MERCIA INVESTMENT PROPERTIES LTD v MARGARET NORTHWAY
Decision date: 20 November 2012
Neutral citation: [2012] UKUT 419 (LC)
Overall AI summary confidence: high
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 an LVT decision finding a tenant had breached a lease covenant but waiving the breach when the tenant presented a cheque, and nevertheless ordering the landlord to pay the tenant's costs. The UT allowed the landlord's appeal on costs, holding the LVT had no lawful basis to make an effectively unlimited costs award because it made no finding under paragraph 10(2) Schedule 12 of the 2002 Act and failed to apply the statutory £500 cap in paragraph 10(3)(a).
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 may order costs under paragraph 10 Schedule 12 only if it makes a finding within the specific grounds in paragraph 10(2) (for example, that an application was dismissed under the regulations or that the applicant's conduct was vexatious/unreasonable). Absent such a finding, the tribunal lacks power to award costs; and any award under paragraph 10 is subject to the statutory cap in paragraph 10(3)(a) (here £500) unless a higher amount is prescribed by procedure regulations.
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 judgment noted that conduct described as "not far from" being vexatious does not meet the statutory threshold for costs under paragraph 10(2). It also observed that the timing of a tenant presenting a cheque before proceedings can affect whether a breach is treated as waived and thus whether proceedings are justified.