Service Charges & Civil Procedure: Appeal as to the extent of the First-tier Tribunal’s powers to review one of its own decisions (Point West GR Ltd v Rita Bassi & Others – 2020)

The Court of Appeal considers an appeal regarding procedure in the First-tier Tribunal and the FTT’s ability to review one of its own decisions following an application to appeal to the Upper Tribunal.

The background

In Point West GR Ltd v Rita Bassi & Others [2020], the property comprised a large mixed residential and commercial development which contained, together with retail space and ancillary facilities, 399 leasehold apartments. The landlord was obliged under all residential apartment leases to provide services, the costs for which it was entitled to claim through annual service charge.

The landlord brought proceedings to recover service charges, including surveying, management and accountancy fees, for the 2 years prior to its acquisition of the headlease, during which time the previous landlord was in administration. The claim also included fees of the administrator. The FTT found that all sums were reasonable and payable by the leaseholders, save that it reduced the sum claimed in respect of the administrators’ fees by 50%. The FTT did not reference specific sums in making such a deduction and some sums had already been included in amounts allowed and therefore considered twice.

The landlord appealed, and the leaseholders cross-appealed. The FTT reviewed its own decision, and following a further hearing the FTT held that charges claimed by the landlord were not payable at all having been incurred by its predecessor. This point had not been appealed and had not been considered at the initial hearing. The landlord appealed to the Upper Tribunal, which found that the FTT had gone beyond its own powers to review. However, the UT also considered the FTT’s judgment in respect of reasonableness of charges claimed and made reductions to charges.

The landlord appealed further.

The decision

The Court of Appeal found in favour of the landlord, agreeing that the FTT did not enjoy the ability to reach a judgment based on a new point not raised at the earlier hearing. Its power was to review a matter in a case, not the power to review the whole decision in its entirety.

The Court of Appeal also considered the Upper Tribunal’s judgment and found ‘serious misgivings’, finding that the UT had reached a decision without hearing any oral evidence or giving the landlord opportunity to deliver further evidence. The Court of Appeal restored the FTT’s original decision in respect of the reasonableness of the notional rent, disbursements and the management charge.

Advice and action

In restoring the FTT’s original decision, the Court of Appeal found that the FTT did not have the jurisdiction within its procedural powers to review its decision as a whole which would certainly present challenges to the civil procedure and the role of the UT.

This decision is therefore welcome, upholding finality in dispute resolution and providing both reassurance and affirmative guidance in the role of the FTT during case management of applications.