Susan Wood failed in her court struggle earlier this week to be reimbursed the £1,150 in exit fees paid when her late father’s flat was sold in 2010.
Wood argued that as the fee was for a service that was not carried out – ostensibly to vet the capability of the flat’s purchaser for “independent living” – she should receive the money back.
The issue was heard in the small claims division of Sheffield County Court, but Fairhold, a freehold owning company within the Tchenguiz Family Trust, was taking no chances.
Barrister Paul Letman was sent up from London to fight the case, which may have cost many times more than the sum disputed.
Wood gave a polished outline of her case, which rested on the simple point that she had been charged for something that had not, in fact, been done. Only if this argument failed did she ask the court to rule that the transfer fee represented an “unfair term” under consumer contract legislation.
But Letman successfully argued on points of law that the lease did not say that the transfer fee was a fee for a service, nor did this represent an unfair contract term.
Wood could have refused to accept Fairhold’s last minute complex legal argument that had not been outlined before the day of the hearing. The judge asked whether she wanted an adjournment, but Wood declined.
As a result, the case went ahead and she lost.
But the positive news is that any future litigant can be informed, via Carlex, of the landlord’s legal arguments on exit fees.
“This is very far from being a disaster,” said Wood. “Mine was a simple argument. But I was not legally represented and I cannot dispute a point of law. There is also a limit to how much time I can spend on this issue.
“I am delighted to have brought this case. From the start, Fairhold tried to delay proceedings. However, the court rejected all their attempts. The most serious issue was when they tried to have the case moved to a higher court, which would have put me at risk of being responsible for their costs had I lost. But the court agreed with me that it should properly be heard as a small claim,” said Wood.
Small Claims Courts are designed for ordinary people to have their cases heard in a comparatively informal environment, where legal costs are not usually awarded. The judge made it clear that the case was reasonable, and Fairhold did not, in fact, ask for costs.
Wood made a strategic mistake in not accepting the judge’s offer of an adjournment. Far too often lay representatives just want to get on with the case, for which they have prepared for months.
It’s also far too common for landlords’ barristers to present information at the very last stage, although this is frowned on in the Civil Procedure Rules.
But once you have “accepted” a document it is as if it were never late and is given equal weight to other evidence.
“The good news is that we now have all the legal arguments used by the landlord in this case,” said Wood. “Anyone planning to mount a similar challenge over exit fees can be provided with the full bundle of Fairhold’s arguments.
“Although I lost this particular case, it does not create a legal precedent for any future challenges. I do hope many more people will now be encouraged to take similar action against these pernicious fees.
“A Small Claims Court is the ideal forum. I had a fighting chance of winning, otherwise Fairhold would not have expended so much effort and money on its defence.”
Carlex sends congratulations to Sue for having the courage to bring the first case on exit fees.
Here is to many, many more!