Ilag’s case against a charge for a leaseholders’ association was heard last week. Islington Council put forward a case which could leave us facing even higher charges for pyschoanalysts, jugglers and masseurs.
Here we have written to Mr Anthony Essien, chief executive of the Leasehold Advisory Service, setting out the implications if the Leasehold Valuation Tribunal approves the charge.
Dear Anthony,
Before your elevation to the top job, you kindly wrote for me an opinion about the potential legality of a charge for a leaseholders’ association, proposed by the London Borough of Islington (LBI).
An LVT case on the issue was heard this week (Thursday, 29 November, 2007). Our case was built purely on the construction of the lease rather than the reasonableness of the charge.
Our counsel was Mr Francis Davey. He put forward broadly your original position: the charge couldn’t be made because it wasn’t in the lease. Mr Davey’s skeleton argument is on attachment here. (davey-skeleton.doc)
I think it is of interest to those involved in leasehold issues to be aware of the argument advanced by LBI, which was put by Mr Christopher Baker, senior counsel with Arden.
It was his view that the management element of LBI’s leases had to be interpreted in terms of the 1985 Housing Act rather than the 1987 Landlord and Tenant Act. This is because, he asserted, they were right-to-buy leases which were granted under the 1985 Housing Act.
The Housing Act confers certain undefined “management” powers to an authority. Mr Baker referenced various precedents in case law – set out in the accompanying skeleton arguments, also on attachment (bakerskeleton2.doc) – for stretching this definition of the management element of our leases to include what he termed a “tenant welfare” function uniquely present in a lease statutorily controlled by the Act
By this means, he was able to circumvent that key feature of a private lease set out it in case precedents, mentioned in your opinion, that it is to be restrictively interpreted.
A charge for a leaseholders’ association could be legitimate in that the organisation’s tenant welfare functions could be considered part of the authority’s management of its housing estate.
Mr Baker would therefore claim that leases of social sector leaseholders are different from those in the private sector which are governed by the 1987 Landlord and Tenant Act.
I would submit that a social sector lease would be weaker too because they can be less restrictively interpreted than those of the private sector.
Although I recognise an LVT decision will not be binding, and tribunals regularly make perverse and inconsistent judgments, the move would appear to give social sector landlords the possibility of developing myriad tenant-welfare management functions which could be charged to social sector leaseholders.
(Are we now to be charged too for post-traumatic stress counselling following the receipt of large bills for major works? There seems to be good case for jugglers, masseurs and just about any damn service you could care to think of.)
The chair of the tribunal, a Mrs JSL Goulden, a solicitor with almost 40 years of experience of Landlord and Tenant Law, was aware of the potential liability being created.
She expressed some incredulity at the proposed services to be offered by the proposed leaseholders’ association and therefore by implication raised the possibility that there could be a subsequent challenge to the proposed charge on the grounds of reasonableness.
But our LVT claim was made on the basis of the construction of the lease rather than the reasonableness of charges.
And she appeared uncertain about her view on the construction of the lease given that she mentioned she would be speaking to the President of the LVT, Mrs Siobahn McGrath, about the issue. Ms McGrath is incidentally a door tenant at Arden.
I thought you should be aware too of what has taken place and the ramifications for the advice offered by your advisers to social sector leaseholders if the LVT endorses Mr Baker’s argument.
The LVT’s decision will be issued by 11 Janaury, 2008
Yours sincerely Michael Read 0207 609 3289
TOTALLY INTERESTING FACTS:
Mr Baker is though to have been paid over £10,000 by Islington Council for his 45-minute oration at the tribunal. Ilag member Mr Owen Hart, an expert in these matters, noted that this regal incarnation of the barristering business had had a “facial”. This impressed Ilag’s Mr Michael Read if only he understood what that meant and why he should care.
Mr Read, being more of a body-language strategist, was deeply worried by the effect Mr Baker was having on Mrs Goulden. He could see that this well-preserved 60-year-old would be sorely tempted by the silky charms of matinee man. Dewy-eyed at times, remembrance of romantic times past, no doubt, but she kept control. Just.
Mr Baker’s payout takes to over £100,000 the amount the London Borough of Islington has spent on setting up the Islington Leaseholders Association. There’s a bill of £70,000 for the two ballots, another £15,000 for Maloney’s consultancy services as well as officer time. And there’s a supreme irony that these costs are going to be loaded on the Housing Revenue Account, which means that the poor tenants, 70% on benefits and therefore close to the breadline, will be stumping up for this shebang.
Ms Gina Clarke, deputy director of legal services at LBI, impressed everyone at the tribunal as a total duffer. She didn’t know the title of her boss, she doesn’t understand emails, and to top at all, she doesn’t understand how to turn off her mobile phone, especially when its loaded with the most inane ringtone known to man. She got a Force 9 bollocking off Mrs Goulden for her lack of courtesy on that issue.
Ilag enjoyed that bit immensely. Schadenfreude is delightful even more so when it is a case of “there for the grace of God go I”.
Mr Nigel Freeman, who manages the Home Ownership Services arm of HFI, made a fleeting appearance in the witness box. To someone who has never been there that’s a tough number and he has our sympathy because he’s a sort of regular fella. But we knew from the moment he opened his mouth that he’d never written his witness statement. ”It’s a sort of partnership thingy,” referring to the ILA, gave it all away.
HUBRIS FOLLOWED BY NEMESIS:
The Gods might still intervene on our side. Mr Baker was the counsel appointed by the council to defend the chief executive of Islington Council, Helen Bailey, at the Ethical Standards Boart, when she was in the dock with six Liberal-Democrat politicians in early 2006.
A complaint had been made that proper procedures had not been followed in her appointment. It wasn’t that she couldn’t read or write. Bailey passed that test. Nor was it the fact that the beach of Montserrat on the end of a mobile phone seemed to be an odd place for her to face an initial screening interview for the top job.
To cut a long story short, they were all cleared. Three months later, however, the electorate had their revenge when the Lib-Dem leader Steve Hitchins and his deputy Bridget Fox got the boot at the May election.
People’s justice, you might say.
Written by Robert Charlton
