Matthew James Kirk & Anor v The Sheffield Bath Company Limited [2025] UKUT 111 (LC)

[2025] UKUT 111 (LC)Case No LC-2024-672
IN THE UPPER TRIBUNAL (LANDS CHAMBER)
APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL PROPERTY CHAMBER
FTT Ref: 2022/0720
Venue Royal Court of Justice, Strand,
Between
MATTHEW JAMES KIRKAppellantand PETER SEPHTONAppellantTHE SHEFFIELD BATH COMPANY LIMITEDRespondent
London WC2A 2LL
31 March 2025
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
LANDLORD AND TENANT – APPOINTMENT OF MANAGER – application to extend period of manager’s appointment – application received before expiry of original appointment – not determined until after expiry of original appointment – whether FTT having power to extend appointment – s.24, Landlord and Tenant Act 1987 – appeal allowed
Glossop Road Baths,Sheffield S3 7QDMartin Rodger KC,Deputy Chamber PresidentDetermination on written representations© CROWN COPYRIGHT 2025The following cases are referred to in this decision:Eaglesham Properties Ltd v Jeffrey[2012] UKUT 157 (LC)Re Guidezone Limited[2014] 1 WLR 3728Jevan v Athansiadi[2024] UKUT 358 (LC)Date 2025-03-31

Introduction

[1]On an application made before the expiry of his appointment by a manager appointed under Part 2 of the Landlord and Tenant Act 1987, but determined by the First-tier Tribunal, Property Chamber (the FTT) after the date on which the appointment was due to expire, does the FTT have jurisdiction to vary the original management order by extending the period of the appointment?[2]In a decision issued in this case on 30 July 2024, the FTT considered that it did not have jurisdiction to “breathe new life” into a management order which had already expired by the time the decision was made. It therefore struck out an application made jointly by a tribunal appointed manager, Mr Kirk, and the representative of the residential leaseholders of Glossop Road Baths in Sheffield who had procured his appointment in 2021.[3]With the permission of the FTT, the appellants, Mr Kirk and Mr Sephton, now appeal the FTT’s decision. At the request of the parties, the appeal has been determined under the Tribunal’s written representations procedure.

Section 24, Landlord and Tenant Act 1987

[4]The FTT is given power to appoint a manager to act in relation to premises which contain two or more flats by section 24, Landlord and Tenant Act 1987 (the 1987 Act), the relevant parts of which are as follows:
“24 Appointment of manager by a tribunal (1) The appropriate tribunal may on an application for an order under this section, by order (whether interlocutory or final) appoint a manager to carry out in relation to any premises to which this Part applies – (a) such functions in connection with the management of the premises, or (b) such functions of a receiver, or both, as the tribunal thinks fit. (2) The appropriate tribunal may only make an order under this section in the following circumstances, namely – (a) where the tribunal is satisfied – (i) that the landlord either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them […], (ii) […], and (iii) that it is just and convenient to make the order in all the circumstances of the case; (ab)-(ac) […] or (b) where the tribunal is satisfied that other circumstances exist which make it just and convenient for the order to be made … (4) An order under this section may make provision with respect to – (a) such matters relating to the exercise by the manager of his functions under the order, and (b) such incidental or ancillary matters as the tribunal thinks fit; and, on any subsequent application made for the purpose by the manager, the tribunal may give him directions with respect to any such matters. (5)-(8) […] (9) The appropriate tribunal may, on application of any person interested, vary or discharge (whether conditionally or unconditionally) an order made under this section; […] (9A) The tribunal shall not vary or discharge an order under subsection (9) on the application of any relevant person unless it is satisfied – (a) that the variation or discharge of the order will not result in a recurrence of the circumstances which led to the order being made, and (b) that it is just and convenient in all the circumstances of the case to vary or discharge the order.” (a) such functions in connection with the management of the premises, or (b) such functions of a receiver, or both, as the tribunal thinks fit. (a) where the tribunal is satisfied – (i) that the landlord either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them […], (ii) […], and (iii) that it is just and convenient to make the order in all the circumstances of the case; (ab)-(ac) […] or (b) where the tribunal is satisfied that other circumstances exist which make it just and convenient for the order to be made … (a) such matters relating to the exercise by the manager of his functions under the order, and (b) such incidental or ancillary matters as the tribunal thinks fit; and, on any subsequent application made for the purpose by the manager, the tribunal may give him directions with respect to any such matters. (a) that the variation or discharge of the order will not result in a recurrence of the circumstances which led to the order being made, and (b) that it is just and convenient in all the circumstances of the case to vary or discharge the order.”
[5]Three features of these statutory provisions should be noted. First, under section 24(1), the FTT has power to appoint a manager on an interlocutory or final basis; an “interlocutory” appointment means an appointment made on a temporary basis before a final decision in the proceedings has been made. Secondly, the FTT has power under section 24(9) to vary or discharge a management order; no limit is placed on the sort of variation which may be made. But, thirdly, by section 24(9A), the FTT must be satisfied that it is “just and convenient in all the circumstances of the case” before it can exercise its power to vary a management order.

The relevant facts

[6]As its name suggests, the Glossop Road Baths Building in Cavendish Street, Sheffield is a former Victorian public swimming pool and baths. The upper floors of the building have been converted to provide 21 residential apartments, while the ground floor comprises three commercial units which have been used variously as shops, a pub, and a supermarket.[7]The freehold of the building is owned by Sheffield City Council. On 14 January 2008 it granted a head lease of the whole building to the respondent, the Sheffield Bath Company Ltd, for a term of 150 years. The respondent then granted long leases of the 21 apartments in the building. The leases are on conventional terms which oblige the respondent to keep the building in repaired and maintained and require the leaseholders to pay a service charge to fund those services. The commercial parts of the building are also let on terms requiring the payment of service charges.[8]21 July 2021 the FTT appointed Matthew Kirk of Rendell and Rittner Ltd, a large property management firm based in Manchester, to be the manager of the building for a period of three years from the date of the order. Mr Kirk’s responsibilities related specifically to the residential parts of the building and to its structure and did not include the ground floor commercial units.[9]Mr Kirk was appointed on an application under section 24, Landlord and Tenant Act 1987 made by Peter Sephton, in his capacity as Chair of the Glossop Road Baths Residents' Association. The FTT heard evidence that the roof of the building had been in need of urgent repair since at least March 2020 and that eight apartments were suffering from rainwater penetration causing damage to the interior, including the collapse of part of the ceiling in one. The FTT was satisfied that it was just and convenient to appoint a manager because of the respondent’s breaches of its repairing obligations.[10]Unfortunately, the management of the building has not progressed as was intended. Whether that has been due to the refusal of the respondent to comply with FTT directions requiring the provision of documents, information and contributions equal to 40% of the cost of repairs and maintenance, as the manager and the leaseholders maintain, or whether it is explained by the manager’s neglect of his responsibilities, as the respondent suggests, is not an issue in this appeal. It is not in doubt that substantial works are still required and that the funds to pay for them have not yet been collected.[11]The management order provided that, no later than 28 days before the end of the period of his appointment on 21 July 2024, the manager was to apply to the FTT for directions as to the disposal of any unexpended monies, and to make a written report on the progress and outcome of his management of the building. The order continued, at paragraph 23, as follows:
“By no later than 28 days after the application referred to in the previous paragraph is determined by the tribunal, the manager shall: a) reimburse any unexpended monies in accordance with the tribunal's directions; b) prepare final closing accounts and send copies of the accounts and the Final Report to the landlord and lessees, who may raise queries on them within 14 days; c) answer any such queries within a further 14 days.”

The application

[12]On 18 July 2024, three days before his appointment was due to expire, the manager applied to the FTT, jointly with Mr Sephton for an order under section 24(9) of the 1987 Act extending and varying the management order. The application explained that the management order was due to expire on 20 July 2024 and that works to the roof of the building were still required. These could not wait any longer but the difficulty of obtaining funds from the respondent had made financing the works extremely difficult.[13]The application sought an extension of the period of the order to 20 July 2026 and modifications of its terms so that the manager would become responsible for collecting contributions towards insurance and maintenance from the commercial tenants. The applicants also sought disclosure of information by the respondent and requested that a penal notice be endorsed on the order in the event of non-compliance by the respondent. While the application was being considered, the applicants requested that the FTT temporarily extend Mr Kirk's appointment to ensure that the building continued to be managed by him.

The FTT’s decision

[14]The application was received by the FTT on 18 July and referred to a Member of the tribunal for consideration on 25 July, by which time the term of the manager’s appointment had expired. The FTT gave the parties the opportunity to make representations on whether it had jurisdiction to make the proposed order or whether the application should be struck out. When these were received, the application was returned to the Member for consideration. By an order made on 30 July 2024 the application was struck out, the Member giving the following reasons:
“This Order which ceased on Saturday 20 July 2024, was for a term certain and the application was only referred to a procedural judge for consideration by a Tribunal case officer after the expiration date of that Order. The Tribunal does not possess the jurisdiction or power to breathe new life into and determine a variation to an expired Order. The parties and the Tribunal must adhere to the required statutory procedures, however unsatisfactory that maybe for the Applicants, which are set down to protect all parties in what is after all the exercise of a draconian power.”
[15]The Member supplemented these reasons when he granted permission to appeal and referred in particular to a decision of this Tribunal, Eaglesham Properties Ltd v Jeffrey [2012] UKUT 157 (LC) to which he had drawn the parties’ attention when inviting their submissions on whether the application should be struck out. In Eaglesham, a manager had allowed his interim appointment to expire before making an application to the appropriate tribunal for an extension, which was granted by the first instance tribunal. On appeal, this Tribunal (Judge Walden-Smith) decided that no such order should have been made, saying:
“Once the interim order has lapsed and the functions of the management of the block reverted to the freehold owner, through their appointed manager, there is no jurisdiction to extend the original order.”
[16]The Member acknowledged that the facts of this case are different, in that (as he put it) the application had been made before the expiry of the order, whereas in Eaglesham the appointment had already expired before the application was made. Nevertheless, he considered that the original order could not “automatically be deemed to be extended by receipt of an application for variation or extension close to the expiration of the existing management order.” There would be “significant practical difficulties” if that approach was adopted.[17]The Member recognised the implications of his decision for the applicants and more widely and granted permission to appeal.[18]After the application had been struck out the respondent informed the appellants’ solicitor on 2 August 2024 that it had resumed responsibility for the management and maintenance of the building, until such time as the Tribunal had made a decision on the appeal. I do not know what, in practice, that resumption of responsibility has entailed, if anything, and in their submissions in support of the appeal the appellants have stated that the leaseholders have refused to comply with the respondent’s requests for the payment of service charges.

The appeal

[19]By their solicitors, JB Leitch, the appellants made submissions explaining the difficulties they had encountered in obtaining the cooperation of the respondent since the manager’s appointment. The manager now intended to commence proceedings to recover £89,000 said to be payable by the respondent as its contribution to the cost of repairs to the roof of the building. They pointed out that their application to vary the management order had been made before the end of the manager’s appointment and had included a request for an interim extension of the appointment while the application was being fully considered. In those circumstances the Tribunal’s decision in Eaglesham was distinguishable and the FTT should have accepted that it had jurisdiction to determine the application.[20]The appellants submitted that the only jurisdictional restrictions on an application to vary an order made under section 24, 1987 Act, were that the application must be made by a “person interested”, as required by section 24(9), and that it must be made while the order remained operative. In this case both those requirements were satisfied.[21]By analogy with the approach taken by courts to the commencement of proceedings before the expiry of a limitation period, the appellants submitted that the only relevant date was the date of the application, not the date on which it was considered by the FTT. They pointed out that, under the Civil Procedure Rules (which do not apply in tribunals) a different approach is taken to applications to extend time for compliance with court orders if the application has been made in time (i.e. before the date originally appointed for taking the required step) or out of time (after that date). The decision of Nugee J in Re Guidezone Ltd [2014] EWHC 1165 (Ch) showed that the date on which an application was determined was immaterial to the question whether it was in time or not, and therefore to the basis on which it should be determined.[22]In later submissions, the appellants also relied on my own decision in Jevan v Athansiadi [2024] UKUT 358 (LC) which concerned the date on which an application to the FTT made without payment of the required fee is to be treated as having been made. They suggested that the same issue arises in this appeal, although they did not explain why that was thought to be the case.[23]On behalf of the respondent, one of its directors, Steven Wilkinson, criticised the manager for the lateness of the application and suggested that it should be refused on that ground alone. Mr Wilkinson complained that the application may have been held back deliberately in an attempt to prolong the manager’s appointment while it was considered, which he said would be an abuse of process. The building was also said to have been mismanaged since the original order and the manager had not submitted the termination report and accounts required by the order. Mr Wilkinson wished to resume management personally and to proceed with any works which were required.

Discussion

[24]Neither of the authorities relied on by the appellants is relevant to the issue in this appeal, which is not concerned with tribunal procedure or compliance with directions, but with the power of the FTT to vary a management order. That depends on the proper interpretation of section 24, 1987 Act and on any limits it imposes on the power of the FTT to vary a management order.[25]It is important first to note that the management order remains in force, to the extent that its terms have not yet been complied with. The three year term of the manager’s appointment has expired but, as Mr Wilkinson indignantly pointed out, paragraphs 22 and 23 of the order have not yet been complied with. These require the manager first to submit a report on the progress and outcome of his management and to request directions for the disposal of unexpended funds, and then to comply with the FTT’s directions, report to the parties, and respond to their questions. The application for directions and the reporting to the FTT required by paragraph 22 of the order are to take place not more than 28 days before the expiry of the appointment. No deadline is specified for the FTT to considered and respond to the application, but once it has done so, the remaining steps required by paragraph 23 may then take up to a further 56 days. It is perfectly conceivable that the process may take longer if the manager feels it necessary to consult the FTT when he receives the parties’ responses to his report.[26]The relevance of these features of the original order is that they cast doubt on the FTT’s understanding of the application, namely, that it was being invited to “breathe new life” into the management order. Whether or not it is varied, the order has life after the expiry of the period of the manager’s appointment. The manager’s obligations did not come completely to an end on 21 July 2024 (although most of his management responsibilities did). In particular, he is still obliged to report and apply to the FTT, which will need to respond, notwithstanding the expiry of the appointment.[27]Next, there is nothing in section 24 itself which limits the possible duration of a manager’s appointment, or that requires that it be time limited at all; nor does section 24(9) suggest that some types of variation are permissible and others not. There is therefore no reason to doubt that the power to vary an order under section 24(9) includes power to prolong the period of appointment. Applications for extensions of appointment are commonplace and are regularly granted. I therefore question whether it is appropriate to treat the issue in this appeal as a question of jurisdiction, as the FTT did.[28]The Tribunal’s decision in Eaglesham indicates that the FTT cannot vary a management order to extend an appointment which has already expired. The explanation given was that management reverted to the freeholder when the appointment terminated. In those circumstances the proposed variation:
“would not be an extension, but a new order, and that requires the service of a preliminary notice under section 22 (unless dispensed with under section 22(3). If there was an extension after the original order had come to an end that would lead to complete confusion as to who is responsible for managing the property between the end of the original order and the extension granted after the interim order has come to an end.”
I agree that the procedural requirements which the 1987 Act prescribes before management can be taken from a landlord and given to a tribunal appointed manager (which involve service and expiry of a preliminary notice under section 22) is a reason for treating an application in those circumstances as raising an issue of jurisdiction. That is consistent with the Tribunal’s decision in Urwick v Pickard [2019] UKUT 365 (LC), at [56]-[57], which rejected the proposition that an order under section 24 could be varied to confer management functions in respect of land which was not already the subject of an effective appointment, without the procedure in section 22 being followed.[29]I also acknowledge that the management of the building reverted to the respondent when the period of the manager’s appointment came to an end. But when it reverted the application to extend the period of appointment had already been made and was awaiting determination. If the FTT had determine the application on 18 July 2024 and had made an interim order varying the original management order by extending the period of the manager’s appointment, there would have been no doubt about the validity of that variation. It would therefore be surprising if the FTT lost the power to vary the order simply because of the lapse of time between the receipt of the application and its determination, especially when some of the requirements of the order still remained to be performed by the manager and the order anticipated further directions being given by the FTT.[30]In practice, an application to extend a manager’s appointment temporarily can be made. In this case, because of the lateness of the application and the need to comply with the FTT’s own procedures for receiving payment of the necessary fee, which entailed a short delay, the application did not receive judicial consideration until after 21 July. It would be surprising, I suggest again, if the jurisdiction of the FTT to consider such an application depended on its own administrative procedures.[31]I also respectfully question the risk of confusion foreseen in Eaglesham. In practice, that risk will readily be dispelled by the making or refusal of an interim order. If there is a delay, de facto management will either revert to the original manager (the landlord or management company) or it will continue in the hands of the tribunal appointed manager. Competition to perform management functions during a brief period of uncertainty seems improbable and it is more likely that there would be a standoff in which management temporarily ceased. That might appear an alarming prospect, but the FTT can be nimble when the need arises and would not long delay consideration of an interim application.[32]There therefore seems to me to be no good reason to regard the issue in this appeal as an issue of jurisdiction; the FTT was seized of an application to extend the period of the manager’s appointment before the original period ran out. It had jurisdiction when the application was received, and there is no reason to treat it as having been lost.[33]The better approach, which nothing in the language or structure of Part 2 of the Act, nor any practical consideration, appears to me to rule out, is to treat an application to extend the appointment of a manager made before the period of the appointment has expired like any other application for a variation. The key provisions of the Act are well designed to deal with such an application. The FTT has power to make interlocutory orders to hold the ring for an interim period. It has discretion, expressed in the widest terms, to vary or discharge, and as a specialist tribunal with expertise in property management it is well placed to exercise that discretion. It must be satisfied that it is “just and convenient in all the circumstances of the case to vary or discharge the order” (section 24(9A)). It may then make provision with respect to such matters relating to the exercise of the manager’s functions and to ancillary or incidental matters as it thinks fit (section 24(4)). The only other limitation on the FTT’s discretion is that it must be satisfied that the proposed variation or discharge will not lead to the recurrence of the circumstances which first led to the order being made.[34]I am therefore satisfied that the FTT was wrong to consider that it lacked jurisdiction to vary the management order by prolonging the period of the manager’s appointment. I do not consider that the expiry of the original term, while the application was under consideration, deprived the FTT of power to make the proposed variation.[35]I would add two final points.[36]The first is relevant to the exercise of the FTT’s discretion to extend a manager’s appointment. The fact that a manager’s appointment has expired without an application being made in sufficient time to enable its orderly consideration, while not fatal, is a matter which can properly be taken into account when considering whether to make the proposed variation. The practical consequences of the delay will be relevant considerations when deciding whether it is just and convenient to accede to the request. In this case the circumstances relevant to that decision have changed since the application to vary the order was first made, and it will be necessary for the FTT to consider how the building has been managed since 21 July last year.[37]The second is relevant to the FTT’s power to make provision for ancillary or incidental matters. If the manager has continued to undertake management functions since 21 July 2024, it will be for consideration by the FTT whether the original order should be varied to recognise those steps, and to confirm the manager’s entitlement to collect service charges and to receive remuneration. The point may be academic, as I do not know if the manager has continued to act in anticipation of a successful outcome to these proceedings, but in principle the FTT’s discretion under section 24(4) is wide enough to enable it to give directions about the treatment of acts carried out after the expiry of the original period of the manager’s appointment.

Disposal

[38]For these reasons I allow the appeal and remit the application to vary the order to the FTT for determination.[39]Finally, I have considered whether I should make the interlocutory order which the FTT could have made, extending the manager’s appointment on an interim basis while the full application is determined. I have decided not to do so because I have no information about the current situation on the ground. My reluctance to make such an order does not mean that the FTT cannot do so, but it should only make an interim order if it has evidence which satisfies it that it would be just and convenient. If the appellants wish to pursue such an order they should apply promptly to the FTT with an account of the current state of management of the building. Martin Rodger KC, Deputy Chamber President 31 March 2025 Right of appeal Any party has a right of appeal to the Court of Appeal on any point of law arising from this decision. The right of appeal may be exercised only with permission. An application for permission to appeal to the Court of Appeal must be sent or delivered to the Tribunal so that it is received within 1 month after the date on which this decision is sent to the parties (unless an application for costs is made within 14 days of the decision being sent to the parties, in which case an application for permission to appeal must be made within 1 month of the date on which the Tribunal’s decision on costs is sent to the parties). An application for permission to appeal must identify the decision of the Tribunal to which it relates, identify the alleged error or errors of law in the decision, and state the result the party making the application is seeking. If the Tribunal refuses permission to appeal a further application may then be made to the Court of Appeal for permission.