Town Practice and procedure – Management order – Injunction – Attachment of penal notice – First appellant being freeholder owner of development – Second appellant being leasehold owner of part of development – First-tier Tribunal (FTT) granting application for appointment of respondent manager over residential blocks – FTT making management order for provision by appellants of information, documents and keys to respondent – County court granting injunction to enforce order with attached penal notice – Appellants appealing – Whether injunction being valid – Whether tribunal having power to attach penal notices to management order – Appeal allowed
The first appellant was the freehold owner of a development known as Canary Riverside, Canary Wharf, London which comprised four blocks of residential apartments, including penthouse apartments, a hotel, a gym and various commercial units. The second appellant was the leasehold owner of a large part of the site under to six long leases. Pursuant to section 24 of the Landlord and Tenant Act 1987, a number of occupational sub-leasehold owners of the apartments in the residential blocks applied successfully to the First-tier Tribunal (FTT) to have a manager appointed (the respondent). Once appointed, the respondent was answerable to the FTT.
The FTT refused the appellants’ application for permission to appeal its decision and the Upper Tribunal upheld that refusal. The respondent applied to the county court for an injunction to enforce the tribunal’s decision. He was concerned that a locksmith was present at the premises and that all keys, service charges and information that the management order required to be passed to him had not been transferred. An injunction was granted under section 37 of the Senior Courts Act 1981 and section 38 of the County Courts Act 1984 with a penal notice attached.
The appellants challenged the terms of the injunction and claimed that the court lacked jurisdiction to make it. The judge expressly found that he had jurisdiction to grant the injunction and ruled that the respondent had permission to enforce the tribunal’s management order in the county court. He held that the appellants were to provide keys and access to the premises. It was conceded that the injunctions applied to the second appellant only.
The appellants appealed to the Court of Appeal contending that: (i) the court had no jurisdiction to grant an injunction as there was no cause of action which could be enforced by an injunction; and (ii) the injunction itself was too broad and/or too vague and insufficiently particularised.
Held: The appeal was allowed.
(1) The county court had no jurisdiction pursuant to section 37 of the 1981 Act or section 38 of the 1984 Act to grant an injunction to enforce a management order made by the FTT in favour of a manager appointed under section 24 of the 1987 Act. It was necessary that the court should have power, in appropriate circumstances, to grant injunctions in new areas but that did not destroy the principle that injunctions, save in particular circumstances, were not freestanding but were incidental to the cause of action. There was a continuing development in the law as to the circumstances in which injunctions would be granted. However, in the present case, the respondent was seeking enforcement of the tribunal’s management order, which was governed by section 176C of the Commonhold and Leasehold Reform Act 2002. That required the county court’s permission in accordance with CPR rule 70 and its associated practice direction. The respondent had complied in substance with those requirements and was therefore entitled to apply for enforcement of the management order. However, that was not the same as applying for an injunction with a penal notice attached. There was no lacuna requiring the court to grant an injunction in a case such as this. An underlying cause of action was needed, and one did not exist. The making of such an injunction was outside the jurisdiction of the county court, as it conferred new rights not provided by the management order. It was solely for the FTT to decide how the management order was to operate and how the manager was to fulfil his obligations pursuant to its terms. Therefore, the respondent ought to have applied to the tribunal, not to the county court, for clarification of the management order. If the tribunal determined that it was necessary for a penal order to be attached to the management order as a result of a failure to comply with its terms, then section 24(4) of the 1987 Act gave it power to do so: Siskana v Distos Compania Naviera SA [1979] AC 210 applied. Cartier International AG v British Sky Broadcasting [2016] EWCA Civ 658 distinguished.
(2) In any event the injunctions were too wide. The management order did not prohibit the appellants from changing the locks as it did not confer any proprietary interest on the respondent. The prohibition on removing property was also too wide, since the appellants were entitled to remove their own property. Furthermore, the complaint about the way in which the appellants had allegedly failed to comply with the management order was too vague and lacked particularisation.
Justin Bates (instructed by Trowers & Hamlins LLP) appeared for the appellants; Amanda Gourlay (instructed by Downs Solicitors LLP) appeared for the respondent.
Eileen O’Grady, barrister
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