Jurisdiction over leasehold issues

In some circumstances, legal proceedings issued at county court can be transferred to the First-tier Tribunal (Property Chamber) in England, or the Leasehold Valuation Tribunal in Wales.

For example it is possible for an applicant (usually a landlord) to bring a case at county court for the recovery of outstanding service charges and for that case to be transferred to the appropriate property tribunal where its expertise in leasehold matters is called upon.

Section 176A of the Commonhold and Leasehold Reform Act 2002 gives all courts the power to transfer matters to the appropriate tribunal where there are matters falling within the tribunal’s jurisdiction. This is called a transferred application.

The Commonhold and Leasehold Reform Act 2002 provides that:

“Where in any proceedings before a court there falls for determination a question falling within the jurisdiction of a leasehold valuation tribunal, the court-

• a) may by order transfer to a leasehold valuation tribunal so much of the proceedings as relate to the determination of that question, and
• b) may then dispose of all or any remaining proceedings, or adjourn the disposal of all or any remaining proceedings pending the determination of that question by the leasehold valuation tribunal, as it thinks fit.”

Scenario

A leaseholder refused to pay certain service charges they considered to be excessive.

After demanding the sums on various occasions the landlord applied to county court for recovery of the outstanding sums.

The leaseholder asks the court to transfer the matter to the appropriate tribunal as he feels the sums are not reasonable and therefore not payable. The court may also use its discretion to transfer the matter without one of the parties requesting this.

The leaseholder does not feel that this is a straightforward breach of covenant matter and while the court has the power to make a ruling on such cases it does not have the expertise to determine the reasonableness of the charges.

The court makes an order to transfer the matter to be decided by the tribunal.

The tribunal has statutory jurisdiction under section 27A of the Landlord and Tenant Act 1985 to determine the reasonableness of service charges. The tribunal hears the case.

The jurisdiction of the tribunal in a transferred application is confined to the question transferred and all related issues.

Often court orders for a transfer are expressed in general terms, but if the matter falls within the tribunal’s jurisdiction, it could be more cost-effective and timely for the parties if any subsidiary issues are dealt with by the tribunal, particularly if there is no indication that the county court intended to retain any questions.

Whether or not a case will be transferred will depend upon the complexity of the case and the benefit of the tribunal’s expertise, the likely costs saving and whether there are other pertinent issues which must remain to be determined at court.

Other legal issues can be retained by the court and by virtue of Rule 6 (3) (n) of the Tribunal Procedure (First-tier Tribunal (Property Chamber)) Rules 2013, the tribunal can use its discretion to transfer matters to another court or even back to the county court if the tribunal does not consider it has jurisdiction to deal with them, or if it considers there is a more appropriate forum for the determination of the case.

Paragraph 15 of the Practice Direction to the Civil Procedure Rule 56 requires the following to be satisfied where there is a transfer of a case:

1. Send a notice of the transfer to all parties to the claim, and
2. Send to the tribunal –
   1. The order of transfer, and
   2. All documents filed in the claim relating to the question.

Rule 28 of the Tribunal Procedure Rules is designed to keep the parties abreast of progress in the matter. It places an obligation on the tribunal to notify the parties of the date they receive notice that the matter was transferred to them and the names and known addresses of the parties to the proceedings.

After a case has been transferred, it is treated by the tribunal in the same way as a direct application and the claimant and defendant at county court become the applicant and respondent at the tribunal.

A fee will be payable upon transfer from the court to the Tribunal. Under the First-tier Tribunal (Property Chamber) Fees Order 2013 this will be “the fee due less the total amount of any fees previously paid by the applicant to the court in respect of the court proceedings.”