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Avon Ground Rents Ltd v Child [2018] UKUT 204 (LC) and the idea of ‘double hatting’

Although, by virtue of S.5 of the County Courts Act 1983, all First-tier Tribunal (Property Chamber) (“FTT”) judges are deemed to be County Court Judges there are numerous occasions during which a claim may be transferred between the two jurisdictions. A good example of this is when you require a money judgment in a service charge arrears claim, but it gets transferred to the FTT to determine whether the charges are reasonable but traditionally they have limited powers in relation to contractual costs so the matter has to be “bounced back” to the court to determine those.

A suggested solution to this problem was introduced by the 2015 Civil Justice Council whereby a pilot scheme was introduced to allow FTT Judges and County Court judges to effectively wear two ‘hats’. They would be able to retain specific cases that otherwise would need to be transferred between the two, ultimately allowing them to come to a resolution in one forum.

The idea of ‘double-hatting’ is to simplify the process, reduce time and costs, and provide consistency in the decisions given.

The pilot scheme was recently tested in the case of Avon Ground Rents Ltd v Child [2018] UKUT 204 (LC)

 Summary of the Facts

 Mrs Childs was issued a service charge demand of £1,698 together with costs and court fees. £1,355.16 of this amount represented administration charges for the demand letters that were issued.

Mrs Childs paid the sum of £343.02 which was the outstanding service charge but argued that the administrative charges were not payable.

The County Court transferred the case to the FTT where the judge advised he wanted to use powers as both FTT judge and County Court judge to determine the dispute.

Avon Ground Rents argued that their County Court costs would not be within the jurisdiction of the FTT and that they wanted a paper judgment. The judge rejected both of these points.

The decision

The FTT decided that the administration charges were payable but reduced them to £473.16. They also determined that the County Court costs could be considered ‘contractually as administration charges’ at a reduced amount of £2,208.

The application to appeal to the upper tribunal was initially rejected but then granted by the upper tribunal.

Upper Tribunal Appeal

The Upper Tribunal granted the appeal on the basis that the FTT had no right to determine the costs in the same way as the County Court.  The statutory powers given to the FTT could not be enhanced by another body, i.e. the County Court to make themselves more powerful and increase their jurisdiction in relation to the administration charges.

The Upper Tribunal made it clear that any judge in this position should make it very clear which ‘hat’ they are wearing in relation to the different aspects of the case and the distinction remains clear throughout each role.

What does this all mean?

This case has highlighted the problems with the pilot scheme and the idea that we can allow FTT judges to wear both hats during proceedings. The decision can be summarised as follows:

  • The FTT cannot deal with issues outside its statutory authority
  • Contrary to the wording of the pilot scheme, the FTT cannot make decisions outside its own jurisdiction even if within that of the County Court. The distinction is that they can make decisions within the jurisdiction of the County Court when sitting as a County Court Judge
  • The FTT cannot take on the costs rules of the County Court and the power is limited to the FTT’s own rules
  • An FTT Judge can sit as a County Court judge to determine costs but it must be made clear that they are sitting as a County Court judge.

In order for significant improvement in determining property disputes, it seems some clarity is required as to when Judges are able to wear both ‘hats’ and how this is to be governed. This appeal casts doubt over the current pilot scheme and it can be seen that further work is required before we will see any development on the current status quo.

If you would like to know more or have any questions, please do not hesitate to contact Stacy Dawes on 0207 288 4780 or by e-mail at  Stacydawes@boltburdon.co.uk.

Alternatively, you can also contact one of our other solicitors in our Leasehold Extensions and Property Management team here.

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