Cowling v Worcester Community Housing Ltd

This is a renewed application by Mrs Gertrude Cowling, a litigant in person, for permission to appeal against the order of His Honour Judge Pearce-Higgins Q.C. sitting in the Worcester County Court, dated 7 August 2014, in which he allowed in part Mrs Cowling’s appeal against the decision of District Judge Khan ordering her to give possession of the dwelling-house at 71 Grenville Road, Dines Green in Worcester, and to pay arrears of service charge amounting in total to £511.51. There is also an application for an extension of time, of some four months. Mrs Cowling has been assisted today by her McKenzie Friend, Mr Brown. The court is grateful for the help it has received both from Mr Brown and from Mrs Cowling and for the courtesy and clarity with which the application has been presented.

Permission to appeal was refused on paper by Lewison L.J. on 28 May 2015. He gave two reasons for refusing permission. The first was that Mrs Cowling’s appellant’s notice was more than four months out of time, and that no adequate reason had been given for the delay.

In her submissions to the court today Mrs Cowling has put forward two reasons for the delay. The first relates to the parallel proceedings before the First-tier Tribunal (Property Chamber) and then, on appeal, the Upper Tribunal (Lands Chamber). As I understand it, Mrs Cowling was optimistic at one stage that the matter might go back to the County Court and that an appeal to this court might not be necessary. That optimism ultimately faded. Looking back, Mrs Cowling now wishes she had put in her appellant’s notice on time or at least sought an extension of time sooner than she did. The second reason relates to Mrs Cowling’s son’s mental health. I have not heard extensive submissions about that, but it is clear that at the relevant time there were difficulties which understandably preoccupied Mrs Cowling and which were a distraction from these proceedings. In the circumstances, I would prepared to grant the extension of time. I shall therefore go on to consider the grounds of appeal on their merits.

This is a second appeal. The court cannot grant permission to appeal unless it considers either that the appeal would raise an important point of principle or practice or that there is some other compelling reason for an appeal to be heard.

It is not necessary to set out the history at length. The dwelling-house was let to Mrs Cowling on a weekly assured non-shorthold tenancy from 29 March 2004. There was disagreement about the terms of the tenancy, and in particular whether or not they included the “Assured Tenancy Agreement Non-Shorthold Transferring Tenants” document, which contains, under the heading “Service Charges”, provisions on which the judge relied. The dispute was over a service charge for a television aerial connection point, introduced after Worcester Community Housing had decided to provide a connection to digital television. A question arose as to whether Worcester Community Housing had proceeded properly in the light of consultation as required under the provisions of the “Assured Tenancy Agreement Non-Shorthold Transferring Tenants” document. In short, Mrs Cowling did not accept that she was liable to pay that element of the service charge.

Worcester Community Housing issued a claim for possession in November 2013. The matter came before District Judge Khan on 7 January 2014. Giving judgment for Worcester Community Housing, he said:

“...The Leasehold Valuation Tribunal, I think, deal with these types of disputes but this is not the forum for that. On the face of it, the landlord has levied this charge. They are entitled to levy a charge on the face of it and it has to be paid.”

District Judge Khan ordered Mrs Cowling to give possession of the property and to pay Worcester Community Housing £511.51, as he said, for “rent arrears”, though he must have meant “service charge”.

In his judgment on the appeal from that order, His Honour Judge Pearce-Higgins Q.C. acknowledged that the District Judge seemed to have been in “… some error because he felt that his order could be, effectively, varied if the tenant made an application to the Leasehold Valuation Tribunal in respect of part of the service charge.” He noted that the sums involved were, as he put it, “relatively small”, though he recognized that Mrs Cowling was on a “limited income”. He said the dispute must be resolved before too much more money was spent on legal proceedings. He considered the relevant terms of the tenancy agreement. He accepted that the provisions contained in the “Assured Tenancy Agreement Non-Shorthold Transferring Tenants” document were indeed part of the tenancy agreement. He referred to the salient provisions:

“... [Paragraphs] 2.7 and 2.8 are the provisions that permit the landlord, after some consultation, to introduce the sort of charge that is introduced by way of the TV aerial point. As a matter of reality, my judgment is that, if the matter were to be readmitted for a full trial, the court is going to be bound to find that there were terms applying to the tenancy and those are the terms.”

He said that Worcester Community Housing had gone through “the right procedure” and was entitled to make the service charge it did. He accepted that this was not a case for the tribunal for two reasons. First, the service charge in question did not vary with the costs incurred by Worcester Community Housing as landlord every year. It was a fixed charge. Secondly and in any event, the landlord was entitled to levy this element of the service charge, and his own judgment resolved that question. Although Mrs Cowling genuinely believed she was not obliged to pay 74 pence per week in respect of the television aerial, he found that she was. He did not accept, however, that the order for possession ought to have been made. He therefore dismissed the appeal in so far as it related to the payment of the arrears of service charges, but adjourned generally the claim for possession.

I note that the First-tier Tribunal clearly concluded that His Honour Judge Pearce-Higgins Q.C. had correctly understood the terms of the tenancy. District Judge Khan could have transferred to it the issue between the parties over the service charge for the television aerial connection, under section 176A of the Commonhold and Leasehold Reform Act 2002, but had chosen not to do so. However, Mrs Cowling could not pursue before the tribunal any grievance she might have about the proceedings in the County Court. The First-tier Tribunal’s decision was appealed to the Upper Tribunal. The appeal was heard by the Upper Tribunal (His Honour Judge Gerald) on 9 September 2015. It too was concerned only with, as it said, a “very narrow jurisdictional issue”, which was whether the First-tier Tribunal had had jurisdiction to consider the reasonableness of the service charge under section 19 of the Landlord and Tenant Act 1985 “in circumstances where a money judgement for the amount of the service charge claimed had been entered by order of the county court”. The Upper Tribunal observed that “[the] differing reasons behind the making of the money order do not alter the fact that, subject to the outstanding application for permission to appeal, the money order or judgment remains extant”, and that that judgment “not only resolves the question of liability but also of the amount which must be paid and by whom but also the question of jurisdiction”. It added that in its view “no sensible distinction can be made between liability to pay and the amount payable”.

I turn to the grounds of appeal. I shall deal with all six of the grounds in the appellant’s notice. Mr Brown has concentrated today on a relatively small number of points, concerning, in particular, the terms of the tenancy agreement and the question of consultation under paragraphs 2.7 and 2.8 of the “Assured Tenancy Agreement Non-Shorthold Transferring Tenants” document. I shall deal with those points together with the others raised in the appellant’s notice.

The first ground is that the courts below, in finding Mrs Cowling liable to pay the disputed service charge, failed to explore the “pivotal” issue of whether Worcester Community Housing had carried out a “contractually specified consultation” and had wrongly found as a fact that consultation had taken place. This point does not seem to me to be properly arguable on a second appeal. It cannot be suggested that the judge failed to consider the requirement of consultation in the provisions for rent and service charges in the “Assured Tenancy Agreement Non-Shorthold Transferring Tenants” document, and in particular the provisions for service charges in paragraphs 2.7 and 2.8. He explicitly did so in paragraphs 3 and 4 of his judgment. He dealt with Mrs Cowling’s concern about the lack of a consultation process. He referred to the correspondence and other documents before him, including a letter of 1 June 2007 from Worcester Community Housing to Mrs Cowling in which Mr Lloyd, on behalf of Worcester Community Housing, referred to the “great deal of consultation” that had taken place since Worcester Community Housing had decided to provide digital television for their tenants. It is also clear that he had in mind a document entitled “Digital Aerial Consultation, Thursday 2nd November 2006 – Horizon Centre, Worcester”, which records what happened at a meeting on that day between representatives of Worcester Community Housing and tenants. A representative of Worcester Community Housing said the purposes of the meeting were “[to] explain how we plan to meet the offer document promise of upgrading or installing digital TV aerials to all communal blocks” and “[to] give tenants and leaseholders an opportunity to ask questions about the proposals so we can hopefully answer them, and also consider any issues that these questions might raise when we are planning the installation”. Mr Brown has referred to observations made by the judge in the course of the hearing. But I must concentrate on what he had decided by the time he came to give judgment, for it is his judgment that represents his findings and conclusions. He was satisfied that Worcester Community Housing had gone through the right procedure, including consultation. It does not seem to me that this finding is susceptible of challenge by way of a second appeal to this court. There was material before the judge on which he could make it. The consultation may not have been as extensive as Mrs Cowling would have wished. It may not have been undertaken at the time she would have wished it to be undertaken. But the contention that there was no consultation under the provisions for consultation in the tenancy agreement does not seem to me to be a possible argument to raise on an appeal to this court.

The second ground is that the judge was wrong not to set aside the decision of District Judge Khan in its entirety. It is submitted that District Judge Khan ought not to have proceeded to hear the case when he did, but should have made case management directions for the future conduct of the proceedings. Again, the difficulty for Mrs Cowling is that this is not an available argument on a second appeal to this court. At the hearing before District Judge Khan the dispute between the parties was explained to him. No doubt the hearing was short. And the judgment was undoubtedly concise. But District Judge Khan made the clear finding that Mrs Cowling was liable to pay the arrears of service charge for the relevant period. When the matter came before His Honour Judge Pearce-Higgins Q.C. on appeal, the question of the reasonableness of the service charge and Worcester Community Housing’s entitlement to levy it was fully aired in the light of the relevant documentary evidence. Mrs Cowling had a fair opportunity to explain her opposition to paying the disputed service charge. The judge dealt both with the dispute over the arrears of service charges and with the order for possession made by District Judge Khan. I do not think Mrs Cowling’s application is assisted here by the decision of the Court of Appeal in Forcelux Limited v Martyn Ewan Binnie [2009] EWCA Civ 854, in particular the judgment of Warren J. at paragraphs 32 to 34. That decision does not seem relevant to the situation that arose in this case, where the County Court judge dealt with the dispute between the parties. I do not accept, therefore, that this ground of proposed the appeal satisfies the second appeals test.

The third ground is that the courts below failed to address Mrs Cowling’s complaint that the terms of her tenancy agreement had been altered or manufactured by Worcester Community Housing. I do not accept that this ground is properly arguable on a second appeal. The judge had to decide what the relevant terms were, on their true construction. He did that, and in my view he did it correctly. He rejected the contention that the document on which Worcester Community Housing were relying was not part of the tenancy agreement. He was not persuaded that the terms for “rent and service charges” had been added to the provisions of the tenancy particulars signed by Mrs Cowling on 15 June 2004. He was entitled to conclude as he did.

The fourth ground contends that the judge was misled by counsel for Worcester Community Housing to the erroneous conclusion that the contentious service charge was a fixed, as opposed to a variable charge, and thus not suitable for referral to the First-tier Tribunal – a conclusion rejected by the tribunal. This ground too I reject as unarguable. I do not accept that the judge was actively misled by counsel, and I would not accept such a contention without the benefit of counsel’s own account of what took place at the hearing. It is clear that it was submitted to the judge, and the judge accepted, that the disputed service charge was not a variable charge but a fixed charge. However, that submission was not maintained by Worcester Community Housing before the First-tier Tribunal. In the end, it seems to me, the point is futile because the judge did not find it necessary to rely on the proposition that he was dealing with a fixed charge. Irrespective of that, he concluded that Worcester Community Housing was entitled to make the service charge it had, and Mrs Cowling was obliged to pay it. That conclusion was determinative of the dispute before him. He clearly decided that the service charge for the period in question was reasonable and could reasonably be levied on Mrs Cowling. It follows that the money judgment in the courts below has resolved not only the question of liability, but also the amount that had to be paid. This, as I understand it, was also accepted by the Upper Tribunal in its decision.

The fifth ground, which I can take shortly, is that the judge acted in breach of natural justice by taking into account, when considering whether the case ought to proceed to a “full trial”, his view that the litigation would be expensive. It is said that this militated against the fairness of the proceedings to Mrs Cowling because Worcester Community Housing was the party professionally represented and incurring costs. I do not regard this ground as properly arguable. The judge was entitled to have regard to the cost of the litigation over a dispute of this scale. He concluded on the evidence and submissions before him that the terms of Mrs Cowling’s tenancy made it possible for Worcester Community Housing to levy the disputed service charge. It was in no sense a breach of the rules of natural justice that he should seek to resolve the dispute on the evidence and submissions before him in the way he did.

I turn finally to the sixth ground, which is that the judge was wrong to conclude that at a full trial the court would be “bound to find” the terms of the tenancy were as Worcester Community Housing contended them to be. It is said that there are “uncontested and unexplored irregularities” in the evidence on that question. I reject this ground too. The judge was entitled to interpret the provisions of Mrs Cowling’s tenancy as he did. His conclusions on what the relevant terms of the tenancy were and what they meant were correct. He could not have reached those conclusions if he had accepted that the terms of the tenancy agreement on which Worcester Community Housing were relying had been falsified. He plainly rejected that suggestion. And he was right to do so.

In conclusion, having considered all of the grounds in the appellant’s notice and the oral submissions amplifying those grounds made on behalf of Mrs Cowling today, I find myself in agreement with the decision of Lewison L.J. when refusing permission on the papers. I pay tribute to both Mrs Cowling and Mr Brown for the tenacity and courtesy they have shown in presenting her application to me. But in the event I am not satisfied that the second appeals test is met. This renewed application for permission to appeal is therefore refused.