Mohammed Naeem & Anor v Abacona Investments Limited

This is an appeal from a decision of the First-tier Tribunal about service charges payable in respect of leasehold property. The dispute was about charges payable for major works carried out to the exterior of the building in 2019 which the appellant leaseholders, Mr Mohammed Naeem and Mr Russell Smith (who bought their properties in 2013 and 2016 respectively, say could have been done much more cheaply; the respondent landlord, Abacona Investments Limited, disagrees. We explain below why permission was given to appeal on the basis of what looks at first sight like an issue of fact. Neither party was legally represented; the appellants presented their own case, and the respondent was represented by its company secretary Ms Lyndsey Cannon-Leach, and we are grateful to them all for their assistance.

Endwood Court is a nine-storey block of 36 flats in Birmingham, built in the 1960s. The two appellants each hold a long lease of a flat in the building. The respondent bought the freehold in the 1970s. The long leases require the landlord to maintain the building and to decorate the exterior, subject to the usual requirement for the leaseholders to pay a service charge.

We are told that in 2020 a right to manage company was formed and has acquired the right to manage the building, so that for the future the leaseholders’ own company has responsibility for external redecoration, maintenance and other works. However, there remains dispute about some of the charges demanded by the landlord before the RTM company took over.

In 2024 the appellants made an application to the FTT for determinations in its jurisdiction under section 27A of the Landlord and Tenant Act 1985 to decide whether service charges are payable and, if so, in what amount, to whom and so on. Section 19 of the 1985 Act provides that service charges are payable only if the relevant cost was reasonably incurred. The application referred to charges for external redecoration and other work carried out in 2013, 2014, 2018 and 201, but in October 2024 the FTT determined that only the 2019 charges were in dispute and struck out the application as regards the earlier charges.

The cost incurred by the landlord for external redecoration in 2019, for half of the building, was £124,759.94. The landlord followed the consultation procedure required pursuant to section 20 of the Landlord and Tenant Act 1985. The appellants’ case in the FTT was that that charge was not reasonably incurred. They pointed out that the building had been decorated in 1992 for £10,340 plus VAT; between that date and 1992 half the window-frames had been replaced and were now UPVC which did not require decorating; the 2019 charge therefore looked disproportionately expensive. They said redecoration used to be done using cradles, or maintenance carriages suspended from the roof, and was done in that way in 1992, but that those cradles were removed by the landlord in the 1990s so that it could rent the roof space to telecommunications companies. That meant that scaffolding had to be used instead, which was far more expensive and accounted for £75,000 of the cost of the work in 2019. The appellants produced quotes they had obtained for redecoration in 2019, for a total of £21,686 using a scissor lift instead of scaffolding, and another for £37,900 including £8,000 for the hire of a cradle.

In its decision dated 20 March 2025 the FTT rejected the appellants’ argument on the basis that there was no evidence before it that there had been cradles on the roof or that they had been used in 1992. It noted the presence of telecommunications equipment on the roof and found that the landlord had been making payments of £6,000 per annum to the service charge account from the revenue from the telecommunications companies. As to the work in 2019, the landlord had obtained a number of quotes for the 2019 works, at prices ranging from £120,000 to £165,000. The FTT accepted the landlord’s argument that the quotes obtained by the appellants were for a more limited specification of work. It concluded that the costs in question had been reasonably incurred.

The appellants asked the FTT for permission to appeal. In considering that application the FTT refused permission on a number of grounds which have not been renewed. However, it decided (a) that it had overlooked a consensus between the parties that there had originally been a cradle system on the roof of the building and (b) that it had failed to deal with the appellants’ argument that a scissor lift could have been used in 2019. In light of that it considered whether to review its decision pursuant to rule 53 of the Property Chamber’s rules, and decided to do so.

However, in its reviewed decision dated 22 July 2025 the FTT again concluded that the costs had been reasonably incurred. It said this about the cradles:

The FTT concluded that in light of the absence of relevant evidence it could not find that cradles should have been used. As to a scissor lift it said this:

Again, therefore, the FTT took the view that there was insufficient evidence to find that a scissor lift should have been used.

Strictly the appellants should have applied to the FTT for permission to appeal its reviewed decision, but they did not do so and the Tribunal treated the reviewed decision as being also a reasoned refusal of permission to appeal. The application was renewed to the Tribunal and permission to appeal was granted by the Deputy President (Mr Martin Rodger KC) on the following basis:

The Deputy President’s reasons for granting permission to appeal reflect the well-established position that leaseholders who seek to challenge a service charge do not have to show on the balance of probabilities that a charge was unreasonable. Rather, they have to raise only a prima facie case – in other words, they have to show that as things stand it looks unreasonable. It is then for the landlord to show why the cost was nevertheless reasonably incurred. See Schilling v Canary Riverside Developments Pte Ltd [2005] EWLands LRX_26_2005, and the recent decision of the Court of Appeal in Spender v FIT Nominee Limited [2025] EWCA Civ 1578).  It was therefore arguable that in the present case it was for the landlord to show why it was reasonable to use scaffolding rather than to use cradles or a scissor lift.

The ground on which permission to appeal was given was narrow and quite technical, and understandably the parties, who were without legal representation, did not expressly engage with it.

The appellants focussed on the FTT’s finding of fact in its reviewed decision that cradles had been used to carry out exterior decoration in 1992, and that they had been removed to make way for telecommunications equipment. They expressed the view that it would have been practicable to carry out the work done in 2019 using cradles and/or scissor lifts; that it can be seen from a search of the internet that scissor lifts could have been extended to cover all nine storeys; that the cradles used in the 1990s were “bosun’s cradles” (on the basis of correspondence seen by Mr Smith but which was not in the bundle), and that such cradles can be obtained very cheaply and could safely be installed on the roof. Overall they were extremely concerned by the level of service charges, which they felt was staggering for a building in a not-very-affluent area of Birmingham and had an inevitable effect upon the value of their properties.

The respondent in its skeleton argument had not taken on board that the FTT had found as a fact that cradles were used in or around 1992, and continued to argue that they had not been. However, Ms Cannon-Leach at the hearing accepted the FTT’s finding and focussed her argument on the fact that it would have been impracticable for the 2019 work to have been done using either a scissor lift or a cradle. A scissor lift, she said, in 2019 could only extend to seven storeys. And there was no way to attach a temporary cradle; the position of the lift shaft would have made it impracticable to position the counter-weights. The appellants disagreed.

Both parties were expressing their opinions about how the work could or should have been done, in a situation where neither had adduced expert evidence and where, in any event, the Tribunal’s task was not to make findings of fact but to consider the legal effect of the absence of evidence before the FTT.

The FTT put itself in a difficult position in reviewing its decision. It was aware that it had overlooked evidence, and had to revisit the evidence in circumstances where it did not have the parties in front of it (the application was determined on the papers) and could not explore issues with the parties’ representatives. Having accepted that the appellants did have a point (to put it colloquially) about both cradles and scissor lifts, the FTT had to decide what to do about those points. It would have been helpful for it to have had in mind the familiar analysis of the burden of proof in a service charges case: it was for the tenants to raise a prima facie case and for the landlord then to answer it. Once the FTT had understood that the appellants did have an argument that cradles might have been used, and had raised an issue about scissor lifts which had not been addressed, the FTT should have seen that the appellants had made a prima facie case about both those points and then have considered whether the evidence relied upon by the landlord showed that it was reasonable for the landlord to incur the cost of scaffolding in 2019.

One possible course of action would be for us to allow the appeal on the basis that the correct reasoning process was not followed, and remit the matter to the FTT for it to decide this point afresh.

However, it is clear to us from the appeal bundle, comprising material that was before the FTT, that if it had asked itself the right questions there was ample evidence before it to demonstrate that the use of cradles and/or a scissor lift for the work done in 2019 would not have been practicable. The appeal bundle included the specification produced by the landlord’s managing agents, Pennycuick Collins, referred to by the FTT at its paragraph 13, in relation to the work to be done in 2019. This material was, of course, not before the Tribunal when it considered the application for permission to appeal.

The 2019 specification went far beyond the decorating that was done in 1992 or the work covered to in the quotations obtained by the appellants (which were two-page documents referring only to sanding, cleaning and painting). The 2019 specification was a 43-page document including a substantial amount of pre-decoration repair, for example (from the Schedule and Summary on page 29):

Further sections of the document reflect the expectation that a substantial amount of new timber would be required, that in places new timber was expected to be spliced in, that sills were to be replaced, and also that windows serving private flats as well as ventilation louvres to staircases would need replacement, and that old render would be hacked off around steel windows and new masonry cement applied.

This is a substantial repair programme. As an expert Tribunal, perhaps even as a matter of commonsense and certainly without the need for expert evidence, we find that the removal of windows, the rectifying of distorted windows, and the installation of timber, to give just the most obvious examples, could not be done from dangling cradles. It needs a firm working platform. Nor could it be done from a scissor lift even if the respondent is wrong about the reach of such a lift. We conclude that the use of either form of platform for this type of work is simply implausible. Furthermore, the specification refers of the use of specialised paints, mastics and finishes, and the need to keep the working areas weather tight. That requires a degree of enclosure which can only be achieved by use of scaffold and sheeting. Ms Cannon-Leach mentioned the placement of formwork for concrete repairs around windows and that too would require a fixed structure to attach to. In other words, it would need scaffolding. This is not a case where only part of the building would need to be scaffolded. Mr Smith explained that although a significant number of the original windows had been replaced by UPVC units these works were undertaken by individual leaseholders and were dispersed across both elevations.

In our judgment the respondent’s own specification of work answers the appellants’ point about the possible use of cradles and a scissor lift. There is no basis on which the FTT could find that the cost of scaffolding – which amounts to the only surviving challenge to the charge for the 2019 work – was not reasonably incurred because cradles or a scissor lift should have been used.

Accordingly there is no point in allowing the appeal; the substance of the FTT’s decision was undoubtedly correct and we do not set it aside.

We have said nothing about the FTT’s finding that the use of cradles was made impossible by the letting of roof space for telecommunication equipment. The point was discussed at the hearing and we summarise what we heard as follows: Ms Canon-Leach pointed us to a letter which was in the FTT bundle (she said, and the appellants did not disagree). It was from the landlord, headed “Advice to Intending Purchasers of Leasehold Flats at Endwood Court”, and dated 10 February 2003. It explained that in 1994 the landlord was approached by a telecommunications company about the possibility of leasing roof space at Endwood Court; that the landlord had consulted the lessees in writing and at a meeting, and that “it was decided unanimously at that meeting that a letting should proceed.” Further lettings had been arranged later and “the whole of the premiums received upon the granting of leases, that is £40,000, has been credited to lessees. In addition the Service Charge Account has benefited from an annual payment of £3,000, which more than pays for lift maintenance and insurance.” Payments to date (i.e. at 2003) from the lettings amounted to £64,000 which had been used to purchase new domestic water pumps, refurbish the basement and improve the carpark and re-landscape the grounds.

The appellants did not suggest that what was said in the letter was not true. Nor did they dispute the FTT’s finding that in fact £6,000 had been paid per annum to the service charge account, although they complained that that had been reduced to £3,000 after 2020.

Accordingly in our judgment the circumstances in which the telecommunications equipment was installed on the roof were not as it seemed at the permission stage. It was not a move made by the landlord solely for its own profit; there had been consultation, a shared decision, and a considerable benefit to the leaseholders.

On that basis even if we had found that cradles could have been used in 2019, we do not think that it would have been unreasonable for the landlord to incur the cost of scaffolding. The landlord’s conduct in letting the roof space did not have the consequence that it should itself have shouldered the additional cost of maintenance incurred as a result, because the leaseholders have shared in the benefits arising from the telecommunications leases.

However, in light of our finding about the nature of the work done in 2019 the point does not arise.

The appeal fails, and the FTT’s reviewed decision of 22 July 2025 stands; the cost of work to the exterior of the building in 2019 was reasonably incurred.