[2025] UKUT 320 (LC)

In Lea v GP Ilfracombe Management, at [15], Coulson LJ suggested that a good practical rule when a tribunal is considering whether a party or its representative has acted unreasonably in bringing, defending or conducting proceedings is to ask:

“…would a reasonable person acting reasonably have acted this way? Is there a reasonable explanation for the conduct in issue?”

The following conduct by the appellants and their representatives was relied on by the respondents as having been unreasonable:

The second respondent’s submissions echoed the manager’s complaints that the appellants should never have issued their application as the issues raised by it would inevitably have to be dealt with within the context of the existing proceedings. It had been inappropriate and unreasonable for the appellants then to “hijack” the FTT case management hearing on 25 November 2024 and to seek to have their unnecessary application heard urgently in advance of the final hearing. There was no urgency because the Landlords never intended to proceed with cladding works before the determination of the long and slow running claim brought against them by the Secretary of State for a remediation or remediation contribution order. The misconceived and unreasonable appeal against what was obviously an appropriate case management decision by the FTT further exacerbated the appellants’ unreasonable conduct. In the light of the manager’s own prior application and the clear lack of urgency, the attempt to have the appellants’ application expedited and the unsuccessful appeal were designed to harass the other parties and the manager rather than advance the resolution of the issues in an orderly way.

The appellants denied that they had behaved unreasonably. The appeal had been brought because the appellants are the accountable persons at Canary Riverside but are finding it exceptionally difficult to fulfil all their functions as a result of the interaction of the management order and the Building Safety Act 2022. The “temporary and uncomfortable overlap” between the 2022 Act and the management order identified by the Tribunal is proving to be anything but temporary. It is not clear who is responsible for what and that is said to be intolerable. The appellants are being criticised, in correspondence and in evidence and pleadings, by the Secretary of State, the local authority and by the respondents for not making progress with fire safety measures. A reasonable person in the position of the appellants, having statutory duties, backed by criminal sanction, would do all that they could to ensure that there was no impediment to the discharge of their functions. In this case, that included launching the appeal.

I am not concerned with the way in which the appellants conducted themselves before the FTT. The only conduct which is relevant at this stage is the appellants’ conduct in bringing and pursuing the appeal. It is true that Mr Morshead KC expressed some puzzlement when first asked by me what the purpose of the original application had been, but I took his perplexity to be forensic rather than genuine as it suited his purpose to put as much distance as possible between his own approach to the case and that of his predecessor. Having achieved that aim he later provided the explanation I have recorded in the previous paragraph. I therefore disregard the first of the respondents’ criticisms.

Nor do I regard the fifth ground of complaint as evidence of unreasonable conduct. Parties should not pursue grounds of appeal in which they no longer have confidence, and it is not unreasonable to do so.

The remaining grounds are of greater substance.

The appellants are expertly represented by counsel and solicitors who will have been fully aware of the restraints which apply to any appellate court or tribunal when it is asked to review a case management decision of a lower tribunal. The FTT’s decision to hear all of the outstanding applications together, and not to separate and prioritise the hearing of the appellants’ application, was a pure case management decision. The prospect of the appeal against that decision succeeding were further fatally compromised by the fact that the appellants had not invited the FTT to proceed in the way they asserted on the appeal it should have done, by determining it “peremptorily” at the case management hearing. In effect, the appellants were inviting this Tribunal to take over case management from the FTT because, following a change of counsel, they now wished to present their case on a different basis. Taking these two factors together, I am satisfied that there was never any realistic prospect of this Tribunal upsetting the FTT’s decision not to list the appellants’ application for separate hearing on an expedited basis.

Additionally, the appellants’ attempt to use their appeal against the FTT’s case management decision as a route to challenge my own March 2024 decision, Unsdorfer v Octagon Overseas Ltd [2024] UKUT 59 (LC), following the discontinuance by the leaseholders of their appeal to the Court of Appeal, was manifestly inappropriate. The FTT is bound by that decision, which the appellants relied on at the case management stage. An appeal against the FTT’s routine case management simply did not engage the arguments which Mr Morshead KC advanced before me. That the appellants were deprived of the opportunity of a cross-appeal by the leaseholders’ discontinuance of their appeal did not make the basis on which the appeal was pursued any more sustainable.

I am not persuaded that the appellants have offered any credible explanation for pursuing the appeal. The difficulties in which they may now find themselves (and which I accept raise a genuine issue) may have justified a request to the FTT for a speedy decision on how the manager should proceed in relation to building safety. But having failed to persuade the FTT to deal with that issue separately, for perfectly understandable case management reasons, those difficulties could not justify pursuing a hopeless appeal on a premise the FTT failure was not asked to consider. The appellants and their advisers must have appreciated that there was nothing to be gained by the appeal, which was bound to fail, and I do not accept that they can reasonably have expected to ameliorate the uncertainty of their position by pursuing it.

Nor do I consider the fact that the FTT was persuaded to grant permission justifies the subsequent pursuit of the appeal. The FTT gave no weight to the fact that the decision to be challenged was a case management decision and was apparently unconcerned that the challenge was to be based on new arguments which had not been advanced to it. It took a different view from the one I formed, after argument, of the viability of the appeal. That does not alter the fact that the appellants appreciated, or should have appreciated, that the exercise was pointless and bound to fail.

I am therefore satisfied that the appellants behaved unreasonably in bringing and pursuing the appeal.