Steven Robert Coogan & Anor v Maryam Taheri & Anor

Following a two-day hearing on 3 and 4 October 2024 at which the appellants represented themselves, on 10 October 2024 the First-tier Tribunal (Property Chamber) (Residential Property) (‘the FTT’) determined four applications, three from the tenants (‘the appellants’) and one from the landlord (‘the respondents’) of residential premises at 9A Belsize Crescent, London NW3 5QY (‘the property’). The tenants’ three applications were as follows: for determination of certain service charges; for the appointment of a manager; and for an order limiting the landlords’ costs. The landlords’ application sought dispensation from the consultation requirements under Landlord and Tenant Act 1985 in respect of major works. The FTT allowed a sum in respect of major works; made no order on the application to be dispensed from consultation since it was unnecessary in view of the determination of the cost of the major works; and refused the application for the appointment of a manager. It gave directions for submissions on costs. There is no appeal from that decision.

The landlords applied for a costs order. Following written submissions on costs, in its decision dated 25 November 2024 (corrected under the slip rule on 5 December 2024), the FTT made a costs order against the tenants in the sum of £70,000 pursuant to rule 13(1)(b) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, and refused the tenants’ application for an order under section 20C Landlord and Tenant Act 1985.

Permission to appeal the costs order was granted by this Tribunal on 5 February 2025. This is the Tribunal’s decision on that appeal.

As the FTT observed, save in relation to the fees payable to HMCTS, it is in principle a ‘no costs’ jurisdiction. However, so far as relevant, under rule ‘the Tribunal may make an order in respect of costs only… if a person has acted unreasonably in bringing, defending or conducting proceedings’: r.13(1)(b) of the 2013 Rules.

The FTT referred to Willow Court Management Co (1985) Ltd v Alexander [2016] UKUT 290 (LC), reminded itself that a sequential approach to applications under that provision should be adopted.

“At the first stage the question is whether the person has acted unreasonably. At the second stage it is essential for the tribunal to consider whether, in light of the unreasonable conduct it has found, it ought to make an order for costs or not. If so, the third stage is what the terms of the order should be.”

In summary, the appellants challenge the decision on the basis that the FTT, while correctly identifying the test for unreasonable behaviour at the first stage, misapplied it so as wrongly to conclude that the tenant’s behaviour had been unreasonable; alternatively, on the basis that the FTT exercised its discretion wrongly at the second stage, in concluding that it ought to make an order for costs against the tenants.

There was no difference between the appellants and the respondents before me as to the nature of that test at stage one. In particular, counsel for the appellants did not pursue an earlier suggestion that the test involved exceptionality in some way. He accepted that it was simply a question of whether the tenant had acted unreasonably. This Tribunal had concluded in Willow that the language and approach of rule 13(1)(b) were clear and sufficiently illuminated by the decision in Ridehalgh v Horsefield [1994] Ch 205. In that case it was held that

“Unreasonable also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner’s judgment, but it is not unreasonable.”

In Willow, the Tribunal declined to adopt a wider interpretation in the context of rule 13(1)(b) and to treat as unreasonable, for example, the conduct of a party who fails to prepare adequately for a hearing, fails to adduce proper evidence in support of their case, fails to state their case clearly or seeks a wholly unrealistic or unachievable outcome. It held,

“…An assessment of whether behaviour is unreasonable requires a value judgment on which views might differ but the standard of behaviour expected of parties in tribunal proceedings ought not to be set at an unrealistic level. We see no reason to depart from the guidance given in Ridehalgh at 232E, despite the slightly different context. “Unreasonable” conduct includes conduct which is vexatious, and designed to harass the other side rather than advance the resolution of the case. It is not enough that the conduct leads in the event to an unsuccessful outcome. The test may be expressed in different ways. Would a reasonable person in the position of the party have conducted themselves in the manner complained of? Or Sir Thomas Bingham’s “acid test”: is there a reasonable explanation for the conduct complained of?”

It went on to say,

“We also consider that tribunals ought not to be over-zealous in detecting unreasonable conduct after the event and should not lose sight of their own powers and responsibilities in the preparatory stages of proceedings. As the three appeals illustrate, these cases are often fraught and emotional; typically those who find themselves before the FTT are inexperienced in formal dispute resolution; professional assistance is often available only at disproportionate expense.”

It continued,

“A decision that the conduct of a party has been unreasonable does not involve an exercise of discretion but rather the application of an objective standard of conduct to the facts of the case. If there is no reasonable explanation for the conduct complained of, the behaviour will properly be adjudged to be unreasonable, and the threshold for the making of an order will have been crossed. A discretionary power is then engaged and the decision maker moves to a second stage of the inquiry. At that second stage it is essential for the tribunal to consider whether, in the light of the unreasonable conduct it has found to have been demonstrated, it ought to make an order for costs or not; it is only if it decides that it should make an order that a third stage is reached when the question is what the terms of that order should be.”

And further,

“In the context of rule 13(1)(b) we consider that the fact that a party acts without legal advice is relevant at the first stage of the inquiry. When considering objectively whether a party has acted reasonably or not, the question is whether a reasonable person in the circumstances in which the party in question found themselves would have acted in the way in which that party acted. In making that assessment it would be wrong, we consider, to assume a greater degree of legal knowledge or familiarity with the procedures of the tribunal and the conduct of proceedings before it, than is in fact possessed by the party whose conduct is under consideration. The behaviour of an unrepresented party with no legal knowledge should be judged by the standards of a reasonable person who does not have legal advice. The crucial question is always whether, in all the circumstances of the case, the party has acted unreasonably in the conduct of the proceedings.”

The fact a party who has behaved unreasonably does not have the benefit of legal advice may also be relevant, though to a lesser extent, at the second and third stages. The burden is on the party claiming costs.

Finally,

“Unreasonable conduct is a condition of the FTT’s power to order the payment of costs by a party, but once that condition has been satisfied the exercise of the power is not constrained by the need to establish a causal nexus between the costs incurred and the behaviour to be sanctioned.”

But,

“At this stage [stages 2 and 3] the unreasonable conduct, its nature, extent and consequences are relevant factors to be taken into account in deciding whether to make an order for costs and the form of the order.”

At this point it may be convenient to observe that counsel for the appellants submitted in his skeleton argument and, initially, in his oral submissions, that a judge minded to make an order for costs must establish a causative link between the conduct complained of and the relevant cost said to have been wastefully incurred. That submission could not be maintained, however, in the face of the passages cited immediately above, and the Tribunal did not understand it to be pursued.

Helpfully, the decision in Willow also sets out the Tribunal’s thinking on how a costs judgment ought to be approached.

“A decision to award costs need not be lengthy and the underlying dispute can be taken as read. The decision should identify the conduct which the tribunal has found to be unreasonable, list the factors which have been taken into account in deciding that it is appropriate to make an order, and record the factors taken into account in deciding the form of the order and the sum to be paid…we remind ourselves that an appellate tribunal should exercise restraint when undertaking a review of a discretionary decision of a first-tier tribunal. If that tribunal properly directed itself on the applicable law, took into account all relevant matters and was not swayed by irrelevant matters, and did not reach a conclusion which is irrational, it is not for us to substitute our own assessment.”

Having briefly but accurately referred itself to the appropriate test, which this decision sets out in greater detail above, the FTT’s costs judgment proceeded by reciting the landlords’ submissions, then the tenants’ and then accepted the landlords’ submissions. Its conclusions must be read in the context of the submissions made to it; and its recital of those submissions in the context of its substantive judgment and the material before it. That is in line with the observation in Willow that ‘the underlying dispute can be taken as read”.

The decision of the FTT, considering these competing submissions, as to whether the test for unreasonable behaviour had been met, was expressed in the following way.

“7.

In this section and the next we refer to the landlord as the applicant and the tenants as the respondents. We start by considering the first question (or questions): Would a reasonable person in the position of the party have conducted themselves in the manner complained of? Or, is there a reasonable explanation for the conduct complained of?

8.

We remind ourselves that the respondents are not lawyers. However, Mr Coogan had been a property professional and Mrs Coogan (who made the legal submissions on their behalf) was an impressive lay advocate who had clearly been able to research the law. Both were clearly intelligent. Only Mr Coogan gave evidence, but we accept the landlord’s submission that he was willing to say whatever, whether truthful or not, without any regard for due process, fairness or courtesy. We also accept the other points made on the landlord’s behalf, which are amply borne out by the evidence adduced before us.

9.

As to the respondents’ points, (a) and (b) were the only allegations made out by them, but the points (as they should have appreciated) were so old as to have negligible weight in the Tribunal’s determination whether to appoint a manager. (c), we are afraid, shows the unreality of the respondents’ approach to the case. There were and are major concerns about the fire safety of the ceiling of the respondents’ flat. As to (d), we did not in our substantive judgment accept that the applicant scuppered the sale of the flat. We have dealt with (e) and (f) in our substantive judgment: there is no valid criticism which could have been made of the applicant.

10.

(g) shows the respondents’ unreasonable approach to the litigation. The cost of roof repairs to them was about £162.50. Their complaint is that the landlord did not permit them to go on the roof, using a ladder and without any form of harness, despite potential health and safety issues and the absence of any contractual right to do so. It is in our judgment farfetched to suppose that this allegation could have supported the respondents’ application to appoint a manager.

11.

(h) is of little weight. If anything it tells against the appointment of a manager, because the applicant was managing the ordinary expenses in a proper manner. (i) and (j) are also make-weights.

12.

As to (k), having seen Mr Coogan give evidence, we agree with the landlord’s submissions that “the Lessees had no intention to negotiate unless it was entirely on their terms.”

13.

As to (l), we heard no argument about the jurisdictional matters raised, but then retracted, by the landlord. It cannot affect the reasonableness or otherwise of the respondents’ litigation behaviour. However, it is relevant to the second and third stages of our consideration.

14.

Looking at these matters in the round, in our judgment the respondents have behaved unreasonably in the manner in which they have brought their application and conducted the matter.”

Having reached this conclusion, the FTT went on to consider stage 2 of the Willow test in the following terms.

“We turn then to the second question as to whether we should make a costs order. This is a discretionary matter. In our judgment this is a bad case. Obviously bad points were pursued vigorously. Serious allegations of fraud and bad faith were bandied about vexatiously. In our judgment, this is an appropriate case to exercise our discretion to make a costs order.”

The appellants rightly submitted that while it is well-established (Barton v Wright Hassall LLP [2018] UKSC 12) that the same rules apply to litigants as to professional litigants, the fact that a litigant acts without legal advice is relevant at the first stage of the enquiry: Willow at para. 32 ff. The reasons are obvious. They have probably not had the years of training and practice in making arguments, or dealing with evidence, in a way which Courts and Tribunals find attractive, clear and easy to follow. They have probably not had the opportunity of learning the law, and identifying the relevant law, that professionals have had. They may not understand the procedure or practice of the court or tribunal, and it is likely in any event to be unfamiliar. They are unlikely to have the detachment from the issues which a professional representative will have, and it is all too common for litigants in person to be overwhelmed by a combination of these factors when actually facing the tribunal or, before that, when having to put their case together or respond to that of their opponent. That can render them prone to act out in a variety of ways, some of which would represent unprofessional or unreasonable behaviour in a legal professional.

The appellants complain that while the FTT reminded itself that they were represented, it had wrongly gone on to judge them more severely on the grounds that both were intelligent, Mr Coogan was a property professional, and Mrs Coogan an impressive lay advocate. This complaint is not borne out. The appellants were being contrasted with unrepresented litigants who were not as intelligent, and did not have experience in property. The FTT was locating them within the spectrum unrepresented litigants, and was plainly doing so in order to consider what behaviour was properly to be expected of them, in the context of reasonableness. It was plainly right to do so.

The appellants further complain that the FTT alleged that Mr Coogan was willing to say whatever suited his purpose, regardless of its truthfulness, while there was simply nothing in the substantive judgment amounting to a specific finding that Mr Coogan had given dishonest evidence. In any event, what the FTT had said did not amount to an allegation of dishonesty, but only to one of carelessness.

The first thing to observe here is that Counsel’s repeated reference to an allegation on the part of the FTT is misdirected: it was a finding of fact. When this was pointed out, Counsel accepted that he was not seeking to disturb the findings of fact made by the FTT.

Counsel sought to argue that this finding did not amount to a finding of dishonesty but only of carelessness. In the course of submissions, he sensibly accepted that the most he could say was that it was only a finding that Mr Coogan had been reckless about whether what he was saying was truthful or not. He appeared to submit that this did not amount to dishonesty. Since the classic definition of the tort of deceit involves the tortfeasor in making a misrepresentation which he either knew to be untrue or made recklessly, not caring whether it was true or not, the Tribunal is unable to accept this submission. The FTT had plainly found as a fact that Mr Coogan had been dishonest.

Counsel submitted that the FTT had not been specific about the occasions upon which Mr Coogan had been being dishonest. It was not wholly clear where this submission went, given his acceptance that it was a finding of fact, and that he was not seeking to disturb findings of fact. Nor was this Tribunal given the opportunity of forming its own view by the provision of a transcript of the evidence. It is clear that the fact it had concluded that serious allegations of unlawful and criminal behaviour had been repeatedly made by the appellants against the respondents, and pursued even when they were clearly hopeless; and that given the intelligence and experience of the appellants, this could not be put down to ignorance or a lack of intelligence, and was therefore to be understood as behaviour they knew to be unjustified, and which was therefore unreasonable.

Counsel submitted that this Tribunal should have regard only to the substantive judgment and the costs judgment of the FTT when considering whether the FTT was right to accuse the appellants of pursuing hopeless allegations, doing so vexatiously, and in circumstances where they were implausible, unsupported, or irrelevant; and in particular making unfounded allegations of harassment, fraud and other improper behaviour, with reference to the Bribery Act and the like, pursuing nonsensical interpretations of events which were objectively benign, and adopting hopeless position. His point was that those judgments reflected none of those features.

This submission cannot be sustained either. Paragraphs 7 to 14 of the costs judgment is to be read in the context of the submissions summarised in paragraphs 5 and 6 of that judgment. The costs judgment as a whole is to be read in the context of the substantive judgment. The substantive judgment refers, of course, to other material, and in particular to the appellants’ skeleton argument and notice pursuant to section 22 Landlord and Tenant Act 1987, in which many of the allegations to which the FTT referred were repeatedly and emphatically contained.

Nothing in that material supports the proposition that the FTT was wrong in considering that the appellants had acted unreasonably in the way in which they brought their application and conducted the matter.

It is perfectly true that the costs decision of the FTT relied in part upon having seen Mr Coogan give evidence. That is a matter as to the evaluation of which the FTT was in a better position than this Tribunal could ever have been. Since the appellant elected not to obtain a transcript of the proceedings before the FTT, this Tribunal is not in a position to form a view about that at all; but that does not assist the appellants, since the burden is on them to establish that the FTT’s decision was wrong.

It was submitted on behalf of the appellants that because the respondents had themselves, after all, voluntarily engaged a manager, and that it was the same individual as had been proposed by the appellants, the appellants’ approach to the application for a manager should be understood as having been vindicated. That simply does not follow. In the context of the FTT’s evaluation of the appellant’s approach, it is an unattractive, as well as an ill-founded, submission.

Accordingly, this Tribunal concludes that the appeal on the basis that the FTT was wrong to conclude that the appellants’ behaviour in bringing their applications and conducting their case was unreasonable must fail.

In the alternative the appellants contend that the FTT exercised its discretion at stage 2 wrongly. Here too the submission is that the basis upon which it did so was its observation,

“In our judgment this is a bad case. Obviously bad points were pursued vigorously. Serious allegations of fraud and bad faith were bandied about vexatiously. In our judgment, this is an appropriate case to exercise our discretion to make a costs order.”

It was submitted on behalf of the appellants that the FTT ‘had felt emboldened to do so’ with ‘its intemperate use of language’ at this point; and that the basis for it was not at all evident from the underlying judgment, and it was equally unclear what exactly the FTT had meant by ‘vexatiously’ in the context.

Before me it was not in dispute that the appellants’ case had been pursued with vigour. Nor could it be disputed that obviously bad points had been pursued in that way. The serious allegations of fraud and bad faith were evident from the judgments, and from other material including the skeleton argument mentioned above. To say they were bandied about is to say that they were made lightly, and carelessly or recklessly. Nothing before this Tribunal has suggested that this did not reflect the reality of the position. ‘Vexatiously’ was meant in its ordinary sense, namely, “designed to harass the other side rather than advance the resolution of the case.” That is a conclusion which the material shows was open to the FTT. The skeleton argument in particular proposes that the respondents were guilty of deliberate falsehoods designed to secure outcomes to which they were not entitled, harassment, unlawful eviction, fraud, bribery, modern slavery and so on.

Perhaps a differently constituted tribunal might have reached a different conclusion in the exercise of its discretion at stage 2. That, however, is nothing to the point, provided the FTT’s discretion was not exercised improperly, which it was not.

It is not for this Tribunal to substitute its own discretion. As already noted, if a tribunal “properly directed itself on the applicable law, took into account all relevant matters and was not swayed by irrelevant matters, and did not reach a conclusion which is irrational, it is not for us to substitute our own assessment.”

Accordingly, the appeal is dismissed.