A judge has given a First Tier Property Tribunal a ticking off for unfair conduct during a hearing over a dispute about leaseholder service charges.

The appeal was made by Sovereign Network Homes against the First Tier Property Tribunal’s (FTT) ruling, concerning properties owned by Sovereign in Cudweed Court, on London’s Isle of Dogs, where leaseholders had complained that service charge demands were unreasonable.

Some of the properties in the block are owned by landlords, while some are rented out as student accommodation.

Chamber president of the Upper Tribunal, Justice Edwin Johnson, said the FTT raised on its own initiative whether the payments demanded were due at all, as a matter of contractual liability.

Sovereign argued it had no notice of this being introduced and said the FTT was wrong both to raise the issue and to give directions for its determination.

Sovereign also said the FTT hearing was conducted unfairly and created the appearance of bias.

Justice Johnson said: “It seems to me that the FTT, in raising the contractual liability issue, stepped outside its arbitral role and effectively took on an inquisitorial or investigative role.”

Sovereign’s allegations of unfair conduct included when the FTT judge asked how long the appellant’s counsel had been doing her job and said the judge consistently addressed counsel for the appellant in a negative tone, accompanied by eye-rolling.

The judge added: “For reasons which I find impossible to understand, the appellant, by [its counsel], was treated as being at fault for not being ready or able to deal with the contractual liability issue at the hearing.”

He concluded the FTT “crossed a line and allowed its interest in an unpleaded issue to get the better of it”.

Its appeal was allowed, and the case will now go back to the FTT.

The case also highlights the importance of landlords keeping an eye on their costs including service charges; while these are usually paid by tenants, they can be included in bills.

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