Landlord and tenant – Appointment of manager – Variation – Appellant appealing against decision of First-tier Tribunal (FTT) to vary terms of appointment of first respondent as manager of estate – Whether challenge to FTT’s power to vary management order could be raised for first time on appeal – Appeal dismissed
The Canary Riverside Estate, Westferry Circus, London E14, was a prime residential and commercial development in Canary Wharf, comprising 325 apartments in four towers, a hotel, various restaurants, a café and a health club.
In 2015, the First-tier Tribunal (FTT) appointed the first respondent as manager of the estate on the application of the leaseholders. The FTT identified a number of failures in the management of the estate and considered it just and convenient to appoint a manager under section 24 of the Landlord and Tenant Act 1987.
In November 2018, the fifth respondent head lessees assigned a number of commercial leasehold interests on the estate to the appellant as part of a restructuring of the group of companies of which the fourth and fifth respondents and the appellant were all members. As a result of the assignment the reversion to the lease, under which Virgin Active Health Clubs occupied the health club, became vested in the appellant.
In April 2021, the FTT agreed to vary the terms of his appointment to require the appellant to make good a shortfall in contributions payable to the first respondent towards the cost of shared services, including electricity; Virgin was about to enter a restructuring plan under Part 26A of the Companies Act 2006, thereby avoiding its debt to the first respondent, who feared that his ability to secure a supply of electricity at a reasonable price would be prejudiced if the shortfall was not met.
The appellant appealed, raising the new argument that the FTT had no power to make any order against it because it had acquired its interest in the estate after the original management order was made.
Held: The appeal was dismissed.
(1) An appellate court would be cautious about allowing a new point to be raised on appeal that was not raised before the first instance court. It would not, generally, permit a new point to be raised on appeal if it would either necessitate new evidence or, had it been run below, it would have resulted in the trial being conducted differently with regard to the evidence at the trial. Even where the point might be considered a pure point of law, the appellate court would only allow it to be raised if: (i) the other party had had adequate time to deal with the point; (ii) the other party had not acted to his detriment on the faith of the earlier omission to raise it; and (iii) the other party could be adequately protected in costs: Singh v Dass [2019] EWCA Civ 360 applied.
That approach to taking new points was justified on a number of grounds, including: the right of the parties to define in their statements of case the issues on which the court was invited to adjudicate; the unfairness of exposing a party to issues and arguments of which fair warning had not been given; the expectation, for reasons of fairness and proportionality, that parties would put before the trial judge all questions both of fact and of law upon which they wished to have an adjudication; and the general public interest in the finality of litigation. If the point was a pure point of law, and especially where the point of law went to the jurisdiction of the court, an appeal court might permit it to be taken for the first time on appeal. But where the point, if successful, would require further findings of fact to be made, it was a very rare case in which an appeal court would permit the point to be taken. In addition, before an appeal court permitted a new point to be taken, it would require a cogent explanation of the omission to take the point below: Prudential Assurance Co Ltd v HMRC [2016] EWCA Civ 376 applied.
(2) It was necessary to distinguish the different senses in which a tribunal might be said to lack jurisdiction to make an order. The FTT’s jurisdiction was limited by statute, and it might not determine disputes which had not specifically been allocated to it. But in cases which the FTT had been given jurisdiction to determine, such as those concerning the appointment of managers under the 1987 Act, its power to do so in a particular case might nevertheless depend on proof or admission of additional facts. There would often, for example, be preliminary procedural steps which had to be taken before a particular dispute could be considered by a tribunal which had jurisdiction over disputes of that variety. Until the required steps had been taken, the FTT might be said to lack jurisdiction to determine the dispute. A procedural requirement which had been included in a statute for the protection or benefit of one party might generally be waived: Urwick v Pickard [2019] UKUT 365 (LC); [2019] PLSCS 229 and Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 considered.
(3) There was no question in this case of the FTT having exceeded its jurisdiction in the sense of making an order which it simply had no power to make; the appellant’s points were procedural rather than jurisdictional. It was therefore enough to consider how the dispute might have developed if the appellant had adopted its current stance when it first became known to the then manager, to the leaseholders and to the second respondent freeholder that it had acquired the reversion to Virgin’s lease of the health club.
The appellant had provided no evidence to explain why the FTT’s power to vary the management order in the manner proposed had not previously been disputed. The tribunal was satisfied that no jurisdictional hurdle which could not have been waived by the appellant prevented the FTT from making the order which it did. In all the circumstances and having regard to the tribunal’s overriding objective of dealing with cases fairly and justly, the tribunal would refuse to permit the appellant to rely on the single ground of appeal for which permission was granted.
Justin Bates (instructed by Ince Gordon Dadds LLP) appeared for the appellant and the fourth and fifth respondents; Daniel Dovar (instructed by Wallace LLP) appeared for the first respondent; Philip Rainey QC (instructed by Norton Rose Fulbright LLP) appeared for the second respondent; Jonathan Upton (instructed by Direct Access) appeared for the third respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Riverside CREM 3 Ltd v Unsdorfer and others
