Cases - Stenau Properties v Karin Leek and others
Record details
- Name
- Stenau Properties v Karin Leek and others
- Date
- [2010]
- Citation
- UKUT 478 (LC), LRX/11/2011
- Legislation
- Keywords
- Landlord and tenant – service charges – application to dispense with consultation requirements - whether LVT entitled to assume prejudice
- Summary
-
This case concerned the meaning of ‘prejudice’ when considering whether consultation requirements under s.20ZA LTA 1985 should be dispensed with.
The respondent tenants were long leaseholders of flats in the applicant landlord’s building. The respondents made an application to Land Valuation Tribunal under section 27A of the Landlord and Tenant Act 1985 for a determination of their liability to pay the service charge expenditure claimed or estimated. While the LVT found that the service charges were justified and reasonable, it noted that it was admitted by the landlord that it had not carried out the statutory consultation required by section 20 of the Act. The LVT pointed to the fact the respondents had only had 24 hours notice of a meeting to discuss future works and a lack of consultation in correspondence passing between the parties. The LVT felt that this left it bound to find that the maximum contribution it could recover from the leaseholders was £250, unless and until the landlord succeeded in an application seeking dispensation.
This decision prompted the landlord to make a further application to the LVT under section 20ZA for a determination that the consultation requirements could be dispensed with. The LVT found that no good reason had been put forward to explain the failure to consult and that the application ought to be refused.
The applicant appealed on the ground that the LVT had needed to consider the degree to which there had been a breach of the prescribed consultation process, and the degree to which such failings as there had been were repaired subsequently before it could conclude that a ‘substantial’ failure inevitably meant that the leaseholders ‘must have been prejudiced.’
The appeal was dismissed. Although the LVT did not set out explicitly what the prejudice to the respondent was the issue of prejudice was plainly considered by the LVT. In line with Daejan, the purpose of the consultation provisions was not to create ‘an obstacle race’ but to give the tenants confidence in the decisions that are reached and leave them feeling as comfortable as they can be with the service charges that are likely to flow from those decisions.
There was no tension between the conclusion that the curtailment of the consultation itself amounted to significant prejudice and the observations in Eltham and Grafton that it was important to find that there should have been prejudice to the tenants.
Where there has been a minor breach of procedure it will be important for a tribunal to find evidence that respondents were prejudiced or disadvantaged. Where the breach has been substantial it may be reasonable to assume prejudice. The LVT in this case was entitled to find that the breach was so substantial that prejudice must be taken to have flowed from it, even though there was no evidence of any work that would have been done differently if the consultation had been carried out properly.
Therefore, it is not necessary to show exactly what prejudice has been caused by a failure to carry out the s.20 consultation procedure. The failure to carry the procedure itself may provide evidence that sufficient prejudice has been caused.