It took almost three years for some long-awaited guidance to be handed down by the Upper Tribunal on rule 13 of the Tribunal Procedure (First Tier Tribunal) Property Chamber Rules 2013. It was in Willow Court Management Company (1985) Limited v Alexander [2016] UKUT 290 (LC) that the Upper Tribunal considered, for the first time, how the Tribunal should exercise its discretion to award costs under Rule 13 where a party has acted unreasonably in bringing, defending or conducting proceedings.

 

The Tribunal’s decision in Willow Court

In Willow Court, the Upper Tribunal held that when exercising any power under the 2013 Rules, including the power to award Rule 13 costs, a tribunal had to deal with cases justly and fairly.

When asking themselves whether a reasonable person in the position of the party would have conducted themselves in the manner complained of, a three-stage assessment should be followed:

  1. Firstly, the tribunal must assess whether the conduct complained of is objectively “unreasonable”;
  2. Secondly, if the conduct meets the “unreasonable test” threshold, the tribunal must consider whether (in exercising its discretion and taking account of all relevant factors) it is appropriate to make a costs order;
  3. Thirdly, if the tribunal consider that it is appropriate to award costs, they must, as a further exercise of discretion, consider the form and quantum of the costs award.

It was stressed by the Upper Tribunal that Rule 13 costs should be reserved for the clearest cases, and that in every case the burden of demonstrating that the other party’s conduct has been unreasonable lies with the party claiming costs.

 

Costs orders where litigant in person acted inconsistently with directions

The issue of Rule 13 costs was considered by the tribunal again in Matier v Christchurch Gardens (Epsom) Limited [2017] UKUT 56 (LC).

 

What happened in the First-Tier Tribunal?

As is often the case, the lessee involved in these proceedings was unrepresented.  The proceedings concerned the payment of service charge.  The first-tier tribunal determined the payment of a service charge, and then proceeded to make a costs order against the lessee under Rule 13 on the basis that the leaseholder had acted unreasonably in conducting proceedings by:

  • providing unnecessarily lengthy written submissions; and
  • vigorously objecting to the manner in which his material had been edited in the hearing bundle.

The lessee appealed that decision.

 

Decision of the Upper Tribunal

The Upper Tribunal upheld the costs order.

The Upper Tribunal, in making its decision, was heavily influenced by the lessee’s failure to follow the directions issued by the tribunal about the preparation of submissions and the hearing bundle.

The Upper Tribunal:

  1. held the lessee’s long written submissions were unreasonable because they considerably exceeded what was reasonable and proportionate to deal with the issues; and
  2. took into account that the lessee continued making these objections in an aggressive manner even after it was pointed out to him that his proposed arrangement of the bundle was inconsistent with the tribunal’s directions.

 

Commentary

Although it was stressed by the Upper Tribunal in this matter that similar cases will turn on their facts, and that where a litigant in person acts in good faith in their defence (even if misconceived) this would rarely amount to unreasonable conduct, it is still a powerful reminder to litigants that acting inconsistently with tribunal directions may lead to an adverse costs order being made against them. The moral of the story? Comply with directions!