Lease – Remedial scheme – Tenant covenanting to deliver up premises in good and substantial repair – Surveyors agreeing that patch repairs required to roof – Landlord’s surveyor later deciding carrying out of repairs impracticable – Landlord carrying out more extensive and expensive repairs – Landlord claiming damages for failure to repair – Whether tenant entitled to deduct cost of works superseded from damages – Claim allowed in part
The claimant was the freeholder of industrial premises let to the defendant under a lease dated December 1990 that expired in December 2004. The premises were sublet by the defendant to a third party (M), who remained in occupation following the expiry of the lease. The claimant relet the premises to M in July 2005.
Upon termination of its lease, the defendant was obliged to deliver up the premises in “good and substantial repair and condition”. Throughout the tenancy, the asbestos roof had leaked and attempts had been made to patch it up. However, at the end of the tenancy, the roof remained in disrepair, with defective roof lights and seals, areas of rainwater ingress and isolated cracked roof sheets. Building surveyors appointed by both parties agreed that patch repairs would be of the appropriate standard to comply with the repairing covenant. However, on the basis that patch repairs had been tried and had failed many times, M instead required the overcladding of the roof before taking a new sublease.
The claimant’s surveyor subsequently concluded that overcladding the roof was the appropriate remedial course and that patch repairs were impracticable owing in part to the health and safety issues involved in working on an asbestos roof with defective roof lights. The claimant carried out the more extensive works required by M and sought to recover the cost. The defendant refused to pay, arguing that the wholesale recovering of the roof was not necessary to bring it into the state of repair commensurate with the repairing covenant and that the individual elements of disrepair were capable of being repaired. The claimant sought damages for failure to repair. The defendant argued that if the patch-repair scheme was appropriate, it was entitled to deduct the cost of replacing the roof lights because the overcladding work superseded their replacement.
The second limb of section 18(1) of the Landlord and Tenant Act 1927 provided that no damage would be recoverable for breach of a covenant to put premises in repair on termination of a lease if it could be shown that the premises were to be demolished after the termination of the lease or that such structural alterations that were to be carried out would render the repairs valueless.
Held: The claim was allowed in part.
The patch-repair works were possible, practicable and appropriate having regard to the state of repair of the roof and the defendant’s obligations under the lease. M’s demand for a new roof was relevant as the stance taken by an incoming tenant to the state of repair of the premises. However, since that demand was not based upon the terms of the lease between the parties, it was outweighed by the evidence of the surveyors, who had both initially agreed that patch repairs were appropriate. In order to sustain an argument that repairs were impracticable on health and safety grounds, it was necessary to provide a detailed critique of the works required and the risks involved: Elmcroft Developments Ltd v Tankersley-Sawyer [1984] 1 EGLR 47; (1984) 270 EG 140, Dame Margaret Hungerford Charity Trustees v Beazley [1993] 2 EGLR 143; [1993] 29 EG 100, Ladbroke Hotels Ltd v Sandhu [1995] 2 EGLR 92; [1995] 39 EG 152, Welsh v Greenwich London Borough Council [2000] 3 EGLR 41; [2000] 49 EG 118 and Latimer v Carney [2006] EWCA Civ 1417; [2006] 3 EGLR 13; [2006] 50 EG 86 considered and applied.
Further, the mere fact that the claimant had carried out more extensive and expensive remedial works did not trigger the second limb of section 18(1) of the 1927 Act. The broad purpose of that provision was to avoid the injustice of a lessor recovering damages for breach of a covenant even though the buildings in question were to be demolished or structurally altered, so that there would be no point in performing the covenant: Marquess of Salisbury v Gilmore [1942] 2 KB 38 distinguished.
In the present case, the defendant suffered no injustice by being held liable for the cost of the lesser remedial works. The overcladding had not superseded the patch repairs and did not amount to a structural alteration.
Duncan Kynoch (instructed by Michael Conn Goldsabel) appeared for the claimant; Greville Healey (instructed by TLT LLP) appeared for the defendant.
Eileen O’Grady, barrister
