United Kingdom Upper Tribunal (Lands Chamber)

UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2015] UKUT 324 (LC)

UTLC Case Number: RAP/30/2014

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

 

LANDLORD AND TENANT – RENT DETERMINATION – assured periodic tenancy – whether agreement provided for contractual rent review and precluded reference of proposed new rent to First-tier Tribunal - new service charge for support and intensive housing management services not required by tenant – market rent determined by reference to comparable without such services – tenant’s challenge to service charges not adjudicated on by First-tier Tribunal - ss. 13-14, Housing Act 1988 – appeal dismissed

 

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE FIRST TIER TRIBUNAL (PROPERTY CHAMBER)

 

BETWEEN

HELENA PARTNERSHIPS LIMITED

Appellant

 

and

MR MICHAEL BROWN

Respondent

 

Re: Flat 16, Cross Meadow Court,

Peasley Cross,

St Helens ,

Merseyside

 

Before: Martin Rodger QC, Deputy President

 

Sitting at: The Liverpool Civil and Family Justice Centre,

35 Vernon Street, Liverpool L2 2BX

on

10 June 2015

 

Mr W.E. Hanbury, instructed by Weightmans LLP, appeared for the appellant

The Respondent appeared on his own behalf

 

 

© CROWN COPYRIGHT 2015

 

 

The following case is referred to in this decision:

 

Contour Homes Limited v Rowen [2007] EWCA Civ 842

 

 

Introduction

1.                  The respondent, Mr Michael Brown, is an assured periodic tenant of Flat 16, Cross Meadow Court, Peasley Cross, St Helens under a tenancy agreement which he entered into on 3 November 2003 with the appellant (which was then known as Helena Housing Ltd).  The issue in this appeal concerns the rent he is required to pay for his flat following the introduction of a service charge for support services which Mr Brown did not request and neither wants nor needs.

2.                  At the commencement of his tenancy Mr Brown agreed to pay a weekly rent of £48.56, a sum which included a small service charge of £0.62 per week for ground maintenance and communal lighting.  His tenancy agreement expressly entitled the appellant to increase that rent “in accordance with Sections 13 and 14 Housing Act 1988”.

3.                  In 2010 the appellant introduced additional services which it described as “specialist housing related support to existing and new tenants who require advice and assistance to help them manage their tenancies”.  The cost of those services was initially met by the appellant from its general revenue but with effect from 7 April 2014 it sought to defray the expense by introducing a weekly service charge of £33.02 (of which £0.97 was for the original ground maintenance and communal lighting services and the balance for the new services).  At the same time the appellant gave notice to Mr Brown under section 13(2) of the Housing Act 1988 proposing a new rent for his tenancy of £77.65 in place of the previous rent of £72.87.  The effect of these measures was to increase the sum payable by Mr Brown as rent and service charges from £73.81 a week to £110.67 a week.

4.             Mr Brown does not consider that he benefits from the new services.  He is not in need of housing related support, intensive or otherwise, and he has sustained his tenancy quite successfully without it for more than 10 years.  Having taken advice he referred the notice of increase of rent to the First-tier Tribunal (“the FTT”) on the form appropriate to an application under section 13(4)(a), Housing Act 1988.  He did not separately challenge his liability to pay the new service charge.

5.             By its decision given on 7 July 2014, subsequently explained in reasons given in September 2014, the FTT reduced the rent payable under the tenancy to £32.98 per week with effect from 7 April 2014 which was to be payable in addition to the new service charge assumed by the FTT to be payable in full.  The net effect of the decision was that Mr Brown’s combined rent and service charge was reduced from £73.81 to £66.00 per week.

The issue

6.             The FTT granted permission to appeal its decision.  It did so having been referred by the appellant to a decision of the Court of Appeal, Contour Homes Limited v Rowen [2007] EWCA Civ 842, which concerned the applicability of the statutory procedures for challenging a notice of increase of rent in cases where the assured tenancy contains a contractual rent review clause. 

7.             The issue for which permission was given were not clearly formulated by the FTT, but it was understood by the parties to comprise the following:

Whether the references to sections 13 and 14 of the 1988 Act in clause 1.10.2 of the tenancy agreement gave the FTT jurisdiction to determine a challenge to the proposed rent increase or whether, as the appellant contends, clauses 1.10.1 and 1.10.2 of the tenancy agreement provide a contractual rent review mechanism falling within section 13(1)(b), the effect of which was to exclude the FTT’s jurisdiction.

The facts

8.             Before considering the grounds of appeal I should record the relevant facts as they appear from the documents before the Tribunal and the FTT’s decision. 

9.             Mr Brown’s flat is on the second floor of a three-storey purpose-built block of flats, and has one bedroom, a lounge, kitchen and bathroom, all with central heating and double-glazing.  The building is one of three similar blocks of flats on the appellant’s Appleton Road estate and has communal gardens and communal off-street parking.  No furniture is provided by the appellant nor have any improvements been made by Mr Brown.  When the FTT inspected Mr Brown’s flat it found that the kitchen and bathroom fittings were “ageing”, some re-plastering was required and some seals were broken in the double-glazing units.  

10.         The tenancy agreement entered into by the parties on 3 November 2003 initially provided for Mr Brown’s tenancy to be an assured shorthold tenancy under section 19A, Housing Act 1988 but that it would automatically become an assured tenancy after one year.  The agreement is drafted in an informal style, which is no doubt intended to make it a user-friendly document which can be easily understood.  Throughout the document the appellant is referred to as “we” and the tenant as “you”. On the cover it is recorded that the document is based on the National Housing Federation model assured tenancy agreement.

11.         Clause 1.6 of the agreement records the original rent and additional charges totalling £48.56 payable on Monday of each week; that aggregate figure comprised a basic rent of £47.94 and additional charges of £0.27 for ground maintenance and £0.35 for communal lighting.  The printed form of agreement provided space to record additional charges for a list of services comprising general counselling and support, “Care Line/Sheltered”, heating and furniture but no charge was shown against any of those items in Mr Brown’s agreement.  Clause 1.6 concluded by stating that:

“In this agreement the terms “rent” and “service charge” refer to all the charges shown on page 2 which can be changed as set out below.”

12.         Under the heading “Services” space was provided in clause 1.8 of the agreement to record the services which the appellant would provide and for which Mr Brown was required to pay the service charge shown in clause 1.6.  The printed form included the words “general counselling and support” as a service presumably intended to be available to all whose tenancies were on the same terms but no other entries had been added.  As I have already noted, no charge was shown for that service in the breakdown in clause 1.6 and no other service was listed in clause 1.8 as available to Mr Brown.  The clause concluded with the statement, to which Mr Brown drew particular attention:

“Other services can be provided at your request for which a separate additional charge will be made by agreement between us in writing.”

13.         The parties’ expectations in relation to increases in rent and service charges are recorded in clauses 1.10 and 1.12.  As far as rent is concerned the agreement included the following:

“Changing your rent

1.10.1 We will increase your rent on the first Monday in April following the grant of this tenancy by no more than the change in the Retail Price Index (all items) for the previous 12 month period announced in the October before your rent increase (“RPI”) plus half a percent.

1.10.2 Thereafter we can (in accordance with Sections 13 and 14 Housing Act 1988) increase your rent at any time if we give you at least one month’s notice in writing of the increase.  You must then pay the full amount shown in the notice unless either we and you agree to an alternative figure or you ask a rent assessment committee to set a rent for you.  This rent will be the most we can charge for one year from the date specified in the notice unless you and we agree otherwise.

1.10.3 Save as set out in clause 1.10.1 above we will not increase your rent more than once a year and no increase shall take effect less than a year after the last increase.”

14.         Under the heading “Changing your service charge (if this applies)” clause 1.12 provided that, if a service charge was payable:

“1.12.1 We may increase your service charge (if it applies) at any time if we give you at least one month’s notice in writing, but not more than once a year unless there is a change in the services provided or it is necessary to meet the actual cost of the services provided.”

15.         The remainder of clause 1.12 provided for an annual RPI increase in the service charge in April in the year following the grant of the tenancy, and thereafter for Mr Brown to pay “a service charge based on our estimate of the sum we are likely to spend in providing services to you over the coming year”.  There was to be an adjustment of the service charge for the following year if it transpired that more or less had been spent “on providing services for you”. 

16.         Clause 12.1.5 informed Mr Brown of his entitlement to examine receipts and other documents relating to the service charge, while clause 12.1.6 informed him that he may be able to apply to either a leasehold valuation tribunal or a rent assessment committee if he considered the charges were unreasonable.  No express reference was made to sections 22 or 27A, Landlord and Tenant Act 1985, but it is apparent that the purpose of these clauses of the tenancy agreement was to inform Mr Brown of his rights under the general law. 

17.         The agreement contains a number of other similar statements of the general law applicable to the relationship between the appellant and Mr Brown.  They were no doubt included in the National Housing Federation’s model assured tenancy agreement in the interests of transparency and to be helpful to tenants.  By way of example:

clause 1.11 informs tenants in receipt of housing benefit of the possibility of arranging for the local authority to pay the benefit direct to the appellant;

clause 2.14 informs tenants that, as tenants of a body regulated by the Housing Corporation, their rights are explained in certain Charters of which copies can be obtained from the appellant’s offices;

clause 6.2 explains the limitations on the recovery of possession while the tenancy is an assured shorthold tenancy and clause 7.2 does the same for the period after the tenancy has become fully assured. 

Although these clauses are included in the agreement it is difficult to see them as being intended to alter the general law applicable to the legal relationship between the parties; they are a statement of relevant aspects of the law, helpfully recorded in the agreement for information, rather than to confer on them any separate contractual force. 

18.         On 2 January 2014 the appellant commenced a consultation with its tenants, including Mr Brown, over the introduction of the proposed new service charge.  A letter of that date listed the services currently provided as including 24 hour CCTV surveillance, a daily evening and early morning concierge service, “a drop in” service available from Monday to Friday during office hours, the use of a community room to access IT facilities and “group sessions”, access to a dedicated support officer able to provide individual advice and assistance and planned one-2-one sessions, as well as the services of the caretaker who attended to the general up keep of the estate and cleaning of communal areas. 

19.         Although Mr Brown responded negatively to the appellant’s consultation, he received notice on 14 February 2014 that, with effect from 7 April 2014, his combined rent and service charge would increase from £73.81 to £110.67.  These figures were broken down only to the extent that rent, ground maintenance, communal lighting and “services” were itemised, with the catch-all category of “services” totalling £32.05.  The letter referred to an attached notice of increase of rent under section 13 of the 1988 Act which showed that the rental element of the total was to increase from £72.87 to £77.65 per week.

20.         Mr Brown applied to the FTT on the prescribed form for use by a tenant who wishes to exercise the right given by section 13(4)(a), Housing Act 1988 to refer a notice proposing a new rent under an assured periodic tenancy for consideration by the appropriate tribunal.  That form of notice does not require that a tenant provide details of any disagreement with the increase proposed, and concludes with a simple, unqualified statement that the tenant applies for the notice proposing a new rent to be considered by the tribunal.  Nonetheless, in those sections of the application form in which the tenant is asked to provide details of services provided under the tenancy, Mr Brown took the opportunity to emphasise that he did not agree with the introduction of the new service charge.  In a subsequent letter to the FTT dated 16 May 2014 Mr Brown stressed the scope of his challenge when he wrote:

“I agree to the rent of £77.65 but do not agree with the increase of £32.05 for services that are not required, agreed or used.”

Mr Brown did not object to paying the small service charge of £0.97 for ground maintenance and communal lighting which he had always paid, but he did object to the remaining service charges.

The relevant statutory provisions

21.         Sections 13 to 14B of the Housing Act 1988 are concerned with the determination of rent under assured periodic tenancies.  They have no application to assured tenancies for a fixed term (which will either contain a contractual provision for rent review or regular rent increases to pre-determined amounts, or will be at the same rent throughout the term).  For the purpose of this appeal it is necessary to refer only to section 13(1) which provides as follows:

“13. Increases of rent under assured periodic tenancies

(1) This section applies to –

(a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part 1 of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and

(b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.”

22.         As Mr Hanbury correctly pointed out, unless section 13 applies to a tenancy, section 14, which confers jurisdiction on the appropriate tribunal to determine disputes over proposed increases in rent, cannot be engaged.  The jurisdiction of the FTT to determine the proper rent for the dwelling under section 14(1) arises only where a notice of increase of rent given under section 13(2) has been referred to the FTT under section 13(4)(a) by the tenant to whom the notice was given.  Such a reference may only be made if the tenancy is one to which section 13 applies, which requires that it fall into one of the two categories described in section 13(1). 

23.         As Mr Hanbury also correctly submitted, the FTT is a statutory tribunal and it is not possible for the parties to a tenancy agreement to give it jurisdiction to determine a rent as if sections 13 and 14 of the 1988 Act applied when, on a proper application of the statutory provisions, they do not apply.

24.         Section 13(1)(a) is concerned with statutory periodic tenancies i.e. any assured tenancy which is a fixed term tenancy but which has come to an end leaving the tenant in possession by virtue of section 5 of the 1988 Act (see section 5(7)). The effect of section 13(1)(a) is that (with certain irrelevant exceptions) any statutory periodic tenancy is a tenancy to which section 13 applies. 

25.         Section 13 will also apply to any other periodic tenancy which is an assured tenancy unless the exception in section 13(1)(b) is engaged.  That exception applies wherever there is “a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period.”  Section 13(1)(b) is intended to cover all contractual provisions for increasing rent, whether they be for fixed increases (for example by reference to the change in the retail price index, or stepped increases to predetermined figures) or for increases by reference to an objective standard such as open market value.  The scope of section 13(1)(b) was considered by the Court of Appeal in Contour Homes Ltd v Rowen [2007] EWCA Civ 842 in which Arden LJ held that:

“The exclusion in section 13(1)(b) of the 1998 Act applies not simply to cases where the amount of the increase in rent is set by the tenancy agreement but also in cases where the tenancy agreement merely provides a machinery for increasing the rent.”

If there is contractual machinery for increasing the rent, the parties are not entitled to make use of the statutory provisions for determining an increase in sections 13 and 14.

The FTT’s decision

26.         The FTT issued its decision on 7 July 2014, reducing the rent to £32.98 with effect from 7 April 2014.  The notice of the decision recorded that variable service charges were not included in that figure. 

27.         In its subsequent reasons for the decision the FTT noted that the appellant had challenged its jurisdiction to entertain Mr Brown’s application on the basis that the agreement was within the exception in section 13(1)(b).  The FTT recorded that challenge in paragraph 21 of its decision but dismissed it because “the tenancy agreement entitled the landlord to increase the services provided to the tenant and the service charge and the rent, but did not include a detailed formula for increasing either.”

28.         In paragraph 22 of its reasons the FTT determined the rent at which it considered Mr Brown’s flat might reasonably be expected to be let on the open market.  It found that figure to be £66.00 per week, which included £33.02 in respect of all services.  It explained how it arrived at that conclusion:

“Market rent for a similar property let on the open market fully furnished, with all modern amenities and without defects and including service charges (equating to £350 pcm):

£81.00

Deductions:

Lack of furnishings/white goods £  8.00

Necessary improvements/defects as listed £  7.00 _____

£15.00

Market rent for the property £66.00”

29.         The FTT subsequently explained (when granting permission to appeal) that it had had a specific open market comparable in mind when it referred to a market rent of £350 per month, or £81 per week, for a similar property let on the open market.  It had assumed that rent was payable without any additional charge for services provided to the occupier.  The FTT did not say what those services were but there is no reason to think that they included the sort of intensive housing management, “group sessions” and one to one support and advice which the appellant provides to some of its tenants.  Nevertheless the FTT considered that it was appropriate to deduct the full cost of the services provided by the appellant to its tenants from the rent established by that open market comparable when arriving at its determination of the rent properly payable for Mr Brown’s flat.  With respect to the FTT that seems a rather surprising approach.  The rent of £81 for the comparable property no doubt included consideration for routine residential services such as cleaning and lighting the common parts, and repairs to the structure of the building; the tenant of the comparable property would not be expected to pay any additional charge for those services.  It does not seem to me to follow that another tenant in the open market would be prepared to pay only £32.98 for the subject property if it was let on terms which required the payment of a separate charge for services of a very different nature not available at the comparable property. 

30.         If the two flats are truly comparable Mr Brown would appear to be getting £66 worth of accommodation for £32.98.  It is true that he is also getting access to services which he considers to be of no value to him but which cost the appellant £32.05 to provide.  It is therefore apparent that the proper treatment of those services is critical to the determination of the rent.  If the terms of Mr Brown’s tenancy oblige him to pay for the services (despite not having requested or agreed to them), if the services would be of no value to a tenant in the open market, and if section 14(1)(c) of the 1988 Act requires the obligation to pay for them to be taken into account in determining the new rent, then the approach taken by the FTT may be defensible.  If, on the other hand, either Mr Brown is not obliged to pay for the services, or the open market for a flat let on terms which include the provision of services of this nature would comprise tenants who would value those services and be in a position to pay for them (whether personally or through housing benefit) then the decision to discount the rent by the full amount of the new service charge is very difficult to justify.  The FTT was not addressed on these issues and did not consider them in the reasons it gave for its decision.

The appeal

31.         The appellant did not seek permission to appeal against the FTT’s assessment of the market rent for the property.  Rather, the appeal focused solely on the question of the FTT’s jurisdiction. 

32.         Mr Hanbury submitted that clauses 1.10.1 and 1.10.2 of the tenancy agreement constituted “… a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period” so that the agreement fell within the exception in section 13(1)(b) of the Housing Act 1988 and the rent could not be referred to the FTT by Mr Brown. 

33.         Mr Hanbury’s first submission focussed on clause 1.10.1 of the agreement which permitted the appellant, at its option, to increase the rent payable with effect from 1 April 2005 by no more than the change in the retail price index for the twelve months ending in October 2003.  Mr Hanbury submitted that clause 1.10.1 was plainly a rent review provision falling within the definition “under which the rent…. will or may be greater than the rent for an earlier period.”  Although the clause gave an entitlement to a rent increase, rather than providing for an automatic increase, it was one under which the possibility of the tenant paying a greater sum by virtue of a provision of the agreement was open.  That was enough, Mr Hanbury submitted, to remove the assured tenancy for all time from the application of section 13, whatever effect was given to clause 1.10.2. 

34.         I have no doubt that Mr Hanbury’s first submission is wrong.  Clause 1.10.1 of the agreement provided for a single increase with effect from 1 April 2004.  It had no continuing effect after that date.  When Mr Brown referred the notice of increase to the FTT in 2014, it could not be said that clause 1.10.1 was “a provision, for the time being binding on the tenant.”  It was a provision that had been binding on the tenant but was now spent; it was no longer binding and therefore it could not exclude the tenancy from the application of section 13. 

35.         Mr Hanbury’s second submission focussed on clause 1.10.2.  He said this too was a provision binding on the tenant at the time the notice of increase was given, under which the rent may be increased.  The parties had referred in that clause to sections 13 and 14 of the 1988 Act but they had wrongly assumed that they could confer jurisdiction on the FTT to resolve any dispute over any increase which the appellant proposed in a notice given under clause 1.10.2.  As the Court of Appeal had confirmed in Contour such jurisdiction could not be conferred by the agreement of the parties.  The effect of trying to do something which could not be done was that clause 1.10.2 should be read as though the words “(in accordance with sections 13 and 14 Housing Act 1988)” and the words “or you ask a rent assessment committee to set a rent for you” had not been included.  Those parts of the clause were, Mr Hanbury submitted, “otiose”. Mr Hanbury nevertheless submitted that by incorporating a contractual provision for increases in rent, albeit one which sought unsuccessfully to invoke sections 13 and 14 of the 1988 Act, the parties had brought the assured tenancy within the exception in section 13(1)(b). 

36.         Mr Hanbury sought to mitigate the surprising consequences of his surprising submission.  Initially he suggested that the butchered remains of clause 1.10.2 would not operate unfairly to a tenant because the rent proposed in a notice given under the clause would not take effect unless the tenant agreed to it.  If the tenant did not agree the landlord’s proposal, the parties would have to try to reach agreement on an alternative figure.  When it was pointed out that such a construction, which was not backed up by any dispute resolution mechanism, would give tenants a veto on any rent increase, Mr Hanbury made an alternative submission.  As a registered social landlord the appellant could only increase rents in accordance with guidance given by central government and as a public funded body it could not act unreasonably without leaving itself open to judicial review.  It was therefore necessary to imply into clause 1.10.2 a limitation on the increase which the appellant could require in any year.  That increase might be an increase to open market rental value, or an increase in line with guidance given to registered social landlords generally, or by reference to some other standard such as a reasonable increase.  Mr Hanbury referred to the rent review clause which had been considered by the Court of Appeal in the Contour Homes case and which had included an expressed stipulation that the housing association landlord would not to set a rent in excess of the prevailing market rent for the premises, and suggested that a similar provision could be implied into Mr Brown’s tenancy. 

37.         I cannot accept Mr Hanbury’s second submission.  As I have described in paragraph 16 above the tenancy agreement includes a number of statements of the general law which I do not read as any more than information to the tenant concerning his rights.  I read clause 1.10.2 similarly as a simple statement of the effect of the general law under which, after the first year of the tenancy the appellant will have the right under sections 13 and 14 of the 1988 Act to increase the rent payable under the agreement.  That statement has no independent contractual force.  The parties clearly intended no more than that Mr Brown would have the right to refer a notice of increase given under section 13 to the appropriate Tribunal as the general law entitled him to do.  It follows that the appellant’s entitlement to invoke the statutory rent review procedure does not convert that procedure into a contractual rent review clause with the perverse consequence that access to the statutory procedure is prohibited. 

38.         Alternatively Mr Hanbury’s argument is unacceptable because of its circularity.  If clause 1.10.2 is a provision under which the rent may be increased, with the result that section 13 of the 1988 Act does not apply, then it cannot be said that the appellant can increase Mr Brown’s rent “in accordance with sections 13 and 14.”  The machinery for rent review which the parties had agreed would have entirely broken down.  There would be no provision “for the time being binding on the tenant” in the form of clause 1.10.2 because, in that form, the provision is unenforceable and binding on no one. 

39.         I do not think Mr Hanbury’s solution of simply drawing a red pen through the reference to sections 13 and 14 and the right of the tenant to refer the notice to the appropriate Tribunal is consistent with any conventional contractual analysis.  If sections 13 cannot be invoked by the appellant in giving a notice of increase, if the valuation formula in section 14 cannot apply, and if the right of a tenant to challenge the notice is not available, the consequence must be that the whole of clause 1.10.2 is rendered inapplicable.  What would remain, therefore, would be clauses 1.10.1, providing for an increase within the first year of the tenancy, and clause 1.10.3 providing for an annual opportunity thereafter for the appellant to obtain an increase.  That annual opportunity would be one to which sections 13 and 14 would attach by virtue of the tenancy being an assured tenancy to which section 13(1) applies.

40.         Mr Hanbury had a final alternative argument which was that the FTT lacked jurisdiction to reduce the rent at all because in his letter of 16 May 2014 Mr Brown had made it clear that he agreed to the proposed rent of £77.65 but did not agree with the increase of £32.05 for services.

41.         I do not think Mr Hanbury’s alternative submission is correct.  Section 13(2) permits a landlord to serve on a tenant a notice of increase of rent.  Section 13(4) provides that the rent specified in the notice shall take effect unless the tenant refers the notice to the appropriate tribunal or the landlord and the tenant agree on a variation of the rent which is different from that proposed in the notice or they agree that the rent should not be varied.  As I have already indicated, the prescribed form of application to the FTT does not require the tenant to state that he disagrees with the figure proposed.  The procedure involves no more than a request for the FTT to consider the proposed new rent.  There is no doubt that Mr Brown made a valid application under section 13(4)(a) and Mr Hanbury did not suggest to the contrary.  The fact that Mr Brown indicated that he was content with that part of the total increase represented by the rent did not deprive the FTT of jurisdiction to determine the rent at which it considered that the property might reasonably be expected to be let in the open market in accordance with the criteria identified in section 14(1).  The FTT is relieved of the obligation to determine such a rent only if the landlord and the tenant give notice in writing that they no longer require a determination (see section 14(8)), but in the absence of such a joint request, section 14(1) imposes an obligation on the FTT to reach a determination.  I therefore do not accept Mr Hanbury’s submission that the FTT was deprived of jurisdiction by Mr Brown’s willingness to accept the rental element of the proposed increase in rent and service charges. 

42.         Standing back at this point I am concerned that the real dispute between the parties has not been resolved by the FTT’s decision.  In his application referring the notice of increase of rent for consideration, and in the subsequent correspondence with the FTT including in particular the letter of 27 May 2014 in which he had said that he was prepared to accept increases in the service charges for ground maintenance and communal lighting only, Mr Brown made it entirely clear that he disputed the appellant’s entitlement to impose the new service charges on him at all.  Mr Brown wished to argue that the appellant was not free to introduce new services without his agreement because clause 1.8 of the agreement stated explicitly that “other services can be provided at your request for which separate additional charge will be made by agreement between us in writing.” 

43.         Although Mr Brown did not appreciate it, the challenge which he wished to make fell squarely within section 27A, Landlord and Tenant Act 1985 which permits an application to be made to the FTT for a determination whether a service charge is payable.  The FTT could have overlooked the form in which Mr Brown made his challenge, especially as he said explicitly that the proposal to increase the rent to £77.65 did not concern him, and could have treated his application as an application under section 27A(1).  While the application was not in the form appropriate to such an application, rule 8(1) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 provides that any irregularity resulting from a failure to comply with any provision of the Rules does not itself render the proceedings void.  Having regard to the FTT’s overriding objective of dealing fairly and justly with cases before it, which includes avoiding unnecessary formality and seeking flexibility in the proceedings, the FTT could have given directions for the application to proceed additionally as an application under section 27A (1) or exclusively as such an application if Mr Brown had been prepared to withdraw his reference under section 13(4)(a).  Directions could have been given for the submission of an appropriate statement of Mr Brown’s challenge and the FTT could have gone on to determine the real dispute between the parties. 

44.         The FTT did not take that course because it was not asked to and because, quite understandably, the real issues between the parties did not emerge clearly from the formal documents.  The FTT’s decision has not been challenged, except on the grounds of jurisdiction, which I have found to be misconceived.  Although the method of valuation which it adopted was questionable, there has been no appeal against that aspect of its decision. 

45.         The question arises what I should do next.  Mr Brown has represented himself, very competently, but he has had no opportunity to seek advice on whether to consent to the matter being referred back to the FTT with a direction that it consider the issue of whether service charges are payable and, if they are, whether the amount claimed is reasonable.  I have come to the conclusion that the simplest and safest course is to leave the FTT’s decision undisturbed.  I am satisfied that the FTT had jurisdiction to make the decision and that the grounds of appeal advanced before me all fail.  In those circumstances it would be unnecessarily complicating to remit the matter to the FTT for it to consider whether it should additionally treat the application as if made under section 27A.  The better course is for the appellant to make an application of its own under Section 27A for a determination of its entitlement to levy a service charge, or for Mr Brown to make such an application.

46.         I have suggested to Mr Brown that if the issue does return to the FTT he would be well-advised to seek to obtain representation on what are complicated issues.  He may, for example, consider asking the CAB which has previously advised him to refer his case to the Bar Pro Bono Unit or another similar organisation.

47.         The only order I make, therefore, is to dismiss the appeal.

Martin Rodger QC
Deputy President

25 June 2015