Landlord and tenant — Tenants’ liability to repair under full repairing lease — Basement of office building consisting of basement, ground floor and six upper storeys flooded owing to rise of water table combined with defects of construction and possibly of design — Basement ankle deep in water for most of the time between 1979 and 1984 — Owing to lowering of water table since 1984 basement had been dry, but remedial work was obviously necessary in case water table rose again — Action by plaintiff tenants for a declaration as to liability under the covenants of the lease — Expert structural engineers called by tenants and landlords, although differing in some respects as to the causes of the trouble, agreed that there had been a failure of the ‘kicker’ joint between floor and walls caused by poor workmanship which had resulted in weak areas of concrete of a relatively porous texture — As to the necessary remedial measures, the plaintiff tenants’ expert recommended an asphalt tanking of the basement while the landlords’ expert recommended either an asphalt tanking scheme, but of a lesser height, or a cheaper waterproof rendering method — Any of these schemes would entail very substantial structural additions to the basement — Held, after considering authorities on repairing covenants and the meaning of ‘repair’, that the work required in the present case did not come within the scope of repair, but entailed structural alterations and improvements to the basement — Hence it did not fall within the tenants’ repairing covenant — Declaration accordingly
This was an
action by the Post Office as plaintiffs seeking a declaration as to their
position as tenants under the repairing covenants of their lease of Abbey House
in the City of London, and in the events which had happened. The defendants
were the landlords, Aquarius Properties Ltd.
Paul Morgan
(instructed by B A Holland, Solicitor’s Department, The Post Office) appeared
on behalf of the plaintiffs; A D Dinkin (instructed by Masons) represented the
defendants.
Giving
judgment, HOFFMANN J said: Abbey House is an office building in the City of
London constructed in the mid-1960s. Since 1969 it has been let to the Post
Office on a full repairing lease by Aquarius Properties Ltd. For most of the
time between 1979 and 1984 the basement was ankle deep in water. This appears
to have been the result of a rise in the level of the local water table
combined with defects in the construction and possibly the design of the
building. In 1984 the water table subsided again and since then the basement had
been dry.
The tenants’
lease expires in 1991, but the building has a life expectancy of many years and
it is therefore agreed by landlords and tenants that remedial work is necessary
to make the basement waterproof in case the water table should rise again. The
issue in this case is whether such work is ‘repair’ within the meaning of the
tenants’ covenants.
The building
consists of front and rear sections. The basement runs under both. It has 12-in
thick reinforced concrete walls. Under the front section of the building the
basement floor is a reinforced concrete raft 3 ft thick which, together with
the walls, supports the ground and six upper storeys. At the rear there are
only two upper storeys and the basement slab is of lighter construction. For
the most part it is 8 in thick and reinforced with a light mesh on the lower
surface only. Around the walls and to a width of 6 ft the thickness is
increased to 15 in. There are also three internal columns under which the
basement floor becomes a concrete foundation 3 ft thick. The floor has been
constructed integrally with the walls by forming a 5-in upstand around the edge
of the floor and then using that as the base for the walls. This upstand is
called the ‘kicker’.
Concrete has
to be cast in sections with each new section of wet concrete being poured
alongside or above a section which has already dried. There is also a tendency
for concrete to shrink as it dries, partly from chemical reaction and partly on
account of evaporation. The result is to produce a construction joint between
sections of concrete which, unless suitably bridged, may admit water. In the
design of Abbey House, basement pvc water bars were specified for insertion at
the construction joints beneath the concrete floor and on the outside of the
walls up to a height of 6 ft from a datum line corresponding to the surface of
the basement concrete floor. These water bars are, in effect, strips of pvc
which are keyed into the concrete and overlay the construction joints by some
inches on each side. The floor was also laid upon a thin layer of polythene,
which in turn covered a blinding layer laid on the earth to give a level
surface. Between the two sections of the building there was an expansion joint
which ran across the basement floor and up the walls. A water bar was also
specified to bridge this joint.
The contract
documents record that in November 1964 trial holes
referred, that is about a foot below the 8-in section of the rear basement
floor. In May 1965 the engineer engaged for the construction of the building
reported the water table 3 in higher. In 1979 it appears to have risen to at
least 6 in above the basement floor and the flooding took place. There is no evidence
that ground water entered at any higher level. Although there had been some
minor leakage at about 4 ft above ground level, this was almost certainly
surface water which had penetrated the wall where a localised failure of the
water bars occurred.
I have had the
benefit of the views of two eminent structural engineers on the causes of the
flooding and the remedies which should be adopted. Both agreed that there had
been a failure of the kicker joint between the floor and the walls. This was
caused by poor workmanship which had produced weak areas of concrete or what Mr
Reith, the plaintiffs’ expert, described as honeycombing of the concrete. This
means that the concrete consists in places almost entirely of aggregate and is
deficient in sand and cement. It is therefore relatively porous. Unless care is
taken, this phenomenon tends to occur at the bottom of the section being cast
and in this case affected the concrete immediately above the kicker. There was
also evidence that some construction joints had not been formed with care and
that the water bars had therefore been inadequate to prevent the ingress of
water. Shrinkage of the concrete may also have detached the water bars and
allowed water to enter between them and the concrete. Mr Reith was also of the
view that there had been seepage through cracks in the 8-in slab. These cracks
were, in his opinion, likely to have been caused by the upward deflection of
the slab by two kinds of pressure. One was the pressure from the ground caused
by the load borne by the foundations under the central columns and walls being
transmitted to the 8-in slab. The other was hydrostatic pressure caused (when
the water table rose) by the head of water above the slab. The ground pressure
was in itself sufficient, in his opinion, to neutralise the dead weight of the
slab. Consequently the rise of the water table would have caused upward
deflection and since the slab had no reinforcement on its upper or most
vulnerable side, Mr Reith considered that cracking was likely to have occurred.
The defendants’ expert, Mr Deverill, disagreed on this point. He discounted the
effect of upward pressure from the ground because he doubted whether the
structural bond between the column foundations and the 8-in slab was sufficient
to enable such pressure to be transmitted. He therefore treated the dead weight
of the slab as fully available to counteract the hydrostatic pressure and
reckoned it to be sufficient to resist a 2-ft head of water — a calculation
with which Mr Reith, given the hypothesis of no ground pressure, agreed. As the
head of water did not appear to have exceeded 6 in, Mr Deverill thought it
unlikely that the slab had suffered any deflection. On the other hand, he
agreed that it was bad practice to cast a slab without any reinforcement on its
upper side and his recommendation for remedial work took into account the fact
that the 8-in slab might in some way be defective.
Neither expert
was able to submit his opinion to empirical verification because very little of
the cement screed over the concrete slab had been removed in order to allow the
slab to be inspected for cracking. There was no evidence of cracking in the
small area which had been uncovered, but Mr Reith said that he would not have
expected to see any because the cracks he had in mind would have been extremely
small and would in any event have closed when the water table fell and the
hydrostatic pressure upon the slab diminished.
The result is,
I think, that both experts would regard the question of whether there had been
water entry through the slab itself as to some extent conjectural. Mr Reith
thought it more likely than Mr Deverill, but Mr Deverill accepted that it was
sufficiently plausible to make it prudent to devise remedial measures which
took such a possibility into account. In those circumstances, I do not think
that I am called upon to express an opinion on a point on which I am entirely
unqualified to adjudicate.
Much the same
may be said of the differences between the remedial measures proposed by the
two experts. Mr Reith recommends the tanking of the basement with a layer of
asphalt covering the floor and the walls up to a height of 5 ft. Since asphalt
does not bond very well with concrete it would have to be held in place by an
additional concrete slab of 12-in thickness laid over the floor and an inner
concrete skin 6 in thick within the walls. In order to add additional weight to
the floor, he also recommends the extension of the inner concrete walls to the
ground-floor slab so as to enable its weight to be transmitted to the basement
floor and the construction of heavy internal partitions for the same purpose.
Mr Deverill
has proposed two alternative schemes. One is an asphalt tanking scheme similar
to that of Mr Reith. The differences are that Mr Deverill considers that it
would be excessive to allow for the possibility of a 5-ft head of water. In his
opinion 3 ft would be enough. Furthermore, taking the view he does about the
absence of significant ground pressure, he sees no need to extend the inner concrete
skin to the ground-floor slab or to construct heavy internal partitions. On the
other hand, he agrees that it would be advisable to cover the asphalt on the
floor with an additional 12-in concrete slab. Mr Deverill’s second and
preferred scheme involves the use of waterproof rendering in place of asphalt.
This would be strongly bonded to the floor and walls and would not, therefore,
need an inner concrete skin or covering. On the floor, however, Mr Deverill
still thinks it advisable to add another 9 in of concrete slab firmly bonded to
the existing slab and reinforced on the upper side. The waterproof rendering
would then be applied to the upper surface of the new slab. Mr Deverill
proposed the rendering scheme as a cheaper and more elegant solution than the
traditional asphalt scheme. He agreed that the application of rendering was
technically more demanding than asphalt and that unless the workmanship was
good there was a higher risk of failure. Mr Reith said that his experience
taught that the rendering scheme was too risky and that asphalt was worth the
additional expense. His recommendation of waterproofing to a height of 5 ft was
based upon the British Standards Institution’s Code of Practice for Protection
of Buildings against Water from the Ground CP 102, para 303, which recommends
that in a normal single-storey basement a minimum allowance of not less than
one-third of the depth below ground would be necessary. The depth of the Abbey
House basement is 15 ft. Mr Deverill said that in his view a normal
single-storey basement was 10 ft deep. In this case it was known that the water
table was normally beneath the basement slab and it was irrational to allow for
a 5-ft fluctuation rather than a 3-ft fluctuation simply by reference to the
height of the basement. In his opinion, a 3-ft allowance was ample. Mr Reith
drew attention to the fact that the original design specified water bars to a
height of 6 ft and suggested that this might indicate that the designer
contemplated the possibility of a 6-ft head of water. On the other hand, Mr
Reith and Mr Deverill agreed that anyone contemplating a 6-ft head of water
would have realised that an 8-in floor slab unreinforced on the upper side was
hopelessly inadequate. Mr Deverill gave what seemed to me, in the circumstances,
a more plausible explanation of the 6-ft water bars by saying they were meant
to prevent the ingress of surface water penetrating down the outside of the
basement walls.
The choice
between the schemes involves an evaluation of the additional risk in the
cheaper scheme and the likely damage and inconvenience if the risk eventuates
against the additional cost. The comparative figures are £175,000 for Mr
Reith’s asphalt scheme, including professional fees and VAT, and £86,000 for Mr
Deverill’s rendering scheme, with Mr Deverill’s other scheme somewhere in
between. The differences in cost are due mainly to the differences in the
schemes which I have already described, but also to some extent to differences
of opinion over subsidiary questions such as whether it will be necessary to
cut a new entrance to get materials and workmen into and out of the basement,
and the extent to which it will be necessary to remove and reposition the air
ducts and other services. Again, I feel ill-equipped to judge between the two
experts’ opinions of the risk and I think that such evaluation can best be done
by the person who is called upon to pay for the work. If it were my money I
think I would choose Mr Deverill’s scheme, but this may be more personally
revealing than helpful in deciding the question before me. That question is, as
I have said, whether the work required to waterproof the basement amounts to
‘repair’ within the meaning of the tenant’s covenants. For reasons which I
shall mention later, the answer might have depended upon the scheme which I
thought appropriate, but in this case I think that the answer is the same
whichever of the three schemes is adopted.
The landlords
hold under a long lease for 125 years from September 29 1966 granted in
consideration of the rents and covenants and the erection of the building. The
Post Office has an underlease dated June 25 1969 for a term from March 25 1969
until September 19 1991, or about 22 1/2 years. The rent was £11,250 until a
rent review at March 24 1983. Thereafter the rent was to be the market rent at
the rent review date on the assumption that the Post
upon whether this means the Post Office must be assumed to have waterproofed
the basement and, accordingly, the determination of the new rent awaits the
outcome of these proceedings.
I was told
that upon the assumption that the basement was waterproofed the annual rent
would be in the region of £50,000-£60,000. The capital value of the building
was said to be about £687,000, but the cost of rebuilding it today would be a
good deal more.
The repairing
covenant in the Post Office’s underlease is clause 2(3). It is in fairly
standard form and I shall not quote it in full because the critical words are
‘. . . keep in good and substantial repair the demised premises and every part
thereof . . .’. ‘Keep in repair’ implies, of course, an obligation to put in
repair so far as the premises are out of repair at the commencement of the
lease, but I do not think that this helps to answer the problem in this case,
which is whether the work required to waterproof the basement can be described
as ‘repair’.
Counsel have
referred me to a number of cases on the meaning of ‘repair’ from Lister
v Lane [1893] 2 QB 212 to Elmcroft Developments Ltd v Tankersley-Sawyer
(1984) 270 Estates Gazette 140. I have found most assistance in the judgment of
Sachs LJ in Brew Brothers Ltd v Snax Ross Ltd [1970] 1 QB 612.
This says, in effect, that the whole law on the subject may be summed up in the
proposition that ‘repair’ is an ordinary English word. It also contains a
timely warning against attempting to impose the crudities of judicial exegesis
upon the subtle and often intuitive discriminations of ordinary speech. All
words take meaning from context and it is, of course, necessary to have regard
to the language of the particular covenant and the lease as a whole, the
commercial relationship between the parties, the state of the premises at the
time of the demise and any other surrounding circumstances which may colour the
way in which the word is used. In the end, however, the question is whether the
ordinary speaker of English would consider that the word ‘repair’ as used in
the covenant was appropriate to describe the work which has to be done. The
cases do no more than illustrate specific contexts in which judges, as ordinary
speakers of English, have thought that it was or was not appropriate to do so.
Mr Dinkin for
the landlords formulated a number of propositions which he said could be
derived from three recent cases, namely Brew Brothers, Ravenseft Properties
Ltd v Davstone (Holdings) Ltd [1980] QB 12 and Elmcroft. The
most important was that the test for whether or not the work which needed to be
done was repair was whether it would give the landlord a wholly different thing
from that which he had before. In this case, he said, the landlord would still
have essentially the same building and therefore the work was repair. This
proposition, in my view, illustrates the wisdom of Sachs LJ’s warning, because
it does not make sufficient allowance for the range of distinctions embodied in
ordinary words. I think Mr Dinkin’s proposition does express what is usually
implied in the distinction between repair and rebuilding or reconstruction, but
these are not the only concepts which border upon repair. There are also words
like ‘improvement’, ‘alteration’ and ‘addition’ which are distinguishable from
repair in different ways. For example, one usually thinks of an improvement as
a fairly substantial and identifiable addition to or change in a building but
involving a subsidiary part rather than the building as a whole. Nevertheless,
‘improvement’ is different from repair. It is often said that whether or not
something is repair is a question of degree, but the question of degree which
has to be answered is not necessarily always the same. There are different
criteria for distinguishing the word ‘repair’ from its various neighbours.
These differences can be seen operating in Brew Brothers, in which the
majority of the court thought that the works taken as a whole were so extensive
as to amount to a reconstruction rather than a repair. Harman LJ did not accept
that the totality was reconstruction but thought that one part of the work,
namely the construction of new foundations, was an improvement. Wright v
Lawson (1903) 19 TLR 203 is also an example of an addition or
improvement, the construction of a new bay window, which could not be described
as a rebuilding or reconstruction of the premises as a whole.
In this case
Mr Morgan accepts that it would be difficult, except in a somewhat artificial
and question-begging sense, to say that the work needed in the basement would
make Abbey House a wholly different building from what it was before, but he
says he is not bound to submit that the work amounts to a reconstruction of the
premises. He says that it is not repair because it should more appropriately be
called a substantial improvement to the premises, creating a thoroughly waterproof
structure in the basement which was not previously there.
Both counsel
agree that the question is one of degree and, to a large extent, one of
impression on which different people could reasonably give different answers. I
think one is entitled to take into account, first, as part of the context, the
commercial relationship between the parties at the time of the demise. This was
that the landlords had a headlease of 125 years and the tenants had been given
an underlease of about 22 years. Second, in considering whether the work was
improvement rather than repair, one must have regard to its substantiality. In
this case both experts advise that whatever scheme of waterproofing is adopted,
there should be a very substantial structural addition to the basement, namely
a new concrete slab with reinforcement on the upper side, thicker than the
existing slab and laid above it (compare Wates v Rowland [1952] 2
QB 12). This has the effect of reducing the head room in the basement and
necessitates some degree of repositioning the ducts and services under the
ground-floor slab, although the experts are not agreed on how much. In the
asphalt schemes of both experts it is also necessary to construct inner
concrete skins against the existing walls.
Third, I think
I am entitled to take into account the probable cost of the work, which at the
lower end of the range of figures mentioned in the evidence is about £100,000.
This is twice the likely annual market rent for the whole building with
waterproof basement and over 15% of its total capital value. I was not given a
separate figure for the total value of the basement but it must be a small
fraction of the whole.
Taking these
matters into consideration and deploying my ordinary understanding of language,
I do not think it would be appropriate to describe any of the three schemes of
treatment as work of repair. In my judgment, they involve structural
alterations and improvements to the basement. Consequently, they do not fall
within the tenants’ obligations under the lease and I shall so declare.
Judgment was
given for the plaintiff tenants on the claim and counterclaim with costs.
