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Kol v Bowring [2015] UKUT 530 (LC)

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9th September 2016

Summary

The Upper Tribunal determined that the First Tier Tribunal has jurisdiction to determine all matters relating to the discharge of a tribunal appointed receiver-manager’s functions. This includes but is not limited to the provision of final accounts and the repayment of any surplus service charges.

Facts

On 4 August 2011 the Leasehold Valuation Tribunal as it then was appointed Ms Mary-Anne Bowring, chartered surveyor, as the receiver and manager of premises comprising three residential flats and a commercial unit. Ms Bowring’s appointment was to last for a period of two years to 4 August 2013 and was made pursuant to the LVT’s powers under s.24 of the Landlord and Tenant Act 1987.

Between 2011 and 2015 a number of applications and cross-applications were made both by the tenants and Ms Bowring. Ms Bowring had on 30 September 2014 been ordered to ‘use her best endeavours to provide the Tribunal and [the tenants] a fully itemised statement of account’ for the final period of her appointment. However as at 14 October 2015 Ms Bowring still had not produced this.

The decision which was appealed to the Upper Tribunal related specifically to a cross-application by the tenants for Ms Bowring to return any surplus monies owed to them at the end of the period of her appointment, which was refused by the FTT. Permission to appeal this decision was granted on 5 February 2015. Ms Bowring issued a written statement but did not appear at the Upper Tribunal hearing to save costs as the FTT would not pay her costs of so attending.

Issues

The narrow issue raised in this case was whether the FTT is empowered to order a tribunal-appointed manager to repay surplus monies owed to tenants. However the Upper Tribunal’s decision also considered the wider issue of whether or not the FTT has jurisdiction to control the functions of managers which it had appointed s.24 LTA87, notably in determining disputes that might arise between such managers and relevant tenants.

First instance

The tenants applied to the First-Tier Tribunal to have their ‘cash property’ returned to them by Ms Bowring. The Tribunal’s decision on this point stated only that they had no jurisdiction to make that order, noting that Ms Bowring had been ordered to provide accounts for the period January 2013 to 4 August 2013.

Decision on appeal

The Upper Tribunal considered the issue in the light of the Court of Appeal decision in Maunder Taylor v Blaquiere [2002] EWC Civ 1633, which had found that while a court-appointed manager’s responsibilities would be defined by a relevant lease, they did not arise from that lease. Their duties arose from their appointment by the tribunal and were therefore owed to the tribunal, and not to landlords. The FTT had been given wide powers under s.24 to supervise the exercise of a manager’s functions once appointed under that section.

The Tribunal further considered the purpose of s.24 LTA87, which was to enable a property to be managed under the control of the tribunal where there had been issues with the landlord’s fulfilment of such duties. Given this aim, any issues arising as a result of those functions should be approached in a simple and practical way to keep continuing costs to a minimum.

It was to be expected of a manager that they should keep proper accounts in the ordinary course of this process, and the production of their final accounts was itself a required step before tenants could be repaid any surplus funds held at the end their appointment period. The Tribunal concluded that the power of the FTT to order the production of such accounts, as well as the subsequent repayment of any surplus to the tenants, fell specifially under s.24(4) of the Act, which broadly permits the FTT to make provisions as to matters ‘relating to the exercise by the manager of his functions’.

The appeal was therefore granted and the matter remitted to the First Tier Tribunal for further directions.

Comment

His Honour Judge Gerald made several findings of general relevance to practitioners dealing with the appointment of managers under s.24. At paragraphs 31-33 it is observed that where the FTT appoints a manager their initial order should: provide for accounts to be produced by the manager at relevant intervals throughout their appointment; give a timetable by which such accounts should be provided; and give a timetable for tenants to raise any queries or objections. Further, any subsequent application by manager or tenant for further directions or to resolve a dispute should retain the same application number and ideally be dealt with by the same FTT panel as made the initial order.

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