[2025] UKUT 246 (LC)

I can deal with the grounds of appeal in reverse order. Ground 5 was not developed by Mr Morshead KC and is, in my view, unsustainable. The FTT clearly had the risk of prosecution well in mind (see [22] above). It cannot be said to have overlooked the relevance of that factor and the complaint that by assessing its significance, the FTT was pre-empting the decision of another court or Tribunal is, with respect, sophistry. What else was it to do than to look at the facts and form a view about how serious the risk was? In November it was being said by the appellant to be a very serious risk. Nothing has eventuated which supports that assessment although five months have now passed since it was relied on.

Grounds 1, 3 and 4 are, in different packaging, an expression of the appellants’ disagreement with parts of the reasoning in my decision of March 2024. In that decision I addressed submissions by the manager based on the suggested absurdity or practical difficulties if his interpretation of the 2022 Act and his contention that he could be an accountable person were not accepted as correct. In particular, it was argued by the manager that Parliament could not have intended to take away “at a stroke” all of his responsibilities for aspects of management which concerned building safety. I agreed that that was an improbable intention to impute to Parliament but I did not consider that the Act had that effect.

Having referred to the relevant provisions of the Act in which it was clear that the draftsman was well aware of the possibility of a manager undertaking functions which mirror the responsibilities of the accountable person, I explained between paragraphs [109] and [113] how, in the absence of transitional provisions, I considered the functions of the manager and the responsibilities of the accountable person related. I concluded at paragraph [113] by recognising that there is a potential impasse between section 24(2E) and section 24(9A) of the 1987 Act. The first, inserted by section 110 of the 2022 Act, prohibits any new (or modified) order which has the effect of conferring building safety functions on the manager, while the second (inserted in 1996) prevents the FTT from modifying or discharging an order on the application of a landlord unless it is satisfied that the circumstances which led to the making of the order will not recur.

I suggested that, in the absence of transitional provisions and for so long as the FTT is not satisfied that a section 24(9A) condition for modification or discharge is met, the only way to resolve this impasse may be for the FTT to make no order on an application by the appellant, leaving the manager to continue to perform the functions originally conferred by the order until either the manager himself or another interested person applies (free of the section 24(9A) restrictions) for discharge or modification. (Although, when I said that, I did not anticipate that it might take 18 months or more for the FTT to be given the opportunity to consider whether the Order should be varied in light of the 2022 Act, the mere passage of time does not alter what appears to me to be the relationship which Parliament intended between the two regimes.)

I went on at paragraph [114] to comment on what I had then been told of the arguments which the parties might deploy at the final hearing. I said this:

“When a management order expires no new order made by the FTT may require the manager to perform functions which Part 4 imposes on the accountable person. Mr Dovar hinted that at Canary Riverside, because the FTT is being asked to vary the existing order (by extending it), rather than make a new order, it might be possible to avoid the restrictions in section 24(2E). Although I heard no argument on that proposition, the FTT will not be able to confer functions on the Manager which Part 4 provides are to be carried out by an accountable person and it appears to me to be far-fetched to suggest that it has power, by extending the Manager’s term, to continue functions falling into that category which the Manager already has.”

I should emphasise, as I did at the time, that I had heard no argument on the proposition which Mr Dovar outlined. It is clear from submissions today that the leaseholders intend to seek a continuation of the Order on terms which allow the manager to take charge of the remediation programme, notwithstanding section 24(2E) of the 1987 Act. What I said in March last year was, as I said at the time, an observation which was intended to be helpful but which was made without hearing proper argument. I say nothing about it today.

The substance of Mr Morshead's submissions was directed at the analysis in my March 2024 decision and in particular paragraphs [106] to [113]. It was, he courteously submitted, a flawed analysis. The correct analysis was, as he had argued 13 months previously in the same room, that from the commencement of the 2022 Act those functions of a Tribunal-appointed manager which were co-extensive with the functions of the accountable person under Part 4 were suspended or overridden and became legally irrelevant. Once that is recognised, there is no need for further consideration and the appellants’ application should be granted summarily.

I will abstain from recording Mr Morshead's argument in further detail. I intend no disrespect to him or to his argument by that abstention, but take that course for these reasons.

First, this is an appeal against the case management decision of the FTT. I have explained the positions taken by the parties before the hearing on 25 November. It was no part of the appellants’ case at that time that the analysis in my own previous decision was wrong. In fact, that analysis was relied on in part by them and was incorporated into the FTT’s own reasoning.

Secondly, given that the FTT was not invited to make its case management decision on the basis of Mr Morshead's analysis of the correct relationship between the statutes, but was asked instead to allocate between three and five days of hearing time at which evidence would be heard, it cannot have erred in law by failing to treat the issue as a point of law on which no evidence was required.

Thirdly, I am not persuaded that the description of the relationship between the two acts I gave in March 2024 was wrong. Whether it was wrong or not, the FTT was at the very least entitled to proceed on the basis that it was correct.

Fourthly, because these are new points, they can only be raised on appeal with the permission of the Tribunal. Mr Upton reminded me of my own review of the authorities on the introduction of new points on an appeal in the Riverside CREM 3 Ltd v Unsdorfer [2022] UKUT 98 (LC), at [38]-[39].

“[38] A concise and frequently cited summary of the relevant principles to be applied in deciding whether a new point may be advanced on appeal was provided by Haddon-Cave LJ in Singh v Dass [2019] EWCA Civ 360, as follows:

“[16] First, an appellate court will be cautious about allowing a new point to be raised on appeal that was not raised before the first instance court.

[17] Second, an appellate court will not, generally, permit a new point to be raised on appeal if that point is such that either (a) it would necessitate new evidence or (b), had it been run below, it would have resulted in the trial being conducted differently with regards to the evidence at the trial…

[18] Third, even where the point might be considered a 'pure point of law', the appellate court will only allow it to be raised if three criteria are satisfied: (a) the other party has had adequate time to deal with the point; (b) the other party has not acted to his detriment on the faith of the earlier omission to raise it; and (c) the other party can be adequately protected in costs.”

[39] I was also referred to passages from the judgment of the Court of Appeal (Lewison, Christopher Clarke and Sales LJJ) in Prudential Assurance Co Ltd v HMRC [2016] EWCA Civ 376, which discussed these principles and explained them in greater detail. The approach to taking new points is justified on a number of grounds, which include: the right of the parties to define in their statements of case the issues on which the court is invited to adjudicate; the unfairness of exposing a party to issues and arguments of which fair warning has not been given; the expectation, for reasons of fairness and proportionality, that parties will put before the trial judge all questions both of fact and of law upon which they wish to have an adjudication; and the general public interest in the finality of litigation.”

It is a subject of legitimate complaint by the leaseholders that, as the Riverside CREM 3 case illustrates, this is not the first occasion on which new points have been taken on an appeal, putting them to additional expense and anxiety, when the appellant could have taken the same points before the FTT and had them resolved there.

For those reasons, I am not prepared to express any further view on the issue Mr Morshead placed centrally in his argument, namely whether the task of the FTT was simply a practical exercise in bringing the manager's functions, so far as they relate to building safety, to an end and providing for a transition or handover to the appellants without room for a different destination; or whether what is required is an evaluative or discretionary decision to be made under the 1987 Act, having regard to the provisions of the 2022 Act, on which functions, if any, should be conferred on or remain with the manager and whether these might result in the manager undertaking the remediation works. That is not a question which the FTT considered and it would not be fair to the leaseholders for it to be determined against them without them having had the opportunity to present full argument (which they have not done today). It would hijack and pre-empt the final hearing of the applications and would disrupt the FTT's own case management timetable.

My only reason for hesitating at all in coming to the conclusion that I should not address Mr Morshead’s argument is that when it gave permission to appeal, the FTT suggested that it was “reasonably arguable” that the appellant was right, and that evidence was not required to enable it to dispose of the two rival applications. That appears to have been why it gave permission to appeal, notwithstanding that it had been presented with no argument before it made its own determination and had not been asked to consider the way in which Mr Morshead now puts the appellants’ case. It may have considered that it would be assisted by having that issue addressed by this Tribunal before it considered the applications now listed before it. But it is not the function of an appeal to determine the appropriate case management of issues which the parties have previously agreed do require evidence and should not yet be determined, nor, except in the circumstances mentioned in Singh v Dass (which do not apply), to determine issues which have not yet been considered by the FTT.

I am anxious to be as helpful as I can but this Tribunal can only express views on matters which are properly the subject of an appeal, and can only substitute a decision of its own if it is satisfied that the FTT has gone wrong in law. The status of any preliminary expression of opinion by me would be very questionable indeed (it was perhaps ill-advised for me to go as far as I did in paragraph [114] of my decision of March last year). I am quite sure any observations by me adverse to the submissions put forward by Mr Morshead would be the subject of an immediate application for permission to appeal to the Court of Appeal. The whole orderly determination of issues by the FTT, with a right of appeal to this Tribunal, would be disrupted.

So I decline Mr Morshead's invitation and, if it was the intention of the FTT, the FTT's invitation to have the first bite at those questions. The first bite should be the FTT’s in October.

Those are my reasons for dismissing the appeal. They deliberately do not do justice to the full extent of the argument which has been presented, but in my own defence, that is because the argument has been presented prematurely. I cannot sit as a tribunal of appeal from my own decision of March last year, and that is effectively what I have been asked to do.