Landlord and tenant – Breach of covenant – Right of entry – Clause in lease requiring tenant to permit landlord to enter on 48 hours notice for specified purposes – Notice given by appellant landlord requiring access on date 18 days ahead and requiring tenant to confirm within seven days that access would be provided – In absence of response by respondent tenant, appellant not attending on specified date – Whether respondent in breach of covenant – Appeal dismissed
The appellant owned a property at New Crane Wharf, 11 New Crane Place, London, E1. The respondent was the leaseholder of flat 114 in the building. Clause 3.08 of the lease was a covenant by the respondent requiring him “To permit the lessor and its agents and workmen at all reasonable times on giving not less than 48 hours notice (except in case of emergency) to enter the demised premises for” a number of purposes. It was not in dispute that the appellant as landlord requested access for a lawful purpose within the terms of the covenant.
The appellant’s solicitor wrote to the respondent on two occasions requiring access. There was no reply to that letter although it was referred to in later correspondence. The appellant applied to the First-tier Tribunal (FTT) arguing that the tenant’s failure to respond to the two letters amounted to a breach of covenant. There was no evidence before the FTT that the appellant or its agents or workman had attended on either of the two dates specified in the letters. The FTT held that there was no breach of covenant.
The FTT considered that there was nothing contained in or implied by the wording of the covenant to indicate that the landlord might only gain access after first securing the tenant’s confirmation that the chosen day and time was convenient. The landlord had to give 48 hours’ notice but, having done so, it might exercise the right at the stipulated time provided that it was a reasonable time. In failing to respond positively to the appellant’s solicitors’ statement that their client wished to gain access to the property, the respondent was not in breach of the obligation to permit entry. If on the appellant attempting to gain entry, such entry had been refused or not facilitated it could have been established that entry was not being permitted. But that was not the case in the absence of either an attempt to enter or an express refusal of permission to enter in advance. The appellant appealed.
The appellant also sought permission to appeal against the FTT’s refusal of its application that the respondent reimburse the application and hearing fees pursuant to rule 13(2) of the Tribunal Procedure (First-tier Tribunal) Rules 2013.
Held: The appeal was dismissed.
(1) The obligation on the respondent in clause 3.08 was to permit the appellant to enter the premises on giving the appropriate notice. When interpreting a written contract, the court was concerned to identify the intention of the parties by reference to what a reasonable person having all the background knowledge available to the parties would have understood them to be using the language in the contract to mean. That meaning had to be assessed in the light of: (i) the natural and ordinary meaning of the clause; (ii) any other relevant provisions of the lease; (iii) the overall purpose of the clause and the lease; (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed; and (v) commercial common sense; but (vi) disregarding subjective evidence of any party’s intentions: Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 and Arnold v Britton [2015] UKSC 36; [2015 EGLR 53 applied.
(2) The granting of permission required some positive act by the tenant. The crucial question was to identify the time when the tenant was required to grant permission. There was nothing in the wording of clause 3.08 which required the tenant to grant permission before the time and date specified in the notice. The natural and ordinary meaning of the clause was that permission would be granted at that date and time. Whilst it would be commercially convenient to require permission to be granted earlier that the time and date in the notice, such a term was not necessary to give business efficacy to the lease. In those circumstances, the tribunal would not imply such a term.
(3) In the case where there was a clear refusal of entry, it would normally be reasonable for the landlord to rely on the refusal. In those circumstances the landlord would not need to attend. However, there might be circumstances where it would not be reasonable to rely on the refusal. The nature of the refusal might not be sufficiently clear. The tenant might change his mind before the time when access was to be exercised. If, after a refusal he recanted and informed the landlord that he would allow access, the landlord would have to attend. The crucial time was the time when the access was to be exercised. There might be other circumstances where it would not be reasonable for the landlord to rely on the refusal. In the present case, there was no evidence that the respondent failed to grant a right of entry at the date and time specified in the letter.
(4) Although the respondent had admitted subletting and making alterations, he had not admitted that they were breaches of the lease. Unless the breaches were continuing they would have occurred in the past. The FTT should not have assessed the breaches as “minor”. The possibility that the breaches might have been waived and whether the respondent made a mistake about subletting should have been irrelevant. However, the decision whether to exercise the tribunal’s power under rule 13(2) was discretionary. Furthermore, the Upper Tribunal would be slow to interfere with a discretion in relation to costs and the reimbursement of fees. In this case, the application failed in relation to breaches of clauses in the lease. It was open to the FTT to take into account its view of the seriousness of the breach and whether there were mitigating factors in the exercise of its discretion under rule 13(2). The decision to refuse the order was well within the ambit of the FTT’s wide discretion and permission to appeal would be refused.
Robert Brown (instructed by Northover Litigation) appeared for the appellant; the respondent appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of New Crane Wharf Freehold Ltd v Dovener
