Adriatic Land 5 Limited v The Long Leaseholders at Hippersley Point
Decision date: 13 November 2023
Neutral citation: [2023] UKUT 271 (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 whether the First-tier Tribunal lawfully imposed a condition preventing the landlord from recovering its costs of a dispensation application from long leaseholders, and whether paragraph 9 of Schedule 8 to the Building Safety Act 2022 bars recovery of those costs from qualifying leaseholders. The Upper Tribunal held the FTT’s Costs Condition was unlawful for procedural unfairness and substantive error, set that part of the decision aside, granted dispensation unconditionally, and recorded that paragraph 9 (from its commencement on 28 June 2022) prevents qualifying leaseholders being charged for such qualifying legal or professional costs. Some related s.20C applications to the FTT remain for determination.
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 impose a condition affecting parties’ rights (for example a costs condition) without giving the affected parties an opportunity to make submissions; failure to do so vitiates the exercise of discretion. Further, paragraph 9 of Schedule 8 to the Building Safety Act 2022, read with paragraph 10, excludes from payable service charges legal or professional costs “relating to the liability (or potential liability) … incurred as a result of a relevant defect,” and operates from its commencement to prevent recovery from qualifying leaseholders.
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 indicated that the analogy with relief from forfeiture (as discussed in Daejan) does not support a blanket rule precluding recovery of dispensation costs and that each dispensation case requires a fact‑sensitive exercise of discretion. It also noted that explanatory material and Part 5 of the BSA support treating Schedule 8 as a self-contained code aimed at protecting leaseholders from historical building‑safety costs.