Managers of flats fail to get injunction against owners
A letting and management company has failed to get an injunction to allow it to continue to manage a block of flats following a dispute with the owner.
The case involved Atlas Residential Solutions Management UK Ltd and Greengate Sarl (2019).
Greengate had purchased the building and hoped to re-sell it after the flats had been successfully let and managed.
It entered into a contract with Atlas to provide letting and management services.
Under the contracts, the parties were required to cooperate in the management of the building, with Greengate supplying Atlas with information and data when required.
Atlas was entitled to a performance fee of 20% of the net profit earned on the sale of the property. In September 2019, the parties' relationship broke down after Greengate served notice to terminate the contracts, alleging that it was concerned with the poor management of the property.
Atlas applied for an injunction allowing it to continue to manage the flats until the dispute could be decided at a full court hearing. It submitted that preventing it from managing the building before the trial would affect its public association with the building, which was its flagship asset in the UK, and therefore damage its reputation.
In deciding whether to grant an injunction, the judge said the court needed to take the path likely to cause the least amount of irremediable prejudice to either side.
While there were good arguments on both sides, the court did not have a high assurance that Atlas’ case would prevail at trial.
The parties' contracts contemplated that successful management of the building would involve cooperation between the parties. It followed that the injunction sought by Atlas would require the parties to work together even though their relationship had broken down, which would cause practical difficulties. The balance of convenience lay in favour of refusing the injunction.
Please contact Simeon Clipstone if you would like more information about the issues raised in this article or any aspect of commercial property law.