Harrison Engler acted for the successful landlord (on a direct access basis) in obtaining a rare costs order in the First-tier Tribunal (Property Chamber) after the tribunal found that 6 tenants brought an inflated claim of £60,000 to intimidate the landlord.
The tenants, represented by Justice for Tenants, lived in an HMO for 2 years. They sought a rent repayment order for 12 months and then withdrew their application. Following the withdrawal of the claim, the landlord applied for costs under rule 13(1)(b) of the Tribunal Procedure (FTT) (Property Chamber) Rules.
The tribunal considered evidence showing that the tenants were advised by Justice for Tenants that the property was unlicensed for a short period and they had a claim for 2 months’ rent.
Despite this, they brought a claim for 12 months’ rent. In fact, it was incorrect that the property had ever been unlicensed. There was an HMO in place and no valid RRO claim could be brought.
Tribunal finds unreasonable conduct
Applying the principles in Willow Court Management Company (1985) Ltd v Alexander [2016] UKUT 290 (LC), the tribunal found that Justice for Tenants had acted unreasonably in 4 respects.
- The request to the local authority for information about the HMO license was defective. It did not include the key question ‘was there a license in force during the whole of the relevant period?’
- The tenants produced no evidence to explain why they thought there was no licence for a short period when this was incorrect.
- The tenants had brought the application for a 12 months’ RRO despite emails between them and Justice for Tenants showing they were aware no such claim could be brought. This was 'the most egregious' unreasonable conduct.
- Justice for Tenants then wrote a ‘without prejudice as save to costs’ letter claiming 85% of the 12 months’ rent, which was exaggerated and made to ‘intimidate’ the landlord.
Determination
The tribunal decided that there was a very strong case to make a costs order under rule 13(1)(b). The landlord had acted reasonably by instructing a firm of estate agents for £240 to deal with the initial application.
The tribunal also:
- awarded the ‘costs of costs’, ie the cost of instructing counsel on a direct access basis for £3,000 to attend the hearing of the costs application
- rejected the tenants’ submission that there was no jurisdiction to award ‘costs of costs’, and
- accepted Harrison’s submission that the costs incurred were reasonable.
Therefore the 6 tenants were ordered to jointly pay the sum £3,240.
Significance of the tribunal's decision
This is a rare example of a costs order in the tribunal following an RRO application. The tribunal is ordinarily costs-neutral.
This case shows that costs can be considered in the tribunal where there are exaggerated claims or unreasonable conduct. Also it highlights that advice in the early stage of litigation to consider strategy concerning costs can be a good investment.
Read the judgment in full in 19 Alderney Road, London E1 4EG: LON/00BG/HMF/2025/0807.