Rana vs Maitland Court Limited

This case concerned an appeal by leaseholders Khalid Qayyum Rana and Rubanashafi Rana against Maitland Court Limited regarding administration charges for litigation costs.

TLDR:

• Rana appealed against an order of the First-tier Tribunal (FTT) concerning administration charges.
• The FTT had discretion under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.
• The Upper Tribunal set aside the FTT's decision and extinguished the appellants' liability for litigation costs.

The appellants, Khalid Qayyum Rana and Rubanashafi Rana, are leaseholders of a flat in Maitland Court, London. The respondent, Maitland Court Limited, is the management company entitled to demand service charges under the lease. A dispute arose over the service charges demanded by the respondent, leading to a determination by the First-tier Tribunal (FTT) on 10 April 2023.

The FTT initially found that £1,063.97 was payable by the appellants, out of an amount of £1,909 in dispute. The FTT declined to make an order under section 20C of the Landlord and Tenant Act 1985, reasoning that the respondent was the more successful party. On 9 May 2023, the appellants applied for permission to appeal and for an order under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

The FTT reviewed its decision and on 31 August 2023, amended it to accept that £804.23 was not payable. It made an order under paragraph 5A, limiting the respondent's recoverable administration charges to half of its litigation costs. The appellants appealed this decision, arguing that none or only 5% of the respondent's costs should be recoverable.

Upper Tribunal Judge Elizabeth Cooke considered the appeal. She noted that the FTT's decision was discretionary and typically not subject to appeal unless flawed in principle. The judge found that the FTT had failed to consider relevant concessions made by the respondent before the hearing, which significantly reduced the amount in dispute.

Judge Cooke concluded that the FTT's decision was flawed as it did not account for the substantial reductions made by the respondent. She set aside the FTT's decision and substituted it with an order extinguishing the appellants' liability to pay the respondent's litigation costs by way of an administration charge.

Legal representatives: Ms. Diane Dolivoux for the appellants, Wagner & Co & Co Solicitors for the respondent.

Judicial Panel: Upper Tribunal Judge Elizabeth Cooke

Case Citation Reference: [2024] UKUT 122 (LC)