Landlord and tenant – Breach of covenant – Exoneration clause – Appellant lessee claiming specific performance and damages against respondent landlord in respect of breaches of lease covenants – Exoneration clause in lease relieving respondent of liability for damage suffered through fault of agents employed by it save to extent that such liability insured against – Whether exoneration clause applying to liability for breach of lease covenants – Appeal allowed The appellant held a long lease of an apartment in a development whose facilities included a swimming pool and gym. The respondent landlord was a company of which the apartment lessees were directors. The appellant brought claims against the respondent in respect of various alleged breaches of the lease covenants, including the blocking of a door to the swimming pool complex, the removal of a jacuzzi, which had been replaced by a sauna, tree root damage to tarmac on the drive and a failure to repair or replace gym equipment. The appellant had originally been able to access the swimming pool through a door from an internal stairwell that served her apartment. The decision to block that door had been taken by the lessees on the respondent’s management committee, following persistent problems with condensation in the stairwell. The appellant sought an order for specific performance of the respondent’s covenants, requiring it to reinstate the door and remedy the other matters complained of, plus damages for loss of amenity. Held: The appeal was allowed. Peter Knox QC and Pierre Janusz (instructed by Pictons Solicitors LLP, of Tring) appeared for the appellant; Mark Jones (instructed by Rowberrys Solicitors, of Crowthorne) appeared for the respondent. Sally Dobson, barrister
The respondent relied on an exoneration clause in the lease, to the effect that it would not be liable for any “damage” suffered by appellant through “the neglect or fault or misconduct of any servant agent contractor or workman… employed by… the Company” save to the extent that such liability was covered by its insurance. The respondent had no such insurance.
In the county court, the judge held that the respondent could rely on the exoneration clause since all the relevant decisions had been taken by its management committee, which was an “agent” of the respondent within the meaning of that clause. The appellant appealed. Her claim for specific performance in respect of the door was not pursued, in light of an undertaking by the respondent to unblock it, but she maintained her claim for damages.
On the clear wording of the exoneration clause, that clause did not apply to breaches of the respondent’s repairing covenants but applied only where the respondent company was sued in tort on the basis of vicarious liability. The respondent had expressly undertaken certain repairing covenants and it would be odd if, under later provisions of the lease, it was exonerated from liability for breaching those covenants unless it had taken out insurance. Moreover, since the exoneration clause fell to be construed contra proferentem, the word “damage” as used in that clause should be given its narrower meaning, such that it applied only to claims for physical damage and did not include claims for loss of amenity. Further, had it been necessary to decide the point, the court would have held that the decisions of the directors of the respondent company, in their capacity as such, were not within the exoneration clause. The directors on the management committee were not employees of the respondent but had simply been appointed, and agreed, to act on the terms of the respondent’s memorandum and articles. Nor were they agents used by the respondent since they were officers of the company.
Damages of £1,000 were awarded for loss of amenity caused by the blocking up of the internal door to the swimming pool. In relation to the jacuzzi, specific performance was refused on the ground that the high cost of installing a new one was excessive and disproportionate when compared to the loss of amenity involved: Ruxley Electronics & Construction Ltd v Forsyth [1996] AC 344; [1995] EGCS 117 applied. However, damages of £2,500 were awarded for loss of amenity. A reasonable person, with knowledge of the circumstances in which people acquired leasehold interests in that sort of development, would not consider the sauna to be an acceptable substitute since a jacuzzi and a sauna were two different things and served different functions. Damages of £500 were awarded for the failure properly to maintain the gym. There was no merit in the claim in respect of the tree root damage, since the damage had been dealt with by making the tarmac area smaller, without touching the tree roots, and the drive was still fully useable.
Newman v Framewood Manor Management Co Ltd
Landlord and tenant – Breach of covenant – Exoneration clause – Appellant lessee claiming specific performance and damages against respondent landlord in respect of breaches of lease covenants – Exoneration clause in lease relieving respondent of liability for damage suffered through fault of agents employed by it save to extent that such liability insured against – Whether exoneration clause applying to liability for breach of lease covenants – Appeal allowed
The appellant held a long lease of an apartment in a development whose facilities included a swimming pool and gym. The respondent landlord was a company of which the apartment lessees were directors. The appellant brought claims against the respondent in respect of various alleged breaches of the lease covenants, including the blocking of a door to the swimming pool complex, the removal of a jacuzzi, which had been replaced by a sauna, tree root damage to tarmac on the drive and a failure to repair or replace gym equipment. The appellant had originally been able to access the swimming pool through a door from an internal stairwell that served her apartment. The decision to block that door had been taken by the lessees on the respondent’s management committee, following persistent problems with condensation in the stairwell. The appellant sought an order for specific performance of the respondent’s covenants, requiring it to reinstate the door and remedy the other matters complained of, plus damages for loss of amenity.The respondent relied on an exoneration clause in the lease, to the effect that it would not be liable for any “damage” suffered by appellant through “the neglect or fault or misconduct of any servant agent contractor or workman… employed by… the Company” save to the extent that such liability was covered by its insurance. The respondent had no such insurance.In the county court, the judge held that the respondent could rely on the exoneration clause since all the relevant decisions had been taken by its management committee, which was an “agent” of the respondent within the meaning of that clause. The appellant appealed. Her claim for specific performance in respect of the door was not pursued, in light of an undertaking by the respondent to unblock it, but she maintained her claim for damages.
Held: The appeal was allowed.On the clear wording of the exoneration clause, that clause did not apply to breaches of the respondent’s repairing covenants but applied only where the respondent company was sued in tort on the basis of vicarious liability. The respondent had expressly undertaken certain repairing covenants and it would be odd if, under later provisions of the lease, it was exonerated from liability for breaching those covenants unless it had taken out insurance. Moreover, since the exoneration clause fell to be construed contra proferentem, the word “damage” as used in that clause should be given its narrower meaning, such that it applied only to claims for physical damage and did not include claims for loss of amenity. Further, had it been necessary to decide the point, the court would have held that the decisions of the directors of the respondent company, in their capacity as such, were not within the exoneration clause. The directors on the management committee were not employees of the respondent but had simply been appointed, and agreed, to act on the terms of the respondent’s memorandum and articles. Nor were they agents used by the respondent since they were officers of the company.Damages of £1,000 were awarded for loss of amenity caused by the blocking up of the internal door to the swimming pool. In relation to the jacuzzi, specific performance was refused on the ground that the high cost of installing a new one was excessive and disproportionate when compared to the loss of amenity involved: Ruxley Electronics & Construction Ltd v Forsyth [1996] AC 344; [1995] EGCS 117 applied. However, damages of £2,500 were awarded for loss of amenity. A reasonable person, with knowledge of the circumstances in which people acquired leasehold interests in that sort of development, would not consider the sauna to be an acceptable substitute since a jacuzzi and a sauna were two different things and served different functions. Damages of £500 were awarded for the failure properly to maintain the gym. There was no merit in the claim in respect of the tree root damage, since the damage had been dealt with by making the tarmac area smaller, without touching the tree roots, and the drive was still fully useable.
Peter Knox QC and Pierre Janusz (instructed by Pictons Solicitors LLP, of Tring) appeared for the appellant; Mark Jones (instructed by Rowberrys Solicitors, of Crowthorne) appeared for the respondent.
Sally Dobson, barrister
