FirstPort Property Services Ltd v Settlers Court RTM Company Ltd & Ors [2022] UKSC 1 (12 January 2022)

Citation:FirstPort Property Services Ltd v Settlers Court RTM Company Ltd & Ors [2022] UKSC 1 (12 January 2022).

Subjects invoked: 44. Heritable Property, 11. Legal Methods,

Rule of thumb: Can there be more than one overall development manager or multiple factors in a private gated estate? There can be only one development manager in a private gated estate. However, there can still be multiple factors for different flats within it. It also affirmed the general principle of legal methods that if there is past case-law which the Court does not just disagree with but think is definitely technically wrong & an error of law, then this should be stated and it should be overturned.

Background facts:

This case invoked the subjects of heritable property and legal methods. In heritable/residential property law it invoked the principle of co-ownership, and the obligations arising therefrom, and in legal methods, it invoked the principle of wrong law in previous case requiring to be overturned by a Court.

The material facts of this case were that there was a private gated estate development in the city centre of London near the 02 arena called, Virginia Quay. Inside this estate there were multiple big flats and terraced houses. Of course in a private gated estate the Council do not adopt the roads, paths and drains for maintenance like they normally would. The roads, paths and drains etc in the wider development were therefore co-owned by every block of flats and the houses, and the flat owners/occupiers had to maintain them.

The tenants in one of the flats decided to set up a company, called ‘RTM’, to run the management of the common areas of their flat themselves – hallways, roof, gardening etc – rather than get property management company FirstPort Property Services to do so. RTM stated that as well as manage their own flats (hallways, roof, garden) etc, they would also manage the roads, paths and drains at their bit of the development only as well. They said they were paying FirstPort Property Services nothing and wanted nothing to do with them.

FirstPort Property Services stated that RTM could not do this and RTM were stuck with them. FirstPort stated that had the right to manage the whole drains, paths and roads on the wider estate, as they had been appointed by all the other flats and houses to do so, and that RTM had to allow them to do this, and indeed RTM had to pay them for doing this.

This matter essentially came down to an interpretation of the the Commonhold and Leasehold Reform Act 2002 Part 2, chapter 1, as well as the overturning of wrong case-law made by the Court in the past.

RTM argued that there was a case in-point from the Court of Appeal in England and Wales, Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] EWCA Civ 1372, holding that they were allowed to do this under the 2002 Act – ie they were allowed manage both their own flats, and also the co-owned parts outside of it as well, and they were within their rights to tell First Port Property Services to clear off and leave them alone. FirstPort Property Services argued that this Judgment was a wrong interpretation of the 2002 Act, and it was completely unworkable in practice for managing co-owned areas. They wanted this Judgment overturned.

Judgment:

The Court found in favour of FirstPort Property Services. They affirmed that the previous Judgment in Gala Unity was wrong law and made managing co-owned areas unworkable in practice. The Court held that under the 2003 Act, in private gated estates, all the co-owners/co-occupiers of all the properties on the development have to appoint one person to manage the co-owned/co-occupied parts of the development – roads, paths, and drains – and that there cannot be multiple parties managing these areas. The Court affirmed that FirstPort Property Services were the company who were appointed to manage the larger estate, and RTM were legally obliged to let them do this and pay them for it. The Court overturned past case-law affirming the opposite of this.

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Ratio-decidendi:

‘I consider that the right to manage scheme in Chapter 1 of Part 2 of the 2002 Act makes no provision within the statutory right to manage for management by the RTM company of shared estate facilities. It is concerned only with management of the relevant premises, that is the relevant building or part of a building, together with appurtenant property (if any) which means nearby physical property over which the occupants of the relevant building (or part) have exclusive rights… In my view the Gala Unity case was wrongly decided and should be overruled… has stood as binding authority for several years… That is not, however, a sufficient reason to perpetuate an interpretation which is not merely causing practical difficulties but, more fundamentally, is contrary to the purpose of the statute’, Lord Briggs at 62-63

Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.