Preliminary issue — Commercial sublease — Exterior brickwork in disrepair — Remedial works undertaken after lapse of approximately 18 months — Tenants indemnifying assignees — Landlord under obligation “to keep” building in repair — Whether that obligation applied at all times — Whether repairs within reasonable period fulfilling obligation — High Court holding obligation to keep building in repair at all times — Court of Appeal upholding that decision — Whether exceptions to general rule — Judgment for the tenant
The tenant leased three parts of Randolph House, Wellesley Road, Croydon, under three subleases in 1969, 1973 and 1976. The landlord held an underlease whereby the land and whole building was let to it for a term expiring in June 2091. In the summer of 1986 a bulge appeared in the brick cladding forming part of the external walls and main structure of the building, so that the exterior of the building at fifth-floor level became out of repair due to the poor fixing of the cladding to the inner wall. The defendant put in hand works to carry out necessary remedial work, which was commenced in February 1988.
At the time that the defect appeared, the tenant was in the process of disposing of the leases and it agreed to indemnify the assignees if the defects had not been remedied by September 1987. It claimed damages for the payments it made under the indemnities. The tenant relied on clause 5(b) in the sublease whereby the defendant covenanted “to perform the tenant’s covenants contained in the lease under which it holds the building …”. Its covenants in that lease included to “keep in good and substantial repair the demised premises …”. The tenant argued that that was an obligation which was broken as soon as the premises were out of repair. It was accepted that if the tenant succeeded on the 1976 lease, it would succeed on the other two leases in that they contained similar clauses in all material respects. The landlord argued, inter alia, that there was no breach until a reasonable time to carry out repairs had expired, calculated from the date on which the defect first arose. The High Court found in favour of the tenant: see [1994] EGCS 117. The landlord appealed.
Held The appeal was dismissed.
1. The general rule was that a covenant to keep premises in repair obliged the covenantor to keep them in repair at all times, so that there was a breach of the obligation immediately a defect occurred: see Loria v Hammer[1989] 2 EGLR 249.
2. There was an exception where the obligation was the landlord’s and the defect occurred in the demised premises, in which case he was in breach of his obligation only when he had information about the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair were needed and he had failed to carry out the necessary works with reasonable expedition thereafter: see Makin v Witkinson (1870) LR 6 Ex 25.
3. The court did not express a concluded view as to the case where a defect was caused by an occurrence wholly outside the landlord’s control. However, there seemed no reason why such a case should not be made the subject of further exception to the general rule. That point would have to be decided if and when it arose.
Jonathan Gaunt QC and Christopher Nugee (instructed by Ashurst Morris Crisp) appeared for the tenant; Kirk Reynolds QC and Wayne Clark (instructed by Church Adams Tatham & Co) appeared for the landlords.
