Agincourt Investments Limited v Natasha Joy Williams & Ors

This is an appeal from a decision of the First-tier Tribunal, in its jurisdiction under section 27A of the Landlord and Tenant Act 1985 to decide whether service charges are payable in respect of leasehold property. The appeal is brought by the landlord of 19 Eglinton Hill, London SE18; the respondents are the leaseholders of the five flats in the building who are each responsible for one-fifth of the costs incurred in maintaining the building.

The landlord was represented in the appeal by Dr Barry MacEvoy, the managing partner of MPM Building Surveyors, who supervised the works that are the subject of the present dispute. Mr Clacy, the director of the landlord, filed a skeleton argument. The leaseholders were represented by Ms Elodie Gibbons of counsel. I am grateful to Dr MacEvoy and Ms Gibbons for their very measured and helpful explanations which shed a lot of light on the dispute, the associated documents and the parties’ positions for me, and I hope for each other too.

The dispute arises from major work on the structure and exterior of the property, commenced in January 2018 following a consultation carried out in accordance with the requirements of the Landlord and Tenant Act 1985. Following completion of the works the leaseholders had the building inspected by Ms Angela Lyon FRICS, who concluded that a number of items from the works specification had not been done, or had not been finished, or had not been carried out to a reasonable standard. The leaseholders then disputed a number of elements of the service charges demanded in reimbursement of the landlord’s expenditure. In 2023 the landlord applied to the FTT for a determination as to whether the charges in respect of the major works were payable as well as other charges in the years ending June 2022, 2023, and 2024. The appeal concerns only the charges for the major works.

The FTT gave its usual directions for the preparation and circulation of a Scott Schedule indicating the items in dispute and the parties’ positions. The landlord added its comments as directed in July 2024, and appended to the schedule a large bundle of photographs, to which it referred in its comments.

At the hearing before the FTT on 4 to 6 November 2024 both parties were represented by counsel. Mr Clacy was present, as was Ms Lyon as an expert witness for the leaseholders.

At the start of the hearing counsel for the landlord asked for an adjournment so that he could take instructions about the provenance of the photographs; the hearing was adjourned for the rest of 4 November. But Dr MacEvoy, who knew about the photographs, was on holiday in the Canaries and unavailable until 5pm UK time. The hearing resumed on 5 November; during the hearing Dr MacEvoy sent an email to the FTT offering to produce meta-data to show the dates on which the photographs were taken, and to work through the night in order to do so. The FTT did not accept that offer.

The FTT delivered its decision on 9 December 2024. It divided the charges for the major works into four categories. As to the 19 items in category 1, it accepted Ms Lyon’s evidence that the work had not been done and disallowed the expenditure.

As to category 2, comprising over 40 items, the FTT found that the work was done but could not be completed “due to the Applicant’s failure to manage the Major Works project reasonably”; it rejected the landlord’s evidence that the work was unfinished because the relevant leaseholders had not allowed access to their flats. The FTT accepted that the work has some value and allowed 50% of the charges.

The third category was “preliminaries, scaffolds and skips”; the FTT said: “as proposed by the parties, the Tribunal finds that the average percentage reduction which follows from the Tribunal’s determinations in respect of all of the 2019 Major Works items should be applied to preliminaries and scaffold costs”. It decided that the cost of no more than three skips was payable.

The fourth category was “Other disputed major works”; it comprised a number of items, some of which the FTT allowed in part and to some of which it found were not payable.

Having made those determinations the FTT gave the following direction:

“By 5 pm on 6 January 2025 the Applicant shall send the Respondents a schedule setting out the sums which are payable by them following the Tribunal’s determinations.  If these figures are not agreed, any party may apply to the Tribunal (on notice to all other parties) for a determination, setting out the reasons for the dispute, by 24 January 2025.

The appellant did not comply with that direction. Counsel for the leaseholders wrote to the FTT to ask for a number of apparent errors in the decision, in the numbering of the items of work, to be corrected, but received no response.

The landlord sought permission to appeal the FTT’s decisions on two grounds. One was a challenge to the FTT’s rejection of the landlord’s explanation for the unfinished works in category 2. An appeal on that ground would have been a challenge to findings of fact about arrangements made or attempted to be made for access and permission was refused. The other ground was about the landlord’s photographs; permission was granted by this Tribunal on the ground:

“that the FTT should have had regard to the applicant’s photographs rather than dismissing them on the ground that it was not clear what they showed or when they were taken and because they were not accompanied by a witness statement. They are extensively referenced in the Scott Schedule, so what they showed was known, and Mr Clacy was available to provide information about them.”

That was a summary of a number of paragraphs in the landlord’s application; another way of expressing it would be to say that the FTT failed to take account of relevant evidence, or failed to explain why it rejected one party’s evidence in favour of the other’s. Permission was not sought on any other ground,.

Nevertheless, Mr Clacy in his skeleton argument in the appeal and Dr MacEvoy at the hearing raised three matters which were said to be “intertwined”. I will deal first with the issue on which permission to appeal was granted and will then comment on Dr MacEvoy’s two other issues.

The landlord says that its photographs, provided in July 2024 and not challenged by Ms Lyon, showed that work had been done and/or had been done to a proper standard. Dozens of photographs were provided, showing the roof and other areas of the property and providing an answer to Ms Lyon’s challenges to the individual items of work. References to the photographs in the Scott Schedule made it clear which photographs referred to particular items of work. When it became apparent in the course of the hearing that the leaseholders did not accept that the photographs were genuine or relevant, counsel for the landlord secured an adjournment. Dr MacEvoy, who had taken the photographs, was on holiday in the Canaries and so could not attend, but offered to provide the metadata which would indicate when each picture was taken. The FTT did not accept that offer; nor did it take evidence from Mr Clacy who was present and could have helped establish the authenticity of the photographs.

In response, Ms Gibbons explained that the leaseholders on 23 September 2024 applied to the FTT to have the photographs excluded on the grounds that they were undated, that there was no way to know where they were taken from, that plates had been provided so that it was impossible to zoom, that some of them appeared to have been taken a long time after the work was finished, and the leaseholders had not been given the opportunity to accompany the photographer and take their own photographs. That application was adjourned to be decided at the hearing; but it meant that the landlord knew several weeks before the hearing that the authenticity and relevance of the photographs was being challenged and yet made no attempt to produce any evidence to support them. As it was, they had been appended to the Scott Schedule, but not verified, let alone explained, by a witness statement. No application was made for permission to call Mr Clacy to give evidence about the photographs at the hearing. In the circumstances the FTT was entitled to prefer the evidence of the expert witness called by the leaseholders.

That is a complete answer to this ground of appeal. The landlord in seeking permission to appeal did not refer to the application of 23 September 2024 – not, I am sure, that Mr Clacy or Dr MacEvoy had intended to conceal it but that they had either lost track of it or did not understand its significance.

I have to say that my impression that Mr Clacy and Dr MacEvoy were doing their best to present the landlord’s case – and clearly put a lot of work into the FTT hearing as they did into the appeal – but failed to appreciate the formality of the FTT proceedings. A tribunal is not as formal as a court and the rules of evidence are relatively relaxed; nevertheless, the FTT does need evidence. A bundle of photographs by itself is not evidence, and the inclusion of a bundle of photographs alongside a Scott Schedule did not tell the FTT anything; it was unsurprising that the leaseholders objected to them on the ground that that they were undated and unverified. The landlord took a considerable risk in submitting the photographs without an accompanying witness statement to explain who took them, where, and when (or notes on the photographs, with a witness statement to verify the notes). Crucially, the landlord knew weeks before the hearing that the photographs were not accepted; it was aware of the application to exclude them, but it still did not produce evidence prior to the hearing.

The FTT had no choice but to refuse to invite Dr MacEvoy to produce material – however indisputable he thought it would be – in the middle of the hearing. A tribunal will not accept new evidence at that stage, because it is not fair to the other party. It would be a hijack. How the FTT would have responded if before the hearing, once the leaseholders had applied to exclude the photographs, the landlord had sought permission to file a late witness statement from Dr MacEvoy, is not known. But there was no possibility of evidence from Dr MacEvoy being produced and admitted in the very midst of the hearing itself.

In those circumstances it was both predictable and fair that the FTT accepted Ms Lyon’s evidence. The appeal fails on the ground for which permission has been given.

Mr Clacy in his skeleton argument and Dr MacEvoy at the hearing raised a new point which was not mentioned in the application for permission to appeal. They explained that the FTT had directed the leaseholders to respond to the landlord’s comments on the Scott Schedule (which it filed as directed in July 2024) by 6 September 2024, but they did not do so. Instead, on 28 October, just a few days before the hearing, the leaseholders filed a new version of the Scott Schedule in which an additional 20 items were shown as being in dispute. The landlord had inadequate notice of the addition of these items; Mr Clacy’s skeleton argument says that the landlord was “outwitted by the First Tier Tribunal allowing evidence submitted deliberately late.”

Ms Gibbons did not deal with this complaint in her skeleton argument because she did not know it was going to be an issue, but at the hearing she explained what had happened; there is no appeal on this point but I hope that it will be helpful to the parties if I set out the explanation Ms Gibbons gave and say what I have observed in the appeal bundle.

Ms Gibbons explained that Ms Lyon’s first report in April 2023 was not in an appropriate form for evidence in a Tribunal and as a result the leaseholders sought to re-submit her report in an appropriate form when they responded to the landlord’s comments on the Scott Schedule. They were not able to do that in September as directed because Ms Lyon was ill. The leaseholders applied for permission for her to file an amended report on 17 October 2024. That report, dated 21 October 2024, was sent to the landlord with the leaseholders’ comments on the Scott Schedule on 28 October 2024. There were no new items disputed.

Looking at the documents in the appeal bundle I cannot see whether the application of 17 October 2024 was sent to the landlord on that date along with a draft of Ms Lyon’s new report, together with the updated Scott Schedule. It should have been, and no complaint was made by counsel at the hearing that it had not been. Importantly there is no indication in the decision that counsel for the landlord had objected to any of the items in the Scott Schedule on the ground that the landlord had not had warning of them, and I know that if that objection had been made Ms Gibbons would have told me.

There are a number of different Scott Schedules in the bundle. Mr Clacy and Dr MacEvoy did not like the Excel format used by the leaseholders and when they responded to the Scott Schedule in July 2024 they did so in the Excel document but also transcribed it into a Word document (pages 5 either10 and following of the appeal bundle). Since the hearing I have been through that Word document alongside the list at paragraph 20 of Mr Clacy’s skeleton argument which highlights what he says are 20 new items of which the landlord had no warning before the end of October. All but nine of those supposedly new items are recorded as in dispute in the landlord’s Word version of the Scott Schedule produced in July (page 510 and following of the bundle). Of those nine items, items 6.10 to 6.13 were shown as not being in dispute. Items 19.9 and A29 do not appear in the earlier document and the FTT made no decision about them. Only items 17.5, A42 and A49 appear in the October version and not in the landlord’s Word version in July. The amounts in question are £160, £264 and £1,480 respectively, which the FTT reduced by 50%.

There may have been some confusion as to what fell under which item (the demarcation between 17.5 and 17.6, for example, is not very clear). Aside from those three items nothing was disputed in the October Schedule that the landlord had not already seen and commented on in July. There is in any event no appeal on this point, but I have to say that even if there was an error in relation to those three items the complaint of a hijack appears to be without substance.

In his skeleton argument Mr Clacy alleges that the FTT has “misfiled” 7 items of work in its fourth category when they should be in category 1 or 2; that 19 items of work listed under category 2 belong in category 1 because they were not affected by a refusal to grant access; and there are numerous numbering errors in the decision.

The landlord has not provided a complete list of what is “misfiled” and in any event I do not understand the reasoning. In particular, the complaint that items in Category 2 should be moved to Category 1 does not avail the landlord since its argument about the photographs has failed; anything moved into Category 1 will be disallowed.

So I make no further comment about this category.

However, under this heading it is convenient to deal with items that are agreed to be incorrect in the FTT’s decision. Items 6.10 to 6.13 were not in dispute; I set aside the FTT’s decision insofar as it placed those four items in category 1. A number of further items referred to in the FTT’s decision are the subject of queries by the leaseholders on the basis that there may be an error in the numbering; it is unfortunate that the FTT did not respond to the leaseholders’ queries, and also that the landlord did not comply with the FTT’s direction to set out a list of what was payable following the FTT’s decision. I will give directions in the hope of resolving the overall sums payable, failing which the matter will have to be remitted to the FTT in respect only of the points that the respondents have queried.

The appeal fails on the one ground for which permission was given. I have set aside the FTT’s decision on items 6.10, 6.11, 6.12 and 6.13 with the parties’ agreement.