Service charges: procedural fairness

The First-tier Tribunal must give weight to the need to deal with cases fairly and justly, including by avoiding any unnecessary formality and seeking flexibility in the proceedings in accordance with its rules. In Saunders v Shenfield Ltd [2023] UKUT 208 (LC), the respondent landlord applied to the FTT for a determination under section 27A of the service charge payable for the years 2020 and 2021 by the appellant long leaseholder, under his lease of his flat situated in London, W1. On receipt of the application the FTT gave standard case management directions, which included an order for the landlord to produce copies of all relevant service charge accounts and estimates for the years in dispute. Further, the landlord was required to produce all demands for payments and details of any payments made. No further disclosure was ordered at that stage, as was in keeping with the FTT’s standard directions. The lessee was ordered, in turn, to prepare a schedule setting out all items and amounts disputed. The landlord was directed to respond to the schedule by commenting on the items in dispute and supplying copies of all relevant invoices, documents and other photographs upon which it intended to rely. Each party was given permission to produce witness statements. When the lessee filed his schedule he stated that he required further information to determine whether the disputed sums claimed were properly chargeable. He subsequently applied to the FTT for an order for specific disclosure and an adjournment of the final hearing that had been listed when the standard directions were made. The application was refused. Just before the hearing, the landlord produced a hearing bundle that contained documents that had not been previously provided to the lessee that were relevant to the matters in dispute. At the hearing, the lessee renewed his application for specific disclosure, the FTT again dismissed the same. It also refused to permit the lessee to raise issues highlighted by the new documents disclosed by the landlord as they had not been identified in the schedule. The FTT found that the charges for almost all of the items demanded were payable. On appeal, the appellant argued that the FTT’s failure to order the specific disclosure sought and allow him to raise further issues had deprived him of a fair hearing. The Upper Tribunal (Lands Chamber) agreed in part. The FTT had failed to deal satisfactorily with the application for disclosure. The UT determined that the FTT should not have refused to consider arguments based on the content of documentation that had only been disclosed by the landlord a few days before the hearing, when their importance had been flagged up earlier by the lessee. The UT was critical of the FTT for having prioritised the importance of each issue being identified in the schedule over the importance of dealing with cases fairly and justly, including avoiding formality and being flexible, when necessary, in accordance with its rules. Elizabeth Dwomoh is a barrister at Lamb Chambers