As with any adversarial process, in most disputes handled by the First-Tier Tribunal (“FTT”), there will inevitably be one party (often, but not always, the ‘unsuccessful’ party) who is aggrieved by the outcome reached by the FTT. However, the circumstances in which the decision of the FTT can be challenged by way of an appeal are limited and it is not enough simply that the aggrieved party is unhappy with the outcome.

This week’s legal update considers the process and general principles which apply to appeals of FTT decisions. It is focussed on cases involving service charges but the process applies to most disputes handled by the FTT (but not all). It does not cover the process involved where a decision of the FTT is to be set aside or where the dispute has been decided by the County Court (as distinct from the FTT).

Where to appeal?

Appeals typically follow a relative standard process in that the higher Tribunal or Court will decide the appeal, but it will only do so where permission to appeal has been granted. In the first instance, permission must be sought from the original Tribunal or Court whose decision is being appealed, e.g. here, the FTT, with an ability to seek permission afresh from the higher Court or Tribunal if the original Tribunal or Court refuses permission to appeal. In England, appeals of service charge decisions made by the FTT will be dealt with by the Upper Tribunal (Lands Chamber) (“UT”).

What will happen?

The appeal usually involves a review of the FTT decision being challenged whereby the UT hears legal argument but not evidence (except in cases dealt with as a re-hearing, which a less common). The UT will decide whether to review (in whole or in part) the decision of the FTT and may either substitute its own decision on the case, or may remit the case back to the FTT to decide the matter anew in light of the issues decided on appeal.

When can a decision of the FTT be appealed?

The circumstances in which a decision of the FTT can be appealed are when :

1. The decision shows that the FTT wrongly interpreted or wrongly applied the relevant law; and/or

2. The decision shows that the FTT wrongly applied or misinterpreted or disregarded a relevant principle of valuation or other professional practice; and/or

3. The FTT took account of irrelevant considerations, or failed to take account of relevant considerations or evidence, or there was a substantial procedural defect; and/or

4. The point or points at issue is or are of potentially wide implication.

What is a “point of law” is widely interpreted and, as well as covering instances where there has been a mistake in the application of the law, it can include instances where there has been :

• A failure by the FTT to provide adequate reasons for its decision;

• A procedural irregularity or obvious unfairness in the proceedings which causes the decision of the FTT to be unjust;

• A decision based on a finding of fact for which there was no supporting evidence.

What does the process involve?

Permission to appeal

Permission to appeal must be sought from the FTT within 28 days of the FTT issuing the reasons for its decision (e.g. the written determination).

In most cases, an application for permission to appeal will be dealt with on the papers without a hearing, with no automatic right for the opposing party (known as the respondent) to make submissions in response to the application (although submission may nonetheless be lodged if the respondent so wishes).

Where permission to appeal is refused by the FTT, a renewed application for permission can be made to the UT within 14 days of the FTT’s decision refusing permission. Where permission has been granted on some grounds and refused on others, a renewed application for permission on those refused grounds must be made within 1 month to tie in with the date for lodging the application with the UT - see below.

When considering whether to grant permission, the UT will consider whether the proposed appeal has a realistic prospect of success or there is some other good reason for an appeal. In most cases, the respondent will be given 14 days to make any observations or submissions to the UT on the application for permission to appeal. Again, typically the decision will be made on the papers without a hearing.

There is no further right of appeal where the UT refuses permission to appeal, although if the case raises an important point of principle or practice, or there is some other compelling reason, the High Court has power to conduct a judicial review of the UT’s decision refusing permission to appeal. Such an application must be made within 16 days.

Once permission has been granted

Once permission has been granted, the appeal will only proceed where the party appealing (known as the appellant) files notice of appeal with the UT, with 1 month of the FTT or UT decision granting permission to appeal. That notice must be accompanied with the grounds of appeal, the decision of the FTT being appealed and the order granting permission to appeal.

Where permission has been granted by the UT, the UT may waive the requirement for the notice of appeal and, typically, the grounds filed in support of the application for permission to appeal to the UT will stand as the grounds of appeal. In other words, it may be unnecessary to re-file grounds of appeal.

Bringing an appeal does not automatically suspend any consequences arising from the original decision of the FTT. In other words, a party can still take steps to enforce the FTT’s decision (e.g. to recover payment of any service charges determined payable). So in order to avoid such action being  taken, a party should include in their application a request to suspend enforcement of the FTT decision when bringing the appeal. 

Where the respondent wishes for the decision of the FTT to stand, they should lodge Respondent’s Notice, stating the grounds on which the appeal is opposed, within such timeframe as directed by the UT (typically within 1 month). In most cases the appellant will have an opportunity to respond to the matters raised by the respondent in opposition to the appeal, in such timeframe as directed by the UT.

The appeal will then usually proceed to a hearing (subject to any further directions made by the UT), although some cases are dealt with by way of a written procedure where that is appropriate. It will be the responsibility of the appellant to produce a bundle for the hearing, and the parties are expected to work together to agree the contents of that bundle. It is not necessary for the UT to have every document that was before the FTT in the original proceedings, and documents in the bundle should be limited to those relevant to determination of the issues to be decided on appeal. The parties may also file ‘skeleton arguments’ before the hearing, setting out a concise written summary of their case.

Unlike with the FTT, which is made up of a panel of up to three (typically a lawyer, surveyor and lay individual), the appeal will be heard in the FTT by a single judge with expertise in those property matters dealt with by the UT (including service charge disputes). In most cases, the UT’s decision will follow in writing a short while after the hearing, setting out in full the UT’s decision on the appeal and its reasons.

Can the costs of the appeal be awarded?

As with the FTT, the UT has very limited jurisdiction when it comes to the award of costs and, when dealing with service charge disputes, it’s powers are generally limited to costs where a party has acted in the matter in abuse of process or unreasonably, akin to those under Rule 13 in the FTT. Section 20C applications can also be made in the UT for an order that the costs incurred in the UT are not to be treated as a service charge cost for the leaseholder party, as well as applications under Paragraph 5A into Schedule 11 to the Commonhold and Leasehold Reform Act 2002 for an order that such costs are not to be treated as an administration charge under the lease (to be demanded as a direct re-charge from the leaseholder party). For more information about costs orders that can be made in the FTT, see here.

Typically costs applications are to be made within 14 days of the UT’s decision.

What if I’m unhappy with the decision of the UT?

Decisions of the UT may be appealed to the Court of Appeal, and a further right of appeal of a decision of the Court of Appeal lies with the Supreme Court, that being the highest and final court for appeals in England.

 FTT          ->          UT          ->          Court of Appeal          ->          Supreme Court

The process and circumstances in which decisions can be further appealed beyond the UT are outside the scope of this Legal Update.

Conclusion

Appeals can be legally and procedurally complicated, so it is imperative that a party aggrieved by a decision of the FTT who wishes to challenge that decision takes competent legal advice on the merits of the appeal, before embarking on a potentially expensive and lengthy process of an appeal.

Should you have any queries in relation to this week’s Legal Update, please feel free to contact a member of the team on 01435 897297 or info@kdllaw.com

Disclaimer

This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

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