In an eagerly awaited judgment by the Supreme Court handed down today, Lord Briggs in First Port Property Services Limited -v- Settlers Court RTM Company Limited & Others [2022] UKSC 1 overturned the Court of Appeal’s decision in Gala Unity Limited -v- Ariadne Road RTM Co Limited [2013] 1WLR988. Gala interpreted a right to manage company’s management functions under the Commonhold and Leasehold Reform Act 2002 (the “2002 Act”) as being sufficiently wide as to include the management of property outside the relevant building and which was also enjoyed by third parties with no nexus to the right to manage company or the lessees of the relevant building. That gave rise to a concept that there would or could be a “dual management” scenario.
The thorough judgment of Lord Briggs determined that the Gala decision was “wrong” and produced “absurd” results that were plainly not intended under the 2002 Act.
The Supreme Court further clarified that in relation to the management functions enjoyed by a right to manage company under the 2002 Act, such management was concerned only with the relevant building together with nearby appurtenant property over which the lessees of the relevant building enjoyed exclusive rights. The Supreme Court has therefore interpreted the management functions of a right to manage company on a significantly narrower basis than in Gala (and other authorities).
In respect of any RTM or other property related disputes, please contact the property litigation team at Colman Coyle on +44 (0)20 7354 3000 or enquiries@colmancoyle.com.
