlord and lessee.

The landlord knows that whatever the conditions of dispensation, if granted, s/he will have to meet the lessee’s costs. S/he will then be able to take a view as to whether the application for dispensation is worth pursuing if the lessee’s costs are likely to equate as the amount by which dispensation is sought.

The lessee knows that, provided that the costs s/he incurs are reasonable, that s/he:

  • Will not be left out of pocket at the end of the process, and
  • Will have the benefit of legal representation throughout.

Statements of truth

The FTT was not interested in the formalistic arguments deployed by Camden about statements of truth.

It is however the case that statements of case and witness statements should be verified by a statement of truth.

The FTT rules do not give any guidance as to the wording of a statement of truth. I have therefore turned to the Civil Procedure Rules (the CPR).

Adapting Practice Direction 16, paragraph 11.2, the form of the statement of truth for a statement of case in the FTT should run:

“I believe/the Applicant/Respondent believes (*delete as appropriate) that the facts stated in this statement of case are true”.

Adapting Practice Direction 32, paragraph 20.2, the form of the statement of truth for a witness statement should run:

“I believe that the facts stated in this witness statement are true”.

Both documents must then be signed and dated.

There is one key difference between a statement of truth to a statement of case and a statement of truth to a witness statement.

It is this: a statement of case can be signed by a (legal) representative, or by the party to the application.

A witness statement must be signed by the person whose evidence it is. It must not be signed someone on behalf of the witness.

On that point, a company cannot write or sign a witness statement, because a witness must be a real person who can come to the Tribunal to explain the contents of the statement.

If one of the parties to the proceedings is a company, and the person who is to attend the Tribunal to give evidence is a director of the company, the witness statement must be made in the name of that person.

The relationship between the witness and the company can then be set out in the first paragraph of the witness statement. The text generally used runs along the following lines:

“I [name of person, qualifications and occupation (if relevant, eg surveyor)], of [address], will say:

  1. I am [a director of the Applicant/Respondent (*delete as appropriate) company].
  2. The contents of this witness statement are made from my own knowledge unless otherwise stated. Where information has been given to me, those statements are true to the best of my knowledge and belief and the sources of that information are stated.
  3. I am duly authorised to make this statement on the Applicant’s/Respondent’s (*delete as appropriate) behalf, and I make it in support of the Applicant/Respondent (*delete as appropriate) in relation to the application for dispensation under section 20ZA of the Landlord and Tenant Act 1985 etc.

Knowledge

It was immensely refreshing to read Lady Wilson’s observations about parties’ lack of awareness of the law, particularly in relation to the lessee’s potential right to have the landlord pay his/her costs of dealing with a dispensation application.

Those observations rang true to my own experience in the FTT, and they pave the way for an Announcement.

Law Unleashed: an Announcement

A few months ago, I announced on twitter that Law and Lease was going on tour.

This does not mean that I have taken up the electric guitar and joined a band.

It means that I am going to take Law and Lease into the real world through Law Unleashed, two-hour sessions for groups of up to fifteen people, focusing on:

1)    Understanding leases, the important terms and points to be aware of;

2)    A basic introduction to the service charge law, and

3)    The lifecycle of a case in the First-tier Tribunal.

If you are at sea with your lease, cannot see the wood for the trees of the Landlord and Tenant Act 1985, or are flummoxed by the prospect of dealing with a case in the First-tier Tribunal, these sessions are for you.

You cannot know too little to take part in Law Unleashed. It is for absolute beginners.

The sessions will take place outside office hours in the early evening or on Saturdays to suit lessees.

How much will it cost?

Affordability is my watchword. This is a project which is designed to give something back to the community where the sessions are run.

The cost will vary, depending on the location and the cost of running the sessions – materials, venue hire etc. It will include an amount which will be passed on to a local property/housing charity.

If you are interested in Law Unleashed, please do contact me, either through the “Send me a message” feature at the top of the page, or by email directly at law@lawandlease.co.uk.

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