Dispute about historic debt related to service charges

As non-professional Directors of freehold property management company, we accepted a condition of our purchase that we use “reasonable endeavours” to recover outstanding service charge debts on behalf of the administrators. 

The outstanding debt remains with a professional leaseholder who countered this by taking us to the LVT for over-payment of service charges. On two occasions that company has been successful, and credits have been given to all leaseholders. However, at the 2nd LVT application the two sides cannot agree on what payments have already been made. Things were made more complicated by a changeover of property management company just before the first LVT.

As the Directors have not complied with the LVT decision, the claimant has now applied through the county court for implementation of the LVT decision. A large amount of money has been spent on legal and accountancy fees which has not been allowed from service charges. The Directors want to defend their position and bring to the County Court’s attention the fact that the claimant who is owed money is part of the original development company that accrued debt in the first place before going into administration.

The Directors need to find a cost effective solution as soon as possible. Their original Solicitors feel it is a case worth defending.

What do you think as a principle?

Can the County court be used as a place for appeal?

This time witnesses would be subpoenaed to substantiate the disputed payments.

Many thanks

Martin Brown