Daejan Investments Ltd v Benson and Others: SC 6 Mar 2013

Daejan owned the freehold of a block of apartments, managing it through an agency. The tenants were members of a resident’s association. The landlord wished to carry out works, but failed to complete the consultation requirements. The court was asked as to the extent of the flexibility given to a Leasehold Valuation Tribunal to dispense with those requirements. The LVT and Upper Tribunal had found the failure serious and prejudicial to the tenants, and had each declined to allow the claim in full.
Held: (Majority; Lord Hope and Lord Wilson dissenting) The landlord’s appeal was allowed, but on terms limiting the tenants’ aggregate liabilities.
The effective issue was whether the tenants had suffered any prejudice. Had the landlords fulfilled the procedure, the result would have been the same. The purpose of the Regulations was to ensure that tenants were not asked to pay more than was appropriate. The consultation procedure and transaprency were not ends in themselves. Nor was it appropriate to look at whether the failure was serious or minor save as far as that created prejudice to the tenants.
The discretion given to the LVT included a power to attach conditions to its exercise in favour of the landlord whether as to costs or otherwise, and such conditions may be used to remedy any prejudice to the tenants.
Lord Neuberger, President, Lord Hope, Deputy President, Lord Clarke, Lord Wilson, Lord Sumption
UKSC 2011/0057, [2013] UKSC 14, [2013] 2 All ER 375, [2013] 1 WLR 854, [2013] L andTR 17, [2013] HLR 21, [2013] WLR(D) 94, [2013] RVR 164, [2013] 11 EG 80, [2013] 2 P andCR 2, [2013] 2 EGLR 45
SC Summary, SC, Bailii, WLRD
Landlord and Tenant Act 1985, Commonhold and Leasehold Reform Act 2002, Service Charges (Consultation requirements) (England) Regulations 2003
England and Wales
At UTLCDaejan Investments Ltd v Benson and Others UTLC 27-Nov-2009
UTLC LANDLORD AND TENANT ACT – service charges – consultation requirements for qualifying works – failure at stage 2 to provide summary of observations received during stage 1 consultation period and responses to . .
Appeal fromDaejan Investments Ltd v Benson and Others CA 28-Jan-2011
The landlord had set out to refurbish the building occupied by the defendant tenants. They began a consultation process for the repairs, but failed to complete it, and the tenants objected. The landlords now appealed against rejection of their . .
CitedPaddington Basin Developments Ltd and Others v West End Quay Estate Management Ltd and Another ChD 20-Apr-2010
The parties disputed whether a particular arrangement was covered by and subject to the 2003 Regulations.
Lewison J said: ‘[T] here are two separate strands to the policy underlying the regulation of service charges. Parliament gave two types . .
CitedHoward v Fanshawe 29-Jun-1895
In equity a proviso for re-entry in a lease is to be treated as a security for the payment of the rent.
A tenant applying for relief from forfeiture will normally be required to pay the lessor’s costs of the forfeiture proceedings, save in so . .
CitedEgerton v Jones CA 1939
A mortgagee of a leasehold interest claimed that he should have been given notice of a section 146 notice served on the lessee.
Held: A mortgagee by subdemise is always at the risk of a lessor obtaining re-entry for breach of covenant without . .
CitedFactors (Sundries) Ltd v Miller CA 1952
The tenant seeking and being granted forfeiture was legally aided and the court was precluded by statute from making an order for costs against him.
Held: There was nonetheless jurisdiction to require him to pay the landlord’s costs as a . .
Cited30-40 Grafton Way – Camden : London LVT 30-Oct-2006
Service Charges . .
CitedCamden v Leaseholders of Flats on Grafton Way LT 30-Jun-2008
LT LANDLORD AND TENANT – service charges – consultation requirements for qualifying works – failure to serve notice – application for dispensation – financial consequences for landlord – whether relevant – . .
CitedCart v The Upper Tribunal SC 21-Jun-2011
Limitations to Judicial Reviw of Upper Tribunal
Three claimants sought to challenge decisions of various Upper Tribunals by way of judicial review. In each case the request for judicial review had been first refused on the basis that having been explicitly designated as higher courts, the proper . .
CitedRavat v Halliburton Manufacturing and Services Ltd SC 8-Feb-2012
The respondent was employed by the appellant. He was resident in GB, and was based here, but much work was overseas. At the time of his dismissal he was working in Libya. The company denied that UK law applied. He alleged unfair dismissal.
Updated: 15 October 2021; Ref: scu.471358