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The HLA will continue to represent leaseholders as a group at Council level. Of course we always listen sympathetically to the stories of our membership. See also the Leasehold Advisory Service under links. |
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| HARINGEY’S LVT HEARING 29/30 March 2007 |
Background
Recent years have seen some important improvements in the legal position of leaseholders. In particular leaseholders no longer have to pay the full cost of large bills if they weren’t properly consulted about them beforehand.
It has, therefore, become important to councils to circumvent these legal provisions by exploiting loopholes in the law wherever they can.
One such loophole is the dispensation application whereby the Leasehold Valuation Tribunal can dispense councils from consulting with their leaseholders and still allow them to claim back the full amount of any bills they see fit to charge.
As Haringey hopes to undertake roughly £200 million pounds of Decent Homes work over the next four years they needed to know that even if they failed to tell leaseholders what they were up to they’d still be able to claim back from leaseholders the £40 million pounds or so that they’ll be billed.
That’s what this application was about.
Preparation
At the beginning of 2007 the HLA was in a weakened, dormant, state after losing a very expensive earlier court case against the council. Nevertheless the HLA objected to what the council was doing in an attempt to stand up for leaseholders and protect them from becoming the prey of money-minded construction companies and the casual incompetence and mismanagement that typifies local government
administration.
In order to present the leaseholders’ case however the HLA needed access to information from the Arms Length Management Organisation that the council had set up to take charge of running their housing stock.
This was the first battlefield on which this case was fought.
The ALMO itself and the council’s in-house legal department were systematically obstructive and unhelpful throughout this process, adopting an adversarial and mean-spirited approach that very nearly got them into serious trouble at the hearing itself. Fortunately for them a sympathetic chair and the money they’d spent on their very fancy lawyer got them through.
Following initial requests for information the first meeting supposedly to inspect documents was held on the 26th February, 2007.
This meeting was hijacked by the ALMO’s in-house lawyer who had no business to be there but spent two hours arguing aggressively and insulting the leaseholders’ representative, accusing him of
blackmail. No progress was made on the inspection of documents and leaseholders were told that a number of key documents were irrelevant to the proceedings and would not be provided. If leaseholders wanted access to them they would have to ask for them under the Freedom of Information Act which meant that there was no guarantee that the documents would be made available in time for the hearing itself.
The leaseholders complained to the LVT about this treatment and asked for a postponement. They didn’t get the postponement but the tribunal issued new directions to the ALMO to make available all relevant documents and allow copies to be taken by the 15th March, 2007. At this point the council flipped their approach anddecided to bury the HLA in paperwork and then blame them for an excess of documents.
This cynical tactic was unfortunately to pay dividends at the tribunal.
At the second (and final) meeting on the 14th of March to inspect documents several thousand pages of documents were spread across three or four meters of table-top length and leaseholders were given three hours to try and understand them with minimal help and guidance. These documents included all of those previously ruled
irrelevant although no explanation was given of why and how that decision was taken, thus exposing it as having been purely tactical from the beginning.
Those ‘irrelevant’ documents were later to form the core of the council’s own case at the hearing itself.
In a breach of the tribunal’s directions no copies were made available on the day. Finally at 6pm on the evening of the 16th March, 2007, copies of the documents leaseholders had selected were made available.
With only five days to go before the procedural regulations said that leaseholders had to present a final version of their case to the tribunal the HLA was at last in a position to start the process of examining the documents for the first time. There was, however, no time for a meeting of the HLA or even for anything more than the most superficial co-ordination and discussion.
Bear in mind that there were well over a thousand pages of technical documents to try and understand, sift and assimilate, as well as a legal framework in which to try and place it. Bear in mind too that the HLA had no access whatsoever to any kind of legal help.
Contrast that with the roughly £40,000 the council spent on its legal advice.
You get longer to sort out your objections to a £50 parking ticket than the HLA were given to sort out their objections to being stripped of their rights in a £200 million pound project over four years, during which some leaseholders could well face bills in excess of £30,000 and the risk of losing their homes.
There is no other word for it, this was a nonsense, but out of respect for the tribunal’s ruling and despite the monumental effort involved, the HLA complied to the letter with all that had been required of it, given the importance of the occasion, and
come the day their case was ready to be presented.
The Hearing
They never got the chance. Their case was never heard.
Of all the shortcomings at the hearing this was probably the worst. The council were given over a day and a half to present their case including putting forward a witness. Most of what they put forward had no relevance to the issues. The chair insisted on keeping the hearing to two days in order to accommodate the council who had got themselves into a bind by arranging for an Audit Commission inspection in the near future. Given the need for summing up and deliberation time that meant the leaseholders were allocated precisely fifteen minutes in which to present their case. And even then those fifteen minutes were not in fact used for that purpose.
The chair intervened to ask whether the HLA would accept a compromise under which the dispensation would be granted but made conditional on further consultation. By the time that had been gone through and explained the fifteen minutes were up and that was that.
During the time allocated for the leaseholders to put their case what in fact happened was that the chair talked to them instead of listening to them.
For the record the leaseholders decided to accept the compromise as there was nothing better to hope for given the abysmal way in which the hearing was going but the council objected to it and so the chair threw the idea out.
Absolutely nothing had been achieved.
A Dirty Trick
The council weren’t to know that the chair would be so one-sided so before the hearing even began their QC launched a trademark personal attack on the main spokesman for the leaseholders in an attempt to discredit him.
This came in the form of a witness statement from a senior ALMO employee. The witness statement inaccurately repeated the allegation of blackmail and alleged selfish motives on the part of this individual.
The chair, who had apparently not looked in much detail at any of the documents before the hearing (his first question to the QC was ‘Is this a newbuild case?’) and who informed the parties during the first day that he didn’t intend to look at any that evening, nevertheless took this witness statement away to read and consider overnight before deciding to admit it as evidence the next morning.
This means that the only document the chair apparently actually read in detail during the conduct of proceedings was a character assassination of the leaseholders’ main representative.
The chair said that he would admit the document but that it had only marginal relevance. Of course it is hard to believe that this underhand tactic did not in fact play its part in making it more difficult for the leaseholders to get a fair hearing. It may also have played some part in the rather extraordinary personal attack that the chair himself then went on to make on that same representative in his judgement.
Possible bias?
In a final procedural flurry before the hearing the council had fallen foul of some lastminute directions issued by the tribunal.
Sticking to their tactic of information overload they had proposed to include every single scrap of paper that had covered those table-tops on the 14th March, 2007, in their hearing ‘bundles’ on the spurious grounds that the unreasonable leaseholders might otherwise accuse them of withholding something. The leaseholders had objected to this and the tribunal had reminded the council only to put in what was relevant.
When they turned up with several hundred pages of asbestos regulations, the drugs-policy of the council and hundreds of other pages of pointless technical regulations they had clearly breached the directions and landed the tribunal with an unwieldy number of documents.
Their case should probably have simply been thrown out at this point in an ideal world. However, the deviousness of the council’s QC combined with what might be seen as a certain complacency from the chair to twist things round completely.
The chair said that he ‘didn’t understand the directions’ and wondered why there hadn’t been a pre-trial review. The leaseholders didn’t know what a pre-trial review was so couldn’t object at the time that there hadn’t been time for one. (Usually they take place two weeks before a hearing begins and that sort of time-scale had been thrown aside in the headlong gallop towards the hearing that the council had insisted on).
The QC said that the leaseholders had made repeated and ever-increasing requests for information and implied that faced with such unreasonable behaviour the council had decided they had no option but to put everything in lock, stock and barrel.
This was the opposite of the truth as leaseholders had made one, subsequently trimmed-down, request for information that had been unreasonably obstructed and had specifically objected to the lock, the stock and the barrel.
When the QC then said that the directions couldn’t have been followed anyway because they would have required the council to decimate the Amazonian rain-forest by sending out 8 large files to over 4,000 leaseholders the argument was practically over.
Of course the directions didn’t say any such thing but that was a nuance that seemed to get lost in the hurly-burly.
Twenty minutes later it was firmly established in the tribunal’s mind that the leaseholders were to blame for the huge number of documents and this when the council had been in clear breach of explicit directions – a major no-no. That was a forensic tour de force.
That’s what you get when you can afford to pay £20,000 to a QC. But it’s not justice.
Apart from this there were numerous other, smaller, instances of what leaseholders felt was unfairness that collectively added up to a considerable obstacle.
For instance the late submission of the council’s case (the evening of the day before the hearing)was not deemed inappropriate.
The leaseholders’ representative was admonished for standing in the way of benefits to both rent-paying tenants AND other leaseholders, making it clear that the tribunal accepted the council’s repeated arguments that the leaseholders present were not representative of leaseholders in general.
When compromises were first mooted during the hearing and the QC said that he was glad to hear that compromise was now in the air the remark of ‘Finally’ was heard. And this despite the fact that it was the council that rejected a pre-hearing compromise suggestion that moreover they then agreed to afterwards.
When leaseholders complained that an ALMO officer had refused to answer a question it was implied that they were lucky only one had not been answered (‘Only one [question]?’).
Again it was at the suggestion of the tribunal, quite unprompted by anything suggested by the council’s QC, that notices were printed in some local newspapers (the free distribution of which incidentally didn’t cover the whole borough) rather than being mailed individually to leaseholders as the council would otherwise have done.
When it was pointed out that the council had had to radically alter their case after leaseholders had forced them to take into account the fact that they did after all have unit-cost price information the chair glossed that over by saying that their case hadn’t changed, it was just that more information had become available.
When the council witness fudged his answers on the timing of the decision to make a dispensation application no need for clarification or inconsistency between ‘the council was in discussions about it when I arrived’ and ‘it was decided before my arrival’ was seen.
A double-standard was apparently applied over how local government interacted with central government and how leaseholders interacted with local government. The council’s argument that the central government environment was capricious and difficult was given full credence. Leaseholders were told however that they could rely totally on the ‘duty of care’ that local government in theory had towards them.
Nothing capricious or difficult about that then!
Leaseholders were supposed to have requested minutes of the meetings of a group called the Procurement Group ahead of the tribunal even though it clearly emerged at the hearing that they had never heard of it before. Again, the fact that one leaseholder had been involved in the procurement process meant that all leaseholders throughout the borough had had ample opportunity to take stock of all the surrounding documentation.
No time for legal argument
Most importantly the leaseholders’ legal argument against this use of a loophole to undermine their legal rights was never discussed. The chair asked the QC what he thought of it. The QC replied that it had ‘no merit’ in his opinion and the chair apparently thought that was good enough. That was that, there was no discussion.
The only other reference to it was two paragraphs in the judgement which arguably show only how the lack of a proper discussion had made it harder to grasp the arguments. Perhaps the high status that a QC naturally enjoys within the legal profession mitigated against a thorough-going discussion.
But didn’t fairness demand it?
Interestingly the leaseholders were not provided with the ‘legal bundle’ until the actual morning of the hearing. This made the point that the leaseholders were not lawyers and that there was no point in listening to anything they might have to say on that score.
Effectively it seemed rank was pulled on the legal argument and that closed it off. And this despite the chair saying when he gave his verbal decision that he ‘liked to get the law right’.
The weight of convention
The main argument put forward by the council on the day had nothing to do with the law and still less in fact to do with the grounds they had originally said they were seeking the dispensation under.
It was a completely new argument very simple in nature. ‘Give us this dispensation,’ they said, ‘or we won’t get our money from central government. The Audit Commission inspectors expect us to have a dispensation and money is too tight to take any chances. If you, the chair, don’t help us out you will have it on your head that thousands of council homes in our borough remain in a state of disrepair.’
None of this is actually relevant but this was their whole case. They didn’t really need even one single document. The point was that a convention existed and an expectation had been created that they could not afford to disappoint. This argument was decisive.
Now it must be said that when the HLA met the Audit Commission inspectors they said that a dispensation was ‘the norm’. So the council were right about the professional consensus in the local government environment.
But what if the convention is not soundly based?
What if the legal foundation is shaky?
What if the original decision in Brent’s application, which was uncontested, is not a sure guide?
Why didn’t the tribunal examine that?
We then have a situation in which the tribunal gives a decision because the inspectors expect it, possibly more or less whatever the law says, but where the inspectors are convinced that legal questions are decided on an independent legal basis.
And all because there’s a lot of money at stake. This becomes a very powerful self-reinforcing process where legal discussion comes second to time-pressures.
Why didn’t the leaseholders appeal?
The short answer to that is that leaseholders got a lot of what they wanted by other means, through campaigning and demonstrating and negotiating directly with the ALMO.
They have not achieved everything but they have got a committment to a high level of consultation amongst other things. Ironically that level is now so high that the ALMO needn’t have gone to the trouble and expense of getting a dispensation in the first place. Moreover the ALMO have now agreed after the fact to the very reasonable compromise that leaseholders were suggesting before it, meaning that the whole process need not have been nearly so contested. What a surprise.
The long answer involves pointing out that an appeal would have involved major financial risks and that the tribunal refused to be extend a deadline to allow leaseholders access to legal advice.
Conclusion
Despite everything, the tribunal experience was a positive one for the HLA. They obtained a lot of information and also a list of all the other leaseholders in the borough for the first time in their history.
As an organisation, the HLA has emerged strengthened and in better shape to face the formidable challenges of the Decent Homes Programme.
In terms of confidence in the LVT, however, this was a disaster.
The very informality that was supposed to protect leaseholders when the LVT was originally set up worked, in this case, against them.
When there is such an outrageous legal imbalance, as between unrepresented litigants and a QC, the more formal structures of a proper court might in fact provide better protection. At least then the leaseholders would have been able to state their case and there might have been less banter between the QC and the chair (‘senior member of the bar’ this and ‘cricket world cup’ that).
In the end, as so often, it seems that money was the decisive factor.
They say that British justice is the best but this experience suggests that the going rate for a dispensation decision is approximately £40,000 of tax-payers’ money.
And that’s about £40,000 more than this one was worth.
Created on 02/04/2003 10:24 AM by admin
Updated on 03/08/2009 07:14 PM by catrina
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