::--..c...:-·---- • HMCourts & Tribunals Service Residential Property TRIBUNAL SERVICE LONDON RENT ASSESSMENT PANEL DECISION OF THE LEASEHOLD VALUATION TRIBUNAL ON AN APPLICATION UNDER SECTION 88 OF THE COMMONHOLD AND LEASEHOLD REFORM ACT 2002 Case Reference: Premises: Applicant(s): Representative: Respondent(s): Representative: Date of decision: Leasehold Valuation Tribunal: LON/OOBK/LCP/2012/0020 Marathon House, 174-204 Marlebone Road, London NW1 5PW Proxima GR Properties Ltd Estates and Management Ltd Marathon House RTM Co Ltd Adrian Mackaay, director 14th November 2012 Mr Adrian Jack and Mr Luis Jarero BSc FRICS
Transcript
::--..c...:-·----
•
HMCourts & Tribunals Service Residential
Property TRIBUNAL SERVICE
LONDON RENT ASSESSMENT PANEL
DECISION OF THE LEASEHOLD VALUATION TRIBUNAL
ON AN APPLICATION UNDER SECTION 88 OF THE COMMONHOLD AND LEASEHOLD REFORM ACT 2002
Case Reference:
Premises:
Applicant(s):
Representative:
Respondent(s):
Representative:
Date of decision:
Leasehold Valuation Tribunal:
LON/OOBK/LCP/2012/0020
Marathon House, 174-204 Marlebone Road, London NW1 5PW
Proxima GR Properties Ltd
Estates and Management Ltd
Marathon House RTM Co Ltd
Adrian Mackaay, director
14th November 2012
Mr Adrian Jack and Mr Luis Jarero BSc FRICS
Determination
1. By an application to the Tribunal dated 1 yth September 2012 the freeholder applied for determination of the RTM company's liability to pay costs in the sum of £425.89 under section 88 of the Common hold and Leasehold Reform Act 2002 (exercise of the no-fault right to manage). The sum of £425.89 reflects 1 hour 50 minutes time of an in-house solicitor, Mr Richard Sandler, employed by Estates & Management Ltd, an associated company of the applicant.
2. The Tribunal gave directions on 25th September 2012. These were substantially complied with by the parties. The parties agreed that the matter be determined on paper and there was no request for an oral hearing.
The law
2
3. Section 88(1) of the 2002 Act provides that an "RTM company is liable for reasonable costs incurred by a person who is (a) landlord ... in consequence of a claim notice given by the company in relation to the premises."
:::e--·.- -·- Issues and determination
4. The RTM company complains that the landlord was tardy in giving details of the costs which it claimed and that it issued the current proceedings prematurely. We consider this point below under costs, because it is does not in our judgment provide a substantive defence to the landlord's claim.
5. In paragraph 26 of its submissions the RTM company argues that:
"In order to determine the amount of the reasonable costs, one must assess the costs 'incurred' by the applicant. In order to establish that the applicant has incurred cost, it is necessary for it to establish:
(a) that E&M had a contractual relations with the applicant which enabled it to charge the applicant for the work undertaken; and
(b) what such charges would have been so that there is no breach of the indemnity principle set out in section 88(2) of the Act."
6. The RTM company relied on two cases in the Leasehold Valuation Tribunal dealing with Mr Sandler's costs, 39-46 Gandon Vale CAM/11 UF/LCP/2011/0001 and 1-2 Ripley Close and 29-39 Garatts Way
~-· ---
~--...- ..
7.
CAM/11 UF/LCP/2011 /0006. In both cases the Tribunal (comprising in each case Mr Edgington and Mr Brown, the president and vice-president of the Eastern Panel) held that Estates & Management Ltd had failed to show any contractual obligation on the part of the applicant freeholder to pay the costs claimed in respect of Mr Sandier's work.
The applicant relied on the recent Upper Tribunal decision in Merryfield Grange, Fairhold Mercury Ltd v Merryfield RTM Co Ltd [2012] UKUT 311, which also concerned the recoverability of costs for Mr Sandier's work. The point in issue is that case, however, was the holding of the Leasehold Valuation Tribunal that it was not lawful for Estates & Management Ltd to charge a landlord for the services of Mr Sandier because of the terms of the Solicitors' Code of Conduct. That is not an issue raised in the current case.
8. There is nothing in Merryfield Grange to cast doubt on the decisions in Gandon Vale and Ripley Close and these latter decisions are, if we may respectfully say so, clearly right as regards the point of law which they establish. If there is no contractual obligation on a landlord to pay Estate & Management Ltd, then the landlord cannot recover the cost from the RTM company.
3
9. In the current case the landlord has failed to show any contractual relationship between it and Estates & Management Ltd such as to give rise to an obligation on it to pay Estates & Management Ltd. Nor has it shown that it has actually paid Estates & Management Ltd. The current case is in our judgment on all fours with Gandon Vale and Ripley Close. The RTM company has put the applicant expressly on notice of the point; and Estates & Management Ltd are on notice of the point as a result of the other two cases. We infer that the failure of Estates & Management Ltd to meet the RTM company's objection is because it cannot.
10. It follows in our judgment that nothing is owed by the RTM company to the applicant. We therefore do not need to deal with the reasonable of the time and the hourly rate claimed in respect of Mr Sandier's costs.
Costs
11 . The RTM company seeks to recover costs under paragraph 1 0 of Schedule 12 to the 2002 Act on the basis that the applicant has acted unreasonably in issuing the current application without having sought to agree the costs previously. The RTM company says that Estates & Management Ltd refused to reply to correspondence.
12. The landlord exhibits a letter from Canonbury Management of 2nd May 2012 in which that firm gives email addresses for Mr Geoffrey Taylor and Mr Roger Wood. The landlord subsequently wrote to Mr Taylor. In fact Mr Taylor was not a director of the RTM company and the email address given was not his. The applicant cannot, however, in our judgment be blamed for acting on
4
Canonbury's letter as it did. Accordingly it has not acted unreasonably and we refuse the application for costs.
DETERMINATION
The Tribunal accordingly determines:
(a) that the RTM company owes the applicant nothing in respect of costs;
(b) that the RTM company's application for costs under paragraph 10 of Schedule 12 to the Commonhold and Leasehold Reform Act 2002 be refused.
~~r Adrian Jack, Chairman 14th November 2012
London Rent Assessment Panel Residential Property Tribunal Service 1 0 Alfred Place London WC1 E 7LR
Dear Sirs,
Estates & Management Ltd Molteno House, 302 Regents Park Road London N3 2JX OX: 57286 Finchley 2
Application Under Section 88 of the Commonhold and Leasehold Reform Act 2002-Marathon House RTM Company Ltd
Please find enclosed Application on behalf of the Freeholder, Piervalley Limited, together with a further copy for service upon the Respondent, Marathon House RTM Company Ltd,
.
Richard Sa Solicitor For and on behalf of Estates & Management Ltd
\lolteno Hous11 302 Regents Park Road London N3 2JX Company Registt}red 1!1 England Registration Numbor: 324-iiOO
In the Leasehold Valuation Tribunal
BETWEEN:
PROXIMA GR PROPERTIES LIMITED
Applicant
And
MARATHON HOUSE RTM COMPANY LIMITED Respondent
APPLICATION UNDER SECTION 88 OF THE COMMONHOLD AND
LEASEHOLD REFORM ACT 2002
1. The Applicant is the freeholder of flats at Marathon House 174-204 Marlebone
Road,London (The Buildings)
2. The Respondent is a company acquired to acquire the Right to Manage the building.
3.The Respondent served ten Right to Manage claim notice on the Applicant on 19th December
2011.
4. The Applicant instructed its agents Estates and Management Limited to deal with the application.
The agents through their in house solicitor Richard Sandler (admitted in 1972) examined
the application and requested further information from the Respondents solicitors
including a copy of the certificate of incorporation and memorandum of association. He
also examined the freehold title, the leases and checked the register of members against
their own clients records
5. The Applicant after further consideration of the papers and consultation with their Client
subsequently confirmed that a counter notice would not be served and admitting the
claim ..
6. On 28th April 2012 the Applicant through its agent rendered an account a copy of which is
attached .. The Applicants Solicitor is a Grade A fee earner but as an in house solicitor his
charge out rate is the lower than normal rate of £190 per hour, he also included letters and
emails within his account which totals £348.33 plus vat and copy land registry entries.
Giving a total figure of £425.89
7. Despite further reminders no payment has been received from the Respondent and the
Applicant therefore applies for an assessment of costs under Section 88 of the above Act.
~~:u;;;i:~:;;;~ :;: :;~~;~~~;:~n .~'s .Application me true. Estates and Management Limited
Molteno House
302 Regents Park Road
London N3 2JX
Dated: 29th August 2012 .................................................. .
Proxima GR Properties Limited Date: 126 April 2012 Payable by Marathon House RTM Company Limited Account No: I RS137/F"sooooosoo17Ce9ai---m~~--
i
Property: Marathon House
DESCRIPTION
I To taking your instructions to act on your behalf in connection with a Right to Manage 1 application at Marathon House 174-204 Marylebone Road_ Perusing list of lessees
and raising further enquiries to the Right to Manage Company_ Taking your further instructions and confirming that the Right to Manage application would not be opposed and dealing with all necessary formalities.
Solicitor (Grade A fee earner) engaged a total of 1 hour 50 minutes at an in house hourly rate of £190.00 per hour (inclusive of all correspondence, emails and telephone calls)
Plus VAT
Disbursements \ Official copies
TOTAL
Please make full payment of these charges within 14 days directly to: Estates & Management Ltd.
AMOUNT(£} i
£348.33
£69.66
£8.00
£425.99
Registered Office: Molteno House 302 Regents Park Road London N3 2JX Company Registered in England Registration Number: 3244100 VAT Registration Number: 666036222
Proxima GR Properties limited Molteno House 302 Regents Park Road Finchley, london N3 2JX
30 September 2012
Dear Sir or Madam,
LVT Application- Marathon House, London NWl SPW L VT Reference LON/OOBK/LCP /2012/0020
Please find here enclosed the response of Marathon House RTM Company limited to your recent application.
Regards,
Director
Marathon House RTM Company Ltd and and Wales: 7863910
leasehold Valuation Tribunal
Between:
Proxima GR Properties limited (Applicant} and Marathon House RTM Company Limited (Respondent}
Case reference: LON/OOBK/LCP/2012/0020 Premises: Marathon House
200 Marylebone Road London NW1 5PW (the "Building"}
Respondent's Response
The Respondent acknowledges its liability under Section 88 of the Commonhold and Leasehold Reform Act 2002 (the "Act") for the reasonable costs incurred by the Applicant in consequence of the Respondent's notice of claim to acquire the right to manage the Building ("Reasonable Costs") and at no time has sought to avoid that liability.
Historical facts and context
1. The Respondent served its Right to Manage claim notice on the Applicant on 19 December 2011. The Applicant did not contest the claim and the Right to Manage was acquired on 29 April 2012.
2. OM Property Management Limited (the "Managing Agent") was employed at all material times (by the Applicant from 19 December 2011 until 28 April 2012, and then by the Respondent from 29 April 2012 to 31 August 2012} to supply property management services at the Building. The Managing Agent was an associate company of the Applicant until 6 March 2012.
3. Estates and Management limited ("E&M"), the Applicant's agent and the company responsible for the £425.99cbsts setoutinthe Application (the "Claimed Costs") is an associate company of, and has the same address as, the Applicant.
4. Piervalley Limited, the company listed as the freeholder of the Building in E&M's 5 September 2012 letter to the London Rent Assessment Panel, is another associate company of, and has the same address as, the Applicant. It is not the freeholder of the Building. The Applicant is the freeholder.
Respondent's submissions
5. The Respondent made reasonable efforts to ascertain the Reasonable Costs with a view to settling them expeditiously.
6. The Applicant has not made reasonable efforts to seek payment from the Respondent for the Claimed Costs before bringing the matter to the leasehold Valuation Tribunal.
7. The Applicant has not provided sufficient evidence that the Claimed Costs constitute Reasonable Costs as defined in the Act. In the absence of such evidence, the Respondent should not be held liable for the Claimed Costs.
--1--
8. The Applicant has engaged in an abuse of process of the Tribunal and the Application should be dismissed in whole.
These submissions are further detailed below.
Submissions on Respondent's efforts to pay the Reasonable Costs
9. On 27 February 2012 (prior to the acquisition of the Right to Manage), the Respondent wrote to request the amount ofthe Reasonable Costs from the Managing Agent, who responded:
(a) on 5 March 2012 that "these are generally not provided until after the RTM process and [we] will endeavour to provide [them] ASAP"; and then
(b) on 19 March 2012 that "Estates and Management will request payment of costs from the RTM company shortly after the hand over is complete. Unfortunately until then we cannot confirm what amount this will be".
Based on this, the Respondent understood that E&M would send it an invoice at some point after 29 April 2012 and that the Managing Agent would confirm the amount at that time.
10. Between 20 March 2012 and 23 April 2012, the Respondent sent no less than eleven emails to senior managers of the Managing Agent which showed the Reasonable Costs as an open issue. This was complemented with verbal reminders, including at update meetings that the Respondent's directors held periodically with the Managing Agent to review current issues for which the Managing Agent was responsible in relation to the Building.
11. On 29 April 2012, the Respondent wrote to the Managing Agent to confirm the completion of the Right to Manage process and to request the statement of Reasonable Costs as soon as possible. The Managing Agent replied on 1 May 2012 to say that it had "chased the Legal Team for the statement [ ... ] as soon as possible".
12. The Respondent sent a further reminder to the Managing Agent on 13 May 2012 but at no time received any form of accounting for, or any indication of, the Claimed Costs from either the Applicant, E&M or the Managing Agent until the service on it of the Application commencing these proceedings.
Submissions on Applicant's efforts to seek payment
13. It is the Applicant's onus to establish the delivery of any notices it may contend were served on the Respondent. The Respondent raises issue that any such communication was received.
14. The Application contains a letter dated 9 May 2012 addressed to Geoffrey Taylor which appears only to have been sent by email to~. The Respondent does not know who Geoffrey Taylor is and the stated email address was unknown to it prior to these proceedings.
15. On 30 September 2012 the Respondent wrote to the above email address~ and was informed in reply that (a) the email address was not Geoffrey Taylor's and (b) the recipient had disregarded the communication from E&M as she had no idea what the matter was about.
16. Neither the 26 April 2012 invoice included in the Application nor the 9 May 2012 letter contains the Respondent's registered address, which is a matter of public record and easily ascertainable.
17. E&M holds the names and addresses of all tenants of the Building. It could have identified the directors and secretary of the Respondent (which are a matter of public record) residing at the Building and contacted them in relation to the Claimed Costs. It did not do so.
--2--
18. The Application refers to "further reminders" (plural) after the original invoice was allegedly issued on 26 April 2012. The Respondent admits neither the "further reminders" nor any other communication from the Applicant or E&M on the matter of the Reasonable Costs.
19. The Application contains no evidence of any efforts the Applicant may have made to obtain payment for the Claimed Costs after 9 May 2012 before signing its leasehold Valuation Tribunal Application on 29 August 2012 -less than four months after the original invoice was allegedly issued.
20. The Applicant's improper management of its dealings with the Respondent is evident in the above and other instances (e.g. E&M's letter to the london Rent Assessment Panel dated 5 September 2012, which refers to the freeholder of the premises as being Piervalley limited, a company totally unconnected with, and prior to these proceedings unknown to, the Respondent).
21. The Respondent therefore asserts that the Applicant took no steps, alternatively no reasonable steps, to engage with the Respondent about the Claimed Costs.
No evidence of having incurred Reasonable Costs
22. An RTM company is liable for "reasonable costs incurred by a [ ... ] landlord [ ... ] in consequence of a claim notice given by the [RTM] company in relation to the premises", in accordance with Section 88(1) of the Act.
23. The method of assessment is on the basis of the indemnity principle as set out in Section 88(2) of the Act. The costs payable are those which would be payable by the Applicant "if the circumstances had been such that he was personally liable for all such costs".
24. The costs must be reasonably incurred and reasonable in amount.
25. The Applicant did not instruct independent solicitors to undertake the work involved following service of the Respondent's Right to Manage claim notice. The Claimed Costs are fees allegedly incurred by E&M, a member of the Applicant's group of companies.
26; In order to determine the amount of the Reasonable Costs, one must assess the costs "incurred" by the Applicant. In order to establish that the Applicant has incurred cost, it is necessary for it to establish
(a) that E&M had a contractual relationship with the Applicant which enabled it to charge the Applicant for the work undertaken; and
(b) what such charges would have been so that there is no breach of the indemnity principle set out in Section 88(2) of the Act.
27. There is nothing in the Application which would indicate what costs have actually been "incurred" by the Applicant. The submission by E&M provides no evidence to say what their overheads might be and what, if anything, they charge the Applicant for any work undertaken, let alone the work in this case.
28. The Application states that the person who performed the work, Richard Sandler, is a solicitor (Grade A fee earner) charging £190 per hour. This does not explain what costs have been "incurred" by the Applicant.
29. The details provided by the Applicant as to exactly what time was spent by E&M are limited. The Application contains simply a list of six activities which E&M says it performed. There is no detail as to when each task was carried out and how long it took. Thus, there is no factual basis upon which to determine whether each item of time was reasonably spent or not. There is also no indication of how many letters or emails were written or how many telephone calls were made.
--3--
30. In the absence of sufficient evidence that the Claimed Costs represent Reasonable Costs "incurred" by the Applicant, the Respondent's position is that it should not be held liable for such Claimed Costs.
Abuse of l VT process by the Applicant
31. The Tribunal is directed to cases CAM/11UF/LCP/2011/0001 and CAM/11UF/LCP/2011/0006 (see Appendix, pages 5-15), which dealt with very similar issues as this case.
32. Both these cases involve a member of the Applicant's group of companies (Holding & Management (Solitaire) Limited, company number 01649347, which is registered at the same address as the Applicant) and the services of the same in-house solicitor at E&M, Richard Sandler. In both cases, the Tribunal found that the Applicant had failed to present evidence of having incurred Reasonable Costs.
33. The Respondent submits that
(a) the facts of this current case are similar to those in the above-referenced cases;
(b) the facts presented by the Applicant in this case have deficiencies similar to those for which it was criticised by the Tribunal in the above-referenced cases; and
(c) the Applicant has prematurely brought this case to the Tribunal without first having made reasonable efforts to resolve its claim directly with the Respondent.
Order requested by the Respondent
The Respondent invites the Tribunal to find that the Applicant was vexatious and unreasonable in bringing the Application and in so doing has engaged in an abuse of the process of the Tribunal, and to
(a) dismiss the Application in whole, in accordance with Regulation 11, Leasehold Valuation Tribunals (Procedure) (England) Regulations 2003; and
(b) order the Applicant to pay the Respondent's costs of £500, as allowed under Schedule 12 paragraph 10 sub-paragraph (2)(b) read with sub-paragraph 3(a) of the Commonhold and leasehold Reform Act 2002. This would cover the time and effort expended by the directors of the Respondent in dealing with the Application, including seeking independent advice.
The Respondent believes that the facts stated in this Response are true.
Signed for and on behalf of the Respondent by
Adrian Mackaay Di RTM Company Limited
Date: 30 September 2012
--4--
Appendix
Relevant LVT Cases
--5--
RESIDENTIAL PROPERTY TRIBUNAL SERVICE LEASEHOLD VALUATION TRIBUNAL
Property
Applicant
Respondent
Case number
Date of Application
Type of Application
Tribunal
39-46 Gandon Vale, High Wycombe, Bucks. HP13 5LG
Holding & Management (Solitaire) Ltd.
Gandon Vale 39-46 RTM Company Ltd. .
CAM/11 UF/LCP/2011/0001
12th Janual)t 2011
To determine the costs payable on Service of RTM notice (Section 88 of the Commonhold and Leasehold Reform Act 2002 ("the Act")
Bruce Edgington (solicitor, chair) David Brown FRICS MCI Arb
DECISION
1. The reasonable legal costs of the Applicant in dealing with the matters set out in Section 88 of the Act which are recoverable from the Respondent are nil.
Reasons
Introduction · 2. It is agreed that the Respondent is a right to manage ("RTM") company
created for the purpose of exercising the right to manage leasehold properties and serving the necessary notices under Section 79 of the Act in respect of the property in this case. · · ·
3. It is also agreed that a claim notice was served. Initially it was denied that a counter-notice was served but it was then agreed on production of the evidence of posting. There seems to have been some argument about its validity and on the ih September 2010, the Applicant's managing agent, Estates & Management Ltd. wrote to the Respondent acknowledging the right to manage as from 141
h
-- 6 --
November 2010. A costs calculation was sent to the Respondent but agreement could not be reached. This application has therefore been made.
The Law 4. Section 88 of the Act says that "a RTM company is liable for
reasonable costs incurred by a person who is .... a landlord under a lease of the whole or part of any premises ... .in consequence of a claim notice given by the company in relation to the premises"
5. The method of assessment is on the basis of what is sometimes called the indemnity principle. In other words the costs payable are those which would be payable by the landlord "if the circumstances had been such that he was personally liable for all such costs". (Section 88(2) of the Act)
The Applicant's claim 6. The Applicant has not employed solicitors. Throughout, it has used
Estates & Management Ltd which is a company of managing agents. The person dealing with the relevant work is said. to have been Richard Sandler who says he is a solicitor Grade A fee earner who qualified in 1972.
7. As Mr. Sandler has chosen to use this phrase, it is appropriate to set out where it comes from and what it means. It is set out in the Practice Direction to Part 48 of the Civil Procedure Rules 1998 under the heading 'Guideline Figures for the Summary Assessment of Costs'. Grade A fee earners are defined as "solicitors with over eight years post qualification experience including at least eight years litigation experience". The guideline rates for such solicitors in the N3 pqstcode for work undertaken in 2010 were £229-267 per hour.
8. Despite the directions order issued by the Tribunal chair asking the Applicant to say what the experience of the fee earner involved has been, Mr. Sandler does not give that information.
9. Guideline rates are decided by the Master of the Rolls on an annual basis with the assistance of the Senior Costs Judge and are intended to cover the cost of running a solicitors' practice. The rates reduce for areas out of London down to £201 per hour for what is known as the National 2 rate in the provinces. The reason why the rates reduce is because the running of a solicitor's practice becomes cheaper in the various areas designated.
10. Mr. Sandler did not undertake this work as part of a solicitors practice. He is the 'in house' solicitor employed not by the Applicant freeholder but by that company's managing agent. He claims £180 per hour for his time. He claims for 2 hours work plus VAT and Land Registry freehold Office Copy entries of £16.00. The total claim is £439.00.
--7--
The Points of Dispute 11. The Respondent's objection is twofold. Firstly it is said that an
excessive amount of time has been expended on this matter fncluding time on an invalid counter-notice for which the Respondent should not have to pay.
12. Secondly the disbursement is challenged because the freeholder should know whether it is the freeholder without having to search for the information at the Land Registry. The Respondent offered £258.75 and sent a cheque for this amount on the 29th November 2010. For some reason which is not known to the Tribunal, this cheque was returned on the 22nd December 2010. If the amount was not agreed, the cheque could have been accepted on account of the claim and under protest to avoid any suggestion of satisfaction and accord. ·
The Procedure 13.1n the directions order made by the Tribunal chair on the 13th January
2011, it was said that the Tribunal considered that it could deal with this matter on paper with the necessary written representations from the parties. The parties were informed that they could seek an oral hearing at any time prior to the matter being considered on or after the 4th March 2011. No such request was received. ·
14. However, when the Tribunal came to consider the papers, it felt that it did not have suffjcient information about the contractual relationship between the freeholder and the managing agent. No evidence had been produced to satisfy the 'indemnity' principle i.e. what arrangement there was between the freeholder and the managing agent for payment of that agent's fees for the work involved. Indeed, there was no evidence from the Applicant itself at all.
15.1n other words, the Tribunal has to be satisfied that the amount being claimed is an amount 'incurred by the landlord. If the landlord is not liable to pay the amount claimed by Estates & Management Ltd., then that amount has not been 'incurred by the landlord.
16.1n a court assessment of a solicitor's costs·, the court is entitled to call upon the solicitor to disclose that part of his or her retainer which sets out hourly charging rates etc. for this very reason. Thus the Tribunal caused a letter to be written to the Applicant's agent on the 11th March saying:-
"The Tribunal has been considering the papers submitted in th_is case and would like clarification about the contractual· relationship between the Holding and Management (SoNtaire) Ltd. and yourselves. Could you send in a copy of the retainer please dealing, in particular, with when charges can be raised and charging rates. Could we have this within the next 10 days."
-- 8 --
17.The agent's reply of the 161h March said:-
" The position is that Estates & Management Ltd are the appointed agents for the Freeholder, Holding & Management (Solitaire) Limited in respect of all administrative matters relating to the Freehold interest. Estates & Management Ltd. have their own Legal department of which the writer, Richard Sandler, is a member. Mr. Sandler is not a solicitor in private practise and is a salaried employee of Estates & Management Ltd. The charging rate has been established in previous L VT application has been upheld in each of them and cases can be produced if required. The in-house charging rate is considerably Jess than would be charged by a firm of Solicitors with similar experience."
18. The Tribunal did not feel that this was a matter which could be pursued further in correspondence. A letter was therefore written to the agents on the 241
h March saying that as the question raised had not been answered and as a copy of the retainer had now been sent, the decision to deal with this matter on ~aper was revoked and an oral hearing would take place on the 281 April 2011. It was also pointed out that facts or opinions set out in a previous L VT decision could not be evidence in this case.
19. The relevant parts of the agent's response were:-
"Estates & Management Ltd are the authorised agents of Holding & Management (Solitaire) Ltd. In terms of the agency agreement confidential will not be produced.
With respect other L VT decisions can be evidence as Freeholders costs have been assessed the number of cases Leasehold Valuation Tribunals without any question. whatsoever and we have cited a recent example in our statement.
In the circumstances we are.instructed not to attend an oral hearing. We do not believe it is for the Tribunal to take additional points at this stage. Statements have been submitted by both parties and it is now for the Tribunal to make a determination."
We trust that this makes the Applicants position abundantly clear"
20.1n view of this clear statement that the Applicant was not going to attend the hearing, was not going to produce any evidence of a retainer and charging rates and was content to rely on the evidence submitted, the Tribunal decided to proceed and make its decision.
Conclusions
--9-
21. Even though these proceedings are adversarial and the Respondent has chosen, for whatever reason, to accept the claim but offer a lower figure, the Tribunal still has to decide this case on the basis of the law as it stands. The first question to be answered is whether the Applicant was liable to pay for the work undertaken by Estates & Management Ltd. There may be any number of ways in which the financial arrangement between the Applicant and its agents could have been constructed.
22. Simple examples could be that the agents would not be paid at all by the Applicant but would have to gain their income from management fees paid by lessees in respect of the properties they manage. There may be a fixed fee for work such as this. There may be an agreed hourly rate.
23. Despite being given very explicit indications by the Tribunal, a request for information about the contractual relationship between the Applicant and Estates & Management Ltd. has produced no relevant information. Indeed, the position has become rather worse in the sense that Mr. Sandler has not even suggested that Estates & Management Ltd. were employed specifically to do this work and can charge the landlord on a quantum meruit basis. Even if he wanted to prevent disclosure of the agency agreement, he could have said that in a statement or letter.
24. On the issue as to whether the time of an 'in house' solicitor can be charged, the Tribunal would certainly consider the position of an 'in house' solicitor employed by a landlord. If it could be established that the time of that person was spent on this matter at the expense of time spent on other matters then a claim could no doubt be considered perhaps on the basis oftime and additional overheads 'incurred'.
25. The other matter raised by the Applicant relates to previous LVT decisions. The hearing bundle contains a copy of a decision of the London panel of the L VT in the case of Mybase 1 RTM Co. Ltd. v Ramvel Ltd. which was decided on the 14th January 2011. In that decision it appears that Estates & Management Ltd represented the landlord. Objection was raised and it was asserted that Mr. Sandler "was an employee of a related company and so his salary costs would have been paid anyway by the same group of companies of which the Respondent is a parf'.
26. There is no indication as to what evidence was produced about the relationship between Estates & Management Ltd. and the landlord in that case but it does seem that they were related companies. There is no evidence in this case of any particular relationship. Indeed, Mr. Sandler's letter of the 28th March refers to an agency agreement which implies nothing more than a purely commercial arms length relationship.
--10 --
27. On the 151h September 2005, the Lands Tribunal, in the well known
case of Arbib v Earl Cadogan, reaffirmed its previously held view that "Decisions of L VTs and this Tribunal on questions of fact and opinion should not be treated as evidence .... in later cases. Such decisions do not establish any conventions or precedents".
28.1n summary, therefore, the position is that before the Tribunal can even consider the question of quantum, the Applicant has to establish that there. is a contractual relationsliip between the Applicant landlord and Estates & Management Ltd. whereby the latter company of managing agents can charge the Applicant landlord for the work which is the subject of this claim.
29. Despite being asked very specifically for this information, it has not been given, even in very general terms. The only inference which this. Tribunal can draw is that there is no such relationship and therefore, on the balance of probabilities, the claim by Estates & Management Ltd. is not an expense 'incurred' by the Applicant landlord. It may have been incurred by Estates & Management Ltd. but that is a different issue.
Bruce Edgington Chair 7th April 2011
--11--
Date of Application
Type of Application
Tribunal
GWRC (RTM) Company ltd.
5th May 2011 (received 11th May)
To determine the costs payable on service of RTM notice (Section 88 of the Commonhold and leasehold Reform Act 2002 ('fthe Act")
Bruce Edgington (solicitor, chair) David Brown Arb
1. The reasonable costs of the Applicant in dealing with the matters set out in Section 88 of the Act are assessed at nit
Reasons
Introduction The Respondent is a right to manage {11RTM") company created for the purpose of exercising the right to manage properties and serving the necessary notices under Section the in respect of
'""'r .. o.rnt in this case.
A notice was served as was a counter-notice denying the Respondent's right to manage the property. original claim notice was then withdrawn. A new claim notice was then served and the Respondent is taking over or has actually taken over the management This application is made presumably because the Respondent refused to pay any costs.
An RTM company becomes liable for the "reasonable costs incurred by a .. .landforrL.in consequence of a claim notice given by the (RTM) company in relation to the premises" (Section 88(1) of the Act).
--12-
5. The method of assessment is on the basis of what is sometimes called the indemnity principle. In other words the costs payable are those which would be payable by the client "if the circumstances had been such that he was personally liable for all such costs" (Section 88(2) of the Act). The costs must be reasonably incurred and reasonable in amount. Any doubt in respect of these two issues is normally resolved in the receiving party's favour.
The Applicant's claim 6. The Applicant did not instruct independent solicitors to undertake the
work involved following service of the claim notices. The costs claimed are fees allegedly incurred by managing agents known as Estates and Management Ltd. The actual work was said to be · undertaken by Richard Sandler who says that he is a solicitor admitted in 1972.
7. The claim is for 2.5 hours work at £180 per hour plus VAT and Land Registry fees of £24. The total claim is £564.00.
The Respondent's position 8. The Respondent's case is that because the Applicant has been
allegedly obstructive when transferring management to the Respondent and in passing over funds held by the Applicant on the lessees' behalf, it should not be responsible for any c6sts.
9. The Applicant's response to this is to say, rightly, that this does not, of itself, mean that the Respondent is not liable for reasonable costs incurred by the Applicant as a result of the service of the claim notices.
The Procedure 1 O.ln the directions order made by the Tribunal chair on the 25th May
2011, it was said that the Tribunal considered that it could deal with this matter on paper with the necessary written representations from the parties. The parties were informed that they could seek an oral hearing at any time prior to the matter being considered on or after the 1 ih July 2011. Because an incorrect address had been used by the Tribunal, it became necessary to issue a further directions order on the 14th July 2011 giving the 19th August 2011 as the date on or after which this matter would be considered. No request for a hearing has been received.
11. Where a Tribunal is considering the costs being charged by an independent solicitor, it is necessary to establish what the solicitor would be able to charge the client, i.e. the Applicant in this case. The reason for this is that the Tribunal has to be satisfied that if the Respondent were not paying the costs claimed, then only the costs payable by the Applicant itself could be allowed. In other words, the Tribunal has to assess the costs "incurred" by the landlord. What tends to happen is that the Tribunal asks to see the solicitor's client care letter which is required by Law Society rules and sets out the solicitor's charging rates and terms of business.
--13 --
12.As the Applicant's agent is not an independent solicitor where the Tribunal can check the client care letter, the first direction to the Applicant was to produce a copy of its instructions to Estates & Management Ltd. to deal with the work claimed for including any terms of business.
13. The next direction was to "serve on the Respondent a breakdown of the time spent by the case worker on each item of work undertaken with a fuf! narrative of such work to include the date when it was undertaken".
Conclusions 14. The Applicant did not comply with those parts of the directions order.
As to the first direction, the only document in the bundle is a letter purportedly dated 31st May 2011 from the Applicant to Estates & Management Ltd. saying "We, Holding & Management (Solitaire) Limited of Molteno House, 302 Regents Park Road, London N3 2JX, confirm that we have appointed Estates & Management Ltd of the same address as our agents for the purpose of administering our freehold portfolio and that this appointment commenced on 12th September 2006".
15. This letter post dates the work undertaken in this case. It fails to set out the terms upon which the 'appointmel)t' is to take place. As is set out in the letter, the address of the Applicant and Estates & Management Ltd. is the same, as is the telephone number and the document exchange number. ·
16. There is nothing in the application or the papers filed which would indicate to the Tribunal what costs have actually been incurred by the Applicant. The submission by Estates & Management Ltd. about its charging rate is simply that it is "lower than the normal rate of £180 per hour". This is not understood as the charging rate applied is £180 per hour. There is no other evidence to say what their overheads might be and what, if anything, they charge the Applicant for any work undertaken, let alone the work in this case.
17. The submissions say that the person doing the work is a solicitor admit1ed in 1972. That may well be the case, but that, of itself, does not explain what costs have been s'incurred" by the Applicant.
18. As to the second direction, the detail$ provided by the Applicant as to · exactly what time was spent by Estates & Management Ltd. and when are scant indeed. It is simply a list of 6 activities which Estates & Management Ltd. say they have performed without any detail as to when each task was carried out and how long it took. Thus, there is no factual basis upon which the Tribunal can determine whether each item of time was reasonably spent or not. There is also no indication of how many letters were written or how many telephone calls there were. There are claims in the 6 items listed for letters and documents received.
--14--
19. The sort of information ordered to be supplied is information which all solicitors in practice are perfectly used to supplying for the purpose of assessment of costs by a District Judge. Incoming letters are never allowed in the County Court on a detailed assessment of a solicitor's costs.
20. Taking all of these matters into account, the Tribunal cannot be satisfied that any costs have actually been incurred by the Applicant. It may well be that Estates & Management Ltd. has done work and has incurred expense itself. However, in order to establish that the Applicant has incurred cost, it is necessary for it to establish (a) that Estates & Management Ltd. had a contractual relationship with the Applicant which enabled it to charge the Applicant for the work undertaken and (b) what such charges would have been so that there is no breach of the indemnity rule. Despite very clear directions ordering the provision of this information, the Applicant has simply failed to do so. The only inference the Tribunal can reasonably draw is that there is no such contractual relationship.
21. As the person dealing with matters states that he is a solicitor with many years of experience and must have a practising certificate issued by the Law Society, he will know about the client care letter and the process of assessment of costs and the lack of the requested information is surprising. If he did not have a practising certificate, he would be required to make it clear that he was non practising, which he has not.
22. Even if the Tribunal could be satisfied about the ability of Estates & Management Ltd. to charge the Applicant, there is no basic information as to details of time spent which the Tribunal could use to assess whether costs have been reasonably incurred .
............. ~ ...........••....••..•..... Bruce Edgington Chair 19th August 2011
--15 --
Marathon House RTM Company Limited
Dear Sirs,
Re: Marathon House RTM Company Ltd
Estates & Management Ltd Molteno House, 302 Regents Park Road London N3 2JX DX: 5'721!6 Finchlrey 2
Thank you for your letter of the 301h of September enclosing your response. Please find enclosed the
Applicant's reply.
Yours faithfully,
Richard ndler Solicitor For and on behalf of Estates & Management Ltd
3244400
In the Leasehold Valuation Tribunal LON/OOBKILCP/2012/0020
BETWEEN:
PROXIMA GR PROPERTIES LIMITED Applicant
And
MARATHON HOUSE RTM COMPANY LIMITED Respondent
REPLY BY APPLICANT
The Applicant is in receipt of the Reply and would respond briefly as follows
1. The Applicant has received no correspondence from the Respondent. The Applicant sent
its correspondence to one of the email addresses provided by the Respondents agents, the
Respondent may have corresponded with the managing agent but not with the Applicant or
Estates and Management Limited, correspondence is attached at "Pl"
2. Estates and Management is associated with the Freeholder and deals with the
administration of the Applicant's properties. There is no legal reason why in house solicitors
costs cannot be dealt with in this way and the Respondent may not be aware of the recent
Upper Chamber decision in Merryfield Grange which is attached at "P2" which clarifies the
position
3. The Respondent requests clarification of the time spent, this is as follows
A receiving claim notice, examining it and obtaining land registry entries and list of lessees
45 minutes
B requesting further information and examining this and reporting to clients
55 minutes
C confirming that application would not be opposed and instructing managing agents
regarding service of contractor notices and liaison with new agents
20 minutes
Total one hour fifty minutes
4. It is submitted that the Applicants costs are reasonably incurred and are payable by the
Respondent
The Appl}~ant believes that the facts stated in this Application are true .
....... 1Z1t.! .. .............................................. . Signe for n ~ b~ of the Applicant by Estate d anvnent\Limited
Molteno House
302 Regents Park Road
London N3 2JX
Dated: 17tl1 October 2012 .................................................. .
In the Leasehold Valuation Tribunal LON/OOBKILCP/2012/0020
BETWEEN:
PROXIMA GR PROPERTIES LIMITED
And
MARATHON HOUSE RTM COMPANY LIMITED
Signed for and on behalf of the Applicant by
Estates and Management Limited
Molteno House
302 Regents Park Road
London N3 2JX
Dated: 1 ih October 2012 ....................... .
'"PI" .......................... .
Applicant
Respondent
Canonbury Management One Carey Lane London EC2V 8AE
Dear Sirs,
Re: Marathon House RTM Company Ltd
23rd January 2012
We write to confirm that the Freeholder will not be opposing this Right to Manage Application therefore Right to Manage will take effect as from the 291
h of ApriL We have advised the Managers and would you please advise us of the name and address of the new Managing Agents,
Yours faithfully,
Ri~~a Sandier Sdfic1t For and on behalf of Estates & Management Ltd
Marathon House RTM Company Limited C/0: Canonbury Management One Carey Lane London EC2V 8AE
Dear Sirs,
Re: Marathon House RTM Company Ltd
Estates & Management Ltd Mn;;~,.nn House, 30:2 Ragents ParK Road
Please find enclosed details of the freeholder's legal costs for dealing with this Right to Manage application. If you are no longer the managers, would you kindly advise us of their details.
"' Yours\faJthfully,
' \ \
Richard Sa· r Solicitor For and on behalf of Estates & Management Ltd
Application for payment
Estates & Management Ltd Molteno House, 302 Regents Park Road London N3 2JX DX: 57286 Finchley 2
Proxima GR Properties limited Payable by Marathon House RTM Company limited
i Date: [ 26m April2012
f Account No: ! RS137/FS000006001/Legal
I 1
To taking your instructions to act on your behalf in connection with a Right to Manage application at Marathon House 174-204 Marylebone Road. Perusing list of lessees and raising further enquiries to the Right to Manage Company. Taking your further instructions and confirming that the Right to Manage application would not be opposed and dealing with all necessary formalities.
l I
l
Solicitor (Grade A fee earner} engaged a total of 1 hour 50 minutes at an in house hourly rate of £190.00 per hour (inclusive of all correspondence, emails and telephone calls) £348.33
Plus VAT £69.66
Disbursements Official copies
Please make full payment of these charges within 14 days directly to: Estates & Management Ltd.
Registered Office: Molteno House 3\52 Rey:ent.s Par't< Road London N:J 2JX Company Raglst~red m England Registration Number: 3244100 VAT Registtation Number: 660035222
,\utk•n::·...:G fniG r:.?.-gu!~:kJ b~. the F!non:. ia\ Sen ice:: Aurhorit:.
02/05/2012
Geoffrey Taylor
By Email:-@ •• 1
Dear Sirs,
Re: Marathon House RTM Company Ltd
Estates & Management Ltd Molte~o House, 302 Regents Park Road London N3 2JX DX: 57288 F!nch!ey 2
S\rvltchboard: +44 8371 2800 3371 2949
gth May 2012
We refer to our letter of the 26th of April addressed to the registered office of Marathon House and have been instructed to forward you the invoice. This is now enclosed herewith.
,,.,. Yoqrs_ faithfully,
\ "'\ ~\ \,
Richard dler Solicitor \\\ For and on "behalf of Estates & Management Ltd
Estates & Management Ltd Molteno House, 302 Regents Park Road London N3 2JX OX: 57286 Finchley 2
Proxima GR Properties Limited j Date: j26 April2012 Payable by Marathon House RTM Company Limited j Account No: 1 RS137/FS000006001/Legal
I Property: I Marathon House
DESCRIPTION I l I To taking your instructions to act on your behalf in connection with a Right to Manage I
i application at Marathon House 174-204 Marylebone Road. Perusing list of lessees I l and raising further enquiries to the Right to Manage Company. Taking your further I i instructions and confirming that the Right to Manage application would not be opposed ! I and dealing with all necessary formalities. j l l i Solicitor (Grade A fee earner) engaged a total of 1 hour 50 minutes at an in house · I hourly rate of £190.00 per hour (inclusive of all correspondence, emails and telephone I calls)
I i l Plus VAT
~
I
~~ Disbursements Official copies
\ \ J
TOTAL.
Please make full payment of these charges within 14 days directly to: Estates & Management Ltd.
AMOUNT(£} I
£348.33
£69.66
£8.00
£425.99
Registered Office: Molteno House 302 Regents Park Road London N3 2JX Company Registered in England Registration Number: 3244100 VAT Registration Number: e66036222
Geoffrey Taylor
By Email:~·-·
Dear Sirs,
Re: Marathon House RTM Company L.td
Estates & Management Ltd Molteno House, 302 Regents Park Road London N3 2JX DX: 57286 Finch!ey
We refer to our letter of the gth of May, enclosing a copy our account, dated the 26th of April 2012. This remains unpaid and unless payment is made within the next 7 days we will be referring the matter to the Leasehold Valuation Tribunal for Determination.
Yours faithfully,
fP Richard Sandier Solicitor For and on behalf of Estates & Management Ltd
Reg!sts:red :.)ffice:
In the Leasehold Valuation Tribunal LON/OOBK/LCP/2012/0020
BETWEEN:
PROXIMA GR PROPERTIES LIMITED
And
MARATHON HOUSE RTM COMPANY LIMITED
Signed for and on behalf of the Applicant by
Estates and Management Limited
Molteno House
302 Regents Park Road
London N3 2JX
Dated: 1 ih October 2012 ....................... .
"P2" .......................... .
Applicant
Respondent
UPPER TRIBUNAL (LANDS CHAMBER)
UT Neutral citation number: [2012] UKUT 311 (LC) UTLC Case Number: LRX/134/2011
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD AND TENANT- right to manage - landlord's costs- whether lawful for company providing services to landlord to charge for work done by in-house solicitor- held that it was- appeal allowed- Commonhold and Leasehold Reform Act 2002 s 88
BETWEEN
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF A LEASEHOLD VALUATION TRIBUNAL FOR THE
The following case is referred to in this decision:
Beitov Properties Ltd v Martin [2012] UKUT 133 (LC), LRX/59/2011
2
DECISION
1. This is an appeal against a decision of a leasehold valuation tribunal dismissing a claim made by the appellant under section 88 of the Commonhold and Leasehold Reform Act 2002 for costs incurred by it in consequence of two right to manage claims made by the respondent RTM company. The appellant is the freehold owner of the premises, Merryfield Grange, Bolton, in respect of which the claims were made. Neither claim was effective, either because it was withdrawn or because the respondent failed within the requisite period to apply under section 84(3) for a determination that it was entitled to acquire the right to manage the premises.
2. Section 88 ofthe 2002 Act (omitting subsection (3), which is not material for present purposes) provides:
"(1) A RTM company is liable for reasonable costs incurred by a person who IS-
(a) landlord under a lease ofthe whole or any part of any premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act to act in re !at ion to the premises, or any premises containing or contained in the premises,
in consequence of a claim notice given by the company in relation to the premises.
(2) Any costs incurred by such a person in respect of professional services rendered to him by another are to be regarded as reasonable only if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs ...
(4) Any question arising in relation to the amount of any costs payable by a RTM company shall, in default of agreement, be determined by a leasehold valuation tribunal."
2. The appellant applied to the LVT for a determination under subsection (4) in respect ofthe costs that it had incurred in the preparation of the two counter-notices it had served in response to the claims. The amounts were £650.50 and £216.00 respectively. The counter-notices had been prepared by a company called Estates and Management Limited, and these amounts were its charges for doing this work. The application to the L VT was determined on written representations. In its decision at paragraph 7 it recorded as follows the RTM company's reasons for resisting the application:
"The Respondent considers the counter notices mentioned only 'minor infringements' and that there was a 'genuine' for service of the notice of claim in an effort to exercise better management."
It appears that "reason", or some such word, was omitted after "genuine".
3
3. Having set out the relevant provisions of section 88, the LVT expressed its conclusions as follows:
"9. The Act allows the reasonable costs ofthe landlord under a lease or a party to such a lease otherwise than a landlord or tenant. We accept that the work set out in the two invoices submitted by Estates & Management Ltd is work consequent upon the service of the notice and specifies work to an extent that would fall within our range of expectations arising from the notices. Noting the charging rate we are satisfied that the sums requested are reasonable.
10. We do not consider it relevant as submitted by the Respondent that there was a good reason for service of the notices or that errors detected were minor. The Respondent is fully entitled to serve counter notices. It is telling that ultimately the Respondents did not make an application to the Tribunal.
11. We note the invoices relate to work provided by a solicitor. As such the accounts are payments of a solicitor's services. Estates and Management Ltd the billing party does not purport on its letterhead to be a firm of solicitors, it is not on the face of its correspondence regulated or authorised by any professional organisation and the bills do not include or refer to the requirements of solicitors' professional rules for submissions for accounts oflegal costs. We do not consider the accounts can lawfully be payable in these circumstances they do not reflect disbursements for external legal advice. No letter of engagement, solicitor client agreement or retainer has been exhibited.
12. Whilst in other circumstances we accept the costs would be reasonable and payable we do not determine in this case the Respondent has a liability for such costs as we find they are not payable by the Applicant."
The LVT accordingly dismissed the application.
4. The appellant applied to the L VT for permission to appeal against the decision. In its application it asserted that the L VT had failed to give any or any adequate reasons for concluding that the accounts could not "lawfully be payable" or that the costs "are not payable by the Applicant." It said that the L VT appeared to have considered "the requirements ofthe solicitors' professional rules" but had failed to give any particulars of these or to explain how they were relevant. It submitted that the rules were not relevant. In refusing permission to appeal the L VT said in relation to these points:
"Liability of Applicant- The Tribunal considered that the Applicant is not liable and hence cannot be reimbursed for services that could not lawfully be charged. This arises from Rules 12 and 13 ofthe Solicitors' Code ofConduct in force at the relevant time."
When application was made to this Tribunal, I granted permission to appeal. The appeal is being determined on the basis of written representations.
5. In its statement of case the appellant says that Estates and Management Ltd ("E&M") is its appointed agent and deals inter alia with right to manage claims. E&M is not and did not purport to be a firm of solicitors. It provides professional services to
4
landlords. It employs Mr Sandler who is their in-house solicitor. E&M dealt with the right to manage claim notices that had been served on the appellant by the respondent. The relevant work was carried out for E&M by their employee, Mr Sandler. The appellant was liable for the professional services that E&M had rendered to it. The costs claimed from the appellant were not payment for a solicitor's services but for the services provided by E&M.
6. A response on behalf of the respondent has been provided by its agent Clearwater Estate Company. The agent says that it feels that the appellant's statement of case is a fair and true representation of the facts ofthe case as they have occurred. It says that the reason for dismissal of the application was a specific point of law which it is not qualified to question but which it leaves to the appeal system to determine. If the appeal is successful it will accept the decision and make the necessary payment.
7. The appellant has produced copies of the two invoices for the amounts that it claims. Both are from Estates and Management Ltd and request payment to the company. The first dated 21 October 2010, says:
"To taking your instructions and acting on your behalf in a Right to Manage application made by Merryfield RTM Company Limited. Receiving application and perusing the same. Taking further instructions and serving Counter Notice and being informed of withdrawal of the Counter Notice. To receiving subsequent application. Perusing the same and taking further instructions and serving a second Counter Notice.
Grade A fee earner Solicitor inhouse engaged for a total of3 hours at £180 per hour (inclusive of all correspondence, telephone calls and emails)."
The second invoice, dated 1 April2011, was in similar form.
8. The basis upon which the LVT determined that the appellant's application should be refused- that the demand for payment was unlawful, so that the costs to which it related were not reasonable- was not one that had been advanced by the respondent. Nor does the respondent now seek to contend that the decision was correct in this respect. The point was one that the L VT took on its own initiative. It failed, however, to put it to the appellant so as to give the appellant the opportunity of addressing it. That, as a breach of natural justice, was a procedural impropriety which has clearly prejudiced the appellant and must inevitably lead to the decision being quashed.
9. In its decision the L VT said that the accounts could not "lawfully be payable" because they were for the services of a solicitor, and E&M did not appear to be a firm of solicitors, the bills did not include or refer to the requirements of solicitors' professional rules for submissions for accounts of legal costs, and no letter of engagement, solicitor client agreement or retainer had been exhibited. In refusing permission to appeal, after the appellant had asserted that no or no adequate reason had been given for saying that the accounts could not lawfully be payable, the LVT said simply: "This arises from Rules 12 and 13 ofthe Solicitors' Code of Conduct in force at the relevant time."
5
l 0. The L VT was in my judgment wrong in saying that the accounts could not lawfully be payable. The appellant had contracted with E&M for the work that had been done and was contractually liable to pay for it. The fact that the work had been done by a solicitor employed by E&M does not affect this contractual liability. The work done was not a reserved legal activity under section 12 of the Legal Services Act 2007, and it was not, therefore, subject to the limitation in section 13 to persons entitled to carry on such an activity. The L VT did not suggest that it was. Under section 24 of the Solicitors Act 1974 it is an offence for a body corporate or any director, officer or servant of a body corporate to do an act of such a nature or to do an act in such a manner as to be calculated to imply that the body corporate is qualified or recognised by law as qualified to act as a solicitor. No such act was, however, done by E&M or Mr Sandler. As the LVT said, E&M does not purport on its letterhead to be a firm of solicitors, it is not on the face of its correspondence regulated or authorised by any professional organisation and the bills do not include or refer to the requirements of solicitors' professional rules for submissions for accounts of legal costs.
11. The L VT said that the illegality that it saw "arises from Rules 12 and 13 of the Solicitors' Code of Conduct". Those rules (in the 2007 Rules, the ones in force at the time) dealt with "Framework of practice" and "In-house practice" respectively. The L VT did not suggest in what respect or respects acts were done which contravened these provisions. Clearly E&M can have done nothing to contravene them because it is not a solicitor. Mr Sandler, as a solicitor, would have been subject to the Rules, but in the absence of some specific indication there is nothing to suggest to me that he was in breach of any ofthe requirements. Even ifhe was in breach of any ofthe requirements, however, I do not see that this would render it unlawful for E&M to engage in the work that, through him, it did or to charge for the work that was done.
12. I would add that there is in subsection (3) of section 88 a particular limitation on charges for professional services, but no question arises for present purposes under this provision. The question is simply whether the costs claimed were reasonable. The L VT accepted that, apart from the question of legality, the costs of the work done were reasonable, and I can see no reason why this should not be so. Its conclusion on the lawfulness ofthe charges was, in my judgment, wrong.
13. I am satisfied, therefore, that the appeal should be allowed. Accordingly I determine that the amounts, £650.50 and £216.00, are payable.
14. It should be noted that this case is another instance ( cf Beitov Properties Ltd v Martin [2012] UKUT 133 (LC), LRX/59/2011) of an LVT of its own motion taking a point against one ofthe parties and deciding the case on that basis. Here not only had the point not been taken by the other party but that party does not now seek to advance any arguments in its support or ask that it should be upheld. The decision was made, in breach of natural justice, without the point having been raised with the parties in order to give them the opportunity to comment upon it. The reasons given for the decision were inadequate, and the decision itself was, in my view, plainly wrong. It is unfortunate that the parties should have been put to the inconvenience and cost of an appeal.
![CHAPTER VIII ECCLESIASTICAL TRIBUNALS, FACULTIES ... · [Ch.8.] 8.1 CHAPTER VIII ECCLESIASTICAL TRIBUNALS, FACULTIES, REGISTRIES _____ 1 Preliminary The tribunals and courts defined](https://static.documents.pub/doc/80x56/5f28569df07cce5e7012f180/chapter-viii-ecclesiastical-tribunals-faculties-ch8-81-chapter-viii-ecclesiastical.jpg)