QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
2 Redcliff Street, Bristol, BS1 6GR |
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B e f o r e :
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THE QUEEN ON THE APPLICATION OF CAWSAND FORT MANAGEMENT COMPANY LIMITED |
Claimant |
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THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER) |
Defendant |
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MR & MRS R KANE AND OTHERS |
Interested Parties |
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The Defendant and the Interested Parties neither appearing nor being represented
Hearing date: 11 November 2014
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Crown Copyright ©
Mr Justice Hickinbottom:
Introduction
The Statutory Framework
"(1) [The appropriate tribunal] may, on the application for an order under this section, by order… appoint a manager to carry out in relation to any premises to which this Part applies –
(a) such functions in connection with the management of the premises, or
(b) such functions of a receiver
or both as the tribunal thinks fit.
(2) [The appropriate tribunal] may only make an order under this section in the following circumstances, namely –
(a) where the tribunal is satisfied –
(i) that any relevant person either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them…
(ii) …
(iii) that it is just and convenient to make the order in all the circumstances of the case.
…
(b) where the tribunal is satisfied that other circumstances exist which make it just and convenient for the order to be made."
By subsection (2ZA), "relevant person" includes a person upon whom notice has been served under section 22. Subsection (4) states that an order under the section may make provision with respect to "such matters relating to the exercise by the manager of his functions under the order and… such incidental or ancillary matters as the tribunal thinks fit…". Subsection (9) provides for the tribunal to vary a management order. Subsection (11) provides that references in Part II to the management of any premises include references to the repair, maintenance or insurance of those premises.
The Background
"1.3 The [Claimant] does not appeal against the appointment of the Manager per se. Rather on appeal the [Claimant] alleges that the LVT exceeded its jurisdiction under section 24 of the… Act because the extent of the property in respect of which the LVT's order was made includes 'premises' to which Part II of the… Act does not apply.
…
6.1 On appeal, the [Claimant] contends an order under section 24 of the… Act can only be made in respect of 'premises' within the meaning of section 21 of the… Act. It is further contended that the management order made by the [LVT] was made in respect of property which is not 'premises' within the meaning of section 21 of the… Act, and it therefore ultra vires.
6.2 On appeal the Respondents [i.e. the Interested Parties in the claim before me] contend that section 21 of the… Act defines a tenant's right to apply for the appointment of a manager, and section 24… defines the jurisdiction of the LVT to appoint a manager, and the functions of the manager appointed. It is further contended that the management order made by the LVT concerns management functions 'in relation to' premises to which Part II of the… Act applies and is within the jurisdiction of the LVT". "
"17. … [W]hat has to be recognised is that in performing works of repair a manager, although prompted by the tenants' right to enjoy an incorporeal right, would be carrying out functions in the form of physical works to the servient tenement. He would not, as Mr Adams put it, be repairing the rights of way, since the rights of way are incorporeal. He would be repairing the ways themselves, and these are part of the servient tenement. It seems to me, for this reason, to be inescapable that a management order 'in relation to' premises that include easements may appoint a manager to carry out functions that may include works to the servient tenement. These would, undeniably, be functions 'in connection with the management of the premises'. In the circumstances, it is clearly the case that the 'property' (to use the word in the management order) in respect of which the manager is appointed to exercise functions may properly include appropriate parts of the servient tenement. The principal concern that led to the respondents' application related to the amenity land over which they had incorporeal rights, and, in my judgment, the [valuation tribunal] had the power to make an order that included this land in the property to which the management order related.
18. The contention of the [Claimant] that the LVT had no jurisdiction to make a management order extending over parts of the fort that are not within the curtilage of the buildings containing the leasehold flats must therefore necessarily fail, and, since this is the only issue raised, the appeal must be dismissed…".
"18. … Mr Adams pointed out that the property, as defined in the order, included parts of the [Claimant's] land over which the lessees have no rights (the buildings beneath the mound). It also included residential land that was in other freehold ownerships, although it is to be noted that there is apparently no objection on the part of those freehold owners to the inclusion of their properties. Under the programme of works, the manager is required, among other things, 'to keep insured the land and buildings', which would therefore extend to land and buildings in relation to which the lessees have no rights. It appears to me that, in some respects, the order probably goes too far, although what parts of the servient tenement it is appropriate to include must be a matter for the LVT's judgment. The remedy of the [Claimant], now the issue in the appeal has been resolved, is to apply to the LVT, under section 24(9), to vary the order if it feels that its provisions go beyond what is reasonably necessary."
"The short issue is whether the LVT went beyond its powers in purporting to appoint a manager of the whole of the property known as 'The Fort' ".
That issue was, he said, identified by the President of the Lands Tribunal, in paragraph 11 of his decision, quoted at paragraph 15 above.
"19. The [Claimant] has no objection to the appointment of a manager in this case or to Mr Woodhead being appointed manager by the tribunal, provided that the order is limited to the buildings and their curtilages as defined in the tribunal's earlier ruling under section 13 of the… Act.
20. The [Claimant] based its submissions on the interpretation of "the premises" in sections 21 and 24(I) of the… Act. Its case was that the power of the tribunal to appoint a manager does not extend to granting powers over property owned by the [Claimant] outside the leased buildings and their curtilages, such as the amenity land at the Fort over which the [Claimant] granted recreational rights to residents and other land over which the lessees enjoy appurtenant incorporeal rights. To the extent that the tribunal's order appointing a manager covered such property, it was ultra vires.
21. The lessees' case was that section 21 defines a tenant's right to apply for the appointment of a manager. They own premises which satisfy the requirements of the section. Each leasehold unit consists of a part of a building, which contains two or more flats. Section 24 defines the jurisdiction of the tribunal to make an appointment and to lay down the functions of the manager appointed "in relation to" the premises owned by the lessees and to carry out functions in connection with their management. They contended that the functions of the manager as set out in the tribunal's order for his appointment are to be carried out "in relation to" premises to which Part II of the… Act applies, and the order was therefore validly made."
"24. In his skeleton argument Mr Adams criticised the President for treating the appeal as raising only the 'premises issue' and for not deciding 'the true issue' on the extent of the jurisdiction of the [LVT] to appoint a manager, which was limited to premises to which Part II of the… Act applied. In oral argument I understood Mr Adams to accept that 'the true issue' is simply another way of formulating the premises issue and that the appeal to this court, as to the Lands Tribunal, turns only on that issue."
"25. Under the procedures relevant to the premises issue, which I have identified in paragraphs 20 and 21, it is necessary to consider four steps.
26. The first step is the applicant's entitlement to apply to the tribunal for the appointment of a manager under Part II. This is governed by section 21 in Part II, which is clearly directed to the standard case of a lessee of a flat in a purpose-built block of flats or in a house or other building which has been converted into two or more flats. Section 21(1) provides that the applicant must be a "tenant of a flat contained in any premises to which this Part applies". Section 21(2) provides that Part II applies to "premises consisting of the whole or part of a building if the building or part contains two or more flats".
27. The focus of the provision is on a building or part of a building containing flats. There is no dispute that Mrs Stafford and her fellow leaseholders at the Fort are entitled to apply to the tribunal for the appointment of a manager, all of them being tenants of flats in buildings to which Part II applies.
28. The second step is whether the case is one in which the tribunal could properly exercise its discretion to appoint a manager. There is no dispute on this point. The [Claimant] has no objection to the appointment under section 24 of a manager to carry out, on premises to which Part II applies, functions in connection with the management of the premises.
29. The third step is to identify the extent of the property over which the tribunal has power to appoint a manager. This is the controversial aspect of the decision of the tribunal and the Lands Tribunal.
30. Mr Adams correctly pointed to the fact that the opening words of section 24(1) contain the expression "premises to which this Part applies". He submitted that the manager can only be validly appointed of, over or in respect of a building (together with its curtilage) to which the… Act applies, and not of, over or in respect of other premises such as, for instance, the amenity land.
31. … [T]his submission, which concentrates on 'the premises', does not give full effect to the language of section 24(1), which refers to the appointment of a manager to carry out functions 'in relation to' any premises to which Part II applies. This clearly requires a causal link or nexus between the functions to be carried out by the manager and the premises defined in section 21(1), but it does not confine the manager's functions to buildings and their curtilages. The power of the tribunal is broader than simply appointing a manager of or over premises as a building or part of a building. For example, the recreational rights were granted by the [Claimant's predecessor] over the amenity land. Although they were not granted over the building containing the flats, it is an accurate use of language to describe the rights granted over the amenity land as being 'in relation to' the premises consisting of the building which contains the lessees' flats. In those circumstances an order appointing a manager to carry out functions 'in relation to' the premises may extend to the amenity land and their land not within the buildings or other curtilages.
32. The section goes on to provide what functions the manager may be appointed to carry out, ie functions "in connection with the management of the premises" which may include repair, improvements and maintenance under section 24(11). This fourth step involves a decision by the tribunal as to what management functions in connection with the premises the manager should carry out 'in relation to' the premises.
33. In my judgment, the flaw in the [Claimant's] submissions on the construction of section 24 stems from narrowly concentrating on the definition of 'premises to which the Act applies' and neglecting the self-evident purpose of the provision and the width of the language in which the power of the tribunal is expressed.
34. The practical purpose of Part II is to protect the interests of lessees of premises, which form part of a building, by enabling them to secure, through the flexible discretionary machinery of the appointment of a manager, the carrying out of the management functions which they are entitled to enjoy "in relation to" the premises of which their flats are part. There is nothing in the language of Part II or in its aim to justify limiting a manger's functions to those which must be carried out on "the premises to which the Act applies" in section 24(1) in the way suggested by the company by reference to Parts I and III of the… Act. Both the tribunal and the Lands Tribunal rightly rejected the company's submissions on construction.
35. I would add that I agree with the President of the Lands Tribunal that the only issue before him (and the same is true in this court) is the question of construction. If, in the light of the ruling on that issue, it appears that the order of the tribunal goes too far by conferring powers on the manager otherwise than 'in relation to the premises' the proper procedure for correcting the order of the tribunal is not to appeal to the Lands Tribunal or to this court on a point of law, but to apply to the tribunal under section 24(9) for a variation of the order. The tribunal's order contains an express liberty to apply for variation: para 19."
The appeal was thus dismissed.
"55. The Application for an appointment of a manager of the Property is acceptable to the [Claimant] if the extent of the Property over which any order is made is changed and if the functions of the manager are set out in a different way from what is contained in the current order made by [an LVT] in 2008 and which will expire on the 31 October 2013.
56. The [Claimant]'s counter proposal is that the Tribunal issue an order but on different terms and relies upon an argument, repeated by it unsuccessfully in the past, that the Court of Appeal Decision implied that the appointment of a Manager in 2005 "went too far". What was said by the Court of Appeal in paragraph 35 of that decision is that the only issue before both it and the Lands Chamber (whose decision it was reviewing) was the issue of construction. If in the light of its ruling on that issue the Tribunal went too far it should be referred back to them or an application made for a variation of the order. No such application has been made nor has any reference been made back to the Tribunal until the [Claimant] submitted its arguments at the Hearing.
57. It was stated prior to and at the Hearing that the [Claimant] does not object to the Appointment. His case is that, in reliance on the possibility, identified in the Court of Appeal Decision, that the extent of the land subject to the order might be too extensive and for reasons which were never clearly explained either in written submissions or orally by his Counsel he wanted to limit the extent of the Property to which a new order would apply.
58. Mr Adams said that the Property to be subject to the order should only include the land beneath the leasehold property but that the [Claimant] had no obligations to manage that land. He conceded that the Deeds of Covenant, (referred to in paragraph 35 above) contained freeholder obligations but said that the original freeholder, (the [Claimant's] predecessor) had received no moneys to enable him to fulfil those obligations.
59. He did not explain why the [Claimant] sought to limit the manager's functions….
…
62. There is no agreement between the parties as to what functions should be specified in the draft order. The [Claimant] suggested that it was necessary to limit the functions to ensure the jurisdiction of the Manager was confined to those obligations of the freeholder which must be undertaken, and nothing more, but he did not explain why that was necessary given the context of eight years of successful management on the terms of the existing order without complaint from the [Claimant]. Therefore the Tribunal is not minded to accept the [Claimant's] suggestions.
63. In the absence of any convincing justification from the [Claimant] that the terms of the current order should be changed, the Tribunal grants the application to appoint Martin Woodhead as Manager and Receiver of the Property the extent of which remains the same Property as the property to which the current order relates."
The Claim
i) Under section 24 of the Act, the tribunal is empowered to appoint a manager to carry out "in relation to any premises to which this Part [of the Act] applies… such functions in connection with the management of the premises… as the tribunal thinks fit".ii) "Premises" here means the buildings and appurtenances – both the appurtenant land or curtilage, and appurtenant rights such as easements – of the relevant leaseholders.
iii) Mr Adams continues to accept that a manager appointed "in relation to… premises" may be authorised by the tribunal to manage appurtenant rights, such as the right to enter and repair a way over which the tenant has a right of way. Consequently, he said, the tribunal has the power to make a management order over land outside the land comprising the premises, in the sense of an order appointing a manager to carry out works on such land; but it has no power to make such a management order of such land, which would give the manager powers over that land which would be in competition with the rights of the freeholder.
iv) Section 24 requires a management order to be for the management of the leaseholder's premises; although that might include functions over other land, such as the amenity land. The tribunal's order of 4 October 2013 is a management order of "the Property" which includes land outside the land comprising the premises, including the amenity land. In making an order for the management of (e.g.) the amenity land, the tribunal acted without jurisdiction.
v) As it was made without jurisdiction, the order of the tribunal is a nullity, and is not amenable to an appeal. The only means of challenge is by way of judicial review.
vi) Similarly, in respect of the 2005 management order – which was in materially similar terms – the LVT had no jurisdiction to make the order that it purported to make; the 2005 order was a nullity; and the Lands Tribunal did not have jurisdiction to consider the appeal it purported to consider, nor did the Court of Appeal or House of Lords have jurisdiction to consider the onward appeals.
vii) Alternatively, even if the question of jurisdiction can be raised by way of appeal, where a tribunal acts without jurisdiction, that is such a fundamental procedural error that this court should in any event be prepared to intervene in the exercise of its supervisory jurisdiction.
viii) In any event, the Court of Appeal decided nothing of substance. On a true construction of Mummery LJ's judgment, he merely held that a management order could be over land outwith the relevant leaseholders' premises – not of such land – and Mr Adams had in fact conceded that, by accepting that a manager could be properly appointed to (e.g.) enter other land and there repair a way over which a relevant tenant had a right of way. The judgment therefore did no more than accept that concession. Neither the Lands Tribunal nor the Court of Appeal gave a determinative ruling on the short but important point of law, namely whether it was beyond the statutory powers of the First-tier Tribunal (or its predecessor) to appoint a manager of property which is not within the relevant premises to which Part II of the Act applies.
The Jurisdiction of the Court
The Substantive Issue
Conclusion