Aviva Investors Ground Rent GP Limited and another (Respondents) v Williams and others (Appellants)

Описание: UKSC 2021/0059

On appeal from: [2021] EWCA Civ 21

This appeal concerns several flats in Southsea, which form part of a mixed-use commercial and residential block. The Appellants are the individual leaseholders of 38 flats in the building. The Respondent are the Appellants' landlords and own the freehold of the block and wider estate. Each lease provides that the tenant is to pay a service charge comprised of a share of three types of cost of maintaining the building and wider estate - insurance, building services and estate services costs. The share of each type of costs is set at a fixed percentage or 'such part as the Landlord may otherwise reasonably determine' (the "Reapportionment Provisions")

For some years, the Respondent has been demanding service charges in different proportions from those percentages stated in the leases, in reliance on the Reapportionment Provisions. The Appellants challenged that practice. They argued that section 27A(6) of the Landlord and Tenant Act 1985 meant that the Reapportionment Provisions are void. The First-tier Tribunal ("FTT") rejected the leaseholders' argument that the Reapportionment Provisions were rendered void. It considered that the landlords’ re-apportionments were reasonable and so should be enforced.

On appeal by the leaseholders the Upper Tribunal reversed the FTT's decision and held that section 27A(6) rendered the Reapportionment Provisions void. Therefore, neither the landlord nor the FTT had the power to vary the percentages set out in the leases unless the leaseholders agreed.

The Court of Appeal allowed the landlords' appeal on the basis that the effect of Section 27A(6) was to transfer the power to vary the percentages from the landlord to the FTT. It therefore restored the decision of the FTT which had considered the re-apportionment reasonable and so should be enforced. The leaseholders now appeal to the Supreme Court.

The Supreme Court unanimously dismisses the leaseholders’ appeal and, for reasons different to those given by the Court of Appeal, approves the decision of the First-tier Tribunal that the revised apportionment is valid. Lord Briggs gives the only judgment, with which the other members of the Court agree.

More information is available on our website: UKSC 2021/0059