Defendant landlord responsible for insurance of property through managing agents — Insurers refusing to continue cover — Managing agents failing to obtain alternative cover — Claimant tenants applying for appointment of receiver to manage property — Whether court had jurisdiction to appoint receiver — Section 37 of Supreme Court Act 1981– Sections 21(6) and 24 of Landlord and Tenant Act 1987 — Claim dismissed
The defendant was the freehold owner of a property that was divided into five flats. The claimants were lessees of three of the flats held under long leases at low rents. Under the terms of the lease, the defendant was responsible for insuring the property, which he did through managing agents. After the existing insurers refused to renew the policy in October 2001, the managing agents failed to find alternative insurance for the property. Under section 24 of the Landlord and Tenant Act 1987, the claimants proposed the appointment of a receiver and manager, to take control of the property, in order to increase the prospects of obtaining comprehensive buildings insurance.
Section 21(6) of the 1987 Act provided that a tenant should not make an application to court to appoint a receiver or manager in circumstances where such an application could be made under section 24 of the Act. Under that provision, the leasehold valuation tribunal (LVT) had exclusive jurisdiction over the appointment of a receiver. The procedural regulations of the LVT stipulated that at least 21 days notice had to be given before it could hear an application. The parties could agree to that time being abridged, but the defendant had refused to give consent. The earliest date upon which the LVT could hear the application in this case was 19 March 2002, which meant that the property would be without insurance in the interim. The claimants therefore applied for the appointment of a receiver and manager under section 37 of the Supreme Court Act 1981. They argued that they were entitled to make the application because of the urgency of the case.
Held: The claim was dismissed.
1. By virtue of section 21(6) of the 1987 Act, the LVT had exclusive jurisdiction over matters affecting the appointment of a receiver. Section 21(6) specifically barred the claimants’ present action. There was no limitation on the prohibition in that section.
2. There was no evidence to suggest that the proposed receiver would have been more successful in acquiring an alternative insurance. The simple fact might be that the property was uninsurable. For whatever reason, therefore, the appointment of a receiver would achieve nothing. In such circumstances, even if the court had had jurisdiction to appoint a receiver, it would not have exercised it in this case.
Stan Gallagher (instructed by Jennifer Israel & Co) appeared for the claimants; Robert Lamb (instructed by Sookias & Sookias) appeared for the defendant.
Eileen O’Grady, barrister
