Default Judgement Received Against Me - Next Step To Take?

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

The first thing to look at is whether those service charges were lawfully demanded at the time. If they weren't then they can't have the money.

Section 153 of the Commonhold and Leasehold Reform Act 2002 states that a service charge demand must be accompanied by "a summary of the rights and obligations of tenants". If you didn't get a s.153 Notice with your service charge demand(s) then you have the right to withhold payment.

Did you get the Notice? If you didn't then non compliance with s.153 would be part of your Defence.

There's no exact wording in the legislation but this is an example used by most Landlords (Freeholders) of what the s.153 Notice must include (all of it, not just some of it):

1. This summary, which briefly sets out your rights and obligations in relation to variable service charges, must by law accompany a demand for service charges. Unless a summary is sent to you with a demand, you may withhold the service charge. The summary does not give a full interpretation of the law and if you are in any doubt about your rights and obligations you should seek independent advice.

2. Your lease sets out your obligations to pay service charges to your landlord in addition to your rent. Service charges are amounts payable for services, repairs, maintenance, improvements, insurance or the landlord’s costs of management, to the extent that the costs have been reasonably incurred.

3. You have the right to ask the First-tier Tribunal to determine whether you are liable to pay service charges for services, repairs, maintenance, improvements, insurance or management. You may make a request before or after you have paid the service charge. If the tribunal determines that the service charge is payable, the tribunal may also determine-

* who should pay the service charge and who it should be paid to;

• the amount;
• the date it should be paid by; and
• how it should be paid.

However, you do not have these rights where-

* a matter has been agreed or admitted by you;

• a matter has already been, or is to be, referred to arbitration or has been determined by arbitration and you agreed to go to arbitration after the disagreement about the service charge or costs arose; or
• a matter has been decided by a court.

4. If your lease allows your landlord to recover costs incurred or that may be incurred in legal proceedings as service charges, you may ask the court or tribunal, before which those proceedings were brought, to rule that your landlord may not do so.

5. Where you seek a determination from the First-tier Tribunal , you will have to pay an application fee and, where the matter proceeds to an oral hearing, a hearing fee, unless you qualify for fee remission or exemption.. Making such an application may incur additional costs, such as professional fees, which you may have to pay.

6. The First-tier Tribunal and the Upper Tribunal (in determining an appeal against a decision of the First-tier Tribunal) have the power to award costs in accordance with Section 29 of the Tribunals, Courts and Enforcement Act 2007.

7. If your landlord –

*proposes works on a building or any other premises that will cost you or any other tenant more than £250, or

• proposes to enter into an agreement for works or services which will last for more than 12 months and will cost you or any other tenant more than £100 in any 12 month accounting period.
• Your contribution will be limited to these amounts unless your landlord has properly consulted on the proposed works or agreement or the First-tier Tribunal has agreed that consultation is not required.

8. You have the right to apply to the First-tier Tribunal to ask it to determine whether your lease should be varied on the grounds that it does not make satisfactory provision in respect of the calculation of a service charge payable under the lease.

9. You have the right to write to your landlord to request a written summary of the costs which make up the service charges. The summary must-

*cover the last 12 month period used for making up the accounts relating to the service charge ending no later than the date of your request, where the accounts are made up for 12 month periods; or

• cover the 12 month period ending with the date of your request, where the accounts are not made up for 12 month periods.

10. The summary must be given to you within 1 month of your request or 6 months of the end of the period to which the summary relates whichever is the later.

11. You have the right, within 6 months of receiving a written summary of costs, to require the landlord to provide you with reasonable facilities to inspect the accounts, receipts and other documents supporting the summary and for taking copies or extracts from them.

12. You have the right to ask an accountant or surveyor to carry out an audit of the financial management of the premises containing your dwelling, to establish the obligations of your landlord and the extent to which the service charges you pay are being used efficiently. It will depend on your circumstances whether you can exercise this right alone or only with the support of others living in the premises. You are strongly advised to seek independent advice before exercising this right.

13. Your lease may give your landlord a right of re-entry or forfeiture where you have failed to pay charges which are properly due under the lease. However, to exercise this right, the landlord must meet all the legal requirements and obtain a court order. A court order will only be granted if you have admitted you are liable to pay the amount or it is finally determined by a court, tribunal or by arbitration that the amount is due. The court has a wide discretion in granting such an order and it will take into account all the circumstances of the case.

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

No, it means basically the party that loses overall will pay the costs of the application (ie if you won you would be entitled to your £255 back - if you lost you'd pay their solicitors costs for that part of the case )

Ok thanks for clearing that up for me. So you mean their solicitors costs for bringing the claim (the amount awarded in the default judgement) or would it be their solicitors costs up to the end of the case?

I think, from what Di was saying, that once this is set aside, you get negotiating settlement with them on the undisputed issues - or tell them to discontinue and take it to a tribunal, if that is where the case should be? ( not my area I'm afraid, I don't know how leaseholder stuff works apologies xx)

Yes, Di's suggestion seems a very good idea to take it to the first tier tribunal - thanks Di!

I don't believe there are any items I haven't disputed are there? I know I will have to pay something for the insurance but I have disputed it as being too high (and I feel confident it is too high since the cost of insurance has come down since the claimant stopped arranging it).

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

Have you spoken to your Freeholder about all this?

I think you posted that you have a Right to Manage company set up by the lessees. Who's the spokesman for that and do you get on with them? It'll probably be one of the other lessees. How many are there of you (lessees) and are the others content with the service charges which makes you a lone voice, or do others feel the same way as you?

I take your point about the fluctuations with the building insurance premium. Have there been any claims on the policy because that can cause the cost to rocket and then fall back again after 3 - 5 years? Or is it arranged through the Freeholder who may get paid commission by the insurance provider for placing the business (a common rip off).

The legal costs accrued would fall under the terms of your lease. Does it say (most do) that the Landlord (Freeholder) can charge for the costs of recovering service charges? However if they've discontinued twice I don't see how they can charge for those costs especially if it was after you filed your Defence each time. Did they give you a reason for discontinuing?

Solicitors can only do what they're instructed to do so is there any hope of lowering the legal temperature by talking to the horses mouth (Freeholder) via the Right to Manage company? This dispute really does belong with the Tribunal so why not suggest that to them as an alternative. If you don't ask you don't get.

Sorry about all the questions but sometimes a useful legal nugget appears from nowhere when you dig deep.

Di x

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

Di's suggestion seems a very good idea to take it to the first tier tribunal - thanks Di!

My suggestion is based on both law and personal experience as a leaseholder. I hate the way other people spend my money without my having any meaningful input on the decision!

The Tribunal panel includes one lawyer (with specialist knowledge), a surveyor (who knows about buildings insurance and how to maintain properties), and a 'lay person', although I've never been to one with a 'lay person' yet so goodness knows what walk of life they pick those from.

It's much less daunting than being in court.

Di x

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

Section 153 of the Commonhold and Leasehold Reform Act 2002 states that a service charge demand must be accompanied by "a summary of the rights and obligations of tenants". If you didn't get a s.153 Notice with your service charge demand(s) then you have the right to withhold payment.

Did you get the Notice? If you didn't then non compliance with s.153 would be part of your Defence.

Thanks for the replies Di. Yes, I believe they always send the summary of rights and obligations of tenants. I will check the wording to see that everything is included in there though.

Have you spoken to your Freeholder about all this?

I think you posted that you have a Right to Manage company set up by the lessees. Who's the spokesman for that and do you get on with them? It'll probably be one of the other lessees. How many are there of you (lessees) and are the others content with the service charges which makes you a lone voice, or do others feel the same way as you?

I take your point about the fluctuations with the building insurance premium. Have there been any claims on the policy because that can cause the cost to rocket and then fall back again after 3 - 5 years? Or is it arranged through the Freeholder who may get paid commission by the insurance provider for placing the business (a common rip off).

The legal costs accrued would fall under the terms of your lease. Does it say (most do) that the Landlord (Freeholder) can charge for the costs of recovering service charges? However if they've discontinued twice I don't see how they can charge for those costs especially if it was after you filed your Defence each time. Did they give you a reason for discontinuing?

Solicitors can only do what they're instructed to do so is there any hope of lowering the legal temperature by talking to the horses mouth (Freeholder) via the Right to Manage company? This dispute really does belong with the Tribunal so why not suggest that to them as an alternative. If you don't ask you don't get.

Sorry about all the questions but sometimes a useful legal nugget appears from nowhere when you dig deep.

Di x

A little bit of history of the management of our block. We used to have a single management company collect both the ground rent and service charges for the freeholder and then in 2008 we had a letter saying that a new company (which is a subsidiary of, and has the same address as, the freeholder) was taking responsibility for collecting ground rent, buildings insurance and legal notices to do with sales, etc, but the first management company would still be responsible for collecting the service charges.

The lessees then obtained the Right to Manage (although the freeholder fought this) and instructed our own management company which became responsible for service charges and buildings insurance. The first company was dismissed and the second company (the subsidiary company) continues to collect ground rent. Myself and two other lessees agreed to become directors of the RTM company but have limited involvement as we have a management company running things.

None of the lessees (12 in total) have been happy with the management of the building from day 1 and it seems the numerous management companies we have had have all been subsidiaries of the freeholder or closely connected in some way (e.g. same company directors, etc). I know other lessees complained of bad management and unreasonable service charges but I don't know if any of them had any disputes or withheld payments.

I remember there was a leak from the roof into one of the flats years and years ago but I'm sure that was long before this subsidiary company came along and I am not aware of any other insurance claim. The subsidiary company (with the same address as the freeholder) arranged the insurance that I have disputed as being unreasonably high.

The lease states the following on Service Charges:
By way of further or additional rent the Interim Charge and the Service Charge at the times and in the manner provided in the Fourth Schedule hereto PROVIDED THAT if the Interim Charge or the Service Charge or any part thereof shall at any time remain unpaid for 14 days after becoming due and payable then the amount thereof (without prejudice to the Lessor's right of re-entry hereinafter contained or any other right or remedy or the Lessor) shall as from the date when such Interim Charge or Service Charge become due and payable and until the same shall have been paid bear and carry interest thereon (as well after as before any judgement) at the rate of four per centum per annum above Barclays Bank PLC Base Rate for the time being prevailing AND the Lessee shall in such circumstances and during such period or periods as aforesaid pay to the Lessor in addition to the Interim Charge or Service Charge interest thereon at the aforesaid rate.

The Lease states the following on Costs:
To pay the Lessor all costs charges and expenses (including solicitors' counsels' and surveyors' costs and fees) incurred by the Lessor in or in contemplation of any proceedings in respect of this Lease under Section 146 and 147 of the Law of Property Act 1925 notwithstanding that forfeiture is avoided otherwise than by relief granted by the court.

They didn't give a reason for discontinuing the previous cases - I was told by the court when I called them to find out what was happening they they hadn't responded.
Regarding asking them to take the case to the Tribunal, I assume I should wait until the solicitors send in the consent order agreeing to the set aside?

Please do not apologise for asking so many questions - it is for my benefit and you are helping me. Happy to answer as many questions as you may wish to ask! Thanks for all your help!

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

My suggestion is based on both law and personal experience as a leaseholder. I hate the way other people spend my money without my having any meaningful input on the decision!

I can certainly understand this.

The Tribunal panel includes one lawyer (with specialist knowledge), a surveyor (who knows about buildings insurance and how to maintain properties), and a 'lay person', although I've never been to one with a 'lay person' yet so goodness knows what walk of life they pick those from.

It's much less daunting than being in court.

That's reassuring to know but I am sure I read somewhere that the Tribunal is not able to adjudicate on costs/fees (only on service charges) and that only the County Court can do so. Do you know if this is true or am I imagining it?

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

They didn't give a reason for discontinuing the previous cases - I was told by the court when I called them to find out what was happening they they hadn't responded

Are you certain those previous two claims were discontinued not stayed as a result of the Claimant not informing the court that they wished to proceed within 28 days of receiving your Defence?

Are any of the items they're claiming now the same as any of the items they were claiming in the first two attempted claims? It looks like it from your list but I may have misunderstood.

This is important because if they've already discontinued a claim (after you filed your Defence) then they can't re-issue without permission of the court if the 'new' claim is for the same (or substantially the same) as the first (or second in your case) claim.

If those two claims are stayed not discontinued then they shouldn't issue a new claim (if it's for the same stuff), instead they should make an application to the court to lift the stay on the original claim and proceed from there.

Did you get a formal Notice of Discontinuance for both of those claims?

Di x

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

They have asked for a particularised defence now.

Who is the "they" who has asked for a particularised Defence? Have you received Directions from the court ordering you to do this?

It's hard to particularise your Defence when the Claimant hasn't 'particularised' their Claim. Those POC are woefully inadequate. They basically say "she owes us money for service charges and other stuff due under the terms of her lease".

How can you be expected to respond to something that isn't pleaded properly?

A Defence can be an opportunity to ask the court to make the Claimant prove their claim by proving sufficient information for you to defend it. A breakdown of what their claiming in precise money terms would be a good start.

The POC mention the terms of your lease which they say you defaulted, and they mention that the service charges have been demanded. They need to provide the exact terms(s) of the lease and they need to provide evidence that the service charge demands were lawfully served. You say you did get the s.153 Notice(s) but it's the Claimant's job to prove that - no need for you to do their work for them in your Defence. You can tear their evidence (or lack of) to shreds in your Witness Statement later on (if it gets that far).

Di x

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

Are you certain those previous two claims were discontinued not stayed as a result of the Claimant not informing the court that they wished to proceed within 28 days of receiving your Defence?

In the first case, after filing my defence, the claimant did not send in the allocation questionnaire and fee by the due date so the court gave them extra time and ordered that they do so by a given date or the claim would be struck out. I didn't hear anything else so assume the case was struck out.

In the second case, the court sent a letter acknowledging my defence and saying a copy was being sent to the claimant who must then contact the court within 28 days if he wished to proceed and that if he failed to do so then the claim would be stayed. I didn't hear anything so called the court who told me the case had been stayed.

Are any of the items they're claiming now the same as any of the items they were claiming in the first two attempted claims? It looks like it from your list but I may have misunderstood.

This is important because if they've already discontinued a claim (after you filed your Defence) then they can't re-issue without permission of the court if the 'new' claim is for the same (or substantially the same) as the first (or second in your case) claim.

If those two claims are stayed not discontinued then they shouldn't issue a new claim (if it's for the same stuff), instead they should make an application to the court to lift the stay on the original claim and proceed from there.

Yes, the items in the new claim are for exactly the same as those in the first two attempted claims - with the addition of some arrears charges (for not paying the items in the previous cases) and court charges for bringing this new claim.

The second attempted claim should not have been brought then either as that was for the same items as in the first claim.
Should the court have let me know if the freeholder has applied to have the stay/struck off lifted?

Who is the "they" who has asked for a particularised Defence? Have you received Directions from the court ordering you to do this?

It's hard to particularise your Defence when the Claimant hasn't 'particularised' their Claim. Those POC are woefully inadequate. They basically say "she owes us money for service charges and other stuff due under the terms of her lease".

How can you be expected to respond to something that isn't pleaded properly?

A Defence can be an opportunity to ask the court to make the Claimant prove their claim by proving sufficient information for you to defend it. A breakdown of what their claiming in precise money terms would be a good start.

The 'they' is the claimant who included the request for a particularised defence as one of the terms in the Consent Order they asked me to sign for them to agree to set aside the default judgement. I've not received any Directions from the court yet.

All I have from the claimant is a statement of account listing all the charges and payments made to date (but this was not sent to me as part of their claim and has a lower total than the amount claimed).

Thanks for all your help Di. It has really made me feel much better about this whole situation.

[Diana M]

Re: Default Judgement Received Against Me - Next Step To Take?

In the first case, after filing my defence, the claimant did not send in the allocation questionnaire and fee by the due date so the court gave them extra time and ordered that they do so by a given date or the claim would be struck out. I didn't hear anything else so assume the case was struck out.

In the second case, the court sent a letter acknowledging my defence and saying a copy was being sent to the claimant who must then contact the court within 28 days if he wished to proceed and that if he failed to do so then the claim would be stayed. I didn't hear anything so called the court who told me the case had been stayed.

Yes, the items in the new claim are for exactly the same as those in the first two attempted claims - with the addition of some arrears charges (for not paying the items in the previous cases) and court charges for bringing this new claim.

The second attempted claim should not have been brought then either as that was for the same items as in the first claim.

Should the court have let me know if the freeholder has applied to have the stay/struck off lifted?

This is beginning to look like an abuse of process. Or as I prefer to call it 'persecution' by your Landlord!

Three claims all for the same thing.

The first claim struck out for procedural reasons (failed to file DQ) but nevertheless struck out after you had filed your Defence. This was in June 2011.

The second claim is stayed, and has been since May 2013 because they failed to inform the court that they wished to proceed within 28 days of receiving your Defence. That claim still exists yet they have chosen to issue a third claim.

The amount claimed may vary slightly with each claim, but the basis of the claim stays the same with them adding the legal costs of the struck-out claim and the stayed claim. Cheeky so-and-sos.

I would be inclined to ask the court to strike out this current claim on the basis of abuse of process. You could put that at the beginning of your Defence.

A lot will depend on what was in the Particulars of Claim for each claim, so attach those as exhibits.

The court should have sent you a copy of the strike-out Order (May 2011) so get a copy from them if they didn't or you've mislaid it.

The court won't inform you if a claim has been stayed because they only tell you when things happen not when they don't (if that makes sense). If the claim history is still on the MCOL website you can login and take a screenshot of the status showing it's stayed and add that as an exhibit. The court will have it on record but it always helps to make a DJ's life easy.

Di x

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

The particulars of claim for the first case in 2011 were:

1. The Claimant, as the Lessor, claims monies in relation to outstanding ground rents, insurance and administration charges.
2. The Defendant has the benefit of the leasehold interests held under a lease dated...
3. The Defendant has failed to make payment despite numerous demands being issued.
4. The Defendant remains indebted to the Claimant.
And the Claimant claims
1. The sum of £1022.12 in respect of arrears held on the property ledger
2. Interest at a rate of 8% in accordance with County Courts Act 1984.
3. Costs

The particulars for the second case in May 2013 were:

Monies due to landlord under lease.
Lease charges 461.62 Due Date 21/05/13
Total due:- 461.62
The claimant claims the sum of 461.72 for Monies due to to landlord under lease including 0.10 interest pursuant to S.69 of the County Courts Act 1984
Daily rate to judgement: 0.10

I can't work out how they got the figure of £461.62 from looking at the statement of account I posted earlier though.

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

You sign the consent order and return it to the Claimant. Keep a copy.

The 14 days is from the date of the Order. The Order will come from the court (as the court can refuse the consent order although in practice in these cases they don't) and the court will date the order.

I have received a letter from the solicitors saying they expect to receive my defence within 14 days.

Does this have to be a final defence that I will not be allowed to add to and should I also send a copy of the defence to the Court (the Court has not responded to the Consent Order yet)?

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

I would be inclined to ask the court to strike out this current claim on the basis of abuse of process. You could put that at the beginning of your Defence.Di x

The consent order written by the claimant that the judgement be set aside and the set aside hearing (from my set aside application) be vacated included an order that I serve a fully particularised defence within 14 days. Could someone please advise if I should send this to the court as well as the claimant? I expect so but just want to check I am doing things correctly.

What will be the next step after filing my defence - will the claim start again as if my defence had been received first time round (i.e. before the default notice)?

I will add to the defence a request that the claim be struck out for an abuse of process due to the previous two claims being struck out and stayed. If the court agrees to strike it out then where does that leave the claimant in regards to the items in the claim?

Thanks for any advice!

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

I just thought I would write an update.

Still no news on the consent order asking for the judgement be set aside. Apparently it is still awaiting action from the judge.

I sent off the defence requested by the claimant and stated that I believe the claim should be struck out as there was an abuse of process since the items in the claim had been included in two previous claims in which one was struck out and the other was stayed.

I have now received a letter from the claimant's solicitors saying that in order to resolve the issue quickly and amicably, they will waive all the admin costs and legal fees if I agree to pay the outstanding insurance amount (this is the original insurance amount that I disputed which led to all the admin costs and legal fees). They have asked that I pay the insurance amount within 7 days in full and final settlement.

I think in view of this they clearly do not believe they have any prospect of winning the case.

[apollo18]

Re: Default Judgement Received Against Me - Next Step To Take?

UPDATE

Good news - I have now heard from the claimants that they are discontinuing with the claim and removing all charges from my account.

Worryingly, I have not heard anything from the court since July and despite the claimant sending the court a consent order to set aside the judgement at the beginning of July, the judgement is still on my file and I have not had any notice about the judgement being set aside or that the hearing has been cancelled.