Canary Riverside Estate Management Limited & Ors v J Abrahart & Ors

On 15 and 16 April 2025 I heard and dismissed an appeal by the appellants from a case management decision of the First Tier Tribunal (Property Chamber) dated 9 December 2024. Permission to appeal had been given by the FTT itself and the appeal had been heard expeditiously because it concerned proceedings which had been listed for final determination in the FTT.

I gave my decision orally at the conclusion of the hearing and issued a decision notice the same day recording that the appeal had been dismissed. A transcript of the decision was subsequently produced and published with corrections on 3 September, bearing the neutral citation number [2025] UKUT 246 (LC).

I received applications on 9 May from all three respondents for orders under rule 10(3)(b) of the Tribunal’s Rules that the appellants pay their respective costs of the appeal on the grounds that they had behaved unreasonably in bringing or conducting the appeal. The second respondent had not participated in hearing but had made submissions in writing and sought to recover the cost of these.

In response to the application for costs the appellants contended that no order should be made because: (a) the applications had been made out of time; or, (b) the substantive requirements of rule 10(3)(b) are not met.

The parties have exchanged submissions and counter-submissions on the applications, and I have been provided with schedules of costs by the respondents and comments on them by the appellants.

The following sums (including VAT) are claimed by the respondents:

I will determine the applications in accordance with the guidance in Willow Court Management Co (1985) Ltd v Alexander [2016] L. & T.R. 34 which has recently been approved by the Court of Appeal in Lea v Ilfracombe Management Co Ltd [2025] 1 WLR 371. The issues which I must consider are therefore these:

Rule 10(10) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 (the Rules) provides as follows:

“(10)

An application for an order for costs may be made at any time during the proceedings but may not be made later than 14 days after the date on which—

(a)

the Tribunal sends a decision notice recording the decision which finally disposes of all issues in the proceedings;

(b)

the Tribunal sends notice under rule 20 (withdrawal) that a withdrawal which ends the proceedings has taken effect; or

(c)

notice of withdrawal is sent to the Tribunal with the consent of all parties.”

The reference in rule 10(10)(a) to a “decision notice” is to a decision notice given under rule 51. Rule 51(1) provides that the Tribunal may give a decision orally at a hearing, as occurred in this case. Rule 51(2) provides that the Tribunal must supply to each party as soon as reasonably practicable after making a decision which finally disposes of all issues in the proceedings a decision notice stating the Tribunal’s decision and informing them of rights of appeal. Rule 51(3) requires the Tribunal to provide written reasons for the decision with the decision notice unless the decision was made by consent or the parties have agreed to dispense with reasons.

In this case my decision notice was sent to the parties without my reasons on 16 April (the day the decision was delivered orally). A transcript of my oral decision was requested by Dr Steel, on behalf of the leaseholders, on 17 June. A complete transcript was received from the transcribers on 21 July and returned approved on 23 July. The perfected transcript was not published until the transcribers confirmed that their fee for preparing the transcript had been paid by the parties on 3 September.

On behalf of the appellants Mr Bates KC submitted that, on any view, the applications for costs received on 9 May were made outside the 14-day window allowed by rule 10(10), after which an application for an order for costs “may not be made”.

It was submitted in response by Mr Dovar, on behalf of the manager, that the time limit in rule 10(10) was not engaged as this was an appeal against a case management decision, which was an interim decision, and was not therefore a ‘decision which finally disposes of all issues in the proceedings.’ I do not accept that submission. The “proceedings” referred to in rule 10(10) are the proceedings in this Tribunal. That is clear from rule 1(2) which explains that the Rules “apply to proceedings before the Lands Chamber of the Upper Tribunal”. The fact that the proceedings are an appeal against a decision of the FTT which did not finally dispose of the proceedings in the FTT does not affect the date by which an application for costs may be made under rule 10(10).

The first and second respondents adopted the submissions of Mr Dovar. Through its solicitors, the second respondent also made some additional points. It explained that it had submitted its original application on the understanding that it had 1 month to do so pursuant to the analogous rule 10 of the Tribunal Procedure (Upper Tribunal) Rules 2008, which also accords with rule 13 of the FTT Rules. It apologised for its error in having regard to the wrong rules and that no prejudice had resulted. In any event, the reference to the date on which the Tribunal sends a decision notice recording the decision which “finally disposes of all issues in the proceedings” in rule 10(10)(a) of 2010 rules was ambiguous and might properly be interpreted in a number of ways. It was suggested that the reference to the “proceedings” may be either to the substantive proceedings in the FTT, or to the interim application in those proceedings from which the appeal has arisen. I do not accept either of those interpretations for the reasons I have given.

Alternatively, it was submitted that if “the proceedings” meant just the appeal to this Tribunal, the date on which those proceedings were finally disposed of should be taken to be the date at which the time for appealing the final decision of the Tribunal had elapsed. I do not accept that submission. The relevant date is the date on which the Tribunal “sends the decision notice recording the decision which finally disposes of the proceedings”. The date of sending the decision notice is a fixed date which does not change depending on whether a party pursues an appeal (although if an appeal was pursued, it might be the case that the decision notice recording the Tribunal’s main decision does not finally dispose of the proceedings and that time would run instead from the date on which the Tribunal determined the application for permission to appeal). In this case there has been no application for permission to appeal and the decision which finally disposed of the proceedings was my decision of 16 April. I do not think section 64(1)(c) of the Landlord and Tenant Act 1954 (which uses different language and does not refer to the sending of the decision but was nevertheless relied on as providing an analogy) assists in interpreting the different provision in the Tribunal’s Rules.

It was not submitted, as it might perhaps have been, that the decision notice sent on 16 April was incomplete, and that time did not begin to run until the Tribunal’s reasons were provided to the parties in writing on 3 September. I say no more about that possibility and conclude, on the submissions made, that the applications for costs were indeed made out of time for the reasons advanced by the appellants.

The respondents requested an extension of time to enable them to proceed with their applications for costs. The appellants submitted lengthy and detailed submissions why no extension should be allowed. These included, on the one hand, a complaint that the applications themselves were being conducted in a piecemeal and disproportionate manner, and on the other, a complaint that formal applications for an extension of time had not been filed supported by witness statements and application fees and the respondents, many of whom act in person, had not sufficiently engaged with the criteria applicable to proceedings governed by the CPR (which these are not). The contradictory arguments on which the appellant relied did not include any submission that the Tribunal lacked power to extend time.

As Mr Dovar pointed out, the 14 days permitted in rule 10(10), is not a period provided for by primary legislation), nor is it the same period as is provided for costs applications to the rest of the Upper Tribunal (but not the Lands Chamber) by the Tribunal Procedure (Upper Tribunal) Rule 2008, where a month is allowed, or by rule 13(5) of the FTT Rules, where the relevant period is 28 days.

Rule 5 (3) of the Rules provides that the Tribunal may extend time for complying with any rule or practice direction, including after the time limit has expired. By rule 7, a failure to comply with a rule does not of itself render the step taken void and the Tribunal may take such action as it considers just, including waiving the requirement. It is clear, therefore, that the Tribunal has power to extend time for the making of an application under rule 10(10). In exercising that power the substantive merits of the application are irrelevant.

Time expired on 1 May, and the applications were made on 9 May. An extension of eight days is therefore required.

I reject the appellants’ submission that a breach of any deadline is “obviously serious”. The relevant procedural rules are the Tribunal’s own Rules, not the CPR by reference to which the appellants made their submissions. The Tribunal’s overriding objective of dealing with cases fairly and justly includes avoiding unnecessary formality (rule 2(2)(b)). The Tribunal’s Rules do not require any particular formality in the making of procedural applications, and do not require that applications be supported by witness statements (rule 6(2)).

I am satisfied that the delay in this case was trivial. It has caused no prejudice to the appellants or to the progression of the appeal, which is already at an end.

The need for a convincing or meritorious explanation of the delay is proportionate to its seriousness. I have no reason to doubt that the delay occurred in the case of the second respondent for the reason given by its solicitors, namely, that it was assumed that the time limit was longer, as it would have been in the FTT or in other Upper Tribunal Chambers. That was an easy enough mistake to make with an application rarely made in this Tribunal. The third respondent’s solicitors have said only that the delay was caused by “an oversight”; they may have shared the assumption made by the second respondent’s solicitors. No explanation for the delay has been offered by the first respondents, who are unrepresented (although they brief counsel directly for tribunal hearings); it is possible that they did not know that there was any time limit, or what it might be, which would have been understandable as the Tribunal does not notify parties of it. In any event, the eight-day period of delay was short. Six of the fourteen days after the decision was sent were either bank holidays or fell on weekends. A further bank holiday and a weekend fell in the eight days ending on the date of the application and for which the extension is required.

There is nothing in the general circumstances of the proceedings which discourages me from granting the required extension of time, which I now do.

In Lea v GP Ilfracombe Management, at [15], Coulson LJ suggested that a good practical rule when a tribunal is considering whether a party or its representative has acted unreasonably in bringing, defending or conducting proceedings is to ask:

“…would a reasonable person acting reasonably have acted this way? Is there a reasonable explanation for the conduct in issue?”

The following conduct by the appellants and their representatives was relied on by the respondents as having been unreasonable:

The second respondent’s submissions echoed the manager’s complaints that the appellants should never have issued their application as the issues raised by it would inevitably have to be dealt with within the context of the existing proceedings. It had been inappropriate and unreasonable for the appellants then to “hijack” the FTT case management hearing on 25 November 2024 and to seek to have their unnecessary application heard urgently in advance of the final hearing. There was no urgency because the Landlords never intended to proceed with cladding works before the determination of the long and slow running claim brought against them by the Secretary of State for a remediation or remediation contribution order. The misconceived and unreasonable appeal against what was obviously an appropriate case management decision by the FTT further exacerbated the appellants’ unreasonable conduct. In the light of the manager’s own prior application and the clear lack of urgency, the attempt to have the appellants’ application expedited and the unsuccessful appeal were designed to harass the other parties and the manager rather than advance the resolution of the issues in an orderly way.

The appellants denied that they had behaved unreasonably. The appeal had been brought because the appellants are the accountable persons at Canary Riverside but are finding it exceptionally difficult to fulfil all their functions as a result of the interaction of the management order and the Building Safety Act 2022. The “temporary and uncomfortable overlap” between the 2022 Act and the management order identified by the Tribunal is proving to be anything but temporary. It is not clear who is responsible for what and that is said to be intolerable. The appellants are being criticised, in correspondence and in evidence and pleadings, by the Secretary of State, the local authority and by the respondents for not making progress with fire safety measures. A reasonable person in the position of the appellants, having statutory duties, backed by criminal sanction, would do all that they could to ensure that there was no impediment to the discharge of their functions. In this case, that included launching the appeal.

I am not concerned with the way in which the appellants conducted themselves before the FTT. The only conduct which is relevant at this stage is the appellants’ conduct in bringing and pursuing the appeal. It is true that Mr Morshead KC expressed some puzzlement when first asked by me what the purpose of the original application had been, but I took his perplexity to be forensic rather than genuine as it suited his purpose to put as much distance as possible between his own approach to the case and that of his predecessor. Having achieved that aim he later provided the explanation I have recorded in the previous paragraph. I therefore disregard the first of the respondents’ criticisms.

Nor do I regard the fifth ground of complaint as evidence of unreasonable conduct. Parties should not pursue grounds of appeal in which they no longer have confidence, and it is not unreasonable to do so.

The remaining grounds are of greater substance.

The appellants are expertly represented by counsel and solicitors who will have been fully aware of the restraints which apply to any appellate court or tribunal when it is asked to review a case management decision of a lower tribunal. The FTT’s decision to hear all of the outstanding applications together, and not to separate and prioritise the hearing of the appellants’ application, was a pure case management decision. The prospect of the appeal against that decision succeeding were further fatally compromised by the fact that the appellants had not invited the FTT to proceed in the way they asserted on the appeal it should have done, by determining it “peremptorily” at the case management hearing. In effect, the appellants were inviting this Tribunal to take over case management from the FTT because, following a change of counsel, they now wished to present their case on a different basis. Taking these two factors together, I am satisfied that there was never any realistic prospect of this Tribunal upsetting the FTT’s decision not to list the appellants’ application for separate hearing on an expedited basis.

Additionally, the appellants’ attempt to use their appeal against the FTT’s case management decision as a route to challenge my own March 2024 decision, Unsdorfer v Octagon Overseas Ltd [2024] UKUT 59 (LC), following the discontinuance by the leaseholders of their appeal to the Court of Appeal, was manifestly inappropriate. The FTT is bound by that decision, which the appellants relied on at the case management stage. An appeal against the FTT’s routine case management simply did not engage the arguments which Mr Morshead KC advanced before me. That the appellants were deprived of the opportunity of a cross-appeal by the leaseholders’ discontinuance of their appeal did not make the basis on which the appeal was pursued any more sustainable.

I am not persuaded that the appellants have offered any credible explanation for pursuing the appeal. The difficulties in which they may now find themselves (and which I accept raise a genuine issue) may have justified a request to the FTT for a speedy decision on how the manager should proceed in relation to building safety. But having failed to persuade the FTT to deal with that issue separately, for perfectly understandable case management reasons, those difficulties could not justify pursuing a hopeless appeal on a premise the FTT failure was not asked to consider. The appellants and their advisers must have appreciated that there was nothing to be gained by the appeal, which was bound to fail, and I do not accept that they can reasonably have expected to ameliorate the uncertainty of their position by pursuing it.

Nor do I consider the fact that the FTT was persuaded to grant permission justifies the subsequent pursuit of the appeal. The FTT gave no weight to the fact that the decision to be challenged was a case management decision and was apparently unconcerned that the challenge was to be based on new arguments which had not been advanced to it. It took a different view from the one I formed, after argument, of the viability of the appeal. That does not alter the fact that the appellants appreciated, or should have appreciated, that the exercise was pointless and bound to fail.

I am therefore satisfied that the appellants behaved unreasonably in bringing and pursuing the appeal.

During the lengthy progress of the FTT proceedings, including repeated appeals to this Tribunal, it has been apparent that the appellants have the resources and the will to take every conceivable opportunity open to them to fight out their disagreements with their leaseholders and the manager in formal legal proceedings, conducted as intensively as any complex commercial litigation. It has not previously been suggested that they have crossed the line into unreasonable conduct, but they have certainly approached the FTT proceedings in a no holds barred and no expense spared spirit, and in doing so have caused the other parties, including private individuals and the tribunal appointed manager (whose costs are met by the leaseholders), to incur huge expense. That is not to say there are not genuine and important issues between the parties, but genuine disputes can be resolved by litigating in a moderate and proportionate manner and need not give rise to the mountain of expense which these proceedings have been generating for years.

In deciding whether it is appropriate to order the appellants to pay the respondents’ costs I therefore bear in mind their approach to the proceedings as a factor in favour of making an order. I bear in mind also that the bulk of the expense on the respondents’ side has fallen on the private individuals, who contribute to the manager’s costs through the service charge as well as bearing their own (where they are members of the leaseholders’ association).

The general rule in tribunals is that costs are not awarded. That rule is designed with typical tribunal proceedings in mind, often involving modest sums and capable of being managed without professional representation. These proceedings are anything but typical and to the extent that the respondents have been put to unnecessary expense by the unreasonable conduct of the appellants in pursuing them, it is fair and just in my judgment that the appellants should bear the expense.

I will therefore make orders in favour of all respondents.

The appellants submitted that, in principle, it would be wrong to award costs in favour of three respondents who took a materially common position on the appeal, yet who put in three separate statements of case, without attempting to isolate those points (if any) which are unique to any particular respondent. That was said to be a repetitive and disproportionate approach.

I bear in mind that Mr Unsdorfer, the third respondent, is a tribunal appointed office holder, who is independent of the parties. He is not the leaseholders’ manager. He has always taken his own advice and acted with separate representation. There is nothing inappropriate about that and it would not have been straightforward for him to join forces with the leaseholders for the purpose of the appeal; negotiating the boundaries of such an arrangement would also have come at a cost. The manager has incurred the bulk of the costs of the appeal on the respondents’ side and any trimming on the grounds of duplication would appropriately fall on the other respondents; but I am satisfied they have taken a proportionate approach, the leaseholders in representing themselves, with direct access counsel’s assistance, and Circus Apartments in limiting their participation to written submissions.

On behalf of the members of the residents’ association Dr Steel has asked for an order for payment of their counsel’s fees for acting in connection with the appeal (they otherwise act without legal representation). These total £17,760 inclusive of VAT and reflect a capped rate for the preparation of written material. The appellants complain that this was too high for “junior” counsel and suggest the leaseholders should recover no more than half the fee appropriate for leading counsel. They have not, as far as I can see, disclosed how much their own leading counsel charged, but all counsel in this matter are senior specialist practitioners. I see nothing unfair or unjust in the appellants paying the professional costs incurred by the residents’ association in full and I will so order.

Circus Apartments did not attend the hearing of the appeal but seeks to recover the costs of its solicitors in considering the appellants’ application to the Tribunal for permission to appeal, preparing and serving its respondent’s notice and statement of case, considering the parties’ skeleton arguments and corresponding with the parties and the Tribunal about logistics for the appeal. It also seeks to recover the costs incurred in this application for costs. These total £10,173, a sum described by the appellants’ solicitors as “eye-watering”. I bear in mind the limited role taken by the second respondents and that they have a purely commercial interest in Canary Riverside. Having considered the material supplied in support of the claim I will order that the appellants pay the second respondent £5,000 in respect of its costs.

The Manager seeks all his costs of the appeal totalling £40,867.80, including VAT, of which £19,200 is referable to counsel’s fees. The appellants complain that the manager had described his stance on their application to the FTT as neutral, and that he should not be entitled to his costs. I disagree. The manager may have been neutral before the FTT, as at that stage the relief sought by the appellants was not inconsistent with the relief he sought. Success for the appellants in the appeal, however, would have been very disruptive and would have derailed the parties’ preparations for the final hearing in the FTT. The manager was perfectly entitled to resist the appeal.There is more substance in the appellants’ observation that 90% of the solicitors’ time charged for was incurred by Grade A solicitors, on top of counsel, which was disproportionate. Proportionality has only a limited part to play in determining the costs payable on an application under rule 10(3)(b), but I give some weight to that criticism. Having considered the material supplied in support of the application I will order that the appellants pay the manager £30,000 in respect of his costs.

In summary, therefore, the appellants shall pay £17,760 to the first respondent, £5,000 to the second respondent, and £30,000 to the third respondent. All such sums are payable within 14 days.