Morshead Mansions Ltd v Di Marco

The Court of Appeal considered whether sections 21 and 22 of the Landlord and Tenant Act 1985, which require a landlord to supply a written summary of service charge costs and to afford inspection of supporting documents, give rise to a private civil right enforceable by mandatory injunctions as well as criminal sanctions. The court held that they do not: Parliament provided only a criminal sanction and related statutory remedies in other specific contexts, and there is no clear intention to create a private civil remedy for breach of sections 21 or 22. The court relied on statutory construction principles, the existing statutory scheme governing service charges (including provisions that expressly create civil remedies elsewhere), and the practical and remedial consequences of implying a civil right.

Background and factual matrix.

• The appellant is the freehold company Morshead Mansions Ltd; the respondent, Mr Di Marco, is a lessee of a flat and a member of the landlord company. The lease required payment of a service charge and provided for certified accounts, and the company also levied contributions under its articles of association. In earlier proceedings this court determined that some contributions were not "service charges" under the 1985 Act.
• Mr Di Marco sought orders requiring the landlord to provide certified accounts and summaries of costs for particular years and to provide inspection facilities under sections 21 and 22 of the Landlord and Tenant Act 1985, or alternatively an order that the landlord substantially comply with those sections.

Procedural posture. The claim was before the High Court (Mann J), who held that tenants have a direct civil enforcement remedy; the landlords appealed to the Court of Appeal. The appeal concerned whether the statutory duties in sections 21 and 22 are enforceable by civil mandatory orders.

Issues framed by the court.

• Whether sections 21 and 22, which create criminal offences for non-compliance, also give rise to a private civil cause of action enforceable by injunction or mandatory order.
• How sections 21 and 22 fit into the wider statutory scheme regulating service charges and whether Parliament intended civil remedies to be available in addition to criminal sanctions.

Court’s reasoning.

• The court applied established principles of statutory construction: where a statute prescribes a particular remedy, other remedies will not be implied unless Parliament’s intention to confer them is clear. The presence of only a criminal sanction ordinarily weighs against implying a private civil remedy.
• The court reviewed the statutory landscape: other provisions in the Landlord and Tenant Act 1985 and related statutes expressly create civil remedies or limit civil recoverability (for example sections dealing with implied covenants, consulting tenants, the right to withhold service charges, and express powers for courts to make mandatory orders in specified contexts). Where Parliament has conferred a mandatory-order power in comparable circumstances (for example under section 81 of the Leasehold Reform, Housing and Urban Development Act 1993 and paragraph 5 of Schedule 4 to the Housing Act 1996) it has done so expressly, which suggests it did not intend the same remedy to be available generally under sections 21 and 22.
• The court also considered the types of loss that would support a private action in damages and found them insufficiently established here, and observed that the statutory defence of "reasonable excuse" is framed only for criminal proceedings, which makes it unlikely Parliament intended a parallel civil liability without that defence.
• Practical points were relevant: many tenants have contractual (lease) remedies; local housing authorities are prosecuting authorities under the Act; and imposing civil remedies could produce disproportionate consequences compared with the limited criminal fine provided by Parliament.

Conclusion. The Court of Appeal allowed the landlords’ appeal and held that sections 21 and 22 do not give rise to a private civil right enforceable by mandatory injunction; Mann J was wrong to conclude otherwise.

Appeal allowed. The Court of Appeal held that sections 21 and 22 of the Landlord and Tenant Act 1985, which impose duties to supply a summary of service charge costs and to provide inspection facilities and include criminal sanctions for non-compliance, do not give rise to a private civil remedy enforceable by mandatory injunction. The court relied on statutory construction, the wider statutory scheme (including express civil remedies in related provisions), the limited nature of the criminal sanction, and the absence of a clear parliamentary intention to create a private civil cause of action.

Appeal from the High Court, Chancery Division (Mann J) [2013] EWHC 1068 (Ch); the High Court had held that tenants have a direct civil enforcement remedy under sections 21 and 22. The Court of Appeal allowed the landlords' appeal and reversed Mann J: [2014] EWCA Civ 96.