Maunder Taylor v SHG-SH20 Ltd 3CL02066 is one of the more interesting (and potentially, important) county court cases I’ve come across recently (transcript not publicly available; I’ve got one and am trying to persuade the Landlord and Tenant Reports to publish it). For reasons that will become clear, it has wider significance for LVT/FTT cases and although only a county court judgment, it is by HHJ Walden-Smith who is herself a judge of the UT(LC); not binding authority, I accept, but persuasive and important.

The case concerns the powers of the FTT/LVT under the Landlord and Tenant Act 1987. As you may know (and, if you don’t know, this excellent book will explain it to you), if you are a leaseholder of a flat and your landlord (or other manager, e.g. RMC under a tri-partide lease) fails in its management obligations, then the Tribunal can appoint an independent third party to manage the building in place of the landlord/other manager. It is a “for cause” power (to be contrasted with the no fault RTM process under CLRA 2002) but, potentially, very powerful. The Tribunal can, for example, grant the manager powers which go far beyond the terms of the lease and can even allow him/her to manage property which is not demised to any leaseholder nor comprised in any common parts.

That is what had happened in this case. As you can see from the FTT decisions (here and here), the Tribunal was satisfied that there had been some serious management failings by SHG-SH20 Ltd and exercised its powers under the 1987 Act to appoint a manager (Mr & Mr Maunder Taylor). The order provided, as one might expect, for the current manager to deliver up documents necessary for the management of the building.

The manager took the view that the landlord had not complied with this requirement and issued proceedings in the county court to seek to compel compliance with the order of the FTT.

Pausing here for a moment, I understand why they did this. Under s.24A(4), 1987 Act, the court was empowered to enforce orders of the LVT (as it was then). But that power was repealed in 2003 (England) and 2004 (Wales). CPR 70, however, retains general rules relating to enforcement of orders of tribunals by the court.

But HHJ Walden-Smith thought the manager had simply got the wrong end of the stick. The appropriate course was to apply back to the Tribunal for directions as to what to do and, if necessary, to have the Tribunal vary the order by adding a penal notice to it. Yes, you have read that correctly. The Tribunal can issue a penal notice.

In the circumstances therefore, in my judgment, it is quite clear that the appropriate body to deal with this matter is the… Tribunal. If there is a wish – and indeed if it is appropriate at this stage – to apply for a penal notice to be attached to the order, then that is a matter for the… Tribunal to deal with. The… Tribunal has power to do so pursuant to the provisions of section 24 of the 1987 Act…

If the Tribunal was to add a penal notice, then, and only then, could the county court become involved by way of committal proceedings.

If there is then a failure of the defendants to comply with the order and if the penal notice is attached, then of course at that stage the appropriate forum for the committal proceedings… would be the county court.

And so there we have it. The FTT can make penal orders under s.24, 1987 Act. That, I confess, came as a bit of a surprise to me but, perhaps it shouldn’t. After all, we know from the decided cases that the powers under s.24 are broad and are designed to ensure that a coherent scheme of management exists (Maunder-Taylor v Blaquiere [2002] EWCA Civ 1633; Cawsand Fort Management Co Ltd v Stafford [2007] EWCA Civ 1187) and, if that requires a penal notice, why not?

It might also be possible, I suppose, to get the same result under the FTT procedure rules. Rule 8(5) lets the FTT transfer the case to the UT to deal with someone who has refused to comply with an order, inter alia, to produce a document. The UT has power (s.25, Tribunals Courts and Enforcement Act 2007) to punish such disobedience as if it were a contempt of court (see also MD v Secretary of State for Work and Pensions (Enforcement Reference) [2010] UKUT 202 (AAC)). So long as someone (whether FTT or UT) has attached a penal notice, then the UT could enforce it (and, interestingly, MD casts no doubt on the proposition that the FTT can make a penal notice).