Under Section 27A of the Landlord and Tenant Act 1985, the tribunal hold jurisdiction to determine whether a service charge is payable and, if it is, as to:

  1. The person by whom it is payable.
  2. The person to whom it is payable.
  3. The amount which is payable.
  4. The date at or by which it is payable; and
  5. The manner in which it is payable.

The First Tier Tribunal (Property Chamber) does not itself have enforcement powers, but its decisions can potentially be enforced through court mechanisms, notably pursuant to Section 176C of the Commonhold and Leasehold Reform Act 2002 or Section 27 of the Tribunals, Courts and Enforcement Act 2007.

But can a determination of the FTT on an application under Section 27A of the Landlord and Tenant Act 1985 being enforced in such a way?  This was the matter under consideration by the Court of Appeal in Termhouse (Clarendon Court) Management Limited v Al-Balhaa.

Background

In September 2017, an application was made to the FTT under Section 27A of the Landlord and Tenant Act 1985 by the lessee in relation to service charges for the periods 2013 to 2017.  Matters were determined by the tribunal, and the tribunal’s decision was handed down in May 2018.

In August 2018, Termhouse applied to the County Court for the FTT’s decision to be enforced pursuant to CPR70.5.  In September 2018, a “proper officer sitting at the County Court at Willesden” ordered that Termhouse may “enforce the award in this court” and specified the “amount enforceable” as £9,316.04.  Then in October 2018, the lessee applied for the order to be set aside.  The lessee’s application was dismissed.  The lessee appealed the dismissal of his application, and his appeal was unsuccessful.  Matters therefore found their way to the Court of Appeal on appeal.

Legal framework

The tribunal hold jurisdiction to determine whether a service charge is payable, and if it is as to:

  1. The person by whom it is payable.
  2. The person to whom it is payable.
  3. The amount which is payable.
  4. The date at or by which it is payable; and
  5. The manner in which it is payable.

By Section 176A of the Commonhold and Leasehold Reform Act 2002, where court proceedings raised a question which the FTT would have jurisdiction to determine under, amongst others, the 1985 Act, the court may transfer to the FTT “so much of the proceedings as relate to the determination of that question”.  And, by Section 176A(3), once the FTT “has determined the question, the court may give effect to the determination in an order of the court”.

By Section 176C of the 2002 Act

Any decision of the First Tier Tribunal or Upper Tribunal under or in connection with an enactment specified in Section 176A(2), other than a decision ordering the payment of a sum (as to which see Section 27 (Enforcement) of the Tribunals, Courts and Enforcement Act 2007), is to be enforceable with the permission of a County Court in the same was as orders of such a court”.

Section 27 of the 2007 Act states in sub-section (1)

A sum payable in pursuance of a decision of the First Tier Tribunal or Upper Tribunal made in England and Wales

    • Shall be recoverable as if it were payable under an order of a County Court in England and Wales;
    • Shall be recoverable as if it were payable under an order of the High Court in England and Wales.

Finally, CPR Part 70 and one of the practice directions supplementing it is relevant.  CPR 70.5 is headed “Enforcement of Decisions of Bodies other than the High Court and the County Court and Comprises Enforceable by Enactment”.

Issues on Appeal

The central issue for the Court of Appeal was whether the FTT’s decision was susceptible to enforcement in the County Court.

Decision on Appeal

Section 176C of the 2002 Act allows a decision of the FTT other than one ordering the payment of a sum to be enforced “in the same was as orders of [the County Court]”.

The question for the Court of Appeal, therefore, was whether a decision of the FTT on an application under Section 27A of the 1985 Act was just declaratory.  If so, then an FTT decision which is no more than declaratory is incapable of enforcement, and Section 176C cannot be invoked in such a case.

The Court of Appeal held that the FTT’s decision is declaratory in nature.  On a Section 27A determination, the FTT determines whether a service charge is “payable”.  Because it is declaratory only, it is not susceptible to enforcement action pursuant to either Section 176C of the 2002 Act, or Section 27 of the 2007 Act.

The terms of Section 27A made it impossible to equate “payable” with “due”.  The FTT’s role was to decide what service charges can properly be charged, rather than the amount owed.  In this case, the FTT neither ordered the lessee to make a payment, nor required him to do or refrain from doing something.  The FTT Section 27A determination was declaratory in nature only.

Commentary

We now have authority from the Court of Appeal that a Section 27A determination is declaratory only, and cannot be enforced in the County Court.

In these circumstances, and in order to bring about payment, new proceedings in the County Court will need to be brought, which will then be binding on the parties.  A fresh money claim in the County Court for the sum owed is required …