Upper Tribunal decision on extent of FTT jurisdiction when no s.47 notices served
Kester Lees acted for the respondent landlord in the Upper Tribunal in Cannon v 38 Lambs Conduit Street LLP [2016] UKUT 0371 in which the Upper Tribunal determined the extent of the First Tier Tribunal's jurisdiction to make a determination as to the service charges payable when, as at the date of the FTT hearing, no valid s.47 notice had been served. The Upper Tribunal accepted the landlord's submissions that the FTT retained jurisdiction to make such a determination in the absence of s.47 demands, albeit that payment of those determined sums would be contingent upon the subsequent service of the s.47(2) notice. HHJ Bridge concluded (at [31]-[32]):
"I do not consider that a failure to comply with section 47 has such an effect. Section 27A is intended to provide a low cost, easily accessible machinery for dispute resolution. It is facilitative, enabling parties to resolve whatever their service charge dispute may be by referring the issue to the tribunal. The provision itself is, consistent with this objective, widely drawn. The tribunal is required to consider the provisions of the lease, and then to consider whether ‘a service charge’ is ‘payable’. If it is ‘payable’, then the tribunal may be asked to determine the persons by or to whom it is payable, the amount payable, and (significantly for this case) the date at or by which it is payable. It does not have to be satisfied that the charge is payable here and now (the appropriate word might be ‘due’).
Section 47 has a quite different purpose, as I have explained above. That purpose is achieved by requiring the landlord, as a pre-condition to successful enforcement of the service charge, to provide the tenant with his name and address in writing. Unless and until that is done, then the charge is not ‘due’. But it does not follow that where the charge is not due, the F-tT cannot consider an application under section 27A. As long as there is a service charge, the F-t T may be asked, and required to answer, the questions that naturally arise. If a demand has been made which does not comply with section 47, but the F-tT takes the view, having considered the application, that the tenant is otherwise obliged to make payment under the service charge, it retains jurisdiction. It may determine that the charge (which it may quantify if required to do so) is payable if and only if a section 47 compliant demand is served by the landlord on the tenant."
The Upper Tribunal also provided further guidance on the construction of costs provisions in long residential leases in relation tot he recovery of costs of proceedings before the First Tier Tribunal. The Upper Tribunal concluded that little guidance could be garnered from Assethold Ltd v Watts [2014] UKUT 0537 and that the stricter approach in Union Pension Trustees Ltd v Slavin [2015] UKUT 0103 and Geyfords v O’Sullivan [2015] UKUT 683 was to be preferred. Further the Upper Tribunal provided interesting commentary on the extent to which the draftsmen of such leases can be taken to have known of the state of the law at the time of execution (see at [55]-[56]).
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