Landlord and Tenant Act 1987, Part II — Appointment of managers by the court — Application by motion for interim order appointing a company representing tenants to manage flats — Management by landlords ‘simply non-existent’ — One matter requiring urgent attention was leaking roof — Judge satisfied within the terms of section 24(2)(a)(i) and (ii) that landlords were in breach of obligations owed to tenants and that the circumstances were such that the breaches were likely to continue — Management company appointed — Further proceedings to go to county court
also satisfied that it would not be ‘just and convenient’ to use the words of
section 24(2)(a)(iii) or section 24(2)(b) to allow the present conditions in
regard to management to continue pending the trial of the originating summons
between the parties — Hence the need for these interlocutory proceedings —
According to affidavit evidence the damage caused by penetration of water into
the subject building was getting worse — There was no suggestion from the
defendant landlords, Midrome Ltd, that, if the judge refrained from making the
order now sought, they would take steps to remedy the condition of the roof or
indeed take any other steps towards the proper management of the property
the judge’s conclusions on the substance of the application, the points raised
on behalf of the defendants were necessarily of a procedural and technical
nature — They were as follows:
notice under section 22 of the 1987 Act was defective in not containing a
statement that the tenants would not make an application under section 24 if
the landlords complied with the specified requirements — This criticism
appeared to imply that all the matters relied on by the tenants were capable of
remedy, which was not the case here — In any case the judge decided to exercise
the dispensing power given him by section 24(7) to overlook this defect, if it
was a defect
under section 22 did not sufficiently specify the steps to be taken by the
landlords to remedy certain of the defects — The judge held that in fact the
specification given was sufficient
matters which were capable of being remedied but which the tenants’ notice did
not require the landlords to remedy — These, however, related to insurance
which could not be obtained and to the payment of money which the landlords had
no intention to pay — If there were defects here, the judge again relied on his
dispensing power under section 24(7)
28 days for compliance was not in the circumstances reasonable — The judge
rejected this criticism on the ground that, whatever period was specified, the
landlords had no intention of complying
Ord 97, r15 had not been complied with, as the ‘qualifications’ of Croftbride
Ltd, the proposed manager, had not been stated — The judge rejected a suggested
implication that the manager must have a professional qualification; the
provision merely asked for qualifications to be stated if there were
qualifications
be debarred by delay from obtaining interlocutory relief, the notice having
been served in August 1989, the originating summons in December 1989 and the
present motion launched in July 1990 — The judge, however, decided that it was
‘just and convenient’ to make the order sought notwithstanding the delay;
another winter was on the way and the physical deterioration and the lack of
management continued
accepted a submission that the words ‘profits’ and ‘other moneys’ should be
omitted from the wording of the powers to be conferred on Croftbride Ltd, so
that the wording should read ‘receive or levy all rents and service charges
payable by the tenants’
made an order appointing Croftbride Ltd manager for an interim period before
the trial of the action, subject to Croftbride Ltd providing security to the
satisfaction of the master, the costs of the application to be costs in the
cause — The judge ordered further proceedings to be transferred to the
appropriate county court
No cases are
referred to in this report.
This was an
interlocutory motion for an interim management order under section 24 of the
Landlord and Tenant Act 1987. The main application was for an acquisition order
under Part III of the Act. The plaintiffs were the tenants’ representative,
Catherine Howard, and Croftbride Ltd, the proposed management company. The
defendants were the landlords, Midrome Ltd, and Thomas Collins and Nadir Craft.
The premises which were the subject of the proceedings were at Berry Lodge,
Crouch Hill, London.
Philip Waller
(instructed by Portner & Jaskel) appeared on behalf of the plaintiffs;
Barry Denyer-Green (instructed by David Wise) represented the first defendants.
Giving
judgment, WARNER J said: Having regard to the lateness of the hour I
will state my reasons for the order I am going to make as shortly as I can. I
will make the order sought by the plaintiffs with, however, in the light of Mr
Denyer-Green’s submissions, the omission of some words from the provisions
relating to the powers that are to be exercisable by Croftbride Ltd as manager
of the property.
Shortly
stated, the need for the appointment of a manager of the property arises first
because of the leaking roof. It has, of course, been leaking for some time,
but, as was pointed out by Miss Howard in her affidavit, another winter is going
to occur in a very few months’ time, and I infer from what she says in the last
of her affidavits that the damage caused by penetration of water into the
building is getting worse. Second, it seems to me clear from the evidence that
the landlord, Midrome Ltd, has no intention of doing anything at all about that
roof unless paid in advance to do it. Third, the evidence also points to
management of the property by or on behalf of Midrome Ltd being now simply
non-existent. As long ago as October 1988 it was stated on behalf of Midrome
Ltd in a letter to one of the tenants at the property that Midrome Ltd was not
equipped to cope with the management due to the difficulty it had had in
securing the services of suitably qualified staff.
It would not
be just and convenient within the terms either of section 24(2)(b) or of
section 24(2)(a)(iii) of the Landlord and Tenant Act 1987 to let the present
conditions as regards the management of the property continue pending the trial
of the originating summons. I am satisfied within the terms of section
24(2)(a)(i) and (ii) that the landlord is in breach of obligations owed by it
to the tenants, in particular the failure to keep the roof in proper repair,
and that the circumstances by virtue of which the landlord is in breach of
those obligations are likely to continue.
Mr Denyer-Green
himself, on behalf of Midrome Ltd, attributed the situation to three
difficulties faced by Midrome Ltd. One was its difficulties with previous
agents and builders. Another was its difficulties over insurance. The third was
its inability to require payments in advance, which he stressed. There is no
suggestion from Midrome Ltd or Mr Antonelli, who as a director has sworn
evidence on its behalf, that, if I refrain from making this order, Midrome Ltd
will take steps to remedy the condition of the roof or indeed any other steps
towards the proper management of the property.
Mr
Denyer-Green, who has said everything that could possibly be said in opposition
to the motion, took four points, apart from relying on the difficulties facing
Midrome Ltd. One of those points was that, so he submitted, the notice served
by the plaintiffs on August 3 1989 was defective, so defective that it could
not be relied upon under the Act. However, Mr Denyer-Green, quite properly,
drew my attention to section 24(7), which says:
In a case
where an application for an order under this section was preceded by the
service of a notice under section 22, the court may, if it thinks fit, make
such an order notwithstanding —
(a) that any period specified in the notice in
pursuance of subsection (2)(d) of that section was not a reasonable period, or
(b) that the notice failed in any other respect
to comply with any requirement contained in subsection (2) of that section or
in any regulations applying to the notice under section 54(3).
The first
point taken by Mr Denyer-Green under this head was that the notice did not
contain a statement in accordance with the second limb of section 22(2)(b). By
virtue of that provision a notice under section 22 must, if para (d) of
subsection (2) is applicable, state that the tenant will not make an
application for an order under section 24 if the landlord complies with the
requirements specified in pursuance of para (d). Para (d) provides that where
the matters that would be relied upon by the tenant for establishing the
grounds upon which the court would be asked to make an order under section 24,
if an application for that order were pursued, are capable of being
remedied by the landlord, the notice must require the landlord, within such
reasonable period as is specified in the notice, to take such steps for the
purpose of remedying them as are so specified.
Here, Mr
Denyer-Green pointed out, the notice did not in terms contain a statement to
that effect, that is to say a statement that the tenant would not make an
application for an order under section 24 if the landlord complied with the
specified requirements. That seems to me to be a highly technical point.
Possibly it was met by Mr Waller’s report that the second limb of para (b) of
section 22(2) does not apply unless all the matters relied on by the tenant are
capable of being remedied, which is not the case here. At all events, as I say,
it is a highly technical point, and I think it would be just for me to
disregard it in exercise of the power under section 24(7).
Then Mr
Denyer-Green objected that the steps to be taken by the landlord to remedy
certain of the defects were not specified in the notice. I do not think that
that is right. The notice required the landlord to remedy the matters specified
in paras 1(i), 1(ii) and 3(iv) of Schedule 2. Para 1(i) relates to the failure
to repair the roof and gutters of the property, and under the particulars in
that part of Schedule 2 there is this paragraph:
Full
particulars of the defects in the roof and guttering and of the work required
to remedy them appear from the reports of Peter M Olley and Associates, dated
January 13 1989, a copy of which has been served upon the landlord.
That is so, a
copy of that report had been served. Para 1(ii) relates to the failure to
decorate the exterior of the property as required by the terms of the leases,
and in particular to paint the exterior parts of the property at least once in
every three years, contrary to the said terms. The particulars under that
simply state that the exterior of the property was last decorated in 1984. It
is difficult to see how the tenants could be more specific than that, because
the terms of the leases were not more specific.
Third, Mr
Denyer-Green objected that there were in the schedule certain matters relied
upon by the tenants which were capable of being remedied but which the notice
did not require the landlord to remedy. One of those was the failure by the
landlord to insure. That, as Mr Denyer-Green himself rightly accepted from me during
the course of the argument, was a somewhat hollow complaint in view of Mr
Antonelli’s evidence that it is not possible (for reasons that I need not go
into) for Midrome Ltd to insure the property. There is really no alternative at
present to the property being insured by the tenants, as it is. The other
matter that Mr Denyer-Green mentioned under this heading was the repayment of
£1,094.67. Since there is absolutely no intention on the part of Midrome Ltd to
repay that amount, that complaint also is a little hollow. So I think that, if
those are technically defects in the notice, I should and I do waive them under
section 24(7).
Then Mr
Denyer-Green submitted that 28 days, which was the period specified in the
notice, was not in the circumstances a reasonable period. Indeed, he said,
Midrome Ltd could not comply in that time, so far, at all events as the
external painting of the property was concerned, with the requirements of
section 20(3) of the Landlord and Tenant Act 1985. That seemed to me at one time
to be a valid objection. In fact when I first saw this notice I thought that 28
days was an unreasonably short period in the circumstances. However, after some
hesitation, I have come to the conclusion that that objection too I should
waive under section 24(7), because it is quite plain from the evidence that,
whatever period had been specified, Midrome Ltd had no intention of complying
and would not have complied. It would be unrealistic to hold that that
requirement, namely the requirement that the period specified in the notice
should be reasonable, should in the circumstances of this case result in the
plaintiffs being denied the remedy to which they are otherwise entitled.
Mr
Denyer-Green’s next contention rested on the terms of Ord 97, r15 of the Rules
of the Supreme Court which, among other things, require an application for an
order under section 24 of the Act of 1987 to state ‘the name, address and
qualifications of the person it is desired to be appointed manager of the
premises’. Here the originating summons, while it states the name of Croftbride
Ltd and its address, 8 Welbeck Way, London W1M 7PE, does not of course state
its qualifications. Its memorandum and articles of association are in evidence.
Under the objects clause in its memorandum it has as its principal objects to
undertake the management and administration of flats etc and to manage any land
and buildings or other property. But Mr Denyer-Green’s point is that Ord 97,
r15 points to the need for the person appointed as manager of premises to have
professional qualifications. I do not think that that is right. I do not think
that the order is intended to restrict the discretion that the court has under
the Act. It merely requires the court to be informed of such qualifications as
the person concerned has, and obviously if it has none of a professional
character none can be stated. What matters for present purposes is that the
tenants, whose creature Croftbride Ltd is, have shown that they are likely to
be capable of managing this property. They have provided for it to be insured;
they have had these reports from Peter M Olley & Associates; and I
understand that they have obtained estimates for repairs to the roof, and so
on.
Before I deal
with Mr Denyer-Green’s next point I will deal with his last point, which was
that the delay which the plaintiffs have allowed to elapse should debar them
from obtaining interlocutory relief. They served their notice, as I have
mentioned, in August 1989; the originating summons was issued in December 1989;
and this motion was launched in July 1990. I have already said that in my view
it is just and convenient to make the order sought. I think that that is so
notwithstanding the delay, because another winter is on its way, the
deterioration in the property is continuing, and so is the lack of management
of the property.
Objections
were raised by Mr Denyer-Green to the wording of the powers which the notice of
motion seeks to have conferred on Croftbride Ltd. Those objections were, first,
to the use of the words ‘profits’ and ‘other money’ in the provision for
Croftbride Ltd to ‘receive or levy all rents, profits, service charges and
other moneys payable by the tenants of the said premises under their respective
leases.’ As I think Mr Waller was
inclined to concede, Croftbride Ltd will not really need the words ‘profits’
and ‘other moneys’ in that provision, and it would be better if they were
omitted. So it would read: ‘receive or levy all rents and service charges
payable by the tenants’.
Then Mr
Denyer-Green objected to the provision in para 8 for Croftbride Ltd to ‘receive
such remuneration from the Defendant or otherwise as the court may think fit’.
I am not at all sure that in the circumstances of this case, bearing in mind
that Croftbride Ltd is the alter ego of the tenants and that it is being
appointed only for an interim period until the trial, it is necessary or even
proper for any provision for its remuneration to be included at all. My
inclination would be to omit that altogether, but I have not heard Mr Waller on
it, and if he wishes to address me on it I will hear him. Otherwise I will make
an order in the form that I have indicated.
Croftbride
Ltd appointed manager of the premises pending trial of the action, subject to
providing security to the satisfaction of the master; costs of the motion to be
costs in the cause; further proceedings transferred to the appropriate county
court.
