Cases - Kevin G Conway and others v Jam Factory Freehold Ltd
Record details
- Name
- Kevin G Conway and others v Jam Factory Freehold Ltd
- Date
- [2013]
- Citation
- UKUT 0592 (LC)
- Legislation
- Keywords
- Costs – service charges – recoverability of landlord’s costs – Landlord and Tenant Act 1985, section 20, 24
- Summary
-
The appellant leaseholders appealed against the decision of the LVT that the terms of the standard Jam Factory lease permitted the respondent landlord to include in the service charge payable by all the leaseholders the cost which it incurred in unsuccessful proceedings brought by the appellants to procure the appointment of a manager under section 24 of the Landlord and Tenant Act 1985 (LTA 1985).
The respondent landlord cross-appealed against the decision of the LVT to make an order under section 20 of LTA 1985 that the costs of the section 24 proceedings, although recoverable in principle, should not be added to the service charges.
The costs of dealing with the appellants’ section 24 application fell within the conditions laid down by clause 14.1 of the lease; namely costs incurred 'in the management of the building'.
In respect of the section 20 application, the LVT failed to give appropriate weight to its own unequivocal dismissal of the appellant’s application to appoint a new manager.
It appears that the LVT had given no consideration its section 20 order would have on the respondent. If the respondent was not to succumb to insolvency the sum expended on defending the proceedings would have to be found from an alternative source, namely its members. The LVT assumed that its section 20 order applied to all the leaseholders and prevented the respondent from recouping its expenditure through the service charge payable by any of them. Yet, in accordance with section 20C no other person except the applicant and those specified in the application is entitled to benefit from the order.
The majority of leaseholders did not support the appellant’s section 24 application. They are, however, liable to contribute through the service charge to the respondent’s costs in defending the application. The appellants, however, are protected by virtue of the order from their contractual obligation to pay their share of those costs.
In any application under section 20C, it is essential to consider what will be the practical and financial consequences for all those who will be affected by the order, and to bear those consequences in mind when deciding on the just and equitable order to make.
The appeal was dismissed and the cross appeal was allowed.