Practice and procedure – Declarations – Claimant landlord wishing to change communal heating and hot water system serving defendants’ flats – Defendants opposing change – Claimant seeking declarations as to its entitlement to renew system – Whether lessor entitled to change communal system as it considered reasonable where result was enhanced and different repairing obligation on lessees – Claim dismissed
Northwood Hall, Hornsey Lane, London N6, was a purpose-built block of 194 flats, constructed in or around 1935. The flats were held by their occupiers under long leases with varying unexpired terms; a number of leases were held by the defendants.
A dispute arose concerning the communal heating and hot water system serving all the flats which was operated by the claimant landlord under its obligation to maintain the building. The claimant wanted to change the way in which the system operated but the defendants objected because they said it would alter the terms of their leases.
The new system was different to the old in that it relied upon additional apparatus, principally heat exchangers, to deliver the hot water to the flats. The existing system did not need such equipment, sending hot water directly into the pipes in the flats and directly to the radiators. The defendants said the introduction of heat exchanger units would add to their repairing covenant obligations.
The claimant sought a declaration that it was entitled to renew the system by replacement apparatus which might not be identical to what had been there since 1935, but performed the same service; alternatively, it sought a declaration as to whether it would be in breach of its covenant to supply, if it merely brought hot water to the exterior of the defendants’ flats and offered it up for connection.
Held: The claim was dismissed.
(1) The court might grant declaratory relief, whether or not any other remedy was claimed. However, claims for declarations alone were unusual, and generally were sought and granted together with other forms of relief.
The power to grant declaratory relief was discretionary. When considering the exercise of the discretion, in broad terms, the court had to take into account justice to the claimant and the defendant, whether the declaration would serve a useful purpose and whether there were other special reasons why, or why not, the court should grant the declaration: Financial Services Authority v Rourke [2002] CP Rep 14 considered.
In general, there had to be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them. A present dispute over a right or obligation that might only arise if a future contingency occurred might well be suitable for declaratory relief and amount to a real and present dispute. Each party had to be affected by the court’s determination of the issues concerning the legal right in question.
(2) The courts were prepared in appropriate cases to make declarations as regards rights which might arise in the future or which were academic as between the parties, but the court might refuse a declaration on grounds of prematurity, or because it would serve no useful purpose (no practical utility): Pavledes v Hadjisavva [2013] EWHC 124 (Ch); [2013] 2 EGLR 123; [2013] EGILR 1 considered.
The fact the claimant was not a party to the contract in respect of which such a declaration was sought was not fatal to an application for a declaration, provided the claimant was directly affected by the issue. In such cases, however, the court ought to proceed very cautiously when considering whether to make the declaration sought.
The court had to be satisfied that all sides of the argument would be fully and properly put. Therefore, it had to ensure all those affected were either before it or would have their arguments put before the court. Therefore, declarations should not be made without trial.
In all cases, assuming the other tests were satisfied, the court had to ask whether a declaration was the most effective way of resolving the issues raised. In answering that question, the court had to consider other options for resolving the issue: RollsRoyce Plc v Unite the Union [2009] EWCA Civ 387; [2010] 1 WLR 318, Thomas Brown Estates Ltd v Hunters Partners Ltd [2012] EWHC 21 (QB); [2012] PLSCS 9, Pavledes v Hadjisavva and Bank of New York Mellon, London Branch v Essar Steel India Ltd [2018] EWHC 3177 (Ch) considered.
(3) The decisive question was whether a lessor was entitled to change by renewal a communal central heating and hot water system in a way that it considered reasonable and then connect that new system to individual flats where the result would be an enhanced and different repairing obligation on the lessees.
It seemed to be an exorbitant construction to place on a repairing covenant to hold that it permitted the lessor to make additions howsoever it considered appropriate and then expect the lessee to carry out repairs as if it were a fixture comprising part of the demise. The lessor might agree only to make reasonable additions, but that would require reading words into the lease that were not there.
(4) The word “additions” in that context, was properly to be construed as a reference to something added to the demise by the lessee. The reasonable reader of the repairing obligation would see it as being intended to extend to fixtures added to the demise by the lessee and the same applied to the use of the word “additions”. The phrase ought to be read conjunctively in the sense that the fixtures and additions were of the same essence. They were fixtures and additions which the lessee had introduced, and the purpose and effect of the covenant was that the lessee had to keep those in repair too. Had it been the case that the additions could be added to the demise by the lessor, it would have been made clear by virtue of a separate limb to the covenant.
The effect of the introduction of the heat exchanger units to the new system meant that there was a change in the way that the lease operated; it would entail two heating devices whereas upon the grant of the lease there was only one. That was an additional burden not contemplated by the parties upon entering into the lease. Accordingly, the court would refuse to make the declarations sought.
Brie Stevens-Hoare KC and Cameron Stocks (instructed by Hamlin LLP Solicitors) appeared for the claimant; Christopher Heather KC (instructed by Payne Hicks Beach Solicitors) appeared for the defendants
Click here to read a transcript of Triplark Ltd v Whale and others
