First-tier Tribunal Procedure: The First-tier Tribunal’s powers where a landlord breaches a management order
The First-tier Tribunal’s powers where a landlord breaches a management order
The background
In Staples v Cranfield [2018], the appellant was appointed by the FTT as the manager of a block of flats. Under the management order, the respondent freeholder was required to provide accounting and service charge information to Mr Staples, but failed to do so. Mr Staples applied for a directions order from the FTT, and also sought costs under r.13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, or under s.24 of the LTA 1987. Rule 13 states that the FTT has the jurisdiction to award costs where a party has “acted unreasonably in bringing, defending or conducting proceedings”.
The FTT directed the disclosure of documentation but did not make an order for costs, finding that as the application concerned ‘enforcement’ rather than ‘proceedings’ and did not therefore invoke r.13. Mr Staples appealed.
The decision
The Upper Tribunal allowed the appeal in part. Although the FTT had been right to find that its power to issue directions did not extend to an order for costs, the Court had incorrectly distinguished between ‘enforcement’ and ‘proceedings’. Where a party refuses to comply with a directions order, it risks an order of costs against it under r.13. Enforcement steps form part of the wider proceedings to appoint the manager.
The UT referred the matter back to the FTT to allow it to decide whether to make an order for costs under r.13 where the FTT concluded that the freeholder had acted unreasonably in defending or conducting proceedings.
Advice and action for landlords
Although technical in its nature, this case provides a useful reference point for managers involved in proceedings relating to their appointment. As the enforcement steps in this case formed part of the wider action to appoint the manager, the First-tier Tribunal did have jurisdiction to make a costs order where the respondent had acted unreasonably. It was for the FTT to determine whether the costs order should be made.
As the enforcement steps in this case formed part of a wider action to appoint a property manager, the First-tier Tribunal did have jurisdiction to make a costs order where the respondent had acted unreasonably.
