Landlord and tenant – Covenants – Administration and management – Appellant taking assignment of commercial premises on industrial estate – Respondent landlords leaving heap of rubble near to entrance to estate for several years – Whether presence of rubble a breach of landlords’ covenant to administer and manage estate – Whether this encompassing requirement to maintain appearance of estate – Appeal dismissed
In 2009, the appellant became the tenant of commercial premises on an industrial estate on taking an assignment of a lease for a term of 25 years from 2007. Thereafter, it continued to operate the self-storage business that the former tenant had run from the premises. The appellant made several complaints to the first to third respondents, as the freeholders of the estate and the landlords under the lease, regarding the presence of a heap of rubble near the main entrance to the estate. The rubble was on land over which the respondents retained control; it was not subject to any lease and did not form part of the common parts of the estate. It had been present since 2008, when the first three respondents had demolished a building that was in a poor state of repair, with the intention of using the rubble as hardcore to form the base of a new building once planning permission was obtained.
The fourth respondent purchased the freehold of the estate in early 2011 and thereby became the landlord under the lease. The appellant subsequently brought a claim for damages against the respondents, arguing that the presence of the rubble had a deterrent effect on potential customers and amounted to a breach of the landlord’s covenants under the lease. The appellant submitted that maintaining the appearance of the estate fell within the services that the landlord had covenanted to provide, in particular that of “administering and managing the Estate”; it argued that leaving a large rubble heap near the entrance to the estate for an indefinite period of time amounted to a failure to administer and manage the estate in accordance with the principles of good estate management.
In the court below, the claim was dismissed on the sole ground that the appellant had been aware of the rubble heap when it took on the lease and that the landlord was not obliged to put the estate into a better condition that it had been in at that time. The appellant appealed.
Held: The appeal was dismissed.
(1) The judge in the court below had erred in rejecting the appellant’s claim solely on the ground that, where the appellant had known of the presence of the rubble heap prior to the assignment, the relevant covenant could not require the estate to be put into a better state than it was at the date of such assignment. To determine the claim for breach of covenant, it was necessary to consider what subject matter had been in the contemplation of the parties at the time when the covenant was entered into: Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 applied. However, even if the judge had adopted the correct approach, the appellant would have failed to establish that the respondents had breached the lease covenants or that the appellant had suffered damage as a result.
The words “administering and managing the Estate” were not limited merely to the discharge of office functions. They were wide enough to connote, in appropriate circumstances, an obligation on the part of the landlord actively to carry out works on the retained parts or the common parts of the estate or to prevent the carrying on of unsuitable activities to ensure that there was no material impairment of its tenants’ enjoyment of the common parts or the various premises that had been demised to them. However, construed objectively in accordance with well-established principles of construction, those words were not sufficiently broad to impose a generalised obligation, of a wholly unspecific ambit, to “maintain the appearance of the estate”. No such obligation could be implied in the absence of any definition of a sufficiently certain standard, or set of criteria, by reference to which the appearance of the estate could be judged. The covenant could not be construed as requiring the respondents to remove, or lower the level of, the rubble heap simply on the grounds that such work would improve the appearance of the estate.
Further, even if the covenant had imposed any such obligation, the judge’s factual findings precluded any possible factual finding that the respondents were in breach of that obligation or that the appellant had suffered any damage as a result of such breach. Although the judge’s approach had been wrong in law, he had reached the correct result in dismissing the appellant’s claim.
Philip Sissons (instructed by Clarke Willmott LLP, of Bristol) appeared for the appellant; Stephen Jones (instructed by Viva-Law Solicitors Ltd, of Southaampton) appeared for the respondents.
Sally Dobson, barrister
