FAIRHOLD MERCURY LIMITED v MERRYFIELD RTM COMPANY LIMITED

Decision date: 11 September 2012

Neutral citation: [2012] UKUT 311 (LC)

Overall AI summary confidence: high

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Short overview

This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.

AI confidence in this short overview: high

This appeal concerned whether two sums charged by the freeholder’s managing agent for preparing counter-notices to RTM claims were lawfully payable and recoverable under s.88 of the Commonhold and Leasehold Reform Act 2002. The Upper Tribunal held the Leasehold Valuation Tribunal breached natural justice by raising, of its own motion, a legal objection about the lawfulness of the invoices without giving the appellant an opportunity to respond. The UT also concluded the LVT was wrong on the law: the charges were payable under the contract with the agent and the involvement of an employed solicitor did not render them unlawful, so the claimed amounts (£650.50 and £216.00) were payable.

Ratio decidendi

This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.

AI confidence in this ratio decidendi summary: high

A tribunal should not, of its own motion, decide a point of law against a party without giving that party an opportunity to address the point (natural justice). Charges invoiced by a corporate managing agent for work carried out by an employed solicitor are not automatically unlawful; contractual liability to the agent and reasonableness under s.88 are material to recoverability.

Obiter dicta

This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.

AI confidence in this obiter dicta summary: medium

The UT indicated that, absent specific evidence of breaches of solicitors’ professional regulation or reserved-activity prohibitions, a tribunal should not assume such breaches make a corporate agent’s charges unlawful, and that work performed by an employed solicitor does not automatically engage restraints that prevent the employer from billing for the services.

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