Under-takings overboard

2 Considers whether the First-tier Tribunal has the power to accept or impose undertakings.

The First-tier Tribunal was faced with a large number of allegations of defects in the quality of the works both inside and outside the flats of the 35 lessees who applied for a determination of their liability to pay service charges.

It found that the external works had not been carried out to a reasonable standard. It made no finding in connection with the defective work inside the flats.

In Westminster City Council v Allen [2013], the Upper Tribunal held that the First-tier Tribunal had the power to impose, even without the parties’ consent, a global deduction on the service charge bill to take account of defects in works.

This power obviates the need for the First-tier Tribunal to calculate deductions for flats involved in multi-lessee applications. Where the works concern a large number of flats there are clear, practical reasons for doing so.

Rather than apply Allen however, in Nogueira the First-tier Tribunal opined that the way forward was to find that the costs of the works were recoverable in full on the assumption that the works would become works carried out to a reasonable standard once Westminster had complied with the undertakings it had offered.

The Nogueiras, Westminster and HHJ Huskinson in the Upper Tribunal disagreed: the First-tier Tribunal should have made a deduction from the service charge bill if the works were not reasonable in standard.

HHJ Huskinson, having observed that this was “not the case to examine the question of the extent to which undertakings can properly be given to a First-tier Tribunal or Leasehold Valuation Tribunal”, made three points:

1 By analogy with the county court, which has no inherent power in care proceedings to grant an injunction and therefore no power to accept an undertaking, the First-tier Tribunal, which has no inherent power to grant an injunction, has no power to accept an undertaking;

2 Even if it could accept undertakings, the First-tier Tribunal has no power to compel a party to comply with it, and

3 In any event, the terms of the undertakings proposed by Westminster were too vague.

Having allowed the appeal, HHJ Huskinson remitted the case to the First-tier Tribunal for it to determine the amount that should be deducted from the lessees’ service charge bills, whether by applying the Allen principle or by some other method.

The First-tier Tribunal, faced with a mountain of allegations, each slightly different from the other, must have felt that it had come up with the ideal solution in accepting Westminster’s undertakings.

Practicality must always be reconciled with legal principle. The First-tier Tribunal only has the powers that are given to it by Parliament.

It is therefore always sensible, in those “light-bulb” moments, to ensure that it is legally, as well as practically, justifiable.

Amanda Gourlay is a Barrister at Tanfield Chambers