The Upper Tribunal (Lands Chamber) has dismissed all four appeals over costs and tribunal fees after a service charge case at Basin Approach, London E14, affecting leaseholders and their management company.
Key facts
- Who: Leaseholders and leaseholder-owned management companies in service charge disputes, particularly where the landlord's legal costs and tribunal fees are in question.
- From: 17 March 2026 (judgment date)
- Source: Limehouse East Management Limited v Simon Butler & Ors [2026] UKUT 118 (LC)
Background
Limehouse East Management Limited (LEML) manages flats at Basin Approach, London E14. The leases provide for building and estate service charges. Three leaseholders challenged charges in the First-tier Tribunal (Property Chamber): Mr Simon Butler, Limemanor Limited and E14 Limited, who between them own five flats. On 21 February 2025 the First-tier Tribunal decided the liability questions, with mixed success for both sides.
It then made consequential orders on costs and fees. Under section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of the Commonhold and Leasehold Reform Act 2002, a tribunal can stop a landlord recovering its legal costs through the service or administration charge. These provisions exist because many leases let a landlord recover legal costs from tenants, so a tenant could win a challenge and still pay the landlord's costs.
The First-tier Tribunal relieved the three leaseholders of 25% of the landlord's costs. It refused to order LEML to reimburse the fees the leaseholders had paid in the tribunal.
The question
Both sides appealed. LEML argued that the First-tier Tribunal had not invited submissions at the hearing, had not referred to authority, and had not properly weighed its written submissions, including that it is a leaseholder-owned company. The leaseholders said 25% was too little. They argued that they should have been told the amount of the landlord's costs, that they were 82% successful, and that the finding of "limited success" lacked reasons. They also appealed the refusal to reimburse their fees.
The decision
Upper Tribunal Judge Elizabeth Cooke, deciding on written representations, dismissed every appeal. The First-tier Tribunal's orders stand.
The reasoning
- Submissions at the hearing. The judge did not accept that the First-tier Tribunal should have invited further submissions at the hearing. It already had written submissions. She said it might have been useful to invite submissions after its main decision, but allowing an appeal on that basis would be disproportionate, because the order was within its broad discretion.
- No mechanical percentages. The order did not have to match the proportion of charges the leaseholders avoided. The tribunal could look at the matter in the round, including the time and energy spent on individual issues.
- Costs level not required. Section 20C and paragraph 5A decisions are invariably made without knowing the level of costs, which can be challenged later if necessary.
- Fee refunds. No party, even a wholly successful one, is entitled to reimbursement of fees. The First-tier Tribunal gave no reasons for refusing, but its thinking was easy to infer, and the leaseholders had already been relieved of most of the landlord's legal costs.
What this means for leaseholders and landlords
Tribunals have wide discretion over orders limiting recovery of legal costs through service charges, and an appeal needs an error of law or irrationality, not just disagreement with the proportion. Success on individual issues does not translate into an equal percentage reduction. Fee reimbursement is never automatic.
Any party may appeal to the Court of Appeal on a point of law, but only with permission. An application for permission must first be sent to the Upper Tribunal, to be received within one month of the decision being sent to the parties. If an application for costs is made within 14 days of the decision being sent, the one month runs from the date the Tribunal's costs decision is sent. If the Upper Tribunal refuses permission, a further application can be made to the Court of Appeal. If you are involved in a service charge dispute, get advice before any deadline passes.
Sources
- Limehouse East Management Limited v Simon Butler & Ors [2026] UKUT 118 (LC), Upper Tribunal (Lands Chamber), 17 March 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/118