Adrian Suchorski and Gosia Suchorski & Ors v Richard Norton

A tribunal-appointed manager is an official of the appointing tribunal and must perform the duties imposed by the appointment. Service charge payments made to such a manager remain subject to the statutory protections governing service charges, including the statutory trust. The manager assumes trustee-like responsibilities and must account for all money received. Failure to account permits the Upper Tribunal to presume that the money remains held on trust and to order personal repayment, subject to any properly established expenditure. Where the amount received cannot be established from the manager’s account, the Tribunal may direct an inquiry and invite leaseholders to provide payment evidence.

The applicants were leaseholders at Albert Court. The First-tier Tribunal appointed Richard Norton as manager under section 24 of the Landlord and Tenant Act 1987. Following concerns about his management, the First-tier Tribunal discharged him, appointed a replacement manager and ordered him to provide a closing account, transfer documents and reimburse unexpended funds.

Mr Norton repeatedly failed to comply or attend. The First-tier Tribunal referred the matter to the Upper Tribunal under rule 8(5) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The central issues were the legal status of a tribunal-appointed manager, the consequences of failing to account for service charge monies, and the appropriate enforcement order.

1. The application was dealt with in Mr Norton’s absence. The Tribunal concluded that it was unnecessary to compel further attendance because the minimum appropriate response was sufficiently punitive.

2. A tribunal-appointed manager is an official appointed to carry out the duties specified in the appointing order and answers to the appointing tribunal. The manager is not the manager of the landlord’s business or of the landlord’s obligations under the lease: Maunder Taylor v Blaquiere [2002] EWCA Civ 1633; [2003] 1 WLR 379.

3. Payments made by leaseholders to a tribunal-appointed manager as contributions towards services are service charges within section 18(1) of the Landlord and Tenant Act 1985. The statutory protections applicable to service charges therefore apply. The additional trust protections in section 42 of the Landlord and Tenant Act 1987 also apply to those payments, requiring the recipient to hold them on trust for the relevant purposes and, subject to those purposes, for the contributing leaseholders.

4. The tribunal-appointed manager assumes the responsibilities of a trustee. The manager must account for every sum received. A trustee who fails to account is presumed still to hold the money subject to the trust. Applying that principle, Mr Norton was ordered personally to repay all money received between 1 November 2017 and 29 August 2019 in his capacity as manager.

5. The order did not prevent Mr Norton from establishing expenditure properly incurred as manager. The applicants and other leaseholders were given the opportunity to provide evidence of payments, including demands, receipts and bank statements. An inquiry would establish the total received, after which repayment would be made to the replacement manager or the leaseholders who made the payments. The Tribunal’s power to require a final account and direct payment of any surplus was confirmed in Kol v Bowring [2015] UKUT 0530 (LC).

• First-tier Tribunal (Property Chamber): discharged Mr Norton as manager, appointed a replacement manager, ordered him to provide a closing account and transfer documents, and referred his non-compliance to the Upper Tribunal under rule 8(5) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.
• Upper Tribunal (Lands Chamber): ordered Mr Norton personally to repay the sums received during his appointment, subject to proof of properly incurred expenditure, and directed an inquiry to establish the amount.