When construing a badly drafted, complicated order appointing a manager, the entirety of the order should be considered as different parts may shed light on each other and the parties must be intended not to contradict themselves.
Canary Riverside is a large mixed residential and commercial estate in east London. In 2016, following failures by the landlord, a group of residential tenants successfully applied for a manager to be appointed under the provisions of the Landlord and Tenant Act 1987. Unfortunately, the order appointing the manager was poorly drafted. It has been amended on various occasions since it was first made. In Unsdorfer v Octagon Overseas Ltd and others [2023] UKUT 137 (LC), the Upper Tribunal (Lands Chamber) considered the manner in which the FTT had resolved a dispute as to the extent to which the manager could recover his costs of various proceedings from the tenants of the commercial premises.
Any liability to contribute to the litigation costs being considered was an obligation greater than that imposed by the commercial leases. While an order going beyond the terms of a lease is permissible under the 1987 Act, it was significant that the commercial lessees were not made parties to the proceedings under which the manager was appointed. It would be surprising and unfair for the FTT to have imposed additional obligations on lessees without giving them an opportunity to make representations, and therefore an interpretation which did not impose such additional obligations should be preferred. In construing the paragraph of the order which concerned reimbursement, the other parts of the order (especially those that referred to the manager’s ability to conduct litigation) should be considered as they may shed light on the part being construed and the parties must be intended not to contradict themselves.
Although the Upper Tribunal’s approach differed from that of the FTT, it accepted that the FTT’s conclusions had been correct. The correct construction of the order was that only a limited part of certain litigation costs would fall on the commercial lessees. Interestingly, the Upper Tribunal observed that an omission greater than the gaps or inconsistencies in the requirement of commercial lessees’ contribution was that the order did not allow the manager to recoup from the landlord any part of his costs of proceedings against the landlord, thus leaving a significant burden on the residential lessees.
Elizabeth Haggerty is a barrister
