Court of Appeal
Published April 5, 2011
Daejan Investments Ltd v Benson and Others
The discretion whether to grant or refuse to dispense with the landlord’s requirement of consultation with tenants concerning works to be carried out on a block of flats did not depend on financial consequences.
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The Court of Appeal (Lord Justice Sedley, Lord Justice Pitchford and Lord Justice Gross) so held on January 28, 2011, when dismissing an appeal by Daejan Investments Ltd against the dismissal by the Upper Tribunal (Lands Chamber) ([2009] UKUT 233 (LCC)) of its appeal against two decisions of the Leasehold Valuation Tribunal, dated March 11 and August 8, 2008, that it was not reasonable to dispense with the consultation requirements with five defendant tenants and made no order for dispensation under section 20ZA(1) of the Landlord and Tenant Act 1985, as inserted by the Commonhold and Leasehold Reform Act 2002.
The valuation tribunal held that Daejan had failed to comply with the Service Charges (Consultation Requirements) (England) Regulations (SI 2003 No 1987) in respect of works to be done at Queen’s Mansions, Muswell Hill and refused to conclude that it was reasonable to dispense with the consultation requirements, so that the landlord failed to recover £270,000 from the defendants and was limited to recovering £250 from each.
LORD JUSTICE GROSS said that the financial effect of the grant or refusal of dispensation was an irrelevant consideration when exercising the discretion under section 20ZA (1). His Lordship adopted the observations of the Upper Tribunal that section 20ZA(1) gave the valuation tribunal power to dispense with the consultation requirements, not with the statutory consequences of non-compliance.