Costs in the first-tier tribunal
The recent case of Matier v Christchurch Gardens (Epsom) Limited is one of the first decisions on what constitutes unreasonable behaviour since Willow Court Management Company (1985) Limited v Alexander  UKUT 0290 (LC). It is clear that the threshold remains very high but costs will be awarded in clear cases of unreasonable conduct. See box 1 for details of the costs jurisdiction and box 2 for the Willow Guidance.
The Appellant was a leaseholder of a flat in Epsom. The Respondent was the freeholder of the Estate. The original dispute between the parties related to arrears of service charges owed by the Appellant and the First-Tier Tribunal (Property Chamber)(“the FTT”) found in favour of the Respondent on every issue before it.
The Respondent sought recovery of its costs on the basis that the Appellant acted unreasonably in defending the proceedings and that his conduct during the proceedings was unreasonable (which resulted in increased costs for the Respondent).
The behaviour complained of included:
- Repetitive and unproductive correspondence sent by the Appellant to the Respondent;
- The Appellant objected to the reorganisation of his materials for inclusion in a trial bundle in accordance with the directions of the FTT. He also alleged that documents had been deliberately omitted from the hearing bundle resulting in lengthy correspondence and time spent at the hearing dealing with this issue.
- The written materials which the Appellant relied upon, and his oral submissions at the hearing, were, as the FTT described, them “repetitive and prolix”.
The FTT rejected the suggestion that the Appellant had acted unreasonably in defending the proceedings, and suggested such an argument would only succeed in very rare cases. However, the FTT agreed that the Appellant had acted unreasonably and that certain costs incurred by the Respondent were only necessary because of the Appellant’s unreasonable conduct during the proceedings, awarding the costs arising from the unreasonable conduct to the Respondent.
Upper Tribunal Decision
The Upper Tribunal (Lands Chamber)(“the UT”) was satisfied that the FTT was entitled to regard the Appellant’s behaviour regarding the hearing bundles as unreasonable. Whilst it noted that he was a litigant in person, he conducted himself without regard or consideration for the FTT’s Directions, and he responded in “an intemperate and unjustifiably aggressive manner”. The UT was therefore satisfied that the conduct passed the threshold required to justify an order for costs in relation to the hearing bundles.
With regards to the prolixity of the Appellant’s submissions, the UT noted the volume of papers submitted and agreed that they were unfocused. The UT noted that the FTT took into account that the Appellant was a litigant in person, but agreed that the voluminous submissions “exceeded by a considerable distance what was reasonable and proportionate to deal with the six discrete issues raised in the proceedings”.
There was concern in some quarters that, following the decision in Willow, it would prove very difficult to get an award of costs against a litigant in person. Unless the risk of an adverse costs award is a real risk then litigants will have little incentive to adhere to the directions of the tribunal and act reasonably to keep costs down. It will come as a relief to some that the FTT is prepared to award costs in appropriate cases and this decision can be brought to the attention of litigants to persuade them to co-operate in the preparation of the case for trial.
David Haines and Rachel Carfrae of Charles Russell Speechlys acted for the successful Respondent.
FFT's Costs Jurisdiction
The FTT has the power to award costs to a party in the circumstances set out in Rule 13(1) of The Tribunal Procedure (First-Tier Tribunal) (Property Chamber) Rules 2013. That Rule provides that
“The Tribunal may make an order in respect of costs only —
(a) under section 29(4) of the 2007 Act (wasted costs) and the costs incurred in applying for such costs;
(b) if a person has acted unreasonably in bringing, defending or conducting proceedings in —
(i) an agricultural land and drainage case,
(ii) a residential property case, or
(iii) a leasehold case; or
(c) in a land registration case”
“unreasonable” conduct includes conduct which is vexatious, and designed to harass the other side rather than advance the resolution of the case. It is not enough that the conduct leads in the event to an unsuccessful outcome.”
The UT has now established a three stage test for the FTT to apply when considering an application for costs:
- Has the party acted unreasonably? The UT noted that “If there is no reasonable explanation for the conduct complained of, the behaviour will properly be adjudged to be unreasonable, and the threshold for the making of an order will have been crossed.”
- Should an order for costs be made? Even if the party has acted unreasonably, the FTT still has the discretion to decide whether to make a costs order.
- If an order is to be made, what should it be? Importantly the FTT noted that this need not be confined to costs “attributable to the unreasonable conduct”.
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