Cases - Phillips and another v Francis and another
Record details
- Name
- Phillips and another v Francis and another
- Date
- [2014]
- Citation
- EWCA 1395
- Legislation
- Keywords
- Double recovery of costs for services – Qualifying works – repairs – Landlord and Tenant Act 1985, section 18, section 19, section 20, section 20ZA section 30, schedule 3 para. 6, schedule 3 para. 8
- Summary
-
The appellant lessors appealed against the decision of the court below allowing an appeal brought by the respondent long lessees against a ruling permitting the appellant to recover through the service charge provision of the leases the cost of improvement works carried out to the holiday site.
By virtue of the service charge provisions in the leases, the appellant sought reimbursement from the respondents for discrete pieces of improvement works carried out in the service charge years 2008 to 2009. Taken separately, none of these works would have triggered the consultation requirements necessitated by section 20 of the Landlord and Tenant Act 1985, (the Act). The respondents sought a declaration that that the costs of the works should be aggregated. Further, as there had been no section 20 consultation, in light of the aggregated value of the works in each year being greater than the limit of £250 imposed under section 20 of the Act, the appellant was limited to recovering only £250 per lessee.
At first instance the appellant won. The respondents then succeeded on appeal to the High Court. The Chancellor found that the works carried out were qualifying works within the meaning of the statute. Further, the value of the works should be aggregated when calculating the lessees’ contributions and applying the limit (‘the aggregating approach’). As the contributions were paid annually the limit was applicable to the qualifying works carried out in that year.
On appeal, the Court of Appeal had to decide the proper meaning of ‘qualifying works’ under section 20 of the Act. The Court held that the aggregating approach was not a sensible approach. It gave rise to serious practical problems which Parliament could not have intended. The ‘sets approach’, namely where section 20 of the Act applied by reference to individual sets of works, was far more sensible. Section 20 of the Act should not be interpreted so as to mean that the limit for contributions (£250) related to an annual threshold. Rather, it related to an individual tenant’s exposure for any given batch of qualifying works. The real protection afforded to tenants was under section 19 of the Act; namely, that all service charges must be reasonable and reasonably incurred.