[2025] UKUT 111 (LC)

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

I would add two final points.

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.

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.