In Octagon Overseas Ltd and Canary Riverside Management Ltd v Coates [2017] EWHC 877 (Ch), the First-tier Tribunal appointed Mr Coates as the manager of Canary Riverside (a development comprising, amongst other things, four blocks of residential apartments of which Octagon were the freehold owners) under s.24, Landlord and Tenant Act 1987. As part of its order it required that Canary Riverside Management Ltd must, amongst other things, provide copy documents (accounts, invoices, etc) to Mr Coates. Mr Coates contended that this order had not been complied with and brought a claim in the County Court for an injunction against Canary Riverside Management Ltd seeking to enforce the management order. The County Court made an injunction, with a penal notice attached, restraining Canary Riverside Management Ltd from
- Changing any locks to the premises;
- Removing any property from the premises;
- Interfering with the manager’s exercise of his obligations under the management order.
Canary Riverside Management Ltd successfully appealed to the High Court against the making of the injunction. The county court lacked jurisdiction to make an injunction as there was no underlying cause of action. Mr Coates ought to have either applied back to the First-tier Tribunal for further directions and orders including, if appropriate, for a penal notice to be attached to the management order or to the County Court for permission, under CPR 70 and section 176C, Commonhold and Leasehold Reform Act 2002 Act, for the management order to be enforceable “in the same way as orders of such a court.”
Comment
The decision that a First-tier Tribunal may impose penal notices to its orders is not without controversy. The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, which give the First-tier Tribunal its case management powers, do not provide for the making of penal orders. Moreover, in Nogueira v Westminster CC [2014] UKUT 327 (LC), the Upper Tribunal held that one of the reasons for prohibiting the First-tier Tribunal from accepting undertakings is that it had no means of enforcing the promise being made to it; a similar argument could be made in respect to the attachment of a penal order. Finally, the fact that s.176C, Commonhold and Leasehold Reform Act 2002 gives the County Court the power to enforce orders made in the First-tier Tribunal is suggestive that Parliament intended for Tribunal orders to be enforced by the County Court and it was intentionally left it to the County Court to decide whether it was appropriate or not to attach penal orders to orders.
It will be interesting to see if judges of the First-tier Tribunal will now use this power to compel landlords to comply with other orders it may make in relation to other parts of its jurisdiction.