In the matter of Marlborough Park Services Ltd v Micha Leitner (2018) UKUT 230 (LC) His Honour Judge Stuart Bridge, sitting in the Upper Tribunal (Lands Chambers), provided guidance as to when previously uncontested service charges may be challenged.
A Tenant sought a determination of the reasonableness of 10 years’ worth of service charges. The Landlord had, unsuccessfully, argued before the First Tier Tribunal that the scope of the claim should be restricted because, pursuant to s.27A Landlord and Tenant Act 1985, they had obtained judgment in default against the tenant in respect of some of the older charges (a final determination by the Court) and the Tenant had in effect accepted the charges by paying them and not registering a complaint for many years. The First Tier Tribunal held that there was no express or implied admission of the charges and did not limit the scope of the claim. The Landlord appealed.
The appeal was, for the most part, successful. His Honour Judge Bridge held that, in so far as the default judgments related to service charges which had already been certified, the Tenant’s application should have been struck out and a robust approach was needed to such challenges whether or not the judgment of the County Court was entered in default or following contested proceedings. In relation to the Landlord’s argument that some of the older charges should be viewed as having been accepted, the Judge also allowed the appeal in part, commenting that:
“In my judgment, the FTT erred in law in failing to recognise the significance of the payment of service charge without protest over a period of time long before the application to the FTT was made, the issue of proceedings in the county court to enforce payment of subsequent amounts of service charge and the entry of default judgments in favour of the lessor.”
The impact of this decision may go beyond property tribunal cases: s.27A(5) Landlord and Tenant 1985 provides that “the tenant is not to be taken to have agreed or admitted any matter by reason only of having made any payment”. However, this decision supports the view that, when making payment under protest, the protest should not be delayed.