Costs awards in the Property Tribunal are rare. Costs orders are discretionary and usually only made where a party has been unreasonable. The bar on what constitutes unreasonable behaviour by a party is high. It is trite law that a party’s conduct has to be worse than just poor enough to result in an unsuccessful outcome (Willow Court Management Company (1985) Ltd v Alexander [2016] UKUT 290 (LC) (21 June 2016)). “Unreasonable” conduct would be “vexatious, and designed to harass the other side rather than advance the resolution of the case” (Ridehalgh v Horsefield [1994] CH 205). The Tribunal’s discretionary powers are contained in rule 13 of the Tribunal Procedure (First-tier Tribunal) (property Chamber) Rules 2013. I previously set out the established position on what constitutes “unreasonable” conduct here. 

The position was reiterated recently by the Upper Tribunal (“UT”) in the case of Assethold Limited v The Lessees of Flats 1-14 Corben Mews [2023] UKUT 71 (LC) where Judge Cooke dismissed an appeal of a rare costs order made by the First-tier Tribunal (“FTT”). In her decision, which was handed down a month ago on 21 March, Judge Cooke considered the interesting point of whether a costs order should be made where a party has already been penalised for its unreasonable conduct.

In Assethold, the company had been unrepresented until shortly before the FTT hearing. The company had failed to comply with the FTT’s directions on several occasions, resulting in the need for directions to be amended a number of times and in the loss of a hearing date. The FTT had even observed in its directions that Assethold’s behaviour “clearly demonstrates an unwillingness to comply with the Directions given”.

As a result of Assethold’s repeated failure to comply with the directions, the company was eventually debarred by the FTT from relying on any evidence it had not produced by way of compliance with the relevant FTT directions.

Furthermore, the FTT made a costs order against Assethold on application by the Lessees. The costs order was made on the express basis that the company’s conduct was unreasonable “to the extent that it has met the high threshold required by Willlow Court”.

The UT dismissed Assethold’s appeal of the costs order.

Judge Cooke found that any explanation given by the company regarding its failure to comply with the FTT’s directions had been “inadequate or non-existent”. Assethold’s written representations in response to the costs application did not only fail to provide a “proper explanation” (as the company had submitted), but “instead sought to play it down”.

The company also sought to appeal on the basis that it had already been penalised for the breaches by the debarring order. Judge Cooke was less than impressed by this argument, which she stated was “obviously spurious”. The debarring order clearly did not address the consequences suffered by the Lessees as a result of the severe delays caused by Assethold’s breaches. Judge Cooke remarked that some of the practical implications affecting the Lessees “cannot fully be compensated, but the additional costs incurred can be reimbursed through a costs order”.

This decision is a reminder that while unrepresented parties will be judged by the standards of a reasonable litigant in person, repeated failures to comply with rules and directions could result in a costs order being made under the FTT’s rule 13 discretionary powers. Tribunal proceedings are highly technical and our Property Litigation team is experienced in navigating this process.