S.20C Orders: JB Leitch Successfully Appeals s.20C Order Made by First-tier Tribunal on Behalf of Freeholder Client

JB Leitch recently received judgment from the Upper Tribunal which successfully set aside a s.20C order made by the First-tier Tribunal (“FTT”) against our client.

The background

On behalf of the freeholder, and pursuant to wider proceedings relating to a service charge dispute heard firstly in the FTT and on appeal in the Upper Tribunal (“UT”), J B Leitch applied to the UT to set aside a s.20C order made by the FTT under s. 20C of the Landlord and Tenant Act 1985.

The leaseholders resisted this request, and instead sought an order under s.20C themselves in respect of the UT proceedings, together with repayment of their UT costs.

S.20C of the Landlord and Tenant Act 1985 states:

“A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court…are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant or any other person or persons specified in the application.”

In the FTT proceedings, the leaseholders had been the more successful party by reference to a percentage of the dispute’s value. On appeal in the UT, the freeholder had been the more successful party.

The decision

The UT found in favour of the freeholder, setting aside the FTT’s s.20C order and refusing the leaseholders’ application for a s.20C order in respect of the proceedings heard in the UT.

The UT declined to consider accusations made by the leaseholders relating to service charges demanded in breach of the FTT’s order, concluding that these further submissions should be taken by the leaseholders to the county court if they wished to pursue them.

Finding that the freeholder was entitled to recover legal fees as service charges, the UT held that the extent of the leaseholders’ success did not merit a s.20C order that deprived the freeholder of its contractual rights to recover legal fees in this way.

The s.20C order made in respect of the leaseholders’ costs in the FTT was set aside. The UT made no s.20C order in respect of the UT proceedings, during which the freeholder had been considerably more successful.

The freeholder was ordered to reimburse the leaseholders’ Tribunal fees in the sum of £605.