Housing Act 1961 — Important decision on interpretation of landlord’s statutory covenants under section 32 — Covenant to pay a share of increased cost of repairs, including repairs to block in which flat was situated — ‘Structure and exterior’ held to extend to parts not included in demise, such as the outside wall of a flat, but ‘installations’ confined to what is within the demised dwelling
This was an
appeal by Campden Hill Towers Ltd and Davstone (Holdings) Ltd, lessors
successively of two blocks of flats–Gate Hill Court and Campden Hill Towers–and
other property in Notting Hill Gate, London, from the refusal of Judge Leslie
at Bloomsbury and Marylebone County Court to award them the whole sum they had
claimed from S W Gardner and his wife, lessees of 20 Gate Hill Court, in
respect of the lessees’ covenant to contribute towards the cost of repairs.
Camden Hill Towers Ltd, the first plaintiffs, had assigned their reversion to
Davstone (Holdings) Ltd, the second plaintiffs, during the period covered by
the claim.
J S Colyer QC
and Robert Pryor (instructed by Thornton, Lynne & Lawson) represented the
appellants, and Derek Wood (instructed by Allen & Son) appeared for the
respondents.
Giving the
judgment of the court, MEGAW LJ said that by an underlease, Campden Hill Towers
Ltd let to a Miss Lawson and a Miss Field, a third-floor flat, 20 Gate Hill
Court. During the currency of the underlease Davstone (Holdings) Ltd took over
Campden’s interests in Gate Hill Court and an adjacent block. Miss Lawson
married Mr Gardner and they became lessees of flat no 20. By proceedings in the
county court, the lessors claimed against the lessees the recovery of so-called
‘service charges’ of £197.22 for 1973 and 1974. The claim was based on a
covenant in the underlease. The lessees, relying on section 32 of the Housing
Act 1961, contended that the lessors were not entitled to recover the whole of
the sum claimed. The lessors now agreed that the underlease was a lease to
which section 32(1) applied.
Section 32
provided:
(1) In any lease of a dwelling-house, being a
lease to which this section applies, there shall be implied a covenant by the
lessor–(a) to keep in repair the structure and exterior of the dwelling-house
(including drains, gutters and external pipes); and (b) to keep in repair and
proper working order the installations in the dwelling-house–(i) for the supply
of water, gas and electricity, and for sanitation (including basins, sinks,
baths and sanitary conveniences but not, except as aforesaid, fixtures,
fittings and appliances for making use of the supply of water, gas or
electricity), and (ii) for space heating or heating water, and any covenant by
the lessee for the repair of the premises (including any covenant to put in
repair or deliver up in repair, to paint, point or render or to pay money in
lieu of repairs by the lessee or on account of repairs by the lessor) shall be
of no effect so far as it relates to the matters mentioned in paragraphs (a)
and (b) of this subsection.
His Lordship
said that by virtue of the definition of ‘dwelling-house’ in section 32(5) the
relevant ‘dwelling-house’ was flat no 20, not the whole block, for the flat was
the relevant ‘part of a building’ let as a private dwelling. Section 32(1)
provided that there should be implied in the underlease a covenant by the
lessors in the terms of paragraphs (a) and (b) of section 32(1), whatever they
meant, and that any covenant inconsistent therewith, purporting to remove from
the landlords, or to reduce, the obligations comprised in paragraphs (a) and
(b) should be ineffective. The subsection did not, however, purport to render
ineffective a covenant putting on the lessees any obligations as to repairs
outside the scope of paragraphs (a) and (b). Section Section 32(1) provided
that there should be implied in ‘any covenant by the lessee for the repair of
the premises (including any covenant . . . to pay money . . . on account of
repairs by the lessor) . . . so far as it relates to the matters mentioned in
sub-paragraphs (a) and (b) of this subsection.’
The intention
and effect of these provisions, particularly as regards covenants to pay money
were, in some respects, obscure. For example, what did ‘the premises’
mean? However, it did not matter for the
decision in this case how wide or how narrow a meaning ought to be given to
‘the premises’ because paragraphs (a) and (b) referred to ‘the dwelling-house,’
not to ‘the premises.’ It was common
ground that clause 4(2) of the underlease, incorporating the third schedule
thereto, was a covenant affected by section 32(1). It related in some degree to
the matters mentioned in paragraphs (a) and (b). The question was–in what
degree? That would involve an
examination of the meaning of these paragraphs.
By the definition
in the underlease, ‘the premises’ included not only the whole block of flats in
which the relevant flat, ‘the dwelling-house,’ was situated, but another block
of flats and other property. This was the definition of ‘premises’ for the
purpose of the underlease, not, of course, for the purpose of the statute.
There were 140 flats altogether. Clause 2 of the underlease demised ‘all that
flat . . . numbered 20 on the third floor of Gate Hill Court,’ but expressly
excluded its outside walls from the demise. The underlease also provided for
the yearly rent and the service charge. Both parties accepted that, to the
extent that the ‘service charge’ involved payment by the lessees in respect of
matters which fell within paragraphs (a) and (b), the lessors could not require
payment by the lessees. To that extent the covenant for the ‘service charges’
was unenforceable. But to the extent that the service charges relate to matters
outside the scope of paragraphs (a) and (b), the covenant was enforceable and the
lessees must pay.
The third
schedule listed the undertakings by the lessors towards the costs in respect of
which the lessees were to pay the service charge. They included keeping in
repair gas and water pipes, gutters, sewers, drains and electric cables ‘in,
under and upon the premises’; keeping in repair the common
timbers and party walls thereof. That schedule throughout was concerned with
‘the premises’ as defined in the underlease. However widely the words of
paragraphs (a) and (b) of section 32(1) were to be interpreted, no one could
sensibly suggest that they should be treated as applying to repairs to
buildings which were quite separate from the block of flats in which ‘the
dwelling-house’ in question was situated. Therefore the lessees’ obligation
under clause 4(2) of the underlease to pay one 140th share of the extra cost of
such part of any repairs as related to buildings other than Gate Hill Court was
not abrogated by section 32(1). But that negative proposition did not help much
in deciding what the positive proposition should be. It merely emphasised an
apparent oddity: the less directly the repairs in a covenant appeared to be for
the lessees’ immediate benefit, the more likely it was that they would have to
pay for them. Whether that was Parliament’s intention, their Lordships would
not speculate.
The judge had
rejected the lessors’ argument that the Act only imposed an obligation to keep
in repair the structure and exterior of the particular flat demised. He
expressed the view that the intention of the legislature must have been to
regard the whole building in which the dwelling-house was comprised as ‘the
exterior of the dwelling-house.’ Their
Lordships did not think that that was the correct interpretation of paragraph
(a) even if ‘the whole building’ for that purpose was to be treated as meaning
only Gate Hill Court. In their Lordships’ opinion anything which, in the
ordinary use of words, would be regarded as a part of the structure, or of the
exterior, of the particular ‘dwelling-house,’ regarded as a separate part of
the building, would be within the scope of paragraph (a), even if not part of
what was demised. That paragraph therefore applied to the outside wall or walls
of the flat; the outside of inner party walls of the flat; the outer sides of
horizontal divisions between flat no 20 and flats above and below; and the
structural framework and beams supporting the floors, ceilings and walls of the
flat. It went no further than that, however. It was not concerned with other
obligations on the lessors, whether by virtue of obligations in leases or under
other statutory provisions.
Paragraph (2),
in their Lordships’ judgment, meant that the installations within the physical
confines of the flat must be kept in repair and capable, so far as their own
structural and mechanical condition was concerned, of working properly. But no
more than that. ‘Installations’ in paragraph (b) did not, for example, cover a
boiler outside the flat. The lessors might be under additional obligations, but
if so they did not arise from the statute.
[Note: As
the parties had previously reached an agreement as to the amount which would be
payable by the lessees to the lessors in the circumstances, the appeal was
dismissed by consent, no order being made as to the costs of the appeal, but
the order as to costs below to stand. Megaw LJ said that, so far as the
decision had a bearing on other cases, it should be noted that the terms of the
decision, and the reasons why the appeal had been dismissed, were peculiar to
the unusual procedure adopted in the case.]
