Phillips v Francis [2012] EWHC 3650 (Ch)

The claimants were a group of tenants who occupied chalets on a holiday site owned by Francis under 999 year leases. Francis undertook various works to improve the site and sought to recover the costs from the tenants by way of service charge. The tenants objected to the increased service charges on various grounds. In earlier proceedings, the court had held that the chalets were dwellings for the purposes of the Landlord and Tenant Act 1985 and, as such, the tenants were entitled to the protection set out in that legislation. The tenants argued that the landlord had failed to comply with the consultation requirement for major works as set out in section 20 of the Landlord and Tenant Act 1985 and so was limited to recovering the sum of £250 per tenant in respect of those qualifying works.

The judge at first instance held that, save for the removal and dispersal of earth banks and the construction of office/shop and launderette/staff buildings, no other items for which service charge was claimed amounted, individually or cumulatively, to a single set of “qualifying works” for the purposes of section 20 on the basis that each was below the threshold value of £250 per tenant. The tenants appealed, arguing that the works should have been considered cumulatively as a whole for the purposes of the £250 threshold.

The court allowed the tenants’ appeal. The 1985 Act did not require the identification of any distinct sets of works. If works are qualifying works then the consultation requirements must be applied unless the value of all qualifying works over the service charge period falls below the £250 threshold. In effect, the landlord must consult in accordance with the Act whenever he seeks to undertake works which will push a tenant’s total service charge contribution for that year beyond £250. The landlord in this case had failed to consult and the tenants were therefore only obliged to contribute £250 each toward the repair and improvement works.