G & A Gorrara Ltd and others vs Kenilworth Court Block E RTM Co Ltd

This case concerned a dispute over service charges and the right to manage between G & A Gorrara Ltd and others and Kenilworth Court Block E RTM Co Ltd.

TLDR:

• G & A Gorrara Ltd and others appealed against a First-Tier Tribunal decision on service charges.
• The case involved the interpretation of the Landlord and Tenant Act 1985 and the Commonhold and Leasehold Reform Act 2002.
• The Upper Tribunal ruled on the applicability of estoppel by convention and the agreement of service charges.

The appellants, G & A Gorrara Ltd, Paola Gorrara, and Roberto Gorrara, challenged the service charges demanded by Kenilworth Court Block E RTM Co Ltd. The dispute began in 2019 when the appellants questioned the charges for several years, leading to a series of hearings and appeals.

The case primarily involved two areas of law: the right to manage under the Commonhold and Leasehold Reform Act 2002 and the regulation of variable service charges under the Landlord and Tenant Act 1985. The appellants argued that the service charges were not properly calculated and that the RTM company was not managing the estate in accordance with the law.

Kenilworth Court is a development of five blocks of flats managed as a single unit. The appellants owned a flat in Block E and questioned the service charges for the entire estate. They argued that the charges should be specific to Block E, not the entire estate.

The First-Tier Tribunal had previously ruled on preliminary issues, including the interpretation of the lease and the applicability of estoppel by convention. The appellants appealed these decisions to the Upper Tribunal.

The Upper Tribunal Judge Elizabeth Cooke reviewed the case and the relevant legal principles. The judge noted that the FTT's jurisdiction under section 27A of the Landlord and Tenant Act 1985 allowed it to determine whether service charges were payable and in what amount.

The judge found that the FTT had erred in its interpretation of section 27A(5), which states that a tenant is not to be taken to have agreed to any matter by reason only of having made any payment. The judge clarified that a series of payments alone does not indicate agreement or admission of the charges.

Regarding estoppel by convention, the judge found that the FTT had incorrectly applied the doctrine. The judge noted that estoppel by convention requires a shared assumption, communication of that assumption, reliance on it, and resulting detriment. The evidence did not support the FTT's finding that the appellants were estopped from challenging the service charges.

The Upper Tribunal allowed the appeal, setting aside the FTT's findings on both the agreement of service charges and estoppel by convention. The case was remitted to the FTT to determine the correct amount of service charges for the years in dispute.

Legal representatives: Miss Amanda Gourlay for the appellants, instructed by Paola Gorrara, solicitor; Mr Thomas Walsh for the respondent, instructed by Realty Law Ltd.

Judicial Panel: Upper Tribunal Judge Elizabeth Cooke

Case Citation Reference: [2024] UKUT 81 (LC)